Document:

EXHIBIT 10.1

 STOCK PURCHASE AGREEMENT

 BETWEEN

 UNICO, INC. AND STARLICON GROUP

 S1_EX-23<PAGE>

                           
STOCK PURCHASE AGREEMENT

           AGREEMENT
made as of November 30, 1997, by and between Unico, Inc., a

New Mexico corporation (UNICO); Starlicon Group, Inc., a Nevada
Corporation

("Seller or SGI"); and Starlicon International Corporation, a California

corporation ("SI").

           WHEREAS,
Seller desires to sell, and UNICO desires to purchase and

acquire from Seller all outstanding shares of SI, upon the terms
and subject to

the conditions set forth herein; and,

           WHEREAS,
SGI owns 100% of the issued and outstanding shares of SI;

           NOW,
THEREFORE, in consideration of the mutual agreements recited

herein, the parties agree as follows:

 

                                   
ARTICLE I

                          
PURCHASE AND SALE OF SHARES

           1.1
Purchase and Sale. Subject to the terms and conditions of this

Agreement, and in reliance upon the representations and warranties
set forth

herein, on the Closing Date, as defined herein, Seller will issue,
sell,

transfer and deliver to UNICO, and UNICO shall acquire from Seller,
100% of the

issued and outstanding Capital Stock of SI, free and clear of all
liens,

pledges, encumbrances, charges, and claims thereon ("the Shares").
Within 30

days thereafter the UNICO shares paid to SGI as consideration pursuant
to

Section 1.2 of this Agreement shall be distributed to the shareholders
of SGI.

           1.2
Base Purchase Price. The purchase price for the Shares shall be

an amount equal to SI's Total Revenue (defined as "Sales," less
"Sales Returns,"

(including return merchandise authorizations ("RMAs") less "Interest
Income") as

reported in SI's audited financial statements for the twelve month
period ending

November 30, 1997 ("Base Purchase Price" and "Base Total Revenue").
One-third of

the Base Purchase Price shall be paid in the form of UNICO common
stock and

two-thirds of the Base Purchase Price shall be paid in the form
of UNICO Series

A Preferred Stock. No fractional shares of either class of stock
will be issued.

           1.2.1
Unico Common Stock For the purpose of this Agreement, UNICO

common stock shall be deemed to have a value of $1.40 per share.

 

 

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           1.2.2
Unico Series A Preferred Stock

                    
a.        Number of Shares Issued. The
number of UNICO

                              
Series A Preferred Shares to be issued pursuant

                              
to Section 1.2 of this Agreement shall be

                              
determined by multiplying the number of common

                              
shares issued pursuant to Section 1.2 times

                              
0.002.

                    
b.        The rights and preferences
of the Series A

                              
Preferred Shares are as set forth on Exhibit

                              
1.2.2

           1.3
Supplemental Purchase Price. As soon as reasonably practical

after SI's audited Total Revenue Statements for the 12 month period
ending

November 30, 1998 are available, a Supplemental Purchase Price
shall be

determined in accordance with the following formula:

               
SPP= (NTR - BTR) X0.5

                    
Where:

               
SPP= Supplemental Purchase Price in dollars

               
NTR= New Total Revenue - 12 months ending November 30, 1998

               
as defined in Section 1.2.

               
BTR= Base Total Revenue as defined in Section 1.2.

In the event the value of SPP as determined above is 0 or a negative
number, no

further payments shall be due. Payments of the Supplemental Purchase
Price, if

any, shall be in the form of shares of UNICO Series A Preferred
Stock. The

number of such shares shall be determined by the following formula:

               
Number of Preferred Shares=       SPP

                                         
  
---------------

                                         
  
(1000) x (1.4)

No fractional shares will be issued.

 

                                  
ARTICLE II

                            
ADDITIONAL TRANSACTIONS

           2.1
Confidentiality and Non-Competition Agreement. At the Closing,

UNICO and the officers of SI, will enter into an agreement with
UNICO agreeing

not to disclose to any third party (other than their attorneys,
accountants and

advisers) any confidential information relating to SI or its business,
except as

required to be disclosed by law, and agreeing not to compete with
SI for a

period of three years following the Closing Date. Such agreement

                                      
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S1_EX-25<PAGE>

 

 

shall be in form and substance reasonably satisfactory to SGI, SI

and UNICO.

           2.2
Constitution of the Board of Directors. On Closing the Board of

Directors will be satisfactory to both UNICO and Seller and will
comply as of

February 22, 1998 with the new NASD requirements under the Small
Cap Market

System.

 

                                  
ARTICLE III

                 
REPRESENTATIONS AND WARRANTIES OF SGI AND SI

           SGI,
and to the extent applicable SI, jointly make the following

representations and warranties to UNICO, each of which shall be
deemed material,

and UNICO, in executing, delivering and consummating this Agreement,
has relied

and will rely upon the correctness and completeness of each of
such

representation and warranty:

           3.1
Valid Corporate Existence; Qualifications. SGI and SI ("the

Companies") are corporations duly organized, validly existing and
in good

standing under the laws of the State of California and Nevada,
respectively.

Each of the Companies has the corporate power to carry on its business
as now

conducted and to own its assets. Each company is duly qualified
to conduct

business and is in good standing as a foreign corporation in those
jurisdictions

set forth in Exhibit 3.1, which are the only jurisdictions in which
the

Companies are required to qualify in order to own their assets
or properties or

to carry on its business as now conducted, and there has not been
any claim by

any other jurisdiction to the effect that either Company is required
to qualify

or otherwise be authorized to do business as a foreign corporation
therein which

could reasonably be expected to have a materially adverse effect
upon the

business of SI. The copies of the Companies' Certificates of Incorporation

(certified by the Corporation's secretary), as amended to date,
which have been

exhibited to UNICO with respect to SGI and delivered to UNICO with
respect to

SI, are true and complete copies of those documents as now in effect.
The minute

books of SGI and SI contain accurate records of all material meetings
of its

Board of Directors, Executive Committee of the Board, if any, and
shareholders

since its incorporation, and accurately reflect all transactions
authorized

therein.

           3.2
Capitalization. The authorized capital stock of SI consists of

1,000 shares of Common Stock, no par value, of which 1,000 shares
of Common

Stock are issued and outstanding. All of such shares of Common
Stock are duly

authorized and validly issued and outstanding, fully paid and non
assessable.

           3.3
Subsidiaries. Except as set forth in Exhibit 3.3, there are no

corporations, partnerships and other business entities controlled
by SI. As used

herein, "controlled by" means (i) the

                                      
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S1_EX-26<PAGE>

 

 

ownership of not less than 50% of the voting securities or other
interests of a

corporation, partnership or other business entity, or (ii) the
possession,

directly or indirectly, of the power to direct or cause the direction
of the

management and policies of a corporation, partnership or other
business entity,

whether through the ownership of voting shares, by contract or
otherwise.

           3.4
Consents. All requisite consents of governmental and other

regulatory agencies, foreign or domestic, and of other parties
required to be

received by or on the part of SGI and/or SI to enable them to enter
into and

carry out this Agreement in all material respects have been, or
prior to the

Closing will have been, obtained.

           3.5
Corporate Authority; Binding Nature of Agreement; Title to

Shares. SGI and SI have the corporate power to enter into this
Agreement and to

carry out their respective obligations hereunder. The execution
and delivery of

this Agreement and the consummation of the transactions contemplated
hereby have

been duly authorized by their Boards of Directors and, except for
the approval

of SGI's shareholders, no other corporate proceedings on the part
of SGI or SI

are necessary to authorize the execution and delivery of this Agreement
and the

consummation of the transactions contemplated hereby. This Agreement
constitutes

Sellers valid and binding obligation and is enforceable in accordance
with its

terms. At the Closing, SGI will be the sole record and beneficial
owner of the

Shares, free and clear of all manner of liens, charges, encumbrances,
and

claims, will have good and marketable title to the Shares, and
will have, the

absolute and unqualified right to sell, transfer and deliver such
Shares to

UNICO. The delivery of the Shares to UNICO at the Closing pursuant
to the

provisions of this agreement will transfer valid title thereto,
free and clear

of all manner of liens, charges, encumbrances and claims.

           3.6
Financial Statements. The books of accounts of SI, taken as a

whole, fairly reflect its income, expenses, assets and liabilities
in all

material respects. The unaudited financial statements of SI for
the period

ending November 30, 1997 fairly present the financial position
of SI as of said

date and the results of their operations for such period and were
prepared in

conformity with generally accepted accounting principles. Such
financial

statements will be audited within sixty (60) days following the
Closing Date.

           3.7
Liabilities. As at November 30, 1997 (the "Balance Sheet Date"),

SI had no material debts, liabilities or obligations, contingent
or absolute,

other than those debts, liabilities and obligations reflected or
reserved

against on SI's balance sheet as at November 30, 1997 (the "Balance
Sheet") or

in the footnotes thereto or in the exhibits to this Agreement.

           3.8 
Action Since Balance Sheet Date.  Except as otherwise

expressly provided or set forth in, or required by this Agreement,

                                      
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S1_EX-27<PAGE>

 

 

since the Balance Sheet date, SI has not (and will not have as of
the Closing

Date): (i) issued or sold, or agreed to issue or sell any of its
capital stock,

options, warrants, rights or calls to purchase such stock, any
securities

convertible or exchangeable into such capital stock or other corporate

securities, or effected any subdivision or other recapitalization
affecting its

capital stock; (ii) incurred any material obligation or liability,
absolute or

contingent, except those arising in the ordinary and usual course
of its

business; (iii) discharged or satisfied any lien or encumbrances,
except in the

ordinary and usual course of business, or paid or satisfied any
liability,

absolute or contingent, other than liabilities as of the Balance
Sheet Date and

current liabilities incurred since the Balance Sheet Date in the
ordinary and

usual course of business; (iv) made any wage or salary increases
or granted any

bonuses other than wage and salary increases and bonuses granted
in accordance

with its normal salary increase and bonus policies; (v) mortgaged,
pledged or

subjected to any lien or other encumbrance any of its properties
or assets, or

permitted any of its property or assets to be subjected to any
liens or other

encumbrance, except in the ordinary and usual course of business;
(vi) sold,

assigned or transferred any of its properties or assets, except
in the ordinary

and usual course of business; (vii) entered into any transaction
except in the

ordinary and usual course of business; (viii) waived any rights
of substantial

value, or canceled, modified or waived any indebtedness for borrowed
money held

by it, except in the ordinary and usual course of business; (ix)
declared, paid

or set aside any dividends or other distributions or payments on
its capital

stock, or redeemed or repurchased, or agreed to redeem or repurchase,
any shares

of its capital stock; (x) made any loans or advances to any person,
or assumed,

guaranteed, endorsed or otherwise became responsible for the obligations
of any

person; or (xi) incurred any indebtedness for borrowed money (except
for

endorsement, for collection or deposit of negotiable instruments
received in the

ordinary and usual course of business).

           3.9
Adverse Developments. Except as otherwise expressly provided or

set forth in, or required by, this Agreement, since the Balance
Sheet Date,

there have been no changes in the properties, operations or financial
condition

of SI, and no event has occurred other than in the ordinary and
usual course of

business which could be reasonably expected to have a materially
adverse effect

upon the business of SI, SI and SGI do not know of any development
or threatened

development of a nature that is, or which could be reasonably expected
to have a

materially adverse effect upon the business of SI or upon any of
its assets or

properties, including, without limitation, the loss of any licenses
or permits,

suppliers, customers or employees, which loss would be of a materially
adverse

nature. This representation will also be true on the Closing date.

           3.10
Taxes. All taxes, including, without limitation, income,

property, sales, use, franchise, capital stock, excise, added value,
employee's

income withholding, social security and

                                      
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S1_EX-28<PAGE>

 

 

unemployment taxes imposed by the United States, any state or any
foreign

county, or by any other taxing authority, which have or may have
become due or

payable by SI and all interest and penalties thereon, whether disputed
or not,

have been paid in full or adequately provided for by reserves shown
in its books

of account; all deposits required by law to be made by SI with
respect to

estimated income, franchise and employees' withholding taxes have
been duly

made; and all tax returns, including estimated tax returns, required
to be filed

have been duly filed. No extension of time for the assessment of
deficiencies

for any year is in effect. No deficiency is proposed or, to the
knowledge of SGI

or SI, threatened against SI.

           3.11
Ownership of Assets. SI owns outright, and has good and

marketable title to all of its assets, properties and business
(including all

assets reflected in the Balance Sheet, except as the same may have
been disposed

of in the ordinary course of business since the Balance Sheet Date),
free and

clear of all liens, mortgages, pledges, conditional sales agreements,

restrictions on transfer or other encumbrances or charges, except
those listed

on Exhibit 3.11. Exhibit 3.11 sets forth a true and complete list
and brief

description of all patents, copyrights, trademarks, trade names
and other

similar intangible assets which are either owned by SI or in which
SI has an

interest. Except as set forth in Exhibit 3.11, no other person,
firm or

corporation has any proprietary or other interest in any such intangible
assets.

Such assets so owned or leased are, in the reasonable business
judgment of SGI

and/or SI, sufficient to permit SI to conduct its business as now
conducted.

Except as set forth in Exhibit 3.11, SI is not a party to or bound
by any

license or agreement requiring the payment to any person, firm
or corporation of

any royalty. SGI and SI do not know, or have reasonable grounds
to know of, any

violation by others of the trademark, trade name or patent rights
of SI. SI is

not infringing upon any patent, copyright, trade name or trademark
or otherwise

violating the rights of any third party with respect thereto, and
no proceedings

have been instituted or, to the knowledge of SGI and SI are threatened,
and no

claim has been received by SGI or SI alleging any such violation.

           3.12
Insurance. Exhibit 3.12 sets forth a list and brief description

of all policies of fire, liability and other forms of insurance
held by SI as of

the date hereof. Except as set forth in Exhibit 3.12, such policies
are valid,

outstanding and enforceable policies, as to which premiums have
been paid

currently. Except as set forth in said Exhibit 3.12, neither SGI,
nor SI, know

of any state of facts, or of the occurrence of any event which
might reasonably

or form the basis for any claim against SI not fully covered by
insurance for

liability on account of any express or implied warranty or tortious
omission or

commission.

           3.13
Litigation, Compliance with Law. Except as set forth in Exhibit

3.13, there are no actions, suits, proceedings or governmental
investigations

relating to SI or to any of its

                                      
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S1_EX-29<PAGE>

 

 

properties, assets or business pending or, to the knowledge of SGI
or SI,

threatened, or any order, injunction, award or decree outstanding
against SI or

against or relating to any of its respective properties, assets
or business; and

SGI and SI know of no basis for any such action, suits or proceedings
within the

past two years or any such governmental investigation, orders,
injunctions or

decrees. SI is in not in violation of any law, regulation, ordinance,
order,

injunction, decree, award or other requirement of any governmental
body, court

or arbitrator relating to its properties, assets or business which
could be

reasonably expected to have a materially adverse effect upon the
business of SI.

           3.14
Real Property. Exhibit 3.14 sets forth a brief description of

all real property which is owned by, or leased to SI. SI owns outright
the fee

simple title in and to the real properties shown on said Exhibit
3.14 as being

owned by SI, free and clear of all claims, liens, mortgages, charges,
or

encumbrances of any nature whatsoever, except as otherwise described
in Exhibit

3.14. The real property leases described in Exhibit 3.14 that relate
to the

leased properties described therein are now in full force and effect,
and all

amounts payable thereunder have been paid. Except as set forth
in Exhibit 3.14,

none of such leases could reasonably be expected to result in material
liability

for restoration of premises. All uses of such owned or leased property
by SI

conform, in all material respects, to all applicable building and
zoning

ordinances, laws, and regulations and, in the case of leased property,
to all

terms of the leases relating thereto.

           3.15
Agreements and Obligations, Performance. Except as listed and

briefly described in Exhibit 3.15 (the "Listed Agreements") SI
, is not a party

to, or bound by any: (i) written or oral agreement or other contractual

commitment, understanding or obligation which involves aggregate
payments or

receipts in excess of $5,000 that cannot be canceled on thirty
(30) days or less

notice without penalty; (ii) contract, arrangement, commitment
or understanding

with its customers or any officer, employee, shareholder, director,

representative or agent thereof for the repurchase of products,
sharing of fees,

the rebating of charges to such customers, bribes, kickbacks from
such customers

or other similar arrangements; (iii) contract for the purchase
or sale of any

materials, products or supplies for a fixed term; (iv) contract
of employment

with any officer or employee not terminable at will without penalty
or premium

or any continuing obligation of liability; (v) deferred compensation,
bonus or

incentive plan or agreement not cancelable at will without penalty
or premium or

any continuing obligation or liability; (vi) management or consulting
agreement

not terminable at will without penalty or premium or any continuing
obligation

or liability; (vii) lease for real or personal property (including
borrowings

thereon), license or royalty agreement; (viii) union or other collective

bargaining agreement; (ix) agreement, commitment or understanding
relating to

indebtedness for borrowed money; (x) contract which, by its terms,

                                      
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S1_EX-30<PAGE>

 

 

requires the consent of any party thereto to the consummation of
the

transactions contemplated hereby; (xi) contract containing covenants
limiting

the freedom of SI to engage or compete in any line or business
with any person

in any geographical area; (xii) contract or option relating to
the acquisition

or sale of any business; (xiii) voting trust agreement or similar
shareholders'

agreement; (xiv) other contract, agreement, commitment or understanding
which

materially affects any of SI's properties, assets or business,
whether directly

or indirectly, or which was entered into other than in the ordinary
course of

business. A true and correct copy of each of the written Listed
Agreements has

been delivered to UNICO. SI has in all material respects performed
all

obligations required to be performed by it to date under all of
the Listed

Agreements, is not in default in any material respect under any
of the Listed

Agreements and has received no notice of any default or alleged
default

thereunder which has not heretofore been cured or which notice
has not

heretofore been withdrawn. SGI and SI know of no material default
under any of

the Listed Agreements by any other party thereto or by any other
person, firm or

corporation bound thereunder.

           3.16
Condition of Assets. All machinery and equipment regularly used

by SI in the conduct of its business is in operating condition
and repair,

ordinary wear and tear excepted. The inventories of SI are substantially
in

usable and saleable condition and in reasonable balance, and such
inventory in

the aggregate is saleable at least at the value at which it is
carried on SI's

books.

           3.17
Accounts Receivable. To the knowledge of SGI and SI, all of the

accounts receivable reflected in the books of account of SI are
valid and arose

in the ordinary course of its business, from the sale of services
or goods, and

SGI and SI do not know, or have reason to know, of any valid defense
or right of

set-off to the rights of SI to collect such accounts receivable
in the full

amounts shown on such books of account less any reserves on the
Balance Sheet.

           3.18
Permits and Licenses. Exhibit 3.18 sets forth all permits,

licenses, orders, franchises and approvals from all federal, state,
local and

foreign governmental regulatory bodies held by SI. SI has all permits,
license,

orders and approvals of all federal, state, local and foreign governmental
or

regulatory bodies required of it to carry on its business as presently

conducted; all such permits, licenses, orders, franchises and approvals
are in

full force and effect, and to the knowledge of SGI and SI, no suspension
or

cancellation of any of such permits, licenses, etc., is threatened;
and SI is in

compliance in all material respects with all requirements, standards
and

procedures of the federal, state, local and foreign governmental
bodies which

have issued permits, licenses, orders, franchises and approvals.
Exhibit 3.18

also sets forth a brief description of all motor vehicles owned
or leased by SI

and the state of title thereof.

                                      
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           3.19
Banking Arrangements. Exhibit 3.19 sets forth the name of each

bank in or with which SI has an account, credit line or safety
deposit box, and

a brief description of each such account, credit line or safety
deposit box

including the names of all persons currently authorized to draw
thereon or

having access thereto, and the names of all persons, if any, now
holding powers

of attorney from SI and a summary statement of the terms thereof.

           3.20
Interest in Assets. Except as set forth in Exhibit 3.20, neither

SGI nor any of SI's shareholders or affiliates, owns any property
or rights,

tangible or intangible, used in or related, directly or indirectly,
to the

business of SI.

           3.21
Salary Information. Exhibit 3.21 contains a list of the names

and current salary rates of and bonus commitments to all present
officers of SI,

and the names and current annual salary rates of all other persons
employed by

SI whose annual salaries exceed $25,000.00.

           3.22
Employee Benefit Plans. SI maintains no "pension" and "welfare"

benefit plans (within the respective meanings of sections 3(2)
and 3(1) of the

Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
nor does

it make employer contributions with respect to its employees. SI
acquired no

such plans and assumed no such contribution obligations in connection
with the

acquisition of its existing business.

           3.23
No Breach. Neither the execution and delivery of this Agreement

by SGI and/or SI nor compliance by SGI and/or SI with any of the
provisions

hereof nor the consummation of the transactions contemplated hereby,
will:

                   
(a) violate or conflict with any provision of the

Certificate of Incorporation or By-Laws of SGI or SI;

                   
(b) violate, or with the passage of time, result in the

material breach or termination of, or otherwise give any contracting
party the

right to terminate, or declare a material default under, the terms
of any

agreement or other document or undertaking, oral or written to
which SGI or SI

is a party or by which either its properties or assets may be bound
(except for

such violations, conflicts, breaches or defaults as to which required
waivers or

consents by other parties have been, or will, prior to the Closing,
be,

obtained);

                   
(c) result in the creation of any lien, security interest,

charge or encumbrance upon any of the properties or assets of SI
pursuant to the

terms of any such agreement or instrument;

                   
(d) violate any judgment, order, injunction, decree or award

against, or binding upon, SGI or SI or upon their respective properties
or

assets; or

                                      
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(e) violate any law or regulation of any jurisdiction

relating to SGI or SI or any of their respective securities, assets
or

properties.

           3.24
Brokers. All negotiations relative to this Agreement and the

transactions contemplated hereby have been carried on directly
between SGI and

UNICO without the intervention of any broker, finder, investment
banker or other

third party except one party, to be paid by SGI, and another party,
to be paid

by UNICO. Except for such parties, neither UNICO or SGI have engaged,
consented

to, or authorized any broker, finder, investment banker or other
third party to

act on its behalf, directly or indirectly, as a broker or finder
in connection

with the transaction contemplated by this Agreement.

           3.25
Labor Discussions. Except with respect to the agreements listed

in Exhibit 3.15 pursuant to Section 3.15(viii), SI is not, and
has not, during

the past three years, been involved in any labor discussions with
any unit or

group seeking to become the bargaining unit for any of its employees.
With

respect to said Agreements, Exhibit 3.15 sets forth a description
of the status

thereof, including any demands or proposals with respect to the
renewal,

extension or replacement thereof.

           3.26
Change of Name. SI has not conducted business under any name

during the past three (3) years except those set forth on Exhibit
3.26.

           3.27
Backlog. Exhibit 3.27 sets forth as of November 30, 1997 the

name, aggregate contract price, revenues received to date and balance
remaining

upon all orders then in progress or under contract. The aggregate
backlog of SI

as at November 30, 1997 is set forth in Exhibit 3.27.

           3.28
Environmental. Except as previously disclosed or set forth on

Exhibit 3.28, neither SI nor any previous owner, tenant, occupant
or user of any

real property of SI, used, generated, manufactured, installed,
released,

discharge, stored or disposed of any "Hazardous Materials," as
defined below,

on, under, in or about the side of any such property. The term
"Hazardous

Materials" shall mean any waste material which is regulated by
any state or

local governmental authority in the states in which SI and its
subsidiaries, if

any, conduct business, or the United States Government, including,
but not

limited to, any material or substance which is (i) defined as a
"hazardous

waste," "hazardous material," "hazardous substance," "extremely
hazardous

waste," or "restricted hazardous waste" under any provision of
California Law,

(ii) petroleum, (iii) asbestos, (iv) designated as a "hazardous
substance"

pursuant to Section 311 of the Clean Water Act, 33 U.S.C. 1251
et seq. (33

U.S.C. 1321) or listed pursuant to Section 307 of the Clean Water
Act (33 U.S.C.

1317), (v) defined as a "hazardous waste" pursuant to Section 1004
of the

Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq.
(42 U.S.C.

                                     
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6903), or (vi) defined as a "hazardous substance" pursuant to Section
101 of the

Comprehensive Environmental Response, Compensation, and Liability
Act, 42 U.S.C.

6901 et seq. (42 U.S.C. 9601). The current operations of SI and
its current and

past use comply and then complied; with all applicable laws and
governmental

regulations including all applicable federal, state and local laws,
ordinances,

and regulations pertaining to air and water quality, Hazardous
Materials, waste,

disposal or other environmental matters, including the Clean Water
Act, the

Clean Air Act, the Federal Water Pollution Control Act, the Solid
Waste Disposal

Act, the Resource Conservation Recovery Act, the Comprehensive
Environmental

Response, Compensation and Liability Act, and the statutes, rules,
regulations

and ordinances of the state, city and country in which such property
is located.

All sewage and waste discharge at such property is and has been
discharged in

compliance with applicable federal, state and local law. No wells
of any kind

which may exist on such property have or have been receiving any
discharges.

There are no underground storage tanks of any kind at any such
property.

           3.29
Untrue or Omitted Facts. No representation, warranty or

statement by SGI or SI in this Agreement contains any untrue statement
of a

material fact, or omits or will omit to state a fact necessary
in order to make

such representations, warranties or statements not materially misleading.

Without limitation of the foregoing, there is no fact known to
SGI or SI, that

has had, or which may be reasonably expected to have, a materially
adverse

effect on SI or any of its assets, properties and business and
that has not been

disclosed in writing to UNICO.

 

                                  
ARTICLE IV

                    
REPRESENTATIONS AND WARRANTIES OF UNICO

              
UNICO makes the following representations and warranties to SGI,

each of which shall be deemed material, and SGI, in executing this
Agreement,

has relied and will rely on the correctness and completeness of
such

representations and warranties:

           4.1
Valid Corporate Existence; Qualification. UNICO is a corporation

duly organized, validly existing and in good standing under the
laws of the

State of New Mexico. UNICO has the corporate power to carry on
its business as

now conducted and to own its assets. UNICO is duly qualified to
conduct business

and is in good standing as a foreign corporation in those jurisdictions
set

forth in Exhibit 4.1, which are the only jurisdictions in which
UNICO is

required to qualify in order to own its assets or properties or
to carry on its

business as now conducted, and there had not been any claim by
any other

jurisdiction to the effect that UNICO is required to qualify or
otherwise be

authorized to do business as a foreign corporation therein which
could

reasonably be expected to

                                     
-11-

 

 

 

S1_EX-34<PAGE>

 

 

have a materially adverse effect upon the business of UNICO. The
copies of

UNICO's Certificate of Incorporation (certified by the Secretary
of State of New

Mexico) and By-Laws (certified by UNICO's secretary), as amended
to date, which

have been delivered to SGI, are true and complete copies of those
documents as

now in effect. The minute books of UNICO contain accurate records
of all

material meetings of its Board of Directors, Executive Committee
of the Board,

if any, and shareholders since its incorporation, and accurately
reflect all

transactions authorized therein.

           4.2
Capitalization. The authorized capital stock of UNICO consists of

50,000,000 shares of Common Stock, par value $.20 per share, and
8,000,000

shares of Preferred Stock of which 986,590 shares of Common Stock
are issued and

outstanding. None of the Preferred Shares are issued and outstanding.
All of

such shares of Common Stock and Preferred Stock are duly authorized
and, in the

case of the Common Stock, validly issued and outstanding, fully
paid and

nonassessable. Except as set forth on Exhibit 4.2, there are no
subscriptions,

options, warrants, rights or calls or other commitments or agreements
to which

UNICO is a party or by which any person is bound, calling for the
issuance,

transfer, sale or other disposition of securities of UNICO convertible
or

exchangeable, actually or contingently, into shares of Common Stock
or any other

securities of UNICO.

           4.3
Subsidiaries. Except as set forth on Exhibit 4.3, there are no

corporations, partnerships and other business entities controlled
by UNICO. As

used herein, "controlled by" has the meaning set forth in Section
3.3 of this

Agreement.

           4.4
Consents. The consent of all requisite governmental and other

regulatory agencies, foreign or domestic, and of other parties
required to be

received by, or on the part of UNICO to enable it to enter into
and carry out

this Agreement, have been, or prior to the Closing will have been,
obtained.

           4.5
Corporate Authority; Binding Nature of Agreement; Title to

Shares. UNICO has the corporate power to enter into this Agreement
and to carry

out its obligations hereunder. The execution and delivery of this
Agreement and

the consummation of the transactions contemplated hereby have been
duly

authorized by its Board of Directors and no other corporate proceedings
on the

part of UNICO are necessary to authorize the execution and delivery
of this

Agreement and the consummation of the transactions contemplated
hereby. This

Agreement constitutes UNICO's valid and binding obligation and
is enforceable in

accordance with its terms. At the Closing, UNICO will have the
absolute and

unqualified right to issue, transfer and deliver its common and
preferred shares

to SGI. The delivery of the Common and Preferred Stock to SGI at
the Closing

pursuant to the provisions of this Agreement will transfer valid
title thereto,

free and clear of all manner of liens, charges, encumbrances and
claims.

 

                                     
-12-

 

 

S1_EX-35<PAGE>

 

 

           4.6
Financial Statements. The books of accounts of UNICO taken as a

whole, fairly reflect its income, expenses, assets and liabilities
in all

material respects. The unaudited financial statements of UNICO
for the period

ending November 30, 1997 fairly present the financial position
of UNICO as of

said date and the results of its operations for such period and
were prepared in

conformity with generally accepted accounting principles. Such
financial

statements will be audited within sixty (60) days following the
end of UNICO's

fiscal year ending February 28, 1998.

           4.7
Liabilities. Except as set forth in Exhibit 4.7, as of November

30, 1997 (the "Balance Sheet Date"), UNICO had no material debts,
liabilities or

obligations, contingent or absolute, other than those debts, liabilities
and

obligations reflected or reserved against on UNICO's balance sheet
as at

November 30, 1997 (the "Balance Sheet Date") or in the footnotes
thereto or in

the exhibits to this Agreement.

           4.8
Action Since Balance Sheet Date. Except as otherwise expressly

provided or set forth in, or required by this Agreement, since
the Balance Sheet

date, UNICO has not (and will not have as of the Closing Date):
(i) issued or

sold, or agreed to issue or sell any of its capital stock, options,
warrants,

rights or calls to purchase such stock, any securities convertible
or

exchangeable into such capital stock or other corporate securities,
or effected

any subdivision or other recapitalization affecting its capital
stock; (ii)

incurred any material obligation or liability, absolute or contingent,
except

those arising in the ordinary and usual course of its business;
(iii) discharged

or satisfied any lien or encumbrances, except in the ordinary and
usual course

of business, or paid or satisfied any liability, absolute or contingent,
other

than liabilities as of the Balance Sheet Date and liabilities incurred
since the

Balance Sheet Date in the ordinary and usual course of business;
(iv) made any

wage or salary increases or granted any bonuses other than wage
and salary

increases and bonuses granted in accordance with its normal salary
increase and

bonus policies; (v) mortgaged, pledged or subjected to any lien
or other

encumbrance any of its properties or assets, or permitted any of
its property or

assets to be subjected to any liens or other encumbrance, except
in the ordinary

and usual course of business; (vi) sold, assigned or transferred
any of its

properties or assets, except in the ordinary and usual course of
business; (vii)

entered into any transaction except in the ordinary and usual course
of

business; (viii) waived any rights of substantial value, or canceled,
modified

or waived any indebtedness for borrowed money held by it, except
in the ordinary

and usual course of business; (ix) declared, paid or set aside
any dividends or

other distributions or payments on its capital stock, or redeemed
or

repurchased, or agreed to redeem or repurchase, any shares of its
capital stock;

(x) made any loans or advances to any person, or assumed, guaranteed,
endorsed

or otherwise became responsible for the obligations of any person;
or (xi)

incurred any indebtedness for borrowed money (except for endorsement,
for

collection or

                                     
-13-

 

 

S1_EX-36<PAGE>

 

 

deposit of negotiable instruments received in the ordinary and usual
course of

business).

           4.9
Adverse Developments. Except as otherwise expressly provided or

set forth in, or required by, this Agreement, since the Balance
Sheet Date,

there have been no changes in the properties, operations or financial
condition

of UNICO, and no event has occurred other than in the ordinary
and usual course

of business which could be reasonably expected to have a materially
adverse

effect upon the business of UNICO, and UNICO does not know of any
development or

threatened development of a nature that is, or which could be reasonably

expected to have a materially adverse effect upon the business
of UNICO or upon

any of its assets or properties, including, without limitation,
the loss of any

licenses or permits, suppliers, customers or employees, which loss
would be of a

materially adverse nature. This representation will also be true
on the Closing

date.

           4.10
Taxes. All taxes, including, without limitation, income,

property, sales, use, franchise, capital stock, excise, added value,
employee's

income withholding, social security and unemployment taxes imposed
by the United

States, any state or any foreign county, or by any other taxing
authority, which

have or may have become due or payable by UNICO and all interest
and penalties

thereon, whether disputed or not, have been paid in full or adequately
provided

for by reserves shown in its books of account; all deposits required
by law to

be made by UNICO with respect to estimated income, franchise and
employees'

withholding taxes have been duly made; and all tax returns, including
estimated

tax returns, required to be filed have been duly filed. No extension
of time for

the assessment of deficiencies for any year is in effect. No deficiency
is

proposed or, to the knowledge of UNICO, threatened against UNICO.

           4.11
Ownership of Assets. UNICO owns outright, and has good and

marketable title to all of its assets, properties and business
(including all

assets reflected in the Balance Sheet, except as the same may have
been disposed

of in the ordinary course of business since the Balance Sheet Date),
free and

clear of all liens, mortgages, pledges, conditional sales agreements,

restrictions on transfer or other encumbrances or charges, except
those listed

on Exhibit 4.11. Exhibit 4.11 sets forth a true and complete list
and brief

description of all patents, copyrights, trademarks, trade names
and other

similar intangible assets which are either owned by UNICO or in
which UNICO has

an interest. Except as set forth in Exhibit 4.11, no other person,
firm or

corporation has any proprietary or other interest in any such intangible
assets.

Such assets so owned or leased are, in the reasonable business
judgment of

UNICO, sufficient to permit UNICO to conduct its business as now
conducted.

Except as set forth in Exhibit 4.11, UNICO is not a party to or
bound by any

license or agreement requiring the payment to any person, firm
or corporation of

any royalty. UNICO does not know, or have reasonable grounds to
know of, any

violation by

                                     
-14-

 

S1_EX-37<PAGE>

 

 

others of the trademark, trade name or patent rights of UNICO. UNICO
is not

infringing upon any patent, copyright, trade name or trademark
or otherwise

violating the rights of any third party with respect thereto, and
no proceedings

have been instituted or, to the knowledge of UNICO are threatened,
and no claim

has been received by UNICO alleging any such violation.

           4.12
Insurance. Exhibit 4.12 sets forth a list and brief description

of all policies of fire, liability and other forms of insurance
held by UNICO as

of the date hereof. Except as set forth in Exhibit 4.12, such policies
are

valid, outstanding and enforceable policies, as to which premiums
have been paid

currently. Except as set forth in said Exhibit 4.12, UNICO does
not know of any

state of facts, or of the occurrence of any event which might reasonably
form

the basis for any claim against UNICO not fully covered by insurance
for

liability on account of any express or implied warranty or tortious
omission or

commission.

           4.13
Litigation, Compliance with Law. Except as set forth in Exhibit

4.13, there are no actions, suits, proceedings or governmental
investigations

relating to UNICO or to any of its properties, assets or business
pending or, to

the knowledge of UNICO, threatened, or any order, injunction, award
or decree

outstanding against UNICO or against or relating to any of its
respective

properties, assets or business; and UNICO knows of no basis for
any such action,

suits or proceedings within the past two years or any such governmental

investigation, orders, injunctions or decrees. UNICO is in not
in violation of

any law, regulation, ordinance, order, injunction, decree, award
or other

requirement of any governmental body, court or arbitrator relating
to its

properties, assets or business which could be reasonably expected
to have a

materially adverse effect upon the business of UNICO.

           4.14
Real Property. Exhibit 4.14 sets forth a brief description of

all real property which is owned by, or leased to UNICO. UNICO
owns outright the

fee simple title in and to the real properties shown on said Exhibit
4.14 as

being owned by UNICO, free and clear of all claims, liens, mortgages,
charges,

or encumbrances of any nature whatsoever, except as otherwise described
in

Exhibit 4.14. The real property leases described in Exhibit 4.14
that relate to

the leased properties described therein are now in full force and
effect, and

all amounts payable thereunder have been paid. Except as set forth
in Exhibit

4.14, none of such leases could reasonably be expected to result
in material

liability for restoration of premises. All uses of such owned or
leased property

by UNICO conform, in all material respects, to all applicable building
and

zoning ordinances, laws, and regulations and, in the case of leased
property, to

all terms of the leases relating thereto.

           4.15
Agreements and Obligations, Performance. Except as listed and

briefly described in Exhibit 4.15 (the "Listed Agreements") UNICO
is not a party

to, or bound by any: (i) written

                                     
-15-

 

S1_EX-38<PAGE>

 

 

or oral agreement or other contractual commitment, understanding
or obligation

which involves aggregate payments or receipts in excess of $5,000
that cannot be

canceled on thirty (30) days or less notice without penalty; (ii)
contract,

arrangement, commitment or understanding with its customers or
any officer,

employee, shareholder, director, representative or agent thereof
for the

repurchase of products, sharing of fees, the rebating of charges
to such

customers, bribes, kickbacks from such customers or other similar
arrangements;

(iv) contract for the purchase or sale of any materials, products
or supplies

for a fixed term; (v) contract of employment with any officer or
employee not

terminable at will without penalty or premium or any continuing
obligation of

liability; (vi) deferred compensation, bonus or incentive plan
or agreement not

cancelable at will without penalty or premium or any continuing
obligation or

liability; (vii) management or consulting agreement not terminable
at will

without penalty or premium or any continuing obligation or liability;
(viii)

lease for real or personal property (including borrowings thereon),
license or

royalty agreement; (ix) union or other collective bargaining agreement;
(x)

agreement, commitment or understanding relating to indebtedness
for borrowed

money; (xi) contract which, by its terms, requires the consent
of any party

thereto to the consummation of the transactions contemplated hereby;
(xii)

contract containing covenants limiting the freedom of UNICO to
engage or compete

in any line or business with any person in any geographical area;
(xiii)

contract or option relating to the acquisition or sale of any business;
(xiv)

voting trust agreement or similar shareholders' agreement; (xv)
other contract,

agreement, commitment or understanding which materially affects
any of UNICO's

properties, assets or business, whether directly or indirectly,
or which was

entered into other than in the ordinary course of business. A true
and correct

copy of each of the written Listed Agreements has been delivered
to SGI. UNICO

has in all material respects performed all obligations required
to be performed

by it to date under all of the Listed Agreements, is not in default
in any

material respect under any of the Listed Agreements and has received
no notice

of any default or alleged default thereunder which has not heretofore
been cured

or which notice has not heretofore been withdrawn. UNICO knows
of no material

default under any of the Listed Agreements by any other party thereto
or by any

other person, firm or corporation bound thereunder.

           4.16
Condition of Assets. All machinery and equipment regularly used

by UNICO in the conduct of its business is in operating condition
and repair,

ordinary wear and tear excepted. The inventories of UNICO are substantially
in

usable and saleable condition and in reasonable balance, and such
inventory in

the aggregate is saleable at least at the value at which it is
carried on

UNICO's books.

           4.17
Accounts Receivable. To the knowledge of UNICO, all of the

accounts receivable reflected in the books of account of UNICO
are valid and

arose in the ordinary course of its business, from

                                     
-16-

 

S1_EX-39<PAGE>

 

 

the sale of services or goods, and UNICO does not know, or have
reason to know,

of any valid defense or right of set-off to the rights of UNICO
to collect such

accounts receivable in the full amounts shown on such books of
account less any

reserves on the Balance Sheet.

           4.18
Permits and Licenses. Exhibit 4.18 sets forth all permits,

licenses, orders, franchises and approvals from all federal, state,
local and

foreign governmental regulatory bodies held by UNICO. UNICO has
all permits,

license, orders and approvals of all federal, state, local and
foreign

governmental or regulatory bodies required of it to carry on its
business as

presently conducted; all such permits, licenses, orders, franchises
and

approvals are in full force and effect, and to the knowledge of
UNICO, no

suspension or cancellation of any of such permits, licenses, etc.,
is

threatened; and UNICO is in compliance in all material respects
with all

requirements, standards and procedures of the federal, state, local
and foreign

governmental bodies which have issued permits, licenses, orders,
franchises and

approvals. Exhibit 4.18 also sets forth a brief description of
all motor

vehicles owned or leased by UNICO and the state of title thereof.

           4.19
Banking Arrangements. Exhibit 4.19 sets forth the name of each

bank in or with which UNICO has an account, credit line or safety
deposit box,

and a brief description of each such account, credit line or safety
deposit box

including the names of all persons currently authorized to draw
thereon or

having access thereto, and the names of all persons, if any, now
holding powers

of attorney from UNICO and a summary statement of the terms thereof.

           4.20
Interest in Assets. Except as set forth in Exhibit 4.20, none of

UNICO'S officers, directors, or shareholders of greater than 5%
of the

outstanding shares, owns any property or rights, tangible or intangible,
used in

or related, directly or indirectly, to the business of UNICO.

           4.21
Salary Information. Exhibit 4.21 contains a list of the names

and current salary rates of and bonus commitments to all present
officers of

UNICO, and the names and current annual salary rates of all other
persons

employed by UNICO whose annual salaries exceed $25,000.00.

           4.22
Employee Benefit Plans. Except as set forth in Exhibit 4.22,

UNICO maintains no "pension" and "welfare" benefit plans (within
the respective

meanings of sections 3(2) and 3(1) of the Employee Retirement Income
Security

Act of 1974, as amended ("ERISA")), nor does it make employer contributions
with

respect to its employees. UNICO acquired no such plans and assumed
no such

contribution obligations in connection with the acquisition of
its existing

business.

 

                                     
-17-

 

 

 

S1_EX-40<PAGE>

 

 

           4.23
No Breach. Neither the execution and delivery of this Agreement

by UNICO nor compliance by UNICO with any of the provisions hereof
nor the

consummation of the transactions contemplated hereby, will:

                   
(a) violate or conflict with any provision of the

Certificate of Incorporation or By-Laws of UNICO;

                   
(b) violate, or with notice or the passage of time, result\

in the material breach or termination of, or otherwise give any
contracting

party the right to terminate, or declare a material default under,
the terms of

any agreement or other document or undertaking, oral or written
to which UNICO

is a party or by which either its properties or assets may be bound
(except for

such violations, conflicts, breaches or defaults as to which required
waivers or

consents by other parties have been, or will, prior to the Closing,
be,

obtained);

                   
(c) result in the creation of any lien, security interest,

charge or encumbrance upon any of the properties or assets of UNICO
pursuant to

the terms of any such agreement or instrument;

                   
(d) violate any judgment, order, injunction, decree or award

against, or binding upon, UNICO or upon its properties or assets;
or

                   
(e) violate any law or regulation of any jurisdiction

relating to UNICO or any of its securities, assets or properties.

           4.24
Brokers. All negotiations relative to this Agreement and the

transactions contemplated hereby have been carried on directly
between SGI and

UNICO without the intervention of any broker, finder, investment
banker or other

third party except one party, to be paid by SGI, and another party,
to be paid

by UNICO. Except for such parties, neither UNICO or SGI have engaged,
consented

to, or authorized any broker, finder, investment banker or other
third party to

act on its behalf, directly or indirectly, as a broker or finder
in connection

with the transaction contemplated by this Agreement.

           4.25
Labor Discussions. Except with respect to the agreements listed

in Exhibit 4.15 pursuant to Section 4.15(ii), UNICO is not, and
has not, during

the past three years, been involved in any labor discussions with
any unit or

group seeking to become the bargaining unit for any of its employees.
With

respect to said Agreements, Exhibit 4.15 sets forth a description
of the status

thereof, including any demands or proposals with respect to the
renewal,

extension or replacement thereof.

           4.26
Change of Name. UNICO has not conducted business under any name

during the past three (3) years except those set forth on Exhibit
4.26.

                                     
-18-

 

\

S1_EX-41<PAGE>

 

 

           4.27
Backlog. Exhibit 4.27 sets forth as of November 30, 1997 the

name, aggregate contract price, revenues received to date and balance
remaining

upon all orders then in progress or under contract. The aggregate
backlog of

UNICO as at November 30, 1997 is set forth in Exhibit 4.27.

           4.28
Environmental. Except as previously disclosed or set forth on

Exhibit 4.28, neither UNICO nor any previous owner, tenant, occupant
or user of

any real property of UNICO, used, generated, manufactured, installed,
released,

discharge, stored or disposed of any "Hazardous Materials," as
defined below,

on, under, in or about the side of any such property. The term
"Hazardous

Materials" shall mean any waste material which is regulated by
any state or

local governmental authority in the states in which UNICO and its
subsidiaries,

if any, conduct business, or the United States Government, including,
but not

limited to, any material or substance which is (i) defined as a
"hazardous

waste," "hazardous material," "hazardous substance," "extremely
hazardous

waste," or "restricted hazardous waste" under any provision of
California Law,

(ii) petroleum, (iii) asbestos, (iv) designated as a "hazardous
substance"

pursuant to Section 311 of the Clean Water Act, 33 U.S.C. 1251
et seq. (33

U.S.C. 1321) or listed pursuant to Section 307 of the Clean Water
Act (33 U.S.C.

1317), (v) defined as a "hazardous waste" pursuant to Section 1004
of the

Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq.
(42 U.S.C. 6903),

or (vi) defined as a "hazardous substance" pursuant to Section
101 of the

Comprehensive Environmental Response, Compensation, and Liability
Act, 42 U.S.C.

6901 et seq. (42 U.S.C. 9601). The current operations of UNICO
and its current

and past use comply and then complied; with all applicable laws
and governmental

regulations including all applicable federal, state and local laws,
ordinances,

and regulations pertaining to air and water quality, Hazardous
Materials, waste,

disposal or other environmental matters, including the Clean Water
Act, the

Clean Air Act, the Federal Water Pollution Control Act, the Solid
Waste Disposal

Act, the Resource Conservation Recovery Act, the Comprehensive
Environmental

Response, Compensation and Liability Act, and the statutes, rules,
regulations

and ordinances of the state, city and country in which such property
is located.

All sewage and waste discharge at such property is and has been
discharged in

compliance with applicable federal, state and local law. No wells
of any kind

which may exist on such property have or have been receiving any
discharges.

There are no underground storage tanks of any kind at any such
property.

           4.29
Untrue or Omitted Facts. No representation, warranty or

statement by UNICO in this Agreement contains any untrue statement
of a material

fact, or omits or will omit to state a fact necessary in order
to make such

representations, warranties or statements not materially misleading.
Without

limitation of the foregoing, there is no fact known to UNICO that
has had, or

which may be reasonably expected to have, a materially adverse
effect on UNICO

or any of

                                     
-19-

 

 

S1_EX-42<PAGE>

 

 

its assets, properties and business and that has not been disclosed
in writing

to UNICO.

 

                                   
ARTICLE V

                             
PRE-CLOSING COVENANTS

           UNICO
and SGI each hereby covenant to the other that, from and after

the date hereof, and until the Closing or earlier termination of
this Agreement:

           5.1
Access. It shall afford to the officers, attorneys, accountants

and other authorized representatives of the other free and full
access, during

regular business hours and upon reasonable notice, to its books,
records,

personnel and properties (including, without limitation, the work
papers

prepared by its auditors) so that such other party may have full
opportunity to

make such review, examination and investigation as it may desire
of its

respective business and affairs. It will cause its employees, accountants
and

attorneys to cooperate fully with said review, examination and
investigation and

to make full disclosure to the other party of all material facts
affecting their

respective financial conditions and business operations. All material
disclosed

will be held in strict confidence by the recipient.

           5.2
Conduct of Business. It will conduct its business only in the

ordinary and usual course and make no material change in any of
its policies

without the prior written consent of the other, which shall not
be unreasonably

withheld or delayed.

           5.3
Insurance. It will maintain in force the insurance policies

listed in Exhibits 3.12 and 4.12 as the case may be, except to
the extent that

they may be replaced with equivalent policies.

           5.4
Liabilities. It shall not incur any obligation or liability,

absolute or contingent, except for those incurred in the ordinary
and usual

course of its business; nor shall it pay any obligation or liability
other than:

(i) the foregoing obligations and liabilities, (ii) debts, liabilities,
and

obligations set forth in its Balance Sheet; (iii) debts, liabilities
and

obligations arising after the Balance Sheet Date in the ordinary
course of its

business; and (iv) debts, liabilities and obligations under the
contracts,

agreements, past practices, arrangements, relationships, documents
and

instruments listed, described or contained in this Agreement or
in the Exhibits

annexed to this Agreement.

           5.5
Preservation of Business. It will use its best efforts to

preserve its business organization intact, to keep available the
services of its

present officers, employees and consultants, and to preserve its
goodwill.

 

                                     
-20-

 

 

 

S1_EX-43<PAGE>

 

 

           5.6
No Breach. It will (i) use its best efforts to assure that all of

its representations and warranties contained herein are true in
all material

respects as at the Closing as if repeated at the Closing; (ii)
not voluntarily

take any action or do anything which will cause a breach of or
default

respecting such covenants, representations or warranties; and (iii)
promptly

notify the other of any event or fact which represents or is likely
to cause

such a breach or default.

           5.7
No Negotiations. It will not enter into or conduct negotiations,

or enter into any agreement or understanding, for the sale or possible
sale of

any of its securities or assets, with anyone other than the other
unless the

Closing shall not have occurred by February 15, 1998.

 

                                  
ARTICLE VI

           
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF UNICO TO CLOSE

           The
obligations of UNICO to enter into and complete the Closing, is

subject to the fulfillment, prior to or on the Closing Date, of
each of the

following conditions, any one or more of which may be waived by
UNICO (except

when the fulfillment of such condition is a requirement of law).

           6.1
Representations and warranties. All representations and

warranties of SGI contained in this Agreement and in any written
statement

(including financial statements), exhibit, certificate, schedule
or other

document delivered pursuant hereto or in connection with the transactions

contemplated hereby shall be true and correct in all material respects
as at the

Closing Date, as if made at the Closing and as of the Closing date.

           6.2
Covenants. SGI shall have performed and complied in all material

respects with all covenants and agreements required by this Agreement
to be

performed or complied with by it prior to or at the Closing.

           6.3
No Actions. No action, suit, proceeding or investigation shall

have been instituted, and be continuing before a court or before
or by a

governmental body or agency, and be unresolved, to restrain or
to prevent or to

obtain damages in respect of, the carrying out of the transactions
contemplated

hereby, or which might materially affect the right of UNICO to
own the Shares or

to operate or control the assets, properties and business of SI
after the

Closing Date, or which might have a materially adverse effect thereon.

           6.4
Consents, Licenses and Permits. SGI shall have obtained all

consents, licenses and permits of third parties necessary for the
performance by

it of all of its obligations under this Agreement, and such other
consents, if

any, to prevent (i)

                                     
-21-

 

 

S1_EX-44<PAGE>

 

 

agreements of SGI from terminating, the termination of which, in
the aggregate,

would have a material adverse effect on the business, financial
condition or

assets of SGI, or (ii) any material indebtedness of SGI from becoming
due or

being subject to becoming due with the passage of time or on notice
as a result

of the performance of this Agreement, any other provisions of this
Agreement to

the contrary notwithstanding.

           6.5
Certificate. UNICO shall have received a certificate dated the

Closing Date, signed by the President and Secretary of SGI as to
the

satisfaction of the conditions contained in Sections 6.1, 6.2,
6.3, 6.4 and 6.6.

           6.6
No Material Adverse Change. There shall have been no material

adverse change at the Closing Date in the business, assets and
properties,

financial status or prospects of SGI since the Balance Sheet Date.

 

                                  
ARTICLE VII

                   
CONDITIONS PRECEDENT TO THE OBLIGATION OF

                                 
SGI TO CLOSE

           The
obligation of SGI to enter into and complete the Closing is

subject to the fulfillment, prior to or on the Closing Date, of
each of the

following conditions, any one or more of which may be waived by
SGI (except when

the fulfillment of such condition is a requirement of law).

           7.1
Representations and warranties. All representations and

warranties of UNICO contained in this Agreement and in any written
statement,

schedule or other document delivered pursuant hereto or in connection
with the

transactions contemplated hereby shall be true and correct in all
material

respects as at the Closing Date, as if made at the Closing and
as of the Closing

Date.

           7.2
Covenants. UNICO shall have performed and complied in all

material respects with all covenants and agreements required by
this Agreement

to be performed or complied with by it prior to or at the Closing.

           7.3
No Actions. No action suit, proceedings, or investigation shall

have been instituted, and be continuing, before a court or before
or by a

governmental body or agency, or have been threatened, and be unresolved,
to

restrain or prevent, or obtain damages in respect of, the carrying
out of the

transactions contemplated hereby.

           7.4
Consents, Licenses and Permits. UNICO shall have obtained all

consents, licenses and permits of third parties necessary for the
performance by

UNICO of all of its obligations

                                     
-22-

 

 

S1_EX-45<PAGE>

 

under this Agreement, and such other consents, if any, to prevent;
(i)

agreements of UNICO from terminating, the termination of which,
in the

aggregate, would have a material adverse effect on the business,
financial

condition or assets of UNICO, or (ii) any material indebtedness
of UNICO from

becoming due or being subject to becoming due with the passage
of time or on

notice as a result of the performance of this Agreement, any other
provisions of

this Agreement to the contrary notwithstanding.

           7.5
Certificate. SGI shall have received a certificate of UNICO,

dated the Closing Date, signed by the President and Secretary of
UNICO as to the

satisfaction of the conditions contained in Sections 7.1, 7.2,
7.3 and 7.4 and

7.6.

           7.6
No Material Adverse Change. There shall have been no material

adverse change at the Closing Date in the business, assets and
properties,

financial status or prospects of UNICO since the Balance Sheet
Date.

           7.7
SEC and Nasdaq Compliance UNICO shall be in full compliance with

all reporting requirements of the Securities and Exchange Commission,
including

required amendments to filings and reports, and UNICO's Common
Stock shall be

listed for trading on Nasdaq.

 

                                 
ARTICLE VIII

                                    
CLOSING

           8.1
Time and Location. The Closing provided for herein shall take

place at the offices of Tenzer Greenblatt LLP, effective 60 days
from the date

hereof or at such other time and place as may be mutually agreed
to by the

parties hereto. Such date is referred to in this Agreement as the
"Closing

Date".

           8.2
Items to be Delivered by SGI. At the Closing, SGI will deliver or

cause to be delivered to UNICO:

                   
(a) Certificates representing the Shares in accordance with

Section 1.1 hereof, accompanied by all instruments and documents
as in the

opinion of UNICO's counsel, shall be necessary to effect the transfer
of and to

vest title in and to the Shares in UNICO, free and clear of all
manner of liens,

pledges, encumbrances, charges and claims thereon;

                   
(b) The certificates required by Section 6.5;

                   
(c) Such other certified resolutions, documents and

certificates as are required to be delivered by SGI and UNICO pursuant
to the

provisions of this Agreement.

                                     
-23-

S1_EX-46<PAGE>

 

           8.3
Items to be Delivered by UNICO. At the Closing, UNICO will

deliver or cause to be delivered to SGI:

                   
(a) The certificates required by Sections 7.5;

                   
(b) Such other certified resolutions, documents and

certificates as are required to be delivered by UNICO pursuant
to the provisions

of this Agreement.

                   
(c) The preferred and common stock certificates to be

delivered hereunder.

 

                                  
ARTICLE IX

                 
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION

           9.1
Survival. SGI, SI and UNICO and UNICO agree that their respective

representations, warranties, covenants and agreements contained
in this

Agreement shall survive the Closing for a term of three (3) years
with the

exception of those regarding taxes which shall survive until the
expiration of

the respective periods within which such taxes may be assessed.

           9.2
Indemnification. SGI and UNICO each agree to save, defend and

indemnify the other against and hold it harmless from any and all
liabilities,

of every kind, nature and description, fixed or contingent (including,
without

limitation, counsel fees and expenses in connection with any action,
claim or

proceeding relating to such liabilities) arising out of any misrepresentation

made by such indemnifying party or any transaction or event commencing
or

occurring on or prior to the Closing Date, which is not fully disclosed
or

provided for in UNICO's or UNICO's Balance Sheet, this Agreement
or the exhibits

hereto, including, without limitation, any tax liabilities to the
extent not so

reflected or reserved against in the respective Balance Sheets.
Any valid claims

for indemnification shall be paid for with common shares, meaning
if SGI must

indemnify, UNICO may cancel outstanding shares held by SGI and
if UNICO must

indemnify it will issue additional shares to SGI. In either event,
the shares

will be valued at market value at the time of cancellation or issuance,
as the

case may be.

           9.3
Defense of Claims. An indemnified party shall notify the

indemnifying party with reasonable promptness of any claim asserted
against it

in respect of which the indemnifying party may be liable under
this Agreement,

which notification shall be accompanied by a written statement
setting forth the

basis of such claim and the manner of calculation thereof. The
indemnifying

party shall have the right to defend any such claim at its own
expense and with

counsel of its choice; provided, however, that such counsel shall
have been

approved by the indemnified party prior to engagement; which approval
shall not

be unreasonably withheld or delayed; and

                                     
-24-

 

S1_EX-47<PAGE>

provided further, that the indemnified party may participate in
such defense, if

it so chooses, with its own counsel and at its own expense.

           9.4
Rights Without Prejudice. The rights of UNICO and SGI under this

Article IX are without prejudice to any other rights or remedies
that either may

have by reason of this Agreement or as otherwise provided by law.

 

                                   
ARTICLE X

                            
TERMINATION AND WAIVER

           10.1
Termination. Anything herein or elsewhere to the contrary

notwithstanding, this Agreement may be terminated and the transactions
provided

for herein abandoned at any time prior the Closing Date:

                    
(a) By mutual consent of the Board of Directors of UNICO

and SGI;

                    
(b) By UNICO if any of the conditions set forth in Article

VI hereof shall not have been fulfilled on or prior to the Closing
Date, or

shall become incapable of fulfillment at any time, and shall not
have been

waived;

                    
(c) By SGI if any of the conditions set forth in Article

VII hereof shall not have been fulfilled on or prior to the Closing
Date, or

shall have become incapable of fulfillment at any time, and shall
not have been

waived;

                    
(d) By SGI or UNICO if any material legal action or

proceedings shall have been instituted or threatened seeking to
restrain,

prohibit, invalidate or otherwise affect the consummation of the
transactions

contemplated by this Agreement which makes it inadvisable, in the
judgment of

SGI or UNICO, to consummate same.

           In
the event that the Agreement is terminated as described above,

this Agreement shall be void and of no force and effect, without
any liability

or obligation on the part of any of the parties hereto.

           10.2
Waiver. Any condition to the performance of either party which

legally may be waived on or prior to the Closing Date may be waived
at any time

by the party entitled to the benefit thereof by action taken or
authorized by an

instrument in writing executed by the relevant party. The failure
of any party

at any time or times to require performance of any provision hereto
shall in no

manner effect the right of such party at a later time to enforce
the same. No

waiver by any party of the breach of any term, covenant, representation
or

warranty contained in this Agreement shall release or affect any
liability

resulting from such breach, and no

                                     
-25-

 

S1_EX-48<PAGE>

waiver of any nature, whether by conduct or otherwise, in any one
or more

instances, shall be deemed to be or construed as a further or continuing
waiver

of any such condition or of any breach of any other term, covenant,

representation or warranty of this Agreement.

 

                                  
ARTICLE XI

                           
MISCELLANEOUS PROVISIONS

           11.1
Expenses. Each of the parties hereto shall bear its own expenses

in connection herewith.

           11.2
Confidential Information. Each party agrees that such party and

its representatives will hold in strict confidence all information
and documents

received from the other parties and, if the transactions herein
contemplated

shall not be consummated, each party will continue to hold such
information and

documents in strict confidence and will return to such other party
all such

documents (including the documents annexed to this Agreement) then
in such

receiving party's possession without retaining copies thereof;
provided,

however, that each party's obligations under this Section 11.2
to maintain such

confidentiality shall not apply to any information or documents
that are in the

public domain at the time furnished by the others or that become
in the public

domain thereafter through any means other than as a result of any
act of the

receiving party or of its agents, officers, directors or shareholders
which

constitutes a breach of this Agreement, or that are required by
applicable law

to be disclosed.

           11.3
Modification, Termination or Waiver. This Agreement may be

amended, modified, superseded or terminated, and any of the terms,
covenants,

representations, warranties or conditions hereof may be waived,
but only by a

written instrument executed by the party waiving compliance. The
failure of any

party at anytime or times to require performance of any provision
hereof shall

in no manner affect the right of such party at a later time to
enforce the same.

           11.4
Publicity. The parties agree that no publicity release or other

public announcement concerning the transactions contemplated by
this Agreement

shall be issued by either party without the advance approval of
both the form

and substance of the same by the other party and its counsel, which
approval, in

the case of any publicity, release or other public announcement
required by

applicable law, shall not be unreasonably withheld or delayed.

           11.5
Notices. Any notice or other communication required or which may

be given hereunder shall be in writing and either be delivered
personally or by

reputable overnight delivery service, or be mailed, certified or
registered

mail, postage prepaid, as follows:

                                     
-26-

S1_EX-49<PAGE>

 

          If to UNICO,
to:

                    
Mr. William Hagler

                    
P.O. Box 35

                    
Farmington, NM 87499

                    
With a copy to:

                    
Mr. Thad H. Turk, Esq.

                    
P.O. Box 27560

                    
Albuquerque, NM 87125

           and
if to SGI, to:

                    
Mr. Ike Suri

                    
Starlicon Group, Inc.

                    
48507 Milmont Drive, Suite B

                    
Fremont, CA 94538

           With
a copy to:

                    
Mr. Benjamin  Raphan, Esq.

                    
Tenzer Greenblatt LLP

                    
405 Lexington Avenue

                    
New York, NY  10174

           The
parties may change the persons and addresses to which the notices

or other communications are to be sent by giving written notices
of any such

change in the manner provided herein for giving notice.

           11.6
Binding Effect and Assignment. This Agreement shall be binding

upon and inure to the benefit of the successors and assigns of
the parties

hereto; provided, however, that no assignment of any rights or
delegation of any

obligations provided for herein may be made by any party without
the express

consent of the other parties.

           11.7
Entire Agreement. This Agreement contains the entire agreement

between the parties with respect to the subject matter hereof.

           11.8
Exhibits. All Exhibits annexed hereto and the documents and

instruments referred to herein or required to be delivered simultaneously

herewith or at the Closing are expressly made a part of this Agreement
as fully

as though completely set forth herein, and all references to this
Agreement

herein or in any of such Exhibits, documents or instruments shall
be deemed to

refer to and include all such Exhibits, documents and instruments.

           11.9
Governing Law. This Agreement shall be governed by and construed

in accordance with the laws of the State of California

                                     
-27-

 

S1_EX-50<PAGE>

applicable to agreements made and to be performed entirely within
that state,

excluding the choice of law rules thereof.

           11.10
Counterparts. This Agreement may be executed in counterparts,

each of which shall be deemed to be an original, but which together
shall

constitute one and the same instrument.

           11.11
Section Headings. The section headings contained in this

Agreement are inserted for convenience of reference only and shall
not affect

the meaning or interpretation of this Agreement.

           11.12
Exhibit. This Agreement may be executed prior to the

preparation of all Exhibits. If such occurs, this shall not be
deemed a

completed Agreement until the Exhibits have been prepared, exchanged,
accepted

and initialed or signed by SGI and UNICO.

           11.13
Continued Nasdaq Listing. The parties acknowledge that the

transaction contemplated by this Agreement will constitute a change
in control,

business or financial structure as defined by Nasdaq. Accordingly,
after

Closing, UNICO will be required to meet Nasdaq's Small Cap Market
Entry

Standards. The parties agree to use their best efforts to assure
UNICO's

continued Nasdaq listing.

 

                                     
-28-

 

 

 

S1_EX-51<PAGE>

 

 

           WITNESS
the execution of this Agreement as of the date first above

written.

 

UNICO, INC.                                
STARLICON GROUP,INC.

 

BY: /s/ WILLIAM M. HAGLER                  
BY: /s/ IKE SURI

    ---------------------------------          
--------------------------------

NAME: Mr. William Hagler                   
NAME: Mr. Ike Suri

      -------------------------------            
------------------------------

TITLE: CEO, Chairman                       
TITLE: President

       -----------------------------              
-----------------------------

 

STARLICON INTERNATIONAL,INC.

 

BY: /s/ SZETO, WING PO

    ---------------------------------

NAME: Szeto, Wing Po

      -------------------------------

TITLE: Vice President

      -------------------------------

 

                                     
-29-

 

 

 

 

 

S1_EX-52<PAGE>EXHIBIT 10.2

 NOVATION AGREEMENT

 BETWEEN

 UNICO, INC. AND STARLICON GROUP

 S1_EX-53<PAGE>

                              
NOVATION AGREEMENT

              
This NOVATION AGREEMENT ("the Agreement") is made and entered

into on June 26, 1998 by and between Unico, Inc., a New Mexico
corporation

("Unico") and Intermountain Refining Co., Inc. ("IRC"), a New Mexico

corporation, on the one hand, and Starlicon Group, Inc. ("SGI"),
a Nevada

corporation and Starlicon International ("SI"), a California corporation,
on the

other hand. SGI and SI will be collectively referred to herein
as "Starlicon".

                              
W I T N E S S E T H

              
WHEREAS, on February 21, Unico and SGI entered into a Stock

Purchase Agreement (the "Stock Purchase Agreement"), wherein and
whereby Unico

was to acquire all of the issued and outstanding shares of stock
of SI in

exchange for 5,476,190 shares of Unico common stock and 10,952
shares of Unico

convertible preferred stock, convertible into 10,952,000 shares
of common stock

("the Transaction");

 

              
WHEREAS, as part of fulfilling the requirements of the Agreement,

a dispute arose between Unico and Starlicon;

 

              
WHEREAS, on May 21, 1998, Unico filed a Complaint in the United

States District Court for the Central District of California entitled
Unico,

Inc. v. Starlicon Group, Inc., Starlicon International Corporation,
et al., Case

No. CV 98-3990 DT(SHx);

 

              
WHEREAS, the parties desire to resolve their differences in a

mutually beneficial and amicable way;

 

              
NOW THEREFORE, in consideration of the covenants contained

herein, and other good and valuable consideration, receipt of which
is hereby

acknowledge, the parties agree as follows:

 

        1.    
The effective date of the Transaction is changed to June 1, 1998

              
and Closing will be as of 12:00 a.m. June 26, 1998.

        2.    
The following sections of the Stock Purchase Agreement are

              
amended for purposes of this Agreement:

 

                                      
1

S1_EX-54<PAGE>

 

 

               
A.      Various dates which occur throughout the
Stock Purchase

                       
Agreement are amended in accordance with the following

                       
table:

 

              
Paragraph       Description          
Date Deleted  Amended Date

              
---------       -----------          
------------  ------------

              
First Line      Effective Date       
Nov. 30, 1997 June 01, 1998

              
3.6            
SI Financials         Nov. 30,
1997 June 30, 1998

              
3.6            
Audit Date           
60 days       June 30, 1998

              
3.7            
SI Bal. Sheet Date    Nov. 30, 1997 June 30, 1998

                              
(Two references)

              
3.27           
Backlog              
Nov. 30, 1997 June 30, 1998

              
4.6            
Unico Financials      Nov. 30, 1997 Feb. 28, 1998

              
4.7            
Unico Balance

                              
Sheet Date           
Nov. 30, 1997 Feb. 28, 1998

                              
(Two references)

              
4.27           
Backlog              
Nov. 30, 1997 Feb. 28, 1998

              
5.7            
Negotiations          Feb.
15, 1998 July 01, 1998

               
B.      Paragraph 2.1 is deleted and replaced
with the

                       
following: "Confidentiality Agreement. At the closing,

                       
or as soon thereafter as practicable, Unico's former

                       
officers will enter into a confidentiality agreement in

                       
which they agree not to disclose to any third party any

                       
confidential information related to SI or its business

                       
except as required to be disclosed by law. Such

                       
agreement shall be prepared by the New Unico, as defined

                       
below, shall be in form and substance reasonably

                       
satisfactory to such former officers and New Unico, and

                       
shall contain customary provisions."

               
C.      Paragraph 2.2 is deleted and replaced
with the

                       
following: "on Closing, all current officers and

                       
directors of Unico (excluding officers and directors of

                       
Intermountain Refining Co., Inc.) shall resign from such

                       
positions and as employees of Unico except as provided

                       
in Paragraph 18, below. The replacement board of

                       
directors of the New Unico, as defined below, will

                       
comply fully with the new Nasdaq requirements under the

                       
SmallCap Market System."

               
D.      All references to "Unico" in the Stock
Purchase

                       
Agreement shall be deemed to mean "Unico and its

                       
wholly-owned subsidiary, Intermountain Refining Co.,

                       
Inc.", where appropriate, and all representations and

                       
warranties of Unico shall be interpreted in the context

                       
of this Agreement.

               
E.      The number 986,590 on the third line of
Paragraph 4.2 is

                       
deleted and replaced with the number 1,129,308.

               
F.      The phrase "will be" in the last sentence
of Paragraph

                       
4.6 is deleted and replaced with "were."

               
G.      The first sentence of Paragraph 8.1 is
deleted and

                       
replaced with the following: "The closing provided for

                       
herein shall take place at the offices of Kristin M.

                       
Cano on June 26, 1998.

               
H.      Paragraph 9.1 is amended by striking the
words "SGI, SI

                       
and Unico" and inserting "SGI and SI".

                                       
2

S1_EX-55<PAGE>

 

 

              
I.     Paragraph 9.2 is amended by deleting the second
reference

                     
to Unico on line 9 and inserting "SI" in its place. IRC is

                     
specifically excluded from the operation of this

                     
paragraph.

              
J.     At Paragraph 11.5, all references to "Mr. Thad
H. Turk and

                     
Mr. Benjamin Raphan" are deleted and replaced with Kristin

                     
M. Cano, One Corporate Plaza, Suite 110, Newport Beach,

                     
California and Mr. Jeffrey M. Howard, One Corporate Plaza,

                     
Suite 110, Newport Beach, California.

        3.    
The following sections of the Stock Purchase Agreement are

              
amended unilaterally by SGI.

              
A.     Paragraph 1.2 Base Purchase Price is deleted
and replaced

                     
with the following: "Purchase Price. The purchase price

                     
for the shares shall consist of 5,476,190 shares of Unico

                     
$0.20 par value Common Stock and 5,476 shares of Unico

                     
Series A Preferred Stock. No fractional shares of either

                     
class of stock will be issued."

              
B.     Paragraph 1.2.1 is deleted and replaced with
the

                     
following: "For the purpose of this [Stock Purchase]

                     
Agreement, Unico Common and Series A Preferred Stock shall

                     
be deemed to have values of $0.40 and $400.00 per share

                     
respectively."

              
C.     Paragraph 1.2.2(a) is deleted.

              
D.     Paragraph 1.3 is deleted.

        4.    
The following provisions of the Certificate of Designation for

              
Unico Series A Convertible Preferred Stock are amended for

              
purposes of this Agreement.

              
A.     The date "September 1, 1998" on the last line
of Section

                     
4(C) is deleted and replaced with the date "January 1,

                     
1999."

              
B.     Section 4(c)(i) is amended to reflect the following

                     
conversion dates and share amounts.

                     
Dates                            
Maximum Shares Converted

                     
-----                            
------------------------

                     
January 1, 1999-May 31, 1999      1825

                     
June 1, 1999-August 31, 1999      3650

                     
After September 1, 1999          
5476

        5.    
The following provisions of the Certificate of Designation for

              
Unico Series A Convertible Preferred Stock are amended

              
unilaterally by SGI.

             
A.      The value of "$1,400 par value" in the
Resolution is

                     
deleted and replaced with "$400 par value".

             
B.      The figure "15,000" on the last line in
Section 1 is

                     
deleted and replaced with the figure "5,476".

 

 

                                       
3

S1_EX-56<PAGE>

 

 

              
C.     The last two lines of the first paragraph of
Section 3 are

                     
deleted and replaced with the following" "their ownership

                     
thereof, an amount equal to Four Hundred Dollars ($400)

                     
per share."

              
D.     Section 4(c)(ii) is deleted.

       6.    
In repayment of an inter-company note and/or other debt reflected

             
in the Unico internal financial statements dated May 31, 1998 and

             
also as a contribution to capital, Unico will deliver good and

             
marketable title to all of the assets listed in Exhibit A attached

             
hereto, to Unico's wholly owned subsidiary Intermountain Refining

             
Co., Inc.("IRC"), a New Mexico corporation. From and after

             
closing, the management of IRC and its assets shall be at the sole

             
discretion of its current officers and a board of directors, to be

             
appointed.

       7.    
Starlicon and Unico each covenant and agree that Unico or

             
Starlicon will not, in any way, directly or indirectly, encumber,

             
pledge, lien, offer as security, enter into any security

             
agreement, affecting any of the assets or stock of IRC. Starlicon

             
and Unico each further covenant and agree that Unico or Starlicon

             
will not, in any way, directly or indirectly, cause or permit any

             
third party to encumber, pledge, lien, offer as security, enter

             
into any security agreement, affecting any of the assets or stock

             
of IRC. Upon the execution of this Agreement, Intermountain will

             
file a UCC-1 information statement, for the purpose of effecting

             
notice of this provision.

       8.    
Prior to the execution of this Agreement, Unico will deliver its

             
shares of IRC stock to and grant to Michael M. McGloin its

             
irrevocable proxy to vote the shares of IRC in accordance with

             
instructions from IRC's Board of Directors. Starlicon acknowledges

             
and agrees that after the execution of this Agreement, Starlicon,

             
as controlling shareholder or shareholders of Unico, relinquishes

             
all right to vote the shares of IRC stock or in any way attempt to

             
control the business and affairs of IRC.

       9.    
It is contemplated that Unico's current filing on Form 10K will be

             
made on or about June 12, 1998. The Stock Purchase Agreement and

             
this Agreement will be described in the Form 10K in the manner set

             
forth in Exhibit B, attached hereto. A copy of Note Q to Unico's

             
financial statements is attached as Exhibit B to this Agreement.

       10.    Upon
execution of this Agreement, Starlicon and the Starlicon

             
controlled Board of Directors of Unico ("the New Unico") will

             
assume full responsibility for applying to Nasdaq for the new

             
Small Cap listing or maintenance of the current listing, all as

             
required by Nasdaq due to the Stock Purchase Agreement and this

             
Agreement. The existing management of Unico and its Board of

             
Directors make no representations that such new listing or

             
continued maintenance will be obtained by the New Unico. Unico's

             
former officers will cooperate with the management of the New

             
Unico, if requested, pursuant to Paragraph 19 below, to apply for

             
the new Nasdaq listing.

       11.    William
N. Hagler ("Hagler") will grant to Kristin M. Cano his

             
irrevocable proxy to vote his shares in favor of this Agreement

             
and the Stock Purchase Agreement as amended herein, should

             
shareholder approval be required in order to apply for and obtain

             
a new listing on Nasdaq.

 

                                       
4

S1_EX-57<PAGE>

 

 

       12.    As soon
as is practicable for a diligent party, but not later than

             
November 30, 1998, the New Unico shall commence the Nasdaq listing

             
application process by filing an application that meets the Nasdaq

             
quantitative listing standards (without inclusion of any assets or

             
liabilities of IRC as of the date of such application) and,

             
thereafter, prosecute it to conclusion. Following the successful

             
conclusion of such listing application process, but no later than

             
April 1, 1999, the directors of IRC may, at their sole discretion,

             
consider a transaction involving IRC's stock, assets or business

             
prospects. However, if as of November 30, 1998, the New Unico

             
shall not have commenced the listing application process in the

             
manner described above, then no later than December 1, 1998, the

             
directors of IRC may, at their sole discretion, consider a

             
transaction involving IRC's stock, assets or business prospects.

             
In the event such a transaction contemplates a distribution of

             
IRC's stock or assets to holders of shares of Unico Common Stock,

             
such distribution would be at the Record Date and as defined

             
below.

             
A.     The Record Date to determine which holders of
shares of

                    
Unico Common Stock shall be entitled to the distribution is

                    
the earliest applicable date set forth in this Paragraph

                    
12, above.

             
B.     All shareholders of record on the Record Date
shall

                    
entitled to participate, pro rata, in any such distribution

                    
except those shareholders acquiring shares through and as a

                    
result of the Stock Purchase Agreement, as modified by this

                    
Agreement, and holders of shares issued by the New Unico

                    
between June 1, 1998 and the Record Date.

             
C.     If it is subsequently determined by New Mexico
counsel to

                    
IRC or Unico that approval of the New Unico shareholders is

                    
required to effect any such distribution, the Record Date

                    
for determining the shareholders entitled to vote shall be

                    
the Record Date. For purposes of such vote, only Kristin M.

                    
Cano shall hold the irrevocable proxy of the shareholders

                    
receiving shares pursuant to the Stock Purchase Agreement

                    
as modified by this Agreement and all shares issued between

                    
June 1, 1998 and the Record Date by the New Unico. Ms. Cano

                    
shall vote such shares in favor of such distribution or at

                    
the discretion of the IRC Board of Directors.

       13.    It is
contemplated that any distribution of IRC shares held by

             
Unico will be tax free pursuant to Section 355 of the Internal

             
Revenue Code of 1986. Management of IRC will require a tax opinion

             
from a tax attorney or tax accountant of their choice that such

             
distribution will be tax free. The New Unico will pay for or

             
otherwise reimburse IRC for the cost of obtaining such tax

             
opinion. Should it be determined that the transaction is not tax

             
free then, at the sole discretion of IRC's Board of Directors, IRC

             
may change or modify the transaction or require the New Unico to

             
pay any tax liability associated with the distribution in an

             
amount up to, and including, $200,000. In the event IRC's Board of

             
Directors determines, in its sole discretion, that such

             
distribution is not in the best interest of the shareholders

             
entitled to participate pursuant to Paragraph 12, they may

             
structure any other transaction favorable to such shareholders. If

             
it is determined that a shareholder vote is required for such

             
other transaction, then the requirements of Paragraph 12 C shall

             
apply.

       14.    In order
to accomplish any distribution that may be contemplated

             
in Paragraph 12, the shares of IRC stock to be distributed will

             
require registration with the United States Securities and

             
Exchange Commission and qualification with various state

             
securities

                                       
5

S1_EX-58<PAGE>

 

 

             
regulators. The New Unico will pay for all required audits, state

             
and federal filing fees, attorneys fees, printing and other fees

             
and expenses associated with such registration estimated to be

             
$125,000. The obligation of the New Unico and/or SI to pay the

             
fees and expenses set forth herein above shall be guaranteed

             
jointly and severally by Carol Mauer, Ike Suri and Mr. John Hwang

             
("the Guarantors") , in a form attached hereto as Exhibit C. The

             
execution of such guarantee by the Guarantors shall be a condition

             
to closing this Agreement.

       15.    At such
time as IRC is prepared to commence the registration

             
process described in Paragraph 14 above, an estimate of costs will

             
be submitted to the New Unico/SI solely for information purposes.

             
IRC will consider lower cost means of achieving such a

             
registration that may be suggested by Unico/SI, but is under no

             
obligation to adopt such suggestions.

       16.    Upon
execution of this agreement, Starlicon will deliver a check

             
to IRC in the amount of $25,000 payable to Kristin M. Cano Clients

             
Fund representing partial payment of attorney's fees incurred in

             
the matter that is the subject of this Novation Agreement. The

             
balance of such fees, estimated to be $30,000 shall be due and

             
payable in 30 days. Such $30,000 will be paid to Kristin M. Cano

             
Clients Fund at that time. Should the remaining fees be less than

             
$30,000, Kristin M. Cano will tender a refund to New

             
Unico/Starlicon. Should the remaining fees exceed $30,000, IRC

             
will bill New Unico/Starlicon for the balance. Copies of

             
attorney's statements shall be furnished by IRC, upon request;

             
however, only Kristin M. Cano, and no others, will review and

             
approve the bill of McGloin, Davenport, Severson & Snow for

             
fairness. If Kristin M. Cano approves the bill, such amount will

             
be paid to McGloin, Davenport, Severson & Snow.

       17.    Upon
execution of this Agreement, the New Unico will enter into a

             
retainer Agreement with Kristin M. Cano providing that it will use

             
the services of Ms. Cano for a minimum period of 12 months after

             
the closing for matters of corporate governance, SEC matters and

             
Nasdaq matters. The terms of this relationship will be

             
memorialized in a separate agreement satisfactory to the New Unico

             
and Kristin M. Cano. By executing this Agreement, Starlicon,

             
Unico, the New Unico, and IRC acknowledge that they will waive any

             
claim of conflict of interest as to Kristin M. Cano's

             
representation of SI and IRC in a separate agreement. In the event

             
that the new relationship between Kristin M. Cano and the New

             
Unico is terminated for any reason, the New Unico shall within 10

             
business days engage counsel reasonably acceptable to IRC to

             
perform the serviced contemplated by this Paragraph.

       18.    Upon
execution of this Agreement, Hagler and Hurt shall resign as

             
President and Secretary/Treasurer, respectively of Unico, and

             
shall be appointed to the temporary posts of Executive Vice

             
President and Assistant Secretary for the sole and exclusive

             
purpose of transferring the property reflected on Exhibit A to

             
IRC. At closing, the New Unico will provide an appropriate

             
resolution from the Board of Directors approving such appointments

             
and authorizing an irrevocable power of attorney granting Hagler

             
and Hurt full authority to affect the asset transfers contemplated

             
by this Agreement. The management and board of directors of the

             
New Unico will cooperate fully and expeditiously and take all

             
steps required and requested of them to effect the asset transfers

             
to IRC. In addition, Messrs. Hagler, Hurt, Hickey and Watson will

             
resign their positions on Unico's Board of Directors.

 

 

                                       
6

S1_EX-59<PAGE>

 

 

       19.    In order
to provide orderly implementation of the transaction

             
contemplated herein, Hagler and Hurt will consult the New Unico,

             
as requested, up to 10 hours per month, each, at the hourly rate

             
of $60.00 and $40.00, respectively, including travel time and

             
reasonable expenses, for a period of six months. Payment for such

             
services and costs shall be within 10 calendar days of receipt of

             
a bill from Hagler and Hurt. The terms and conditions of an

             
agreement for consulting services with Hagler and Hurt will be

             
memorialized in a separate agreement. As additional consideration

             
for providing these consulting services the New Unico grants to

             
Hagler a warrant to purchase 100,000 shares of Common Stock and to

             
Hurt stock options to purchase 50,000 shares of Common Stock both

             
of these at $1.40 per share. A Warrant reflecting the granting of

             
these options will be executed by the New Unico contemporaneously

             
with the closing.

       20.    Hagler,
Hurt and a representative of New Unico will meet and work

             
out an orderly transfer of the corporate records of Unico.

       21.    New Unico
will be prohibited from filing any proceeding under the

             
United States Bankruptcy Code within one year of the execution of

             
this Agreement.

       22.    Except
for the Stock Purchase Agreement, which shall remain in

             
full force and effect as modified by this Agreement, this

             
Agreement and the Agreements referred herein, sets forth the sole

             
and entire agreement between Unico, IRC and Starlicon, there are

             
no other agreements or understandings not set forth in this

             
Agreement between the parties and this Agreement supersedes any

             
and all prior or contemporaneous oral or written agreements or

             
understandings between the same parties concerning the subject

             
matter hereof. No modification, waiver or termination of this

             
Agreement, or any part thereof, shall be binding unless signed in

             
writing by all parties.

       23.    Unico's
former management shall approve the press release prepared

             
by the New Unico to announce the transactions contemplated herein.

             
Such approval shall not be unreasonably withheld. The SEC Form 8-K

             
prepared by the New Unico shall be approved by Ms. Cano as to

             
form.

       24.    Concurrent
with the execution of this Agreement, counsel for Unico

             
shall execute and deliver to counsel for Starlicon Dismissals with

             
Prejudice as to the entire action ("Dismissals") of all claims

             
asserted in Unico, Inc. v. Starlicon Group, Inc., Starlicon

             
International Corporation et al., Case No. CV 98-3990 DT (SHx).

       25.    This
Agreement may be executed in its original version or in any

             
copies, counterparts, or other duplicates, and this all signatures

             
need not appear on the same document.

       26.    If any
provision, paragraph, clause, or sentence in this Agreement

             
is found or declared to be illegal, void, invalid, or

             
unenforceable, the remaining provisions, paragraphs, clauses, and

             
sentences shall be severable and shall remain in full force and

             
effect. A void or invalid paragraph, clause, or provision shall be

             
severable from, and shall not affect the validity or

             
enforceability of, the remaining provisions of this Agreement.

       27.    This
Agreement shall be construed and enforced under the laws of

             
the State of California without giving effect to the principles

             
relating to conflicts of law. Any litigation commenced under this

             
Agreement shall be commenced within the State of California,

             
County of Orange.

 

 

                                       
7

S1_EX-60<PAGE>

        28.   
Each of the undersigned agrees and represents that he or she has

              
read this Agreement from beginning to end and fully understands

              
all of it, and has executed it on the date indicated below on

              
behalf of the respective parties.

        29.   
A photocopy of this document may be used with the same force and

              
effect as an original.

        30.   
This Agreement may be executed in its original version or in any

              
copies, counterparts, or other duplicates, and all signatures

              
need not appear on the same document.

 

 

                                         
   
Unico, Inc.

 

 

Dated:  June 25, 1998               
By:    /s/ WILLIAM N. HAGLER

                                         
  
------------------------------------

                                         
  
William N. Hagler, President

 

 

Dated:  June 25, 1998                      
Intermountain Refining Co., Inc.

 

 

                                     
By:    /s/ WILLIAM N. HAGLER

                                         
   
-----------------------------------

                                         
   
William N. Hagler, President

 

 

Dated:  June 26, 1998                      
Starlicon Group, Inc.

 

                                     
By:    /s/ IKE SURI

                                         
   
-----------------------------------

                                         
   
Ike Suri, President

 

 

Dated: June 26, 1998                        
Starlicon International Corporation

 

 

                                     
By:    /s/ WING PO SZETO

                                         
   
-----------------------------------

                                         
   
Wing Po Szeto, President

                                       
8

S1_EX-61<PAGE>

 

                                   
EXHIBIT A

                   
ASSETS TO BE MAINTAINED IN OR TRANSFERRED

                      
TO INTERMOUNTAIN REFINING CO., INC.

 

 

1.      Land, buildings, refinery equipment,
co-generation equipment,

        inventories, cash accounts
receivable and notes receivable. Currently

        owned by Intermountain
Refining Col, Inc., Fredonia, Arizona.

2.      Kansas Gas Properties consisting
of approximately 20 natural gas wells,

        surface and subsurface
equipment, leasehold interests, and related

        accounts receivable
and accounts payable. Currently owned by Unico, Inc.

3.      Series A and Series B 7% Cumulative
Preferred Stock, Chatfield Dean Co.,

        Inc. currently owned
by Unico, Inc.

4.      Land, building and office furniture
and equipment, 1921 Bloomfield

        Blvd., Farmington, New
Mexico. Currently owned by Unico.

5.      Cash value life insurance. Currently
owned by Unico.

6.      Cash, accounts receivable (less
accounts payable), notes receivable,

        income tax refunds receivable,
and deposits owned by Unico through the

        closing date.

 

S1_EX-62<PAGE>

                                   
EXHIBIT B

                   
UNICO FORM 10-K DISCLOSURE OF NOVATION AGREEMENT

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

================================================================================

    Disclosures About Segments: Also in June 1997,
the FASB issued SFAS no. 131,

"Disclosures About Segments of an Enterprise and Related Information."
This

Statement establishes standards for the way that public entities
report

information about operating segments in annual financial statements
and requires

that selected information about operating segments be reported
in interim

financial reports as well. It also establishes standards for related
disclosures

about products and services, geographic areas and major customers.
This

Statement is effective for fiscal years beginning after December
31, 1997.

NOTE Q -- STARLICON MERGER

        On February 21, 1998
the Company entered into an agreement (the

"Agreement") with Starlicon Group Inc. ("SGI") to acquire 100%
of the

outstanding stock of privately held Starlicon International Corporation
("SI").

Based in Fremont, California, SI markets computer peripherals under
the Paradise

brand name as well as certain generic computer components. The
effective date of

the transaction was to have been November 30, 1997.

        A preliminary audit of
SI's books as of November 30, 1997 revealed that

SI failed to meet certain financial criteria. As a result, the
Company notified

SGI and SI on May 20, 1998 of its unilateral rescission of the
transaction. In

addition, on May 21, 1998, the Company filed a Complaint in the
United States

District Court for the Central District of California entitled
Unico, Inc. v.

Starlicon Group Inc., Starlicon International Corporation, et al,
Case No. CV

98-3990 DT (Shx), seeking the Court's confirmation of the Company's
unilateral

rescission.

        The parties have subsequently
agreed that the Agreement executed on

February 21, 1998 did not close and are presently negotiating a
novation

agreement which, among other things, would result in a subsequent
effective date

for the merger. In connection with these negotiations, the Company
has agreed to

withdraw its Complaint upon execution of the novation agreement.

 

 

 

================================================================================

S1_EX-63<PAGE>

                                   
EXHIBIT C

                              
GUARANTY AGREEMENT

              
This Agreement ("Guaranty") is entered into and made on June ___,

1998 by and between Intermountain Refining Co. ("IRC" or "Obligee"),
a New

Mexico corporation, on the one hand, and Carol Mauer ("Mauer"),
Ike Suri

("Suri") and John Hwang ("Hwang") (collectively referred to herein
as,

"Guarantors") on the other hand.

                              
W I T N E S S E T H

              
WHEREAS, on February 21, Unico, Inc., a New Mexico corporation

("Unico") and Starlicon Group, Inc. ("SGI"), a Nevada corporation
entered into a

Stock Purchase Agreement (the "Stock Purchase Agreement"), wherein
and whereby

Unico was to acquire all of the issued and outstanding shares of
stock of

Starlicon International ("SI"), a California corporation, in exchange
for

5,476,190 shares of Unico common stock and 10,952 shares of Unico
convertible

preferred stock, convertible into 10,952,000 shares of common stock
("the

Transaction") (SGI and SI will be collectively referred to herein
as

"Starlicon";

              
WHEREAS, during the course of closing the Transaction and as part

of fulfilling the requirements of the Agreement, a dispute arose
between Unico

and Starlicon;

              
WHEREAS, on May 21, 1998, Unico filed a Complaint in the United

States District Court for the Central District of California entitled
Unico,

Inc. v. Starlicon Group, Inc., Starlicon International Corporation,
et al., Case

No. CV 98-3990 DT(SHx);

              
WHEREAS, Unico and Starlicon desired to settle and resolve their

differences and to that end entered into a Novation Agreement on
this date,

wherein and whereby, shares of IRC, a wholly owned subsidiary of
Unico may

eventually be distributed to certain shareholders of Unico;

              
WHEREAS, in order to settle the differences between Unico and

Starlicon the Novation Agreement provided in Paragraphs 14 and
16 for the

payment of certain obligations to IRC;

              
WHEREAS, it is the intent of the parties hereto to guarantee to

IRC payment of the obligations enumerated in Paragraphs 14 and
16 of the

Novation Agreement;

 

              
NOW THEREFORE, in consideration of the covenants contained

herein, and other good and valuable consideration, receipt of which
is hereby

acknowledge, the parties agree as follows:

        1.     
Obligation Guaranteed . For valuable consideration, receipt of

               
which is hereby acknowledged, the undersigned, Mauer, Suri, and

               
Hwang (hereinafter called" Guarantors") jointly and severally

               
unconditionally guarantee to IRC

                                      
-1-

S1_EX-64<PAGE>

 

 

               
(hereinafter called "Obligee") the following obligation(s) of

               
the New Unico (as defined in Paragraph 10 of the Novation

               
Agreement (hereinafter called "the New Unico or "Obligor"): the

               
indebtedness of Obligor that arises under Paragraph 14 of the

               
Novation Agreement.

 

        2.     
Insolvency or Bankruptcy of Obligor. Guarantors jointly and

               
severally unconditionally guarantee the payment of the

               
indebtedness of Obligor that arises under Paragraph 14 of the

               
Novation Agreement and any and all indebtedness of Obligors to

               
Obligee whether or not due or payable by Obligor, upon (a) the

               
dissolution, insolvency, or business failure of, or any

               
assignment for the benefit of creditors by, or commencement of

               
any bankruptcy, reorganization, arrangement, moratorium, or

               
other debtor relief proceedings by or against Obligors or

               
Guarantors, or (b) the appointment of a receiver for, or the

               
attachment, restraint of, or making or levying of any court

               
order or legal process affecting the property of Obligors or

               
Guarantors, and jointly and severally unconditionally promise to

               
pay this indebtedness to IRC, or order, on demand, in lawful

               
money of the United States.

 

        3.     
Extent of Liability. The joint and several liability of

               
Guarantors is for the amounts set forth in Paragraph 14 of the

               
Novation Agreement, which is the principal sum. The foregoing

               
limitation, does not include interest, attorneys' fees, costs,

               
and expenses as provided in Paragraph 9 of this Guaranty. This

               
Guaranty may be terminated with regard to future transactions

               
provided Guarantors give written notice of termination to

               
Obligee. Notice shall be deemed effective as of noon of the next

               
succeeding business day following receipt of notice by Obligee.

               
No such notice shall release Guarantors, whether or not giving

               
such notice, from any liability as to any indebtedness

               
guaranteed hereunder that may be owing to or held by Obligee or

               
in which Obligee may have an interest or for which Obligee may

               
be obligated at the time of receiving notice, and all extensions

               
or renewals thereto.

                       
The liability of Guarantors under this agreement is

               
exclusive and independent of any security for or other guarantee

               
of the indebtedness of Obligors, whether executed by Guarantors

               
or any other party, and the liability of Guarantors under this

               
Guaranty is not affected or impaired by (a) any indebtedness

               
exceeding Guarantor's liability; (b) any direction of

               
application by Obligors or any other party; (c) any other

               
continuing or other guaranty, undertaking, or maximum liability

               
of Guarantors or of any other party as to the indebtedness of

               
Obligors; (d) any payment on or in reduction of any other

               
guaranty or undertaking; (e) any notice of termination of this

               
agreement as to future transactions given by, or the death or

               
termination of, or the revocation or release of any obligations

               
under this agreement of, any other of the Guarantors; or (f) any

               
payment made to the Obligee on the indebtedness that Obligee

               
repays to Obligors pursuant to court order in any bankruptcy,

               
reorganization, arrangement, moratorium, or other debtor relief

               
proceeding; Guarantors waive any right to the deferral or

               
modification of Guarantor's obligations hereunder by virtue of

               
any such proceeding.

 

                                      
-2-

S1_EX-65<PAGE>

 

 

        4.     
Joinder of Parties. The obligations of guarantors hereunder are

               
joint and several, and independent of the obligations of

               
Obligors, and a separate action or actions may be brought and

               
prosecuted against Guarantors whether action is brought against

               
Obligors or whether Obligors be joined in any such action or

               
actions. Guarantors waive, to the fullest extent permitted by

               
law, the benefit of any statute of limitations affecting their

               
liability under this agreement or the enforcement of this

               
agreement. Any payment by Obligors or other circumstance that

               
operates to toll any statute of limitations as to Obligors shall

               
also operate to toll the statute of limitations as to

               
Guarantors. Any Guarantor who is a married person agrees that

               
recourse may be had against his or her separate property and his

               
or her share of the community property for his or her

               
obligations under this agreement.

 

        5.     
Change of Obligation. Guarantors authorize Obligee, (whether or

               
not after revocation or termination of this guaranty) without

               
notice or demand (except any notice or demand that is required

               
by statute and cannot be waived) and ,without affecting or

               
impairing their liability hereunder, from time to time to (a)

               
renew, compromise, extend, or otherwise change the time for

               
performance of, or otherwise change the terms of the obligation

               
or any part thereof; (b) take and hold security for the

               
performance of this guaranty or the obligation guaranteed, and

               
exchange, enforce, waive, and release any such security; (c)

               
apply such security and direct the order or manner of sale

               
thereof as Obligee in its discretion may determine; and (d)

               
release or substitute any one or more of the Guarantors. Obligee

               
may without notice assign this guaranty in whole or in part.

 

        6.     
Capacity and Authority of Obligors. It is not necessary for

               
Obligee to inquire into the capacity or powers of Obligors or

               
the officers, directors, partners, or agents acting or

               
purporting to act on their behalf, and any indebtedness made or

               
created in reliance on the professed exercise of those powers

               
shall be guaranteed under this agreement. If one or more of the

               
Obligors is a partnership, the words "Obligors" and

               
"indebtedness" as used in this agreement include all successor

               
partnerships and their liabilities to Obligee.

 

        7.     
Subordination. Any indebtedness of Obligors now or hereafter

               
held by Guarantors is hereby subordinated to the indebtedness of

               
Obligors to Obligee, and all such indebtedness of Obligors to

               
Guarantors, if Obligee so requests, shall be collected,

               
enforced, and received by Guarantors as trustees for Obligee and

               
be paid over to Obligee on account of the indebtedness of

               
Obligors to Obligee, without affecting or impairing in any

               
manner the liability of Guarantors under the other provisions of

               
this guaranty. Any instruments now or hereafter evidencing any

               
indebtedness of Obligors to the undersigned shall be marked with

               
a legend that they are subject to this guaranty, and, if Obligee

               
so requests, shall be delivered to Obligee.

 

                                      
-3-

S1_EX-66<PAGE>

 

 

        8.     
Waiver of Defenses. (a) Guarantors waive any right to require

               
Obligee to (1) proceed against Obligors; (2) proceed against or

               
exhaust any security held from Obligors; or (3) pursue any other

               
remedy in Obligee's power whatsoever ; (b) Guarantors waive any

               
defense based on or arising out of any defense of Obligors other

               
than payment in full of the indebtedness, including without

               
limitation any defense based on or arising out of the disability

               
of Obligors, the unenforceability of the indebtedness or any

               
part thereof from any cause, or the cessation from any cause of

               
the liability of Obligors other than payment in full of the

               
indebtedness; (c) Obligee may, at its election, foreclose on any

               
security held by Obligee by one or more judicial or non-judicial

               
sales, whether or not every aspect of any such sale is

               
commercially reasonable, or exercise any other right or remedy

               
Obligee may have against Obligors, or any security, without

               
affecting or impairing in any way the liability of Guarantors

               
under this agreement, except to the extent the indebtedness has

               
been paid; (d) Guarantor waives all rights and defenses arising

               
out of an election of remedies by Obligee;(e) Until all

               
indebtedness of Obligors to Obligee is paid in full, even though

               
that indebtedness is in excess of Guarantors' liability under

               
this agreement, Guarantors shall have no right of subrogation,

               
shall waive any right to enforce any remedy that Obligee now has

               
or may hereafter have against Obligors, and shall waive any

               
benefit of, and any right to, participation in any security now

               
or hereafter held by Obligor. Guarantors waive all presentments

               
and notices of acceptances of this guaranty; (g) Guarantors

               
assume all responsibility for keeping themselves informed of

               
Obligors' financial condition and assets, and of all other

               
circumstances bearing upon the risk of nonpayment of the

               
indebtedness and the nature, scope, and extent of the risks that

               
Guarantors assume and incur under this agreement, and agree that

               
Obligee shall have no duty to advise Guarantors of information

               
known to it regarding those circumstances or risks.

 

        9.     
Attorneys' Fees and Costs. In addition to the amounts guaranteed

               
under this agreement, Guarantors jointly and severally agree to

               
pay legal interest from the date of this Guaranty, reasonable

               
attorneys' fees and all other costs and expenses incurred by

               
Obligee in enforcing this guaranty in any action or proceeding

               
arising out of, or relating to, this guaranty.

 

        10.    
Liens and Setoffs. In addition to all liens upon, and rights of

               
setoff against the moneys, securities, or other property of

               
Guarantors, if any, given to Obligee by law, Obligee shall have

               
a lien upon and a right of setoff against all moneys,

               
securities, and other property of Guarantors now or hereafter in

               
the possession of Obligee, whether held in a general or special

               
account, or for safekeeping or otherwise; and every such lien

               
and right of setoff may be exercised without demand upon or

               
notice to Guarantors.

 

        11.    
Nonwaiver of Rights of Obligee. No right or power of Obligee

               
under this agreement shall be deemed to have been waived by any

               
act or conduct on the part of Obligee, or by any neglect to

               
exercise that right or power, or by any delay in so doing; and

               
every right or power shall continue in full force and effect

               
until specifically waived or released by an instrument in

               
writing executed by Obligee.

                                      
-4-

S1_EX-67<PAGE>

 

        12.   
Meaning of Terms. In all cases where there is but a single

              
Obligor or a single Guarantor, all words used herein in the

              
plural shall be deemed to have been used in the singular where

              
the context and construction so require; and when there is more

              
than one Obligor named herein, or when this guaranty is executed

              
by more than one Guarantor, the word "Obligors" and the word

              
"Guarantors" respectively shall mean all and any one or more of

              
them.

        13.   
Effect on Heirs and Assigns. This guaranty and the liability and

              
obligations of Guarantors under this agreement are binding upon

              
Guarantors and their respective heirs, executors, and assigns,

              
and inure to the benefit of and are enforceable by Obligor and

              
its successors, transferees, and assigns.

        14.   
Governing Law and Modification. This guaranty shall be deemed to

              
be made under, and shall be governed by, the laws of the State of

              
California in all respects, including matters of construction,

              
validity, and performance, and its terms and provisions may not

              
be waived, altered, modified, or amended except in writing duly

              
signed by an authorized officer of Obligee and by Guarantors.

        15.   
Invalidity. If any provision of this guaranty contravenes or is

              
held invalid under the laws of any jurisdiction, this guaranty

              
shall be construed as though it did not contain that provision,

              
and the rights and liabilities of the parties to this agreement

              
shall be construed and enforced accordingly.

        16.   
This Agreement may be executed in its original version or in any

              
copies, counterparts, or other duplicates, and all signatures

              
need not appear on the same document.

        17.   
A photocopy or telefax copy of this document may be used with the

              
same force and effect as an original.

              
IN WITNESS WHEREOF, the undersigned Guarantors have executed this

Guaranty on June ___, 1998.

 

 

- --------------------------------------     
------------------------------------

Ike Suri, Guarantor                        
John Hwang, Guarantor

Address: 1601 N. Sepulveda Blvd., #243     
Address: 45541 Claret Court

         Manhattan Beach,
CA 90266                  
Fremont, CA 94539

Phone:   (310) 396-9347                    
Phone:   (510) 770-3990 x3110

SSN:     ###-##-####                       
SSN:     ###-##-####

 

 

- --------------------------------------

Carol Maurer, Guarantor

Address: 1952 Coldwater Canyon

         Beverly Hills,
CA 90210

Phone:   (310) 859-8906

SSN:     ###-##-####

                                      
-5-

 

 

S1_EX-68<PAGE>

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