EXHIBIT 1.2
AGREEMENT TO EXCHANGE STOCK
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THIS AGREEMENT TO EXCHANGE STOCK (the "Agreement"), dated as of the 2nd day of
June 1999, by and between RealAmerica Company, a Delaware corporation
(hereinafter "RealAmerica"), Trucat Holding Company, Inc., a Delaware
corporation (hereinafter "TRUCAT"), and those persons listed on Exhibit "A"
attached hereto (such persons listed on Exhibit "A" being sometimes
collectively referred to herein as the "TRUCAT Stockholders").
W I T N E S S E T H
WHEREAS, the TRUCAT Stockholders and the Board of Directors of
RealAmerica deem it advisable and in the best interests of (i) TRUCAT, (ii)
the TRUCAT Stockholders and (iii) RealAmerica that RealAmerica acquire 100% of
the issued and outstanding capital stock of TRUCAT, in exchange for (1.)
5,273,000 shares of RealAmerica Class B common stock and (2.) 91,000 shares of
Series A Convertible Preferred Stock pursuant to this Agreement and applicable
provisions of law (such transaction being hereinafter referred to as the
"TRUCAT Acquisition"); and
WHEREAS, RealAmerica, TRUCAT and the TRUCAT Shareholders each acknowledge
that RealAmerica will dispose of its wholly-owned subsidiary, Merrion
Reinsurance Company, Ltd., prior to closing of the TRUCAT Acquisition and that
actions and agreements in connection with that sale will be available to
TRUCAT and the TRUCAT Shareholders; and
WHEREAS, the Board of Directors of RealAmerica and TRUCAT, respectively,
have approved and adopted this Agreement; and
WHEREAS, the TRUCAT Stockholders own and have the right to sell, transfer
and exchange 100% of the issued and outstanding capital stock of TRUCAT to
RealAmerica in accordance with the terms of this Agreement and applicable
provisions of law.
NOW, THEREFORE, in consideration of the promises and of the mutual
agreements, provisions and covenants herein contained, the parties hereto
hereby agree as follows:
1. Exchange of Common Stock.
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1.01 EXCHANGE. Subject to the terms and conditions herein set forth,
at the time of closing set forth in Section 1.02 hereof, RealAmerica will
issue and deliver or cause to be issued and delivered to the TRUCAT
Stockholders the following: (1.) a total of 5, 273, 000 shares of
RealAmerica's authorized Class B voting common stock, par value $0.001 per
share, representing approximately 51 percent (51%) of the issued and
outstanding Class B voting common stock in RealAmerica and (2.) a total of
91,000 shares of the Series A Preferred Stock, par value $10.00 per share,
(together the "RealAmerica Shares"), in exchange for the conveyance by the
TRUCAT Stockholders to RealAmerica of a total of shares of TRUCAT common stock
(the "TRUCAT Shares"), representing 100% of the issued and outstanding capital
stock of TRUCAT.
1.02 TRUCAT (1998 INCENTIVE) STOCK OPTION PLAN. On the Closing Date
RealAmerica shall assume the obligations of TRUCAT under its existing Stock
Option Plan, and further agrees that the outstanding TRUCAT stock options
listed on Schedule 1.02 attached hereto and made a part hereof shall be
exercisable for and into RealAmerica Common Stock at an exercise price of
$2.00 per share. As soon as practical after the Closing Date, RealAmerica
shall issue replacement stock options for the TRUCAT stock options listed on
Schedule 1.02 attached hereto and made a part hereof and shall take all other
necessary actions to effectuate the provisions of this Section 1.02.
1.03 CLOSING. Subject to the terms and provisions of this Agreement,
the closing of the RealAmerica Acquisition will be at 10:00 a.m. at the
offices of RealAmerica , ▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
on or before June 15, 1999, or at such earlier or later date or such other
place as shall be mutually agreed upon by RealAmerica and the TRUCAT
Stockholders, such date and time sometimes being referred to herein as the
"Closing" or "Closing Date."
2. Representations and Warranties of the TRUCAT Stockholders.
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Each of the TRUCAT Stockholders severally, and not jointly, represents
and warrants to RealAmerica that, with respect to the TRUCAT shares owned by
such TRUCAT Stockholder as set forth on Exhibit "A" attached hereto, the
statements contained in this Section 2 are correct and complete as of the date
of this Agreement and will be correct and complete as of the Closing Date as
through made then and as though the Closing Date were substituted for the date
of this Agreement throughout this Section 2.
2.01 AUTHORIZATION. The TRUCAT Stockholder has full power and
authority to execute and deliver this Agreement and to perform his obligations
hereunder. This Agreement constitutes the valid and legally binding obligation
of the TRUCAT Stockholder, enforceable in accordance with its terms and
conditions. The TRUCAT Stockholder need not give any notice to, make any
filing with, or obtain any authorization, consent or approval of any
government, governmental agency, or other person in order to consummate the
transactions contemplated by this Agreement which have not been obtained.
2.02 NONCONTRAVENTION. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will violate any statute, regulation, rule, judgment, order, decree,
stipulation, injunction, charge or other restriction of any government,
governmental agency or court to which the TRUCAT Stockholder is subject or
conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any contract, lease, sublease,
license, sublicense, franchise, permit, indenture, agreement or mortgage for
borrowed money, instrument of indebtedness, security interest, or other
arrangement to which the TRUCAT Stockholder is a party or by which he is bound
or to which any of his assets are subject.
2.03 OWNERSHIP. The TRUCAT Stockholder holds of record and owns
beneficially the number of TRUCAT Shares set forth opposite his name as set
forth on Exhibit "A" attached hereto. The TRUCAT Stockholder holds his TRUCAT
Shares free and clear of any restrictions on transfer (other than restrictions
under federal and state securities laws), claims, taxes, security interests,
options, warrants, rights, contracts, calls, commitments, equities and
demands. The TRUCAT Stockholder is not a party to any option, warrant,
contract, call, put or other agreement or commitment providing for the
disposition or acquisition of any capital stock of TRUCAT (other than this
Agreement). The TRUCAT Stockholder is not a party to any voting trust, proxy
or other agreement or understanding with respect to the voting of any capital
stock of TRUCAT.
2.04 SPECULATIVE NATURE AND RISK. The TRUCAT Stockholders each
understand and acknowledge the speculative nature of and substantial risk of
loss associated with an investment in the RealAmerica Shares which may be
subject to substantial dilution. The TRUCAT Stockholders each represent and
warrant that the RealAmerica Shares constitute an investment which is suitable
and consistent with their respective financial conditions and that they are
each able to bear the risks of this investment for an indefinite period of
time, which may include the total loss of their investment in RealAmerica. The
TRUCAT Stockholders each further represent that they have adequate means of
providing for their respective current financial needs and corporate and
personal contingencies and no need for liquidity in their investment in
RealAmerica and that they each have sufficient financial and business
experience to evaluate the merits and risks of an investment in RealAmerica.
2.05 FEDERAL OR STATE SECURITIES LAWS. The TRUCAT Stockholders each
understand and acknowledge that the RealAmerica Shares have not been, and will
not be, registered under the Securities Act of 1933, as amended (the "1933
Act"), or applicable state securities laws and the TRUCAT Stockholders are
each aware that no federal or state agency has made any review, finding or
determination regarding the terms of their acquisition of the RealAmerica
Shares nor any recommendation or endorsement of the RealAmerica Shares as an
investment, and the TRUCAT Stockholders must each forego the security, if any,
that such a review would provide.
2.06 ACQUISITION FOR OWN ACCOUNT. The TRUCAT Stockholders each
understand and acknowledge that the RealAmerica Shares are being offered and
sold under exemptions from registration provided by the Act and
exemptions provided by applicable state securities laws and the TRUCAT
Stockholders each warrant and represent that the RealAmerica Shares are being
acquired by them solely for their own account, for investment purposes only,
and not with a view to or for the resale, distribution, subdivision or
fractionalization thereof. The TRUCAT Stockholders each represent and warrant
that they have no agreement or other arrangement, formal or informal, with any
person to sell, transfer or pledge any part of the RealAmerica Shares or which
would guarantee them any profit or protect them against any loss with respect
to the RealAmerica Shares. Further, the TRUCAT Stockholders have no plans to
enter into any such agreement or arrangement, and, consequently, they must
each bear the economic risk of an investment in the RealAmerica Shares for an
indefinite period of time.
2.07 LIMITATIONS ON RESALE OR TRANSFER. The TRUCAT Stockholders each
understand and acknowledge that the RealAmerica Shares will be "restricted" as
defined in Rule 144 under the Act and that therefore they cannot offer to
sell, sell or otherwise transfer or distribute the RealAmerica Shares without
registration thereof, which RealAmerica is not obligated to do, under both the
Act and any applicable state securities laws, or unless an exemption is, in
the opinion of RealAmerica's counsel, available to them under the Act and any
applicable state securities laws. Such exemption is not now available and it
is not anticipated that any such exemption will become available in the
future. The TRUCAT Stockholders each further understand and acknowledge that
the restrictions on the transfer of the RealAmerica Shares will be noted on
the books of RealAmerica and that the stock certificate representing the
RealAmerica Shares will bear a written legend setting forth the restriction on
the transferability of the RealAmerica Shares in substantially the following
form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED FOR VALUE IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OF THEM UNDER THE SECURITIES ACT OF 1933, OR AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS
NOT REQUIRED UNDER THE ACT.
3. Representations and Warranties Concerning TRUCAT.
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TRUCAT represents and warrants to RealAmerica that the statements
contained in this Section 3 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date except as
set forth in the disclosure schedule delivered by TRUCAT to RealAmerica on the
date hereof and initialed by the parties (the "TRUCAT Disclosure Schedule").
The TRUCAT Disclosure Schedule will be arranged in paragraphs corresponding to
the lettered and numbered paragraphs contained in this Section 3.
3.01 GOOD STANDING. TRUCAT is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware with
full corporate power to own and operate its properties and to carry on its
business as and in places where such properties are owned, operated and
conducted.
3.02 CAPITALIZATION. The entire authorized capital stock of TRUCAT
consists of 10,000,000 shares of common stock, par value $0.01 per share, of
which 3,396,425 shares are issued and outstanding. All of the issued and
outstanding shares of TRUCAT common stock have been duly authorized, are
validly issued, fully paid, and nonassessable.
3.03 FINANCIAL STATEMENTS. Attached as Section 3.03 of the TRUCAT
Disclosure Schedule are the following financial statements (collectively, the
TRUCAT Financial Statements"): (i) audited balance sheets of TRUCAT as of
December 31, 1995, 1996 and 1997 and compiled (unaudited) balance sheet as of
December 31, 1998 ("Most Recent TRUCAT Balance sheet"); and (iii) audited
statements of operations, retained earnings and cash flows for the years ended
December 31, 1995, 1996 and 1997 and unaudited statements of operations for
the twelve (12) months ended December 31, 1998. The TRUCAT Financial
Statements have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods covered
thereby, are correct and complete in all material respects, and are consistent
with the books and records of TRUCAT which books and records are also correct
and complete in all material respects. Provided, however that the TRUCAT
financial statements including the Most Recent Trucat Balance Sheet are
subject to normal year-end adjustments, which will not be material; and they
lack footnotes and other presentation items.
3.04 UNDISCLOSED LIABILITIES. Except to the extent reflected or
reserved against in the Most Recent TRUCAT Balance Sheet on the dates shown,
or as set forth in Section 3.04 of the TRUCAT Disclosure Schedule, as of those
dates, TRUCAT had no liabilities or obligations of any material nature,
whether accrued, absolute, contingent or otherwise and, as of such dates,
knows nor has reasonable grounds to know any basis for the assertion against
TRUCAT of any liability of any nature or in any amount not fully reflected or
reserved against in the Most Recent TRUCAT Balance Sheet which could have a
materially adverse effect.
3.05 EVENTS SUBSEQUENT. Subsequent to the Most Recent TRUCAT Balance
Sheet and except as set forth in Section 3.05 of the TRUCAT Disclosure
Schedule, TRUCAT has not (i) incurred any material liabilities or obligations,
absolute or contingent, except current liabilities and obligations under
contracts entered into in the ordinary course of business; (ii) declared or
made any payment or distribution to stockholders or purchased or redeemed any
of its capital stock; (iii) mortgaged or pledged or subjected to lien, charge
or any other encumbrance, any of its assets, tangible or intangible, excepting
extensions or renewals of liens for liabilities set forth on the Most Recent
TRUCAT Balance Sheet; (iv) sold or transferred any of its tangible assets or
cancelled any debts or claims except in each case in the ordinary course of
business; W made any capital expenditures other than in the ordinary course of
business; or (vi) incurred any material or adverse losses or damages, to be
involved in strikes, or other labor disputes.
3.06 LITIGATION. Except as set forth in Section 3.06 of the TRUCAT
Disclosure Schedule, there are no actions, suits or proceedings at law or in
equity pending or, to the knowledge of TRUCAT and/or any of the officers or
directors of TRUCAT, threatened against TRUCAT seeking damages; nor are there
any suits threatened or pending before any federal, state or municipal
government or any board, department or agency thereof involving TRUCAT. To the
best of TRUCAT's knowledge, TRUCAT has no pending violation proceedings
relating to state or federal environmental regulations.
3.07 EMPLOYMENT MATTERS. Except as disclosed in the TRUCAT
Disclosure Schedule, TRUCAT is not a party to any employment contract with any
officer, director or other employee. TRUCAT is not bound by a contract with a
labor union, pension or profit share plan or employee benefit plan, other than
as listed in Section 3.07 of the TRUCAT Disclosure Schedule.
3.08 SUBSIDIARIES. Except as disclosed on the TRUCAT Disclosure
Schedule, TRUCAT has no subsidiaries.
3.09 TAX MATTERS. TRUCAT has no knowledge or any reasonable grounds
to know of any tax deficiencies which might be asserted against TRUCAT which
could have a materially adverse effect. Since the date of the TRUCAT
Financial Statements, TRUCAT has paid or has provided for payment of all
federal and state withholding and unemployment insurance taxes and has filed
all federal, state and local tax returns and reports when due; provided,
however that certain expatriate contract workers are paid by a non-U.S. TRUCAT
subsidiary and, in their respective capacities working abroad, may not be
subject to the same withholding for U.S. income tax purposes as domestic
contract workers or employees.
3.10 PROPERTIES. Section 3.10 of the TRUCAT Disclosure Schedule sets
forth a true and complete list of all material leases, contracts,
understandings, commitments, plans or mortgages now in effect, to which TRUCAT
is a party, or under which it is obligated, or which materially affect its
properties. TRUCAT has complied with all material provisions of such leases,
contracts, understandings, commitments, plans and mortgages and is not in
material default with respect to any thereof.
3.11 ADVERSE CHANGES. There has been no material adverse change in
the condition, financial or otherwise, of TRUCAT from that set forth in the
Most Recent TRUCAT Balance Sheet other than certain operating losses in the
approximate estimated amount of $750,000 incurred in the first Quarter of
1999. To the best of TRUCAT's knowledge, TRUCAT is not aware of any facts that
might result in any actions, suit or other proceeding that would result in any
adverse change in the financial condition of TRUCAT. The business, properties
and assets reflected in the TRUCAT Financial Statements have not been
materially and adversely affected as a result of any fire, explosion,
earthquake, accident, strike, lockout, requisition or taking of property by
any government or agency thereof, flood, drought, embargo, riot, activities of
armed forces or acts of God or the public.
3.12 BOOKS AND RECORDS. All of the minute books, stock certificate
books and stock transfer ledgers of TRUCAT are complete and accurate in all
material respects.
3.13 INDEPENDENT INVESTIGATION OF REALAMERICA. TRUCAT confirms that
it has received, reviewed, understands and has fully considered (including,
without limitation, the financial statements contained therein) for purposes
of its acquisition of the RealAmerica Shares, the business prospects and
leases of RealAmerica. TRUCAT acknowledges that (i) RealAmerica has limited
financial resources and will need additional sources of capital to implement
its current business plan, the availability of which is uncertain and cannot
be assured, and (ii) the RealAmerica Shares are a highly speculative
investment with a high degree of risk of loss by TRUCAT of its investment
therein. TRUCAT represents and warrants that in making the decision to acquire
the RealAmerica Shares, it has relied upon the representations and warranties
set out in Paragraph 4 below and on its own independent investigation of
RealAmerica and the independent investigations by its representatives,
including its own professional legal, tax and business advisors, and that
TRUCAT and its representatives have been given the opportunity to examine all
relevant documents and to ask questions of and to receive answers from
RealAmerica, or person(s) acting on its behalf, concerning the terms and
conditions of acquisition by TRUCAT of the RealAmerica Shares and any other
matters concerning an investment in RealAmerica, and to obtain any additional
information TRUCAT deems necessary to verify the accuracy of the information
provided.
3.14 DISCLOSURE. The representations and warranties contained in this
Section 3 do not contain any materially untrue statement of a fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Section 3 not misleading.
4. Representations and Warranties of RealAmerica
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RealAmerica represents and warrants to the TRUCAT Stockholders and TRUCAT that
the statements contained in this Section 4 are correct and complete as of the
date of this Agreement and will be correct and complete as of the Closing Date
except as set forth in the disclosure schedule delivered by RealAmerica to the
TRUCAT Stockholders and TRUCAT on the date hereof and initialed by the parties
(the "RealAmerica Disclosure Schedule"). RealAmerica, TRUCAT and the TRUCAT
Shareholders each acknowledge that RealAmerica will dispose of its wholly-
owned subsidiary, Merrion Reinsurance Company, Ltd., prior to closing of the
TRUCAT Acquisition and that actions and agreements in connection with that
sale will be available to TRUCAT and the TRUCAT Shareholders and the
warranties and representations made herein are made in connection with the
completion of that transaction. The RealAmerica Disclosure Schedule will be
arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this Section 4.
4.01 ORGANIZATION, QUALIFICATION AND CORPORATE POWER. RealAmerica is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. RealAmerica is duly authorized to conduct
business and is in good standing under the laws of each jurisdiction in which
the nature of its business or the ownership or leasing of its properties
requires such qualification. RealAmerica has full corporate power and
authority to carry on the business in which it is engaged and to own and use
the properties owned and used by it. Section 4. 01 of the RealAmerica
Disclosure Schedule lists the directors and officers of RealAmerica.
RealAmerica has made available for inspection by the TRUCAT Stockholders
correct and complete copies of the Certificate of Incorporation and Bylaws of
RealAmerica (as amended to date). The minute books containing the records of
meetings of the stockholders, the Board of Directors and any committees of the
Board of Directors, the stock certificate books and the stock record books of
RealAmerica are correct and complete. RealAmerica is not in default under or
in violation of any provision of its Certificate of Incorporation or Bylaws.
4.02 CAPITALIZATION. The entire authorized capital stock of
RealAmerica consists of (i) 50,000,000 shares of Class A common stock, par
value $0.001 per share, of which no shares are issued and outstanding and no
shares are held in treasury; (ii) 10,500,000 shares of Class B common stock,
par value $0.001 per share of which 5,048,000 shares are issued and
outstanding and (iii) 15,000,000 shares of preferred stock of which 91,000
shares of Series A preferred stock, par value $10.00 per share, are issued and
outstanding. All of the issued and outstanding shares have been duly
authorized, are validly issued, fully paid, and non-assessable and are held of
record by the respective RealAmerica shareholders as set forth in
RealAmerica's stock record books. There are no outstanding or authorized
options, warrants, rights, contracts, calls, puts, rights to subscribe,
conversion rights or other agreements or commitments to which RealAmerica is a
party or which are binding upon RealAmerica providing for the
issuance, disposition or acquisition of any of its capital stock, except as
disclosed in Section 4.02 of the RealAmerica Disclosure Schedule. There are
no outstanding or authorized stock appreciation, phantom stock or similar
rights with respect to RealAmerica. There are no voting trusts, proxies or any
other agreements or understandings with respect to the voting of the capital
stock of RealAmerica. Upon issuance, the RealAmerica Shares to be issued to
the TRUCAT Stockholders pursuant to this Agreement will be duly authorized,
validly issued, fully paid and non-assessable.
4.03 NON-CONTRAVENTION. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any statute, regulation, rule, judgment, order, decree,
stipulation, injunction, charge or other restriction of any government,
governmental agency or court to which the RealAmerica is subject or any
provision of its Certificate of Incorporation or Bylaws of RealAmerica or (ii)
conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel or require any notice under any contract, lease, sublease,
license, sublicense, franchise, permit, indenture, agreement or mortgage for
borrowed money, instrument of indebtedness, security interest or other
arrangement to which RealAmerica is a party or by which it is bound or to
which any of its assets is subject or result in the imposition of any security
interest upon any of its assets. RealAmerica is not required to give any
notice to, make any filing with, or obtain any authorization, consent or
approval of any government, governmental agency or other person in order for
RealAmerica to consummate the transactions contemplated by this Agreement.
4.04 SUBSIDIARIES. RealAmerica does not own, directly or indirectly,
any capital stock, security, partnership interest or other interest of any
kind in any corporation, partnership, joint venture, association or other
entity. RealAmerica has no subsidiaries.
4.05 COMMON STOCK TRADING MARKET. The common stock of RealAmerica is
eligible for quotation and is quoted on the National Association of Securities
Dealers ("NASD") OTC Bulletin Board in accordance with the applicable rules of
the NASD and Securities and Exchange Commission ("SEC") and is in compliance
with applicable NASD and SEC rules for continuing quotation on the NASD
Bulletin Board. The broker-dealers which are market-makers in the common stock
of RealAmerica are Paragon Capital ("Market-Makers"). RealAmerica has
furnished each Market-maker and each other broker-dealer effecting
transactions in the Company's common stock with all information required by
SEC Rule 15c2-11. RealAmerica, its officers, directors and affiliates have
fully complied with any and all requests for information by the Market-Makers
and all other broker-dealers, whether or not acting in the capacity of a
market-maker, pursuant to SEC Rule 15c2-11. Any and all information provided
by RealAmerica to the Market-Makers and all other broker-dealers, whether or
not acting in the capacity of a market-maker, was, at the time if was
furnished, accurate in all material respects.
4.06 FINANCIAL STATEMENTS. Attached as Section 4.06 of the
RealAmerica Disclosure Schedule are the following RealAmerica financial
statements (collectively, the "RealAmerica Financial Statements") : (i)
audited consolidated balance sheets as of the fiscal years ended November 30,
1994 and unaudited consolidated balance sheets as of November 30, 1995, 1996,
and 1997 and audited consolidated statements of income, changes in
stockholders' equity and cash flow as of and for the fiscal year ended
November 30, 1994, and the unaudited statements of operations for the fiscal
years ending November 30, 1995, 1996, and 1997 (the "Most Recent RealAmerica
Fiscal Quarter ") for RealAmerica. The RealAmerica Financial Statements have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods covered thereby, are
correct and complete and are consistent with the books and records of
RealAmerica which books and records are correct and complete; provided,
however, that the Interim RealAmerica Financial Statements are subject to
normal year-end adjustments (which will not be material) and lack complete
footnotes and other presentation items. RealAmerica is delinquent in its
filings with the NASD and the SEC, which delinquency until it is cured
precludes RealAmerica to enjoy the availability of Rule 144 for the issuance
and treatment of its capital stock; and, notwithstanding any cure to said
delinquency by filing required statements with the SEC, RealAmerica may not be
able to enjoy availability of an S-3 registration, an S-8 registration, or
similar.
4.07 EVENTS SUBSEQUENT. Subsequent to the Most Recent RealAmerica
Balance Sheet and except as set forth in Section 4.07 of the RealAmerica
Disclosure Schedule, RealAmerica has not (i) incurred any material liabilities
or obligations, absolute or contingent, except current liabilities and
obligations under contracts entered into in the ordinary course of business;
(ii) declared or made any payment or distribution to stockholders or
purchased or redeemed any of its capital stock; (iii) mortgaged or pledged or
subjected to lien, charge or any other encumbrance, any of its assets,
tangible or intangible, excepting extensions or renewals of liens for
liabilities set forth on the Most Recent RealAmerica Balance Sheet; (iv) sold
or transferred any of its tangible assets or cancelled any debts or claims
except in each case in the ordinary course of business; (v) made any capital
expenditures other than in the ordinary course of business; or (vi) incurred
any material or adverse losses or damages, to be involved in strikes, or other
labor disputes.
4.08 UNDISCLOSED LIABILITIES. RealAmerica has no liability (and
there is no basis for any present or future charge, complaint, action, suit,
proceeding, hearing, investigation, claim or demand against it giving rise to
any liability), except for (i) liabilities set forth on the face of the
RealAmerica Financial Statements (rather than in any notes thereto) and (ii)
liabilities which have arisen after the Most Recent RealAmerica Fiscal Year
End in the ordinary course of business, none of which relates to any breach of
contract, breach of warranty, tort, infringement or violation of law or arose
out of any charge, complaint, action, suit, proceeding, hearing,
investigation, claim or demand.
4.09 TAX MATTERS. Except as disclosed in the RealAmerica Disclosure
Schedule, RealAmerica has no knowledge or any reasonable grounds to know of
any tax deficiencies which might be asserted against RealAmerica. RealAmerica
has paid or has provided for payment of all federal and state withholding and
unemployment insurance taxes and has filed all federal, state and local tax
returns and reports when due.
4.10 TITLE TO PROPERTIES. RealAmerica has good and marketable title
to, or valid leasehold interests in, all its properties and assets, real,
personal and intangible, including without limitation, the assets reflected in
the RealAmerica Financial Statements (except as since sold or otherwise
disposed of in the ordinary course of business) free and clear of all
mortgages, pledges, conditional sales agreements, claims, liens, security
interests and encumbrances, except (i) as referred to or reflected in the
Interim RealAmerica Financial Statements or in the notes thereto, and (ii)
statutory liens for taxes not yet due and payable. RealAmerica has not
received notice of violation of any applicable law, ordinance, regulation,
order or requirement relating to such properties or assets. All leases
pursuant to which RealAmerica leases any real or personal property are valid
and effective in accordance with their respective terms and there is not,
under any of such leases, any existing default or event of default or event
which, with notice or lapse of time, or both, would constitute a default which
has been noticed to RealAmerica or of which RealAmerica is aware.
4.11 REAL PROPERTY LEASES. RealAmerica is not a party to any lease
or sublease of real property.
4.12 INTELLECTUAL PROPERTY.
(a) Except as disclosed in Section 4.12 of the RealAmerica
Disclosure Schedule, RealAmerica does not own any Intellectual Property
and is not a party to any license, sublicense, agreement, or permission
with respect to any Intellectual Property (as defined below) necessary
for the operation of its business as presently conducted and as presently
proposed to be conducted. RealAmerica has not interfered with, infringed
upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of third parties, and none of the directors
and officers (and employees with responsibility for Intellectual Property
matters) of RealAmerica have ever received any charge, complaint, claim,
or notice alleging any such interference, infringement, misappropriation,
or violation.
(b) As used herein, "Intellectual Property" means all (i)
patents, patent applications, patent disclosures, and improvements
thereto, (ii) trademarks, service marks, trade dress, logos, trade names,
and corporate names and registrations and applications for registration
thereof, (iii) copyrights and registrations and applications for
registration thereof, (iv) mask works and registrations and applications
for registration thereof, (v) computer software, data, and documentation,
(vi) trade secrets and confidential business information (including
ideas, formulas, compositions, inventions (whether patentable or
unpatentable and whether or not reduced to practice), know-how,
manufacturing and production processes and techniques, research and
development information, drawings, specifications, designs, plans,
proposals, technical data, copyrightable works, financial, marketing, and
business data, pricing and cost information, business and marketing
plans, and customer and supplier lists and information), (vii) other
proprietary rights, and (viii) copies and tangible embodiments thereof
(in whatever form or medium).
4.13 TANGIBLE ASSETS. Except as set forth on the RealAmerica
Financial Statements, RealAmerica does not own or lease any tangible assets of
any kind or nature.
4.14 INVENTORY. RealAmerica has no inventory of products, raw
materials or other supplies.
4.15 LITIGATION. RealAmerica (i) is not subject to any unsatisfied
judgment, order, decree, stipulation, injunction or charge, and (ii) is a not
party and, to the knowledge of any of the directors and officers (and
employees with responsibility for litigation matters) of RealAmerica, is not
threatened to be made a party to any charge, complaint, action, suit,
proceeding, hearing, or investigation of or in any court or quasijudicial or
administrative agency of any federal, state, local or foreign jurisdiction or
before any arbitrator.
4.16 ADVERSE CHANGES. There has been no material adverse change in
the condition, financial or otherwise, of RealAmerica from that set forth in
the Most Recent RealAmerica Balance Sheet. To the best of RealAmerica's
knowledge, RealAmerica is not aware of any facts that might result in any
actions, suit or other proceeding that would result in any adverse change in
the financial condition of RealAmerica. The business, properties and assets
reflected in the RealAmerica Financial Statements have not been materially and
adversely affected as a result of any fire, explosion, earthquake, accident,
strike, lockout, requisition or taking of property by any government or agency
thereof, flood, drought, embargo, riot, activities of armed forces or acts of
God or the public.
4.17 BOOKS AND RECORDS. All of the minute books, stock certificate
books and stock transfer ledgers of RealAmerica are complete and accurate in
all material respects.
4.18 CERTAIN BUSINESS RELATIONSHIPS WITH REALAMERICA. None of the
TRUCAT shareholders and their affiliates has been involved in any business
arrangement or relationship with RealAmerica within the past 36 months, and
none of the TRUCAT shareholders and their affiliates owns any property or
right, tangible or intangible, which is used in the business of RealAmerica
other than ▇▇▇▇▇ ▇▇▇▇▇▇ who, in his capacity of shareholder of RealAmerica and
a former director, has advised or counselled with RealAmerica management and
directors on an informal basis on the course of action to take in the
operations capital structure of RealAmerica including re-capitalization and
the transaction contemplated hereby.
4.19 INDEPENDENT INVESTIGATION OF TRUCAT. RealAmerica confirms that
it has received, reviewed, understands and has fully considered (including,
without limitation, the financial statements contained therein) for purposes
of its acquisition of the TRUCAT Shares, the business prospects and leases of
TRUCAT. RealAmerica acknowledges that (i) TRUCAT has limited financial
resources and will need additional sources of capital to implement its current
business plan, the availability of which is uncertain and cannot be assured,
and (ii) the TRUCAT Shares are a highly speculative investment with a high
degree of risk of loss by RealAmerica of its investment therein. RealAmerica
represents and warrants that in making the decision to acquire the TRUCAT
Shares, it has relied upon its own independent investigation of TRUCAT and the
independent investigations by its representatives, including its own
professional legal, tax and business advisors, and that RealAmerica and its
representatives have been given the opportunity to examine all relevant
documents and to ask questions of and to receive answers from TRUCAT, or
person(s) acting on its behalf, concerning the terms and conditions of
acquisition by RealAmerica of the TRUCAT shares and any other matters
concerning an investment in TRUCAT, and to obtain any additional information
RealAmerica deems necessary to verify the accuracy of the information
provided.
4.20 DISCLOSURE. The representations and warranties contained in
this Section 4 do not contain any untrue statement of a fact or omit to state
any fact necessary in order to make the statements and information contained
in this Section 4 not misleading.
5. Survival and Indemnity.
-----------------------
5.01 SURVIVAL. All of the representations and warranties of the
parties contained in this Agreement shall survive the Closing Date, even if
the damaged party knew or had reason to know of any misrepresentation or
breach of warranty at the time of the Closing Date, and shall continue in full
force and effect for a period of one year thereafter.
5.02 INDEMNIFICATION FOR BENEFIT OF THE TRUCAT STOCKHOLDERS. In the
event RealAmerica breaches any of its representations, warranties and
covenants contained herein, and provided that any TRUCAT Stockholder or TRUCAT
makes a written claim for indemnification against RealAmerica pursuant to
Section 10.05, then RealAmerica agrees to and does hereby indemnify TRUCAT and
the TRUCAT Stockholders from and against the entirety of any Adverse
Consequences it may suffer through and after the date of the claim for
indemnification (including any Adverse Consequences that TRUCAT or the TRUCAT
Stockholders may suffer after the end of the applicable survival period)
resulting from, arising out of, relating to, in the nature of, or caused by
the breach.
5.03 INDEMNIFICATION FOR BENEFIT OF REALAMERICA. In the event any of
the TRUCAT Stockholders breach any of their respective representations,
warranties and covenants contained herein, and provided that RealAmerica makes
a written claim for indemnification against the TRUCAT Stockholder in breach
pursuant to Section 10.05, then the TRUCAT Stockholders severally, and not
jointly, agree to indemnify RealAmerica from and against the entirety of any
Adverse Consequences RealAmerica may suffer through and after the date of the
claim for indemnification resulting from, arising out of, relating to, in the
nature of, or caused by the breach.
5.04 MATTERS INVOLVING THIRD PARTIES. If any third party shall
notify any party to this Agreement (the "Indemnified Party") with respect to
any matter which may give rise to a claim for indemnification against any
other party (the "Indemnifying Party") under this Section 5, then the
Indemnified Party shall notify each Indemnifying Party thereof promptly;
provided however, that no delay on the part of the Indemnified Party in
notifying any Indemnifying Party shall relieve the Indemnifying Party from any
liability or obligation hereunder unless (and then solely to the extent) the
Indemnifying Party thereby is damaged. In the event any Indemnifying Party
notifies the Indemnified Party within 10 days after the Indemnified party has
given notice of the matter that the Indemnifying Party is assuming the defense
thereof, (i) the Indemnifying Party will defend the Indemnified Party against
the matter with counsel of its choice reasonably satisfactory to the
Indemnified Party, (ii) the Indemnified Party may retain separate co-counsel
at its sole cost and expense (except that the Indemnifying Party will be
responsible for the fees and expenses of the separate co-counsel to the extent
the Indemnified Party concludes reasonably that the counsel the Indemnifying
Party has selected has a conflict of interest), (iii) the Indemnified Party
will not consent to the entry of any judgment or enter into any settlement
with respect to the matter without the written consent of the Indemnifying
Party not to be withheld unreasonably, and (iv) the Indemnifying Party will
not consent to the entry of any judgment with respect to the matter, or enter
into any settlement which does not include a provisions whereby the plaintiff
or claimant in the matter releases the Indemnified Party for all liability
with respect thereto, without the written consent of the Indemnified Party not
to be withheld unreasonably. In the event no Indemnifying Party notifies the
Indemnified Party with 10 days after the Indemnified Party has given notice of
the matter that the Indemnifying Party is assuming the defense thereof,
however, the Indemnified Party may defend against, or enter into any
settlement with respect to, the matter in any manner it reasonably may deem
appropriate.
5.05 DETERMINATION OF LOSS. The parties shall make appropriate
adjustment for tax benefits and insurance proceeds (reasonably certain of
receipt and utility in each case) and for the time cost of money in
determining the amount of loss for purposes of this Section 5.
5.06 OTHER INDEMNIFICATION PROVISIONS. The foregoing indemnification
provisions are in addition to, and not in derogation of, any statutory or
common law remedy any party may have for breach of representation, warranty or
covenant.
5.07 DEFINITION OF ADVERSE CONSEQUENCES. As used in this Section 5,
"Adverse Consequences" means all charges, complaints, actions, suits,
proceedings, hearings, investigations, claims, demands, judgments, orders,
decrees, stipulations, injunctions, damages, dues, penalties, fines, costs,
(including costs incurred to comply with applicable rules and regulations of
the National Association of Securities Dealers and the Securities and Exchange
Commission) amounts paid in settlement, liabilities, obligations, taxes,
liens, losses, expenses and fees, including all attorneys' fees, accountants'
fees and court costs.
6. Conduct and Transactions Prior to Closing.
------------------------------------------
6.01 INVESTIGATION; OPERATION OF BUSINESS OF TRUCAT. Between the
date of this Agreement and the Closing Date:
(a) TRUCAT agrees to give RealAmerica, its agents and
representatives, full access to all of TRUCAT's premises and books and
records, and to cause TRUCAT's officers to furnish RealAmerica with such
financial and operating data and other information with respect to its
business and properties as RealAmerica shall from time to time request.
Provided, however, that any such investigation shall not affect any of
the representations and warranties of TRUCAT hereunder and provided
further, that any such investigation shall be conducted in such manner as
not to interfere unreasonably with the operation of the business of
TRUCAT. In the event of termination of this Agreement, RealAmerica will
return to TRUCAT all documents, work papers, and other material obtained
from TRUCAT in connection with the transactions contemplated hereby and
will keep confidential any information obtained pursuant to this
Agreement unless such information is ascertainable from public or
published information or trade sources.
(b) Except as set forth in the TRUCAT Disclosure Schedule,
TRUCAT, to the extent required for continued operation of the business of
TRUCAT without impairment, will use reasonable efforts to preserve
substantially intact the business organization of TRUCAT, to keep
available the services of the present officers and employees of TRUCAT,
and to preserve the present relationships of TRUCAT with persons having
significant business relationships with TRUCAT.
(c) Except as set forth on the TRUCAT Disclosure Schedule,
prior to Closing, TRUCAT will conduct its business only in the ordinary
course and, by way of amplification and not limitation, TRUCAT will not,
without the prior written consent of RealAmerica (i) issue any capital
stock, or (ii) grant any stock options or warrants or other rights to
purchase or otherwise acquire any shares of TRUCAT capital stock or issue
any securities convertible into shares of TRUCAT capital stock, or (iii)
adopt any employee benefit plans or modify or alter any existing employee
benefit plan, or (iv) declare, set aside, or pay any dividend or
distribution with respect to the capital stock of TRUCAT, or (v) directly
or indirectly redeem, purchase or otherwise acquire any capital stock of
TRUCAT, or (vi) effect a split or reclassification of any capital stock
of TRUCAT or a recapitalization of TRUCAT, or (vii) amend or change the
Certificate of Incorporation or Bylaws of TRUCAT or, (viii) grant any
increase in the compensation payable or to become payable by TRUCAT to
officers or salaried employees of TRUCAT or any increase regardless of
amount, in any bonus, insurance, pension or other benefit plan, program,
payment or arrangement made to, for or with any officers or employees, or
(ix) borrow or agree to borrow any funds, or guarantee or agree to
guarantee the obligations of others except in the ordinary course of
business, or (x) waive any rights of substantial value, or (xi) except in
the ordinary course of business, enter into an agreement, contract or
commitment.
6.02 INVESTIGATION; OPERATION OF BUSINESS OF REALAMERICA. Between
the date of this Agreement and the Closing Date:
(a) RealAmerica agrees to give to the TRUCAT Stockholders, their
agents and representatives, full access to all premises and books and
records, and to cause RealAmerica's officers to furnish the TRUCAT
Stockholders with such financial and operating data and other information
with respect to the business and properties of RealAmerica as the TRUCAT
Stockholders shall from time to time request. Provided, however, that
any such investigation shall not affect any of the representations and
warranties of RealAmerica hereunder; and provided further, that any such
investigation shall be conducted in such manner as not to interfere
unreasonably with the operation of the business of RealAmerica. In the
event of termination of this Agreement, the TRUCAT Stockholders will
return to RealAmerica all documents, work papers and other material
obtained from RealAmerica in connection with the transactions
contemplated hereby and will use all reasonable efforts to keep
confidential any information obtained
pursuant to this Agreement unless such information is ascertainable from
public or published information or trade sources.
(b) RealAmerica, to the extent required for continued operation
of the business of RealAmerica without impairment, will use reasonable
efforts to preserve substantially intact the business organization of
RealAmerica, to keep available the services of the present officers and
employees of RealAmerica, and to preserve the present relationships of
RealAmerica with persons having significant business relationships to
RealAmerica.
(c) Prior to closing, RealAmerica will cause RealAmerica to,
conduct its business only in the ordinary course and, by way of
amplification and not limitation, RealAmerica will not, without the prior
written consent of the TRUCAT Stockholders, (i) issue any capital stock,
or (ii) grant any stock options or warrants or other rights to purchase
or otherwise acquire any shares of RealAmerica capital stock or issue any
securities convertible into shares of RealAmerica capital stock, or (iii)
adopt any employee benefit plans or modify or alter any existing employee
benefit plan, or (iv) declare, set aside, or pay any dividend or
distribution with respect to the capital stock of RealAmerica, or (v)
directly or indirectly redeem, purchase or otherwise acquire any capital
stock of RealAmerica, or (vi) effect a split or reclassification of any
capital stock of RealAmerica or a re-capitalization of RealAmerica, or
(vii) amend or change the Certificate of Incorporation or Bylaws of
RealAmerica, or, (viii) grant any increase in the compensation payable or
to become payable by RealAmerica to officers or salaried employees of
RealAmerica or any increase regardless of amount, in any bonus,
insurance, pension or other benefit plan, program, payment or arrangement
made to, for or with any officers or employees, or (ix) borrow or agree
to borrow any funds, or guarantee or agree to guarantee the obligations
of others except in the ordinary course of business, or (x) waive any
rights of substantial value, or (xi) except in the ordinary course of
business, enter into an agreement, contract or commitment. RealAmerica,
TRUCAT and the TRUCAT Shareholders each acknowledge that RealAmerica will
dispose of its wholly-owned subsidiary, Merrion Reinsurance Company,
Ltd., prior to closing of the TRUCAT Acquisition and that actions and
agreements in connection with that sale will be available to TRUCAT and
the TRUCAT Shareholders.
7. Consents.
---------
Prior to Closing, the TRUCAT Stockholders and RealAmerica shall each use his
or its respective reasonable efforts to obtain the consent or approval of each
person whose consent or approval shall be required in order to permit the
TRUCAT Stockholders or RealAmerica, as the case may be, to consummate the
RealAmerica Acquisition.
8. Conditions to Closing.
----------------------
8.1 General Conditions. The obligations of the parties to effect the
RealAmerica Acquisition shall be subject to the following conditions:
(a) The Board of Directors and, to the extent required by law,
the shareholders of RealAmerica and TRUCAT, shall have approved this
Agreement in accordance with applicable provisions of state law.
(b) No action, suit or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any
federal, state, local or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling,
filing or charge would (i) prevent consummation of any of the
transactions contemplated by this Agreement, (ii) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, (iii) affect adversely the right of RealAmerica to acquire
and own the TRUCAT Shares, (iv) affect adversely the right of the TRUCAT
Stockholders to acquire and own the RealAmerica Shares; or M affect
adversely the right of either RealAmerica or TRUCAT to own its assets and
to operate its businesses (and no such injunction, judgment, order,
decree, ruling or charge shall be in effect).
(c) All governmental approvals, the absence of which would have
a materially adverse effect on RealAmerica or TRUCAT, respectively, on a
consolidated basis, after the Closing Date, shall have been received.
8.02 CONDITIONS OF OBLIGATIONS OF REALAMERICA. The obligation of
RealAmerica to effect the RealAmerica Acquisition and to proceed with the
Closing on the Closing Date shall at all times be subject to the following
conditions precedent, any of which may be waived by RealAmerica in writing:
(a) (i) the representations and warranties of the TRUCAT
Stockholders and TRUCAT contained herein shall be true and correct in all
material respects at the Closing Date with the same effect as though made
at such time, and (ii) the TRUCAT Stockholders shall have each performed
all material obligations and complied with all material covenants
required by this Agreement to be performed or complied with by him or it
prior to the Closing Date.
(b) The TRUCAT Stockholders shall have each obtained and
delivered to RealAmerica consents to the transactions contemplated by
this Agreement from the parties to all material contracts, referred to in
the TRUCAT Disclosure Schedule attached hereto in accordance with this
Agreement, which require such consent.
(c) There shall not have occurred (i) any material adverse
change, since the Most Recent TRUCAT Fiscal Year End, in the business,
properties, results of operations or financial condition of TRUCAT, or
(ii) any loss or damage to any of the properties or assets (whether or
not covered by insurance) of TRUCAT which will materially affect or
impair the ability of TRUCAT to conduct. after the RealAmerica
Acquisition the business now being conducted by RealAmerica.
(d) All statutory requirements for the valid consummation by the
TRUCAT Stockholders of the transactions contemplated by this Agreement
shall have been fulfilled and all authorizations, consents and approvals
of all federal, state or local governmental agencies and authorities
required to be obtained in order to permit consummation by the TRUCAT
Stockholders of the transactions contemplated by this Agreement and to
permit the business presently carried on by TRUCAT to continue unimpaired
to any material degree immediately following the Closing Date shall have
been obtained. Between the date of this Agreement and the Closing Date,
no governmental agency, whether federal, state or local, shall have
instituted (or threatened to institute in a writing directed to the
TRUCAT Stockholders, TRUCAT, RealAmerica or any of their subsidiaries or
affiliates) an investigation which is pending at the Closing Date
relating to the RealAmerica Acquisition and between the date of this
Agreement and the Closing Date no action or proceeding shall have been
instituted or, to the knowledge of the TRUCAT Stockholders, shall have
been threatened by any party (public or private) before a court or other
governmental body to restrain or prohibit the transactions contemplated
by this Agreement or to obtain damages in respect thereof.
(e) The stockholders of TRUCAT shall have each acknowledged to
RealAmerica in writing (i) that the shares of RealAmerica common stock to
be issued to them pursuant to the RealAmerica Acquisition will be issued
without registration under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state in reliance upon
available exemptions from the registration requirements thereof; (ii)
that all such shares of RealAmerica common stock will be subject to
restrictions on transferability and may not be offered for sale, sold or
otherwise transferred unless subsequently registered under the Securities
Act and all other applicable securities laws or unless exemptions from
the registration requirements of the Securities Act and all other
applicable securities laws are available, as established to the
satisfaction of RealAmerica, and (iii) the certificates evidencing such
RealAmerica common stock will bear an appropriate legend evidencing the
above referenced restrictions on transferability.
(f) TRUCAT shall have furnished RealAmerica with a certificate,
dated the Closing Date, stating that the respective representations and
warranties of TRUCAT contained in Section 3 are true and correct on the
Closing Date in all material respects as if then made.
(g) all papers, documents, agreements and other items required
to be delivered at Closing pursuant to Section 9.03 shall be delivered at
Closing.
8.03 CONDITIONS OF OBLIGATION OF THE TRUCAT STOCKHOLDERS. The
obligation of the TRUCAT Stockholders to effect the RealAmerica Acquisition
and to proceed with the Closing on the Closing Date shall at all times be
subject to the following conditions precedent, any of which may be waived by
the TRUCAT Stockholders in writing:
(a) RealAmerica shall have furnished the TRUCAT Stockholders
with (i.) certified copies of resolutions duly adopted by its Board of
Directors and, to the extent required by law, the shareholders of
RealAmerica, authorizing all necessary and proper corporate action to
enable RealAmerica to comply with terms of this Agreement and approving
the execution, delivery and performance of this Agreement, including the
issuance of the RealAmerica Shares, and (ii) an Incumbency Certificate
for the appropriate officers of RealAmerica.
(b) (i) the representations and warranties of RealAmerica herein
shall be true in all material respects at the Closing Date with the same
effect as though made at such time; and (ii) RealAmerica shall have
performed all material obligations and complied with all material
covenants required by this Agreement to be performed or complied with by
it prior to the Closing Date.
(c) RealAmerica shall have obtained and delivered to the TRUCAT
Stockholders consents to the transactions contemplated by this Agreement
from the parties to all material contracts, referred to in the
RealAmerica Disclosure Schedule attached hereto in accordance with this
Agreement, which require such consent.
(d) There shall not have occurred (i) any material adverse
change since the Most Recent RealAmerica Fiscal Quarter in the business,
properties, results of operations or financial condition of RealAmerica,
or (ii) any loss or damage to any of the properties or assets (whether or
not covered by insurance) of RealAmerica which will materially affect or
impair the ability of RealAmerica to conduct, after the RealAmerica
Acquisition, the business now being conducted by RealAmerica.
(e) All statutory requirements for the valid consummation by
RealAmerica of the transactions contemplated by this Agreement shall have
been fulfilled and all authorizations, consents and approvals of all
federal, state, local and foreign governmental agencies and authorities
required to be obtained in order to permit consummation by RealAmerica of
the transactions contemplated by this Agreement shall have been obtained.
Between the date of this Agreement and the Closing Date, no governmental
agency, whether federal, state or local, shall have instituted (or
threatened to institute in a writing directed to the TRUCAT Stockholders,
TRUCAT, RealAmerica or any of their subsidiaries or affiliates) an
investigation which is pending at the Closing Date relating to the
RealAmerica Acquisition and between the date of this Agreement and the
Closing Date no action or proceeding shall have been instituted or, to
the knowledge of RealAmerica shall have been threatened by any party
(public or private) before a court or other governmental body to restrain
or prohibit the transaction contemplated by this Agreement or to obtain,
the damages in respect thereof.
(f) RealAmerica shall have furnished TRUCAT with a certificate,
dated the Closing Date, stating that the representations and warranties
of RealAmerica contained in Section 4 are true and correct on the Closing
Date in all material respects as if then made.
(g) all papers, documents, agreements and other items required
to be delivered at Closing pursuant to Section 9.02 shall have been
delivered at Closing.
9. Actions at Closing.
-------------------
9.01 ACTIONS AT THE CLOSING. At the Closing, RealAmerica and the
TRUCAT Stockholders will each deliver, or cause to be delivered to the other,
the securities to be exchanged in accordance with Section 1.01 of this
Agreement, and each party shall pay any and all federal and state taxes
required to be paid in connection with the
issuance of delivery of their own securities. Certificates representing the
RealAmerica Shares shall be issued and delivered as set forth on Exhibit "A"
attached hereto. Certificates representing the TRUCAT Shares shall be duly
endorsed by each of the TRUCAT Stockholders for transfer to RealAmerica or in
blank, or have appropriately executed powers of attorney attached, and
signatures shall be witnesses.
9.02 DELIVERIES BY REALAMERICA. At Closing, RealAmerica will deliver
to the TRUCAT Stockholders:
(a) certificates for the RealAmerica Shares as provided by
Section 9.01 hereof;
(b) certified copies of corporate resolutions and other
corporate proceedings taken by RealAmerica to authorize the execution,
delivery and performance of this Agreement and the appointment of to the
Board of RealAmerica;
(c) a board action electing a new slate of directors to the
RealAmerica board comprised by the persons determined at the sole
discretion of TRUCAT, together with subsequent resignations of the
current Board of Directors of RealAmerica.
9.03 DELIVERIES BY THE TRUCAT STOCKHOLDERS. At Closing, the TRUCAT
Stockholders shall deliver to RealAmerica:
(a) certificates for the TRUCAT Shares as provided by Section
9.01 hereof;
(b) certified copies of corporate resolutions and other
corporate proceedings taken by TRUCAT to authorize the execution,
delivery and performance of this Agreement;
(c) a certificate of Incumbency and signatures of the Board of
Directors of TRUCAT dated as of the date of this Agreement.
10. Termination.
------------
10.01 TERMINATION OF THE AGREEMENT. The parties may terminate this
Agreement as provided below:
(a) RealAmerica, TRUCAT and the TRUCAT Stockholders may
terminate this Agreement by mutual written consent at any time prior to
the Closing;
(b) the either party may terminate this Agreement by giving
written notice to other party on or before the Closing Date if the either
party is not satisfied with the results of their continuing business,
legal and accounting due diligence regarding each other;
(c) TRUCAT and/or the TRUCAT Stockholders may terminate this
Agreement by giving written notice to RealAmerica at any time prior to
the Closing (i) in the event RealAmerica has breached any representation,
warranty or covenant contained in this Agreement in any material respect,
TRUCAT and/or the TRUCAT Stockholders has notified RealAmerica of the
breach and the breach has continued without cure for a period of 10 days
after the notice of breach, or (ii) if the Closing shall not have
occurred on or before March 31, 1999, or such later date as may be agreed
to by TRUCAT, the TRUCAT Stockholders and RealAmerica, in writing, by
reason of the failure of any condition precedent under Section 8.03
hereof (unless the failure results primarily from TRUCAT or the TRUCAT
Stockholders themselves breaching any representation, warranty or
covenant contained in this Agreement); and
(d) RealAmerica may terminate this Agreement by giving written
notice to TRUCAT and the TRUCAT Stockholders at any time prior to the
Closing (i) in the event TRUCAT or any TRUCAT Stockholder has breached
any representation, warranty or covenant contained in this Agreement in
any material respect, RealAmerica has notified TRUCAT and the TRUCAT
Stockholders of the breach and the breach has continued without cure for
a period of 10 days after the notice of breach or (ii) if the Closing
shall not have occurred on or before March 31, 1999, or such later date
as may be agreed to by TRUCAT, the TRUCAT Stockholders and RealAmerica in
writing, by reason of the failure of any condition precedent
under Section 8.02 hereof ('unless the failure results primarily from
RealAmerica itself breaching any representation, warranty or covenant
contained in this Agreement).
10.02 EFFECT OF TERMINATION. If either TRUCAT and/or the TRUCAT
Stockholders or RealAmerica terminates this Agreement pursuant to Section
10.01 above, all rights and obligations of the parties hereunder shall
terminate without any liability of any party to any other party.
11. General.
--------
11.1 BROKERS AND FINDERS. Each Party hereto represents that no
broker, agent, finder or other party has been retained by either Party, and no
brokerage or finder's fees or agent's commissions or other like payment has
been agreed to be paid by him or it in connection with this Agreement or on
account of the transactions contemplated by this Agreement. Each Party agrees
to indemnify and hold harmless the other parties from and against any and
every claim arising by breach of the aforesaid representation and warranty and
all costs and. expenses, legal or otherwise, which any such party may incur as
the result of any such claim.
11.2 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall issue
any press release or make any public announcement relating to the subject
matter of this Agreement without the prior written approval of the other
Parties. Provided however, that any Party may make any public disclosure it
believes in good faith is required by applicable law or any listing or trading
agreement concerning its publicly-traded securities (in which case the
disclosing Party will use its reasonable efforts to advise the other Party
prior to making the disclosure.
11.03 SCHEDULES. The TRUCAT and RealAmerica Disclosure Schedules
delivered pursuant to the terms of this Agreement shall be bound together,
initialed by RealAmerica and TRUCAT and deemed attached hereto and made a part
hereof.
11.04 SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES. Except
as otherwise specifically provided, the covenants, representations and
warranties contained herein shall expire and be terminated and extinguished at
the Closing Date.
11.05 GOVERNING LAW. This Agreement and the legal relations between
the parties shall be governed by and construed in accordance with the laws of
the State of Delaware.
11.06 NOTICES. Any notices or other communications required or
permitted hereunder shall be sufficiently given if sent by registered mail or
certified mail, postage prepaid if addressed as follows:
If to RealAmerica:
RealAmerica Co.
▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
If to TRUCAT and TRUCAT Stockholders:
Trucat Holding Company, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
President
11.07 No Assignment. This Agreement may not be assigned by operation of
law or otherwise, without the express written consent of each party hereto.
IN WITNESS WHEREOF, this Agreement has been duly signed by the TRUCAT
Stockholders as is required by the TRUCAT By-Laws and applicable law as of the
day and year first written above.
REALAMERICA Co.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_______________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
TRUCAT HOLDING CO., INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
_______________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III, President
THE TRUCAT SHAREHOLDERS
Corsan, Ltd.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
_________________________________ __________________________________
▇▇▇▇▇ ▇▇▇▇▇▇, AIF ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III, AIF
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
_______________________________ __________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III ▇▇▇▇▇ ▇▇▇▇▇
By ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III, AIF
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
__________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Primos N.V.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
_______________________________________________
▇▇▇▇▇ ▇▇▇▇▇▇, V.P.
Frontier Freight Forwarders, Inc.
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇
_______________________________________________
▇. ▇. ▇▇▇▇▇▇▇, AIF
