EXHIBIT A
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT made this 30th day of
April, 1998 between FIRST SOUTHERN FUNDING, INC., a Kentucky
corporation ("Buyer"), and UNITED TRUST, INC., an Illinois corporation
("UTI").
WITNESSETH:
WHEREAS, Buyer and UTI have negotiated concerning an acquisition
by Buyer of shares of the common stock of UTI; and
WHEREAS, the Buyer would acquire the shares of UTI common stock
through a series of transactions with UTI and certain UTI shareholders;
NOW, THEREFORE, in consideration of the premises, covenants and
agreements set forth herein, the sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1. ACQUISITION OF SHARES OF UTI. Buyer will, at the closing,
subject to the terms and conditions set forth herein, acquire shares of the
common stock of UTI as follows:
(a) Buyer will purchase 389,715 shares of the common stock of
UTI from UTI for a purchase price of $3,897,150 to be paid in cash by Buyer
at closing;
(b) Buyer will purchase an additional 473,523 shares of the
common stock of UTI for a purchase price of $7,102,845 to be paid in cash
by Buyer at closing;
(c) Buyer will purchase 66,667 shares of the common stock of UTI
from ▇▇▇▇▇ ▇▇▇▇▇▇ for a cash purchase price of $1,000,000 pursuant to the
terms of that Stock Purchase Agreement set forth in Exhibit 1(c) attached
hereto;
(d) Buyer will purchase $2,560,000 of initial face amount of UTI
Convertible Notes from certain officers and directors of UTI for a cash
purchase price of $3,072,000 pursuant to the terms of that Convertible Note
Purchase Agreement set forth in Exhibit 1(d) attached hereto; and
(e) UTI, at the closing, will grant, for nominal consideration,
an irrevocable, exclusive option to Buyer to purchase shares of common
stock of UTI for a purchase price in cash equal to $15 per share, such
option to expire on July 1, 2001 and to be in the form of that Option
Agreement attached hereto as Exhibit 1(e). The number of shares subject to
such option
shall be that number of shares which, following exercise, and
when combined with all of the other shares then owned by Buyer and its
affiliates, will represent a majority of the then outstanding shares of UTI
common stock, not to exceed 1,450,000 shares. The maximum number of shares
subject to such option shall be reduced by two shares for each share that
Buyer or its affiliates purchase in private or public transactions
subsequent to the closing.
2. REPRESENTATIONS AND WARRANTIES OF UTI. UTI warrants and
represents to Buyer that:
(a) ORGANIZATION AND GOOD STANDING OF UTI AND ITS AFFILIATES.
UTI is a corporation duly organized, validly existing and in good standing
under the laws of the State of Illinois. United Income, Inc. ("UII") is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Ohio. United Trust Group Inc. ("UTG") is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Illinois. First Commonwealth Corporation ("FCC") is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Virginia. Each of Appalachian Life Insurance Company ("APP"),
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Insurance Company ("ALI") United Security Assurance Company
("USA"), and Universal Guaranty Life Insurance Company ("UGL") is a legal
reserve life insurance company duly organized, validly existing and in good
standing under the laws of the State of its domicile and duly licensed to
sell life insurance under the laws of each state as set forth in Exhibit
2(a), attached hereto. (APP, ALI, USA and UGL are hereinafter sometimes
referred to individually as an "Insurance Company Subsidiary, and
collectively as the "Insurance Company Subsidiaries." APP, ALI, USA, UGL,
UTG, UII and FCC are hereinafter sometimes referred to individually as a
"UTI Subsidiary," and collectively as the "UTI Subsidiaries." Each of
UTI, UII, UTG and FCC and each of the Insurance Company Subsidiaries is
qualified to do business in each state where the nature of its business
activities and ownership of its properties require it to be so qualified,
as set forth in Exhibit 2(a).
Except as disclosed in the schedule heretofore delivered to Buyer
by UTI (referred to hereinafter as UTI's Disclosure Schedule), none of the
Insurance Company Subsidiaries is the subject of any supervision,
conservation, rehabilitation, liquidation, receivership, insolvency or
other similar proceeding, nor is any of the Insurance Company Subsidiaries
operating under any formal or informal arrangement or understanding with
the licensing authority of any jurisdiction which restricts its authority
to do business or requires it to take, or to refrain from taking, any
action.
(b) CORPORATE POWER. Each of UTI, UII, UTG and FCC and each
Insurance Company Subsidiary has full corporate power to own its properties
and carry on its business as currently conducted.
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(c) CERTIFICATE OF INCORPORATION AND BY-LAWS. (i) The
certificate of incorporation of each of UTI, UII, UTG and FCC and of each
Insurance Company Subsidiary and all amendments thereto, as certified by
the applicable state governmental authority, and (ii) the bylaws of each of
UTI, UII, UTG, FCC and each of the Insurance Company Subsidiaries, as
currently in effect, and as certified by each company's respective
corporate Secretary as being complete and correct, which have been
delivered to Buyer, are complete and correct.
(d) CORPORATE ORGANIZATION STRUCTURE. UTI owns of record and
beneficially 565,766 shares (40%) of the issued and outstanding common
stock no par value, of UII, free and clear of all liens, restrictions and
encumbrances. UTI owns 53 shares (53%) of the issued and outstanding
common stock, no par value, of UTG, free and clear of any liens,
restrictions and encumbrances. UII owns 47 shares (47%) of the issued and
outstanding common stock par value, of UTG, free and clear of all liens,
restrictions and encumbrances. UTG owns 43,303 shares (79%) of the issued
and outstanding common stock par value $1.00 per share, of FCC, free and
clear of any liens, restrictions and encumbrances except for the
encumbrances set forth below in this Section. FCC owns 400,000 shares
(100%) of the issued and outstanding common stock par value $5.00 par
share, of UGL, free and clear of any liens, restrictions and encumbrances
except for the encumbrances set forth below in this Section. UGL owns
1,000,000 shares (100%) of the issued and outstanding common stock par
value $1.00 per share, of USA, free and clear of all liens, restrictions
and encumbrances. USA owns 1,132,764 shares (83.93%) of the issued and
outstanding common stock par value $ 1.12 per share, of APP, free and clear
of all liens, restrictions and encumbrances. APP owns 600,000 shares
(100%) of the issued and outstanding common stock par value $1.00 per
share, of ALI, free and clear of all liens, restrictions and encumbrances.
All of the outstanding shares of the capital stock of FCC owned
by UTG and promissory notes of FCC payable to the order of UTG in the
aggregate principal amount of $7,492,761 are pledged as collateral to
secure repayment of UTG indebtedness to former shareholders of FCC's former
parent Commonwealth Industries Corporation in the aggregate principal
amount of $7,492,761, and all of the shares of the capital stock of UGL
owned by FCC are pledged as collateral to secure repayment of FCC
indebtedness to First of America Bank in the principal amount of
$6,900,000. True and complete copies of all instruments and agreements
evidencing the terms and conditions of such indebtedness have been provided
to Buyer.
Except as disclosed in UTI's Disclosure Schedule, neither UTI nor
any UTI Subsidiary has any investment in any other entity (other than
portfolio investments made in the ordinary course of business).
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(e) CAPITALIZATION. The authorized, issued and outstanding
capital stock of each of UTI and each UTI Subsidiary is as set forth in
Exhibit 2(e) hereto. Each issued share of capital stock of each of UTI and
each UTI Subsidiary, and each share of capital stock of UTI to be acquired
by Buyer or its assignees, as contemplated by this Agreement, is, and when
acquired by Buyer or its assignees, will be, duly authorized, validly
issued, fully paid and nonassessable.
Except as disclosed in UTI's Disclosure Schedule, there is no
outstanding option, warrant or other agreement or commitment to which UTI
or any UTI Subsidiary is a party or by which it is bound providing for the
issuance of any additional shares of its capital stock or any securities
convertible into its capital stock. Shareholders of UTI and the UTI
Subsidiaries do not have any preemptive rights, and no shares of capital
stock of either UTI or any UTI Subsidiary have been issued in violation of
any preemptive right.
No person has any right to demand, require or otherwise cause UTI
or any UTI Subsidiary to file any registration statement under the
Securities Act of 1933, as amended, or any state securities laws relating
to any debt or equity securities of UTI or any UTI Subsidiary, nor is any
such entity prohibited from granting such rights to any person in the
future. The offer, sale and repurchase of all capital stock and other
securities of UTI and each UTI Subsidiary complied with all applicable
federal and state securities and other laws.
(f) AUTHORIZATION AND VALIDITY OF AGREEMENT. The execution,
delivery and performance of this Agreement have been duly and validly
authorized by all necessary corporate action on the part of UTI and the UTI
Subsidiaries. This Agreement has been duly executed and delivered by UTI
and is the valid and legally binding obligation of UTI, enforceable against
UTI in accordance with its terms, except to the extent that enforcement may
be limited by bankruptcy, insolvency, moratorium or similar laws affecting
the rights of creditors generally and except to the extent that enforcement
may be limited by the application of general equitable principles. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not result in the acceleration of any
indebtedness or other obligation of UTI or any UTI Subsidiary and are not
prohibited by, do not violate any provision of, and do not and will not
result in a default (or an event which, with the giving of notice or the
lapse of time would constitute a default) under:
(i) the certificate of incorporation or bylaws of either UTI or
any UTI Subsidiary;
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(ii) any contract, agreement or other instrument to which UTI or
any UTI Subsidiary is a party or by which it or its assets
is bound;
(iii) any regulation, rule, order, decree or judgment of any
court, arbitration tribunal or governmental agency; or
(iv) any law applicable to UTI or any UTI Subsidiary;
except that (A) the Insurance Holding Company Systems Acts of Ohio,
Illinois and West Virginia prohibit any person from acquiring control of a
domestic insurance company or a holding company controlling a domestic
insurance company unless such acquisition of control has been approved by
the Commissioner of Insurance of each such state in the manner prescribed,
(B) the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976 requires
certain preacquisition notification of the Federal Trade Commission and the
Antitrust Division of the Department of Justice and (C) consummation of the
transactions contemplated by this Agreement requires the approval of First
of America Bank Illinois ("First of America Bank") the holder of FCC's bank
indebtedness totaling $6,900,000.
(g) STATE TAKEOVER LAWS. The board of directors of UTI,
including all of the disinterested directors of UTI, has approved in
advance the transactions pursuant to which Buyer will acquire shares of UTI
Common Stock, as contemplated by this Agreement.
(h) FINANCIAL STATEMENTS. UTI has delivered to Buyer audited
consolidated balance sheets of each of UTI and each UTI Subsidiary at
December 31, 1995, 1996 and 1997, and the related consolidated statements
of operations, consolidated statements of stockholders' equity and
consolidated statements of changes in financial position for each of the
three years 1995, 1996 and 1997 with the footnotes and schedules thereto,
together with the reports of independent public accountants with respect
thereto. The audited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles consistently
applied throughout the periods indicated, and fairly present the
consolidated financial position of each of UTI and each UTI Subsidiary, as
of the respective dates thereof and its consolidated results of operations
and changes in consolidated financial position and stockholders' equity for
the years indicated as stated therein.
The annual statements of each of UGL, USA, APP and ALL filed with
the state insurance department of its domiciliary state, for each of the
years ended December 31, 1996 and 1997, including statutory financial
statements covering each said year, which UTI and UII have heretofore
delivered to Buyer, present fairly the financial position of each of UGL,
USA, APP and ALI, respectively, at the end of each of the years then ended
and the results of its operations for each such year, in conformity with
accounting
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practices prescribed or permitted by the applicable state insurance
laws and regulations applied on a consistent basis as and to the extent
described in such annual statements and related statutory financial
statements.
Each of UTI, UII and FCC has filed with the Securities and
Exchange Commission its annual report on Form 10-K for the year ended
December 31, 1997, and all other reports, schedules, forms, statements and
other documents required to be filed by it with the Securities and Exchange
Commission, and each such report, schedule, form, statement or other
document has been timely filed and when filed was in compliance with the
requirements of the applicable federal securities law and rules and
regulations promulgated thereunder. Other than that disclosed in Section
2(h) of UTI's Disclosure Schedule, none of UTI, UII or FCC has received any
written or oral communications from the staff of the Securities and
Exchange Commission concerning the filing or content of periodic reports.
(i) ABSENCE OF UNDISCLOSED LIABILITIES. Except to the extent
disclosed in (i) UTI's, UII's or FCC's annual reports on Form 10-K for the
year ended December 31, 1997 as filed with the Securities and Exchange
Commission, (ii) UTI's, UII's, or FCC's audited consolidated financial
statements for the year 1997, (iii) the 1997 annual report of each of UGL,
USA, APP or ALI as filed with the applicable insurance department, or (iv)
UTI's Disclosure Schedule:
(i) on December 31, 1997, none of UTI, UII, UTG or FCC or any of
their Insurance Company Subsidiaries had any liabilities,
which in the aggregate were or could be material to it, of
any nature, whether or not of a type that would ordinarily
be shown on a balance sheet and whether accrued, absolute,
contingent or otherwise, known or unknown, and
(ii) since December 31, 1997, none of UTI, UII, UTG or FCC or any
of their Insurance Company Subsidiaries incurred any
liabilities other than in the ordinary course of business.
For purposes of this Section and as used throughout this Agreement, the
term "material" shall be defined to mean any claim, existence or occurrence
of a liability or obligation which either individually or when aggregated
with similar claims or occurrences is in excess of $200,000.
(j) ABSENCE OF CHANGES. Except as reflected in (i) UTI's, UII's
or FCC's annual reports on Form 10-K for the year ended December 31, 1997,
as filed with the Securities and Exchange Commission, (ii) UTI's, UII's or
FCC's audited consolidated financial statements for the year ended December
31, 1997, (iii)
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the 1997 annual report of each of UGL, USA, APP and ALI as filed with the
applicable insurance department, or (iv) UTI's Disclosure Schedule, since
December 31, 1997 there has not been:
(i) any material adverse change in the financial condition,
assets, properties, liabilities, results of operations or
prospects of either UTI or any UTI Subsidiary;
(ii) any declaration, setting aside or payment of any dividend,
or other distribution, in respect of any of the capital
stock of either UTI or any UTI Subsidiary or any direct or
indirect redemption, purchase or other acquisition by UTI or
any UTI Subsidiary of any of its capital stock;
(iii) except for agents' contracts entered into in the ordinary
course of business, any entry into or amendment of any
employment or deferred compensation agreement between either
UTI or any UTI Subsidiary and any officer, director,
employee, agent or consultant of UTI or any UTI Subsidiary;
(iv) any issuance or sale by either UTI or any UTI Subsidiary of
any of its authorized capital stock, debentures, bonds,
notes or other debt securities, or any modification or
amendment of the rights of the holders of any of its
outstanding capital stock debentures, bonds, notes or other
securities;
(v) any creation of any mortgage, lien or other encumbrance or
security interest (other than deposits with State Insurance
Departments pursuant to state insurance statutes and liens
for current taxes which are fully reserved for but not yet
due), including, without limitation, any deposit for
security made of, created on or in any asset or property of
either UTI or any UTI Subsidiary, or assumed by either UTI
or any UTI Subsidiary with respect to any such asset or
property;
(vi) any material indebtedness or other material liability or
obligation (whether known or unknown, absolute, accrued,
contingent or otherwise) incurred, or other transaction
engaged in, by any of UTI or any UTI Subsidiary except in
the ordinary course of business;
(vii) any material obligation or liability discharged or
satisfied, other than the current liabilities reflected in
the consolidated balance sheet of UTI, UII, UTG or FCC or
any of their Insurance Company
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Subsidiaries as of December 31, 1997 and current
liabilities incurred since the date thereof in the ordinary
course of business;
(viii) any sale, transfer or other disposition of any assets or
properties of UTI, UII, UTG or FCC or any of their Insurance
Company Subsidiaries except in the ordinary course of
business;
(ix) any amendment, termination or waiver of any material right
of UTI or any UTI Subsidiary under any material contract,
agreement or governmental license or permit;
(x) any material change in the practices and policies
customarily followed by UTI or any UTI Subsidiary
(including, without limitation, any underwriting, actuarial,
pricing, financial or accounting practices or policies);
(xi) any material increase or decrease in the percentage of its
reinsured business, or any material increase in its lapse
ratio, or any material decrease in the amount of its in-
force business;
(xii) any increase in salaries or other compensation of, or
advances to, executive employees or increases to non-
executive employees which are not in the ordinary course of
business consistent with past practice;
(xiii) any loss of key agents or key employees by any Insurance
Company Subsidiary which could reasonably be expected to
have a material adverse effect on the business of such
Insurance Company Subsidiary; or
(xiv) any transaction which was not in the ordinary course of
business consistent with past practice.
(k) ABSENCE OF DEFAULTS. Except as set forth in UTI's
Disclosure Schedule, neither UTI nor any UTI Subsidiary is in default under
or violation of its certificate of incorporation or bylaws, or under any
term or provision of any deed of trust, mortgage, indenture or security
agreement or of any contract or instrument to which it is a party or by
which it or any of its assets or properties is bound, the result of which
default has caused or reasonably might be expected to cause a material
adverse effect on its business, operations, properties or assets or its
financial condition or prospects.
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(l) COMPLIANCE WITH LAWS. Except as set forth in UTI's
Disclosure Schedule, there has been no failure by UTI or any UTI Subsidiary
to comply with any law or regulation of any applicable jurisdiction in the
conduct of its business and corporate affairs or otherwise other than such
failures which are not, individually or in the aggregate, material and
which have not caused and reasonably might not be expected to cause
consequences which could materially adversely affect the business,
operations, properties or assets or financial condition or prospects of
either UTI or any UTI Subsidiary.
(m) TAX STATUS. Each of UTI and each UTI Subsidiary has duly
filed all federal, state and local tax returns and reports, and all returns
and reports of all other governmental units having jurisdiction, with
respect to taxes imposed upon it or upon its income, assets, properties,
licenses or operations. Each of UTI, UII, UTG and FCC file separate
federal income tax returns. The Insurance Company Subsidiaries file
consolidated federal income tax returns. Except as disclosed in UTI's
Disclosure Schedule, all of such returns or reports reflect the true and
correct tax liability of each of UTI, UII, UTG or FCC or the Insurance
Company Subsidiaries, as the case may be, and all taxes shown on such
returns or reports and all assessments received by each of UTI, UII, UTG or
FCC or any of the Insurance Company Subsidiaries have been paid to the
extent that such taxes have become due or fully reserved for to the extent
not yet due and payable; and except as disclosed in UTI's Disclosure
Schedule, there are no waivers or agreements by any of UTI, UII, UTG or FCC
or any of their Insurance Company Subsidiaries for the extension of time
for the assessment of taxes as above described. Except as set forth in
UTI's Disclosure Schedule, none of the federal or other income tax returns
of any of UTI, UII, UTG or FCC or any Insurance Company Subsidiary has been
audited by the Internal Revenue Service or other government agency. A true,
complete and accurate copy of each audit report and other notices and
letters issued by the Internal Revenue Service in connection with the audit
of any federal income tax return of any of UTI, UII, UTG or FCC or of the
Insurance Company Subsidiaries relating to any year or period not barred by
the applicable statute of limitations has been or will be made available to
Buyer prior to the closing. With respect to the period of time through the
date hereof for which tax returns have not yet been filed, or for which
taxes are not yet due or owing, each of UTI, UII, UTG and FCC and their
Insurance Company Subsidiaries have set up reserves which are adequate to
cover all taxes which may become owing by reason of income earned or
activities engaged in prior to the date hereof. Except as described in
UTI's Disclosure Schedule, there is not now, to the knowledge of UTI, any
proposed assessment of additional taxes against any of UTI, UII, UTG or FCC
or any of their Insurance Company Subsidiaries. There are no tax liens
(other than any lien for current taxes not yet due and payable which have
been fully reserved for) on any of the assets or properties of UTI, UII,
FCC or any of the Insurance Company Subsidiaries. All deposits required
9
by law to be made with respect to employees' withholding and other
employment taxes have been made.
(n) TITLE TO PROPERTIES. Except as set forth in UTI's
Disclosure Schedule, each of UTI, UII, UTG and FCC and their Insurance
Company Subsidiaries has good and marketable title to all of its properties
and assets used or provided for use in its business, including those
reflected on the consolidated balance sheets of each of UTI, UII or FCC and
subsidiaries at September 30, 1997, and on the statutory balance sheets of
UGL, USA, APP and ALI at December 31, 1997, (except as since sold or
otherwise disposed of in the ordinary course of business), free and clear
of all mortgages, pledges, liens, conditional sale agreements, encumbrances
or other charges and title objections, except for liens securing specific
liabilities set forth on such balance sheets (with respect to which no
default exists) and except for minor imperfections of title and
encumbrances, if any, which are not substantial in amount, which do not
adversely affect the marketability of a property or properties or
materially impair the operations of UTI, UII, UTG or FCC or any of their
Insurance Company Subsidiaries and have arisen only in the ordinary course
of business. No third party has any right, title or interest in any name
or trademark used by UTI, UII, UTG, FCC or any of their Insurance Company
Subsidiaries, and none of UTI, UII, UTG, FCC or any of their Insurance
Company Subsidiaries has infringed, or is alleged to be infringing, any
trademark, service ▇▇▇▇, copyright, trade name or corporate name of any
third party in connection with its business.
(o) LITIGATION. Except as set forth in UTI's Disclosure
Schedule, (A) there is no action, suit or proceeding pending or, to the
knowledge of UTI after due inquiry, threatened against any of UTI, UII, UTG
or FCC or any of their Insurance Company Subsidiaries, before any court, at
law or in equity, arbitration tribunal or any federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality which individually or in the aggregate could have a
material adverse effect on the financial condition of any of UTI, UII, UTG
or FCC or any of their Insurance Company Subsidiaries, and (B) none of UTI,
UII, UTG or FCC or any of their Insurance Company Subsidiaries is in
default in any material respect under any order, decree, judgment, award,
determination, ruling or regulation of any court, arbitration tribunal,
governmental department, commission, board, bureau, agency or other
instrumentality.
(p) EMPLOYEE BENEFIT PLANS. Except as described in UTI's
Disclosure Schedule, none of UTI, UII, UTG or FCC or any of their Insurance
Company subsidiaries as of the time of closing will have an employee stock
option, stock bonus, pension, profit-sharing, retirement or similar
employee benefit plan. Each of UTI, UII, UTG and FCC and each of their
Insurance Company Subsidiaries has been and, at the closing, will be in
compliance in all material respects with the applicable provisions of the
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Employee Retirement Income Security Act of 1974, as amended ("ERISA").
Neither UTI, UII, UTG or FCC nor any of their Insurance Company
Subsidiaries, has any liability, actual or contingent, with respect to any
plan that is (i) a defined benefits plan subject to Title IV of ERISA, (ii)
a multi-employer pension plan as that term is defined in Section 4001(a)(3)
of ERISA, (iii) a plan providing health or medical benefits to retired
employees, or (iv) a welfare benefit fund under Section 419 of the Internal
Revenue Code.
(q) CONTRACTS. Except for contracts or agreements described in
UTI's Disclosure Schedule, and except as otherwise set forth herein, there
is no material contract (except agents' agreements entered into in the
ordinary course of business and insurance policies) (i) imposing a direct
or contingent liability on UTI, UII, UTG or FCC or any of their Insurance
Company Subsidiaries in excess of $200,000, including, but not by way of
limitation, any lease or rental agreement covering real or personal
property, any consulting or other service agreement, any purchase
agreement, any promissory note or other instrument or security evidencing
any indebtedness, any mortgage or deed of trust covering real or personal
property, any security agreement or financing statement covering personal
property, or any employment, deferred compensation or agency contract or
other contract or agreement with any employee or (ii) which is otherwise
material to the business of UTI, UII, UTG, FCC or any of their Insurance
Company Subsidiaries.
Except as set forth herein or in UTI's Disclosure Schedule, no
party is in default under any such contract, and no third party is required
to give its consent to the transactions contemplated by this Agreement.
(r) INSURANCE POLICIES. All insurance policies or contracts
issued by UGL, USA, APP and ALI are valid policies or contracts, the form
of which has been approved, where required, by the applicable state
insurance departments.
(s) RESERVES. Except as set forth in UTI's Disclosure Schedule
the reserves for policy liabilities of each of UGL, USA, APP and ALI as set
forth on its December 31, 1997 statutory balance sheet, have been computed
in accordance with generally accepted actuarial methods and principles
consistently applied and, in all cases, have been properly computed, were
based on actuarial assumptions that were in all material respects in
accordance with or more conservative than those called for in the related
policy or contract, and are adequate under the applicable requirements of
the law of the state of its domicile and the law of the states in which it
is licensed to do business to enable UGL, USA, APP or ALI to conduct its
insurance business in those states.
(t) INSURANCE. UTI's Disclosure Schedule contains a description
of all property and casualty, liability, group health,
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group disability, group life and other insurance policies owned by UTI,
UII, UTG or FCC or their Insurance Company Subsidiaries.
(u) REAL ESTATE. Except as set forth in UTI's Disclosure
Schedule, UTI has not received any notice or has any knowledge that any
federal, state or local agency or private party has alleged any violation
of any environmental, building, zoning, health or safety statue or
regulation by any of UTI, UII, UTG or FCC or any of their Insurance Company
Subsidiaries, in connection with real estate owned or leased by UTI, UII,
UTG, FCC or any of their Insurance Company Subsidiaries. Except as set
forth in UTI's Disclosure Schedule, neither the whole nor any portion of
the property or leaseholds owned or held by UII,UTI, UTG or FCC or any of
their Insurance Company Subsidiaries is subject to any governmental decree
or order to be sold or is being condemned, expropriated or otherwise taken
by any governmental body or third party with or without payment of
compensation therefor, and there are no assessments with respect to any
such property which remains unpaid.
(v) BOOKS AND RECORDS. The minute books of each of UTI, UII,
UTG, FCC and each of their Insurance Company Subsidiaries contain the
records of all of the official actions of its board of directors and its
shareholders and there are no material omissions therefrom or misstatements
therein. The minutes of the meetings of the board of directors fully and
correctly describe all official actions taken by the executive committee
and other committees of the board of directors except to the extent fully
and correctly set forth in minutes of such committees. The books, records
and accounts of UTI, UII, FCC and the Insurance Company Subsidiaries
accurately and fairly reflect in reasonable detail the transactions and the
assets and liabilities of such Companies. None of these Companies has
engaged in any transaction, maintained any bank account or used any funds
except for transactions, bank accounts and funds which have been and are
reflected in the normally maintained books and records of the business.
(w) BROKERS. Except as disclosed in UTI's Disclosure Schedule,
neither UTI, any UTI Subsidiary nor any of their respective officers,
directors, employees, or affiliates has employed any broker or finder or
incurred any liability for any financial advisory fees, investment bankers'
fees, brokerage fees, commissions, or finders' fees in connection with this
Agreement or the transactions contemplated hereby.
(x) SEC FILINGS. UTI and each UTI Subsidiary have filed and
made available to Buyer all forms, reports, and documents required to be
filed by UTI or any UTI Subsidiary with the Securities and Exchange
Commission since December 31, 1993 (collectively, the "SEC Reports"). The
SEC Reports (i) at the time filed, complied in all material respects with
the applicable requirements of the Securities Act of 1933 and the
Securities Exchange Act of 1934, as the case may be and (ii) did not at the
12
time they were filed (or if amended or superseded by a filing prior to the
date of this Agreement, then on the date of such filing) contain any untrue
statement of a material fact or omit to state a material fact required to
be stated in such SEC Reports or necessary in order to make the statements
in such SEC Reports, in light of the circumstances under which they were
made, not misleading. Except for reports and statements required to be
filed by UII and FCC pursuant to the Securities Exchange Act of 1934, none
of the UTI Subsidiaries is required to file any forms, reports, or other
documents with the Securities and Exchange Commission.
(y) TRANSACTIONS WITH AFFILIATES. Except as set forth in UTI's
Disclosure Schedule, no director or executive officer of UTI or any UTI
Subsidiary or shareholder beneficially owning 5% or more of the outstanding
shares of capital stock of UTI or any UTI Subsidiary, or any member of the
immediate family or any affiliate of any such director, officer or
shareholder, owns or controls any party which has any material contract,
agreement, understanding, business arrangement or relationship to either
UTI or any UTI Subsidiary. All transactions between each Insurance
Company Subsidiary and each affiliate have been in compliance with all
applicable legal and regulatory requirements.
(z) FULL DISCLOSURE. No representation or warranty by UTI in
this Agreement or any certificate, schedule, statement, document or
instrument furnished to Buyer pursuant to this Agreement, or in connection
with the negotiation, execution or performance of this Agreement, contains
or will contain any untrue statement of a material fact or omits or will
omit to state a material fact required to be stated herein or therein or
necessary to make any statement herein or therein not misleading.
(aa) FUTURE EARNINGS OF UTI. The earnings of UTI combined with
those of its subsidiaries and affiliates will total at least $30,000,000
for the five year period beginning January 1, 1998. Such earnings will be
computed in a manner consistent with UTI's 1997 Annual Plan which has been
delivered to Buyer except that items of a nature similar to those which
were charged directly to capital and surplus on line 46 of the 1997 Summary
of Operations in the statutory annual statements of the Insurance Company
Subsidiaries will be charged to income for purposes of this calculation.
Such earnings will (i) not include the effects of the cash and other assets
obtained by UTI from Buyer in connection with this Agreement; (ii) include
the effects of capital gains and losses on all of the investment real
estate and real estate acquired in satisfaction of debt owned by UTI, UII,
UTG, FCC or their insurance subsidiaries at December 31, 1997 as such real
estate was carried on the December 31, 1997 statutory balance sheets; and
(iii) include an adjustment at December 31, 2002 equal to the difference
between the then market value and the then statutory carrying value of any
investment real estate and real
13
estate acquired in satisfaction of debt owned by UTI, UII, UTG, FCC or
their insurance subsidiaries at December 31, 1997 and still owned at
December 31, 2002.
The market value of the assets as of December 31, 2002 will be
determined by the parties. If the parties can not agree on a value, the
matter shall be submitted to arbitration in accordance with section 19(f),
hereof.
(bb) VOTING OF SHARES. No provision of the articles of
incorporation or bylaws of UTI and, to the best knowledge of UTI, no
provision of Illinois law limits the ability of Buyer to elect a majority
of the Board of Directors of UTI if Buyer owns or validly holds the right
to vote in an election of the Board of Directors a majority of the
outstanding shares at such election.
(cc) PARTICIPATING POLICIES. No policyholder has any contractual
rights to earnings of any Insurance Company Subsidiary, other than claims
relating to the divisible surplus pertaining to the particular policy form
owned by such policyholder.
3. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to UTI that:
(a) VALIDITY OF AGREEMENT. This Agreement has been duly
executed and delivered by Buyer, and is the valid and legally binding
obligation of Buyer, enforceable by UTI in accordance with its terms,
except to the extent that enforcement may be limited by bankruptcy,
insolvency, moratorium or similar laws affecting the rights of creditors
generally and except to the extent that enforcement may be limited by the
application of general equitable principles.
(b) CORPORATE STATUS. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Kentucky.
(c) INSURANCE DEPARTMENT APPROVALS. Buyer is not aware of any
facts or circumstances relating to Buyer that might cause any insurance
department whose approval may be required to consummate the transactions
contemplated by this Agreement to refuse to grant its approval of such
transactions.
(d) INVESTMENT INTENT. The shares of UTI Common Stock to be
acquired by Buyer or its assignees from UTI pursuant to this Agreement will
not be acquired with a view to the distribution thereof, and such shares
will not be resold or otherwise disposed except in accordance with the
provisions of the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder and any applicable state securities
laws. Buyer acknowledges and further agrees that the certificate(s) to be
issued to it or its assignees evidencing shares of UTI Common Stock
14
acquired from UTI pursuant to this Agreement will bear a legend as follows:
"These securities have not been registered under the Securities
Act of 1933 or applicable state securities laws, and have been
acquired for investment, and may not be sold, transferred,
pledged, hypothecated or otherwise disposed of in the absence of
(a) an effective Registration Statement under the Securities Act
of 1933, as amended; (b) a right to sell such securities without
said Registration Statement by reason of an exemption afforded by
the Securities Act of 1933 or the Rules and Regulations
promulgated thereunder or any amendment thereof or successor
thereto; or (c) an opinion of a recognized qualified securities
counsel that such disposition is otherwise permissible under
applicable law."
(e) BROKERS. Except as disclosed in Exhibit 3(e) attached
hereto, neither Buyer nor any of its officers, directors, employees or
affiliates has employed any broker or finder or incurred any liability for
any financial advisory fees, investment bankers' fees, brokerage fees,
commissions or finders' fees in connection with this Agreement or the
transactions contemplated hereby.
(f) FULL DISCLOSURE. No representation or warranty by Buyer in
this Agreement or any certificate, schedule, statement, document or
instrument furnished to UTI pursuant to this Agreement or in connection
with the negotiation, execution or performance of this Agreement, contains
or will contain any untrue statement of a material fact or omits or will
omit to state a material fact required to be stated herein or therein or
necessary to make any statement herein or therein not misleading.
4. ACCESS TO INFORMATION CONCERNING PROPERTIES AND RECORDS. From
and after the date hereof and until the closing Date or termination of this
Agreement pursuant to the terms hereof, for the purpose of confirming the
representations and warranties of UTI, herein made, UTI will give and cause
each of UTI, UII, UTG and FCC and the Insurance Company Subsidiaries to
give, Buyer and its counsel, accountants and other representatives, on a
confidential basis, full access, during normal business hours, to all of
their respective properties, books, contracts, commitments and other
records (including computer files, retrieval programs and related
documentation) and will furnish Buyer and its representatives during such
period with all such information and data concerning the affairs of such
companies as Buyer or its representatives reasonably may request. From and
after the date hereof and until the closing Date or termination of this
Agreement pursuant to the terms hereof, Buyer will afford UTI and its
counsel reasonable access to such information as UTI may reasonably request
for the purpose of confirming the representations and warranties of Buyer
15
hereunder. Except to the extent that such disclosure, in the opinion of
counsel to Buyer, or counsel to UTI, as the case may be, may be required by
law, any confidential information obtained under this Agreement shall not
be disclosed to persons other than the parties to this Agreement and their
representatives in connection with the transactions contemplated hereby. If
the transactions contemplated by this Agreement for any reason are not
consummated, except for documents filed with the Securities and Exchange
Commission, state insurance departments, the Federal Trade Commission, the
Justice Department or otherwise already available to the public, all
written information and statements supplied by UTI, UII, UTG, FCC or any of
their Insurance Company Subsidiaries to Buyer, or by Buyer to UTI and any
copies thereof in Buyer's, or UTI's possession promptly shall be returned
to UTI or Buyer, as the case may be, and any such confidential information
obtained by Buyer or UTI pursuant to this Section 4 shall remain
confidential.
5. ACTIONS BY UTI, UII, UTG AND FCC AND SUBSIDIARIES PENDING
CLOSING. Between the date hereof and the closing date, UTI, UII, UTG, FCC
and their Insurance Company Subsidiaries will comply with the provisions of
this Section, except to the extent that Buyer may otherwise consent in
writing, which consent will not reasonably be withheld.
(a) COMPLIANCE. UTI will, and will cause each UTI Subsidiary
to, comply with all laws, regulations and regulatory requirements
applicable to it and not take any action, or omit to take any action, which
will result in any representation or warranty made by UTI in this Agreement
not to be accurate and complete in all material respects as of the closing
date. UTI will promptly notify Buyer if UTI or any UTI Subsidiary
discovers that any of the representations or warranties of Buyer contained
herein was not true and correct as of the date hereof, or by any reason of
changed circumstances or otherwise, is no longer true and correct. Between
the date hereof and the final purchase of shares of UTI Common Stock
contemplated by this Agreement, UTI will keep Buyer fully advised as to any
material changes in the assets, business, condition, operations or
prospects of UTI or any UTI Subsidiary and any other changes in UTI's
warranties and representations herein contained.
(b) NO CHANGE IN BUSINESS; EMPLOYEES. Except as set forth in
UTI's Disclosure Schedule, UTI will cause each of UTI and each UTI
Subsidiary to continue to operate its business in all material respects as
such business is currently being operated and will not permit any such
company to take any action or omit to take any action other than in the
ordinary course of its business as such business is currently being
operated.
(c) EMPLOYEE BENEFITS . Except as set forth in UTI's Disclosure
Schedule, UTI will not permit any of UTI, UII, UTG or FCC or any of their
Insurance Company Subsidiaries to grant any
16
salary increase to any officer or other employee or enter into, or amend or
alter materially any bonus, savings, retirement, pension, profit-sharing,
stock option, group insurance, death benefit or other fringe benefit plan,
trust agreement or arrangement or any employment, agency (except routine
agents' contracts entered into in the or&nary course of business),
brokerage or consulting agreement, except that nothing herein shall
prohibit UTI, UII, UTG or FCC or any of their Insurance Company
Subsidiaries from conducting its normalannual salary and bonus review of
non-officer employees and granting normal annual salary increases and
bonuses to non-officer employees.
(d) INDEBTEDNESS. Except as set forth in UTI's Disclosure
Schedule, UTI will not permit any of UTI, UII, UTG or FCC or any of their
Insurance Subsidiaries to create, incur, assume, guarantee or otherwise
become liable with respect to any indebtedness, except in the ordinary
course of business.
(e) RECORDS. UTI will cause each of UTI, UII, UTG and FCC and
each of their Insurance Company Subsidiaries to maintain its books,
accounts and records in the usual, regular and ordinary manner.
(f) CERTIFICATE OF INCORPORATION: BYLAWS. Except as described
in UTI's Disclosure Schedule, UTI will not permit any of UTI, UII, UTG or
FCC or any of their Insurance Company Subsidiaries to amend its certificate
of incorporation or its bylaws, or take any action with respect to any such
prohibited amendment, and UTI will cause each of UTI, UII, UTG, and FCC and
each of their Insurance Company Subsidiaries to maintain its corporate
existence and powers.
(g) DISPOSAL OF PROPERTY. Except as set forth in UTI's
Disclosure Schedule, UTI will not permit any of UTI, UII, UTG or FCC or any
of their Insurance Company Subsidiaries to dispose of or encumber any of
its properties or assets, except in the ordinary course of business
(h) ACQUISITIONS. Except as set forth in UTI's Disclosure
Schedule, UTI will not permit any of UTI, UII, UTG or FCC or any of their
Insurance Company Subsidiaries to merge or consolidate with any other
corporation or, except for portfolio investments, acquire or agree to
acquire any stock or assets of any other person, firm, association,
corporation or other business organization
(i) AUTHORIZATION OR ISSUANCE OF SHARES. Except for the
issuance of common stock upon the exercise of outstanding stock options or
the conversion of outstanding convertible debt or as otherwise provided
herein, UTI will not permit any of UTI, UII, UTG or FCC or any of their
Insurance Company Subsidiaries to authorize or issue any shares of capital
stock or debt or equity securities
17
or enter into any contract relating to or granting any option, warrant or
right calling for the authorization or issuance of any such shares or
securities, or create or issue any securities convertible into any such
shares or convertible into securities in turn so convertible, or issue any
options, warrants or rights to purchase any such convertible securities.
(j) COMMITMENTS. Except as required or permitted herein, UTI
will not permit any of UTI, UII, UTG or FCC or any of their Insurance
Company Subsidiaries to enter into, assume or amend any material contract,
agreement, obligation, lease, license or commitment, except in the ordinary
course of business.
(k) APPROVALS. UTI, in good faith, will cooperate with Buyer in
seeking any required governmental approvals of the transactions
contemplated by this Agreement, and will promptly file any and all
documents and information required to be filed with the Federal Trade
Commission or the Antitrust Division of the Department of Justice pursuant
to the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976.
(l) NOTIFICATION. UTI will promptly notify Buyer if it
discovers that any of the representations or warranties of UTI contained
herein was not true and correct as of the date hereof, or by reason of
changed circumstances or otherwise, is no longer true and correct.
(m) TAX RESERVES. Until the closing date, UTI, UII, UTG and FCC
and each of the Insurance Company Subsidiaries will, if appropriate,
maintain reserves which UTI, after due inquiry, believes to be adequate to
cover all taxes which may become owing by reason of income earned or
activities engaged in through the closing date.
(n) CONSUMMATE TRANSACTION. UTI shall use its best efforts to
consummate all transactions contemplated by this Agreement as expeditiously
as practicable in accordance with all applicable laws, rules and
regulations and the terms hereof Further, UTI shall use its best efforts to
assist Buyer in Buyer's efforts to file a full, accurate and complete Form
A Acquisition Statement and procure regulatory approvals from the Directors
or Commissioners of Insurance of the States of Illinois, Ohio, and West
Virginia.
(o) LENDERS APPROVAL. UTI will use its best efforts to obtain
the consent of First of America Bank to the transactions contemplated by
this Agreement.
6. BUYER'S COVENANTS. Buyer covenants and agrees that it will:
18
(a) file as soon as practicable, but in all events within thirty
(30) days following the execution of this Agreement, a Form A Acquisition
Statement with respect to the acquisition of control of ALI with the
Director of Insurance of the State of Illinois; with respect to the
acquisition of control of UGL and USA with the Director of Insurance of the
State of Ohio; and with respect to the acquisition of control of APP with
the Commissioner of Insurance of the State of West Virginia, and to
diligently pursue such applications for, and use its best efforts to
procure, such regulatory approvals;
(b) file, as soon as practicable, but in all events within
thirty (30) days following the execution of this Agreement, all information
required to be filed with the Federal Trade Commission and the Antitrust
Division of the Department of Justice pursuant to the ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇
Antitrust Improvements Act of 1976;
(c) otherwise diligently use its best efforts to obtain the
financing commitment referenced in Section 8(g) and to consummate all
transactions contemplated by this Agreement as expeditiously as practicable
in accordance with all applicable laws, rules and regulations and the terms
hereof;
(d) promptly notify UTI if Buyer discovers that any of the
representations or warranties of Buyer contained herein was not true and
correct as of the date hereof, or by any reason of changed circumstances or
otherwise, is no longer true and correct;
(e) between the date hereof and closing, will keep UTI fully
advised as to any changes in its warranties and representations herein
contained;
(f) following the closing, take no action which would adversely
affect any right, existing as of the closing date of any current or former
director, officer, or employee, agent or attorney of UTI, UII, UTG or FCC
or any of their Insurance Company Subsidiaries, to indemnity for claims and
related expenses, including, but not limited to, expenses of investigation,
reasonable attorney's fees and amounts paid in settlement, based upon or
arising from such person's service as an officer, director, employee, agent
or attorney of UTI, UII, UTG or FCC or any of the Insurance Company
Subsidiaries (or any predecessor thereof) at any time prior to the closing
date;
(g) from and after the closing, not sell a majority of the
shares of the UTI Common Stock acquired by it pursuant to this Agreement to
any person who is not currently an affiliate of Buyer unless within a
period of twelve months thereafter, the remaining shareholders of UTI are
afforded the opportunity to sell their shares of common stock of UTI at the
same price per share which the Buyer receives on the sale by it of UTI
shares, provided this
19
section shall not prohibit the sale or transfer of shares of UTI Common
Stock to any entity formed and controlled by Buyer or the current
shareholders of Buyer subsequent to the date hereof; and
(h) from and after the closing, not allow anyone not currently
an affiliate of Buyer to obtain control of Buyer, provided this section
shall not prevent the transfer of ownership of Buyer to an entity formed
and controlled by the current shareholders of Buyer subsequent to the date
hereof.
7. CONDITIONS TO OBLIGATIONS OF EACH PARTY. The obligations of
Buyer to consummate the acquisition of the shares of UTI Common Stock and
the obligation of UTI to consummate the sale of such shares and the
obligations of each party to consummate the other transactions to be
consummated by it hereunder on the closing date shall be subject to the
satisfaction, prior to or concurrently with the closing on the closing
date, of each of the conditions set forth in this Section. Each party shall
use its best efforts to satisfy such conditions.
(a) NO ACTION OR PROCEEDING. No action or proceeding instituted
by any public authority or unaffiliated private person shall be pending on
the closing date before any court or administrative body to restrain,
enjoin or otherwise prevent the consummation of this Agreement or the
transactions contemplated herein or to recover any damages or obtain other
relief as a result of this Agreement or the transactions contemplated
herein or as a result of any agreement entered into in connection with or
as a condition precedent to the consummation thereof.
(b) GOVERNMENTAL APPROVALS. The Director of Insurance of each
of the States of Ohio and Illinois and the Insurance Commissioner of the
State of West Virginia shall have approved the acquisition of control by
Buyer of UGL, USA, APP and ALI, respectively, pursuant to the Insurance
Holding company Systems Act of each such state on terms and conditions
satisfactory to Buyer in its sole discretion. Any other required approvals
of any regulatory authority and approvals of all other third parties whose
approval is necessary shall have been obtained and all required waiting
periods shall have expired and no proceeding shall be pending before the
Federal Trade Commission or the Antitrust Division of the Department of
Justice relating to the transactions contemplated hereby. Buyer shall have
been furnished with appropriate evidence, satisfactory to it and its
counsel, of the granting of such approvals.
(c) LENDER APPROVAL. First of American Bank the holder of FCC's
$6,900,000 bank debt, shall have approved the transactions contemplated
hereby or, such debt shall have been refinanced on terms and conditions
satisfactory to Buyer and UTI.
20
8. ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF BUYER. The
Obligations of Buyer to consummate the purchase of the shares of UTI Common
Stock and the other transactions to be consummated by Buyer hereunder on
the closing date shall be subject to the satisfaction, or waiver as
provided herein, prior to or concurrently with the closing on the closing
date, of each of the conditions set forth in Section 7 hereof and of this
Section 8.
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES OF UTI AND
RELATED CERTIFICATES. Examination by Buyer and its representatives shall
not have disclosed any material inaccuracy in the representations and
warranties of UTI set forth herein or otherwise made by UTI in writing in
connection with the transactions contemplated hereby; such representations
and warranties shall (except where stated to be as of an earlier date) be
true and correct on the closing date as though made on and as of such date,
and Buyer shall have received from UTI on the closing date a certificate,
dated the closing date, signed by ▇▇▇▇▇ ▇▇▇▇▇▇, Chief Executive Officer of
UTI, in such capacity, to such effect.
(b) COMPLIANCE WITH CERTAIN COVENANTS, AGREEMENTS AND
OBLIGATIONS AND RELATED CERTIFICATE. UTI shall have performed all
covenants, agreements and obligations to be performed by it pursuant to
this Agreement at or prior to the closing, and Buyer shall have received
from UTI on the closing date a certificate dated the closing date, signed
by ▇▇▇▇▇ ▇▇▇▇▇▇, Chief Executive Officer of UTI, in such capacity, to such
effect.
(c) CORPORATE ACTION BY UTI. All corporate action necessary to
authorize the execution, delivery and performance by UTI of this Agreement
shall have been duly and validly taken by UTI and Buyer shall have been
furnished with copies of all resolutions adopted by the board of directors
of UTI in connection therewith, certified by the Secretary or Assistant
Secretary of UTI.
(d) NO ADVERSE CHANGE. Except as described in UTI's Disclosure
Schedule, or as otherwise disclosed herein, there shall have been no
material adverse change in the corporate status, business, operations,
assets, properties or financial condition of UTI, UII, UTG or FCC or any of
the Insurance Company Subsidiaries since September 30, 1997, and Buyer
shall have received from UTI at the closing date a certificate, dated the
closing date, signed by ▇▇▇▇▇ ▇▇▇▇▇▇, Chief Executive Officer of UTI in
such capacity, to such effect.
(e) OPINION OF COUNSEL. If requested, Buyer shall have been
furnished an opinion of counsel to UTI, in form and substance satisfactory
to Buyer, concerning the due organization and existence of UTI and each UTI
Subsidiary and the due authorization, valid issuance and fully paid and
nonassessable status of the capital stock of UTI and the UTI Subsidiaries,
including the shares of UTI Common Stock to be acquired by Buyer or its
assignees
21
pursuant to this Agreement. Buyer agrees that the maximum cost that UTI
will be required to bear to obtain such an opinion is $7,500. All cost in
excess of $7,500 for such opinion will be borne by Buyer.
(f) AGREEMENTS. All parties to the Agreements identified in
Exhibits 1(c), 1(d) and 1(e) shall have executed those Agreements.
(g) FINANCING. Buyer shall have received a commitment, on terms
and conditions reasonably satisfactory to Buyer, for financing in an amount
sufficient to satisfy its obligations under this Sections 1(a), 1(b), 1(c),
1(d) and 1(e) of this Agreement and such commitment shall have been funded
in accordance with its terms.
9. ADDITIONAL CONDITIONS TO OBLIGATIONS OF UTI. The obligation of
UTI to consummate the sale of the shares of UTI Common Stock and the other
transactions to be consummated hereunder on the closing date shall be
subject to the satisfaction, or waiver as provided herein, prior to or
concurrently with the closing on the closing date, of each of the
conditions set forth in Section 7 hereof and this Section 9.
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES OF BUYER AND
RELATED CERTIFICATE. Examination by UTI and its representatives shall not
have disclosed any material inaccuracy in the representations and
warranties of Buyer set forth in Section 3 hereof or otherwise made by
Buyer in writing in connection with the transactions contemplated herein;
such representations and warranties shall (except where stated to be as of
an earlier date) be true and correct on the closing date as though made on
and as of such date, and UTI shall have received from Buyer on the closing
date a certificate, dated the closing date, signed by Buyer, to such
effect.
(b) COMPLIANCE WITH CERTAIN COVENANTS, AGREEMENTS AND
OBLIGATIONS AND RELATED CERTIFICATE. Buyer shall have performed all
covenants, agreements and obligations to be performed by it pursuant to
this Agreement prior to the closing date, and UTI shall have received from
Buyer on the closing date a certificate dated the closing date, signed by
Buyer, to such effect.
(c) AGREEMENTS. All parties to the Agreements identified in
Exhibits 1(c), 1(d) and 1(e) shall have executed those Agreements.
10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All statements of
fact contained in any schedule, certificate or other instrument delivered
by or on behalf of UTI or Buyer pursuant hereto, as well as the warranties
and representations contained herein, shall be deemed representations and
warranties by such
22
party. Except for the representations and warranties set forth in Section
2(aa) hereof, which will survive for a period of five years, the
representations and warranties made by the parties shall survive the
closing for 36 months following the month in which the closing occurs
except for claims for breach of representations and warranties growing out
of income tax liabilities as to which the representations and warranties
shall survive until the expiration of the applicable statute of
limitations.
11. MATERIALITY AND WAIVER OF WARRANTIES, REPRESENTATIONS AND
COVENANTS. All covenants, agreements, representations and warranties made
herein or pursuant hereto shall be deemed to be material and to have been
relied upon by the party which is the beneficiary of such warranty,
representation, covenant or agreement, notwithstanding any investigation
heretofore or hereafter made by such party or upon its behalf prior to the
closing date, provided, however, that no remedy, at law or in equity, shall
be available with respect to any loss, liability or breach of agreement,
covenant, warranty or representation if the party alleging such loss,
liability or breach had actual knowledge of the existence, nature and
magnitude thereof on the closing date and, despite such knowledge,
proceeded with the closing. "Actual knowledge" shall be conclusively
presumed if reference to such matter was contained in this agreement or in
any exhibit hereto or document delivered pursuant hereto prior to the
closing.
12. INDEMNIFICATION AND REIMBURSEMENT.
(a) UTI'S INDEMNIFICATION. Subject to the limits on UTI's
obligations to indemnify as set forth in Section 13 herein, UTI agrees to
defend, indemnify and hold Buyer and its successors and permitted assigns,
harmless of, from and against any loss, claim, damage, liability, penalty,
or other cost or expense (including reasonable attorneys' fees and costs)
incurred or sustained by Buyer and its assigns, as contemplated by this
Agreement, resulting from (1) any misrepresentation by UTI or the breach of
any representation or warranty made by UTI contained in this Agreement or
in any schedule, certificate, exhibit or other document delivered by UTI in
connection with this Agreement; or (2) failure by UTI to perform or
otherwise fulfill any agreement, covenant or obligation hereunder; or (3)
the presence, suspected presence, release or threatened release by UTI,
UII, UTG, FCC or its Insurance Company Subsidiaries or their predecessors
prior to the closing of any hazardous substances in or into the air, soil,
surface, water, groundwater or soil vapor (at, on, about, under, within or
beyond the property owned or leased by UTI, UII, UTG, FCC and its Insurance
Company Subsidiaries) or by any other party prior to the closing on any
property owned by UTI, UII, UTG, FCC or its Insurance Company Subsidiaries
and any actions necessary to achieve compliance with any Federal, State or
local environmental law.
23
(b) BUYER'S INDEMNIFICATION. Subject to the limits on Buyer's
obligations to indemnify as set forth in Section 13 herein, Buyer agrees to
defend, indemnify and hold harmless UTI from and against any loss, claim,
damage, liability, penalty, or other cost or expense (including reasonable
attorneys' fees and costs) incurred or sustained by UTI resulting from (1)
any misrepresentation by Buyer, or the breach of any representation or
warranty of Buyer contained in this Agreement or in any schedule,
certificate, exhibit or other document delivered by Buyer in connection
with this Agreement; or (2) failure of Buyer to perform or otherwise
fulfill any covenant, agreement or obligation hereunder.
(c) CLAIM PROCEDURE. If UTI or Buyer (each an "Indemnified
Party"), receives knowledge of any matter with respect to which the other
party (the "Indemnitor") is liable under the indemnification provisions of
this Agreement whether through receipt of notice of any third-party action,
proceeding, claim, demand, or assessment, or through knowledge of facts
giving rise to liability to indemnify, the Indemnified Party shall: (1)
within ten days, give the Indemnitor written notice of the assertion of the
claim; (2) furnish the Indemnitor relevant information and copies of all
pertinent documents relating to the claim within a reasonable period of
time after the Indemnified Party s receipt thereof or Indemnified Parties
becoming aware of a claim. The failure of the Indemnified Party to give
notice of the claim to the Indemnitor within the ten-day period described
herein shall not affect the Indemnified Party s rights to indemnification
hereunder, except if (and then only to the extent that) the Indemnitor
incurs additional expenses or the Indemnitor's defense of such claim is
actually prejudiced by reason of such failure to give timely notice. In all
events, however, notice of claim for indemnity must be given within the 36
months or other applicable period for the survival of the warranties and
representations upon receipt of such notice. The Indemnitor shall thereupon
undertake and continuously conduct the defense of any claim with counsel of
reputable standing, and the indemnified Party may participate in such
defense by counsel of its own choosing at its own expense. If the
Indemnitor is required to pay any amount to the Indemnified Party
hereunder, such amount shall be paid promptly by the Indemnitor to the
Indemnified Party. If the Indemnitor does not timely undertake or
continuously defend any such claim, the Indemnified Party shall have the
right to defend or dispose of the claim in such manner as it deems
advisable, and, for the purposes hereof, as if such defense or disposition
had been undertaken or made by the Indemnitor.
(d) OBLIGATION TO DEFEND. Subject to the limits on each
Indemnitor's obligation to indemnify with respect to matters as set forth
herein, each Indemnitor agrees, unless it timely assumes the defense of any
claim hereunder, to pay the Indemnified Party s costs of defending any
claim, including attorneys' and paralegals' fees, accountants' fees,
witness fees, and court costs, promptly after receipt of the Indemnified
Party's demand therefor, from time
24
to time, during the pendency of any claim. If the Indemnitor timely
undertakes the defense (at his or its sole cost and expense and under his
or its direction) of any claim, then so long as the Indemnitor, in good
faith, is continuously contesting or defending the claim: (1) the
Indemnified Party shall not admit any liability with respect thereto, or
settle, compromise, pay or discharge the same without the prior written
consent of the Indemnitor; (2) the Indemnified Party shall cooperate with
the Indemnitor in the contest or defense thereof; (3) the Indemnified Party
shall accept any settlement thereof if, but only if, indemnification in
accordance with the terms hereof with respect thereto shall be effected;
and (4) the Indemnitor shall provide the Indemnified party with all
information regarding the contest or defense of the claim and shall allow
counsel for the Indemnified Party to monitor, at the Indemnified Party's
sole expense, all proceedings in connection with the claim. Neither the
Indemnitor nor the Indemnified Party shall admit any liability with respect
to any claim or settle, compromise, pay or discharge any claim without the
prior written consent of the other party if such settlement, compromise,
payment, or discharge could expose such other party to the payment of funds
which are not subject to a claim of reimbursement or indemnification from
the settling, compromising or paying party. The Indemnified Party shall
use reasonable efforts to preserve the status quo, not incur any penalties,
and not prejudice the Indemnitor's defense of any claim prior to the
Indemnitor undertaking the defense of such claim. It is understood that
Indemnitor's obligation to defend and to pay defense costs is subject to
the same limits as are applicable to the Indemnifiable Matters.
13. POST CLOSING ADJUSTMENTS AND PAYMENTS.
(a) FORM OF REIMBURSEMENT. Subject to the exception set forth
in this subsection (a), all payments due either party under Section 12
shall be satisfied by the return of or the issuance of UTI common stock, as
the case may be, in such amounts as determined according to the principles
and procedures set forth in this section. All payments due and owing from
UTI to Buyer or from Buyer to UTI, as the case may be, in reimbursement for
judgments or settlements that must be satisfied by cash shall be made in
the form of a cash payment from UTI to Buyer or Buyer to UTI, as the case
may be.
(b) DATE OF ADJUSTMENT. A final accounting shall be made on
April 30, 2003 to determine all sums due either party under this Section
13.
(c) FUTURE EARNINGS OF UTI. Any shortfall in the $30,000,000
total earnings as represented by UTI in Section 2(aa) will first be reduced
by the actual average tax rate for UTI for the period; then will be further
reduced by one-half of the percentage, if any, representing UTG's ownership
percentage of the
25
Insurance Company Subsidiaries; and then carried forward to the calculation
in Section 13(e) below. Any overage will be ignored.
(d) TAX EFFECT. Any amount of reimbursement due and payable
pursuant to this Section 13 shall first be reduced by the tax savings
thereon to the extent the tax savings have not already been taken into
account. The amount of such reimbursement will be further reduced, if
applicable, by one-half of the percentage, if any, represented by UTG's
then ownership of the outstanding voting shares of Insurance Company
Subsidiaries.
(e) CALCULATION OF POST CLOSING ADJUSTMENTS. Except for cash
payments made pursuant to Section 12(a), amounts owing to Buyer from UTI
will be netted against any amounts owed by Buyer to UTI. The net amount
will then be reduced by $250,000. The remaining amount will be paid by
UTI to Buyer or by Buyer to UTI, as applicable, in the form of UTI
common stock valued at $15 per share. In no instance shall the number of
shares transferred exceed 500,000 shares. The price and number of shares
shall be adjusted for any applicable stock splits, stock dividends, spin
offs or other recapitalizations.
14. POST CLOSING COVENANTS.
(a) UTI covenants to Buyer as follows:
(i) BOARD OF DIRECTORS. UTI will cause three persons
designated by Buyer to be appointed to the Board of
Directors of UTI effective as of the closing date. For
each of the three annual elections of the UTI Board of
Directors following the closing, UTI will cause three
persons designated by Buyer to be included in the
management slate of directors recommended to the UTI
shareholders for election to Board membership. UTI
will not and will cause the UTI Board of Directors not
to take any action that would increase the size of the
Board of Directors for such three year period.
(ii) NO ADDITIONAL SHARES. For a period of three years
following the closing, UTI will not and will not permit
any UTI affiliate to issue additional shares of capital
stock or to issue or agree to issue any option, warrant
or other instrument convertible into shares of capital
stock without prior written consent of Buyer.
(iii) UII NOTE AGREEMENT. UTI will cause UII to call, as
soon as practicable, all of the UII outstanding
convertible debt according to its terms.
26
(iv) REPURCHASE OF SHARES. UTI agrees to purchase for a
cash price of $15 per share, the 28,000 shares of UTI
Common Stock owned by Universal Guaranty on or before
December 31, 1998.
(b) Buyer covenants to UTI as follows:
(i) Buyer agrees to convert the UTI convertible notes
purchased by it pursuant to Section 1(d) hereof to
shares of the common stock of UTI as set forth in such
notes on or before July 31, 2000.
(c) Buyer and UTI covenant that they will proceed with the
merger of UTI and UII according to the terms and conditions discussed in
the Form S-4 Registration Statement filed with the Securities and Exchange
Commission on January 15, 1998.
15. CLOSING. The Closing of this Agreement and the transactions
provided for herein shall take place at a date, time and place to be agreed
on by the parties not later than ten business days following the
satisfaction or waiver of all conditions precedent to the closing as set
forth herein.
16. TERMINATION. This Agreement may be terminated:
(a) by UTI prior to the closing upon notice to Buyer:
(i) if, on or prior to May 31, 1998, Buyer has failed
to receive the financing commitment referenced in
Section 8(g) and has not waived in writing that
condition to its obligations under this Agreement;
(ii) at any time after July 31, 1998 if all conditions of
its obligation to close have not been met by that date,
except for a delay in obtaining regulatory approvals
which is not in the control of Buyer or UTI, in which
case any party may request an extension until the date
regulatory approval is reasonably expected to be
obtained and the other parties hereto shall not
unreasonably withhold their consent to any such
extension;
(iii) at any time if any representation or warranty of Buyer
contained in this Agreement or any certificate or other
instrument delivered or furnished to UTI pursuant
hereto shall be untrue in any material respect when
made or if Buyer breaches any covenant or agreement
contained herein and such breaches are not cured
27
within 5 days notice of such breach from UTI to Buyer;
or
(iv) if, prior to the closing, UTI is offered a transaction
by another party that UTI believes is a more favorable
transaction for its shareholders and the board of
directors of UTI in the exercise of its fiduciary duty,
decides to proceed with such other transaction, upon
reimbursing Buyer for its expenses in connection with
this Agreement and the transactions contemplated hereby
and paying Buyer a break-up fee of $2,000,000.
(b) by Buyer prior to the closing upon notice to UTI:
(i) at any time after July 31, 1998 if all conditions of
its obligation to close have not been met by that date;
or
(ii) at any time if any representation or warranty of UTI
contained in this Agreement or any certificate or other
instrument delivered or furnished to Buyer pursuant
hereto shall be untrue in any material respect when
made or if UTI breaches any covenant or agreement
contained herein and such breaches are not cured within
5 days notice of such breach from Buyer to UTI.
(c) at any time by mutual agreement of Buyer and UTI.
Termination of this Agreement shall not release either party of its
obligations pursuant to Section 4 which continue in force and effect.
17. EXPENSES. Except as set forth in Section 16(a)(iii) each party
hereto shall pay his, her or its own expenses in connection with this
Agreement and the transactions contemplated hereby.
18. NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if hand delivered to
any individual party or to any corporate officer of any corporate party
receiving the notice, or sent by private mail courier, facsimile
transmission or mailed, registered or certified or first class, postage
prepaid, to the party being notified, in each case at its or their address
set forth below (or at such other address for such party as shall have been
specified by it or them by like notice to the other party prior thereto):
28
If to UTI, to: United Trust, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
If to Buyer, to: First Southern Funding, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
19. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement supersedes all prior
discussions and agreements between the parties with respect to the matters
contained in this Agreement, and this Agreement, including the exhibits
hereto and schedules delivered pursuant hereto, contains the entire
agreement between the parties hereto with respect to the transactions
contemplated hereby.
(b) WAIVER. Any term or condition of this Agreement may be
waived at any time by the party which is entitled to the benefit thereof;
such waiver shall be in writing and shall be executed by an authorized
officer of UTI or by Buyer, as the case may be. A waiver on one occasion
shall not be deemed a waiver of the same or any other breach on a future
occasion.
(c) AMENDMENT. This Agreement may be modified or amended only
by a writing duly executed by an authorized officer of UTI or by Buyer.
(d) COUNTERPARTS. This Agreement may be executed simultaneously
in any number of counterparts, each of which shall be deemed an original,
but all of which shall constitute one and the same instrument.
(e) GOVERNING LAW. This Agreement shall be interpreted and
construed in accordance with the laws of the Commonwealth of Kentucky.
(f) ARBITRATION. Any controversy or claim arising out of or
relating to this Agreement shall be settled by arbitration administered by
the American Arbitration Association in accordance with its Commercial
Arbitration Rules and the procedures set out in this Section. Any award
issued as a result of any arbitration shall be final and binding between
the parties and judgment upon the award rendered by the arbitrator(s) may
be entered in and enforceable by any court having jurisdiction over the
party against whom the award is to be enforced.
(i) The arbitration panel shall consist of three
arbitrators. Within fifteen days after the
commencement of arbitration, the Buyer and
29
▇▇▇▇▇ ▇▇▇▇▇▇ or his representative each shall select
one person to act as arbitrator and the two selected
shall select a third arbitrator within ten days of
their appointment, from a list of arbitrators provided
by the American Arbitration Association, . If the
arbitrators selected by the parties are unable or fail
to agree upon the third arbitrator within the allotted
time, the third arbitrator shall be selected by
the American Arbitration Association. Any replacement
arbitrator shall be selected by the party that
initially appointed the arbitrator. Prior to the
commencement of hearings, the neutral arbitrator
appointed shall take an oath of impartiality.
(ii) The fee of the arbitrator(s) shall be paid by the party
found liable in the proceeding. Any cash amounts
specified in any arbitration award shall bear interest
from the date of the award at the rate of ten percent
(10%) per annum until paid in full.
(g) BINDING EFFECT; ASSIGNMENT. UTI shall not assign this
Agreement or any of its obligations hereunder without the prior written
consent of Buyer. Buyer may assign its obligation hereunder to any person
or entity who controls, is controlled by or is under common control with
Buyer. Subject to the limitations set forth in this subsection (f), this
Agreement shall be binding upon and inure to the benefit of the parties and
the successors and assigns of Buyer and UTI.
IN WITNESS WHEREOF, the parties hereto have caused this
Acquisition Agreement to be executed on the date first above written.
FIRST SOUTHERN FUNDING, INC.
Attest:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: PRESIDENT
30
UNITED TRUST, INC.
Attest:
/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: PRESIDENT
31
Exhibit 1(c)
STOCK PURCHASE AGREEMENT
Stock Purchase Agreement (the "Agreement" made this 30th day of
April, 1998, by and between First Southern Funding, Inc. ("Buyer"), and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Seller").
WITNESSETH:
WHEREAS, Seller directly or beneficially owns at least 66,667 shares
of the issued and outstanding common stock no par value, of United Trust,
Inc., an Illinois corporation ("UTI");
WHEREAS, Seller wishes to sell to Buyer and Buyer wishes to purchase
from Seller 66,667 of such shares ("the Shares") upon the terms and subject
to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises, covenants and
agreements set forth below, the sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1. PURCHASE OF STOCK. Subject to the terms and conditions
hereinafter set forth, Seller agrees to sell to Buyer, and Buyer agrees to
purchase from Seller the Shares, free and clear of all liens, claims,
charges, assessments or encumbrances.
2. PURCHASE PRICE AND PAYMENT. The purchase price for the Shares
shall be $1,000,000 (the "Purchase Price"). The Purchase Price shall be
paid at the closing in cash by certified bank check.
3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller warrants and
represents to Buyer that:
a) OWNERSHIP OF SHARES. Seller beneficially owns the Shares,
free and clear of any liens, claims, charges or assessments.
4. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Seller that:
a) all negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by Seller
directly with Buyer, without the intervention of any person in such
manner as to give rise to any valid claim by any person against either
of the parties hereto for a finder's fee, brokerage commission or
similar payment; and
b) The shares to be acquired by Buyer pursuant to this
Agreement will not be acquired with a view to the distribution
thereof, and such Shares will not be resold or otherwise disposed of
except in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder
and any applicable state securities laws. Buyer acknowledges and
further agrees that the certificate(s) to be issued to it evidencing
the Shares acquired to this Agreement will bear a legend as follows:
"These securities represented by this certificate have been
acquired from an affiliate of the corporation without
registration under the Securities Act of 1933 or applicable state
securities laws, and have been acquired for investment, and may
not be sold, transferred, pledged, hypothecated or otherwise
disposed of in the absence of (a) an effective Registration
Statement under the Securities Act of 1933, as amended; (b) a
right to sell such securities without said Registration Statement
by reason of an exemption afforded by the Securities Act of 1933
or the Rules and Regulations promulgated thereunder or any
amendment thereof or successor thereto; or (c)
2
an opinion of a recognized qualified securities counsel that such
disposition is otherwise permissible under applicable law."
5. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS. Each and every
obligation of Buyer to be performed on the "closing date" (as hereinafter
defined) shall be subject to the satisfaction, or waiver as provided
herein, on or prior thereto of the following conditions:
a) ACCURACY OF SELLER'S REPRESENTATIONS AND WARRANTIES.
Representations and warranties made by Seller in this Agreement shall
be true and correct in all material respects on and as of the closing
date.
b) DELIVERY OF SHARES. Seller shall deliver on the closing
date all of the Shares, free and clear of any liens, claims, charges
or assessments.
c) CLOSING OF TRANSACTION BETWEEN BUYER AND UTI. The
Acquisition Agreement between First Southern Funding, Inc. and UTI
signed of even date herewith ("the UTI Agreement") shall have closed.
6. CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS. Each and every
obligation of Seller to be performed on the closing date shall be subject
to the satisfaction, or waiver as provided herein, on or prior thereto of
the following conditions:
a) ACCURACY OF BUYER'S REPRESENTATIVES AND WARRANTIES.
Representations and warranties made by Buyer in this Agreement shall
be tue and correct in all material respects on and as of the closing
date.
3
b) CLOSING OF THE UTI AGREEMENT. The UTI Agreement shall have
closed.
7. CLOSING. The closing of this Agreement and the transactions
provided for herein shall take place on the same day and place as the
closing of the UTI Agreement.
8. EXPENSES. Each party hereto shall pay his or its own expenses in
connection with this Agreement and the transactions contemplated hereby.
9. TERMINATION. This agreement will automatically terminate if the
UTI Agreement terminates.
10. MISCELLANEOUS.
a) ENTIRE AGREEMENT. This Agreement supersedes all prior
discussions and agreements between the parties with respect to the
purchase of the Shares and the other matters contained in this
Agreement, and this Agreement, contains the entire agreement between
the parties hereto with respect to the transactions contemplated
hereby.
b) WAIVER. Any term or condition of this Agreement may be
waived at any time by the party which is entitled to the benefit
thereof; such waiver shall be in writing. Waiver on one occasion
shall not be deemed to be a waiver of the same or any other breach on
a future occasion.
c) AMENDMENT. This Agreement may be modified or amended only
by a writing duly executed.
d) COUNTERPARTS. This Agreement may be executed simultaneously
in any number of counterparts, each of which
4
shall be deemed an original, but all of which shall constitute
one and the same instrument.
e) GOVERNING LAW. This Agreement shall be interpreted and
construed in accordance with the laws of Kentucky.
f) ASSIGNMENT. Seller may not assign any obligations
hereunder. Buyer may assign its obligations hereunder to any person
or entity who controls, is controlled by or is under common control
with Buyer.
g) BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the parties and the successors and assigns of
Buyer and the heirs, legal representatives, successors, and assigns of
Seller.
h) HEADING AND CAPTIONS. The headings and captions of the
various sections and subsections of this Agreement are for convenience
or reference only and shall in no way modify or affect the meaning or
construction of any of the terms or provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed on the date first above written.
BUYER:
FIRST SOUTHERN FUNDING, INC.
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: PRESIDENT
/S/ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
5
EXHIBIT 1(D)
CONVERTIBLE NOTE PURCHASE AGREEMENT
Convertible Note Purchase Agreement (the "Agreement") made this
30th day of April, 1998, by and between First Southern Funding ("Buyer")
and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Sellers").
WITNESSETH:
WHEREAS, Sellers directly and beneficially own $2,560,000 of face
amount of convertible notes (the "Notes") of United Trust, Inc.;
WHEREAS, Sellers wish to sell to Buyer and Buyer wishes to
purchase from Sellers the Notes upon the terms and subject to the
conditions hereinafter set forth;
NOW THEREFORE, in consideration of the premises, covenants and
agreements set forth hereinbelow, the sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1. PURCHASE AND SALE OF NOTES. Subject to the terms and
conditions hereinafter set forth, Sellers agree to sell to Buyer, and Buyer
agrees to purchase from Sellers the Notes, free and clear of all liens,
claims, charges, assessments, encumbrances or restrictions.
2. PURCHASE PRICE AND PAYMENT. The purchase price for the
Notes shall be $3,072,000 and shall be payable to Sellers in cash at the
closing by delivering to Sellers certified bank checks made payable as
follows:
PAYEE FACE AMOUNTS OF NOTES PURCHASE PRICE
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $1,250,000 $1,500,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 350,000 420,000
▇▇▇▇ ▇. ▇▇▇▇▇▇ 350,000 420,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 250,000 300,000
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 160,000 192,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 150,000 180,000
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 50,000 60,000
$2,560,000 $3,072,000
In addition, to the purchase price shown above Buyer will pay to
each Seller an amount equal to the accrued unpaid interest on the
applicable Note calculated as of the Closing Date.
3. REPRESENTATIONS AND WARRANTIES OF SELLERS. Sellers warrant
and represent to Buyer that:
[a] OWNERSHIP OF NOTES. Sellers beneficially own the
Notes.
[b] BROKERS. All negotiations relative to this Agreement
and the transactions contemplated hereby have been
carried out by Sellers directly with Buyer, without the
intervention of any person in such manner as to give
rise to any valid claim by any person against either of
the parties hereto for a finder's fee, brokerage
commission or similar payment.
4. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents
and warrants to Seller that all negotiations relative to this Agreement and
the transactions contemplated hereby have been carried out by Sellers
directly with Buyer, without the intervention of any person in such manner
as to give rise to any valid
2
claim by any person against either of the parties hereto for a finder's
fee, brokerage commission or similar payment.
5. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS. Each and every
obligation of Buyer to be performed on the "Closing Date" (as hereinafter
defined) shall be subject to the satisfaction, or waiver as provided
herein, on or prior thereto of the following conditions:
[a] ACCURACY OF SELLERS' REPRESENTATIONS AND WARRANTIES.
Representations and warranties made by Sellers in this
Agreement shall be true and correct in all material
respects on and as of the Closing Date.
[b] DELIVERY OF THE NOTES. Sellers shall deliver on the
Closing Date all of the Notes, free and clear of any
liens, encumbrances, claims, charges, assessments or
restrictions.
[c] CLOSING OF TRANSACTION BETWEEN BUYER AND UTI. That
Certain Agreement between Buyer and UTI signed of even
date herewith (the "UTI Agreement") shall have closed.
6. CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS. Each and
every obligation of Sellers to be performed on the Closing Date shall be
subject to the satisfaction, or waiver as provided herein, on or prior
thereto of the following conditions:
[a] ACCURACY OF BUYER'S REPRESENTATIONS AND WARRANTIES.
Representations and warranties made
3
by Buyer in this Agreement shall be true and correct
in all material respects on and as of the Closing Date.
[b] CLOSING OF THE UTI AGREEMENT. The UTI Agreement shall
have closed.
7. CLOSING. The Closing of this Agreement and the transactions
provided for herein shall take place at the hour of 10:00 a.m. local time,
on March 1, 1999, at the offices of UTI.
8. EXPENSES. Each party hereto shall pay his or its own
expenses in connection with this Agreement and the transactions
contemplated hereby.
9. TERMINATION. This Agreement will automatically terminate if
the UTI Agreement terminates.
10. MISCELLANEOUS.
[a] ENTIRE AGREEMENT. This Agreement supersedes all prior
discussions and agreements between the parties with
respect to the purchase of the Notes and the other
matters contained in this Agreement, and this Agreement
contains the entire agreement between the parties
hereto with respect to the transactions contemplated
hereby.
[b] WAIVER. Any term or condition of this Agreement may be
waived at any time by the party which is entitled to
the benefit thereof, such waiver shall be in writing.
A waiver on one
4
occasion shall not be deemed to be a waiver of the
same or any other breach on a future occasion.
[c] AMENDMENT. This Agreement may be modified or amended
only by a writing duly executed.
[d] COUNTERPARTS. This Agreement may be executed
simultaneously in any number of counterparts, each of
which shall be deemed an original, but all of which
shall constitute one and the same instrument.
[e] GOVERNING LAW. This Agreement shall be interpreted and
construed in accordance with the laws of Illinois.
[f] ASSIGNMENT. None of Sellers may assign any of their
obligations hereunder. Buyer may assign its
obligations hereunder to any person or entity who
controls, is controlled by or is under common control
with Buyer.
[g] BINDING EFFECT. Subject to [f], this Agreement shall
be binding upon and inure to the benefit of the parties
and the successors and assigns of Buyer and the heirs,
legal representatives, successors, and assigns of
Sellers.
[h] HEADINGS AND CAPTIONS. The headings and captions of
the various sections and subsec-
5
tions of this Agreement are for convenience or
reference only and shall in no way modify or affect the
meaning or construction of any of the terms or
provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed on the date first written above.
FIRST SOUTHERN FUNDING, INC.
By /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
"Buyer"
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇
/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/S/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/S/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
"Sellers"
EXHIBIT 1(E)
OPTION AGREEMENT
This is an Option Agreement dated as of April 30, 1998, between
UNITED TRUST, INC., an Illinois corporation ("Issuer"), and FIRST SOUTHERN
FUNDING, INC., a Kentucky corporation ("Optionee").
RECITALS
A. The authorized capital stock of Issuer consists of 3,500,000
shares of common stock, without par value ("Issuer Common Stock"), of which
1,662,779 shares are issued and outstanding, and 150,000 shares of
preferred stock, none of which are issued and outstanding.
B. To induce Optionee to enter into an Acquisition Agreement dated
April __, 1998 (the "Acquisition Agreement") providing for the acquisition
by Optionee of shares of Common Stock, Issuer has agreed to grant to
Optionee an option to purchase up to 1,450,000 authorized but unissued
shares of Issuer Common Stock upon the terms and subject to the conditions
set forth below, concurrently with the closing of the purchase of shares of
Issuer Common Stock pursuant to the Acquisition Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and
in the Acquisition Agreement, and intending to be legally bound hereby,
Issuer and Optionee agree as follows:
1. DEFINED TERMS. Capitalized terms which are used but not defined
herein shall have the meanings ascribed to such terms in the Acquisition
Agreement.
2. GRANT OF OPTION. Subject to the terms and conditions set forth
herein, Issuer hereby grants to Optionee an irrevocable option (the
"Option") to purchase up to 1,450,000 shares of Issuer Common Stock (as
adjusted as set forth herein, the "Option Shares", but in no event shall
the number of Option Shares for which this Option is exercisable, when
combined with the shares of Issuer Common Stock then beneficially owned by
Optionee and its affiliates, exceed 51% of the issued and outstanding
shares of Issuer Common Stock, after giving effect to any shares subject to
or issued pursuant to the Option and any other then outstanding option,
warrant, conversion right or other right to purchase or acquire shares of
Issuer Common Stock) at a purchase price per Option Share (as adjusted as
set forth herein, the "Purchase Price") equal to $15.00. The number of
Option Shares for which this Option is exercisable shall be reduced by two
shares for each share of UTI common stock that Buyer or its affiliates
purchases from UTI shareholders in private or public transactions that
occur after the execution of this Option Agreement and prior to the
termination of this Option Agreement.
3. EXERCISE OF OPTION.
(a) The Holder may exercise the Option, in whole or in part, at
any time and from time to time on or prior to July 1, 2001. The term
"Holder" shall mean the holder or holders of the Option from time to time,
and which initially is Optionee.
(b) If Holder wishes to exercise the Option, it shall send to
Issuer a written notice (the date of which being herein referred to as the
"Notice Date") specifying (i) the total number of Option Shares it intends
to purchase pursuant to such exercise, and (ii) a place and date not
earlier than three (3) business days nor later than fifteen (15) business
days from the Notice Date for the closing (the "Closing") of such purchase
(the "Closing Date"). If prior notification to or approval of any
regulatory authority is required in connection with such purchase, Issuer
shall cooperate with the Holder in the filing of the required notice or
application for approval and the obtaining of such approval and the Closing
shall occur immediately following such regulatory approvals (and any
mandatory waiting periods). Any exercise of the Option shall be deemed to
occur on the Notice Date relating thereto.
4. PAYMENT AND DELIVERY OF CERTIFICATES.
(a) On each Closing Date, Holder shall (i) pay to Issuer, in
immediately available funds by wire transfer to a bank account designated
by Issuer, an amount equal to the Purchase Price multiplied by the number
of Option Shares to be purchased on such Closing Date, and (ii) present and
surrender this Agreement to the Issuer at the address of the Issuer
specified in Section 18 of the Acquisition Agreement.
(b) At each Closing, simultaneously with the delivery of
immediately available funds and surrender of this Agreement as provided in
Section 4(a), (i) Issuer shall deliver to Holder (A) a certificate or
certificates representing the Option Shares to be purchased at such
Closing, which Option Shares shall be free and clear Of all liens and
subject to no preemptive rights, and (B), if the Option is exercised in
part only, an executed new agreement with the same terms as this Agreement
evidencing the right to purchase the balance of the shares of Issuer Common
Stock purchasable hereunder, and (ii) Holder shall deliver to Issuer a
letter agreeing that Holder shall not offer to sell or otherwise dispose of
such Option Shares in violation of applicable federal and state law or of
the provisions of this Agreement.
(c) In addition to any other legend that is required by
applicable law, certificates, or the Option Shares delivered at each
Closing shall be endorsed with a restrictive legend which shall read
substantially as follows:
2
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or the
securities laws of any state (the "Securities Laws"). These
securities may not be offered, sold, transferred, pledged or
hypothecated in the absence of registration under applicable
Securities Laws, or the availability of an exemption therefrom.
This certificate will not be transferred on the books of the
Corporation or any transfer agent acting on behalf of the
Corporation except upon the receipt of an opinion of counsel,
satisfactory to the Corporation, that the proposed transfer is
exempt from the registration requirements of all applicable
Securities Laws, or the receipt of evidence, satisfactory to the
Corporation, that the proposed transfer is the subject of an
effective registration statement under all applicable Securities
Laws.
It is understood and agreed that: (i) the above legend relating to the
Securities Act of 1933, as amended (the "Securities Act") shall be removed
by delivery of substitute certificate(s) without such legend if Holder
shall have delivered to Issuer a copy of a letter from the staff of the
Securities and Exchange Commission ("SEC"), or an opinion of counsel in
form and substance reasonably satisfactory to Issuer and its counsel, to
the effect that such legend is not required for purposes of the Securities
Act; (ii) if the shares have been sold or transferred in compliance with
the foregoing clause (i) and otherwise in compliance with the provisions of
this Agreement and under circumstances that do not require the retention of
such legend, certificate(s) shall be issued to such buyer or transferee
that do not bear the above legend.
(d) Upon the giving by Holder to Issuer of the written notice of
exercise of the Option provided for under Section 4(a), the tender of the
applicable purchase price in immediately available funds and the tender of
this Agreement to Issuer, Holder shall be deemed to be the holder of record
of the shares of Issuer Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of Issuer shall then be
closed or that certificates representing such shares of Issuer Common Stock
shall not then be actually delivered to Holder. Issuer shall pay all
expenses, and any and all federal, state, and local taxes and other charges
that may be payable in connection with the preparation, issuance and
delivery of stock certificates under this Section in the name of Holder or
its assignee, transferee, or designee.
(e) Issuer agrees (i) that it shall at all times maintain, free
from preemptive rights, sufficient authorized but unissued shares of Issuer
Common Stock so that the Option may be exercised without additional
authorization of Issuer Common Stock after giving effect to all other
options, warrants, convertible securities and other rights to purchase
Issuer Common Stock, (ii) that it will not, by charter amendment or through
reorganization,
3
consolidation, merger, dissolution or sale of assets, or by any other
voluntary act, avoid or seek to avoid the observance or performance
of any of the covenants, stipulations or conditions to be observed or
performed hereunder by Issuer, (iii) promptly to take all action as
may from time to time be required (including (A) complying with all
premerger notification, reporting and waiting period requirements, and (B)
in the event prior approval of or notice to any regulatory authority is
necessary before the Option may be exercised, cooperating fully with Holder
in preparing such applications or notices and providing such information to
such regulatory authority as it may require) in order to permit Holder to
exercise the Option and Issuer duly and effectively to issue shares of the
Issuer Common Stock pursuant hereto, and (iv) promptly to take all action
provided herein to protect the rights of Holder against dilution.
5. REPRESENTATIONS AND WARRANTIES OF ISSUER. Issuer hereby
represents and warrants to Optionee (and Holder, if different than
Optionee) as follows:
(a) CORPORATE AUTHORITY. Issuer has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby; the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by the Board of Directors of Issuer and
approved in advance by all of the "disinterested directors" of the Issuer
(as defined in Section 7.85 of the Illinois Business Corporation Act), and
no other corporate proceedings on the part of Issuer are necessary to
authorize this Agreement or to consummate the transactions so contemplated;
this Agreement has been duly and validly executed and delivered by Issuer.
(b) SHARES RESERVED FOR ISSUANCE; CAPITAL STOCK. Issuer has
taken all necessary corporate action to authorize and reserve and permit it
to issue, and at all times from the date hereof through the termination of
this Agreement in accordance with its terms, will have reserved for
issuance upon the exercise of the Option, that number of shares of Issuer
Common Stock equal to the maximum number of shares of Issuer Common Stock
at any time and from time to time purchasable upon exercise of the Option,
and all such shares, upon issuance pursuant to the Option, will be duly
authorized, validly issued, fully paid and nonassessable, and will be
delivered free and clear of all claims, liens, encumbrances, and security
interests (other than those created by this Agreement) and not subject to
any preemptive rights.
(c) NO VIOLATIONS. The execution, delivery and performance of
this Agreement does not or will not, and the consummation by Issuer of any
of the transactions contemplated hereby will not, constitute or result in
(A) a breach or violation of, or a default under, its articles of
incorporation or bylaws, or the comparable
4
governing instruments of any of its subsidiaries, or (B) a breach or
violation of, or a default under, any agreement, lease, contract, note,
mortgage, indenture, arrangement or other obligation of it or any of its
subsidiaries (with or without the giving of notice, the lapse of time or
both) or under any law, rule, ordinance or regulation or judgment, decree,
order, award or governmental or non-governmental permit or license to
which it or any of its subsidiaries is subject, that would, in any case
give any other person the ability to prevent or enjoin Issuer's performance
under this Agreement in any material respect.
6. REPRESENTATIONS AND WARRANTIES OF OPTIONEE. Optionee hereby
represents and warrants to Issuer that Optionee has full corporate power
and authority to enter into this Agreement and, subject to obtaining any
required regulatory approvals, to consummate the transactions contemplated
by this Agreement; the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Optionee; and
this Agreement has been duly executed and delivered by Optionee.
7. ADJUSTMENT UPON CHANGES IN ISSUER CAPITALIZATION, ETC. In the
event of any change in Issuer Common Stock by reason of a stock dividend,
stock split, split-up, recapitalization, combination, exchange of shares or
similar transaction, the type and number of shares or securities subject to
the Option, and the Purchase Price therefor, shall be adjusted
appropriately, and proper provision shall be made in the agreements
governing such transaction so that Holder shall receive, upon exercise of
the Option, the number and class of shares or other securities or property
that Holder would have received in respect of Issuer Common Stock if the
Option had been exercised immediately prior to such event, or the record
date therefor, as applicable. The number of shares of Issuer Common Stock
subject to the Option shall also be adjusted (up to a maximum of 1,450,000
shares) so that, after such issuance, it, together with any shares of
Issuer Common Stock then owned by Option, equals 51% of the number of
shares of Issuer Common Stock then issued and outstanding, after giving
effect to any shares subject to or issued pursuant to the Option or upon
exercise of any option to purchase Issuer Common Stock or upon conversion
into Issuer Common of any convertible security of Issuer.
8. MISCELLANEOUS.
(a) EXPENSES. Each of the parties hereto shall bear and pay all
costs and expenses incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including fees and expenses of its own
financial consultants, investment bankers, accountants and counsel.
5
(b) WAIVER AND AMENDMENT. Any provision of this Agreement may
be waived at any time by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by the parties hereto.
(c) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES;
SEVERABILITY. This Agreement, together with the Acquisition Agreement and
the other documents and instruments referred to herein and therein, between
Optionee and Issuer (i) constitutes the entire agreement and supersedes all
prior agreements and understandings, both written and oral, between the
parties with respect to the subject matter hereof, and (ii) is not intended
to confer upon any person other than the parties hereto and any transferees
of the Option Shares or this Agreement pursuant to Section 8(h) any rights
or remedies hereunder. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or regulatory
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or
invalidated. If for any reason such court or regulatory authority
determines that the Option does not permit Holder to acquire the full
number of shares of Issuer Common Stock as provided in Section 3 (as may be
adjusted herein), it is the express intention of Issuer to allow Holder to
acquire such lesser number of shares as may be permissible without any
amendment or modification hereof.
(d) GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the laws of the Commonwealth of Kentucky
without regard to any applicable conflicts of law rules.
(e) DESCRIPTIVE HEADINGS. The descriptive headings contained
herein are for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
(f) NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (with confirmation) or mailed by registered or certified mail
(return receipt requested) to the parties at the addresses set forth in the
Acquisition Agreement (or at such other address for a party as shall be
specified by like notice).
(g) COUNTERPARTS. This Agreement and any amendments hereto may
be executed in two counterparts, each of which shall be considered one and
the same agreement and shall become effective when both counterparts have
been signed and delivered, it being understood that both parties need not
sign the same counterpart.
6
(h) ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder or under the Option shall be assigned by
any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other party, except that Holder
may assign this Agreement to one or more affiliates of Holder and Holder
may assign its rights hereunder in whole or in part. Subject to the
preceding sentence, this Agreement shall be binding upon, inure to the
benefit of and be enforceable by the parties and their respective
successors and assigns.
(i) FURTHER ASSURANCES. In the event of any exercise of the
Option by the Holder, Issuer and the Holder shall execute and deliver all
other documents and instruments and take all other action that may be
reasonably necessary in order to consummate the transactions provided for
by such exercise.
(j) SPECIFIC PERFORMANCE. The parties hereto agree that this
Agreement may be enforced by either party through specific performance,
injunctive relief and other equitable relief. Both parties further agree
to waive any requirement for the securing or posting of any bond in
connection with the obtaining of any such equitable relief and that this
provision is without prejudice to any other rights that the parties hereto
may have for any failure to perform this Agreement.
IN WITNESS WHEREOF, Issuer and Optionee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly
authorized, all as of the day and year first written above.
UNITED TRUST, INC.
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: PRESIDENT
FIRST SOUTHERN FUNDING, INC.
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: PRESIDENT
Exhibit 2(e)
*-----------------------------*
| UNITED TRUST, INC. "UTI" *----------41%-----------------*
| (Illinois) | |
| Authorized 3,500,000 shares | *------------*----------------*
| common stock, no par value | | UNITED INCOME, INC. "UII" |
| Issued and Outstanding - | | (Ohio) |
| 1,662,779 shares | |Authorized - 2,310,001 shares|
*-*---------------------------* | common stock, no par value |
| | Issued and Outstanding - |
| | 1,391,919 shares |
| *------------*----------------*
| *------------------------------------------* |
| | UNITED TRUST GROUP "UTG" *--47%---*
| | (Illinois) |
*-53%--* Authorized - 10,000 shares *--------100%-----*
| common stock, no par value | |
| Issued and Outstanding - 100 shares | *-------------*------*
*-------------------*----------------------* | ROOSEVELT EQUITY |
| | CORPORATION "REC" |
| 79% | (Delaware) |
*-------------------*----------------------* | Authorized - 1,000|
| FIRST COMMONWEALTH CORPORATION "FCC" | |shares common stock,|
| (Virginia) | | $25.00 par value |
| Authorized 62,500 shares | |Issued & Outstanding|
| common stock, $1.00 par value | | - 1,000 shares |
| Issued and Outstanding - 54,616 shares | *--------------------*
*-------------------*----------------------*
| 100%
*-------------------*----------------------*
| UNIVERSAL GUARANTY |
| LIFE INSURANCE COMPANY "UGL" |
| (Ohio) |
| Authorized - 400,000 shares |
| common stock, $5.00 par value |
| Issued and outstanding - 400,000 shares |
*-------------------*----------------------*
| 100%
*-------------------*----------------------*
| UNITED SECURITY ASSURANCE COMPANY "USA" |
| (Ohio) |
| Authorized - 1,000 shares |
| common stock, $1,000 par value |
| Issued and Outstanding - 1,000 shares |
*-------------------*----------------------*
| 84%
*-------------------*----------------------*
| APPALACHIAN LIFE INSURANCE COMPANY "APP" |
| (West Virginia) |
| Authorized - 1,500,000 shares |
| common stock, $1.12 par value |
|Issued and Outstanding - 1,349,641 shares |
*-------------------*----------------------*
| 100%
*-------------------*----------------------*
| ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ INSURANCE COMPANY "ALI" |
| (Illinois) |
| Authorized - 10,800,000 shares |
| common stock, $1.67 par value |
| Issued and Outstanding - 600,000 shares |
*------------------------------------------*
Exhibit 3(e)
Buyer has a contract with ▇▇▇▇ ▇▇▇▇▇▇ and an entity affiliated
with him, which requires Buyer to pay ▇▇. ▇▇▇▇▇▇ a brokerage fee of
$150,000 in connection with this Agreement.
AMENDMENT NO. 1
DATED AS OF MAY 29, 1998
TO
ACQUISITION AGREEMENT
BETWEEN FIRST SOUTHERN FUNDING, INC.
AND UNITED TRUST, INC.
DATED APRIL 30, 1998
First Southern Funding, Inc. ("Buyer") and United Trust, Inc. ("UTI")
entered into a certain Acquisition Agreement dated April 30, 1998 (the
"Agreement"). Buyer and UTI agree to amend the Agreement as of this 29th
day of May, 1998, as follows:
By deleting Section 6.(b) thereof in its entirety and
substituting in lieu thereof the following new Section 6.(b):
file, as soon as practicable, but in all events by June
30, 1998 all information required to be filed with the
Federal Trade Commission and the Antitrust Division of
the Department of Justice pursuant to the ▇▇▇▇-▇▇▇▇▇
▇▇▇▇▇▇ Antitrust Improvements Act of 1976;
This Amendment may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed on the date first above written.
FIRST SOUTHERN FUNDING, INC.
Attest:
/S/ ▇▇▇▇ ▇▇▇▇▇▇ By: /S ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: PRESIDENT
UNITED TRUST, INC.
Attest:
/S/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: PRESIDENT