Exhibit 99.5
Execution Copy
ASSET PURCHASE AGREEMENT
DATED AS OF JANUARY 31, 2004
BY AND AMONG
XXXXXXXXXX.XXX INC.
LIFE QUOTES ACQUISITION, INC.
XXXXXXX X. XXXXXX
AND
LIFE QUOTES, INC.
TABLE OF CONTENTS
PAGE
ARTICLE I SALE OF ASSETS.........................................................2
1.1 Purchase and Sale of Assets..........................................2
1.2 Liabilities..........................................................4
1.3 Purchase Price.......................................................5
1.4 The Closing Payment and Preliminary Settlement Statement.............6
1.5 Further Assurances; Post-Execution Cooperation.......................7
1.6 Third-Party Consents.................................................8
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND XXXXXX..............9
2.1 Organization of the Company..........................................9
2.2 Authority............................................................9
2.3 No Conflicts.........................................................9
2.4 Governmental Approvals and Filings...................................9
2.5 Books and Records...................................................10
2.6 Financial Statements; Expenses......................................10
2.7 Absence of Changes..................................................10
2.8 No Undisclosed Liabilities..........................................11
2.9 Taxes...............................................................11
2.10 Legal Proceedings...................................................12
2.11 Compliance With Laws and Orders.....................................13
2.12 Benefit Plans; ERISA................................................13
2.13 Real Property.......................................................14
2.14 Tangible Personal Property..........................................14
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2.15 Accounts Receivable.................................................14
2.16 Work-in-Process.....................................................14
2.17 Renewals............................................................14
2.18 Intellectual Property Rights........................................14
2.19 Contracts...........................................................15
2.20 Licenses............................................................16
2.21 Insurance...........................................................17
2.22 Affiliate Transactions..............................................17
2.23 Employees; Labor Relations..........................................17
2.24 Environmental Matters...............................................18
2.25 Business Forms and Policy Statements................................18
2.26 No Guarantees.......................................................19
2.27 Entire Business.....................................................19
2.28 Brokers.............................................................19
2.29 Commissions.........................................................19
2.30 Disclosure..........................................................19
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.....................20
3.1 Organization........................................................20
3.2 Authority...........................................................20
3.3 No Conflicts........................................................20
3.4 Brokers.............................................................20
3.5 Governmental Approvals and Filings..................................20
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PARENT.........................21
4.1 Organization........................................................21
4.2 Authority...........................................................21
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4.3 No Conflicts........................................................21
4.4 Governmental Approvals and Filings..................................21
ARTICLE V CONDITIONS PRECEDENT..................................................22
5.1 Conditions Precedent - General......................................22
5.2 Conditions Precedent - the Purchaser................................22
5.3 Conditions Precedent - the Company and Xxxxxx.......................23
ARTICLE VI CLOSING..............................................................24
6.1 Closing and Closing Date............................................24
6.2 Closing Documents - General.........................................24
6.3 Closing Documents - The Company and Xxxxxx..........................25
6.4 Closing Documents - Purchaser and Parent............................25
ARTICLE VII COVENANTS...........................................................25
7.1 Pre-Closing Affirmative Covenants - Company and Xxxxxx..............26
7.2 Pre-Closing Negative Covenants - Company and Xxxxxx.................26
7.3 Pre -Closing Affirmative Covenants - Purchaser and Parent...........27
7.4 Post-Closing Covenants..............................................27
7.5 Due Diligence.......................................................28
7.6 Cost of Financial Statements........................................29
7.7 Sale and Use Taxes..................................................29
7.8 Confidentiality.....................................................29
ARTICLE VIII LIMITATIONS........................................................29
8.1 Disclaimers Regarding Warranties....................................29
8.2 Reliance............................................................30
8.3 Damages.............................................................30
ARTICLE IX SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS....30
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9.1 Survival of Representations, Warranties, Covenants and Agreements...30
ARTICLE X INDEMNIFICATION.......................................................31
10.1 Indemnification.....................................................31
10.2 Method of Asserting Claims..........................................32
ARTICLE XI DEFINITIONS..........................................................35
11.1 Definitions.........................................................35
11.2 Interpretation......................................................41
ARTICLE XII MISCELLANEOUS.......................................................41
12.1 Notices.............................................................41
12.2 Entire Agreement....................................................42
12.3 Expenses............................................................42
12.4 Public Announcements................................................42
12.5 Confidentiality.....................................................43
12.6 Waiver..............................................................43
12.7 Amendment...........................................................43
12.8 No Third Party Beneficiary..........................................43
12.9 No Assignment; Binding Effect.......................................43
12.10 Headings............................................................43
12.11 Invalid Provisions..................................................43
12.12 Governing Law.......................................................43
12.13 WAIVER OF JURY TRIAL................................................44
12.14 Counterparts; Facsimile.............................................44
12.15 Preparation and Review of Agreement.................................44
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EXHIBITS
Exhibit A Real Estate Agreement
Exhibit A-1 Lease Agreement
Exhibit B Non-Competition Agreement
Exhibit C Escrow Agreement
Exhibit D Xxxx of Sale and Assumption Agreement
Exhibit E Opinion of Company's Counsel
Exhibit F Officer's Certificate of the Company
Exhibit G Opinion of Xxxxx Xxxxxx LLP
Exhibit H Officer's Certificate of Purchaser
Exhibit I Form of Preliminary Settlement Statement
Exhibit J Option Shares
Exhibit K Agreement
SCHEDULES
1.1(a)(i) Tangible Personal Property
1.1(a)(ii) Personal Property Leases
1.1(a)(iii) Assumed Contracts
1.1(a)(iv) Prepaid Expenses
1.1(a)(v) Intangible Personal Property
1.1(a)(vi) Licenses
1.1(a)(viii) Other Assets and Properties
1.1(a)(ix) Accounts Receivable
1.1(a)(x) Work-in-Process
1.1(a)(xi) Renewals
1.1(b) Excluded Assets
1.1(c) Revenues/Expenses
1.2(a)(ii) Accounts Payable
1.2(a)(iii) Other Liabilities
1.2(b) Excluded Liabilities
1.3(a) Purchase Price Computation
2.3 No Conflicts
2.4 Governmental Approval and Filings
2.7 Absence of Changes
2.8 No Undisclosed Liabilities
2.10 Legal Proceedings
2.11 Compliance With Laws and Orders
2.12 Benefit Plans; ERISA
2.18 Intellectual Property Rights
2.19(a) Contracts
2.19(c) Termination Rights
2.20 Licenses
2.21 Insurance
2.22 Affiliate Transactions
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2.23 Employees; Labor Relations
2.29 Commissions
3.5 Governmental Approvals and Filings
4.4 Governmental Approvals and Filings
10.1(a) Other Matters
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ASSET PURCHASE AGREEMENT
This
ASSET PURCHASE AGREEMENT, dated as of January 31, 2004 (this
"AGREEMENT"), is made and entered into by and among Xxxxxxxxxx.xxx Inc. (the
"PARENT"), a Delaware corporation, Life Quotes Acquisition, Inc. (the
"PURCHASER"), a Delaware corporation and a wholly-owned subsidiary of the
Parent, Life Quotes, Inc. (the "COMPANY"), a Michigan corporation, and Xxxxxxx
X. Xxxxxx ("XXXXXX"). Capitalized terms not otherwise defined herein have the
meanings set forth in SECTION 10.1.
RECITALS
A. The Company is a domestic insurance agency operating in all states
throughout the United States of America (the "BUSINESS").
B. The Company desires to sell, transfer and assign to the Purchaser,
and the Purchaser desires to purchase and acquire from the Company, certain of
the assets of the Company relating to the operation of the Business, and in
connection therewith, the Purchaser has agreed to assume certain specifically
identified liabilities of the Company relating to the Business, all on the terms
set forth herein.
C. Concurrently with the execution and delivery of this Agreement, The
Xxxxxxx X. Xxxxxx Revocable Trust dated as of June 10, 1987 (the "TRUST") and
the Purchaser will enter into that certain Real Estate Purchase Agreement of
even date herewith (the "REAL ESTATE AGREEMENT") substantially in the form
attached hereto as EXHIBIT A, pursuant to which the Trust will sell, transfer
and assign to the Purchaser, and the Purchaser will purchase and acquire from
the Trust, the Real Property (defined below), for a purchase price not to exceed
$5,000,000 in cash, so long as the third party appraisal is equal to or greater
than $5,000,000.
D. The Trust and Purchaser are also concurrently entering into a lease
agreement of even date herewith, in the form attached hereto as EXHIBIT A-1,
pursuant to which the Trust shall lease the Real Property to the Purchaser for
$1 for the Interim Period (defined below).
X. Xxxxxx is the sole shareholder of the Company and therefore will
receive substantial benefits (financial and otherwise) from the transactions
contemplated by this Agreement.
F. On the Closing Date, Xxxxxx will enter into that certain
Non-Competition Agreement dated as of the Closing Date (the "NON-COMPETITION
AGREEMENT") by and among Xxxxxx, the Parent and the Purchaser substantially in
the form attached hereto as EXHIBIT B.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, and for other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
SALE OF ASSETS
1.1 PURCHASE AND SALE OF ASSETS.
(a) ASSETS TRANSFERRED. On the terms and subject to the
conditions set forth in this Agreement, the Company hereby agrees to sell,
transfer, convey, assign and deliver to the Purchaser, and the Purchaser hereby
agrees to purchase and acquire, free and clear of all Liens, all of the
Company's right, title and interest in, to and under the following Assets and
Properties of the Company used or held for use in the operation of the Business
(collectively, the "ASSETS"), except as otherwise provided in SECTION 1.1(b), as
of January 31, 2004 at 11:59 P.M. local time in Evergreen, Colorado (the
"EFFECTIVE DATE"). Subject to the terms and conditions of this Agreement, the
purchase and sale of the Assets shall be closed at a Closing held on the Closing
Date under Article VI below, and shall be effective for all purposes as of the
Effective Date.
(i) TANGIBLE PERSONAL PROPERTY. All furniture, fixtures,
equipment, machinery, office supplies, Business Forms and Policy
Statements, brochures and other marketing materials and other tangible
personal property used or held for use in the conduct of the Business at
the locations at which the Business is conducted, or otherwise used or
held for use or otherwise useful in the operation of the Business
(including but not limited to the items listed in SECTION 1.1(a)(i) OF
THE DISCLOSURE SCHEDULE) (the "TANGIBLE PERSONAL PROPERTY");
(ii) PERSONAL PROPERTY LEASES. (A) The leases or subleases of
Tangible Personal Property described in SECTION 1.1(a)(ii)(A) OF THE
DISCLOSURE SCHEDULE as to which the Company is the lessor or sublessor
and (B) the leases or subleases of Tangible Personal Property described
in SECTION 1.1(a)(ii)(B) OF THE DISCLOSURE SCHEDULE as to which the
Company is the lessee or sublessee, together with any options to purchase
the underlying property;
(iii) ASSUMED CONTRACTS. The Contracts listed in SECTION
1.1(a)(iii) OF THE DISCLOSURE SCHEDULE (the "ASSUMED CONTRACTS");
(iv) PREPAID EXPENSES. All prepaid expenses (other than Taxes)
relating to the Assets, including but not limited to the items listed in
SECTION 1.1(a)(iv) OF THE DISCLOSURE SCHEDULE;
(v) INTANGIBLE PERSONAL PROPERTY. All Intellectual Property used
or held for use in the operation of the Business (including the Company's
goodwill therein) and all rights, privileges, claims, causes of action
and options relating or pertaining to the Business or the Assets,
including the name "Life Quotes," any websites, domain names (including,
"xxx.xxxxxxxxxx.xxx") and including but not limited to the items listed
in SECTION 1.1(a)(v) OF THE DISCLOSURE SCHEDULE;
(vi) LICENSES. The licenses, permits, certificates of authority,
authorizations, approvals, franchises and similar consents granted or
issued by Governmental or
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Regulatory Authorities as listed in SECTION 1.1(a)(vi) OF THE DISCLOSURE
SCHEDULE (the "LICENSES");
(vii) BOOKS AND RECORDS. Subject to SECTION 6.3(c) of this
Agreement, all Books and Records used or held for use in the operation of
the Business or otherwise relating to the Assets, including but not
limited to, the Company's financial books and records (the "BUSINESS
BOOKS AND RECORDS");
(viii) OTHER ASSETS AND PROPERTIES. All other Assets and Properties
of the Company used or held for use in the operation of the Business as
specifically set forth on SECTION 1.1(a)(viii) OF THE DISCLOSURE
SCHEDULE;
(ix) ACCOUNTS RECEIVABLE. All rights to receive payments arising
out of the conduct of the Business comprised of deferred and unpaid first
year commissions on life insurance policies, together with all other
trade accounts receivable, notes and other Indebtedness due or owed to
the Company and arising out of the conduct of the Business and as
specifically set forth on SECTION 1.1(a)(ix) OF THE DISCLOSURE SCHEDULE
(the "ACCOUNTS RECEIVABLE");
(x) WORK-IN-PROCESS. All pending life insurance policies and
applications therefor actually submitted to insurance companies and not
withdrawn or declined and in underwriting based on quotes and
applications for life insurance actually submitted by customers and as
specifically set forth on SECTION 1.1(a)(x) OF THE DISCLOSURE SCHEDULE
(the "WORK-IN-PROCESS");
(xi) INSURANCE RENEWALS. All rights to receive renewal payments,
service fees and renewal policy fee bonuses from in-force life insurance
policies as specifically set forth on SECTION 1.1(a)(xi) OF THE
DISCLOSURE SCHEDULE (the "RENEWALS"); and
(xii) all goodwill of the Business as a going concern.
(b) EXCLUDED ASSETS. Notwithstanding anything in this Agreement
to the contrary, the Company's rights under this Agreement and those items
listed in SECTION 1.1 (b) OF THE DISCLOSURE SCHEDULE shall be excluded from and
shall not constitute Assets, and shall be reserved to and retained by the
Company.
(c) REVENUES/EXPENSES. It is the specific intent of the parties
to this Agreement that all income and revenue pertaining to the operation of the
Business or the Assets paid by cash, check, wire transfer, credit or other means
be allocated and belong to (i) the Company if earned prior to the Effective
Date, and (ii) the Purchaser if earned after the Effective Date, regardless of
the date the Company receives such income and revenue. For example, commissions
paid on an insurance carrier's commission statements covering the period prior
to the Effective Date belong to the Company, even if payment is received after
the Effective Date, and commissions paid on an insurance carrier's commission
statements covering the period after the Effective Date belong to the Purchaser
regardless of when payment is actually received. In applying the foregoing, the
total aggregate commissions, including bonus commissions, set forth in
commission statements covering a time period that overlaps the Effective Date
shall be prorated in the proportion that the number of days
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preceding the Effective Date bears to the number of days following the Effective
Date, as provided in the example set forth in Section 1.1(c) of the Disclosure
Schedule. Similarly, it is the specific intent of the parties to this Agreement
that all costs and expenses pertaining to the operation of the Business or the
Assets be allocated to and borne by (iii) the Company if incurred prior to the
Effective Date, and (iv) the Purchaser if incurred after the Effective Date. For
example, expenses for advertising that is aired or run prior to the Effective
Date shall be borne by the Company regardless of the date of the vendor's
invoice or when payment is made, and expenses for advertising that is aired or
run after the Effective Date shall be borne by the Purchaser regardless of the
date of the vendor's invoice or when payment is made. All such income and
revenue shall be collected and all such costs and expenses shall be allocated in
accordance with the policies set forth in Section 1.1(c) of the Disclosure
Schedule. Notwithstanding the foregoing, the allocation of income, revenues,
costs and expenses under clauses (ii) and (iv) above shall be made at the
Closing and accounted for under Section 1.4 of this Agreement in determining the
Closing Payment (as defined herein) to be paid at Closing. In addition, ad
valorem Taxes on the Tangible Personal Property will be prorated between the
Company and the Purchaser as of the Effective Date such that the Purchaser bears
such Taxes for the period after the Effective Date and the Company bears such
Taxes for the period prior to the Effective Date.
(d) RISK OF LOSS. Except as otherwise provided in this Agreement
and subject to the Closing occurring, the Company assumes all risk of loss with
respect to the Assets prior to the Effective Date and Purchaser assumes all risk
of loss with respect to the Assets from and after the Effective Date. In order
to effect the foregoing, the Company will cause the Purchaser to be named "loss
payee" and "additional insured" on all certificates of insurance concerning the
Business and the Assets as of the Effective Date.
1.2 LIABILITIES.
(a) ASSUMED LIABILITIES. In connection with the sale, transfer,
conveyance, assignment and delivery of the Assets pursuant to this Agreement, on
the terms and subject to the conditions set forth in this Agreement, the
Purchaser shall, effective as of the Effective Date, but subject to Closing,
assume and agree to pay, perform and discharge when due only the following
specified listed obligations of the Company, as the same shall exist on the
Effective Date (the "ASSUMED LIABILITIES"), and no others:
(i) OBLIGATIONS UNDER ASSUMED CONTRACTS AND LICENSES. All
obligations of the Company under the Assumed Contracts and Licenses
arising and to be performed on or after the Effective Date, and excluding
any such obligations arising or to be performed prior to the Effective
Date; and
(ii) ACCOUNTS PAYABLE. All obligations of the Company with respect
to accounts payable listed in SECTION 1.2(a)(ii) OF THE DISCLOSURE
SCHEDULE.
(iii) OTHER LIABILITIES. All other liabilities specifically listed
in SECTION 1.2(a)(iii) OF THE DISCLOSURE SCHEDULE.
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(b) EXCLUDED LIABILITIES. Notwithstanding anything to the
contrary contained in this Agreement, and regardless of whether such liability
is disclosed in this Agreement or on any schedule or exhibit hereto or thereto,
the Purchaser shall not assume, agree to pay, perform or discharge or in any way
be responsible for any Excluded Liabilities. As used herein, the term "Excluded
Liabilities" means any and all debts, liabilities or obligations of the Company,
of any kind or nature whatsoever other than the Assumed Liabilities (whether due
or to become due, fixed or unfixed, xxxxxx or inchoate, secured or unsecured,
absolute or contingent, direct or indirect, asserted or unasserted, known or
unknown, and regardless of whether such debts, liabilities or obligations relate
to the Business or the Assets). Unless such items are otherwise specifically
included in the Assumed Liabilities, the Excluded Liabilities shall include,
without limitation, (i) any liabilities or obligations whatsoever relating,
directly or indirectly, to any Excluded Assets, including without limitation,
any trade creditors, payroll or payroll tax liabilities, payments due to any
current or former employee of the Company for amounts due under any Benefit
Plan, bonus plan or incentive arrangement, income tax liabilities, severance
liabilities to any current or former employees of the Company, or liabilities
with respect to any vacation pay or 401(a) contribution of such employees, (ii)
any environmental or product liability claims arising out of or relating to the
past, present or future operations of the Company or with respect to
contamination of the Real Property that occurred prior to the Closing Date,
(iii) any contractual obligations or liabilities relating to any existing
facilities used in connection with the Business or the Assets, (iv) any
liability of the Company for Taxes, costs and expenses incurred in connection
with this Agreement, (v) the liability of the Company under any "bulk sales" or
similar law or statute relating to the transfer of the Assets hereunder, (vi)
any liability for Taxes (A) imposed on the Company or Xxxxxx at any time, or (B)
attributable to the operation of the Business, with respect to any period (or a
portion thereof) ending on or prior to the Effective Date, and (vii) the items
listed on SECTION 1.2(b) OF THE DISCLOSURE SCHEDULE.
1.3 PURCHASE PRICE.
(a) Subject to the terms and conditions of this Agreement, the
Purchaser shall acquire the Assets in exchange for (i) assuming the Assumed
Liabilities and (ii) a payment of Thirteen Million, Three Hundred Ninety Five
Thousand and No/100 Dollars ($13,395,000) (the "PURCHASE PRICE") in cash in
immediately available funds. The Purchase Price shall be paid by the Purchaser
to the Company on the Closing Date. Notwithstanding the foregoing, Three Hundred
Fifty Thousand and No/100 Dollars ($350,000.00) (the "Escrowed Amount") shall be
deposited with the Escrow Agent in accordance with the terms of the Escrow
Agreement in the form attached hereto as EXHIBIT C and released in accordance
with the terms of the Escrow Agreement and SECTION 1.3(c). The allocation of the
Purchase Price among the Assets shall be made in accordance with Section 1060 of
the Code. Except for the payment of the Purchase Price, the Closing Payment and
payment to the Trust for the Real Property in accordance with the Real Estate
Agreement, there is no additional consideration paid or due to the Company, the
Trust or anyone else.
(b) The Purchase Price is allocated among the Assets in
accordance with the methodology contained in Section 1060 of the Code. Each
party hereto agrees to complete jointly and to file separately IRS Form 8594
with its federal Tax Return consistent with such allocation for the tax year in
which the Closing occurs, to file, or cause to be filed, all other
5
Tax Returns in a manner consistent with such allocation, and not to take any
actions inconsistent therewith.
(c) The Escrowed Amount shall be deposited with the Escrow Agent
on the Closing Date. Within thirty days after the one year anniversary of the
Closing Date, the Purchaser shall deliver to the Company a statement evidencing
the dollar amount of the Accounts Receivable collected by the Purchaser during
such one year period (the "COLLECTED RECEIVABLES"). If the Collected Receivables
as of such one year anniversary date exceed the sum of Two Million Four Hundred
Fifty Thousand and No/100 Dollars ($2,450,000), then the Escrowed Amount shall
promptly be released to the Company in accordance with the terms of the Escrow
Agreement and the Purchaser shall retain the amount by which Collected
Receivables exceeds $2,450,000. If the Collected Receivables are less than the
sum of Two Million Four Hundred Fifty Thousand and No/100 Dollars
($2,450,000.00), then the difference (the "Shortfall Amount"), shall promptly be
paid to the Purchaser from the Escrowed Amount and the remainder of the Escrowed
Amount after Purchaser is so paid shall promptly be paid to the Company, all
such payments to be made in accordance with the terms of the Escrow Agreement.
If the Shortfall exceeds the Escrowed Amount, the Purchaser shall be entitled to
the entire Escrowed Amount but shall have no right to recover any excess from
the Company or Xxxxxx.
1.4 THE CLOSING PAYMENT AND PRELIMINARY SETTLEMENT STATEMENT.
(a) Subject to Section 1.4(b) and Section 1.4(c) hereof, the
parties shall account for all income and revenue and for all costs and expenses
pertaining to the Assets and the Business during the period commencing on the
Effective Date and continuing until the Closing Date (the "INTERIM PERIOD") in
accordance with this Section 1.4(a). Such accounting shall be in accordance with
SECTION 1.1(c) OF THE DISCLOSURE SCHEDULE. Company's Credits shall include
revenues earned by the Company minus expenses borne by the Company in accordance
with SECTION 1.1(c) OF THE DISCLOSURE SCHEDULE. Purchaser's Credits shall
include revenues earned by the Purchaser minus expenses borne by the Purchaser
in accordance with SECTION 1.1(c) OF THE DISCLOSURE SCHEDULE. If as a result of
such accounting, Purchaser Credits exceed Company's Credits, then the Company
shall pay the amount of the positive difference to the Purchaser, or (ii)
Company's Credits exceed Purchaser Credits, then the Purchaser shall pay the
amount of the positive difference to the Company (such amount as the case may be
is hereinafter referred to as the "CLOSING PAYMENT").
(b) Not later than ten (10) business days prior to the scheduled
Closing Date (such ten-day period is the "Statement Period"), the Company shall
prepare, execute and deliver a preliminary settlement statement (the
"PRELIMINARY SETTLEMENT STATEMENT") in the form attached hereto as EXHIBIT I.
The Preliminary Settlement Statement shall set forth the Closing Payment and the
calculation thereof used in determining the Closing Payment.
Upon receipt of the Preliminary Settlement Statement, the Purchaser
(and at Purchaser's sole expense, independent certified public accountants
chosen and hired by the Purchaser) shall be permitted during the succeeding five
(5) day period to examine, and the Company and Xxxxxx shall make available, the
books, records and work papers relied upon by the Company in preparing the
Preliminary Settlement Statement. As promptly as practicable,
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and in no event later than the last day of such five (5) day period, the
Purchaser shall either inform the Company and Xxxxxx in writing that the
Preliminary Settlement Statement is acceptable or object to the Preliminary
Settlement Statement by delivering to Company and Xxxxxx a written notice of
disagreement (the "NOTICE OF DISAGREEMENT"). Any Notice of Disagreement shall
specify in reasonable detail the nature of such disagreement and set forth the
amount of the Closing Payment determined by the Purchaser' and the calculation
thereof.
If the Purchaser shall fail to deliver a Notice of Disagreement
within such five (5) day period, the Preliminary Settlement Statement shall be
deemed to have been accepted by the Purchaser and shall constitute the final
settlement statement (the "FINAL SETTLEMENT STATEMENT") and the Company or the
Purchaser, as the case may be, shall promptly pay the Closing Payment to the
other party. If a Notice of Disagreement is delivered, Purchaser and the Company
shall attempt in good faith to resolve any dispute within ten (10) days after
delivery. If the Company and the Purchaser are unable to resolve the dispute
within such ten (10) days, the Purchaser and the Company shall engage a mutually
selected and acceptable independent accounting firm of national or regional
reputation that has not previously performed services for any of the parties
(the "ARBITRATING ACCOUNTANT"). The Arbitrating Accountant's resolution of the
dispute shall be conclusive and binding upon the parties and nonappealable. The
Arbitrating Accountant shall allocate its costs and expenses between the
Purchaser, on the one hand, and the Company, on the other hand, based upon the
percentage that the portion of the contested amount not awarded to each party
bears to the amount actually contested by such party.
The foregoing notwithstanding (i) if the difference between the Closing
Payment due as determined by the Company and by the Purchaser is less than
$5,000, then the amount of the Closing Payment shall be the arithmetic average
of the two.
Not later than thirty (30) calendar days after the Closing Date, the
Company shall prepare, execute and deliver a settlement statement in the form of
EXHIBIT I for the Statement Period. The Company and the Purchaser shall use the
same procedures outlined in this Section 1.4(b) to resolve disputes and finalize
the Settlement Statement for the Statement Period.
(c) After resolution of all disputes related thereto, the Company
or the Purchaser, as the case may be, shall promptly pay the Closing Payment and
the payment due under the Statement Period to the other party.
1.5 FURTHER ASSURANCES; POST-EXECUTION COOPERATION.
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(a) At any time and from time to time after the date hereof, at
the request of a party hereto and without further consideration, the other
parties hereto shall execute and deliver to the requesting party such other
instruments of sale, transfer, conveyance, assignment and confirmation, provide
such materials and information and take such other actions as the requesting
party may reasonably deem necessary or desirable in order more effectively to
transfer, convey and assign to the Purchaser, and to confirm the Purchaser's
title to, all of the Assets, and, to the full extent permitted by Law, to put
the Purchaser in actual possession and operating control of the Business and the
Assets and to assist the Purchaser in exercising all rights with respect
thereto, and otherwise to cause the parties to fulfill their respective
obligations under this Agreement.
(b) Subject to Closing having occurred and effective as of the
Closing Date, the Company hereby constitutes and appoints the Purchaser the true
and lawful attorney of the Company, with full power of substitution, in the name
of the Company or the Purchaser, but on behalf of and for the benefit of the
Purchaser: (i) to demand and receive from time to time any and all the Assets
sold to Purchaser and to make endorsements and give receipts and releases for
and in respect of the same and any part thereof; (ii) to institute, prosecute,
compromise and settle any and all Actions or Proceedings that the Purchaser may
deem proper in order to collect, assert or enforce any claim, right or title of
any kind in or to the Assets; (iii) to defend or compromise any or all Actions
or Proceedings in respect of any of the Assets; and (iv) to do all such acts and
things in relation to the matters set forth in the preceding clauses (i) through
(iii) as the Purchaser shall deem desirable. The Company hereby acknowledges
that the appointment hereby made and the powers hereby granted are coupled with
an interest and are not and shall not be revocable by it in any manner or for
any reason.
(c) If, in order properly to prepare its Tax Returns, other
documents or reports required to be filed with Governmental or Regulatory
Authorities or its financial statements or to fulfill its obligations hereunder,
it is necessary that a party be furnished with additional information, documents
or records relating to the Assets not referred to above, and such information,
documents or records are in the possession or control of the other party, such
other party shall use its reasonable best efforts to furnish or make available
such information, documents or records (or copies thereof) at the recipient's
request, cost and expense. Any information obtained by a party in accordance
with this SECTION 1.5(c) shall be held confidential by such party in accordance
with SECTION 12.5.
(d) At Closing, or as soon as reasonably practicable thereafter,
Purchaser and Company shall cooperate to transfer the entire content of the
"xxxxxxxxxx.xxx" URL server farm, with minimal website interruption, to an
internet service provider mutually acceptable to both Company and Purchaser.
Purchaser shall bear any costs associated with such transfer.
1.6 THIRD-PARTY CONSENTS. To the extent that any Assumed Contract or
License is not assignable without the consent of another party, each of the
Company and Xxxxxx shall use its or his respective best efforts to obtain the
consent of such other party to the assignment of any such Assumed Contract or
License to the Purchaser in all cases in which such consent is or may be
required for such assignment. If any such consent shall not be obtained, each of
the Company and Xxxxxx shall cooperate with the Purchaser in any reasonable
arrangement designed to provide for the Purchaser the benefits intended to be
assigned to the Purchaser under the relevant
8
Assumed Contract or License, including enforcement at the cost and for the
account of the Purchaser of any and all rights of the Company against the other
party thereto arising out of the breach or cancellation thereof by such other
party or otherwise. If and to the extent that such arrangement cannot be made,
the Purchaser shall have no obligation pursuant to Section 1.2 or otherwise with
respect to any such Assumed Contract or License.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND XXXXXX
The Company and Xxxxxx hereby jointly and severally represent and warrant
to the Purchaser as follows:
2.1 ORGANIZATION OF THE COMPANY. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Michigan and has full power and authority to conduct the Business as and to
the extent now conducted and to own, use and lease the Assets.
2.2 AUTHORITY. The Company has full power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby, including without limitation, to sell and
transfer the Assets pursuant to this Agreement. The execution and delivery by
the Company of this Agreement, and the performance by the Company of its
obligations hereunder, have been duly and validly authorized by Xxxxxx as the
sole shareholder of the Company and by the Board of Directors of the Company, no
other action being necessary. This Agreement has been duly and validly executed
and delivered by each of the Company and Xxxxxx and constitutes legal, valid and
binding obligations of each of the Company and Xxxxxx enforceable against each
of the Company and Xxxxxx in accordance with its terms. Upon payment of the
Purchase Price to the Company, Purchaser will be vested with good and marketable
title to the Assets, free and clear of all Liens.
2.3 NO CONFLICTS. The execution, delivery and consummation by each of
the Company and Xxxxxx of this Agreement does not, and the performance by each
of the Company and Xxxxxx of their respective obligations under this Agreement
will not:
(a) subject to obtaining the consents, approvals and actions,
making the filings and giving the notices disclosed in SECTION 2.4 OF THE
DISCLOSURE SCHEDULE, conflict with or result in a violation or breach of any
term or provision of any Law or Order applicable to Xxxxxx, the Company or any
of the Company's Assets and Properties; or
(b) except as disclosed in SECTION 2.3 OF THE DISCLOSURE
SCHEDULE, (i) conflict with or result in a violation or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default under, or
(iii) require either the Company or Xxxxxx to obtain any consent, approval or
action of, make any filing with, or give any notice to, any Person under the
terms of, any Contract or License to which either the Company or Xxxxxx is a
party or by which any of the Assets and Properties is bound.
2.4 GOVERNMENTAL APPROVALS AND FILINGS.
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(a) Except as disclosed in SECTION 2.4 OF THE DISCLOSURE
SCHEDULE, no consent, approval or action of, filing with or notice to any
Governmental or Regulatory Authority on the part of each of the Company or
Xxxxxx is required in connection with the execution, delivery, performance and
consummation of this Agreement.
(b) All Governmental or Regulatory Authority authorizations,
consents or similar approval that are a requirement for the consummation of this
Agreement have been delivered to Purchaser.
2.5 BOOKS AND RECORDS. The Business Books and Records and the Business
Forms and Policy Statements, as recorded, stored, or otherwise maintained or
held (whether by means of electronic, mechanical or photographic process,
whether computerized or not), are under the exclusive ownership and direct
control of the Company.
2.6 FINANCIAL STATEMENTS; EXPENSES.
The Company has delivered to the Purchaser true and complete copies
of audited balance sheets of the Company as of December 31, 2003 and December
31, 2002, and related audited consolidated statements of operations and cash
flows, including all schedules and applicable notes thereto, for each of the
fiscal years then ended, prepared by Xxxxxx & Xxxxxxxxxx, C.P.A. (the "COMPANY
FINANCIAL STATEMENTS"), together with all letters from such accountants with
respect to the results of such audits. Ernst & Young, the auditor of Parent,
will use the Company Financial Statements to prepare audited financial
statements for the Parent and the Purchaser (the "ANNUAL FINANCIAL STATEMENTS").
Except as set forth in the notes thereto, the Company Financial Statements were
prepared from the Business Books and Records of the Company in accordance with
GAAP, are complete and accurate in all material respects and fairly present the
consolidated financial condition and results of operations of the Company as of
the respective dates thereof and for the respective periods covered thereby.
2.7 ABSENCE OF CHANGES. Except for the execution and delivery of this
Agreement and the transactions to take place pursuant hereto on the date hereof,
since the Annual Financial Statement Date there has not been any material
adverse change, or any event or development which, individually or together with
other such events, could reasonably be expected to result in a material adverse
change, in the Condition of the Business or the Company or the Assets. Without
limiting the foregoing, except as disclosed in SECTION 2.7 OF THE DISCLOSURE
SCHEDULE, there has not occurred, between the Annual Financial Statement Date
and the date hereof, any of the following:
(a) (i) any increase in the salary, wages or other compensation
of any Employee whose annual salary is, or after giving effect to such change
would be, $5,000 or more; (ii) any establishment or modification of salary
ranges, increase guidelines or similar provisions in respect of any Benefit Plan
or any employment Contract or other compensation arrangement with or for
Employees; or (iii) any adoption, entering into, amendment, modification or
termination (partial or complete) of any Benefit Plan except to the extent
required by applicable Law;
10
(b) (i) incurrences by the Company of Indebtedness with respect
to the Assets in an aggregate principal amount exceeding $5,000 (excluding
Indebtedness incurred by the Company in the ordinary course of its business with
trade creditors), or (ii) any voluntary purchase, cancellation, prepayment or
complete or partial discharge in advance of a scheduled payment date with
respect to, or waiver of any right of the Company under, any Indebtedness of or
owing to the Company with respect to the conduct of the Business;
(c) any physical damage, destruction or other casualty loss
(whether or not covered by insurance) affecting any of the Assets in an
aggregate amount exceeding $5,000;
(d) (i) any acquisition or disposition of any Assets and
Properties used or held for use in the conduct of the Business, other than
acquisitions or dispositions not exceeding $5,000 in the aggregate; or (ii) any
creation or incurrence of a Lien on any Assets and Properties used or held in
the conduct of the Business;
(e) any entering into of an agreement to do or engage in any of
the foregoing; or
(f) any other transaction involving or development affecting the
Business or the Assets outside the ordinary course of business.
2.8 NO UNDISCLOSED LIABILITIES. Except as disclosed in Section 2.8 OF
THE DISCLOSURE SCHEDULE, there are no Liabilities against, relating to or
affecting the Assets or the Business other than Liabilities incurred in the
ordinary course of business consistent with past practice, which in the
aggregate are not material to the Condition of the Business.
2.9 TAXES.
(a) (i) The Company has duly and timely filed or caused to be
filed all Tax Returns which are required to be filed by it or which relate to
the Assets or the Business and has paid all Taxes shown as due on such Tax
Returns or pursuant to any assessments received by it, and all such Tax Returns
are correct and complete in all material respects, (ii) all Taxes owed by the
Company, or that if unpaid may become chargeable as a Lien upon any of the
Assets, whether or not shown on any Tax Return, have been paid in full and the
provisions for current Taxes made on the Company Financial Statements are
sufficient for the payment of all accrued and unpaid Taxes not yet due and
payable as of such date, other than Taxes which are being contested in good
faith and by appropriate proceedings and as to which the Company has set aside
on its books and records adequate reserves, and (iii) all monies required to be
withheld by the Company from employees, independent contractors, creditors or
other third parties for Taxes (including without limitation for income, Social
Security or unemployment insurance Taxes) have been collected or withheld, and
either duly or timely paid to the appropriate Taxing Authorities or set aside in
accounts for such purposes and reflected on the Company Financial Statements.
(b) No agreement or other document extending, or having the
effect of extending, the time for filing any Tax Return or the period of
assessment or collection of any Taxes, and no power of attorney with respect to
any such Taxes, has been filed with the IRS or
11
any other Taxing Authority by, on behalf of or with respect to the Company, the
Assets or the Business.
(c) (i) There are no Taxes relating to the Company, the Assets or
the Business asserted in writing by any Taxing Authority to be due and (ii) no
issue has been raised in writing by any Taxing Authority in the course of any
audit with respect to Taxes relating to the Company, the Assets or the Business.
No Taxes relating to the Company, the Assets or the Business are currently under
audit by any Taxing Authority. Neither the IRS nor any other Taxing Authority is
now asserting or, to the best Knowledge of the Company, threatening to assert
against the Company any deficiency or claim for additional Taxes or any
adjustment of Taxes, and the Company has no Knowledge of any reasonable basis
for any such assertion.
(d) The Company has not received any notice nor does the Company
have any Knowledge of any claim by any Taxing Authority in a jurisdiction where
the Company does not file Tax Returns that it is or may be subject to taxation
by that jurisdiction. There are no Liens on any of the Assets that arose in
connection with any failure (or alleged failure) to pay any Tax. None of the
Assumed Liabilities is an obligation to make a payment that will not be
deductible under Section 280G of the Code. The Company does not have liability
for Taxes of any person as a transferee or successor, by contract, or otherwise.
(e) The Company will not be required to include any item of
income in, or exclude any item of deduction from, taxable income for any taxable
period (or portion thereof) ending after the date hereof as a result of any: (i)
change in method of accounting for a taxable period ending on or prior to the
date hereof, (ii) "closing agreement" as described in Code Section 712l (or any
corresponding or similar provision of state, local or foreign income Tax law)
executed on or prior to the date hereof; (iii) installment sale or open
transaction disposition made on or prior the date hereof, or (iv) prepaid amount
received on or prior to the date hereof.
(f) The Company has been properly classified as a subchapter S
corporation for federal income tax purposes since its incorporation on October
17, 1979.
2.10 LEGAL PROCEEDINGS. Except as disclosed in SECTION 2.10 OF THE
DISCLOSURE SCHEDULE (with paragraph references corresponding to those set forth
below):
(a) there are no Actions or Proceedings pending or threatened
against, relating to or affecting each of the Company or Xxxxxx with respect to
the Business or any of its Assets and Properties which (i) could reasonably be
expected to result in the issuance of an Order restraining, enjoining or
otherwise prohibiting or making illegal the consummation of this Agreement or
otherwise result in a material diminution of the benefits contemplated by this
Agreement to the Purchaser, or (ii) if determined adversely to the Company or
Xxxxxx, could reasonably be expected to result in (x) any injunction or other
equitable relief that would interfere in any material respect with the Business
or (y) Losses by the Company, individually or in the aggregate with Losses in
respect of other such Actions or Proceedings, exceeding $5,000.
12
(b) there are no facts or circumstances that could reasonably be
expected to give rise to any Action or Proceeding that would be required to be
disclosed pursuant to clause (a) above; and
(c) there are no Orders outstanding against the Company or Xxxxxx
with respect to the Assets or the Business.
The Company has delivered to the Purchaser true and complete copies of all
responses of counsel to auditors' requests for information delivered in
connection with the Financial Statements (together with any updates provided by
such counsel) regarding Actions or Proceedings pending or threatened against,
relating to or affecting the Assets.
2.11 COMPLIANCE WITH LAWS AND ORDERS. Except as disclosed in SECTION 2.11
OF THE DISCLOSURE SCHEDULE, neither the Company nor Xxxxxx has at any time
within the last five (5) years been, nor has either received any notice that
either is or has at any time within the last five (5) years been, in violation
of or in default under, in any respect, any Law or Order applicable to the
Business or the Assets. In particular, except as set forth in Section 2.11 of
the Disclosure Schedule, neither the Company nor Xxxxxx is, nor has either the
Company nor Xxxxxx received any notice that either is in violation, not
previously resolved without any ongoing liability, of the rules or regulations
of any Governmental or Regulatory Authorities, with respect to the Business or
the Assets. If any such notices have been received and not resolved without
ongoing liability, each of the Company and Xxxxxx has disclosed its receipt and
disposition to the Purchaser in writing prior to the execution of this
Agreement.
2.12 BENEFIT PLANS; ERISA. Except as set forth in SECTION 2.12 OF THE
DISCLOSURE SCHEDULE:
(a) each Benefit Plan and the administration thereof complies,
and has at all times complied, in all material respects with the requirements of
all applicable Laws, including ERISA and the Code;
(b) each Benefit Plan intended to qualify under Section 401(a) of
the Code has at all times since the date of its adoption been so qualified for
favorable tax treatment under Section 401(a) of the Code;
(c) the Company is not now, and at no time has been, a member of
a controlled group, as defined in Section 412(n)(6)(B) of the Code, with any
other enterprise;
(d) the Company does not presently maintain or contribute to, and
at no time has maintained or contributed to, any single-employer plan (within
the meaning of Section 3(41) of ERISA) or any multiemployer plan (within the
meaning of Section 3(37) of ERISA) subject to Title IV of ERISA, and there are
no circumstances pursuant to which the Company could have liability to any party
under Title IV of ERISA;
(e) the Company has not incurred any material liability for any
tax imposed under Section 4971 through 4980B of the Code or civil liability
under Section 502(i) or (1) of ERISA;
13
(f) no Benefit Plan provides health or death benefit coverage
beyond the termination of an employee's employment, except as required by Part 6
of Subtitle B of Title I of ERISA or Section 4980B of the Code;
(g) no Actions or Proceedings (excluding claims for benefits
incurred in the ordinary course of plan activities) have been brought against or
with respect to any Benefit Plan; and
(h) all contributions to Benefit Plans that were required to be
made under such Benefit Plans have been made as of the Effective Date, and all
benefits accrued under any unfunded Benefit Plan have been paid, accrued or
otherwise adequately reserved in accordance with GAAP.
2.13 REAL PROPERTY. The Real Property and the improvements thereon
located at 00000 Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx (the "Real Property") and to
be purchased from the Trust concurrently with this Agreement pursuant to the
Real Estate Agreement is the only real property used or held for use in the
operation of the Business. The Company does not own any real property. The only
real property leased by the Company is the Real Property. The Trust owns the
Real Property. The Company leases the Real Property from the Trust from month to
month under an oral lease, which lease is in full force and effect.
2.14 TANGIBLE PERSONAL PROPERTY. SECTION 1.1(a)(i) OF THE DISCLOSURE
SCHEDULE sets forth all of the Tangible Personal Property as of the Effective
Date. The Company is in possession of and has good title to, or has valid
leasehold interests in or valid rights under Contract to use, all the Tangible
Personal Property. The Tangible Personal Property is free and clear of all
Liens, and is in good working order and condition, ordinary wear and tear
excepted, and its use complies in all material respects with all applicable
Laws.
2.15 ACCOUNTS RECEIVABLE. Subject to Section 1.1(b), SECTION 1.1(a)(ix)
OF THE DISCLOSURE SCHEDULE sets forth all of the Accounts Receivable as of the
Effective Date. The Company has all right, title and interest in the Accounts
Receivable, free and clear of all Liens. The Accounts Receivable are and shall
be valid receivables, and are and shall be subject to no valid counterclaims or
setoffs in excess of any reserves therefor, as disclosed in the Company
Financial Statements.
2.16 WORK-IN-PROCESS. SECTION 1.1(a)(x) OF THE DISCLOSURE SCHEDULE sets
forth all of the Work-in-Process as of the Effective Date. The Company has all
right, title and interest in the Work-in-Process, free and clear of all Liens.
All Work-in-Process are and shall be valid pending applications for life
insurance policies in connection with the Business.
2.17 RENEWALS. SECTION 1.1(a)(xi) OF THE DISCLOSURE SCHEDULE sets forth
all of the Renewals as of the Effective Date. The Company has all right, title
and interest in the Renewals, free and clear of all Liens. The Renewals are and
shall be valid rights to receive insurance payments and service fees under
existing in-force life insurance policies in connection with the Business.
2.18 INTELLECTUAL PROPERTY RIGHTS.
14
(a) The Company has interests in or uses only the Intellectual
Property disclosed in SECTION L.1(a)(v) OF THE DISCLOSURE SCHEDULE in connection
with the conduct of the Business, each of which the Company either has all
right, title and interest in or a valid and binding license to use. No other
Intellectual Property is used or necessary in the conduct of the Business.
(b) Except as disclosed in SECTION 2.18 OF THE DISCLOSURE
SCHEDULE, (i) the Company has the exclusive right to use the Intellectual
Property disclosed in SECTION 1.1(a)(v) OF THE DISCLOSURE SCHEDULE and the
Company has not granted to any third Persons, nor are there any third Persons
who claim to have been granted, the rights to any Intellectual Property, (ii)
all registrations with and applications to Governmental or Regulatory
Authorities in respect of such Intellectual Property are valid and in full force
and effect and are not subject to the payment of any Taxes or maintenance fees
or the taking of any other actions by the Company to maintain their validity or
effectiveness, (iii) there are no restrictions on the direct or indirect
transfer of any license, or any interest therein, held by the Company in respect
of such Intellectual Property, (iv) the Company has delivered to the Purchaser
documentation with respect to any invention, process, design, computer program
or other know-how or trade secret included in such Intellectual Property, which
documentation is accurate in all respects and reasonably sufficient in detail
and content to identify and explain such invention, process, design, computer
program or other know-how or trade secret and to facilitate its full and proper
use without reliance on the special knowledge or memory of any Person, (v) the
Company has taken all reasonable security measures to protect the secrecy,
confidentiality and value of its trade secrets in respect of the Assets, (vi)
the Company is not, nor has it received any notice that it is, in default (or
with the giving of notice or lapse of time or both, would be in default) under
any license to use such Intellectual Property and (vii) the Intellectual
Property is not being infringed by any other Person. The Company has not
received notice that the Company's use of the Intellectual Property or any other
aspect of the Company's conduct of the Business, is infringing any Intellectual
Property Rights of any other Person, no such claim is pending or has been made
to such effect that has not been resolved and the Company is not infringing any
Intellectual Property Rights of any other Person in connection with the use of
the Intellectual Property or any other aspect of the Company's conduct of the
Business.
2.19 CONTRACTS.
(a) SECTION 2.19(a) OF THE DISCLOSURE SCHEDULE contains a true
and complete list of each of the following Contracts or other arrangements (true
and complete copies or, if oral, reasonably complete and accurate written
descriptions) of which, together with all amendments and supplements thereto and
all waivers of any terms thereof have been delivered to the Purchaser to which
the Company is a party or by which any of the Assets is bound:
(i) (A) all Contracts (excluding Benefit Plans) providing for a
commitment of employment or consultation services for a specified or
unspecified term to any independent contractor or Employee, the name,
position and rate of compensation of each Employee party to such a
Contract and the expiration date of each such Contract; and (B) any
written or unwritten representations, commitments, promises,
communications, practices or courses of conduct (excluding Benefit Plans
and not embodied in a Contract) involving an obligation of the Company to
make payments in
15
any year to any independent contractor or Employee exceeding $5,000 or
any group of independent contractors or Employees exceeding $5,000 in the
aggregate;
(ii) all Contracts with any Person containing any provision or
covenant prohibiting or limiting the ability of the Company to engage in
any business activity or compete with any Person in connection with the
Assets or the Business or prohibiting or limiting the ability of any
Person to compete with the Company in connection with the Assets;
(iii) all partnership, joint venture or other similar Contracts
with any Person in connection with the Assets or the Business;
(iv) all Contracts with suppliers, service providers and other
vendors with whom the Company deals in connection with the Assets or the
Business;
(v) all Contracts relating to the future disposition or
acquisition of any Assets or the Business; and
(vi) all other Contracts with respect to the Assets or the
Business that (A) involve the payment or potential payment, pursuant to
the terms of any such Contract, by or to the Company of more than $5,000
and (B) cannot be terminated within ninety (90) calendar days after
giving notice of termination without resulting in any material cost or
penalty to the Company.
(b) Each Contract required to be disclosed in SECTION 2.19(a) OF
THE DISCLOSURE SCHEDULE is in full force and effect and constitutes a legal,
valid and binding agreement, enforceable in accordance with its terms, of each
party thereto; and neither the Company nor any other party to such Contract is,
or has received notice that it is, in violation or breach of or default under
any such Contract (or with notice or lapse of time or both, would be in
violation or breach of or default under any such Contract).
(c) Except as disclosed in SECTION 2.19(c) OF THE DISCLOSURE
SCHEDULE, (i) the execution, delivery, performance and consummation by the
Company of this Agreement will not (A) result in or give to any Person any right
of termination, cancellation, acceleration or modification in or with respect
to, (B) result in or give to any Person any additional rights or entitlement to
increased, additional, accelerated or guaranteed payments under, or (C) result
in the creation or imposition of any Lien upon the Company or any of its Assets
and Properties under, any Assumed Contract, and (ii) the Company is not a party
to or bound by any Assumed Contract that has been, individually or in the
aggregate with any other Assumed Contract, materially adverse to the Condition
of the Business.
2.20 LICENSES. SECTION 1.1(a)(vi) OF THE DISCLOSURE SCHEDULE contains a
true and complete list of all Licenses used or held for use in the Business,
setting forth the function and the effective and renewal date of each. The
Company has delivered to the Purchaser true and complete copies of all such
Licenses. Except as disclosed in SECTION 2.20 OF THE DISCLOSURE SCHEDULE:
(a) the Company owns or validly holds all Licenses to conduct the
Business;
16
(b) each License and authorization is valid, binding and in full
force and effect, and no License has lapsed or been revoked since January 1,
1998;
(c) the Company is not, nor has it received any notice that it
is, in default (or with the giving of notice or lapse of time or both, would be
in default) under any License; and
(d) the execution, delivery, performance and consummation by the
Company of this Agreement will not (A) result in or give to any Person any right
of termination, cancellation, acceleration or modification in or with respect
to, (B) result in or give to any Person any additional rights or entitlement to
increased, additional, accelerated or guaranteed payments under, or (C) result
in the creation or imposition of any Lien upon the Company or any of the Assets
and Properties under, any License.
2.21 INSURANCE. SECTION 2.21 OF THE DISCLOSURE SCHEDULE contains a true
and complete list (including the names and addresses of the insurers, the
expiration dates thereof, the annual premiums and a brief description of the
interests insured thereby) of all liability, property, workers' compensation and
other insurance policies currently in effect that insure the Business, the
Employees or the Assets and Properties. Each such insurance policy is valid and
binding and in full force and effect and the Company has not received any notice
of cancellation, termination or non-renewal in respect of any such policy or is
in default thereunder.
2.22 AFFILIATE TRANSACTIONS. Except as listed in SECTION 2.22 OF THE
DISCLOSURE SCHEDULE, no officer, director, Affiliate or Associate of the Company
or any Associate of any such officer, director or Affiliate provides or causes
to be provided any assets, services or facilities used or held for use in
connection with the Company and the Company does not provide or cause to be
provided any Assets, services or facilities to any such officer, director,
Affiliate or Associate. There are no shared facilities or services, which are
used in connection with any business or operation of any of the Company's
Affiliates or Associates other than the Business.
2.23 EMPLOYEES; LABOR RELATIONS.
(a) SECTION 2.23 OF THE DISCLOSURE SCHEDULE contains a list of
the name of each Employee, together with such Employee's position or function,
annual base salary or wages and any incentive or bonus arrangement with respect
to such Employee in effect on such date. The Company has not received any
information that would lead it to believe that any such Employees will or may
cease to be Employees, or will refuse offers of employment from the Purchaser,
because of the consummation of this Agreement.
(b) Except as disclosed in SECTION 2.23 OF THE DISCLOSURE
SCHEDULE, (i) no Employee is presently a member of a collective bargaining unit
and there are no threatened or contemplated attempts to organize for collective
bargaining purposes any of the Employees, and (ii) no unfair labor practice
complaint or sex or age discrimination claim has been brought during the last
five years against the Company with respect to the conduct of the Business
before the National Labor Relations Board or any other Governmental or
Regulatory Authority. Since January 1, 1998, there has been no work stoppage,
strike or other concerted action by employees of the Company engaged in the
Business. The Company has complied in
17
all respects with all applicable Laws relating to the employment of labor,
including without limitation those relating to wages, hours and collective
bargaining.
2.24 ENVIRONMENTAL MATTERS.
(a) The Company is not required under applicable Environmental
Laws to maintain any Licenses in respect of the Business or the Assets. The
Company has conducted the Business in compliance in all respects with the terms
and conditions of all applicable Environmental Law.
(b) The Company has not handled any Hazardous Material on the
Real Property; and, without limiting the foregoing, (i) no polychlorinated
biphenyl is or has been present, (ii) no asbestos is or has been present, (iii)
there are no underground storage tanks, active or abandoned, and (iv) no
Hazardous Material has been treated, stored, recycled, transported, disposed of
or "released" as defined in 42 U.S.C. Section 9601(22) (collectively, a
"RELEASE") in a quantity reportable under, or in violation of, any Environmental
Law, at, on or under the property during any period that the Company leased such
property or prior thereto.
(c) The Company has not transported or arranged for the
transportation of any Hazardous Material to any location that could lead to
claims against the Purchaser for clean-up costs, remedial work, damages to
natural resources or personal injury claims, including, but not limited to,
claims under CERCLA.
(d) No oral or written notification of a Release of a Hazardous
Material in connection with the operation of the Business has been filed by or
on behalf of the Company and the Real Property is not listed or proposed for
listing on the National Priorities List promulgated pursuant to CERCLA or on any
similar state list of sites requiring investigation or clean-up.
(e) There are no Liens arising under or pursuant to any
Environmental Law or Order on the Real Property, and no action of any
Governmental or Regulatory Authority has been taken or is in process which could
subject the Real Property to such Liens, and no notice or restriction relating
to the presence of Hazardous Material at, on or under the Real Property would be
required to be placed in any deed to such property.
(f) There have been no environmental investigations, studies,
audits, tests, reviews or other analyses conducted by, or which are in the
possession of, the Company in relation to the Real Property, which have not been
delivered to the Purchaser prior to the execution of this Agreement.
2.25 BUSINESS FORMS AND POLICY STATEMENTS. The Company has delivered to
the Purchaser true and complete copies of all Business Forms and Policy
Statements. The Business has been conducted in accordance with the Business
Forms and Policy Statements and all relevant standards imposed by applicable
Governmental and Regulatory Authorities and other applicable Laws. The Company
has submitted all reports, audits and other information, whether periodic in
nature or pursuant to specific requests, for the Business to all Governmental or
Regulatory Authorities, which were so requested. All forms and records of the
Business have
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been prepared, completed, maintained and filed in all respects in accordance
with all applicable Laws, and are true and correct in all respects.
2.26 NO GUARANTEES. No Liability of the Business related to the Assets,
or of the Company incurred in connection with the conduct of the Business, is
guaranteed by or subject to a similar contingent obligation of any other Person,
nor has the Company guaranteed or become subject to a similar contingent
obligation in respect of the Liabilities of any Person with whom the Company or
Xxxxxx has significant business relationships in the conduct of the Business.
2.27 ENTIRE BUSINESS. The sale of the Assets by the Company to the
Purchaser pursuant to this Agreement will effectively convey to the Purchaser
all of the tangible and intangible property used or held by or necessary to the
Company (whether owned, leased or held under license by the Company, by any of
the Company's Affiliates or Associates or by others) in connection with the
conduct of the Business as heretofore conducted by the Company (except for the
Excluded Assets) including, without limitation, all tangible Assets and
Properties of the Company reflected in the balance sheet included in the Company
Financial Statements and Assets and Properties acquired since the Annual
Financial Statement Date in the conduct of the Business, other than Assets and
Properties disposed of since such date, consistent with Section 2.7 and the
Excluded Assets. There are no shared facilities or services, which are used in
connection with any business or other operations of any of the Company's
Affiliates or Associates other than the Business.
2.28 BROKERS. All negotiations relative to the consummation of this
Agreement have been carried out by the Company or Xxxxxx directly with the
Purchaser without the intervention of any Person on behalf of the Company in
such manner as to give rise to any claim by any Person against the Purchaser for
a finder's fee, brokerage commission or similar payment.
2.29 COMMISSIONS. The aggregate gross revenue received by the Company
attributable to the Business and the identity of all insurance companies during
calendar years 2001, 2002 and 2003 are listed in SECTION 2.29 OF THE DISCLOSURE
SCHEDULE. SECTION 2.29 OF THE DISCLOSURE SCHEDULE also lists all commissions and
insurance companies that owe such commissions that are outstanding under all
insurance policies generated by the Company as of the Effective Date. All
insurance brokerage or agency business placed by all employees, brokers,
sub-brokers or agents of the Company have been placed by them through and in the
name of the Company and all commissions on such business have been paid to and
are the property of the Company. None of the insurance sales agents, brokers,
sub-brokers or employees of the Company have indicated a desire to terminate
their relationship with the Company.
2.30 DISCLOSURE. No representation or warranty contained in this
Agreement, and no statement contained in the Disclosure Schedule or in any
certificate, list or other writing furnished to the Purchaser pursuant to any
provision of this Agreement (including without limitation the Financial
Statements), contains any untrue statement of a material fact or omits to state
a material fact necessary in order to make the statements herein or therein, in
the light of the circumstances under which they were made, not misleading.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to Xxxxxx and the Company as
follows:
3.1 ORGANIZATION. The Purchaser is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware.
The Purchaser has full power and authority to enter into and consummate this
Agreement and to perform its obligations hereunder.
3.2 AUTHORITY. The Purchaser has the full power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby, including without limitation,
to purchase the Assets pursuant to this Agreement. The execution, delivery and
consummation by the Purchaser of this Agreement, and the performance by the
Purchaser of its obligations hereunder, have been duly and validly authorized by
the board of directors of the Purchaser, no other action on the part of the
Purchaser being necessary. This Agreement has been duly and validly executed and
delivered by the Purchaser and constitutes legal, valid and binding obligations
of the Purchaser enforceable against the Purchaser in accordance with its terms.
3.3 NO CONFLICTS. The execution, delivery and consummation by the
Purchaser of this Agreement, the performance by the Purchaser of its obligations
under this Agreement will not:
(a) conflict with or result in a violation or breach of (i) the
Certificate of Incorporation of Bylaws of the Purchaser, or (ii) any term or
provision of any Law or Order applicable to the Purchaser; or
(b) (i) conflict with or result in a violation or breach of (ii)
constitute (with or without notice or lapse of time or both) a default under, or
(iii) request the Purchaser to obtain any consent, approval or action of, make
any filing with or give any notice to, any Person, as a result or under the
terms of any contract or license to which Purchaser is a party or by which any
of its assets or properties is bound.
3.4 BROKERS. All negotiations relative to this Agreement and the
transactions consummated hereby have been carried out by the Purchaser directly
with the Company without the intervention of any Person on behalf of the
Purchaser in such manner as to give rise to any claim by any Person against the
Company for a finder's fee, brokerage commission or similar payment.
3.5 GOVERNMENTAL APPROVALS AND FILINGS.
(a) Except as disclosed in SECTION 3.5 OF THE DISCLOSURE
SCHEDULE, no consent, approval or action of, filing with or notice to any
Governmental or Regulatory Authority on the part of the Purchaser is required in
connection with the execution, delivery, performance and consummation of this
Agreement.
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(b) All Governmental or Regulatory Authority authorizations,
consents or similar approval that are a requirement for the consummation of this
Agreement have been delivered to the Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARENT
The Parent hereby represents and warrants to Xxxxxx and the Company as
follows:
4.1 ORGANIZATION. The Parent is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware. The
Parent has full power and authority to enter into and consummate this Agreement
and to perform its obligations hereunder.
4.2 AUTHORITY. The Parent has the full power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution, delivery and
consummation by the Parent of this Agreement, and the performance by the Parent
of its obligations hereunder, have been duly and validly authorized by the board
of directors of the Parent, no other action on the part of the Parent being
necessary. This Agreement has been duly and validly executed and delivered by
the Parent and constitutes legal, valid and binding obligations of the Parent
enforceable against the Parent in accordance with its terms.
4.3 NO CONFLICTS. The execution, delivery and consummation by the Parent
of this Agreement, the performance by the Parent of its obligations under this
Agreement will not:
(a) conflict with or result in a violation or breach of (i) the
Certificate of Incorporation of Bylaws of the Parent, or (ii) any term or
provision of any Law or Order applicable to the Parent; or
(b) (i) conflict with or result in a violation or breach of (ii)
constitute (with or without notice or lapse of time or both) a default under, or
(iii) request the Parent to obtain any consent, approval or action of, make any
filing with or give any notice to, any Person, as a result or under the terms of
any contract or license to which Parent is a party or by which any of its assets
or properties is bound.
4.4 GOVERNMENTAL APPROVALS AND FILINGS.
(a) Except as disclosed in SECTION 4.4 OF THE DISCLOSURE
SCHEDULE, no consent, approval or action of, filing with or notice to any
Governmental or Regulatory Authority on the part of the Parent is required in
connection with the execution, delivery, performance and consummation of this
Agreement.
(b) All Governmental or Regulatory Authority authorizations,
consents or similar approval that are a requirement for the consummation of this
Agreement have been delivered to the Company.
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ARTICLE V
CONDITIONS PRECEDENT
5.1 CONDITIONS PRECEDENT - GENERAL. The obligations of each of the
parties to close the transactions provided for under this Agreement are subject
to the fulfillment of each of the following conditions (all or any of which may
be waived in whole or in part by the parties, other than a party obligated with
respect thereto, in their sole discretion):
(a) REAL ESTATE AGREEMENT. The Trust and the Purchaser shall have
entered into the Real Estate Agreement and closed the purchase and sale of the
Real Property in accordance therewith. The closing under the Real Estate
Agreement and the Closing under this Agreement shall occur simultaneously and
the closing of each such transaction is a condition precedent to the closing of
the other.
(b) ESCROW AGREEMENT. The Company, Xxxxxx, the Purchaser and the
Escrow Agent shall have entered into the Escrow Agreement.
(c) REGULATORY APPROVALS. The parties shall have received all
regulatory approvals required in connection with the transactions contemplated
by this Agreement, including without limitation, regulatory approvals required
under the HSR Act (if applicable), all notice periods and waiting periods with
respect to such approvals shall have passed and all such approvals shall be in
effect and receipt of any other governmental regulatory consents and approvals
shall have been obtained.
(d) NO ACTION OR ORDER. No Action or Proceeding shall be pending
or threatened before any Governmental or Regulatory Authority seeking to enjoin
or restrain the Closing nor shall any party to this Agreement be subject to any
Order of any Governmental or Regulatory Authority that enjoins or prohibits the
consummation of the transactions contemplated by this Agreement.
5.2 CONDITIONS PRECEDENT - THE PURCHASER. The obligations of the
Purchaser to close the transactions provided for under this Agreement are
subject to the fulfillment of each of the following additional conditions (all
or any of which may be waived in whole or in part by the Purchaser in its sole
discretion):
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of the Company and Xxxxxx contained in this
Agreement shall be true and correct in all material respects (except that such
representations and warranties that contain materiality qualifiers shall be true
in all respects) on and as of the Closing Date as though made as of the Closing
Date, and the covenants and agreements to be performed by the Company and Xxxxxx
on or before the Closing Date in accordance with this Agreement shall have been
duly performed in all material respects.
(b) CLOSING DOCUMENTS. On or prior to the Closing Date, the
Company and Xxxxxx shall have delivered, or be standing ready to deliver at the
Closing, all agreements, instruments and documents required to be delivered by
the Company and Xxxxxx pursuant to SECTIONS 6.2 and 6.3.
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(c) NAME CHANGE. The Company shall have ceased using the names
"Life Quotes," "Life Quotes Insurance Services" and "xxxxxxxxxx.xxx"
(collectively, "LIFE QUOTES NAMES"), shall have changed its legal name to a name
dissimilar to the Life Quotes Names, and shall have delivered to Purchaser
documents filed with the necessary government office evidencing such name change
and any other consent or form necessary for Purchaser to change its name to
"Life Quotes, Inc."
(d) ASSIGNMENT OF DOMAIN NAME. The requirements of SECTION 1.5(d)
shall have been satisfied to Purchaser's reasonable satisfaction and the Company
shall have caused its domain name, xxx.xxxxxxxxxx.xxx, and all rights relating
thereto to be assigned to the Purchaser.
(e) NON-COMPETITION AGREEMENT. Xxxxxx shall have executed the
Non-Competition Agreement, the form of which is attached hereto as EXHIBIT B.
(f) FAIRNESS OPINION. As provided in SECTION 7.3(a) of this
Agreement, the Purchaser shall have received the Fairness Opinion satisfactory
in form and substance to the Purchaser in its sole and absolute discretion, and
the Fairness Opinion shall not have been withdrawn or modified.
(g) DUE DILIGENCE. As provided in SECTION 7.3(b) of this
Agreement, the Purchaser shall have completed a satisfactory due diligence
investigation of the Assets, the Business and the Condition of the Business to
the extent deemed necessary by the Purchaser in its sole and absolute
discretion.
(h) FINANCING. As provided in SECTION 7.3(c) of this Agreement,
the Purchaser shall have obtained financing from third party lenders or
investors in order to pay the Purchase Price under the terms of this Agreement
on terms satisfactory to the Purchaser in its sole and absolute discretion.
(i) CLOSING PAYMENT. The Company shall pay to the Purchaser the
Closing Payment, if applicable.
(j) OTHER DOCUMENTS. The Company and Xxxxxx shall have provided
to the Purchaser such other documents and instruments as the Purchaser or its
counsel may reasonably request in connection with the consummation of the
transactions in accordance with the terms of this Agreement, including, without
limitation any assignments in favor of the Purchaser as may be required by law,
contract or otherwise, including, assignments of the Renewals.
5.3 CONDITIONS PRECEDENT - THE COMPANY AND XXXXXX. The obligations of
the Company and Xxxxxx to close the transactions provided for under this
Agreement are subject to the fulfillment of each of the following additional
conditions (all or any of which may be waived in whole or in part by the Company
or Xxxxxx in their sole discretion):
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of the Purchaser and Parent contained in this
Agreement shall be true and correct in all material respects (except that such
representations and warranties that contain materiality
23
qualifiers shall be true in all respects) on and as of the Closing Date as
though made as of the Closing Date, and the covenants and agreements to be
performed by the Purchaser and Parent on or before the Closing Date in
accordance with this Agreement shall have been duly performed in all material
respects.
(b) CLOSING DOCUMENTS. On or prior to the Closing Date, the
Purchaser and Parent shall have delivered, or be standing ready to deliver at
the Closing, all agreements, instruments and documents required to be delivered
by the Purchaser and Parent pursuant to SECTIONS 6.2 and 6.4.
(c) PAYMENT OF THE PURCHASE PRICE. The Purchaser shall pay to the
Company the Purchase Price in accordance with Section 1.3 and Section 6.4.
(d) OTHER DOCUMENTS. The Purchaser and Parent shall have provided
to the Company such other documents and instruments as the Purchaser or its
counsel may reasonably request in connection with the consummation of the
transactions in accordance with the terms of this Agreement.
ARTICLE VI
CLOSING
6.1 CLOSING AND CLOSING DATE. The purchase and sale of the Assets under
this Agreement shall be closed at a closing (the "Closing"), which shall be held
on or before April 1, 2004 (the "Closing Date"), at 10:00 a.m., local time, at
the offices of the Purchaser in Darien,
Illinois, or on such other date, time
and place as the Company and the Purchaser may otherwise agree to in writing.
Notwithstanding the foregoing, Purchaser may by written notice to the Company
and Xxxxxx, extend the Closing Date to a date no later than August 1, 2004. If
Purchaser elects to extend the Closing Date, the Purchase Price shall be
increased by an amount equal to the sum of (i) interest on $18,395,000 at the
rate of 4.5% per annum from April 1, 2004 to the date Closing occurs, and (ii)
$5,000 per week for Xxxxxx'x services from April 1, 2004 to the date Closing
occurs. If Closing has not occurred on or before April 1, 2004 (or on or before
August 1, 2004 if the Closing Date has been extended by the Purchaser), then
this Agreement shall terminate and be null and void and of no force and effect,
provided however that the rights and obligations of the parties under Article X
of this Agreement shall survive such termination with respect to any breach of a
party's representations, warranties and covenants under this Agreement.
6.2 CLOSING DOCUMENTS - GENERAL. At the Closing, the Company and the
Purchaser shall execute and deliver, or cause to be executed and delivered, the
following:
(a) NON-COMPETITION AGREEMENT. Xxxxxx, the Purchaser and Parent
shall execute and deliver the Non-Competition Agreement, the form of which is
attached hereto as EXHIBIT B.
(b) ESCROW AGREEMENT. Xxxxxx, the Company, the Purchaser and the
Escrow Agent shall have entered into the Escrow Agreement, the form of which is
attached hereto as EXHIBIT C.
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(c) XXXX OF SALE AND ASSUMPTION AGREEMENT. The Company and the
Purchaser shall execute and deliver the Xxxx of Sale and Assumption Agreement in
the form attached hereto as EXHIBIT D.
(d) PRELIMINARY SETTLEMENT STATEMENT. Not later than ten (10)
days prior to the Closing Date, the Company and Xxxxxx shall prepare and deliver
to the Purchaser the Preliminary Settlement Statement in accordance with SECTION
1.4(b).
6.3 CLOSING DOCUMENTS - THE COMPANY AND XXXXXX. At the Closing, the
Company and Xxxxxx shall execute and deliver, or cause to be executed and
delivered, the following:
(a) LEGAL OPINION. The Company shall cause the legal opinion of
the Company's counsel to be executed and delivered to the Purchaser in the form
attached hereto as EXHIBIT E.
(b) OFFICER'S CERTIFICATE. The Company shall execute and
deliverer to the Purchaser an Officer's Certificate which includes true and
correct copies of the Company's currently effective (Articles of
Incorporation/Certificate of Incorporation), Bylaws and primary shareholder and
director resolutions approving this Agreement and the transaction contemplated
hereby in the form attached hereto as EXHIBIT F.
(c) BUSINESS BOOKS AND RECORDS. The Company shall deliver to the
Purchaser the Business Books and Records (originals to the extent available)
provided that the Company may, at its sole expense, make and retain copies
thereof for general corporate purposes and for purposes of preparing tax returns
and other filings required to be made by the Company.
6.4 CLOSING DOCUMENTS - PURCHASER AND PARENT. At the Closing, the
Purchaser shall pay the Purchase Price under Section 1.3 to the Company or to
the Company's account (at such bank as may be designated by the Company in a
written notice delivered to the Purchaser not less than five (5) days prior to
the Closing) in immediately available funds (wire transfer or certified check).
In addition, the Purchaser and Parent shall execute and deliver, or cause to be
executed and delivered at the Closing, the following:
(a) LEGAL OPINION. The Purchaser shall cause the legal opinion of
the Purchaser's counsel to be executed and delivered to the Company in the form
attached hereto as EXHIBIT G.
(b) OFFICER'S CERTIFICATE. Purchaser shall have delivered to the
Company an Officer's Certificate which includes the true and correct copies of
the Purchaser's currently effective Certificate of Incorporation, Bylaws, board
of director and shareholder resolutions approving this Agreement and the
transaction contemplated hereby in the form attached hereto as EXHIBIT H.
ARTICLE VII
COVENANTS
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7.1 PRE-CLOSING AFFIRMATIVE COVENANTS - COMPANY AND XXXXXX. During the
Interim Period, if a Closing shall have occurred, and subject to the terms and
conditions of this Agreement, the Company and Xxxxxx shall operate the Business
and utilize the Assets in their respective capacities for the benefit of the
Purchaser, consistent with past practice. Further, during the Interim Period,
the Company and Xxxxxx shall:
(a) keep the Purchaser informed regarding the Assets and the
Business and day to day operations pertaining thereto;
(b) conduct the Business only in the usual and ordinary course of
business in accordance with past custom and practice;
(c) keep in full force and effect the Company's corporate
existence and all rights, franchises and intellectual property relating to or
pertaining to the Business;
(d) use best efforts to retain the Company's employees and sales
and other agents and preserve its present business relationships, and continue
to compensate its employees and sales and other agents in accordance with past
custom and practice;
(e) maintain the Assets in good and customary repair, order and
condition and maintain insurance comparable to that in effect on the date of
this Agreement; replace in accordance with past practice its inoperable, worn
out and obsolete assets with assets of comparable quality; in the event of any
casualty, loss or damage to any of the Assets prior to Closing, either repair or
replace such assets with assets of comparable quality or, if Purchaser agrees in
writing, transfer to Purchaser at Closing the proceeds of any insurance recovery
with respect thereto;
(f) maintain the Company's advertising and marketing campaigns
comparable to that in effect on the date of this Agreement and expend at least
$70,000 per week on such campaigns consistent with current media and direct mail
allocations;
(g) maintain the Company's books, accounts and records in
accordance with past custom and practice as used in the preparation of the
Financial Statements and timely file with the appropriate taxing authorities any
and all returns required to be filed by it for the periods covered thereby and
timely pay all Taxes shown thereon to be due; and
(h) subject to SECTION 7.5 of this Agreement, permit Purchaser
and Parent and their respective employees, agents, accounting and legal
representatives and potential lenders and their representatives to have access
during normal business hours to its books, records, invoices, contracts, leases,
key personnel, independent accountants, property, facilities, equipment and
other things related to the Business or the Assets.
7.2 PRE-CLOSING NEGATIVE COVENANTS - COMPANY AND XXXXXX. Prior to the
Closing, without the prior written consent of the Purchaser, the Company and
Xxxxxx shall not:
(a) directly or indirectly (including through any agent, broker,
finder or other third party), offer to sell, merge, consolidate or otherwise
dispose of, negotiate for the sale, merger, consolidation or other disposition
of, initiate or continue discussions concerning the
26
sale, merger, consolidation or other disposition of, the Company as a whole, or
the sale or other disposition of any of its shares of capital stock or any of
the Assets (other than in the ordinary course of business); and
(b) take or omit to take any action, or permit its affiliates to
take or omit to take any action, which would reasonably be anticipated to have
an adverse effect upon the Business or the Assets.
7.3 PRE -CLOSING AFFIRMATIVE COVENANTS - PURCHASER AND PARENT. Prior to
the Closing, the Purchaser and Parent shall:
(a) retain Mystic Capital Advisors Group, LLC, for purposes of
providing a fairness opinion with regard to the transactions to be consummated
pursuant to the terms of this Agreement (the "FAIRNESS OPINION"), which shall be
provided as promptly as practicable and at the sole cost, risk and expense of
Purchaser and Parent;
(b) subject to SECTION 7.5, undertake and complete a due
diligence review of the Business and the Assets as promptly as reasonably
practicable; and
(c) promptly apply for and diligently pursue financing from third
party lenders or investors in order to pay the Purchase Price under the terms of
this Agreement.
The Purchaser and Parent shall keep the Company and Xxxxxx reasonably informed
of the status of the conditions to Closing contained in subsections (f), (g) and
(h) of Section 5.2. If any of the conditions to Closing contained in subsections
(f) or (h) of Section 5.2 are not satisfied, and by reason thereof the Purchaser
and Parent terminate this Agreement on or after March 1, 2004, then Parent and
the Purchaser shall, jointly and severally, be liable for and shall pay to the
Company immediately upon demand, an amount equal to the documented reasonable
accounting and legal fees actually incurred by the Company related to the
transactions contemplated under this Agreement and the Real Estate Agreement;
provided, however, such amount shall not exceed $60,000. The payment obligation
of Parent and the Purchaser under the preceding sentence is conditioned upon the
Company and Xxxxxx having performed in all material respects (except that such
representations, warranties or covenants that contain materiality qualifiers
shall be true in all respects) their respective obligations under this Agreement
and the Real Estate Agreement.
7.4 POST-CLOSING COVENANTS
(a) EMPLOYEE MATTERS. The Purchaser anticipates a need for
qualified employees of the Company after the Closing and will evaluate employee
retention issues in connection with its due diligence investigation and prior to
Closing. Purchaser is under no legal obligation to employ any personnel
presently or previously employed by the Company. Prior to the Closing Date,
Purchaser may, but shall not be required to, offer employment to such persons
currently employed by the Company as Purchaser in its sole discretion shall
determine. Purchaser shall have the absolute right to establish all terms and
conditions of employment, including wages, benefits and benefit plans, for any
employees of the Company to whom it chooses to make an offer of employment to be
employed by Purchaser. Further, it is expressly agreed that Purchaser is not
bound to assume, implement or continue any wages,
27
terms and conditions of employment, benefits or benefit plans which may
currently exist for the Company's employees. All such offers of employment shall
be on terms and conditions established by the Purchaser and shall be contingent
upon employment commencing with the Purchaser only following the Closing Date.
The Company agrees not to discourage any individuals who are offered employment
or an agency relationship with Purchaser from accepting such employment or
agency relationship with Purchaser. Consistent with its 401K plan, the Purchaser
shall permit such new employees the opportunity to "roll over" their funds into
the Purchaser's 401K plan.
(b) OPTIONS. From and after the Closing Date, the Parent agrees
to use its reasonable best efforts to offer to certain employees of the Company
(who are hired by the Purchaser on the Closing Date) the option to purchase an
aggregate of 300,000 shares of Parent common stock consistent with EXHIBIT J.
Such stock options shall vest over a period of three-years and shall be on terms
similar to those terms offered to other employees of Parent.
(c) XXXXXX. From and after the Closing Date and for a period not
to exceed one (1) month, if requested by Purchaser, Xxxxxx agrees to assist the
Purchaser and Parent with the day-to-day operation of the Asset and the
Business. Following such one (1) month period and for an additional period of
three (3) months, if requested by Purchaser, Xxxxxx agrees to consult with the
Purchaser and Parent regarding the Assets and the Business, and the operation
thereof, including, but not limited to, procuring any licenses or in making any
filings as reasonably requested by the Purchaser or Parent and in assisting in
any marketing and advertising campaigns; provided however, that Xxxxxx shall not
be required to devote more than twenty percent (20%) of his time thereto. Xxxxxx
shall not be entitled to additional compensation for providing such assistance
or consulting, provided that all costs and expenses associated with such
assistance shall be borne solely by the Purchaser and Parent, and Xxxxxx shall
be reimbursed for all reasonable out of pocket expenses incurred in connection
with the foregoing, including travel, meals, telephone and communication
expenses.
(d) AGREEMENTS. Notwithstanding the Non-Competition Agreement,
Xxxxxx, the Company, and his spouse and children, either individually or as
owners of an entity, together with their respective employees, shall be
permitted to sell life insurance products so long as all such insurance products
are placed directly through the Parent (or an Affiliate or Associate of Parent)
in their capacity as agents of Parent and such placements collectively shall not
exceed $2.0 million in annual first-year commissionable premium (such threshold
annually increased based on the rate of inflation as specified by the Consumer
Price Index for all urban consumers), in accordance with the terms of the
agreements in the form attached hereto as EXHIBIT K.
7.5 DUE DILIGENCE. The Purchaser and Purchaser's officers, employees,
representatives, consultants and advisors, at their sole risk, cost and expense
(a) shall have access at reasonable times to the Company's offices and, in a
manner so as not to interfere unduly with the operation of the Business, to the
Business Books and Records insofar as the Company may do so (i) without
violating legal constraints or any legal obligation or waiving any
attorney/client work product or like privilege, and (ii) subject to any required
consent of any third person, and (b) may, at reasonable times and conduct an
inspection of the Business and the Assets; provided however, the Purchaser and
Parent, jointly and severally, shall be responsible for any material
28
loss, damage or injury directly caused by Purchaser or Parent arising out of or
in connection with such access and inspection.
7.6 COST OF FINANCIAL STATEMENTS. The parties agree that the costs and
expenses of the Company's Financial Statements will be borne equally by the
Company and the Purchaser. The costs and expenses of the Annual Financial
Statement shall be borne by the Purchaser and Parent.
7.7 SALE AND USE TAXES. The Purchaser shall bear any sales or use taxes
arising in connection with the Closing and the purchase and sale of the Assets
pursuant to this Agreement.
7.8 CONFIDENTIALITY. The Purchaser and Parent agree to maintain all
information made available to them pursuant to this Agreement confidential and
to cause their respective officers, employees, representatives, consultants and
advisors to maintain all information made available to them pursuant to this
Agreement confidential.
ARTICLE VIII
LIMITATIONS
8.1 DISCLAIMERS REGARDING WARRANTIES. IT IS THE EXPLICIT INTENT OF EACH
PARTY HERETO THAT NEITHER THE COMPANY NOR XXXXXX IS MAKING ANY REPRESENTATION OR
WARRANTY WHATSOEVER, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, BEYOND THOSE
REPRESENTATIONS OR WARRANTIES EXPRESSLY GIVEN IN THIS AGREEMENT, THE REAL ESTATE
AGREEMENT OR THE NON-COMPETITION AGREEMENT, AND IT IS UNDERSTOOD THAT, SUBJECT
TO SUCH EXPRESS REPRESENTATIONS AND WARRANTIES, PURCHASER AND PARENT TAKE THE
ASSETS "AS IS" AND "WHERE IS." WITHOUT LIMITING THE GENERALITY OF THE
IMMEDIATELY PRECEDING SENTENCE, THE COMPANY AND XXXXXX HEREBY (i) EXPRESSLY
DISCLAIM AND NEGATE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT
COMMON LAW, BY STATUTE OR OTHERWISE, RELATING TO (a) THE CONDITION OF THE ASSETS
(INCLUDING, WITHOUT LIMITATION, ANY IMPLIED OR EXPRESS WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR OF CONFORMITY TO MODELS
OR SAMPLES OF MATERIAL), (b) THE ACCURACY, COMPLETENESS OR MATERIALITY OF ANY
DATA, INFORMATION OR RECORDS FURNISHED TO PURCHASER AND PARENT REGARDING THE
ASSETS OR IN CONNECTION WITH THE DUE DILIGENCE REVIEW CONDUCTED BY PURCHASER AND
PARENT UNDER THIS AGREEMENT; (c) THE PRESENT OR FUTURE VALUE OR THE ANTICIPATED
INCOME, COSTS OR PROFITS, IF ANY, TO BE DERIVED FROM THE ASSETS; or (d) ANY
PROJECTIONS AS TO EVENTS THAT COULD OR COULD NOT OCCUR WITH RESPECT TO THE
ASSETS, and (ii) NEGATE ANY RIGHTS OF PURCHASER AND PARENT UNDER STATUTES TO
CLAIM DIMINUTION OF CONSIDERATION AND CLAIMS BY PURCHASER AND PARENT FOR DAMAGES
BECAUSE OF REDHIBITORY VICES OR DEFECTS, WHETHER KNOWN OR UNKNOWN, IT BEING THE
INTENTION OF THE PARTIES THAT THE ASSETS ARE TO
29
BE ACCEPTED BY PURCHASER AND PARENT IN THEIR PRESENT CONDITION AND STATE OF
REPAIR.
8.2 RELIANCE. Notwithstanding the foregoing and notwithstanding any
right of the Purchaser (whether or not exercised) to investigate the Business or
any right of any party (whether or not exercised) to investigate the accuracy of
the representations and warranties of the other party contained in this
Agreement and the Real Estate Agreement, the Company and Xxxxxx, on the one
hand, and the Purchaser and Parent, on the other hand, have the right to rely
fully upon the representations, warranties, covenants and agreements of the
other contained in this Agreement.
8.3 DAMAGES. NOTWITHSTANDING ANYTHING CONTAINED TO THE CONTRARY IN ANY
OTHER PROVISION OF THIS AGREEMENT, THE COMPANY AND XXXXXX, ON THE XXX XXXX, XXX
XXXXXXXXX XXX XXXXXX, XX THE OTHER HAND, AGREE THAT THE RECOVERY OF ANY DAMAGES
SUFFERED OR INCURRED AS A RESULT OF ANY BREACH BY EITHER PARTY OF ANY OF ITS
REPRESENTATIONS, WARRANTIES, COVENANTS OR AGREEMENTS UNDER THIS AGREEMENT SHALL
BE LIMITED TO THE ACTUAL DAMAGES SUFFERED OR INCURRED AS A RESULT OF THE BREACH
BY THE BREACHING PARTY OF ITS REPRESENTATIONS, WARRANTIES, COVENANTS OR
AGREEMENTS HEREUNDER AND IN NO EVENT SHALL THE BREACHING PARTY BE LIABLE TO THE
NON-BREACHING PARTY FOR ANY INDIRECT, CONSEQUENTIAL, SPECIAL, EXEMPLARY OR
PUNITIVE DAMAGES (INCLUDING, WITHOUT LIMITATION, ANY DAMAGES ON ACCOUNT OF LOST
PROFITS OR OPPORTUNITIES) SUFFERED OR INCURRED BY THE NON-BREACHING PARTY AS A
RESULT OF THE BREACH BY THE BREACHING PARTY OF ANY OF ITS REPRESENTATIONS,
WARRANTIES, COVENANTS OR AGREEMENTS HEREUNDER. PROVIDED, HOWEVER, IF AS A RESULT
OF THE BREACH BY A PARTY OF ITS REPRESENTATIONS, WARRANTIES, COVENANTS OR
AGREEMENTS HEREUNDER, INDIRECT, CONSEQUENTIAL, SPECIAL, EXEMPLARY OR PUNITIVE
DAMAGES ARE AWARDED AGAINST OR PAID BY THE NON-BREACHING PARTY TO ANY THIRD
PARTY, THEN IF OTHERWISE ENTITLED TO INDEMNITY HEREUNDER, SUCH NON-BREACHING
PARTY SHALL BE ENTITLED TO BE INDEMNIFIED FOR ALL DAMAGES PAYABLE TO THE THIRD
PARTY, INCLUDING ALL ACTUAL AND ANY INDIRECT, CONSEQUENTIAL, SPECIAL, EXEMPLARY
OR PUNITIVE DAMAGES AWARDED AGAINST OR PAID BY THE NON-BREACHING PARTY.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS
9.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS.
The representations, warranties, covenants and agreements of the Company and
Xxxxxx, on the one hand, and the Purchaser and Parent, on the other hand,
contained in this Agreement hereby survive the execution of this Agreement (a)
indefinitely with respect to the representations and warranties contained in
Sections 2.2, 2.13, 2.14, 2.18, 2.27, 2.30, 3.2, 3.4, and 4.2 of this
30
Agreement, (b) until ninety (90) calendar days after the fourth anniversary of
the Closing Date with respect to matters covered by Sections 2.9, 2.12, 2.22 and
2.24 of this Agreement, (c) until the second anniversary of the Closing Date in
the case of all other representations and warranties and any covenant or
agreement in this Agreement, except that any representation, warranty, covenant
or agreement that would otherwise terminate in accordance with clause (b) or (c)
above will continue to survive if a Claim Notice or Indemnity Notice (as
applicable) shall have been timely given under Article X on or prior to such
termination date, until the related claim for indemnification has been satisfied
or otherwise resolved as provided in Article X.
ARTICLE X
INDEMNIFICATION
10.1 INDEMNIFICATION.
(a) The Company and Xxxxxx, jointly and severally, shall
indemnify the Purchaser, Parent and each of its respective officers,
shareholders, directors, employees, agents, representatives and Affiliates
("PURCHASER INDEMNIFIED PARTIES") in respect of, and hold each of them harmless
from and against, any and all Losses asserted against, imposed upon, suffered,
incurred or sustained by any of them or to which any of them becomes subject,
resulting from, arising out of or relating to directly, indirectly or in
connection with (i) any misrepresentation, breach of warranty or nonfulfillment
of or failure to perform any covenant or agreement on the part of the Company
contained in this Agreement (determined in all cases as if the terms "MATERIAL"
or "MATERIALLY" were not included therein), (ii) the Benefit Plans, (iii) the
Excluded Liabilities, (iv) any Taxes imposed upon Purchaser as a result of the
transactions contemplated hereby (other than sales and use taxes provided for
under Section 7.7), (v) any claim or other cause of action asserted or brought
by an unaffiliated third party that alleges any statement of facts or other
circumstances which, if meritorious, would result in or constitute a breach or
violation of any of the representations or warranties made by the Company or
Xxxxxx in this Agreement, (vi) those items listed on SECTION 10.1(a) OF THE
DISCLOSURE SCHEDULE and (vii) any action taken by the Company or Xxxxxx during
the Interim Period with respect to the Assets or the Business that constitutes a
breach of either of their respective obligations under this Agreement or under
the Real Estate Agreement.
(b) The Purchaser and Parent, severally and not jointly, agree to
indemnify Xxxxxx and the Company and the Company's shareholders, directors,
officers, employees, agents and Affiliates ("SELLER INDEMNIFIED PARTIES") in
respect of, and hold each of them harmless from and against, any and all Losses
suffered, incurred or sustained by any of them or to which any of them becomes
subject, resulting from, arising out of or relating to (i) any
misrepresentation, breach of warranty or nonfulfillment of or failure to perform
any covenant or agreement on the part of the Purchaser or Parent contained in
this Agreement (determined in all cases as if the terms "MATERIAL" or
"MATERIALLY" were not included therein) and (ii) any Assumed Liability.
(c) Notwithstanding subsections (a) and (b), the following terms
and conditions shall apply to the parties' indemnification obligations under
this Agreement:
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(i) The indemnification obligations of the Company and Xxxxxx
under Section 10.1(a) shall in no event exceed the aggregate amount of
the Purchase Price paid under the terms of this Agreement and the
purchase price paid under the Real Estate Agreement.
(ii) Except with respect to the Assumed Liabilities and the
Excluded Liabilities, neither the Purchaser Indemnified Parties nor the
Seller Indemnified Parties (collectively the "INDEMNIFIED PARTIES" and
each individually an "INDEMNIFIED PARTY") shall be entitled to indemnity
under this Article X unless the Indemnified Party has delivered a written
notice of such Loss on or before the fourth anniversary of the Closing
Date.
(iii) With respect to the Assumed Liabilities and the Excluded
Liabilities, the indemnification obligations of the parties under this
Article X shall continue indefinitely.
(iv) The indemnity obligations of a party under this Article X
shall be reduced to the extent of any amounts actually received by the
Indemnified Parties pursuant to the terms of insurance policies (if any)
covering such claim.
(v) The indemnification obligations of the parties under this
Article X are subject to the limitations contained in Section 8.3 hereof
and shall not include incidental, consequential, indirect, punitive or
exemplary Losses or damages.
(vi) The indemnification provisions in this Article X and the
termination rights and remedies provided elsewhere in this Agreement, in
the Real Estate Agreement and in the Non-Competition Agreement shall be
the exclusive remedies with respect to the transactions contemplated by
this Agreement. Notwithstanding the foregoing, the indemnification
limitations with respect to time periods and dollar amounts shall not be
applicable in the case of any action or claim arising due to fraud on the
part of any party to this Agreement.
(vii) No claim for indemnification hereunder shall be made until
the aggregate amount of claims exceeds $5,000, at which point the amount
of indemnification hereunder shall apply to all claims, including without
limitation, those claims below $5,000.
10.2 METHOD OF ASSERTING CLAIMS. All claims for indemnification by any
Indemnified Party under Section 10.1 will be asserted and resolved as follows:
(a) In the event any claim or demand in respect of which an
Indemnifying Party might seek indemnity under SECTION 10.1 is asserted against
or sought to be collected from such Indemnified Party by a Person other than the
Company, the Purchaser, Parent or any Affiliate of the Company, the Purchaser or
Parent (a "THIRD PARTY CLAIM"), the Indemnified Party shall deliver a Claim
Notice with reasonable promptness to the Indemnifying Party. If the Indemnified
Party fails to provide the Claim Notice with reasonable promptness after the
Indemnified Party receives notice of such Third Party Claim, the Indemnifying
Party will not be obligated to indemnify the Indemnified Party with respect to
such Third Party Claim to the
32
extent that the Indemnifying Party's ability to defend has been irreparably
prejudiced by such failure of the Indemnified Party. The Indemnifying Party will
notify the Indemnified Party as soon as practicable within the Dispute Period
whether the Indemnifying Party disputes its liability to the Indemnified Party
under SECTION 10.1 and whether the Indemnifying Party desires, other than in
connection with a Third Party Claim involving Taxes, at its sole cost and
expense, to defend the Indemnified Party against such Third Party Claim.
(i) If the Indemnifying Party notifies the Indemnified Party
within the Dispute Period that the Indemnifying Party desires to defend
the Indemnified Party with respect to the Third Party Claim pursuant to
this SECTION 10.2(a)(i), then the Indemnifying Party will have the right
to defend, other than in connection with a Third Party Claim involving
Taxes, with counsel reasonably satisfactory to the Indemnified Party, at
the sole cost and expense of the Indemnifying Party, such Third Party
Claim by all appropriate proceedings, which proceedings will be
vigorously and diligently prosecuted by the Indemnifying Party to a final
conclusion or will be settled at the discretion of the Indemnifying Party
(but only with the consent of the Indemnified Party in the case of any
settlement that provides for any relief other than the payment of
monetary damages or that provides for the payment of monetary damages as
to which the Indemnified Party will not be indemnified in full pursuant
to SECTION 10.1). The Indemnifying Party will have full control of such
defense and proceedings, including any compromise or settlement thereof;
PROVIDED, HOWEVER, that the Indemnified Party may, at the sole cost and
expense of the Indemnified Party, at any time prior to the Indemnifying
Party's delivery of the notice referred to in the first sentence of this
SECTION 10.2(a)(i), file any motion, answer or other pleadings or take
any other action that the Indemnified Party reasonably believes to be
necessary or appropriate to protect its interests; and PROVIDED FURTHER,
that if requested by the Indemnifying Party, the Indemnified Party will,
at the sole cost and expense of the Indemnifying Party, provide
reasonable cooperation to the Indemnifying Party in contesting any Third
Party Claim that the Indemnifying Party elects to contest. The
Indemnified Party may participate in, but not control, any defense or
settlement of any Third Party Claim controlled by the Indemnifying Party
pursuant to this SECTION 10.2(a)(i), and except as provided in the
preceding sentence, the Indemnified Party will bear its own costs and
expenses with respect to such participation. Notwithstanding the
foregoing, the Indemnified Party may take over the control of the defense
or settlement of a Third Party Claim at any time if it irrevocably waives
its right to indemnity under SECTION 10.1 with respect to such Third
Party Claim.
(ii) If the Indemnifying Party fails to notify the Indemnified
Party within the Dispute Period that the Indemnifying Party desires to
defend the Third Party Claim pursuant to SECTION 10.2(a)(i), or if the
Indemnifying Party gives such notice but fails to prosecute vigorously
and diligently or settle the Third Party Claim, if the Indemnifying Party
fails to give any notice whatsoever within the Dispute Period or if the
Third Party Claim involves Taxes, then the Indemnified Party will have
the right to defend, at the sole cost and expense of the Indemnifying
Party, the Third Party Claim by all appropriate proceedings, which
proceedings will be prosecuted by the Indemnified Party in a reasonable
manner and in good faith or will be settled at the discretion of the
Indemnified Party (with the consent of the Indemnifying Party, which
consent will not
33
be unreasonably withheld). The Indemnified Party will have full control
of such defense and proceedings, including any compromise or settlement
thereof; PROVIDED, HOWEVER, that if requested by the Indemnified Party,
the Indemnifying Party will, at the sole cost and expense of the
Indemnifying Party, provide reasonable cooperation to the Indemnified
Party and its counsel in contesting any Third Party Claim which the
Indemnified Party is contesting. Notwithstanding the foregoing provisions
this SECTION 10.2(a)(ii), if the Indemnifying Party has notified the
Indemnified Party within the Dispute Period that the Indemnifying Party
disputes its liability hereunder to the Indemnified Party with respect to
such Third Party Claim and if such dispute is resolved in favor of the
Indemnifying Party in the manner provided in clause (iii) below, the
Indemnifying Party will not be required to bear the costs and expenses of
the Indemnified Party's defense pursuant to this SECTION 10.2(a)(ii) or
of the Indemnifying Party's participation therein at the Indemnified
Party's request, and the Indemnified Party will reimburse the
Indemnifying Party in full for all reasonable Costs and expenses incurred
by the Indemnifying Party in connection with such litigation. The
Indemnifying Party may participate in, but not control, any defense or
settlement controlled by the Indemnified Party pursuant to this SECTION
10.2(a)(ii), and the Indemnifying Party will bear its own costs and
expenses with respect to such participation.
(iii) If the Indemnifying Party notifies the Indemnified Party that
it does not dispute its liability to the Indemnified Party with respect
to the Third Party Claim under SECTION 10.1 or fails to notify the
Indemnified Party within the Dispute Period whether the Indemnifying
Party disputes its liability to the Indemnified Party with respect to
such Third Party Claim, the Loss in the amount specified in the Claim
Notice will be conclusively deemed a liability of the Indemnifying Party
under SECTION 10.1 and the Indemnifying Party shall pay the amount of
such Loss to the Indemnified Party on demand. If the Indemnifying Party
has timely disputed its liability with respect to such claim, the
Indemnifying Party and the Indemnified Party will proceed in good faith
to negotiate a resolution of such dispute, and if not resolved through
negotiations within the Resolution Period, such dispute shall be resolved
by litigation in a court of competent jurisdiction.
(b) In the event any Indemnified Party should have a claim under
SECTION 10.1 against any Indemnifying Party that does not involve a Third Party
Claim, the Indemnified Party shall deliver an Indemnity Notice with reasonable
promptness to the Indemnifying Party. The failure by any Indemnified Party to
give the Indemnity Notice shall not impair such party's rights, hereunder except
to the extent that an Indemnifying Party demonstrates that it has been
irreparably prejudiced thereby. If the Indemnifying Party notifies the
Indemnified Party that it does not dispute the claim described in such Indemnity
Notice or fails to notify the Indemnified Party within the Dispute Period
whether the Indemnifying Party disputes the claim described in such Indemnity
Notice, the Loss in the amount specified in the Indemnity Notice will be
conclusively deemed a liability of the Indemnifying Party under SECTION 10.1 and
the Indemnifying Party shall pay the amount of such Loss to the Indemnified
Party on demand. If the Indemnifying Party has timely disputed its liability
with respect to such claim, the Indemnifying Party and the Indemnified Party
will proceed in good faith to negotiate a
34
resolution of such dispute, and if not resolved through negotiations within the
Resolution Period, such dispute shall be resolved by litigation in a court of
competent jurisdiction.
(c) An Indemnified Party shall be entitled to set off against
payments such Indemnified Party owes to an Indemnifying Party (including
payments owed under this Agreement), the sum of all obligations that such
Indemnified Party is entitled to from the indemnifying Party pursuant to this
Article X
ARTICLE XI
DEFINITIONS
11.1 DEFINITIONS. As used in this Agreement, the following defined terms
shall have the meanings indicated below:
"ACCOUNTS RECEIVABLE" has the meaning ascribed to it in SECTION 1.1(a)(ix).
"ACTIONS OR PROCEEDINGS" means any action, suit, proceeding, arbitration,
or investigation or audit performed by or to be filed with any Governmental or
Regulatory Authority.
"AFFILIATE" means any Person that directly, or indirectly through one of
more intermediaries, controls or is controlled by or is under common control
with the Person specified.
"AGREEMENT" means this
Asset Purchase Agreement and the Exhibits, the
Disclosure Schedule and the Schedules hereto and any other documents delivered
by the parties in connection with the transactions contemplated hereto, as the
same shall be amended from time to time.
"ANNUAL FINANCIAL STATEMENT DATE" means December 31, 2003.
"ANNUAL FINANCIAL STATEMENTS" has the meaning ascribed to it in SECTION
2.6.
"ARBITRATING ACCOUNTANT" has the meaning ascribed to it in SECTION 1.4(d).
"ASSETS" has the meaning ascribed to it in SECTION 1.1(a).
"ASSETS AND PROPERTIES" of any Person means all assets and properties of
every kind, nature, character and description (whether real, personal or mixed,
whether tangible or intangible, whether absolute, accrued, contingent, fixed or
otherwise and wherever situated), including the goodwill related thereto,
operated, owned or leased by such Person, including without limitation cash,
cash equivalents, accounts and notes receivable, chattel paper, documents,
instruments, general intangibles, real estate, equipment, inventory, goods and
Intellectual Property.
"ASSOCIATE" means, with respect to any Person, any corporation or other
business organization of which such Person is an officer or partner or is the
beneficial owner, directly or indirectly, of ten percent (10%) or more of any
class of equity securities, any trust or estate in which such Person has a
substantial beneficial interest or as to which such Person serves as a
35
trustee or in a similar capacity and any relative or spouse of such Person, or
any relative of such spouse, who has the same home as such Person.
"ASSUMED CONTRACTS" has the meaning ascribed to it in SECTION 1.1(a)(iii).
"ASSUMED LIABILITIES" has the meaning ascribed to it in SECTION 1.2(a).
"BENEFIT PLAN" means any Plan established by the Company, or any
predecessor or Affiliate of the Company, existing on the date hereof or prior
thereto, to which the Company contributes or has contributed on behalf of any
Employee, former Employee or trustee, or under which any Employee, former
Employee or trustee of the Company or any beneficiary thereof is covered, is
eligible for coverage or has benefit rights.
"BOOKS AND RECORDS" of any Person means all files, documents, instruments,
papers, books and records relating to the business, operations, condition of
(financial or other), results of operations and Assets and Properties of such
Person, including without limitation financial statements, Tax Returns and
related work papers and letters from accountants, budgets, pricing guidelines,
ledgers, journals, deeds, title policies, minute books, stock certificates and
books, stock transfer ledgers, Contracts, Licenses, customer lists, computer
files and programs, retrieval programs, operating data and plans and
environmental studies and plans.
"BUSINESS" has the meaning ascribed to it in the forepart of this
Agreement.
"BUSINESS BOOKS AND RECORDS" has the meaning ascribed to it in SECTION
1.1(a)(vii).
"BUSINESS FORMS AND POLICY STATEMENTS" means any forms used in the conduct
of the Business as well as all written policy manuals and other written
statements of regulatory compliance.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, and the rules and regulations promulgated
thereunder or any successor thereto.
"CLAIM NOTICE" means written notification pursuant to SECTION 10.2(a) of a
Third Party Claim as to which indemnity under SECTION 10.1 is sought by an
Indemnified Party, enclosing a copy of all papers served, if any, and specifying
the nature of and basis for such Third Party Claim and for the Indemnified
Party's claim against the Indemnifying Party under SECTION 10.2, together with
the amount or, if not then reasonably ascertainable, the estimated amount,
determined in good faith, of such Third Party Claim.
"CLOSING" has the meaning ascribed to it in SECTION 6.1.
"CLOSING DATE" has the meaning ascribed to it in SECTION 6.1.
"CLOSING PAYMENT" has the meaning ascribed to it in SECTION 1.4
"CODE" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.
36
"COLLECTED RECEIVABLES" has the meaning ascribed to it in SECTION 1.3.
"CONDITION OF THE BUSINESS" means the business, condition (financial or
otherwise), results of operations, Assets and Properties, liabilities and
prospects of the Business, taken as a whole.
"COMPANY" has the meaning ascribed to it in the forepart of this Agreement.
"COMPANY FINANCIAL STATEMENTS" has the meaning ascribed to it in SECTION
2.6.
"CONTRACT" means any agreement, lease, evidence of Indebtedness, mortgage,
indenture, security agreement or other contract (whether written or oral),
including, without limitation, any insurance policies issued by the Company to
any third parties in connection with the Business.
"DEFINED BENEFIT PLAN" means each Plan, which is subject to Part 3 of Title
1 of ERISA, SECTION 412 of the Code or Title IV of ERISA.
"DISCLOSURE SCHEDULE" means the record delivered to the Purchaser by the
Company herewith and dated as of the date hereof, containing all lists,
descriptions, exceptions and other information and materials as are required to
be included therein by the Company pursuant to this Agreement.
"DISPUTE PERIOD" means the period ending thirty (30) calendar days
following receipt by an Indemnifying Party of either a Claim Notice or an
Indemnity Notice.
"EFFECTIVE DATE" has the meaning ascribed to it in SECTION 1.1(a).
"EMPLOYEE" means each employee, officer or consultant of the Company
engaged primarily in the conduct of the Business.
"ENVIRONMENTAL LAW" means any Law relating to human health, safety or
protection of the environment or to emissions, discharges, releases or
threatened releases of pollutants, contaminants or Hazardous Materials in the
environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata), or otherwise relating to the
treatment, storage, disposal, transport or handling of any Hazardous Material,
as in effect from time to time.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"ESCROW AGENT" means Zions Bank.
"ESCROW AGREEMENT" means that certain Escrow Agreement dated as of the
Effective Date by and among Xxxxxx, the Company, the Purchaser and the Escrow
Agent.
"ESCROWED AMOUNT" has the meaning ascribed to it in SECTION 1.3(a).
"EXCLUDED ASSETS" has the meaning ascribed to it in SECTION 1.1(b).
37
"EXCLUDED LIABILITIES" has the meaning ascribed to it in SECTION 1.2(b).
"FAIRNESS OPINION" has the meaning ascribed to it in SECTION 7.3(a).
"FINAL SETTLEMENT STATEMENT" has the meaning ascribed to it in SECTION
1.4(d).
"FINANCIAL STATEMENTS" means any and all of the financial statements
delivered to the Purchaser pursuant to SECTION 2.6.
"GAAP" means generally accepted accounting principles, consistently applied
throughout the specified period and in the immediately prior comparable period.
"GOVERNMENTAL OR REGULATORY AUTHORITY" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state, county,
city or other political subdivision.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended and the rules and regulations thereunder.
"HAZARDOUS MATERIAL" means (a) any petroleum or petroleum products.
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation and transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls (PCBs);
(b) any chemicals, materials, substances or wastes which are now or hereafter
become defined as or included in the definition of "hazardous substances,"
"hazardous wastes," "hazardous materials," "extremely hazardous wastes,"
"restricted hazardous wastes," "toxic substances," "toxic pollutants" or words
of similar import, under any Environmental Law; and (c) any other chemical,
material, substance or waste, exposure to which is now prohibited, limited or
regulated by any Governmental or Regulatory Authority.
"INDEBTEDNESS" of any Person means all obligations of such Person (a) for
borrowed money, (b) evidenced by notes, bonds, debentures or similar
instruments, (c) for the deferred purchase price of goods or services (other
than trade payables or accruals incurred in the ordinary course of business),
(d) under capital leases and (e) in the nature of guarantees of the obligations
described in clauses (a) through (d) above of any other Person.
"INDEMNIFIED PARTY" means any Person claiming indemnification under any
provision of ARTICLE X.
"INDEMNIFYING PARTY" means any Person against whom a claim for
indemnification is being asserted under any provision of ARTICLE X.
"INDEMNITY NOTICE" means written notification pursuant to SECTION 10.2(b)
of a claim for indemnity under ARTICLE X by an Indemnified Party, specifying the
nature of and basis for such claim, together with the amount or, if not then
reasonably ascertainable, the estimated amount, determined in good faith of such
claim.
"INTELLECTUAL PROPERTY" means all patents and patent rights, trademarks and
trademark rights, trade names and trade name rights, trade dress, service marks
and service xxxx rights,
38
service names and service name rights, brand names, inventions (whether or not
patentable and whether or not reduced to practice), processes, formulae,
copyrights and copyright rights (including, but not limited to the content of
the "xxxxxxxxxx.xxx" website), business and product names, corporate names
(including, but not limited to the "xxxxxxxxxx.xxx" name), logos, slogans, trade
secrets, processes, designs, methodologies, computer programs (including all
source codes) and related documentation, URLs, technical information, know-how
and all pending applications for and registrations of patents, trademarks,
service marks and copyrights.
"INTERIM PERIOD" has the meaning ascribed to it in SECTION 1.4.
"IRS" means the United States Internal Revenue Service.
"KNOWLEDGE" shall mean the knowledge, after inquiry, of Xxxxxxx X. Xxxxxx
with respect to the Company.
"LAW" or "LAWS" means all laws, statutes, rules, regulations, ordinances,
standards and other pronouncements having the effect of law of the United
States, any foreign country or any domestic or foreign state, county, city or
other political subdivision or of any Governmental or Regulatory Authority.
"LIABILITIES" means all Indebtedness, obligations and other liabilities of
a Person (whether absolute, accrued, contingent, fixed or otherwise, or whether
due or to become due).
"LICENSES" has the meaning ascribed to it in SECTION 1.1(a)(vi).
"LIENS" means any mortgage, pledge, assessment, security interest, lease,
lien, adverse claim, levy, charge or other encumbrance of any kind, or any
conditional sale Contract, title retention Contract or other Contract to give
any of the foregoing.
"LIFE QUOTES NAMES" has the meaning ascribed to it in SECTION 5.2(c).
"LOSS" means any and all demands, claims, actions, causes of action,
assessments, liabilities, damages, fines, fees, penalties, deficiencies, losses,
Taxes and expenses (including without limitation interest, court costs, fees of
attorneys, accountants and other expense or other expenses of litigation or
other proceedings or of any claim, default or assessment).
"XXXXXX" means Xxxxxxx X. Xxxxxx, the sole shareholder of the Company.
"NOTICE OF DISAGREEMENT" has the meaning ascribed to it in SECTION 1.4(d).
"ORDER" means any writ, judgment, decree, injunction or similar order of
any Governmental or Regulatory Authority (in each such case whether preliminary
or final).
"PARENT" has the meaning ascribed to it in the forepart of this Agreement.
"PERSON" means any natural person, corporation, general partnership,
limited partnership, proprietorship, other business organization, trust, union,
association or Governmental or Regulatory Authority.
39
"PLAN" means any bonus, incentive compensation, deferred compensation,
pension, profit sharing, retirement, stock purchase, stock option, stock
ownership, stock appreciation rights, phantom stock, leave of absence, layoff,
vacation, day or dependent care, legal services, cafeteria, life, health,
accident, disability, workmen's compensation or other insurance, severance,
separation or other employee benefit plan, practice, policy or arrangement of
any kind, whether written or oral, including, but not limited to, any "employee
benefit plan" within the meaning of SECTION 3(3) of ERISA.
"PRELIMINARY SETTLEMENT STATEMENT" has the meaning ascribed to it in
SECTION 1.4(d).
"PURCHASE PRICE" has the meaning ascribed to it in SECTION 1.3(a).
"PURCHASER" has the meaning ascribed to it in the forepart of this
Agreement.
"REAL ESTATE AGREEMENT" has the meaning ascribed to it in the Recitals.
"REAL PROPERTY" has the meaning ascribed to it in SECTION 2.13.
"RECEIVABLES AMOUNT" has the meaning ascribed to it in SECTION 1.3.
"RELEASE" or "RELEASED" has the meaning ascribed to it in SECTION 2.24(b).
"RENEWALS" has the meaning ascribed to it in SECTION 1.1(a)(xi).
"RESOLUTION PERIOD" means the period ending thirty (30) calendar days
following receipt by an Indemnified Party of a Dispute Notice.
"SHORTFALL AMOUNT" has the meaning ascribed to it in SECTION 1.3(c).
"Statement Period" has the meaning ascribed to it in SECTION 1.4(b).
"TANGIBLE PERSONAL PROPERTY" has the meaning ascribed to it in SECTION
1.1(a)(ii).
"TAX RETURNS" means any returns, reports or statements (including any
information returns) required to be filed for purposes of a particular Tax.
"TAX OR TAXES" means any and all federal, state, local or foreign taxes or
assessments of any kind or nature whatsoever, including any and all net or gross
income, franchise, gross receipts, sales, use, alternative or add-on, minimum,
employment, real property, personal property, business, capital stock,
occupancy, ad valorem, value added, transfer, license, excise, stamp, estimated,
withholding, service, payroll, social security, excise, environmental, recording
or other taxes, assessments, duties, fees, levies or other governmental charges
of any nature whatever, whether disputed or not, together with any related
penalties, charges, interest and other additions to tax or additional amounts
with respect thereto.
"TAXING AUTHORITY" means any and all federal, state, local or foreign
authorities empowered to assess or collect Taxes.
"THIRD PARTY CLAIM" has the meaning ascribed to it in SECTION 10.2(a).
40
"TRUST" has the meaning ascribed to it in the Recitals.
"WORK-IN-PROCESS" has the meaning ascribed to in SECTION 1.1(a)(x).
11.2 INTERPRETATION. Unless the context of this Agreement otherwise
requires, (a) words of any gender include each other gender; (b) words using the
singular or plural number also include the plural or singular number,
respectively; (c) the terms "hereof," "herein," "hereby" and derivative or
similar words refer to this entire Agreement; (d) the terms "Article" or
"Section" refer to the specified Article or Section of this Agreement; and (e)
the phrases "ordinary course of business" and "ordinary course of business
consistent with past practice" refer to the business and practice of the Company
in connection with the Business. All accounting terms used herein and not
expressly defined herein shall have the meanings given to them under GAAP.
ARTICLE XII
MISCELLANEOUS
12.1 NOTICES. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if delivered
personally or by facsimile transmission or mailed (first class postage prepaid)
or delivered by a recognized overnight courier service to the parties at the
following addresses or facsimile numbers:
If to the Purchaser or Parent, to:
Xxxxxxxxxx.xxx, Inc.
0000 Xxxxx Xxxx Xxxxxx, Xx. 000
Xxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Chairman,
Chief Executive Officer and President
with a copy to:
Xxxxx Xxxxxx LLP
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
If to the Company or Xxxxxx, to:
Xxxxxxx X. Xxxxxx
000 Xxxx Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
41
with a copy to:
Welborn, Sullivan, Xxxx & Xxxxxx, P.C.
000 00xx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxx
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section (and followed by another method provided herein), be
deemed given upon receipt, (iii) if delivered by mail in the manner described
above to the address as provided in this Section, be deemed given upon receipt
and (iv) if delivered by overnight courier to the address as provided in this
Section, be deemed given upon receipt (in each case regardless of whether such
notice, request or other communication is received by any other Person to whom a
copy of such notice is to be delivered pursuant to this Section). Any party from
time to time may change its address, facsimile number or other information for
the purpose of notices to that party by giving notice specifying such change to
the other party hereto.
12.2 ENTIRE AGREEMENT. This Agreement, the Real Estate Agreement and the
Non-Compete Agreement supersede all prior discussions and agreements between the
parties with respect to the subject matter hereof and thereof, and contain the
sole and entire agreement between the parties hereto with respect to the subject
matter hereof and thereof.
12.3 EXPENSES. Except as provided in Section 7.3 and Section 7.6, each
party shall pay all of its expenses in connection with the preparation,
negotiation and execution of this Agreement, the performance of its obligations
hereunder and the consummation of the transactions contemplated by this
Agreement.
12.4 PUBLIC ANNOUNCEMENTS. The Company, on the one hand, and the
Purchaser, on the other hand, will not issue or make any reports, statements or
releases to the public or generally to the employees, or other Persons to whom
the Company provides services in connection with the Business or with whom the
Company otherwise has business relationships in connection with the Business
with respect to this Agreement or the transactions consummated hereby without
the consent of the other; provided, however, that the Parent may make such
public announcements as it deems reasonable in its sole discretion in order to
comply with any applicable law, including securities laws. The Company, on the
one hand, and the Purchaser, on the other hand, will also use reasonable efforts
to obtain the other party's prior approval of any press release to be issued
immediately following the execution of the Agreement and the Real Estate
Agreement.
12.5 CONFIDENTIALITY. During the term of this Agreement, Purchaser and
Parent shall maintain the confidentiality of all information and materials
received by them, except for the approved press release referenced in Section
12.4 and any information required to be disclosed pursuant to applicable Law.
During the term of this Agreement, the Company and Xxxxxx shall
42
maintain the confidentiality of all information and materials regarding the
transactions contemplated hereby and all information and materials regarding the
Purchaser, Parent and their respective Affiliates except for any information
required to be disclosed pursuant to applicable Law.
12.6 WAIVER. Any term or condition of this Agreement may be waived at any
time by the party that is entitled to the benefit thereof, but no such waiver
shall be effective unless set forth in a written instrument duly executed by or
on behalf of the party waiving such term or condition. No waiver by any party of
any term or condition of this Agreement, in anyone or more instances, shall be
deemed to be or construed as a waiver of the same or any other term or condition
of this Agreement on any future occasion. All remedies, either under this
Agreement or by Law or otherwise afforded, will be cumulative and not
alternative.
12.7 AMENDMENT. This Agreement may be amended, supplemented or modified
only by a written instrument duly executed by or on behalf of each party hereto.
12.8 NO THIRD PARTY BENEFICIARY. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other Person other
than any Person entitled to indemnity under Article X.
12.9 NO ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any right,
interest or obligation hereunder may be assigned by any party hereto without the
prior written consent of the other party hereto and any attempt to do so will be
void, except (a) for assignments and transfers by operation of Law and (b) that
the Purchaser or Parent may assign any or all of its respective rights,
interests and obligations hereunder (including without limitation its respective
rights under Article X) to a wholly-owned subsidiary of Parent. Subject to the
preceding sentence, this Agreement is binding upon, inures to the benefit of and
is enforceable by the parties hereto and their respective legal heirs,
beneficiaries, successors and permitted assigns.
12.10 HEADINGS. The headings used in this Agreement have been inserted for
convenience of reference only and do not define or limit the provisions hereof.
12.11 INVALID PROVISIONS. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future Law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, (c) the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible.
12.12 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the Laws of the State of
Illinois applicable to a contract
executed and performed in such State without giving effect to the conflicts of
laws principles thereof.
43
12.13 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT
SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON,
ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, ORAL OR WRITTEN STATEMENT, OR OTHER ACTION OF ANY
SUCH PARTY.
12.14 COUNTERPARTS; FACSIMILE. This Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument. A signed facsimile
copy of this Agreement shall be deemed an original for all purposes.
12.15 PREPARATION AND REVIEW OF AGREEMENT. Each of the parties hereto
agree that this Agreement has been thoroughly reviewed by its respective choice
of counsel and, in the event of an ambiguity or conflict in the terms hereof,
there shall be no presumption against the Parent, Purchaser or their counsel as
the drafters hereof.
[Signature page follows]
44
WITNESS WHEREOF, this Agreement has been duly executed and delivered by a
duly authorized officer or signatory of each party as of the date first above
written.
LIFE QUOTES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Xxxxxxx X. Xxxxxx, President
XXXXXXX X. XXXXXX
/s/ Xxxxxxx X. Xxxxxx
-----------------------------------------------
LIFE QUOTES ACQUISITION, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------------
Xxxxxx X. Xxxxx, President
XXXXXXXXXX.XXX INC
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------------
Xxxxxx X. Xxxxx, Chairman, Chief Executive
Officer and President
45
