Exhibit 99.1
EXECUTION COPY
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STOCK PURCHASE AGREEMENT
BY AND BETWEEN
▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
AND
ZIONS BANCORPORATION
DATED AS OF MARCH 1, 2004
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TABLE OF CONTENTS
1. Purchase and Sale of the Shares..............................................................................1
1.1 Issuance and Sale of Common Stock.......................................................................1
1.2 Closing.................................................................................................1
2. Representations and Warranties of the Company................................................................2
2.1 Organization, Good Standing and Qualification...........................................................2
2.2 Corporate Authority.....................................................................................2
2.3 Capitalization and Voting Rights........................................................................2
2.4 Subsidiaries............................................................................................3
2.5 Authorization...........................................................................................3
2.6 Valid Issuance of Common Stock..........................................................................4
2.7 Third Party Consents....................................................................................4
2.8 Offering................................................................................................4
2.9 Litigation..............................................................................................4
2.10 Intellectual Property..................................................................................5
2.11 Compliance with Other Instruments and Laws.............................................................5
2.12 Agreements; Actions....................................................................................6
2.13 Related-Party Transactions.............................................................................7
2.14 Permits................................................................................................7
2.15 Environmental and Safety Laws..........................................................................7
2.16 Disclosure.............................................................................................8
2.17 Registration Rights....................................................................................8
2.18 Corporate Documents....................................................................................8
2.19 Title to Real Property and Assets......................................................................8
2.20 Financial Reports......................................................................................8
2.21 Reports................................................................................................9
2.22 Changes...............................................................................................10
2.23 Employee Benefit Plans................................................................................11
2.24 Tax Returns, Payments and Elections...................................................................11
2.25 Insurance.............................................................................................12
2.26 Minute Books..........................................................................................12
2.27 Labor Agreements and Actions..........................................................................12
2.28 Employees.............................................................................................12
2.29 Use of Proceeds.......................................................................................13
2.30 Proprietary Information and Inventions Assignment Agreements..........................................13
3. Representations and Warranties of the Investor..............................................................13
3.1 Organization and Good Standing.........................................................................13
3.2 Corporate Authority....................................................................................13
3.3 Purchase Entirely for Own Account......................................................................13
3.4 Investment Experience..................................................................................14
3.5 Accredited Investor....................................................................................14
3.6 Restricted Securities..................................................................................14
3.7 Legends................................................................................................14
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4. Conditions of the Investor's Obligations at Closing.........................................................15
4.1 Representations and Warranties.........................................................................15
4.2 Performance............................................................................................15
4.3 Absence of Changes.....................................................................................15
4.4 Notices, Consents, Permits and Waivers.................................................................15
4.5 Compliance Certificate.................................................................................15
4.6 Legal Investment; Orders...............................................................................15
4.7 Proceedings and Documents..............................................................................15
4.8 Board of Directors.....................................................................................16
4.9 Opinion of Company Counsel.............................................................................16
4.10 Investor Rights Agreement.............................................................................16
4.11 Secretary's Certificate...............................................................................16
4.12 Employee Matters......................................................................................16
4.13 Due Diligence.........................................................................................16
4.14 Bankruptcy, etc.......................................................................................16
4.15 Absence of Liabilities................................................................................17
4.16 Life Quotes, Inc. Acquisition.........................................................................17
4.17 Rights Plan...........................................................................................17
4.18 Shareholder Approval..................................................................................17
4.19 Waivers to Employment Agreements......................................................................17
5. Conditions of the Company's Obligations at Closing..........................................................17
5.1 Representations and Warranties.........................................................................18
5.2 Legal Investment; Orders...............................................................................18
5.3 Notices, Consents, Permits and Waivers.................................................................18
5.4 Shareholder Approval...................................................................................18
6. Miscellaneous...............................................................................................18
6.1 Survival of Representations and Warranties.............................................................18
6.2 Indemnification........................................................................................18
6.3 Successors and Assigns.................................................................................20
6.4 Governing Law and Venue; Waiver of Jury Trial..........................................................21
6.5 Titles and Subtitles...................................................................................21
6.6 Notices................................................................................................21
6.7 Publicity..............................................................................................22
6.8 Delay or Omissions.....................................................................................23
6.9 Securities Laws........................................................................................23
6.10 Broker's Fees.........................................................................................23
6.11 Expenses..............................................................................................23
6.12 Attorney's Fees.......................................................................................23
6.13 Specific Performance..................................................................................24
6.14 Termination and Effect................................................................................24
6.15 Covenants of the Company..............................................................................24
6.16 Amendments and Waivers................................................................................24
6.17 Severability..........................................................................................25
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6.18 Entire Agreement......................................................................................25
6.19 Counterparts..........................................................................................25
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EXHIBITS AND SCHEDULES
DEFINITIONS ADDENDUM
EXHIBITS
EXHIBIT A FORM OF COMMON STOCK CERTIFICATE
EXHIBIT B FORM OF INVESTOR RIGHTS AGREEMENT
EXHIBIT C IDENTIFIED STOCKHOLDERS
EXHIBIT D OPINION OF ▇▇▇▇▇ ▇▇▇▇▇▇ LLP, SPECIAL COUNSEL TO THE COMPANY
EXHIBIT E OPINION OF ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, GENERAL COUNSEL TO THE
COMPANY
SCHEDULE OF EXCEPTIONS
Section 2.3(d) Pro Forma Capitalization
Section 2.7 Third Party Consents
Section 2.10 Intellectual Property
Section 2.12(f) Agreements; Actions
Section 2.18 Corporate Documents
Section 2.22 Changes
Section 2.23 Employee Benefit Plans
Section 2.24 Tax Returns, Payments and Elections
Section 2.27 Labor Agreements and Action
Section 2.28 Employees
Section 4.12 Employee Matters
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▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
STOCK PURCHASE AGREEMENT
This
STOCK PURCHASE AGREEMENT (as amended, restated, supplemented or
otherwise modified from time to time and including all Exhibits and Schedules
hereto, this "AGREEMENT"), is made as of the 1st day of March, 2004, by and
between ▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC., a
Delaware corporation (the "COMPANY"), and ZIONS
BANCORPORATION, a Utah corporation (the "INVESTOR"). The Company and the
Investor are sometimes hereinafter referred to individually as a "PARTY" and
collectively as the "PARTIES".
Terms defined in the text of this Agreement shall have the meanings
set forth therein. Other capitalized terms not otherwise defined herein shall
have the meanings set forth in the Definitions Addendum, which is attached
hereto and incorporated herein by this reference.
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. PURCHASE AND SALE OF THE SHARES.
1.1 ISSUANCE AND SALE OF COMMON STOCK. Subject to the terms and
conditions of this Agreement, the Investor agrees to purchase at the Closing (as
defined below) and the Company agrees to issue and sell to the Investor at the
Closing, two million three hundred sixty three thousand six hundred thirty six
(2,363,636) shares of the Company's Common Stock (as defined below), which
represent an equal number of preferred stock purchase rights pursuant to the
Rights Agreement, dated as of July 30, 1999 (the "RIGHTS AGREEMENT"), between
the Company and the ▇▇▇▇▇▇ Trust and Savings Bank (collectively, the "SHARES"),
for the purchase price of thirteen million dollars ($13,000,000) (the "PURCHASE
PRICE").
1.2 CLOSING. Subject to the satisfaction or waiver of the
conditions to Closing set forth in Sections 4 and 5 hereof, the purchase and
sale of the Shares shall take place at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m. (local time),
on the same date as the closing of the transactions contemplated by the Asset
Purchase Agreement, dated as of January 31, 2004 (the "APA"), by and among the
Company, Life Quotes Acquisition, Inc. ("LIFE QUOTES ACQUISITION"), ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ and Life Quotes, Inc. ("LIFE QUOTES"), or at such other time and place as
the Company and the Investor mutually agree upon in writing (which time and
place are designated as the "CLOSING"). At the Closing, the Company shall
deliver to the Investor one or more Common Stock certificates in substantially
the form of EXHIBIT A hereto representing the Common Stock being purchased under
this Agreement against payment of the Purchase Price therefor by wire transfer
of immediately available funds to the Company's account (for credit to account
number ▇▇▇-▇▇▇-▇ at ▇▇▇▇▇▇ Trust and Savings Bank, ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, ABA number ▇▇▇▇▇▇▇▇▇, account name ▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. or such other
bank account of the Company designated by the Company in writing no later than
the second Business Day immediately preceding the Closing) or to a designee of
the Company.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Investor that, except as set forth on a Schedule
of Exceptions (the "SCHEDULE OF EXCEPTIONS") attached hereto and made a part
hereof, specifically identifying the relevant subparagraph hereof:
2.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. Each of the
Company and its Subsidiaries is a corporation duly organized, validly existing
and in good standing under the laws of the State of
Delaware and has all
requisite corporate power and authority to own, lease or operate its properties
and to carry on its business as now conducted and as proposed to be conducted.
Each of the Company and its Subsidiaries is duly qualified to transact business
and is in good standing in each jurisdiction in which the failure to so qualify
would have a Material Adverse Effect.
2.2 CORPORATE AUTHORITY. The Company has full corporate power
and authority to enter into this Agreement and the Investor Rights Agreement, in
the form attached hereto as EXHIBIT B (the "INVESTOR RIGHTS AGREEMENT"), to
authorize, issue, sell and deliver the Shares and to carry out the other
provisions of this Agreement and the Investor Rights Agreement. No consent or
approval of stockholders or of any Governmental Entity is required as a
condition to the validity or performance by the Company or any of its
Subsidiaries of this Agreement or the Investor Rights Agreement.
2.3 CAPITALIZATION AND VOTING RIGHTS. The authorized capital of
the Company is 65,000,000 shares, consisting of (i) 60,000,000 authorized shares
of common stock, par value $0.003 per share ("COMMON STOCK"), of which 4,958,232
shares are issued and outstanding and of which (a) 426,821 shares are reserved
for issuance pursuant to the Company's 1997 Employee Stock Option Plan (the
"OPTION PLAN"), (b) 63,929 shares are reserved for issuance pursuant to the 1999
Employee Stock Purchase Plan (the "ESPP"), (c) 300,000 shares are reserved for
issuance to employees of Life Quotes retained by the Company as contemplated by
Section 7.4(b) of the APA (the "LIFE QUOTES OPTIONS") and (d) 50,000 shares are
reserved for issuance pursuant to the Stock Option Agreement, effective as of
December 1, 2001, between the Company and Prospector Partners Connecticut Fund,
L.P., a
Delaware limited partnership (the "PROSPECTOR OPTIONS"), and (ii)
5,000,000 authorized shares of preferred stock, par value $.001 per share
("PREFERRED STOCK"), of which no shares are issued and outstanding. There are no
other classes or series of capital stock of the Company authorized or issued and
outstanding.
(a) Each of the stockholders of the Company specified on
EXHIBIT C hereto (each, an "IDENTIFIED STOCKHOLDER" and, collectively, the
"IDENTIFIED STOCKHOLDERS") beneficially owns the number and percentage of
outstanding shares of Common Stock specified therein.
(b) The outstanding shares of Common Stock are duly and
validly authorized and issued, fully paid and nonassessable, and were issued in
compliance with the registration or qualification provisions of the Securities
Act of 1933, as amended (the "SECURITIES ACT"), and any relevant state
securities laws or pursuant to valid exemptions therefrom.
(c) Except for (i) the preemptive rights granted to the
Investor
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pursuant to Section 3.2 of the Investor Rights Agreement, (ii) preferred stock
purchase rights issued under the Rights Agreement, (iii) currently outstanding
options to purchase 218,332 shares of Common Stock granted to employees pursuant
to the Option Plan, (iv) the Life Quotes Options; (v) the Prospector Options and
(vi) rights to purchase up to an aggregate of 63,929 shares of Common Stock
granted to employees pursuant to the ESPP, there are no outstanding options,
warrants, puts, calls, rights (including conversion or preemptive rights and
rights of first refusal), proxy or stockholder agreements, or agreements of any
kind for the purchase or acquisition from, sale to or exchange with, the Company
or any of its Subsidiaries of any shares of any class or series of capital stock
of the Company or any of its Subsidiaries or other restrictions on the incidents
of ownership or transfer of any such shares of capital stock created by statute
(other than federal and state securities laws), the certificate of incorporation
or bylaws of the Company or any of its Subsidiaries or any Contract to which the
Company or any of its Subsidiaries is a party, by which any of them or their
property is subject to or bound or of which either of them has any knowledge.
Neither the Company nor any of its Subsidiaries is a party or subject to any
agreement or understanding, and, to their knowledge, there is no agreement or
understanding between any Persons which affects or relates to the voting or
giving of written consents with respect to any security of the Company or any of
its Subsidiaries, or by a director of the Company or any of its Subsidiaries.
(d) The pro forma capitalization of the Company after
giving effect to the transactions contemplated by this Agreement is illustrated
on SECTION 2.3(d) of the Schedule of Exceptions and reflects that the Shares to
be purchased by the Investor pursuant to the terms of this Agreement shall
constitute twenty-eight and ninety-six hundredths percent (28.96%) of the issued
and outstanding shares of capital stock of the Company on a Fully Diluted Basis
as a result of the purchase of such Shares pursuant to Section 1.1 hereof. For
purposes of this Agreement, "FULLY DILUTED BASIS" means (without duplication)
issued and outstanding shares of Common Stock plus (i) shares of any class or
series of capital stock of the Company or any of its Subsidiaries that votes
together with the Common Stock, (ii) shares of Common Stock issuable pursuant to
or upon the conversion, exercise or exchange of all rights set forth in
agreements (written or oral), plans, warrants, puts, calls, options, convertible
securities or other commitments or securities convertible into, exchangeable or
exercisable for, shares of Common Stock or any class or series of capital stock
of the Company or any of its Subsidiaries that votes together with the Common
Stock, (iii) shares of Common Stock reserved for issuance pursuant to the Option
Plan, (iv) shares of Common Stock reserved for issuance pursuant to the ESPP and
(v) shares of Common Stock reserved for issuance pursuant to the Life Quotes
Options.
2.4 SUBSIDIARIES. The Company has two Subsidiaries, ▇▇▇▇▇▇.▇▇▇,
Inc., a
Delaware corporation, and Life Quotes Acquisition, a
Delaware
corporation. All of the issued and outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued, are fully paid and
nonassessable and are directly owned by the Company. The Company does not
presently own or control, directly or indirectly, any interest in any other
Person nor is the Company a participant in any joint venture, partnership or
similar arrangement.
2.5 AUTHORIZATION. All corporate action on the part of the
Company and its stockholders necessary for the authorization, execution and
delivery of this Agreement and the Investor Rights Agreement, the performance of
all obligations of the Company hereunder
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and thereunder and the authorization, issuance, sale and delivery of the Shares
has been taken or will be taken prior to the Closing, and this Agreement and the
Investor Rights Agreement constitute valid and legally binding obligations of
the Company, enforceable in accordance with their respective terms, except (i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors' rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) to the
extent the indemnification provisions contained in the Investor Rights Agreement
may be limited by applicable federal or state securities laws. The issuance and
sale of the Shares is not and will not be subject to any preemptive rights or
rights of first refusal that have not been properly waived or complied with.
2.6 VALID ISSUANCE OF COMMON STOCK. The Shares have been duly
authorized and, when issued, sold and delivered in accordance with the terms of
this Agreement, will be duly and validly issued, fully paid and nonassessable,
and will be free of any Liens (other than Liens created by the Investor).
2.7 THIRD PARTY CONSENTS. Except as set forth in SECTION 2.7 of
the Schedule of Exceptions, no consent, permission, waiver, approval, order,
exemption, license or authorization of, or registration, application,
notification, request, qualification, designation, declaration or filing with,
any (i) Governmental Entity or (ii) any party to any Contract to which the
Company or any of its Subsidiaries is a party or is bound or to which any of
their property is subject, is required by the Company or any of its Subsidiaries
in connection with the execution and delivery of this Agreement and the Investor
Rights Agreement, the authorization, issuance, sale and delivery of the Shares
or the consummation of the other transactions contemplated by this Agreement and
the Investor Rights Agreement, except (i) if required, filings or qualifications
under applicable blue-sky laws, which filings or qualifications, if required,
shall be timely filed or obtained and (i) filing of a Notification Form: Listing
of Additional Shares (the "NASDAQ NOTICE") with The Nasdaq Stock Market, Inc.
("NASDAQ"), which shall be timely filed.
2.8 OFFERING. Assuming the accuracy of the representations and
warranties of the Investor set forth in Section 3 of this Agreement, the offer,
issuance, sale and delivery of the Shares will be exempt from the registration
requirements of the Securities Act and applicable blue-sky laws and neither the
Company nor any of its Subsidiaries or any authorized agent acting on the
Company's or any of its Subsidiaries' behalf will take any action hereafter that
would cause the loss of such exemption.
2.9 LITIGATION. There is no action, suit, proceeding or
investigation pending or, to the Company's and its Subsidiaries' knowledge,
currently threatened against the Company or any of its Subsidiaries that
questions the validity or enforceability of this Agreement or the Investor
Rights Agreement or the right of the Company to enter into either of such
agreements, to authorize, issue, sell or deliver the Shares or to consummate the
other transactions contemplated hereby or thereby, or that might result, either
individually or in the aggregate, in a Material Adverse Effect or result in any
change in the current equity ownership of the Company or any of its
Subsidiaries, nor is the Company or any of its Subsidiaries aware that there is
any basis for the foregoing. The foregoing includes, without limitation,
actions, suits, proceedings or investigations pending or threatened (or any
basis therefor known to the Company or any of its Subsidiaries) involving the
prior employment of any of the employees of the Company or any of
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its Subsidiaries, their use in connection with the Company's or any of its
Subsidiaries' business of any information or techniques allegedly proprietary to
any of their former employers or their obligations under any agreements with
prior employers. Neither the Company nor any of its Subsidiaries is a party or
subject to the provisions of any order, writ, injunction, judgment or decree of
any court or Government Entity. There is no action, suit, proceeding or
investigation by the Company or any of its Subsidiaries currently pending or
that the Company or any of its Subsidiaries intends to initiate.
2.10 INTELLECTUAL PROPERTY. Each of the Company and its
Subsidiaries owns or possesses sufficient legal rights to all patents,
trademarks, service marks, trade names, copyrights, trade secrets, information
and other proprietary rights and processes ("INTELLECTUAL PROPERTY RIGHTS")
necessary for its business as now conducted and as proposed to be conducted,
and, to the Company's and its Subsidiaries' knowledge, without any conflict with
or infringement of the rights of others. SECTION 2.10 of the Schedule of
Exceptions contains a complete list of trademarks and pending trademark
applications of the Company and its Subsidiaries. There are no outstanding
options, licenses or other Contracts of any kind relating to the foregoing, nor
is the Company or any of its Subsidiaries bound by or a party to any options,
licenses or other Contracts of any kind with respect to the Intellectual
Property Rights of any other Person other than such licenses to the Company or
any of its Subsidiaries (i) arising from the purchase by either of them of "off
the shelf" standard products or (ii) that are not material to the business now
conducted or proposed to be conducted by either of them. Neither the Company nor
any of its Subsidiaries has received any written communication alleging that it
has violated or, by conducting its business as now conducted or proposed to be
conducted, would violate any of the Intellectual Property Rights of any other
Person. To the knowledge of the Company and its Subsidiaries, no employee of the
Company or any of its Subsidiaries is obligated under any Contract (including
licenses, covenants or commitments of any nature) or other agreement, or subject
to any order, writ, injunction, judgment or decree of any Governmental Entity,
that would interfere with the use of his or her best efforts to promote the
interests of the Company or any of its Subsidiaries or that would conflict with
the business of the Company and its Subsidiaries as now conducted or proposed to
be conducted. Neither the Company nor any of its Subsidiaries believes that it
is or will be necessary to utilize any Intellectual Property Rights developed or
acquired by any of its employees (or people it currently intends to hire) prior
to their employment by the Company or any of its Subsidiaries, as the case may
be.
2.11 COMPLIANCE WITH OTHER INSTRUMENTS AND LAWS. Neither the
Company nor any of its Subsidiaries is in violation or default of (i) any term
of its certificate of incorporation or bylaws, (ii) any provision of any
Contract to which it is a party or by which it is bound or by which any of its
property is subject or (iii) any provision of any judgment, decree, order, writ,
statute, rule or regulation applicable it or its properties except, in the case
of clauses (ii) or (iii), for any violation or default that, individually or in
the aggregate, is not reasonably likely to have a Material Adverse Effect. The
execution, delivery and performance of and compliance with this Agreement and
the Investor Rights Agreement, the authorization, issuance, sale and delivery of
the Shares pursuant hereto and the consummation of the other transactions
contemplated hereby and thereby will not result in any violation or be in
conflict with or constitute, with or without the passage of time and/or giving
of notice, a default under any term of any such certificate of incorporation or
bylaws or any provision of any such Contract or any
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such judgment, decree, order, writ, statute, rule or regulation or result in the
creation of any Lien upon any of the properties or assets of the Company or any
of its Subsidiaries or the suspension, revocation, impairment, forfeiture or
nonrenewal of any Contract, permit, license, authorization or approval
applicable to the Company or any of its Subsidiaries, their respective
businesses or operations or any of their respective assets or properties.
2.12 AGREEMENTS; ACTIONS.
(a) The execution, delivery and performance of this
Agreement and the Investor Rights Agreement, the authorization, issuance, sale
and delivery of the Shares pursuant hereto and the consummation of the other
transactions contemplated hereby and thereby, will not trigger any options,
warrants, puts, calls or other rights of any kind (including conversion or
preemptive rights and rights of first refusal) for the purchase or acquisition
from, sale to or exchange with, the Company or any of its Subsidiaries of any
shares of any class or series of capital stock of the Company or any of its
Subsidiaries or other restrictions on the incidents of ownership or transfer of
any such shares of capital stock created by statute (other than federal and
state securities laws), the certificate of incorporation or bylaws of the
Company or any of its Subsidiaries or any Contract to which the Company or any
of its Subsidiaries is a party, by which any of them or their property is
subject to or bound or of which either of them has any knowledge.
(b) There are no Contracts, proposed transactions,
judgments, decrees, orders, writs or injunctions to which the Company or any of
its Subsidiaries is a party or by which they are bound or by which any of their
property is subject that may involve (i) Liabilities or other obligations
(contingent or otherwise) of, or payments to the Company or any of its
Subsidiaries in excess of, $500,000, (ii) the license of any Intellectual
Property Rights to or from the Company or any of its Subsidiaries, other than
such licenses to the Company or any of its Subsidiaries (a) arising from the
purchase by either of them of "off the shelf" standard products or (b) that are
not material to the business now conducted or proposed to be conducted by either
of them, (iii) provisions restricting or affecting the development, marketing,
sale or delivery of the products or services of the Company or any of its
Subsidiaries or (iv) indemnification by the Company or any of its Subsidiaries
with respect to infringements of Intellectual Property Rights.
(c) Neither the Company nor any of its Subsidiaries has (i)
declared or paid any dividends or authorized or made any distribution upon or
with respect to any class or series of its capital stock, (ii) created,
incurred, assumed or guaranteed any Indebtedness or any other Liabilities
individually in excess of $250,000 or, in the case of Indebtedness and/or
Liabilities individually less than $250,000, in excess of $500,000 in the
aggregate, (iii) made any loans or advances to any Person, other than ordinary
advances for travel expenses or (iv) sold, exchanged or otherwise disposed of
any of its assets or rights, other than in the ordinary course of business and
consistent with past practice.
(d) For the purposes of subsections (b) and (c) above, all
Indebtedness, Liabilities, Contracts and proposed transactions involving the
same Person (including Persons the Company has reason to believe are affiliated
therewith) shall be aggregated for the purpose of meeting the individual minimum
dollar amounts of such
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subsections.
(e) Neither the Company nor any of its Subsidiaries is a
party to, or bound by, any Contract, or subject to any restriction under its
certificate of incorporation or bylaws, that materially and adversely affects
its business as now conducted or as proposed to be conducted, its properties or
its financial condition taken as a whole.
(f) Except as set forth in Section 2.12(f) of the Schedule
of Exceptions, neither the Company nor any of its Subsidiaries has engaged in
the past 6 months in any discussion (i) with any representative of any Person
regarding the consolidation or merger of it with or into any such Person, (ii)
with any Person regarding the sale, conveyance or disposition of all or
substantially all of its assets or a transaction or series of related
transactions in which more than 50% of the voting power of the Company or any of
its Subsidiaries is disposed of or (iii) regarding any other form of
acquisition, liquidation, dissolution or winding up of the Company or any of its
Subsidiaries.
2.13 RELATED-PARTY TRANSACTIONS. There are no obligations of the
Company or any of its Subsidiaries to officers, directors, stockholders or
employees of the Company or any of its Subsidiaries other than (i) for payment
of salary for services rendered, (ii) reimbursement for reasonable business
expenses incurred on behalf of the Company or any of its Subsidiaries and (iii)
for other standard employee benefits made generally available to all employees
(including, without limitation, under the Option Plan and the ESPP). No
employee, officer or director of the Company or any of its Subsidiaries, or
member of his or her immediate family, is indebted to the Company or any of its
Subsidiaries, nor is the Company or any of its Subsidiaries indebted (or
committed to make loans or extend or guarantee credit) to any of them. None of
such Persons has any direct or indirect ownership interest in any Person with
which the Company or any of its Subsidiaries is affiliated or with which the
Company or any of its Subsidiaries has a business relationship, or any Person
that competes with the Company or any of its Subsidiaries, in each case other
than ownership of less than 1% of the outstanding capital stock of publicly
traded companies. No such employee, officer or director, or any member of his or
her immediate family, is, directly or indirectly, interested in any material
Contract with the Company or any of its Subsidiaries. Neither the Company nor
any of its Subsidiaries is a guarantor or indemnitor of any Indebtedness of any
other Person.
2.14 PERMITS. Each of the Company and its Subsidiaries have all
franchises, permits, licenses and any similar authority necessary for the
conduct of its business as now conducted by it or as proposed to be conducted by
it, the lack of which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries is in default under any of such franchises, permits, licenses or
other similar authority, except for such defaults that, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
2.15 ENVIRONMENTAL AND SAFETY LAWS. Neither the Company nor any
of its Subsidiaries is in violation of any applicable statute, law, rule or
regulation relating to the environment or occupational health and safety, except
for any violation that, individually or in the aggregate, is not reasonably
likely to have a Material Adverse Effect, and to their knowledge,
- 7 -
no material expenditures are or will be required in order to comply with any
such existing statute, law, rule or regulation.
2.16 DISCLOSURE. Each of the Company and its Subsidiaries have
provided the Investor with all the information that the Investor has requested
for deciding whether to purchase the Shares. Neither this Agreement, the
Investor Rights Agreement or any other statements or certificates or information
made, delivered or provided by or on behalf of the Company or any of its
Subsidiaries in connection herewith or therewith contains any untrue statement
of a material fact or omits to state a material fact necessary to make the
statements herein or therein not misleading.
2.17 REGISTRATION RIGHTS. Except as provided in the Investor
Rights Agreement, neither the Company nor any of its Subsidiaries has granted or
agreed to grant any registration rights, including piggyback rights, to any
Person. The Investor Rights Agreement, dated as of February 10, 1999, by and
among the Company and Intuit, Inc. has terminated and is no longer of any force
or effect (including, without limitation, the registration rights granted
pursuant thereto).
2.18 CORPORATE DOCUMENTS. The certificate of incorporation and
bylaws of the Company and its Subsidiaries disclosed on the Schedule of
Exceptions are in full force and effect as of the date hereof.
2.19 TITLE TO REAL PROPERTY AND ASSETS. The Company does not own
any real property. Life Quotes Acquisition will own real estate pursuant to that
certain Real Estate Purchase Agreement, dated as of January 31, 2004 (the "REAL
ESTATE AGREEMENT"), by and among Life Quotes Acquisition and The ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ Revocable Trust dated June 10, 1987 executed in conjunction with the APA.
Each of the Company and its Subsidiaries has good title to its leasehold estates
and personal property owned by it, in each case subject to no Lien other than
(i) Liens for Taxes which have not yet become due or payable and (ii) minor
Liens which do not materially detract from the value of the property subject
thereto or materially impair its ownership or use. All facilities, machinery,
equipment, fixtures, vehicles and other properties owned, leased or used by the
Company and its Subsidiaries are in good operating condition and repair, except
for normal wear and tear, and are reasonably fit and usable for the purposes for
which they are being used, other than where the failure to be in good operating
condition and repair or reasonably fit and usable would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.
Each of the Company and its Subsidiaries is in compliance in all material
respects with the terms of each lease to which it is a party or is otherwise
bound.
2.20 FINANCIAL REPORTS. The Company has delivered to the Investor
its audited consolidated financial statements (balance sheets and statements of
operations, statements of stockholders' equity and statements of cash flows,
including notes thereto) at December 31, 2002 and for the fiscal year then
ended, and its unaudited, reviewed, consolidated financial statements (balance
sheets and statements of operations, statements of stockholders' equity and
statements of cash flows) as at and for the three-month period ended September
30, 2003 and the nine-month period ended September 30, 2003 (the "FINANCIAL
STATEMENTS"). The Financial Statements have been prepared in accordance with
GAAP, except that the unaudited
- 8 -
reviewed Financial Statements may not contain all the footnotes required by
GAAP. The Financial Statements fairly present the financial condition and
operating results of the Company and its Subsidiaries as of the dates, and for
the periods, indicated therein, subject in the case of the unaudited reviewed
Financial Statements to the absence of complete notes and to normal year-end
audit adjustments. Except as set forth in the Financial Statements, neither the
Company nor any of its Subsidiaries has any Liabilities, other than (i)
Liabilities incurred in the ordinary course of business subsequent to September
30, 2003 and (ii) obligations under Contracts and commitments incurred in the
ordinary course of business and not required under GAAP to be reflected in the
Financial Statements, which, in both cases, individually or in the aggregate,
are not material to the financial condition or operating results of the Company
or any of its Subsidiaries. The Company and its Subsidiaries maintains a
standard system of accounting established and administered in accordance with
GAAP.
2.21 REPORTS.
(a) The Company has made available to the Investor each
registration statement, prospectus, report, proxy statement or information
statement filed by it since December 31, 2002 and prior to the date hereof,
including (i) the Company's Annual Report on Form 10-K for the year ended
December 31, 2002, together with all amendments thereto filed with the SEC prior
to the date hereof, if any, and (ii) the Company's Quarterly Reports on Form
10-Q for the three months ended March 31, 2003, June 30, 2003 and September 30,
2003, together with all amendments thereto filed with the SEC prior to the date
hereof, if any, each in the form (including exhibits, annexes and any amendments
thereto) filed with the SEC (collectively, including any such reports filed
subsequent to the date hereof and prior to the Closing, the "REPORTS"). As of
their respective filing dates, the Reports did not, and any Reports filed with
the SEC subsequent to the date hereof will not, contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements made therein, in the light of the
circumstances in which they were made, not misleading.
(b) Each of the consolidated balance sheets included in or
incorporated by reference into any Reports (including the related notes and
schedules) fairly presents, or in the case of any Reports filed with the SEC
subsequent to the date hereof will fairly present, in all material respects, the
consolidated financial position of the Company and its Subsidiaries as of its
date and each of the consolidated statements of operations, statements of
stockholders' equity and statements of cash flows included in or incorporated by
reference into any Reports (including any related notes and schedules) fairly
presents, or in the case of any Reports filed with the SEC subsequent to the
date hereof will fairly present, in all material respects, the results of
operations, retained earnings and cash flows, as the case may be, of Company and
its Subsidiaries for the periods set forth therein (subject, in the case of
unaudited statements, to the absence of complete notes and to normal year-end
audit adjustments that will not be material in amount or effect), in each case
in accordance with GAAP, except as may be noted therein.
(c) The Company has timely filed with the SEC all Reports
required to be filed by it under the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT").
- 9 -
(d) The Company has timely filed with Nasdaq all reports or
other documents required to be filed by it for continued listing on the Nasdaq
SmallCap Market.
2.22 CHANGES. Except as set forth in SECTION 2.22 of the Schedule
of Exceptions, or disclosed in the Company's Reports, since September 30, 2003
there has not been:
(a) any change in the assets, Liabilities, financial
condition or results of operations of the Company and its Subsidiaries from that
reflected in the Financial Statements, except for changes in the ordinary course
of business which are not material, individually or in the aggregate, to the
financial condition or operating results of the Company or any of its
Subsidiaries;
(b) any damage, destruction or loss, whether or not covered
by insurance, except any such damage, destruction or loss that is not material
to the assets, properties, financial condition, operating results, business or
prospects of the Company or any of its Subsidiaries (as such business is
presently conducted and as it is proposed to be conducted);
(c) any waiver by the Company or any of its Subsidiaries of
a valuable right or of a material debt owed to it;
(d) any satisfaction or discharge of any Lien or payment of
any obligation by the Company or any of its Subsidiaries, except in the ordinary
course of business and that is not material to the assets, properties, financial
condition, operating results, business or prospects of the Company or any of its
Subsidiaries (as such business is presently conducted and as it is proposed to
be conducted);
(e) any material change or amendment to a material Contract
by which the Company or any of its Subsidiaries, or any of its respective assets
or properties, is bound or subject;
(f) any material change in any compensation arrangement or
Contract with any director, officer, employee or consultant;
(g) any material sale, assignment or transfer of any
Intellectual Property Rights or other intangible assets;
(h) any resignation or termination of employment of any
officer or key employee of the Company or any of its Subsidiaries; and the
Company and its Subsidiaries, to their knowledge, do not know of the impending
resignation or termination of employment of any such officer or key employee;
(i) any mortgage, pledge, transfer of a security interest
in, or Lien, created, incurred or assumed by the Company or any of its
Subsidiaries, with respect to any of its material properties or material assets,
except Liens for Taxes not yet due or payable;
(j) any loans or guarantees made by the Company or any of
its Subsidiaries to or for the benefit of its employees, officers or directors,
or any members of their
- 10 -
immediate families, other than travel advances and other advances made in the
ordinary course of business;
(k) any declaration, setting aside or payment or other
distribution in respect of any of the Company's or any of its Subsidiaries'
capital stock, or any direct or indirect redemption, purchase or other
acquisition of any of such capital stock by the Company or any of its
Subsidiaries, as the case may be;
(l) to the Company's or any of its Subsidiaries' knowledge,
any other event or condition of any character that might reasonably be expected
to have a Material Adverse Effect; or
(m) any agreement or commitment by the Company or any of
its Subsidiaries to do any of the things described in this Section 2.22.
2.23 EMPLOYEE BENEFIT PLANS. Except as set forth on SECTION 2.23
of the Schedule of Exceptions, neither the Company nor any of its Subsidiaries
has any Employee Benefit Plan as defined in the Employee Retirement Income
Security Act of 1974, as amended. Except as set forth on SECTION 2.23 of the
Schedule of Exceptions, neither the execution nor the delivery of this Agreement
or the Investor Rights Agreement nor the consummation of the transactions
contemplated hereby and thereby will (i) entitle any employee to severance pay
or any increase in severance pay upon any termination of employment after the
date hereof, (ii) accelerate the time of payment or vesting or result in any
payment or funding (through a grantor trust or otherwise) of compensation or
benefits under, increase the amount payable or result in any other material
obligation pursuant to, any of the Company's or any of its Subsidiaries' benefit
plans, (iii) limit or restrict the right of the Company or any of its
Subsidiaries to amend or terminate any of its benefit plans or (iv) cause the
Company or any of its Subsidiaries to record additional compensation expense on
its income statement with respect to any outstanding stock option or other
equity-based award.
2.24 TAX RETURNS, PAYMENTS AND ELECTIONS. Each of the Company and
its Subsidiaries has timely filed all Tax Returns required by applicable law.
These Tax Returns are true and correct in all material respects. Each of the
Company and its Subsidiaries has paid all Taxes and other assessments due,
except those contested by it in good faith that are listed in SECTION 2.24 of
the Schedule of Exceptions. The provision for Taxes of the Company and its
Subsidiaries as shown in the Financial Statements is adequate for Taxes due or
accrued as of the date thereof. Neither the Company nor any of its Subsidiaries
has elected pursuant to the Internal Revenue Code of 1986, as amended (the
"CODE"), to be treated as a Subchapter S corporation or a collapsible
corporation pursuant to Section 1362(a) or Section 341(f) of the Code, nor has
it made any other elections pursuant to the Code that would have a Material
Adverse Effect. Neither the Company nor any of its Subsidiaries has ever had any
Tax deficiency proposed or assessed against it and has not executed any waiver
of any statute of limitations on the assessment or collection of any Tax or
governmental charge. None of the Company's or any of its Subsidiaries' Tax
Returns has ever been audited or the subject of inquiry by governmental
authorities. Since September 30, 2003, each of the Company and its Subsidiaries
has made adequate provisions on its books of account for all Taxes, assessments
and governmental charges with respect to its business, properties and operations
for such period.
- 11 -
Each of the Company and its Subsidiaries has withheld or collected from each
payment made to each of its employees, the amount of all Taxes (including, but
not limited to, federal income taxes, Federal Insurance Contribution Act taxes
and Federal Unemployment Tax Act taxes) required to be withheld or collected
therefrom, and has paid the same to the proper tax receiving officers or
authorized depositaries.
2.25 INSURANCE. Each of the Company and its Subsidiaries has in
full force and effect property and casualty insurance policies, with extended
coverage, sufficient in amount (subject to reasonable deductibles) to allow it
to replace any of its properties or assets that might be damaged or destroyed.
The Company has in full force and effect directors' and officers' insurance, on
customary terms and conditions in an amount not less than five million dollars
($5,000,000) and which expires on August 3, 2004, along with products Liability,
errors and omissions and such other insurance of the types and in amounts
customary for companies similarly situated. All such insurance policies are with
reputable insurers and provide full and adequate coverage for all normal risks
incident to the business of the Company, its Subsidiaries and their respective
properties and assets and are in character and amount at least equivalent to
that carried by Persons engaged in similar businesses and subject to the same or
similar perils or hazards.
2.26 MINUTE BOOKS. The minute books of each of the Company and
its Subsidiaries provided to the Investor contain a fair and accurate summary of
all meetings of, and any actions taken by, the directors (including any
committees thereof) and the stockholders of the Company and its Subsidiaries
since the date of their respective incorporation.
2.27 LABOR AGREEMENTS AND ACTIONS. Neither the Company nor any of
its Subsidiaries is bound by or subject to (and none of its assets or properties
is bound by or subject to) any written or oral, express or implied, Contract,
commitment or arrangement with any labor union, and no labor union has requested
or, to the Company's or any of its Subsidiaries' knowledge, has sought to
represent any of the employees, representatives or agents of the Company or any
of its Subsidiaries. There is no strike or other labor dispute involving the
Company or any of its Subsidiaries pending, or to the Company's or any of its
Subsidiaries' knowledge, threatened, that could reasonably be expected to have a
Material Adverse Effect, nor is the Company or any of its Subsidiaries aware of
any labor organization activity involving its employees. Except as set forth in
SECTION 2.27 of the Schedule of Exceptions, the employment of each officer and
employee of the Company and its Subsidiaries is terminable at the will of the
Company or such Subsidiary. To its knowledge, each of the Company and its
Subsidiaries has complied in all material respects with all applicable state and
federal equal employment opportunity and other laws related to employment.
2.28 EMPLOYEES. To the knowledge of the Company and its
Subsidiaries, no employee of the Company or any of its Subsidiaries, nor any
consultant with whom the Company or any of its Subsidiaries has contracted, is
in violation of any term of any employment contract, proprietary information
agreement or any other agreement relating to the right of any such individual to
be employed by, or to contract with, the Company or any of its Subsidiaries; and
to the knowledge of the Company and its Subsidiaries, the continued employment
by the Company or any of its Subsidiaries, of their respective present
employees, and the performance of the contracts of the Company and its
Subsidiaries with their respective
- 12 -
independent contractors, will not result in any such violation except for such
violations which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries has received any notice alleging that any such violation has
occurred. Except as set forth in SECTION 2.28 of the Schedule of Exceptions, no
employee of the Company or any of its Subsidiaries has been granted the right to
continued employment by the Company or any of its Subsidiaries or to any
material compensation following termination of employment with the Company.
Neither the Company nor any of its Subsidiaries is aware that any officer or key
employee intends to terminate his or her employment with the Company or any of
its Subsidiaries, nor does the Company or any of its Subsidiaries have a present
intention to terminate the employment of any such officer or key employee.
2.29 USE OF PROCEEDS. The Company will use the Purchase Price to
fund the transactions contemplated by the APA and the Real Estate Agreement.
2.30 PROPRIETARY INFORMATION AND INVENTIONS ASSIGNMENT
AGREEMENTS. Each employee, consultant and officer of the Company and its
Subsidiaries and any other Person developing intellectual property on behalf of
the Company or any of its Subsidiaries has executed an agreement with the
Company or such Subsidiary regarding confidentiality and proprietary information
substantially in the form or forms delivered to the Investor. Neither the
Company nor any of its Subsidiaries is aware that any of its employees or
consultants is in violation thereof.
3. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR. The Investor
hereby represents and warrants to the Company that:
3.1 ORGANIZATION AND GOOD STANDING. The Investor is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Utah.
3.2 CORPORATE AUTHORITY. The Investor has full power and
authority to enter into this Agreement and the Investor Rights Agreement and to
carry out its obligations hereunder and thereunder. This Agreement and the
Investor Rights Agreement have been duly authorized by all proper and necessary
corporate action on the part of the Investor. This Agreement and the Investor
Rights Agreement constitute valid and legally binding obligations of the
Investor, enforceable in accordance with their respective terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors' rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) to the
extent the indemnification provisions contained in the Investor Rights Agreement
may be limited by applicable federal or state securities laws.
3.3 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made
with the Investor in reliance upon the Investor's representation to the Company,
which by the Investor's execution of this Agreement the Investor hereby
confirms, that the Shares to be received by the Investor will be acquired for
investment for the Investor's own account, not as a nominee or agent, and not
with a view to the resale or distribution of any part thereof, and that the
Investor has no present intention of selling, granting any participation in or
otherwise
- 13 -
distributing the same. By executing this Agreement, the Investor further
represents that the Investor does not have any Contract or arrangement with any
Person to sell, transfer or grant participations to such Person or to any third
Person with respect to any of the Shares.
3.4 INVESTMENT EXPERIENCE. The Investor acknowledges that it is
able to fend for itself, can bear the economic risk of its investment and has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Common
Stock. The Investor acknowledges that the Company has afforded the Investor the
opportunity to discuss the investment in the Common Stock and to ask questions
concerning the condition (financial or otherwise), business, properties, assets,
results of operations and prospects of the Company and its Subsidiaries.
3.5 ACCREDITED INVESTOR. The Investor is an "accredited
investor" within the meaning of SEC Rule 501 of Regulation D, as presently in
effect.
3.6 RESTRICTED SECURITIES. The Investor understands that the
Shares it is purchasing are characterized as "restricted securities" under the
federal securities laws inasmuch as they are being acquired from the Company in
a transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Securities Act only in certain limited circumstances. In this connection,
the Investor represents that it is familiar with SEC Rule 144, as presently in
effect, and understands the resale limitations imposed thereby and by the
Securities Act.
3.7 LEGENDS. The Investor understands that the Shares and any
securities issued in respect thereof or exchange therefor, shall bear the
following legend until such time, if any, as (A) the Shares or such securities
(i) are sold in compliance with Rule 144 under the Securities Act (or a
comparable successor provision) or pursuant to an effective registration
statement under the Securities Act or (ii) may be resold pursuant to Rule 144(k)
under the Securities Act (or a comparable successor provision) or (B) the
Company receives an opinion of counsel reasonably acceptable to it to the effect
that such legend may be removed:
"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN
EXEMPTION FROM REGISTRATION AND (B) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES."
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4. CONDITIONS OF THE INVESTOR'S OBLIGATIONS AT CLOSING. The
obligations of the Investor under Section 1.1 of this Agreement are subject to
the fulfillment on or before the Closing of each of the following conditions,
the waiver of which shall not be effective against the Investor if it does not
consent in writing thereto:
4.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Company in Section 2 hereof shall be true and correct in
all material respects (except that such representations and warranties that
contain materiality qualifiers shall be true in all respects) as of the date of
this Agreement and as of the Closing, except to the extent such representations
and warranties specifically speak as to an earlier date, in which case they
shall be true and correct as of such earlier date.
4.2 PERFORMANCE. The Company shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing.
4.3 ABSENCE OF CHANGES. There has been no event, occurrence,
change, development or state of affairs that had or would reasonably be expected
to have a Material Adverse Effect.
4.4 NOTICES, CONSENTS, PERMITS AND WAIVERS. The Company shall
have complied with any and all notice requirements (including the timely filing
of the Nasdaq Notice), and obtained any and all consents, permits and waivers
necessary or appropriate for consummation by it of the transactions contemplated
by this Agreement and the Investor Rights Agreement.
4.5 COMPLIANCE CERTIFICATE. The Chief Executive Officer of the
Company shall deliver to the Investor at the Closing a certificate stating that
the conditions specified in Sections 4.1, 4.2, 4.3, 4.4, 4.8 and 4.15 have been
fulfilled.
4.6 LEGAL INVESTMENT; ORDERS. The authorization, issuance, sale
and delivery of the Shares shall be legally permitted by all laws and
regulations to which the Investor and the Company are subject. No court or other
Governmental Entity or authority of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any statute, law, ordinance, rule,
regulation, judgment, decree, injunction, writ or other order (whether
temporary, preliminary or permanent) that is in effect and restrains, enjoins or
otherwise prohibits consummation of the authorization, issuance, sale or
delivery of the Shares or any of the other transactions contemplated by this
Agreement or the Investor Rights Agreement (collectively, an "ORDER"), and no
Governmental Entity or any other Person shall have instituted any proceeding or
threatened to institute any proceeding seeking any such Order or questioning the
legality, validity or appropriateness of any such authorization, issuance, sale
or delivery of the Shares or any of the other transactions contemplated by this
Agreement or the Investor Rights Agreement.
4.7 PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to the Investor and its counsel, and
- 15 -
they shall have received all such counterpart original or certified or other
copies of such documents as they may reasonably request.
4.8 BOARD OF DIRECTORS. The Company and the Identified
Stockholders shall have taken all necessary corporate action to appoint the
Investor Director (as defined in the Investor Rights Agreement) to the Board of
Directors of the Company and to fix the number of members of the Board of
Director in accordance with Section 3.5 of the Investor Rights Agreement
(including the adoption by the Board of Directors of any necessary corporate
resolutions with respect thereto).
4.9 OPINIONS OF COUNSEL. The Investor shall have received
opinions, dated as of the Closing Date, in form and substance reasonably
satisfactory to it and its counsel, of:
(a) ▇▇▇▇▇ ▇▇▇▇▇▇ LLP, special counsel to the Company, to
the effect set forth in EXHIBIT D attached hereto; and
(b) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, general counsel to the Company, to
the effect set forth in EXHIBIT E attached hereto.
4.10 INVESTOR RIGHTS AGREEMENT. The Company, the Identified
Stockholders and the Investor shall have entered into the Investor Rights
Agreement.
4.11 SECRETARY'S CERTIFICATE. The Investor shall have received a
recent good standing certificate from the Secretary of State of the State of
Delaware for the Company and its Subsidiaries, and a certificate of the
Secretary of the Company certifying as to (i) the Certificate of Incorporation
of the Company and its Subsidiaries, as amended and in effect as of the Closing,
(ii) the by-laws of the Company and its Subsidiaries, as amended and in effect
as of the Closing, (iii) the resolutions of the Board of Directors of the
Company, authorizing and approving all matters in connection with the
transactions contemplated by this Agreement and the Investor Rights Agreement
and (iv) the duly elected officers of the Company and the incumbency of each.
4.12 EMPLOYEE MATTERS. The officers and employees of the Company
and its Subsidiaries identified on SECTION 4.12 of the Schedule of Exceptions
shall be bound by employment, confidentiality, non-compete, non-solicitation and
work product agreements in form and substance satisfactory to the Investor.
4.13 DUE DILIGENCE. The Investor shall have completed and be
satisfied, in its sole discretion, with its confidential due diligence review of
the assets, properties, financial condition, operating results or business of
the Company and its Subsidiaries (as such business is presently conducted and as
it is proposed to be conducted).
4.14 BANKRUPTCY, ETC. Neither the Company nor any of its
Subsidiaries shall have dissolved or liquidated or taken an equivalent action
nor shall an involuntary petition have been filed under any federal or state
bankruptcy, reorganization, insolvency, moratorium or similar statute against
the Company or any of its Subsidiaries, or a custodian, receiver, trustee,
assignee for the benefit of creditors or other similar official have been
appointed to take
- 16 -
possession, custody or control of the property of the Company or any of its
Subsidiaries; nor shall the Company or any of its Subsidiaries have admitted in
writing its inability to pay any of its debts as they mature, or have filed any
petition or action for relief relating to any bankruptcy, reorganization,
insolvency or moratorium law, or any other similar law or laws for the relief
of, or relating to, debtors; nor shall the Company or any of its Subsidiaries
have made a general assignment for the benefit of creditors or entered into an
agreement of composition with its creditors.
4.15 ABSENCE OF LIABILITIES. Neither the Company nor any of its
Subsidiaries shall have any Liabilities other than (i) Liabilities set forth in
the Financial Statements or (ii) Liabilities (of any amount) incurred since
September 30, 2003 in the ordinary course of conducting the Company's business.
4.16 LIFE QUOTES, INC. ACQUISITION. The APA and Real Estate
Purchase Agreement (i) shall be in form and substance reasonably satisfactory to
the Investor and its counsel, (ii) shall have been duly authorized, executed and
delivered by the parties thereto and approved by their respective stockholders,
if necessary, (iii) shall constitute a valid, binding and enforceable obligation
of the parties thereto and shall be in full force and effect, (iv) shall not
have been amended or otherwise modified without the prior written consent of the
Investor, (v) the conditions for the closing of the transactions set forth or
contemplated therein shall have been satisfied or waived and (vi) the closing of
the transactions set forth or contemplated therein shall occur simultaneously
with the Closing.
4.17 RIGHTS PLAN. The Company shall amend the Rights Agreement
and such amendment shall (i) be in form and substance reasonably satisfactory to
the Investor and its counsel, (ii) be duly authorized, executed and delivered by
the parties thereto, (iii) constitute a valid, binding and enforceable
obligation of the parties thereto and (iv) be in full force and effect and shall
not have been amended or otherwise modified without the prior written consent of
the Investor.
4.18 SHAREHOLDER APPROVAL. The issuance and sale of the Shares to
the Investor shall have been duly approved by the affirmative vote of a majority
of the outstanding shares of Common Stock entitled to vote.
4.19 WAIVERS TO EMPLOYMENT AGREEMENTS. The Investor shall have
received from each of the Identified Stockholders an amendment and waiver (each,
an "AMENDMENT AND WAIVER") to their respective employment agreements with
respect to consequences of the purchase of the Shares by the Investor with
respect to the "change of control" provisions therein. Each Amendment and Waiver
shall (i) be in form and substance reasonably satisfactory to the Investor and
its counsel, (ii) be duly authorized, executed and delivered by the parties
thereto, (iii) constitute a valid, binding and enforceable obligation of the
parties thereto and (iv) be in full force and effect and shall not have been
amended or otherwise modified without the prior written consent of the Investor.
5. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING. The Company's
obligation to sell the Shares at the Closing is subject to the satisfaction, on
or prior to the Closing Date, of the following conditions:
- 17 -
5.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Investor in Section 4 hereof shall be true and correct in
all material respects (except that such representations and warranties that
contain materiality qualifiers shall be true in all respects) as of the date of
this Agreement and as of the Closing, except to the extent such representations
and warranties specifically speak as to an earlier date, in which case they
shall be true and correct as of such earlier date.
5.2 LEGAL INVESTMENT; ORDERS. The authorization, issuance, sale
and delivery of the Shares shall be legally permitted by all laws and
regulations to which the Investor and the Company are subject. No court or other
Governmental Entity or authority of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered an Order, and no Governmental Entity or
any other Person shall have instituted any proceeding or threatened to institute
any proceeding seeking any such Order or questioning the legality, validity or
appropriateness of the authorization, issuance, sale or delivery of the Shares
or any of the other transactions contemplated by this Agreement or the Investor
Rights Agreement.
5.3 NOTICES, CONSENTS, PERMITS AND WAIVERS. The Company shall
have obtained any and all consents, permits and waivers necessary or appropriate
for consummation by it of the transactions contemplated by this Agreement and
the Investor Rights Agreement.
5.4 SHAREHOLDER APPROVAL. The issuance and sale of the Shares to
the Investor shall have been duly approved by the affirmative vote of a majority
of the outstanding shares of Common Stock entitled to vote.
6. MISCELLANEOUS.
6.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Parties contained in (a) Sections 2.3,
2.5, 2.7, 2.16, 2.17, 2.19, 3.4, 3.5, 3.6 and 3.7 shall survive indefinitely,
(b) Sections 2.6, 2.8, 2.17, 2.20 and 2.21 shall survive until the applicable
statue of limitations has expired under applicable Law and (c) the remaining
representations and warranties contained herein shall survive until the first
anniversary of the Closing Date, and shall in no way be affected by any
investigation of the subject matter thereof made by or on behalf of the Investor
or the Company or any agents, employees, attorneys, advisors or representatives
thereof.
6.2 INDEMNIFICATION.
(a) COMPANY BREACH. In the event that the Investor suffers
an Adverse Consequence as a result of (i) the Company's breach of (or a third
Person alleging facts that, if true, would mean the Company has breached) any of
the Company's representations, warranties and covenants contained herein or in
any of the Exhibits or (ii) the Company's actions or failure to act (including
statements, actions or omissions made or information provided by the Company,
its agents, employees, advisors, representatives or the Board of Directors of
the Company) in connection with or relating to this Agreement or the Investor
Rights Agreement, then the Company agrees to indemnify the Investor from and
against the entirety of any such Adverse Consequence the Investor may suffer
through and after the date of the claim for indemnification resulting from,
arising out of, relating to, in the nature of or caused by the
- 18 -
breach, action or failure to act (or the alleged breach, action or failure to
act).
(b) MATTERS INVOLVING THIRD PARTIES.
(i) If any third Person shall notify the Investor
(the "INDEMNIFIED PARTY") with respect to any matter (a "THIRD PARTY CLAIM")
which may give rise to a claim for indemnification against the Company (the
"INDEMNIFYING PARTY") under this Section 6.2, then the Indemnified Party shall
promptly notify the Indemnifying Party thereof in writing; PROVIDED, HOWEVER,
that no delay on the part of the Indemnified Party in notifying the Indemnifying
Party shall relieve the Indemnifying Party from any obligation hereunder unless
(and then solely to the extent) the Indemnifying Party thereby is prejudiced.
(ii) The Indemnifying Party shall have the right to
defend the Indemnified Party against the Third Party Claim with counsel of its
choice satisfactory to the Indemnified Party so long as (A) the Indemnifying
Party notifies the Indemnified Party in writing within fifteen (15) days after
the Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will indemnify the Indemnified Party from and against the
entirety of any Adverse Consequences the Indemnified Party may suffer resulting
from, arising out of, relating to, in the nature of or caused by the Third Party
Claim, (B) the Indemnifying Party provides the Indemnified Party with evidence
acceptable to the Indemnified Party that the Indemnifying Party will have the
financial resources to defend against the Third Party Claim and fulfill its
indemnification obligations hereunder, (C) the Third Party Claim involves only
money damages and does not seek an injunction or other equitable relief, (D)
settlement of, or an adverse judgment with respect to, the Third Party Claim is
not, in the good faith judgment of the Indemnified Party, likely to establish a
precedential custom or practice adverse to the continuing business interests of
the Indemnified Party and (E) the Indemnifying Party conducts the defense of the
Third Party Claim actively and diligently.
(iii) So long as the Indemnifying Party is conducting
the defense of the Third Party Claim in accordance with Section 6.2(b)(ii)
above, (A) the Indemnified Party may retain separate co-counsel at its sole cost
and expense and participate in the defense of the Third Party Claim, (B) the
Indemnified Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without the prior written
consent of the Indemnifying Party and (C) the Indemnifying Party will not
consent to the entry of any judgment or enter into any settlement with respect
to the Third Party Claim without the prior written consent of the Indemnified
Party.
(iv) In the event any of the conditions in Section
6.2(b)(ii) above is or becomes unsatisfied, (A) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any settlement
with respect to, the Third Party Claim in any manner it may deem appropriate
(and the Indemnified Party need not consult with, or obtain any consent from,
the Indemnifying Party in connection therewith), (B) the Indemnifying Party will
reimburse the Indemnified Party promptly and periodically for the costs of
defending against the Third Party Claim (including reasonable attorneys' fees
and expenses) and (C) the Indemnifying Party will remain responsible for any
Adverse Consequences the Indemnified Party may suffer resulting from, arising
out of, relating to, in the nature of or caused by the Third Party Claim to the
fullest extent provided in this Section 6.2.
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(c) INDEMNIFICATION SOLE REMEDY. Subject to Section 6.13,
the indemnification provisions in this Section 6.2 shall be the exclusive remedy
with respect to the transactions contemplated by this Agreement.
(d) LIMITATIONS. In no event shall the indemnification
obligations hereunder exceed the Purchase Price. In addition, no claim for
indemnification hereunder shall be made until the aggregate amount of all claims
exceeds twenty-five thousand dollars ($25,000), at which point the amount of
indemnification hereunder shall apply to all claims, including without
limitation, those claims below twenty-five thousand dollars ($25,000).
6.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, the rights and obligations hereunder may not be assigned or
delegated by either Party without the prior written consent of the other Party;
PROVIDED, HOWEVER, that the Investor may assign its rights and delegate its
obligations hereunder, in whole or in part (including, without limitation, the
right to purchase any or all of the Shares and the obligation to pay all or a
part of the Purchase Price), to any affiliates of the Investor; PROVIDED,
FURTHER, that any such assignee shall, as a condition to such assignment, agree
to be bound by the provisions of this Agreement. The terms and conditions of
this Agreement shall inure to the benefit of, and be binding upon, the
respective successors and assigns of the Parties (including transferees of any
Shares). Subject to applicable securities laws, the Investor may transfer any
Shares to any Person without the prior consent of the Company. Nothing in this
Agreement, express or implied, is intended to confer upon any Person other than
the Parties hereto or their respective successors and assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
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6.4 GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL
RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH
THE LAWS OF THE STATE OF
DELAWARE, WITHOUT REGARD TO THE CONFLICT OF LAW
PRINCIPLES THEREOF. The parties hereby irrevocably submit to the jurisdiction of
the courts of the State of
Delaware and the federal courts of the United States
of America located in
Delaware solely in respect of the interpretation and
enforcement of the provisions of this Agreement and of the documents referred to
in this Agreement, and in respect of the transactions contemplated hereby and
thereby, and hereby waive, and agree not to assert, as a defense in any action,
suit or proceeding for the interpretation or enforcement hereof or of any such
documents, that it is not subject thereto or that such action, suit or
proceeding may not be brought or is not maintainable in said courts or that the
venue thereof may not be appropriate or that this Agreement or any such document
may not be enforced in or by such courts, and the parties hereto irrevocably
agree that all claims with respect to such action or proceeding shall be heard
and determined in such
Delaware state or federal court located in Delaware. The
parties hereby consent to and grant any such court jurisdiction over the person
of such parties and over the subject matter of such dispute and agree that
mailing of process or other papers in connection with any such action or
proceeding in the manner provided in Section 6.6 or in such other manner as may
be permitted by law, shall be valid and sufficient service thereof.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH
PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH
PARTY MAKES THIS WAIVER VOLUNTARILY AND (IV) EACH PARTY HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 6.4.
6.5 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience of reference only and are not to be
considered in construing or interpreting this Agreement.
6.6 NOTICES. All notices, requests, demands or other
communications which are required or may be given pursuant to the terms of this
Agreement shall be in writing and shall be deemed to have been duly given (i) on
the date of delivery if personally delivered by hand, (ii) on the third (3rd)
day after such notice is deposited in the United States mail, if mailed by
registered or certified mail, postage prepaid, return receipt requested, (iii)
on the date of
- 21 -
delivery if sent by a nationally recognized overnight express courier (with
charges prepaid), (iv) by facsimile upon written confirmation (other than the
automatic confirmation that is received from the recipient's facsimile machine)
of receipt by the recipient of such notice (if a confirming copy is also sent by
another method) or (v) by any other method of communication mutually agreed to
by the parties hereto:
IF TO THE INVESTOR: Zions Bancorporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
WITH A COPY, WHICH SHALL NOT
CONSTITUTE NOTICE, TO: ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
IF TO THE COMPANY: ▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇
Telephone No.: (630) 515-0170 ext. 101
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
WITH A COPY, WHICH SHALL NOT
CONSTITUTE NOTICE, TO: ▇▇▇▇▇ ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Such addresses may be changed, from time to time, by means of a
notice given in the manner provided in this Section 6.6.
6.7 PUBLICITY. No press releases shall be issued by a Party
before the Closing without the prior review and written consent of the other
Party. Thereafter, the Parties shall consult with each other, in advance, with
regard to the terms of all proposed press releases, public announcements and
other public statements (other than information contained in any Reports
required to be filed with the SEC by either Party) with respect to the
transactions contemplated hereby and by the Investor Rights Agreement. Except as
may be required by applicable law, court process or by obligations pursuant to
any listing agreement or similar arrangement with any national securities
exchange or automated quotation system, neither Party
- 22 -
shall issue any press release, public announcement or other public statement
(except as aforesaid) with respect to the transactions contemplated hereby or by
the Investor Rights Agreement without the prior written consent of the other
Party, which consent shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing or anything else to contrary in this Agreement or
the Investor Rights Agreement, each Party (and each employee, representative or
other agent of any such Party) may disclose to any and all Persons, without
limitation of any kind, the U.S. federal income tax treatment and tax structure
of the transactions contemplated by this Agreement and all materials of any kind
(including opinions or other tax analyses) that are provided to such Party
relating to such tax treatment and tax structure; PROVIDED, HOWEVER, that the
foregoing shall in no way permit any such Party to make any disclosure in
violation of any applicable securities laws.
6.8 DELAY OR OMISSIONS. It is agreed that no delay or omission
to exercise any right, power or remedy accruing to either Party upon any breach,
default or noncompliance by the other Party under this Agreement or the Investor
Rights Agreement shall impair any such right, power or remedy, nor shall it be
construed to be a waiver of any such breach, default or noncompliance thereafter
occurring. It is further agreed that any waiver, permit, consent or approval of
any kind or character by either Party of any breach, default or noncompliance
under this Agreement or the Investor Rights Agreement or any waiver by either
Party of any provisions or conditions of this Agreement or the Investor Rights
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, under this Agreement, the
Investor Rights Agreement, by law or otherwise afforded to either Party shall be
cumulative and not alternative.
6.9 SECURITIES LAWS. Each Party acknowledges that the federal
securities laws and other laws prohibit any Person who has material, non-public
information concerning a Party, or any of their respective affiliates, from
purchasing or selling any of the securities of such Party, and from
communicating such information to any Person under circumstances in which it is
reasonably foreseeable that such Person is likely to purchase or sell such
securities.
6.10 BROKER'S FEES. Each Party represents and warrants that no
agent, broker, investment banker, Person or firm acting on behalf of or under
the authority of such Party is or will be entitled to any broker's or finder's
fee or any other commission, directly or indirectly, in connection with the
transactions contemplated herein other than, in the case of the Investor, fees
and reimbursable expenses payable to the ▇▇▇▇▇▇▇ Group, Inc. Each Party further
agrees to indemnify the other Party for any claims, losses or expenses incurred
by such other Party as a result of the representation in this Section 6.10 being
untrue.
6.11 EXPENSES. Each Party shall bear its own expenses and legal
fees in connection with the negotiation, preparation, execution, delivery and
performance of this Agreement and the Investor Rights Agreement and all of the
transactions contemplated herein and therein.
6.12 ATTORNEY'S FEES. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement or the Investor
Rights Agreement, the prevailing
- 23 -
Party shall be entitled to reasonable attorney's fees, costs and necessary
disbursements in addition to any other relief to which such Party may be
entitled.
6.13 SPECIFIC PERFORMANCE. The Investor shall be entitled to
specific enforcement of its rights under this Agreement and the Investor Rights
Agreement. The Company acknowledges that money damages would be an inadequate
remedy for its breach of this Agreement or the Investor Rights Agreement and
consents to an action for specific performance or other injunctive relief in the
event of any such breach.
6.14 TERMINATION AND EFFECT.
(a) This Agreement may be terminated at any time prior to
the Closing:
(i) by mutual consent of the Company and the
Investor;
(ii) by either the Company or the Investor if there
has been a material breach of any representation, warranty, covenant or
agreement on the part of the other set forth in this Agreement, which breach has
not been cured within five (5) Business Days following receipt by the breaching
Party of notice of such breach, or if any Order preventing the consummation of
the transactions contemplated by this Agreement or the Investor Rights Agreement
shall have become final and non-appealable; or
(iii) by either the Company or the Investor, so long
as such Party has not materially breached its obligations hereunder, if the
Closing has not occurred on or before June 1, 2004.
(b) In the event of termination of this Agreement pursuant
to Section 6.14(a), the transactions contemplated by this Agreement shall be
deemed abandoned and this Agreement shall immediately become void, without
Liability on the part of either Party hereto, except as provided in Sections
6.2, 6.3, 6.4, 6.5, 6.6, 6.8, 6.10, 6.11, 6.12, 6.16, 6.17, 6.18 and 6.19.
6.15 COVENANTS OF THE COMPANY. On or after the date hereof and
prior to the earlier of the Closing or the termination of this Agreement in
accordance with its terms, the Company (i) shall not take, or permit or cause
its Subsidiaries to take, directly or indirectly, any action or enter into any
transaction outside the ordinary course of the business of the Company or any of
its Subsidiaries, as the case may be, without the Investor's prior written
consent, (ii) shall take, and cause its Subsidiaries to take, all necessary
corporate action to comply with their respective obligations under, and satisfy
all conditions set forth in, Article IV of this Agreement and (iii) shall take,
or cause it or any of its Subsidiaries to take, all actions and do, or cause it
or any of its Subsidiaries to do, and to assist and cooperate with the Investor
in doing, all things, in each case, reasonably necessary or appropriate to
permit the consummation of all transactions and obligations contemplated by or
referred to in this Agreement and the Investor Rights Agreement.
6.16 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or
- 24 -
in a particular instance and either retroactively or prospectively), only with
the written consent of the Company and the Investor.
6.17 SEVERABILITY. In case any provision of this Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
6.18 ENTIRE AGREEMENT. This Agreement, the Exhibits and the
Schedules hereto, the Investor Rights Agreement and the documents delivered
pursuant hereto and thereto constitute the full and entire agreement between the
Parties with regard to the subject matter hereof and thereof.
6.19 COUNTERPARTS. This Agreement may be executed in two or more
counterparts (including by facsimile transmission), each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
[SIGNATURE PAGE FOLLOWS]
- 25 -
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
THE COMPANY:
▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman, President and Chief Executive
Officer
INVESTOR:
ZIONS BANCORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President of Finance
- 26 -
DEFINITIONS ADDENDUM
This Definitions Addendum is an attachment to and part of that certain
Stock Purchase Agreement, dated as of March 1, 2004 (the "
STOCK PURCHASE
AGREEMENT"), between ▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. and Zions Bancorporation. Except as
otherwise stated in the
Stock Purchase Agreement, the following terms shall have
the following meanings:
"ADVERSE CONSEQUENCES" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, writs,
judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs,
amounts paid in settlement, Liabilities, obligations, Taxes, Liens, losses,
expenses and fees, including court costs and reasonable attorneys' fees and
expenses, including indirect, consequential and punitive damages.
"BUSINESS DAY" means any day other than (i) a Saturday, Sunday or legal
holiday or (ii) a day on which commercial banks in the State of California, New
York or Utah are authorized or required by law or executive order to close.
"CLOSING DATE" means the date of the Closing.
"CONTRACT" or "CONTRACTS" means any mortgage, indenture, security
agreement, evidence of Indebtedness, lease, license, agreement, understanding,
instrument, undertaking or other contract.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States applied on a consistent basis throughout the
period involved.
"GOVERNMENTAL ENTITY" means any governmental or regulatory authority,
agency, commission, body, corporation, court, tribunal or other governmental
entity or authority of any kind or nature.
"INDEBTEDNESS" of any Person means all obligations of such Person (i) for
borrowed money, (ii) evidenced by notes, bonds, debentures or similar
instruments, (iii) for the deferred purchase price of goods or services (other
than trade payables or accruals incurred in the ordinary course of business),
(iv) under capital leases and (v) in the nature of guarantees of the obligations
described in clauses (i) through (iv) above of any other Person.
"KNOWLEDGE" an individual will be deemed to have "knowledge" of a
particular fact or other matter if (i) such individual is actually aware of such
fact or other matter or (ii) a prudent individual could reasonably be expected
to discover or otherwise become aware of such fact or other matter. A Person
(other than an individual) will be deemed to have "knowledge" of a particular
fact or other matter if any individual who is serving, or who has at any time
served, as a director, officer or employee of such Person (or in any similar
capacity) has, or at any time had, knowledge of such fact or other matter.
"LIABILITY" or "LIABILITIES" means any liability (whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated and whether due or to become
due), including any liability for Taxes.
"LIEN" or "LIENS" means, with respect to any Person, any security interest,
claim, pledge, mortgage, charge, option, assignment, hypothecation, encumbrance,
attachment, garnishment, sequestration, forfeiture, execution or other voluntary
or involuntary lien upon or affecting the revenues of such Person or any real or
personal property in which such Person has or hereafter acquires any interest.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon the
condition (financial or otherwise), business, properties, assets, results of
operations or prospects of the Company and its Subsidiaries, taken as a whole,
or upon the validity or enforceability of this Agreement, the Investor Rights
Agreement or the Shares, or upon the ability of the Company to perform its
obligations hereunder or under the Investor Rights Agreement, or upon the rights
of the Investor hereunder or thereunder.
"PERSON" means any individual, corporation (including not-for-profit),
general or limited partnership, limited liability company, joint venture,
estate, trust, business trust, association, organization, Governmental Entity or
other entity of any kind or nature.
"SEC" means the Securities and Exchange Commission or any successor agency.
"SUBSIDIARY" means, with respect to any Person, any entity, whether
incorporated or unincorporated, of which at least a majority of the securities
or ownership interests having by their terms ordinary voting power to elect a
majority of the board of directors or other Persons performing similar functions
is directly or indirectly owned or controlled by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries.
"TAX" and "TAXES" means all federal, state, local and foreign taxes,
charges, fees, customs, duties, levies or other assessments, however
denominated, including, without limitation, all net income, gross income,
profits, gains, gross receipts, sales, use, value added, goods and services,
capital, production, transfer, franchise, windfall profits, license,
withholding, payroll, employment, disability, employer health, excise,
estimated, severance, stamp, occupation, property, environmental, unemployment,
capital stock or any other taxes, charges, fees, customs, duties, levies or
other assessments of any nature whatsoever, together with all interest,
penalties and additions imposed with respect to such amounts and any interest in
respect of such penalties and additions.
"TAX RETURNS" means any return, amended return or other report (including
elections, declarations, forms, disclosures, schedules, estimates and
information returns) required to be filed with any taxing authority with respect
to any Taxes including, without limitation, any documentation required to be
filed with any taxing authority or to be retained in respect of information
reporting requirements imposed by the Code or any similar foreign, state or
local law.
- 2 -
EXHIBIT A
FORM OF COMMON STOCK CERTIFICATE
A-1
EXHIBIT B
FORM OF INVESTOR RIGHTS AGREEMENT
B-1
EXHIBIT C
IDENTIFIED STOCKHOLDERS
Percent of Common Stock
Number of shares of Common beneficially owned on a Fully
Stock beneficially owned Diluted Basis
------------------------- -------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 2,356,445 28.87%
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 720,500 8.83%
C-1
EXHIBIT D
OPINION OF ▇▇▇▇▇ ▇▇▇▇▇▇ LLP, SPECIAL COUNSEL TO THE COMPANY
D-1
EXHIBIT E
OPINION OF ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, GENERAL COUNSEL TO THE
COMPANY
E-1