STOCK PURCHASE AGREEMENT
by and among
CALDERA, Inc.,
a Delaware Corporation
▇▇▇▇ ▇. ▇▇▇▇▇▇
F. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
DATED AS OF JULY 7, 1998
TABLE OF CONTENTS
ARTICLE I.
DEFINITIONS
1.01 Definitions . . . . . . . . . . . . . . . . . . . 1
ARTICLE II.
BASIC TRANSACTION
2.01 Purchase and Sale of IFHC Shares . . . . . . . . . 4
ARTICLE III.
CLOSING AND CLOSING DATE
3.01 Closing . . . . . . . . . . . . . . . . . . . . . . 4
3.02 Closing Date . . . . . . . . . . . . . . . . . . . 4
3.03 Deliveries at the Closing . . . . . . . . . . . . . 4
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
4.01 Due Organization; Foreign Qualification . . . . . . 5
4.02 Due Authorization; Enforceability . . . . . . . . . 5
4.03 Non-Contravention; Consents and Approvals . . . . . 6
4.04 Capitalization; Rights, Warrants, Options . . . . . 6
4.05 Financial Statements; Undisclosed Liabilities;
Other Documents . . . . . . . . . . . . . . . . . . 7
4.06 No Material Adverse Effects or Changes . . . . . . 8
4.07 Title . . . . . . . . . . . . . . . . . . . . . . . 8
4.08 Intellectual Property . . . . . . . . . . . . . . . 9
4.09 Insurance Compliance . . . . . . . . . . . . . . . 9
4.10 Rating . . . . . . . . . . . . . . . . . . . . . . 10
4.11 Employment Matters . . . . . . . . . . . . . . . . 11
4.12 Tax Returns and Audits . . . . . . . . . . . . . . 11
4.13 Litigation . . . . . . . . . . . . . . . . . . . . 11
4.14 Compliance with Applicable Laws . . . . . . . . . . 11
4.15 Contracts; No Defaults. . . . . . . . . . . . . . . 12
4.16 Fees of Brokers, Finders and Financial Advisors . . 12
4.17 Books and Records . . . . . . . . . . . . . . . . . 12
4.18 Related Party Transactions . . . . . . . . . . . . 12
4.19 Due Diligence. . . . . . . . . . . . . . . . . . . 13
4.20 Investment . . . . . . . . . . . . . . . . . . . . 13
4.21 General Representation and Warranty . . . . . . . . 13
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF CALDERA
5.01 Due Organization; Foreign Qualification . . . . . . 13
5.02 Due Authorization; Enforceability . . . . . . . . . 14
5.03 Non-Contravention; Consents and Approvals . . . . . 14
5.04 Capitalization . . . . . . . . . . . . . . . . . . 15
5.05 Financial Statements . . . . . . . . . . . . . . . 15
5.06 Commission Filings . . . . . . . . . . . . . . . . 16
5.07 No Material Adverse Effects or Changes . . . . . . 16
5.08 Tax Returns and Audits . . . . . . . . . . . . . . 16
5.09 Litigation . . . . . . . . . . . . . . . . . . . . 16
5.10 Compliance with Applicable Laws . . . . . . . . . 17
5.11 Fees of Brokers, Finders and Investment Bankers . 17
5.12 General Representation of Warranty . . . . . . . . 17
ARTICLE VI.
COVENANTS
6.01 Implementing Agreement . . . . . . . . . . . . . . 17
6.02 Access to Information and Facilities . . . . . . . 17
6.03 Confidentiality . . . . . . . . . . . . . . . . . . 17
6.04 Preservation of Business . . . . . . . . . . . . . 18
6.05 Consents and Approvals . . . . . . . . . . . . . . 19
6.06 Caldera Stockholder Approval . . . . . . . . . . . 19
6.07 Publicity . . . . . . . . . . . . . . . . . . . . . 19
6.08 Fees and Expenses . . . . . . . . . . . . . . . . . 20
6.09 Periodic Reports . . . . . . . . . . . . . . . . . 20
ARTICLE VII.
CONDITIONS PRECEDENT TO THE CONSUMMATION OF THE MERGER
7.01 Actions or Proceedings . . . . . . . . . . . . . . 20
7.02 Approval of Merger . . . . . . . . . . . . . . . . 20
ARTICLE VIII.
CONDITIONS PRECEDENT TO OBLIGATIONS OF CALDERA
8.01 Warranties True as of Closing Date . . . . . . . . 20
8.02 Compliance With Agreements and Covenants . . . . . 21
8.03 Sellers' Certificate . . . . . . . . . . . . . . . 21
8.04 Consents and Approvals . . . . . . . . . . . . . . 21
8.05 Good Standing Certificates . . . . . . . . . . . . 21
8.06 Other Closing Documents . . . . . . . . . . . . . . 21
ARTICLE IX.
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLERS
9.01 Warranties True as of Closing Date . . . . . . . . 21
9.02 Compliance with Agreements and Covenants . . . . . 21
9.03 Caldera Certificate . . . . . . . . . . . . . . . . 22
9.04 Secretary's Certificate . . . . . . . . . . . . . . 22
9.05 Good Standing Certificate . . . . . . . . . . . . . 22
9.06 Consents and Approvals . . . . . . . . . . . . . . 22
9.07 Other Closing Documents. . . . . . . . . . . . . . 22
ARTICLE X.
TERMINATION
10.01 Termination . . . . . . . . . . . . . . . . . . . 22
10.02 Effect of Termination and Abandonment . . . . . . 23
ARTICLE XI.
MISCELLANEOUS
11.01 Amendment . . . . . . . . . . . . . . . . . . . . 23
11.02 No Survival of Representations, Warranties, Covenants
and Agreements . . . . . . . . . . . . . . . . . . 23
11.03 Notices . . . . . . . . . . . . . . . . . . . . . 23
11.04 Waivers . . . . . . . . . . . . . . . . . . . . . 24
11.05 Interpretation . . . . . . . . . . . . . . . . . . 24
11.06 Applicable Law . . . . . . . . . . . . . . . . . . 24
11.07 Assignment . . . . . . . . . . . . . . . . . . . . 24
11.08 No Third Party Beneficiaries . . . . . . . . . . . 25
11.09 Enforcement of the Agreement. . . . . . . . . . . 25
11.10 Further Assurances . . . . . . . . . . . . . . . . 25
11.11 Severability . . . . . . . . . . . . . . . . . . . 25
11.12 Remedies Cumulative . . . . . . . . . . . . . . . 25
11.13 Entire Understanding . . . . . . . . . . . . . . . 25
11.14 Waiver of Jury Trial . . . . . . . . . . . . . . . 25
11.15 Counterparts . . . . . . . . . . . . . . . . . . . 25
LIST OF SCHEDULES
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Number Description
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4.01 Due Organization; Foreign Qualification
4.03 Non-Contravention; Consents and Approvals
4.04 IFHC Options, Warrants, Rights, Convertible
Securities
4.06 No Material Adverse Effects or Changes
4.07 Real Property Leases
4.08 Intellectual Property
4.09 Insurance
4.11 Employment Matters
4.13 Litigation
4.14 Compliance with Applicable Laws
4.15 Contracts; No Defaults
4.17 Books and Records
4.18 Related Party Transactions
5.07 Caldera Contracts
STOCK PURCHASE AGREEMENT
AGREEMENT, dated as of July 7, 1998, by and
among CALDERA, INC., a Delaware corporation ("Caldera"), ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇"), F. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇") and ▇▇▇▇ ▇.
▇▇▇▇▇▇ ("▇▇▇▇▇▇") (▇▇▇▇▇, ▇▇▇▇▇▇ and ▇▇▇▇▇▇ collectively, the
"Sellers" and sometimes individually a "Seller").
W I T N E S E T H :
WHEREAS, the Sellers own all of the issued and
outstanding capital stock of International Fidelity Holding
Corp., a Texas corporation ("IFHC");
WHEREAS, the Sellers desire to sell their
shares of IFHC capital stock (the "IFHC Shares") to Caldera, and
Caldera desires to purchase their IFHC Shares, in exchange for
shares of Caldera Common Stock, subject to a recapitalization of
Caldera as provided for herein, all pursuant to approval by the
stockholders of Caldera;
NOW, THEREFORE, in consideration of the mutual
covenants and agreements hereinafter contained, the parties
hereto, intending to be legally bound hereby, agree as follows:
ARTICLE I.
DEFINITIONS
1.01 Definitions. For purposes of this
-----------
Agreement, the following terms shall have the meanings set forth
in this Section 1.01:
"Actuarial Analyses" has the meaning set forth
in Section 4.09(d) hereof.
"Agreement" means this Stock Purchase
Agreement, as the same may be amended from time to time in
accordance with the terms hereof.
"Caldera" has the meaning set forth in the
caption to this Agreement.
"Caldera Common Stock" has the meaning set
forth in Section 2.01 hereof.
"Caldera Material Adverse Effect" means an
effect on or circumstance involving the business, operations,
assets, liabilities, results of operations, cash flows or
condition (financial or otherwise) of Caldera which is materially
adverse to Caldera.
"Caldera Shares" has the meaning set forth in
Section 2.01 hereof.
"Caldera Stockholders Meeting" has the meaning
set forth in Section 6.06 hereof.
"▇▇▇▇▇" has the meaning set forth in the
caption to this Agreement.
"Closing" has the meaning set forth in Section
3.01 hereof.
"Closing Date" has the meaning set forth in
Section 3.02 hereof.
"Code" means the Internal Revenue Code of 1986,
as amended.
"Commission" means the U.S. Securities and
Exchange Commission.
"Companies Permits" has the meaning set forth
in Section 4.14 hereof.
"Companies" means IFHC and ISCC collectively.
"Contract" means any written or oral agreement,
deed, contract, license, guaranty or other understanding of any
nature to which an Entity is a party or by which its properties
or assets are bound.
"Entity" means any corporation, general
partnership, limited partnership, limited liability company,
trust company, joint venture or other enterprise or association.
"ERISA" means the Employee Retirement Security
Act of 1974, as amended.
"Exchange Act" means the Securities Exchange
Act of 1934, as amended.
"GAAP" means United States generally accepted
accounting principles as in effect on the date of this Agreement.
"Governmental Authority" means any government
or any agency, bureau, board, commission, court, department,
political subdivision, tribunal or other instrumentality of any
government, whether federal, state or local, domestic or foreign.
"IFHC" has the meaning set forth in the first
preamble to this Agreement.
"IFHC Financial Statements" has the meaning set
forth in Section 4.05(a) hereof.
"IFHC Interim Financials" has the meaning set
forth in Section 4.05(b) hereof.
"IFHC Material Adverse Effect" means an effect
on or circumstance involving the business, operations, assets,
liabilities, results of operations, cash flows or condition
(financial or otherwise) of IFHC or ISCC which is materially
adverse to IFHC taken as a whole.
"IFHC Shares" has the meaning set forth in the
second preamble to this Agreement.
"Intellectual Property" has the meaning set
forth in Section 4.08 hereof.
"ISCC" has the meaning set forth in Section
4.01 hereof.
"ISCC Shares" has the meaning set forth in
Section 4.04 hereof.
"Law" means any constitutional provision,
statute, law, rule, regulation, decree, injunction, judgment,
order or ruling of any Governmental Authority.
"Loss" means liabilities, losses, costs,
claims, damages (including consequential damages), penalties and
expenses (including attorneys' fees and expenses and costs of
investigation and litigation).
"▇▇▇▇▇▇" has the meaning set forth in the
caption to this Agreement.
"Reinsurance Agreements" has the meaning set
forth in Section 4.09(b) hereof.
"Reverse Stock Split" has the meaning set forth
in Section 6.06 hereof.
"SAP" has the meaning set forth in Section
4.09(a) hereof.
"SAP Statements" has the meaning set forth in
Section 4.09(a) hereof.
"Securities Act" means the Securities Act of
1933, as amended.
"SEC Documents" means the Caldera Form 10-KSB
for the fiscal year ended December 31, 1997 and Form 10-QSB for
the fiscal quarter ended March 31, 1998.
"Seller" or "Sellers" has the meaning set forth
in the caption to this Agreement.
"Sparks" has the meaning set forth in the
caption to this Agreement.
"Taxes" means all taxes, assessments and
governmental charges imposed by any federal, state, local or
foreign government, taxing authority, subdivision or agency
thereof, including, but not limited to, any withholding, payroll,
employment, custom, duty, sales, any other governmental fee or
assessment, and penalties, in addition to any liability to a
third party for such amounts.
ARTICLE II.
BASIC TRANSACTION
2.01 Purchase and Sale of IFHC Shares. On
--------------------------------
the terms and subject to the conditions set forth in this
Agreement, at the Closing, Caldera shall purchase from the
Sellers, and the Sellers shall sell, transfer, assign, convey and
deliver to Caldera, all right, title and interest in the IFHC
Shares in exchange for 19,777,000 shares of Common Stock, $.01
par value (the "Caldera Common Stock") of Caldera, after the
Reverse Stock Split in accordance with Section 6.06 hereof (the
"Caldera Shares").
ARTICLE III.
CLOSING AND CLOSING DATE
3.01 Closing. Subject to the provisions of
-------
ARTICLE X hereof, the consummation of the transactions
contemplated by this Agreement (the "Closing") will take place at
-------
the office of International Fidelity Holding Corp., at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ at 10:00 a.m. local time on the first
business day after the satisfaction or waiver of all of the
closing conditions set forth in Sections 7 and 8 hereof or at
such other place or on such other date as Caldera and the Sellers
may agree.
3.02 Closing Date. The date on which the
------------
Closing actually takes place is referred to in this Agreement as
the "Closing Date."
------------
3.03 Deliveries at the Closing. At the
-------------------------
Closing, (a) the Sellers will deliver to Caldera the various
certificates, instruments and document referred to in ARTICLE
VIII hereof, (b) Caldera will deliver to the Sellers the various
certificates, instruments and documents referred to in ARTICLE IX
hereof, 3.04 the Sellers will deliver to Caldera stock
certificates representing the IFHC Shares, endorsed in blank or
accompanied by duly executed assignment documents, and 3.05
Caldera will deliver to the Sellers stock certificates
representing the Caldera Shares in the amounts as set forth on
Schedule 4.04 annexed hereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers hereby represent and warrant to
Caldera as follows (with all representations and warranties being
joint and several, except those in Sections 4.02, 4.03, 4.19 and
4.20 shall just be several):
4.01 Due Organization; Foreign Qualification.
---------------------------------------
IFHC and its wholly-owed subsidiary International Surety &
Casualty Corporation, a Texas corporation ("ISCC"), each is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Texas, with all requisite
corporate power and authority to own, lease and operate its
respective properties and to carry on its respective business as
they are now being owned, leased, operated and conducted. IFHC
and ISCC each is qualified to do business and is in good standing
as a foreign corporation in every jurisdiction where the nature
of the properties owned, leased or operated by it and the
business transacted by it require such qualification. The
jurisdictions in which IFHC and ISCC are qualified to do business
are set forth on Schedule 4.01. IFHC has no direct or indirect
-------------
subsidiaries, either wholly or partially owned, other than ISCC,
and ISCC has no direct or indirect subsidiaries, either wholly or
partially owned. Neither IFHC nor ISCC holds any voting or
management interest in any Entity other than IFHC's interest in
ISCC.
4.02 Due Authorization; Enforceability. Each
---------------------------------
of the Sellers has full power and capacity to enter into this
Agreement and to consummate the transactions contemplated hereby,
and has duly and validly executed and delivered this Agreement.
This Agreement constitutes the legal, valid and binding
obligation of each Seller, enforceable in accordance with its
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent transfer, moratorium,
reorganization or other laws from time to time in effect which
affect creditors' rights generally and by general principles of
equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
4.03 Non-Contravention; Consents and
-------------------------------
Approvals. (a) Except to the extent set forth on Schedule 4.03,
--------- -------------
the execution and delivery of this Agreement by the Sellers does
not, and the performance by the Sellers of their respective
obligations hereunder and the consummation of the transactions
contemplated hereby will not, conflict with, result in a
violation or breach of, constitute (with or without notice or
lapse of time or both) a default under, result in or give to any
person any right of payment or reimbursement, termination,
cancellation, modification or acceleration of, or result in the
creation or imposition of any lien upon any of the assets or
properties of any of the Sellers, IFHC or ISCC under any of the
terms, conditions or provisions of (i) the Certificate of
Incorporation or By-Laws of IFHC and ISCC, or (ii) (x) any Law of
any Governmental Authority applicable to the Sellers, IFHC or
ISCC or any of their respective assets or properties (including
the IFHC shares), or (y) any contract, agreement or commitment to
which the Sellers, IFHC or ISCC or by which the Sellers, IFHC or
ISCC or any of their respective assets or properties are bound is
a party, excluding from the foregoing clauses (x) and (y)
conflicts, violations, breaches, defaults, terminations,
modifications, accelerations and creations and impositions of
liens which would not have an IFHC Material Adverse Effect or
result in the inability of the Sellers to consummate the
transactions contemplated by this Agreement.
(b) Except for the consent of the Commissioner
of Insurance of the State of Texas, no consent, approval, order
or authorization of, or registration, declaration or filing with
any Governmental Entity is required by the Sellers, IFHC or ISCC
in connection with the execution and delivery of this Agreement
or the consummation by the Sellers of the transactions
contemplated hereby.
4.04 Capitalization; Rights, Warrants,
---------------------------------
Options. (a) The authorized capital stock of IFHC consists of
-------
1,000,000 shares of Common Stock and no shares of Preferred
Stock. On the date hereof, there are issued and outstanding
153,000 shares of ISCC Common Stock and [no shares of Preferred
Stock]. All of the issued and outstanding IFHC Shares are
validly issued, fully paid and nonassessable and the issuance
thereof was not subject to preemptive rights. Schedule 4.04 is a
-------------
true and complete list of each ISCC shareholder, which indicates
as of the date hereof, the number of shares of IFHC Common Stock
held by each such IFHC shareholder.
(b) There are no shares of IFHC Common Stock
or other equity securities (whether or not such securities have
voting rights) of IFHC issued or outstanding or any
subscriptions, options, warrants, calls, rights, convertible
securities or other agreements or commitments of any character
obligating IFHC to issue, transfer or sell any shares of capital
stock or other securities (whether or not such securities have
voting rights) of IFHC. There are no outstanding contractual
obligations of IFHC which relate to the purchase, sale, issuance,
repurchase, redemption, acquisition, transfer, disposition,
holding or voting of any shares of capital stock or other
securities of ISCC.
(c) The authorized capital stock of ISCC
consists of 2,000,000 shares of Common Stock, $1.00 par value, of
which 1,000,000 shares (the "ISCC Shares") are issued and
outstanding, and owned of record and beneficially by IFHC. There
are no shares of ISCC Common Stock or other equity securities
(whether or not such securities have voting rights) of ISCC
issued or outstanding or any subscriptions, options, warrants,
calls, rights, convertible securities or other agreements or
commitments of any character obligating ISCC to issue, transfer
or sell any shares of capital stock or other securities (whether
or not such securities have voting rights) of ISCC. There are no
outstanding contractual obligations of ISCC which relate to the
purchase, sale, issuance, repurchase, redemption, acquisition,
transfer, disposition, holding or voting of any shares of capital
stock or other securities of ISCC.
4.05 Financial Statements; Undisclosed
---------------------------------
Liabilities; Other Documents. (a) For purposes of this
----------------------------
Agreement, "IFHC Financial Statements" shall mean the audited
consolidated financial statements of IFHC for the years ended
December 31, 1997 and 1996 (the "Audited IFHC Financial
Statements") and unaudited consolidated financial statements of
IFHC for the quarters ended March 31, 1998 and 1997 (the
"Unaudited IFHC Financial Statements") (including all notes
thereto), consisting of the balance sheets at such dates and the
related statements of income, shareholders' equity and cash flows
for the periods then ended. The IFHC Financial Statements have
been prepared in accordance with generally accepted accounting
principles consistently applied (except as may be indicated
therein or in the notes thereto) and present fairly the financial
position of the Companies as at the dates thereof and the results
of operations and cash flows of the Companies for the period
covered thereby (subject, in case of the Unaudited IFHC Financial
Statements, to normal, recurring year-end audit adjustments), and
are substantially in accordance with the financial books and
records of IFHC and ISCC.
(b) Neither IFHC nor ISCC has any
liabilities or obligations of any nature, whether accrued,
absolute, contingent, determined, determinable or otherwise,
which individually or in the aggregate, nor any existing
condition, situation or set of circumstances which, could be
reasonably expected to have an IFHC Material Adverse Effect
except (i) as set forth on or reflected in the IFHC Financial
Statements as of and for the period ended March 31, 1998 (the
"IFHC Interim Financials"), (ii) liabilities and obligations
incurred by the Companies since March 31, 1998 in the ordinary
and usual course of their business, or (iii) in accordance with
day to day surety and insurance lawsuits pertaining to claims.
4.06 No Material Adverse Effects or Changes.
--------------------------------------
Except as contemplated by this Agreement, since March 31, 1998,
neither IFHC nor ISCC has suffered any damage, destruction or
Loss to any of its respective assets or properties (whether or
not covered by insurance) which is having or could reasonably be
expected to have an IFHC Material Adverse Effect. Except as
disclosed in the Interim Financials or on Schedule 4.06 since
-------------
March 31, 1998, IFHC has not nor has permitted or caused ISCC to
have:
(a) declared, set aside or paid any dividend
or other distribution in respect of its capital stock;
(b) made any direct or indirect redemption,
purchase or other acquisition of any shares of its capital stock
or made any payment to any of its shareholders (in their capacity
as shareholders);
(c) made any amendment to any material term
of any of its outstanding securities;
(d) issued or sold any shares of its capital
stock or any options, warrants or other rights to purchase any
such shares or any securities convertible into or exchangeable
for such shares or taken any action to reclassify or recapitalize
or split up its capital stock;
(e) incurred any debt, guaranteed any
indebtedness or forgiven any material or guaranteed any
indebtedness, or mortgaged, pledged or subjected to any lien,
lease, security interest, encumbrance or other restriction, any
of its material properties or assets except in the ordinary and
usual course of its business and consistent with past practice;
(f) had any change in any method of
accounting or accounting practice, except for any such change
required by reason of a concurrent change in GAAP; or
(g) made any arrangement, agreement or
undertaking to do any of the foregoing.
4.07 Title.
-----
(a) Personal Property. Except for
-----------------
properties and assets which have been sold or otherwise disposed
of in the ordinary course of business since March 31, 1998, ISCC
has good, valid, marketable, legal and beneficial title to all of
the properties and assets reflected in the Interim Financials,
free and clear of all liens, security interests, mortgages,
pledges, restrictions, or other encumbrances of any nature
whatsoever, whether absolute, legal, equitable, accrued,
contingent or otherwise. There are no outstanding options,
warrants, commitments, agreements or any other rights of any
character, entitling any person or entity to acquire any interest
in all, or any part of such properties and assets.
(b) Real Property Leases. Schedule 4.07
-------------------- -------------
sets forth a complete and correct list of all real property
leases to which IFHC or ISCC is a party, whether as lessor or
lessee. All leases listed on such Schedule are valid and
subsisting and in full force and effect, and all rent and other
payments now due have been paid. IFHC or ISCC enjoys and is in
peaceful and undisturbed possession under each lease so listed in
which it is a lessee. Neither of the Companies has received any
notice of, and to the knowledge of the Sellers, there does not
exist, any event of default or event, occurrence or act which,
with the giving of notice or the lapse of time or both, would
become a default under any such lease and, neither of the
Companies has violated any of the terms or conditions under any
such lease in any material respect.
4.08 Intellectual Property. Schedule 4.08
--------------------- -------------
sets forth a complete and correct list of all of the trademarks,
tradenames, service marks, and patents, material to the Companies
(including any registrations of or pending applications for any
of the foregoing) ("Intellectual Property") used by the Companies
in the conduct of their business. All of such Intellectual
Property is owned by the Companies free and clear of all liens,
and is not subject to any license, royalty or other agreement.
None of such Intellectual Property has been or is the subject of
any pending or, to the Sellers' knowledge, threatened litigation
or claim of infringement. No license or royalty agreement to
which either of the Companies is a party is in breach or default
by any party thereto except where such breach or default would
not have an IFHC Material Adverse Effect or is the subject of any
notice of termination given or, to the Sellers' knowledge,
threatened.
4.09 Insurance Compliance. (a) The annual
--------------------
statutory financial statements of ISCC for the years ended
December 31, 1997 and 1996 and the quarterly statutory financial
statements of ISCC for the three month period ended March 31,
1998 (the "SAP Statements"), have been furnished to Caldera. The
SAP Statements have been timely filed with all insurance
regulatory authorities required under applicable insurance laws,
rules and regulations. Each such SAP Statement was in compliance
in all material respects with applicable insurance laws, rules
and regulations when filed, was prepared in all material respects
in accordance with statutory accounting practices prescribed or
permitted by the Texas Insurance Commission ("SAP"), applied on a
consistent basis throughout the specified period and in the
immediately prior comparable period, except as noted therein, and
each presents fairly in all material respects the admitted and
non-admitted assets, liabilities and surplus and results of
operations of ISCC at the respective dates and for the respective
periods covered thereby, in conformity with SAP.
(b) The Sellers have no reason to believe
that any material amount recoverable pursuant to any material
reinsurance, coinsurance, excess insurance, ceding of insurance,
assumption of insurance or indemnification with respect to
insurance or similar material arrangements applicable to ISCC or
its properties or assets (collectively, "Reinsurance Agreements")
is not fully collectible in due course. ISCC is entitled to take
full credit in its SAP Statements pursuant to applicable
insurance laws, rules and regulations for such reinsurance,
coinsurance or excess insurance ceded pursuant to any such
Reinsurance Agreement.
(c) Each material reserve and other material
liability of ISCC reflected in, or included with, the SAP
Statements was determined in accordance with generally accepted
actuarial standards consistently applied throughout the specified
period and the immediately preceding period, was based on actual
assumptions that were in accordance with or more conservative
than those called for in relevant policy and contract provisions,
is fairly stated in accordance with sound actuarial principles
and is in compliance with the requirements of applicable
insurance laws, rules and regulations. Except as may be affected
by deviations from investment assumptions, such reserves and
liabilities were adequate in the aggregate to cover the total
amount of all reasonably anticipated liabilities of ISCC under
all outstanding insurance policies, funding agreements,
Reinsurance Agreements and annuity, coinsurance and other similar
arrangements as of the respective dates of such SAP Statements.
Such investment assumptions were reasonable as of such respective
dates. The admitted assets of ISCC as determined under
applicable insurance laws, rules and regulations are in an amount
at least equal to the sum of all such reserves and liabilities
and the minimum statutory capital and surplus as required by such
laws, rules and regulations.
(d) The Sellers have delivered to Caldera a
true and complete copy of any actuarial reports prepared by
independent actuaries with respect to ISCC in the last 12 months,
and all attachments, addenda, supplements and modifications
thereto (the "Actuarial Analyses"). To the knowledge of the
Sellers, the policy information and experience data furnished by
ISCC to its independent actuaries in connection with the
preparation of the Actuarial Analyses were accurate in all
material respects, except insofar as any inaccuracy shall not
have materially affected the accuracy of the Actuarial Analyses.
4.10 Rating. ISCC has a not received any
------
rating, review or accreditation from any recognized rating
institution, service or agency which rates or accredits insurance
companies.
4.11 Employment Matters. Schedule 4.11 sets
------------------ -------------
forth a complete and correct list of all full-time and part-time
employees of the Companies, including the position, salary, date
of hire and any arrangements with such employees, written or
oral. Except to the extent set forth on Schedule 4.11, neither
-------------
of the Companies maintains any employee benefit plan of any kind
for any of its directors, officers, consultants, employees or
former employees, whether or not such plan subject to ERISA.
4.12 Tax Returns and Audits. Each of the
----------------------
Companies has duly filed all federal, state, local and foreign
tax returns, reports and forms required to be filed by it, and
has duly paid (except for Taxes being contested in good faith) or
made adequate provisions of its books in accordance with GAAP for
the payment of all Taxes which have been incurred or are due and
payable, and it will on or before the Closing make adequate
provision on its books in accordance with GAAP for all Taxes
payable for any period through the Closing Date for which no
return is required to be filed prior to the Closing Date. The
federal and state income tax returns of the Companies have never
been examined by the Internal Revenue Service or state taxing
authority, respectively, nor has either of the Companies granted
or given any extensions or waivers of the statute of limitations
with respect to any such federal and state income tax returns.
The Sellers are not aware of any basis for the assertion of any
deficiency against either of the Companies for Taxes, which, if
adversely determined, would have an IFHC Material Adverse Effect.
4.13 Litigation. Except as set forth on
----------
Schedule 4.13, there are no actions, suits, arbitrations,
-------------
regulatory proceedings or other litigation, proceedings or
governmental investigations pending or, to the Sellers'
knowledge, threatened against or affecting either of the
Companies any of its respective officers or directors in their
capacity as such, or any of its respective property or business.
Neither of the Companies is subject to any order, judgment,
decree, injunction, stipulation or consent order of or with any
court or other Governmental Authority, other than orders of
general applicability.
4.14 Compliance with Applicable Laws.
-------------------------------
(a) Schedule 4.14 sets forth a complete and
-------------
correct list of all permits, licenses, variances, exemptions,
orders and approvals of all Governmental Authorities which either
of the Companies holds which are required in the operation of its
business (the "Companies Permits"). The Companies are in
compliance with the terms of the Companies Permits, except where
the failure so to comply would not have an IFHC Material Adverse
Effect. To the knowledge of the Sellers, neither of the
Companies is in violation of any law, ordinance or regulation of
any Governmental Authority, including insurance and labor laws
and regulations, except for possible violations (excluding
violations under the relevant insurance laws) which individually
and in the aggregate do not, and, insofar as reasonably can be
foreseen the Sellers, will not in the future have an IFHC
Material Adverse Effect. Each of the Companies has conducted and
now is conducting its business and operation in compliance with
all applicable domestic and foreign laws, rules, regulations,
judgments and court or administrative orders, permits and
approvals (including, without limitation, state insurance
departments).
4.15 Contracts; No Defaults. Schedule 4.15
---------------------- -------------
sets forth a complete and correct list of all Contracts to which
either of the Companies is a party or by which it or any of its
assets or properties is bound and which provide for payment(s) or
services of not less than $25,000. Neither of the Companies nor,
to the knowledge of the Sellers, any other party thereto is in
breach or violation of, or in default in the performance or
observance of any term or provision of, and no event has occurred
or by reason of the transactions contemplated herein, would occur
which, with notice or lapse of time or both, could be reasonably
expected to result in a default under, any Contract to which
either of the Companies is a party or by which it or any of its
assets or properties is bound. Neither of the Companies is
required to give any notice to any party subject to any of the
Contracts regarding this Agreement or the transactions
contemplated hereby.
4.16 Fees of Brokers, Finders and Financial
--------------------------------------
Advisors. Neither the Sellers nor either of the Companies has
--------
employed any broker, finder or investment banker or incurred any
liability for any brokerage or investment banking fees,
commissions or finders' fees in connection with the transactions
contemplated by this Agreement.
4.17 Books and Records. Each of the
-----------------
Companies has maintained and preserved complete and accurate
books and records for its material transactions. The minute
books of the Companies include complete and correct minutes of
all meetings of its directors, committees and shareholders. The
IFHC and ISCC Certificates of Incorporation and By-laws
previously delivered to Caldera are current and complete. At the
Closing Date, all of those books and records will be in the
possession of IFHC. Schedule 4.17 sets forth a complete and
-------------
correct list of (i) all officers and directors of ISCC and (ii)
the name and address of each bank, trust company or other
financial institution in which IFHC or ISCC has an account and
the names of all persons authorized to draw thereon as well as
all powers of attorney granted by IFHC or ISCC.
4.18 Related Party Transactions. Schedule
-------------------------- --------
4.18 sets forth a complete and correct list of all transactions,
----
loans, claims, or agreements between or involving either of the
Companies and an officer, director, employee, consultant or
stockholder of either of the Companies (or an affiliate of any
such Person) since January 1, 1997 (excluding employment
agreements included on another Schedule to this Agreement and
benefits given to all employees of the Companies). All
transactions and agreements listed on Schedule 4.18 were on terms
-------------
to the Companies no less favorable than what they would have had
with unrelated third parties.
4.19 Due Diligence. Each of the Sellers has
-------------
undertaken all due diligence of Caldera regarding the business
and corporate affairs of Caldera which he or she believes is
appropriate for this transaction, including review of the Caldera
SEC Filings. In evaluating the suitability of the transaction
contemplated by this Agreement, the Sellers have not relied upon
any representations or other information (whether verbal or
written), other than as contained in this Agreement or in any
documents or written responses to questions furnished to the
Sellers by Caldera.
4.20 Investment. Each Seller is acquiring
----------
his or her portion of the Caldera Shares for his or her own
account, and not with a view to distribution thereof. Each
Seller is aware that the Caldera Shares will not be registered
under the Securities Act, is an "accredited investor," as such
term is defined in Regulation D of the Securities Act and aware
of the restrictions under the Securities Act of the sale or other
transfer of the Caldera Shares.
4.21 General Representation and Warranty.
-----------------------------------
Neither this Agreement nor any schedule attached hereto or other
documents and written information furnished by or on behalf of
the Sellers regarding the Sellers or the Companies to Caldera in
connection with this Agreement contains any untrue statement of
material fact or omits to state any material fact necessary to
make the statements contained herein or therein not misleading.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF CALDERA
Caldera hereby represents and warrants to the
Sellers as follows:
5.01 Due Organization; Foreign Qualification.
---------------------------------------
Caldera is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, with all
requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being
conducted. Caldera is qualified to do business and is in good
standing as a foreign corporation in each jurisdiction where the
nature of the properties owned, leased or operated by it and the
business transacted by it require such qualification.
5.02 Due Authorization; Enforceability.
---------------------------------
Caldera has full corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.
The execution, delivery and performance by Caldera of this
Agreement has been duly and validly authorized and approved by
the Board of Directors of Caldera, and no other actions or
proceedings on the part of Caldera are necessary to authorize
this Agreement other than approval of the Caldera Stockholders as
set forth in Section 6.06 hereof. Subject to obtaining the
necessary approval of the Caldera Stockholders, this Agreement
constitutes legal, valid and binding obligations of Caldera,
enforceable in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent transfer, moratorium, reorganization or
other laws from time to time in effect which affect creditors'
rights generally and by general principles of equity (regardless
of whether such enforceability is considered in a proceeding in
equity or at law).
5.03 Non-Contravention; Consents and
-------------------------------
Approvals. (a) The execution and delivery of this Agreement by
---------
Caldera does not, and the performance by Caldera of its
obligations hereunder and the consummation of the transactions
contemplated hereby will not, conflict with, result in a
violation or breach of, constitute (with or without notice or
lapse of time or both) a default under, result in or give to any
person any right of payment or reimbursement, termination,
cancellation, modification or acceleration of, or result in the
creation or imposition of any lien upon any of the assets or
properties of Caldera under, any of the terms, conditions or
provisions of (i) the Certificate of Incorporation or Bylaws
Caldera, or (ii) subject to the taking of the actions described
in paragraph (b) of this Section, (x) any Laws of any
Governmental Authority, or (y) any contract, agreement or
commitment to which Caldera is a party or by which Caldera or any
of its assets or properties is bound, excluding from the
foregoing clauses (x) and (y) conflicts, violations, breaches,
defaults, terminations, modifications, accelerations and
creations and impositions of liens which would not have a Caldera
Material Adverse Effect or result in the inability of Caldera to
consummate the transactions contemplated by this Agreement.
(b) No consent, approval, order or
authorization of, or registration, declaration or filing with any
Governmental Authority is required by Caldera in connection with
the execution and delivery of this Agreement or the consummation
by Caldera of the transactions contemplated hereby, the failure
to obtain which would have a Caldera Material Adverse Effect or
result in the inability of Caldera to consummate the transactions
contemplated hereby, except for the filing of a Certificate of
Amendment to its Certificate of Incorporation with the Secretary
of State of Delaware.
5.04 Capitalization. (a) The authorized
--------------
capital stock of Caldera consists of 5,000,000 shares of
Preferred Stock, $.01 par value per share, none of which is
issued or outstanding, and 50,000,000 shares of Common Stock,
$.01 par value per share, of which 3,345,000 shares are issued
and outstanding. All of the issued and outstanding shares of
Caldera Common Stock are, and the Caldera Shares to be issued to
the Sellers will be, validly issued, fully paid and nonassessable
and the issuances of the Caldera Shares will not be subject to
preemptive rights.
(b) Except for the outstanding shares of
Caldera Common Stock and the Caldera Shares to be issued pursuant
to this Agreement, there are no other equity securities (whether
or not such securities have voting rights) of Caldera issued or
outstanding or any subscriptions, options, warrants, calls,
rights, convertible securities or other agreements or commitments
of any character obligating Caldera to issue, transfer or sell
any shares of capital stock or other securities (whether or not
such securities have voting rights) of Caldera. There are no
outstanding contractual obligations of Caldera which relate to
the purchase, sale, issuance, repurchase, redemption,
acquisition, transfer, disposition, holding or voting of any
shares of capital stock or other securities of Caldera other than
the Caldera Shares.
5.05 Financial Statements. (a) For purposes
--------------------
of this Agreement, "Caldera Financial Statements" shall mean the
audited financial statements of Caldera for the years ended
December 31, 1996 and 1997 and the unaudited financial statements
of Caldera for the quarter ended March 31, 1998 (including all
notes thereto) which are included in the SEC Documents consisting
of the balance sheets at such dates and the related statements of
operations, stockholders' equity and cash flows for the periods
then ended. The Caldera Financial Statements have been prepared
in accordance with GAAP consistently applied (except as may be
indicated therein or the notes thereto) and present fairly the
financial position of Caldera as at the dates thereof and the
results of operations and cash flows of Caldera for the periods
covered thereby (subject, in case of the unaudited financial
statements to, normal, recurring year-end audit adjustments), and
are substantially in accordance with the financial books and
records of Caldera.
(b) There are no liabilities of Caldera of
any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, and there is no existing
condition, situation or set of circumstances which could
reasonably be expected to result in such a liability other than
(i) liabilities reflected or reserved against in the Caldera
Financial Statements, (ii) liabilities incurred after March 31,
1998 in the ordinary course of business consistent with past
practice, which individually or in the aggregate, would not have
a Caldera Material Adverse Effect, and (iii) liabilities under
this Agreement or disclosed pursuant to this Agreement.
5.06 Commission Filings. Caldera is subject
------------------
to filing periodic reports with the Commission pursuant to
Section 15(d) of the Exchange Act. Since January 1, 1996 Caldera
has filed all forms, reports and other documents that it was
required to file with the Commission pursuant to Section 15(d) of
the Exchange Act, all of which complied when filed, in all
material respects, with all applicable requirements of the
Exchange Act. Caldera has heretofore delivered to the Sellers
complete and correct copies of the SEC Documents.
5.07 No Material Adverse Effects or Changes.
--------------------------------------
Except as set forth in the SEC Documents, since January 1, 1997,
Caldera has had no significant operations or business activities.
Except as disclosed in the SEC Documents, or as contemplated by
this Agreement, since March 31, 1998 Caldera has not suffered any
material adverse change involving its business, operations,
assets, liabilities, results of operations, cash flows or
condition (financial or otherwise) which would have a Caldera
Material Adverse Effect. Caldera is not a party to any Contract,
except to the extent set forth on Schedule 5.07.
-------------
5.08 Tax Returns and Audits. Caldera has duly filed
----------------------
all federal, state, local and foreign tax returns, reports and
forms required to be filed by it, except where the failure to so
file would not have an Caldera Material Adverse Effect. Caldera
has duly paid (except for Taxes being contested in good faith) or
made adequate provisions on their books in accordance with GAAP
for the payment of all Taxes which have accrued or are due and
payable, and Caldera will on or before the Closing Date make
adequate provision on its books in accordance with GAAP for all
Taxes payable for any period through the Closing Date for which
no return is required to be filed prior to such date. Since
January 1, 1996, the federal and state income tax returns of
Caldera have not been examined by the Internal Revenue Service or
state taxing authority, respectively, nor has Caldera granted or
given any extensions or waivers of the statute of limitations
with respect to any such federal and state income tax returns.
Caldera is not aware of any basis for the assertion of any
deficiency against Caldera for Taxes, which, if adversely
determined, would have a Caldera Material Adverse Effect.
5.09 Litigation. There are no actions, suits,
----------
arbitrations, regulatory proceedings or other litigation,
proceedings or governmental investigations pending or, to
Caldera's knowledge, threatened against or affecting Caldera or
any of its officers or directors in their capacity as such, or
any of its respective properties or businesses. Caldera is not
subject to any Law with any Governmental Authority, other than
orders of general applicability. There are no pending or, to
Caldera's knowledge, threatened claims against any director,
officer, employee or agent of Caldera or any other Person which
could give rise to any claim for indemnification against Caldera.
5.10 Compliance with Applicable Laws. To Caldera's
-------------------------------
knowledge, Caldera is not in violation of any Law of any
Governmental Authority, except for possible violations which
individually and in the aggregate do not, and, insofar as
reasonably can be foreseen by Caldera, will not in the future
have a Caldera Material Adverse Effect.
5.11 Fees of Brokers, Finders and Investment Bankers.
-----------------------------------------------
Neither Caldera nor any officer, director, or employee of Caldera
has employed any broker, finder or investment banker or incurred
any liability for any brokerage or investment banking fees,
commissions or finders' fees in connection with the transactions
contemplated by this Agreement.
5.12 General Representation of Warranty. Neither this
----------------------------------
Agreement nor any schedule attached hereto or other documents and
written information furnished by Caldera to the Sellers in
connection with this Agreement contains any untrue statement of
material fact or omits to state any material fact necessary to
make the statements contained herein or therein not misleading.
ARTICLE VI.
COVENANTS
6.01 Implementing Agreement. Subject to the terms and
----------------------
conditions hereof, each party hereto shall use its best efforts
to take all action required of it to fulfill its obligations
under the terms of this Agreement and to facilitate the
consummation of the transactions contemplated hereby.
6.02 Access to Information and Facilities. From and
------------------------------------
after the date of this Agreement, the Sellers shall cause Caldera
and its representatives to obtain access during normal business
hours and upon reasonable notice to all of the facilities,
properties, books, Contracts and records of the Companies, shall
cause officers and employees of the Companies to be available to
Caldera or its representatives, and shall furnish with any and
all information concerning the Companies, which Caldera or its
representatives reasonably request. Caldera shall provide to the
Sellers access to information regarding Caldera similar to that
which is to be afforded to Caldera in this Section.
6.03 Confidentiality. Except as otherwise required by
---------------
Law or in the performance of obligations under this Agreement,
any nonpublic information received by a party or its advisors,
agents or representatives from the other party shall be kept
confidential and shall not be used or disclosed for any purpose
other than in furtherance of the transactions contemplated by
this Agreement. The obligation of confidentiality shall not
extend to information which: (a) is or becomes generally
available to the public other than as a result of a disclosure by
a party in violation of this Agreement; (b) was in the lawful
possession of a party prior to its receipt from the other party;
or (c) becomes available to a party on a nonconfidential basis
from a source other than a party to this Agreement, provided such
source is not known to be in violation of a confidentiality
agreement. Upon termination of this Agreement without
consummation of the transactions contemplated herein, each party
shall, upon request, promptly return or destroy any confidential
information received from the other party. The covenants of the
parties contained in this Section 6.03 shall survive any
------------
termination of this Agreement but shall terminate at the Closing,
if it occurs.
6.04 Preservation of Business. (a) From the date of
------------------------
this Agreement until the Closing Date, the Companies and Caldera
shall operate only in the ordinary and usual course of business
consistent with past practice, and shall use reasonable
commercial efforts to (a) preserve intact their respective
business organizations, (b) with respect to the Companies,
preserve the good will and advantageous relationships with
customers, suppliers, independent contractors, agents, employees
and other persons material to the operation of their respective
business, and (c) not permit any action or omission which would
cause any of the representations or warranties contained herein
to become inaccurate or any of the covenants to be breached in
any material respect.
(b) The Sellers further covenant that prior to the
Closing, neither of the Companies shall, without the prior
written consent of Caldera (which shall not be unreasonably
withheld):
(i) take any action, incur any obligation or
enter into or authorize any contract or transaction other
than in the ordinary course of business;
(ii) make any changes in its accounting systems,
policies, principles or practices except as may be required
by applicable law or GAAP;
(iii) authorize for issuance, issue, sell,
deliver or agree or commit to issue, sell or deliver
(whether through the issuance or granting of options,
warrants, convertible or exchangeable securities,
commitments, subscriptions, rights to purchase or otherwise)
any shares of its capital stock or any other securities, or
amend any of the terms of any such securities;
(iv) split, combine or reclassify any shares of
its capital stock, declare, set aside or pay any dividend or
other distribution (whether in cash, stock or property or
any combination thereof) in respect of its capital stock, or
redeem or otherwise acquire any of its securities;
(v) make any borrowings, incur any debt (other
than trade payables in the ordinary course of business), or
assume, guarantee, endorse or otherwise become liable
(whether directly, contingently or otherwise) for the
obligations of any other person in an aggregate principal
amount exceeding $25,000, or make any unscheduled payment or
repayment of principal in respect of any long term debt.
(vi) make any new loans, advances or capital
contributions to, or new investments in, any other person,
other than in connection with travel and expense
reimbursement of employees in the ordinary course of
business;
(vii) enter into, adopt, amend in any material
respect or terminate any contract, agreement, lease,
commitment or arrangement;
(viii) acquire, lease or encumber any assets
outside the ordinary course of business; or
(ix) enter into any agreement, understanding or
commitment with respect to any of the foregoing actions.
6.05 Consents and Approvals. Subject to the terms and
----------------------
conditions provided herein, each of the parties hereto shall use
reasonable commercial efforts to obtain all consents, approvals,
certificates and other documents required in connection with the
performance by it of this Agreement and the consummation of the
transactions contemplated hereby. As soon as practicable after
the date hereof, each of the parties hereto shall make all
filings, applications, statements and reports to all Governmental
Authorities and other Entities which are required to be made
prior to the Closing Date pursuant to any applicable Law or
Contract in connection with this Agreement and the transactions
contemplated hereby.
6.06 Caldera Stockholder Approval. As soon as
----------------------------
practicable after the date hereof, Caldera shall convene a
special stockholders meeting (the "Caldera Stockholder Meeting")
to consider and vote upon (i) approval of this Agreement, (ii) a
one-for-fifteen reverse stock split of the outstanding shares of
Caldera Common Stock (the "Reverse Stock Split"), (iii) a change
in its corporate name to Unistar Financial Service Corp., (iv)
the election of seven persons as directors, which persons must be
reasonably acceptable to the Sellers, and (v) the authorization
of a stock option plan.
6.07 Publicity. Prior to issuing any public
---------
announcement or statement with respect to the entry into this
Agreement or the transactions contemplated hereby and prior to
making any filing with Governmental Authority, Caldera and the
Sellers will, subject to their respective legal obligations,
consult with each other and will allow each other to review the
contents of any such public announcement or statement and any
such filing.
6.08 Fees and Expenses. The Sellers shall cause the
-----------------
Companies to pay all fees and expenses of the Companies and of
Caldera incurred in connection with the transactions contemplated
herein, including, but not limited to, filing, printing, due
diligence expenses, mailing, transfer agent, attorneys and
accounting fees.
6.09 Periodic Reports. Until the Closing Date, Caldera
----------------
shall furnish to the Sellers all filings made by Caldera with the
Commission and shall solicit comments with respect thereto, in
each case at least two business days (or as soon prior thereto as
is practicable) prior to the time of such filings and the time of
such mailings of reports which refer to the Companies or this
Agreement.
ARTICLE VII.
CONDITIONS PRECEDENT TO THE CONSUMMATION OF THE MERGER
The respective obligations of each party to consummate
the purchase and sale of the IFHC Shares are subject to the
fulfillment at or before the Closing of each of the following
conditions:
7.01 Actions or Proceedings. No preliminary or
----------------------
permanent injunction or other order by any federal or state court
preventing consummation of the purchase and sale of the IFHC
Shares shall have been issued and shall be continuing in effect,
and the transactions contemplated herein shall not be prohibited
under any applicable federal or state law or regulation.
7.02 Approval of Merger. The Caldera stockholders
------------------
shall have approved this Agreement and the other items specified
in Section 6.06 hereof at the Caldera Stockholders Meeting.
ARTICLE VIII.
CONDITIONS PRECEDENT TO OBLIGATIONS
OF CALDERA
The obligations of Caldera to consummate the
transactions contemplated herein are subject to the fulfillment
at or before the Closing of each of the following conditions:
8.01 Warranties True as of Closing Date. The
----------------------------------
representations and warranties of the Sellers contained herein
shall be true and correct in all material respects on and as of
the Closing Date with the same force and effect as though made on
and as of the Closing Date.
8.02 Compliance With Agreements and Covenants. The
----------------------------------------
Sellers and the Companies shall have performed and complied with
in all material respects all of their covenants, obligations and
agreements contained in this Agreement to be performed and
complied with by them on or prior to the Closing Date.
8.03 Sellers' Certificate. The Sellers and the Chief
--------------------
Executive Officer of the Companies each shall have delivered to
Caldera a certificate, dated the Closing Date, certifying that
each of the conditions specified in Section 8.01 and Section 8.02
------------ ------------
hereof are satisfied in all respects.
8.04 Consents and Approvals. Caldera shall have
----------------------
received written evidence reasonably satisfactory to it that all
consents and approvals required on behalf of the Sellers and the
Companies for the consummation of the transactions contemplated
hereby have been obtained, and all required filings have been
made.
8.05 Good Standing Certificates. The Sellers shall
--------------------------
have delivered to Caldera at the Closing certificates of good
standing and tax status from the State of Texas, as to IFHC and
ISCC, which certificates shall be dated a date not more than five
(5) business days prior to the Closing Date.
8.06 Other Closing Documents. Caldera shall have
-----------------------
received such other agreements and instruments as Caldera shall
reasonably request, in each case in form and substance reasonably
satisfactory to Caldera.
ARTICLE IX.
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLERS
The obligations of the Sellers to consummate the
transaction are subject to the satisfaction or waiver by Caldera
of the following conditions precedent on or before the Closing:
9.01 Warranties True as of Closing Date. The
----------------------------------
representations and warranties of Caldera contained herein shall
be true and correct in all material respects on and as of the
Closing Date with the same force and effect as though made by
Caldera on and as of the Closing Date.
9.02 Compliance with Agreements and Covenants. Caldera
----------------------------------------
shall have performed and complied with in all material respects
all of its covenants, obligations and agreements contained in
this Agreement, to be performed and complied with by it on or
prior to the Closing Date.
9.03 Caldera Certificate. An executive officer of
-------------------
Caldera shall have delivered to the Sellers a certificate, dated
the Closing Date, certifying that each of the conditions
specified in Section 9.01 and Section 9.02 hereof are satisfied
------------ ------------
in all respects.
9.04 Secretary's Certificate. Caldera shall have
-----------------------
delivered to the Sellers a certificate of the duly authorized
Secretary of Caldera, dated the Closing Date, certifying
resolutions of the Caldera Board of Directors and stockholders
authorizing the execution, delivery and performance of this
Agreement, and the other transactions on behalf of Caldera, as
contemplated herein.
9.05 Good Standing Certificate. Caldera shall have
-------------------------
delivered to the Sellers at the Closing (a) a certificate of
good standing from the State of Delaware as to Caldera, (b) a
certified Certificate of Amendment to its Certificate of
Incorporation setting forth the amendments adopted at the Caldera
Stockholders Meeting, which certificates shall be dated a date
not more than five business days prior to the Closing Date.
9.06 Consents and Approvals. The Sellers shall have
----------------------
received written evidence reasonably satisfactory to them that
all consents and approvals required for the consummation of the
transactions contemplated hereby by Caldera have been obtained,
and all required filings have been made.
9.07 Other Closing Documents. The Sellers shall have
-----------------------
received such other agreements and instruments as the Sellers
shall reasonably request, in each case in form and substance
reasonably satisfactory to the Sellers.
ARTICLE X.
TERMINATION
10.01 Termination. This Agreement may be
-----------
terminated and the purchase and sale of the IFHC Shares may be
abandoned at any time prior to the Closing Date, whether before
or after approval at the Caldera Stockholders Meeting:
(a) by mutual written consent of the Sellers and the
Board of Directors of Caldera;
(b) by either Caldera or the Sellers, by written
notice to the other, if (i) the Closing Date shall not have
occurred on or before September 30, 1998 or (ii) any Governmental
Authority shall have issued an order, judgment or decree (other
than a temporary restraining order) restraining, enjoining or
otherwise prohibiting the sale of the IFHC Shares and such order,
judgment or decree shall have become final and non-appealable;
provided, however, that the right to terminate this Agreement (X)
under clause (i) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been
the cause of, or resulted in, the failure of the Closing to occur
on or before such date or (Y) under clause (ii) shall not be
available to any party unless such party shall have used all
reasonable efforts to remove such order, judgment or decree.
10.02 Effect of Termination and Abandonment. In
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the event of termination of this Agreement and abandonment of the
purchase and sale of the IFHC Shares pursuant to this ARTICLE X,
---------
no party hereto (or any of its directors, officers or
stockholders) shall have any liability or further obligation to
any other party to this Agreement other than the obligations of
Section 6.03 hereof, except that nothing herein shall relieve
------------
any party from liability for any willful breach of this Agreement.
ARTICLE XI.
MISCELLANEOUS
11.01 Amendment. This Agreement may be amended,
---------
modified, supplemented or terminated (in accordance with Article
X), but only by a writing executed by Caldera and the Sellers.
11.02 No Survival of Representations, Warranties,
------------------------------------------
Covenants and Agreements. None of the representations,
------------------------
warranties, covenants and agreements contained in this Agreement
or in any instrument delivered in connection herewith shall
survive the Closing.
11.03 Notices. Any notice, request, instruction or
-------
other document to be given hereunder by a party hereto shall be
in writing and shall be deemed to have been given, (i) when
received if given in person, (ii) on the date of transmission if
sent by telex, facsimile or other wire transmission or (iii)
three business days after being deposited in the U.S. mail,
certified or registered mail, postage prepaid:
(a) If to the Sellers:
c/o ▇▇▇▇ ▇. ▇▇▇▇▇▇
International Fidelity Holding Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
(b) If to Caldera:
Caldera, Inc.
▇-▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇, Secretary
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other individual or address as a party hereto may
designate for itself by notice given as herein provided.
11.04 Waivers. The failure of a party hereto at any
-------
time or times to require performance of any provision hereof
shall in no manner affect its right at a later time to enforce
the same. No waiver by a party of any condition or of any breach
of any term, covenant, representation or warranty contained in
this Agreement shall be effective unless in writing, and no
waiver in any one or more instances shall be deemed to be a
further or continuing waiver of any such condition or breach in
other instances or a waiver of any other condition or breach of
any other term, covenant, representation or warranty.
11.05 Interpretation. The headings preceding the text
--------------
of ARTICLES and Sections included in this Agreement and the
headings to Schedules attached to this Agreement are for
convenience only and shall not be deemed part of this Agreement
or be given any effect in interpreting this Agreement. The use
of the masculine, feminine or neuter gender herein shall not
limit any provision of this Agreement.
11.06 Applicable Law. This Agreement shall be
--------------
governed by and construed and enforced in accordance with the
internal laws of the State of Delaware without giving effect to
the principles of conflicts of law thereof.
11.07 Assignment. This Agreement shall be binding
----------
upon and inure to the benefit of the parties hereto and their
respective successors, assigns, heirs and administrators;
provided, however, that no assignment of any rights or
obligations shall be made by any party without the prior written
consent of the other parties hereto.
11.08 No Third Party Beneficiaries. This Agreement is
----------------------------
solely for the benefit of the parties hereto and, to the extent
provided herein, and their respective directors, officers,
employees, agents and representatives, and no provision of this
Agreement shall be deemed to confer upon third parties any
remedy, claim, liability, reimbursement, cause of action or other
right.
11.09 Enforcement of the Agreement. The parties
----------------------------
hereto agree that irreparable damage would result in the event
that any provision of this Agreement is not performed in
accordance with specific terms or is otherwise breached. It is
accordingly agreed that the parties hereto will be entitled to
equitable relief including an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof.
11.10 Further Assurances. Upon the request of
------------------
Caldera, each of the Sellers will on and after the Closing Date
execute and deliver to Caldera such other documents, releases,
assignments and other instruments as may be required to
effectuate completely the transactions contemplated by this
Agreement.
11.11 Severability. If any provision of this
------------
Agreement shall be held invalid, illegal or unenforceable, the
validity, legality or enforceability of the other provisions
hereof shall not be affected thereby, and there shall be deemed
substituted for the provision at issue a valid, legal and
enforceable provision as similar as possible to the provision at
issue.
11.12 Remedies Cumulative. The remedies provided in
-------------------
this Agreement shall be cumulative and shall not preclude the
assertion or exercise of any other rights or remedies available
by law, in equity or otherwise.
11.13 Entire Understanding. This Agreement sets forth
--------------------
the entire agreement and understanding of the parties hereto and
supersedes all prior agreements, arrangements and understandings
among the parties hereto, including the Letter of Intent, dated
May 26, 1998.
11.14 Waiver of Jury Trial. Each party hereto waives
--------------------
the right to a trial by jury in any dispute in connection with
the transactions contemplated by this Agreement, and agrees to
take any and all action necessary or appropriate to effect such
waiver.
11.15 Counterparts. This Agreement may be executed in
------------
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered on the date first above
written.
CALDERA, INC.
By:
--------------------------------
Name:
Title:
-----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
F. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇