Exhibit (2)(i)
ASSET PURCHASE AGREEMENT
BY AND AMONG
LIFE INVESTMENT FUNDING ENTERPRISES, INC.
(A NEVADA CORPORATION)
AND
______________________________________, A
LIMITED LIABILITY COMPANY EXISTING UNDER
THE LAWS OF THE STATE OF NEVADA
DATED AS OF ____________, 2002
ASSET PURCHASE AGREEMENT
-------------------------
THIS ASSET PURCHASE AGREEMENT providing for the sale and purchase of
the assets hereinafter identified and scheduled (the "Agreement") is made as of
the _____ day of ___________________, 2002 by and between the following
entities:
Agreement Party and Reference General Description of Agreement Party
----------------------------- ---------------------------------
LIFE INVESTMENT FUNDING ENTER- A Nevada corporation presently having its
PRISES, INC. ("LIFE") principal place of business in Sarasota,
Florida
______________________________ A limited liability company organized and
("Seller") existing pursuant to the laws of the State
of Nevada
The foregoing-described entities are sometimes referred to in this Agreement as
the "Agreement Parties".
B A C K G R O U N D
--------------------
LIFE is a corporation formed and existing pursuant to the laws of the
State of Nevada. LIFE has been formed for the express purpose of consummating
the transactions provided for in this Agreement with the Seller and other
limited liability companies who are engaged in the same or similar business as
the Seller. LIFE will continue the business activities of the Seller and other
limited liability companies, the assets of which are acquired by LIFE in
transactions consummated contemporaneous to the consummation of the transactions
provided for in this Agreement.
The Seller has engaged in the business activity of acquiring life
insurance policies of all types and kinds from the owners, insureds and
beneficiaries thereof in transactions that are sometimes referred to as
"Viatical Settlements", "Life Settlements" or "Senior Settlements". Pursuant to
such Settlements, the Seller has acquired such life insurance policies for a
negotiated price and has, in most transactions, continued the payment of all
premiums required with respect to such policies in order to maintain such
acquired policies in force. The business purpose of the Seller in such activity
is to realize profit and economic gain at the time that such acquired life
insurance policies mature by reason of the age of the insured or death benefits
under such policies are paid as a result of the death of the insured. Such life
insurance policies which have been acquired by the Seller constitute all or
substantially all of the assets being acquired pursuant to this Agreement. Such
life insurance policies are described and scheduled as hereinafter provided.
It is acknowledged by LIFE and the Seller that the business and affairs
of the Seller are administered by an Executive Committee elected and constituted
by one or more of the Managing Members of the Seller and that the outstanding
Managing Member interest of the Seller is held of record by approximately _____
persons and entities.
In connection with the carrying out of the asset purchase transaction
provided for in this Agreement, LIFE and the Seller are implementing a material
aspect of the business plan of the Seller and of LIFE, that being the creation
of a publicly held entity which will continue the business of the Seller on an
expanded basis. The outstanding equity securities of LIFE will be held of record
and beneficially, in part, by the Managing Members of the Seller who are of
record as herein provided and other holders of managing member interests of
other limited liability companies that consummate asset sale-purchase
transactions similar to that provided for by this Agreement.
Accordingly, LIFE and the Seller by means of this Agreement wish to
provide for the terms and provisions whereby LIFE will acquire all or
substantially all of the assets of the Seller and the Seller shall effect the
distribution of the equity securities of LIFE in accordance with the terms
hereinafter provided.
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Agreement Parties agree as
follows:
ARTICLE I
FURTHER DEFINITIONS
1.1 ASSETS. "Assets" shall mean the life insurance policies of the
Seller and other related assets being acquired by LIFE in accordance with the
terms and provisions of this Agreement and as are scheduled on Schedule I to
this Agreement.
1.2 BUSINESS. "Business" means that business activity presently being
carried out by the Seller and as such Business will be carried out by LIFE in
accordance with the terms and provisions of this Agreement on and after the
Closing Date, all of which is in accordance with the business plan of LIFE.
1.3 CLOSING DATE. "Closing Date" shall mean that date determined by
LIFE upon which the transactions provided for in this Agreement shall be
consummated.
1.4 COMMISSION. "Commission" shall mean the United States
Securities and Exchange Commission.
1.5 COMMON STOCK. "Common Stock" shall mean the Common Stock of LIFE
which shall be issued upon the conversion of any or all of the shares of the
Preferred Stock of LIFE as provided for in this Agreement or which may be issued
as a part of the Purchase Consideration in addition to or in lieu of Preferred
Stock, such Common Stock having the characteristics subsequently set forth in
this Agreement.
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1.6 EFFECTIVE DATE. "Effective Date" shall mean _______, 2002.
1.7 EXCLUDED ASSETS. "Excluded Assets" shall mean those Assets of the
Seller which are not being acquired by LIFE in accordance with the terms and
provisions of this Agreement, as such Excluded Assets are reflected on Schedule
II to this Agreement.
1.8 EXECUTIVE COMMITTEE. "Executive Committee" shall mean that
committee which carries out the day-to-day Business and affairs of the Seller
and performs functions similar to that of a board of directors of a corporate
entity as such Executive Committee of the Managing Member of the Seller is
constituted from the Effective Date to the Closing Date.
1.9 GOVERNMENTAL AUTHORITIES. "Governmental Authorities" shall mean any
governmental or quasi governmental authority which exercises jurisdiction and
regulation over the Business of the Seller or the Seller and which jurisdiction
relates but is not necessarily limited to the procurement of any permits,
consents, authorities, franchises or similar privileges necessary and required
for the conduct of the Business of the Seller as presently conducted and as such
will be conducted upon the consummation of the Agreement transactions by LIFE.
1.10 LICENSES AND PERMITS. "Licenses and Permits" shall mean any of the
authorities and/or permissive action described in Section 1.7 above issued by
any Governmental Authority.
1.11 MANAGING MEMBERS. "Managing Members" shall mean the holders of the
outstanding Managing Membership Interest of the Seller as such exists on the
Effective Date and as such shall exist on the Closing Date and as reflected in
Schedule III to this Agreement.
1.12 PREFERRED STOCK. "Preferred Stock" shall mean the Class B
Convertible Preferred Stock which shall be issued by LIFE to the Seller and
subsequently the Managing Members subject to the conditions and requirements of
this Agreement, such Preferred Stock having the characteristics as hereinafter
described.
1.13 PROSPECTUS. "Prospectus" means the Prospectus which is a part of
the Registration Statement to be filed by LIFE with the Commission and which
will relate to the Preferred Stock, the Common Stock, the Business of LIFE, the
transactions governed by this Agreement and similar agreement transactions, and
other material matters.
1.14 PURCHASE CONSIDERATION. "Purchase Consideration" shall mean the
consideration to be paid by LIFE to the Seller in the form of the Preferred
Stock and/or Common Stock which shall be distributed to the Managing Members of
the Seller as provided in this Agreement.
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1.15 RECORDS. "Records" shall mean all Records relating to the Business
and Assets of the Seller, as maintained by the Seller in the ordinary course of
its business and in connection with the preparation by the Seller to consummate
the transactions provided for in this Agreement. "Records" shall also mean all
documents issued by any Governmental Authority relating to the creation of the
Seller and the maintenance of its existence as a limited liability company under
Nevada law.
1.16 REGISTRATION STATEMENT. "Registration Statement" shall mean that
Registration Statement of which the Prospectus shall be a part relating to the
registration and issuance of the Preferred Stock and Common Stock of LIFE, as
provided for in this Agreement, as such Registration Statement is filed with the
Commission and amended from time to time.
1.17 SCHEDULE OR SCHEDULES. "Schedule" or "Schedules" means any
Schedule which is prepared and delivered in connection with this Agreement,
which Schedules shall be deemed an integral part of this Agreement.
ARTICLE II
ASSET ACQUISITION
2.1 ASSET ACQUISITION. On the Closing Date, LIFE shall purchase from
the Seller and the Seller shall sell to LIFE those Assets described and
scheduled on Schedule I hereto, which Assets shall include, among other things,
all life insurance policies then in force and in good standing (except as
hereinafter provided) and which are owned by the Seller or in which the Seller
has an interest. Included in such Assets to be sold and purchased as between
LIFE and the Seller, shall be those life insurance policies identified on
Schedule I as being "▇▇▇▇▇▇ Policies".
2.2 CONDITION OF ASSETS. With the exception of those life insurance
policies identified as "▇▇▇▇▇▇ Policies" on Schedule I hereto, all life
insurance policies owned by the Seller and conveyed to LIFE on the Closing Date
shall be in full force and in good standing with the issuers of such life
insurance policies and all premiums due and payable with respect to such life
insurance policies being acquired hereunder shall have been paid by the Seller
to a time to and including the Closing Date. By virtue of written consent issued
by LIFE and received by the Seller, certain premium payments due on ▇▇▇▇▇▇
Policies need not be remitted. Any benefits received by the Seller under any of
such life insurance policies which are received on and after the Effective Date
shall constitute a part of the Assets being sold and purchased hereunder.
2.3 EXCLUDED ASSETS. The sale-purchase transaction of the Assets,
governed by this Agreement, shall not include those Assets which are determined
to be Excluded Assets and which are identified on Schedule II to this Agreement.
2.4 DELIVERY OF LIFE INSURANCE POLICIES. On the Closing Date the Seller
shall deliver to LIFE the actual physical policies as scheduled on Schedule I
hereto, together with all Records of any type whatsoever which relate to the
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issuance, conveyance and maintenance in force of such life insurance policies so
scheduled. The Seller shall cooperate with LIFE in effecting on and subsequent
to the Effective Date such notices as are necessary or deemed necessary by LIFE
and which are intended to inform the issuers of such life insurance policies
described and scheduled on Schedule I hereto, to allow LIFE to be recognized as
the policy beneficiary under all of such policies so scheduled on and subsequent
to the Closing Date. The Seller recognizes and acknowledges that all benefits
received as a result of the life insurance policies which are described and
scheduled on Schedule I which are received by the Seller on and subsequent to
the Effective Date constitute the exclusive property of LIFE except in the event
that the Agreement transactions are not consummated at the time subsequently
specified herein, in which event such benefits shall continue to be the
exclusive property of the Seller.
2.5 PURCHASE CONSIDERATION. (a) The Purchase Consideration to be paid
by LIFE to the Seller shall be shares of LIFE's Preferred Stock and/or shares of
Common Stock, which Preferred Stock and Common Stock shall have the
characteristics and attributes subsequently described in this Agreement. Such
Preferred Stock and/or Common Stock and the underlying Common Stock issued upon
the conversion of the Preferred Stock shall, at the time of the delivery to the
Seller, and subsequently the Managing Members, be fully registered pursuant to
the provisions of the Securities Act of 1933 as amended (the "'33 Act"). The
number of shares of Preferred Stock and/or Common Stock to be issued to the
Seller, and subsequently the Managing Members, shall be determined by utilizing
a formula which provides for the issuance of one share of Preferred Stock to the
Seller for each $25 of aggregate face amount of life insurance policies being
conveyed, without any diminishment being attributable to such aggregate face
amount by reason of any ▇▇▇▇▇▇ policies identified on Schedule I. To the extent
that the Common Stock of LIFE is utilized as a portion or all of the Purchase
Consideration, the formula for determining the number of shares of Common Stock
to be issued to the Seller as all or a portion of the Purchase Consideration
shall be one share of Common Stock for each $6.25 of aggregate face amount of
life insurance policies being conveyed, without any diminishment attributable to
such aggregate face amount by reason of the ▇▇▇▇▇▇ policies identified on
Schedule I. The determination as to the composition of the Purchase
Consideration, as such relates to the number of shares of Preferred Stock and/or
Common Stock to be utilized shall be made by the Seller.
(b) On the Closing Date and in addition to the payment of the Purchase
Consideration, there shall be determined the amount of any inter-limited
liability company accounts receivable - payable which may be owed to the Seller
or which may be owing by the Seller to another limited liability company which
is a party to an asset purchase transaction or if not a party to an asset
purchase transaction with LIFE, is nevertheless entitled to receive the payment
of such inter-limited liability company receivable (an "Inter-company
Obligation"). Such Inter-company Obligation shall be reflected in Schedule VI
hereto. If the Seller is entitled to receive payment of such Inter-company
Obligation, an additional amount of Purchase Consideration in the form of
Preferred Stock shall be remitted by LIFE to the Seller. The number of
additional shares of Preferred Stock to be remitted shall be determined by
dividing $25 into the amount of the Inter-company Obligation entitlement of the
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Seller. LIFE and the Seller acknowledge that the number of additional shares of
Preferred Stock issued by LIFE as a result of a Seller Inter-company Obligation
entitlement shall, most likely, be restored to LIFE in a transaction between
LIFE and non-Agreement parties.
(c) It is acknowledged by LIFE and the Seller that there are certain
fees and costs owing to the providers of accounting and tax return preparation
services which presently as to all limited liability companies which shall
possibly become parties to asset purchase transactions with LIFE aggregate
approximately $45,000. Additional fees will be incurred for calendar year 2002.
On the Closing Date, such accounting and tax return preparation fees shall be
scheduled as Schedule VII and such shall be assumed and paid by LIFE. In
addition, LIFE acknowledges that certain Managing Members of the Seller and
possibly other limited liability companies who become parties to an asset
acquisition transaction with LIFE advanced funds in order to provide for such
accounting and tax return preparation services. LIFE shall directly pay by check
the amount of such advancements which shall also be scheduled on Schedule VII as
of the Closing Date.
2.6 CONDITIONS PRECEDENT. LIFE and the Seller acknowledge that the
consummation of the Asset purchase and sale transaction herein provided for is
subject to the satisfactory fulfillment of the conditions precedent which are
subsequently set forth in this Agreement, and the validity of the
representations and warranties of LIFE and the Seller also set forth
subsequently in this Agreement from the Effective Date to and including the
Closing Date.
2.7 DETERMINING AGGREGATE FACE AMOUNT. The aggregate face amount to be
utilized in determining the number of shares of Preferred Stock to be issued to
the Seller as the Purchase Consideration shall be determined on a date which is
not more than ten (10) days prior to the Closing Date by LIFE and its designated
representatives. The Seller, through the action of the Executive Committee,
shall extend all reasonable cooperation to LIFE and its designated
representatives in action taken to determine such aggregate face value and such
other accounting and audit matters as may be undertaken in connection with this
Agreement and as subsequently described herein. All expenses incurred in
connection with the activities contemplated by this Section 2.7 shall be borne
by LIFE.
ARTICLE III
CONDITIONS PRECEDENT
The respective obligations of LIFE and Seller to consummate the asset
purchase transaction and related transactions governed by this Agreement shall
be conditioned upon the satisfactory resolution of the conditions precedent set
forth below:
3.1 REQUISITE ACTION.
A. BY LIFE. In addition to those matters relating to the Registration
Statement and Prospectus, as subsequently set forth in this Article III, LIFE,
on or before the Closing Date, shall have completed all requisite action,
including any corporate action under the laws of the State of Nevada in order to
permit LIFE to consummate the Agreement transactions.
B. BY THE SELLER. On or before the Closing Date, the Seller shall have
completed all requisite action required to be completed and consummated by it in
order to permit the consummation of the Asset sale-purchase transaction provided
for and governed by this Agreement and the distribution to its Managing Members
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of the Preferred Stock and/or Common Stock which is the subject of the
Registration Statement and Prospectus. In such regard, the Seller shall have
accomplished all necessary action required with respect to the sale of the
Assets by the Nevada Limited Liability Company Act, Nevada Revised Statutes
Chapter 29.601-29.833.
3.2 NECESSARY CONSENTS. LIFE and the Seller shall have obtained all
necessary consents required to be obtained in order to permit the consummation
of the Asset sale-purchase transaction governed by this Agreement from any
Governmental Authorities. Additionally, all requisite consents shall have been
obtained by LIFE and the Seller in order to permit the transfer from the Seller
to LIFE of all Licenses and Permits necessary in order to permit LIFE to
continue the Business of the Seller on and subsequent to the Closing Date.
3.3 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of LIFE and the Seller extended each to the other pursuant to the
provisions of Article IV of this Agreement shall be true and correct on and as
of the Closing Date.
3.4 NO ADVERSE CHANGE. On the Closing Date, the Business of the Seller
shall be as described in the Agreement section captioned BACKGROUND and the
Assets shall not be materially altered or encumbered in any fashion except as
may be contemplated by this Agreement. Excepted from this condition and with
respect to the condition of any of the Assets, are the life insurance policies
identified on Schedule I hereto as the ▇▇▇▇▇▇ Policies.
3.5 OPINION OF COUNSEL. The Seller shall have received from LIFE the
opinion of counsel in the form of Schedule VI, which opinion of counsel shall be
dated as of a date not more than three days prior to the Closing Date. Among
other matters, such opinion of counsel shall address in a favorable manner the
effect of the consummation of the Agreement transactions on the Seller and the
holders of the outstanding Managing Member Interests of the Seller on the
Closing Date.
3.6 ACCOUNTING AND AUDIT MATTERS. There shall have been satisfactorily
completed all necessary and required accounting and audit matters relating to
the Business, Assets and Excluded Assets of the Seller, which shall, if required
by any Governmental Authority, be reflected in audited financial statements
prepared in accordance with generally accepted accounting principles
consistently applied, which financial statements may, if required, be included
in the Registration Statement and Prospectus which relates to the Preferred and
Common Stock of LIFE. In connection with the preparation of the Registration
Statement and the Prospectus, such accounting and audit matters to be completed
prior to the Closing Date shall include the preparation of the pro forma
financial information relating to the Seller as required to be included in the
Prospectus by Item 901 et seq of Regulation S-K of the Commission. The Executive
Committee of the Seller shall extend all necessary cooperation with respect to
the completion of such accounting and audit matters, including any required
audited financial statements and the pro forma financial information required to
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be included in the Prospectus. All of such accounting, audit and financial
statement preparation matters shall be carried out by independent certified
public accountants selected by LIFE and the expense of such process shall be
paid by LIFE.
3.7 REGISTRATION STATEMENT EFFECTIVE. The Registration Statement,
together with the Prospectus, relating to the Preferred Stock and/or Common
Stock of LIFE which shall be issued as the Purchase Consideration, shall have
been declared effective by the Commission under the '33 Act, thereby permitting
the distribution of such Preferred Stock and/or Common Stock to the Managing
Members in accordance with each such Managing Member's entitlement. Such
Registration Statement and Prospectus shall also relate to the Common Stock
which shall be issued upon the conversion of the Preferred Stock and such
Preferred and Common Stock shall have the characteristics hereinafter described.
On the Closing Date, there shall not have been issued any stop order or the
initiation of similar proceedings by the Commission or any state securities
regulatory authority adversely affecting or threatening to adversely affect the
effectiveness of the Registration Statement and the Prospectus.
3.8 ADDITIONAL DOCUMENTS. LIFE shall have received from the Seller and
the Seller shall have received from LIFE such additional documents as may be
reasonably required by LIFE or the Seller, as the case may be, in order to
permit the consummation of the purchase by LIFE and the sale by the Seller of
the Assets.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF LIFE
LIFE hereby represents and warrants to the Seller and the Managing
Members as follows:
4.1. ORGANIZATION AND GOOD STANDING. LIFE is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada and is qualified to conduct its business in such additional states where
the conduct of its activities makes such qualification necessary, which states
include Florida.
4.2 AUTHORITY; NO CONFLICT. The consummation of the Asset sale-purchase
transaction governed by this Agreement will not constitute a violation of any
provision of the Articles of Incorporation or bylaws of LIFE, as amended to
date, nor the provisions of any agreement, contract or other binding authority
to which LIFE is bound. On the Closing Date, LIFE shall have taken all requisite
corporate action required by Nevada corporate law and any other Governmental
Authority in order to permit the consummation by LIFE of the Asset sale-purchase
transaction provided for in this Agreement.
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4.3 REGISTRATION STATEMENT; PROSPECTUS. The Registration Statement,
which includes the Prospectus descriptive of LIFE, its management, the Preferred
Stock and the Common Stock, and which shall have become effective under the '33
Act, shall set forth all necessary information in order to make the information
contained in such Registration Statement and Prospectus not materially
misleading or materially omissive. For purposes of this representation, the term
"Prospectus" shall include any Prospectus supplement prepared from time to time
and delivered to the Seller and any Managing Member.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to LIFE and persons deemed to be in
a control relationship with the Seller, as such term is utilized in the '33 Act
and the '34 Act as follows:
5.1 GOOD STANDING. The Seller is and will be on the Closing Date a
limited liability company validly formed and existing pursuant to the Nevada
Limited Liability Act earlier cited in this Agreement and shall be vested with
such Licenses and Permits as are necessary and required in the conduct of the
Business and its ownership of the Assets.
5.2 AUTHORITY; NO CONFLICT. On the Closing Date, the Seller shall have
taken all requisite action required by the Nevada Limited Liability Act and its
governing documents in order to permit the Seller to consummate the
sale-purchase transaction involving the Assets and distribution on and after the
Closing Date of the Preferred Stock constituting the Purchase Consideration. It
is acknowledged by LIFE and the Seller that this representation does not
contemplate any action on the part of the Seller which would constitute an offer
to sell or the solicitation of an offer to purchase the Preferred Stock and/or
the Common Stock, such offer being exclusively made to the Managing Members of
the Seller by the Prospectus. Such action may include, however, communications
made by the Executive Committee on and after the Closing Date relative to the
transaction governed by this Agreement and the distribution of the Preferred
Stock and/or the Common Stock constituting the Purchase Consideration to be made
by the Seller to the Managing Members pursuant to this Agreement and the
Prospectus.
5.3 THE ASSETS. On the Closing Date, the Assets, as scheduled on
Schedule I to this Agreement, with the exception of those Assets identified as
▇▇▇▇▇▇ Policies, shall be constituted by life insurance policies of various
types with respect to which LIFE is the sole beneficiary by virtue of all
required action necessary to designate LIFE as the sole beneficiary of such life
insurance policies as is required by the issuers thereof and all premiums
required to be paid by the Seller to maintain such life insurance policies in
force from the Effective Date to the Closing Date shall have been paid and none
of such life insurance policies, as scheduled on Schedule I to this Agreement,
shall be in a status of lapse or shall have been canceled.
5.4 NO AFFILIATES OR SUBSIDIARIES. The Seller has no affiliates
or subsidiaries.
5.5 TAXES AND TAX RETURNS. On the Closing Date, the Seller shall have
filed all Federal, state, county and local tax returns relative to any taxes
required to be paid by the Seller or which relate to information required to be
provided to the Managing Members and the Seller shall have timely paid any such
taxes due pursuant to such returns, if any, and as of the Effective Date and on
the Closing Date, the Seller is not and the Seller shall not be involved in any
asserted contest with respect to any tax reflected as due on any return or which
relates to any informational return filed with any taxing authority or delivered
by the Seller to the Managing Members.
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5.6 LITIGATION. Except as described in Schedule VII hereto, the Seller
and the members of the Executive Committee, as of the Effective Date and on the
Closing Date, are not and shall not be parties to any litigation nor shall the
Assets be the subject of any litigation. Additionally, the Seller is not aware
of any factual circumstances or situations which might reasonably be expected to
result in the assertion of any claim by way of litigation as of the Effective
Date and such shall be the case on the Closing Date. As used in this Section
5.6, the term "litigation" includes any administrative proceeding to which the
Seller, members of the Executive Committee or the Assets is or may become
subject to.
5.7 SALE AND ISSUANCE OF MANAGING MEMBER INTERESTS. Except as reflected
in Schedule VI hereto, the sale and issuance of the Managing Member Interests of
the Seller outstanding as of the Effective Date and to be outstanding on the
Closing Date were issued and sold in transactions which (a) did not involve the
offer and sale of a security, as such term is defined in the '33 Act or under
any state securities statutes, or (b) were offered, sold and issued in
transactions reasonably believed by the Seller to be exempt from the
registration provisions of the '33 Act and any applicable state securities
statute.
5.8 NO CONTRACTS AFFECTING ASSETS. As of the Effective Date and on the
Closing Date, there does not exist and there shall not exist any contract or
agreement affecting the Assets to be conveyed hereunder.
5.9 ACCURACY OF PROVIDED INFORMATION. No representation or warranty
given or made by the Seller pursuant to this Agreement or any statement,
certificate or other document required to be furnished by the Seller to LIFE
pursuant to the terms of this Agreement contains on the Effective Date or will
contain on the Closing Date any untrue statement of a material fact or omits or
will omit to state a material fact necessary to make the statements made therein
not misleading.
5.10 NO FINDER'S FEE. The Seller, as a result of the consummation of
the Asset sale-purchase transaction governed by this Agreement, will not be
obligated to pay any finder's fee or similar compensation to any person or
entity.
ARTICLE VI
PRE-CLOSING COVENANTS OF LIFE
6.1 REGISTRATION STATEMENT AND PROSPECTUS. From the Effective Date to
the Closing Date, LIFE will undertake all requisite action in order to cause the
Registration Statement and Prospectus to be prepared and filed with the
Commission and shall take all appropriate and necessary action in order to
permit such Registration Statement to become effective pursuant to the
provisions of the '33 Act. Contemporaneous to the preparation, filing and
processing to effectiveness of the Registration Statement and Prospectus, LIFE
shall take all requisite action in order to effect the registration of the
Preferred Stock and Common Stock to be issued as the Purchase Consideration and
the Common Stock to be issued upon conversion of the Preferred Stock to be
registered pursuant to the provisions of the Securities Exchange Act of 1934
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(the "'34 Act"), thereby causing LIFE to be a reporting company subject to the
Commission's proxy solicitation rules and required to file the periodic and
annual reports required by the '34 Act.
6.2 ACCOUNTING AND AUDIT MATTERS. On and subsequent to the Effective
Date and to the Closing Date, LIFE shall undertake all appropriate and necessary
action in order to initiate, conduct and complete all accounting and audit
matters required and necessary in connection with the consummation of the Asset
sale-purchase transaction governed by this Agreement and as such relates to the
preparation of audited financial statements relating to LIFE and to the Seller,
as well as pro forma financial information relating to LIFE and the Seller as
such financial information and related financial statements are required to be
included in the Registration Statement and the Prospectus.
6.3 POST-CLOSING ACTION. LIFE shall undertake all necessary and
appropriate action on and subsequent to the Closing Date in order to supplement
the Prospectus contained as a part of the Registration Statement one or more
times as is required by the rules of the Commission or as is determined
appropriate by LIFE and its legal counsel, thereby permitting the continuous
delivery of such Prospectus to the Managing Members, which delivery shall be
effected in order to distribute the Preferred Stock constituting the Purchase
Consideration to the Managing Members.
ARTICLE VII
PRE-CLOSING COVENANTS OF THE SELLER
7.1 FULL COOPERATION. The Executive Committee and persons acting under
the direction of the Executive Committee shall, as of the Effective Date through
the Closing Date, extend all necessary cooperation to LIFE and persons acting
under the direction of LIFE with respect to the carrying out of all processes
necessary in order to permit the completion of the accounting and audit matters
described in this Agreement, the preparation, filing and processing to
effectiveness of the Registration Statement and Prospectus relating to the
Preferred Stock and Common Stock, the consummation of the Asset sale-purchase
transaction governed by this Agreement and the distribution of the Preferred
Stock to the Managing Members. Such cooperation shall include, but not be
limited to, any due diligence processes deemed appropriate by LIFE or necessary
in connection with the preparation, filing and processing to effectiveness of
the Registration Statement and Prospectus.
7.2 COMMUNICATIONS WITH MANAGING MEMBERS. Commencing with the Effective
Date and through the Closing Date, the Seller will not effect any communication
to its Managing Members, except those Managing Members who are members of the
Executive Committee, with respect to the Asset sale-purchase transaction
governed by this Agreement and the intended distribution of the Preferred Stock
and/or Common Stock constituting the Purchase Consideration to the Managing
Members of the Seller unless such communication is first approved in writing by
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LIFE or LIFE's legal counsel. As used in this Section 7.2, the term
"communication" includes any written or oral communication effected by any
member of the Executive Committee or by the Executive Committee as a group or by
any employee or agent of the Seller.
7.3 MAINTAIN ASSETS. Commencing on the Effective Date and to the
Closing Date, the Seller shall take all action as is required to maintain the
in-force status of the life insurance policies constituting the Assets as are
reflected and as shall be reflected on Schedule I hereto, such action to
include, but not be limited to, the payment of any required premium in order to
maintain the in-force status of the life insurance policies constituting the
Assets. With respect to the required conduct of the Seller, as described in this
Section 7.3, LIFE may request from time to time on and subsequent to the
Effective Date written reports as to the status of each of the life insurance
policies constituting the Assets. Such reports will be promptly provided by the
Seller to LIFE when so requested. Failure on the part of the Seller to provide
any requested report to LIFE shall constitute, at the election of LIFE, a
material breach of this Agreement, permitting termination hereof in accordance
with Article XI hereof.
7.4 REPORT OF CURRENT INFORMATION. In addition to providing the written
reports contemplated by Section 7.3 above, the Seller shall promptly report in
writing to LIFE any information, development or circumstance which occur
subsequent to the Effective Date and prior to and including the Closing Date
which may affect the representations and warranties extended by the Seller to
LIFE in this Agreement or which affect in a material fashion the information
contained in the Registration Statement and Prospectus.
7.5 FURTHER ACTION RE ASSETS. On and subsequent to the Effective Date
and prior to the Closing Date, the Seller shall have completed all necessary
action permitting LIFE to be named as the sole and exclusive beneficiary
entitled to receive any and all death benefit proceeds (or any other policy
benefits) payable under all of the life insurance policies which constitute the
Assets unless any such policy or policies are excepted from such action pursuant
to written notice to the Seller from LIFE.
7.6 NO INCONSISTENT ACTION. On and subsequent to the Effective Date and
to and including the Closing Date, the Seller shall not take any action or fail
to implement and carry out any course of action which has as its effect the
diminishment or elimination of the Seller's ability to be in compliance with the
terms of this Agreement on and subsequent to the Effective Date and to and
including the Closing Date or which would diminish or preclude the Seller's
ability to consummate the sale-purchase transaction involving the Assets and the
distribution of the Preferred Stock constituting the Purchase Consideration to
the Managing Members.
ARTICLE VIII
CONSUMMATION OF AGREEMENT TRANSACTIONS
13
8.1 THE CLOSING DATE. The consummation of the Asset sale-purchase
transaction, as provided for and governed by this Agreement, shall occur on a
Closing Date to be determined by LIFE. Such Closing Date, however, shall not be
more than _____ months from the Effective Date. The consummation of the
Agreement transactions shall occur at a time and place mutually determined by
LIFE and the Seller and the facilities of the United States mail or other
acceptable document delivery means may be utilized. To the extent appropriate,
escrow arrangements may also be used, utilizing an Escrow Agent mutually
satisfactory to LIFE and the Seller.
8.2 DELIVERIES AT CLOSING.
A. On the Closing Date, the Seller shall deliver to LIFE all of the
life insurance policies identified and scheduled on Schedule I to this Agreement
in original status, together with all Records, documents and other written
paraphernalia which are incidental to the policies so delivered and necessary
for the maintenance of the in-force status thereof. Such documents delivered
with the life insurance policies shall include documentation satisfactory to
LIFE and LIFE's counsel effecting the designation of LIFE as the policy
beneficiary for each life insurance policy scheduled and delivered.
Additionally, the Seller shall deliver to LIFE written evidence satisfactory to
LIFE and LIFE's counsel that all premiums required to be paid on and subsequent
to the Effective Date to and including the Closing Date in order to keep such
life insurance policies so delivered in force have been paid. The Seller shall
also deliver to LIFE any proceeds which it has received on and after the
Effective Date as a result of the death of the insured of a life insurance
policy or policies constituting a portion of the Assets or the occurrence of any
other event (such as policy maturity) which results in the payment of policy
benefits. The Seller shall deliver to LIFE such other documents and papers as
are deemed reasonably necessary by LIFE or LIFE's counsel in order to consummate
the sale-purchase transaction involving the Assets.
B. On the Closing Date, LIFE shall deliver to the Seller the requisite
number of shares of Preferred Stock and/or Common Stock which constitute the
Purchase Consideration evidenced by certificates registered in the names of the
Managing Members, as reflected in Schedule III hereto, which shares of Preferred
Stock and/or Common Stock shall be represented by certificates issued without
restrictive endorsement. LIFE shall also deliver to the Seller the requisite
number of Prospectus (together with any Supplements thereto) permitting delivery
of such Prospectus to the Managing Members, as such Managing Members are
reflected on Schedule III hereto. LIFE shall also deliver to the Seller the
opinion of LIFE's counsel in the form of Schedule VI hereto. LIFE shall take
such further action as is reasonably necessary and required to consummate the
Asset sale-purchase transaction provided for in this Agreement.
8.3 CERTAIN ACKNOWLEDGMENTS. The Seller acknowledges that LIFE, as of
the Effective Date and on and subsequent to the Closing Date, will be a party to
asset purchase agreements with other limited liability companies who have and
are conducting the same or substantially the same business as that conducted by
the Seller and that LIFE, therefore, will be required to coordinate the
consummation of the asset sale-purchase transactions provided for in the several
14
asset purchase agreements. The consummation of the Asset purchase transaction,
as provided for and governed by this Agreement, and as provided for an governed
by other asset purchase agreements to which LIFE is a party are expected to be
conducted in a contemporaneous manner.
15
ARTICLE IX
POST-CLOSING ACTION
9.1 BY LIFE. On and subsequent to the Closing Date, LIFE shall exert
all reasonable effort to continue the Business of the Seller, as such Business
will be conducted on the contemplated enhanced scale resulting from the
consummation of asset sale-purchase transactions under the various asset
purchase agreements described in Section 8.3 above. LIFE shall also supplement
the Prospectus one or more times as is necessary in order to keep the
information provided in such Prospectus current and to reflect, if necessary,
the consummation of the various asset sale-purchase transactions provided for in
the several asset purchase agreements existing between LIFE and various limited
liability companies other than the Seller. LIFE shall also continue the effort
to cause the Preferred Stock and/or Common Stock issued as the Purchase
Consideration and the Common Stock to be issued upon the conversion of the
Preferred Stock to be listed on an appropriate exchange, which exchange may be
the NASDAQ National Market, the NASDAQ SmallCap Market or the NASDAQ Electronic
Bulletin Board Market. The Seller shall extend its cooperation in this effort.
LIFE shall, on an initial and continuing basis, also cause to be prepared and
filed on a timely basis, such reports as are required by the '34 Act or any
securities exchange.
9.2 BY THE SELLER. On the Closing Date, the Seller shall promptly cause
to be delivered the certificates evidencing the Preferred Stock and/or Common
Stock constituting the Purchase Consideration in such share denominations as
each Managing Member is entitled. The Seller shall also promptly deliver on and
after the Closing Date with such share certificates the Prospectus, together
with any supplements to the Prospectus then existing. The Seller shall also
facilitate the completion of the consummation of the Asset sale-purchase
transaction to the extent that matters remain uncompleted subsequent to the
Closing Date.
ARTICLE X
DESCRIPTION OF PREFERRED STOCK AND COMMON STOCK
10.1 PRELIMINARY STATEMENT. The Articles of Incorporation of LIFE, as
filed with the Office of the Secretary of State, State of Nevada, authorize LIFE
to issue one billion (1,000,000,000) shares of capital stock, five hundred
million (500,000,000) of which shares shall be Common Stock with a par value of
$.001 and five hundred million (500,000,000) shares shall be Preferred Stock
issuable in series and also having a par value of $.001 per share. The Preferred
Stock may be issued in series, each series having such characteristics and
rights as determined by the Board of Directors of LIFE. Presently, the Board of
Directors of LIFE has authorized two series of Preferred Stock, that being Class
A Convertible Preferred Stock and Class B Convertible Preferred Stock. The Class
B Convertible Preferred Stock is the Preferred Stock which shall be utilized as
all or a portion of the Purchase Consideration. The Class A and Class B
Convertible Preferred Stock have similar characteristics, except that the Class
A Convertible Preferred Stock is vested with a preference in the event of the
16
liquidation, winding up and dissolution of LIFE requiring that the holders of
such Class A Convertible Preferred Stock receive the amount of $10 per share
prior to any liquidation distributions being made to the holders of LIFE's Class
B Convertible Preferred Stock and Common Stock. The Class A Convertible
Preferred Stock and the Class B Convertible Preferred Stock are both convertible
into the Common Stock of the Company. The Class A Convertible Preferred Stock is
convertible from the date of issuance thereof until LIFE becomes publicly held
at a conversion ratio of three shares of Common Stock for each share of Class A
Convertible Preferred Stock. For purposes of such conversion right the term
"publicly held" means that point in time when the freely tradeable and
unrestricted outstanding Preferred Stock and/or Common Stock of LIFE, including
the Common Stock issued as part of the Purchase Consideration pursuant to this
Agreement or upon conversion of the Class B Shares into Common Stock, is listed
pursuant to the NASDAQ National Market. The Class A Convertible Preferred Stock
and the Common Stock issued upon the conversion thereof constitute and will
constitute Restricted Securities under the '33 Act. The Class B Convertible
Preferred Stock is also convertible into the Common Stock as described in
Section 10.2 below.
10.2 THE PREFERRED STOCK. The Preferred Stock which will constitute all
or a part of the Purchase Consideration to be paid by LIFE to the Seller and
ultimately the Managing Members has been designated by LIFE as its Class B
Convertible Preferred Stock in authorized share amount of 4,500,000 shares. The
Class B Convertible Preferred Stock in the hands of the holders thereof is
entitled to one vote per share on all matters submitted to the shareholders of
LIFE for vote, as are the outstanding shares of Class A Convertible Preferred
Stock and Common Stock in the hands of the holders thereof. The holders of the
outstanding Class B Convertible Preferred Stock are afforded a liquidation
preference subject to the preference attributable to the holders of the
outstanding Class A Convertible Preferred Stock as described in Section 10.1
above which requires that each holder of Class B Convertible Preferred Stock
receive a liquidation distribution of $25 per share in any liquidation, winding
up or dissolution of LIFE prior to any liquidation distributions being made to
the holders of the outstanding Common Stock of LIFE. For a period of six months
from the Closing Date, each share of Class B Convertible Preferred Stock may be
converted into three shares of Common Stock. Commencing on the first day of the
seventh month subsequent to the Closing Date through the last day of the twelfth
month subsequent to the Closing Date, such conversion ratio is two shares of
Common Stock for each share of Class B Convertible Preferred Stock and
commencing on the first day of the thirteenth month subsequent to the Closing
Date through the last day of the eighteenth month from the Closing Date, each
share of Class B Convertible Preferred Stock may be converted into one share of
Common Stock. Subsequent to such eighteenth month, the Class B Preferred Stock
shall be mandatorily converted into Common Stock on such one-for-one basis. LIFE
estimates that it will have outstanding approximately 3,100,000 shares of
Preferred Stock upon the completion of anticipated asset sale-purchase
transactions with the Seller and the several additional limited liability
companies. LIFE anticipates having 200,000 shares of its Class A Convertible
Preferred Stock outstanding on the Effective Date.
10.3 THE COMMON STOCK. The Common Stock represents the basic equity of
LIFE. The Class A Convertible Preferred Stock, the Class B Convertible Preferred
Stock and the Common Stock are equal with respect to voting rights, each share
17
thereof being entitled to one vote. Cumulative voting is not allowed in the
election of directors of LIFE. The holders of the Common Stock will share, on a
per share basis, in any liquidation distributions effected by LIFE in the event
of its liquidation, dissolution and termination subject to the liquidation
preferences attributed to the holders of the outstanding Class A Convertible
Preferred Stock and the outstanding Class B Convertible Preferred Stock of LIFE.
The shares of Common Stock of LIFE outstanding on the Effective Date are
Restricted Securities under the '33 Act and such will continue to be the case
with respect to such shares.
10.4 REGISTERED STATUS. On the Closing Date, the shares of Class B
Convertible Preferred Stock and Common Stock of LIFE constituting the Purchase
Consideration to be paid by LIFE to the Seller and ultimately the Managing
Members in connection with the sale-purchase transaction involving the Assets
shall be registered under the '33 Act and any applicable state securities
status. Such Class B Convertible Preferred Stock and Common Stock shall also be
listed on one of the exchanges described in Section 9.3 above upon the
successful best efforts with respect thereto undertaken and completed by LIFE.
LIFE shall also include in the Registration Statement and Prospectus a
sufficient number of shares of Common Stock in order to provide that upon
conversion of the Class B Convertible Preferred Stock, the shares of Common
Stock received upon such conversion will be of a registered status and will not
constitute Restricted Securities.
ARTICLE XI
TERMINATION
11.1 BY LIFE. LIFE may terminate this Agreement upon (a) a failure in
the performance by the Seller of any of the conditions precedent as described in
Article III hereof, (b) the breach of any of the representations and warranties
extended by the Seller as such representations and warranties are set forth in
Article V hereof, or (c) the failure on the part of the Seller to fulfill the
pre-closing covenants of the Seller as set forth in Article VII hereof.
11.2 BY THE SELLER. This Agreement may be terminated by the Seller in
the event that (a) there is a lack in the performance by LIFE with respect to
any of the conditions precedent as set forth in Article III hereof, including a
failure to cause the Registration Statement to become effective under the '33
Act and/or the failure on the part of LIFE to establish a Closing Date on a date
which is within _____ months of the Effective Date, (b) there is a breach in any
of the representations and warranties extended by LIFE as set forth in Article
IV hereof, or (c) there is a failure of performance on the part of LIFE with
respect to any of the pre-closing covenants of LIFE as set forth in Article VI
of this Agreement.
11.3 WAIVER. Instead of electing to terminate the Agreement, LIFE or
the Seller, as the case may be, may waive in writing the breach, non-occurrence
18
or failure to perform on the part of LIFE or the Seller, as the case may be, of
those matters set forth in Sections 11.2 and 11.2 above, any such waiver being
in writing and delivered to LIFE or the Seller as the case may be.
11.4 EFFECT OF TERMINATION. Any such termination by LIFE or the Seller,
as the case may be, pursuant to this Article XI shall be the subject of a
written notice provided by LIFE to the Seller or the Seller to LIFE, as the case
may be, which notice shall specify the events upon which termination is being
effected by the noticing party. Such notice of termination shall become
effective within ten days of the date thereof. Upon the effectiveness of
termination of this Agreement, the respective obligations and undertakings of
LIFE and the Seller, as set forth herein, shall extinguish, and LIFE and the
Seller shall no longer be obligated to each other in any manner. All sums
expended by LIFE and/or the Seller in preparation to consummate the Asset
sale-purchase transaction provided for in this Agreement shall be the exclusive
responsibility of LIFE or the Seller, as the case may be and neither LIFE nor
the Seller shall seek reimbursement from the other with respect to such sums
expended.
ARTICLE XII
INDEMNIFICATION
12.1 BY LIFE. LIFE agrees to and does hereby indemnify and hold
harmless the Seller and any persons controlling the Seller as such term is used
in the '33 Act and the '34 Act, including, without limitation, the members of
the Executive Committee, harmless from and against any and all liability, loss,
damage, expense, cost or injury, including, without limitation, those resulting
from any and all actions, suits, proceedings and judgements, together with
reasonable costs and expenses, including, without limitation, reasonable legal
expenses relating thereto arising out of or resulting from the failure on the
part of LIFE to include information in the Registration Statement and Prospectus
reasonably deemed material or failure on the part of LIFE to state information
included in the Registration Statement and Prospectus accurately and completely,
thereby causing the Registration Statement and Prospectus to contain information
which is materially misrepresentative or which causes the Registration Statement
and Prospectus to be materially omissive.
12.2 BY THE SELLER. The Seller agrees to indemnify LIFE and persons
controlling LIFE as that term is defined in the '33 Act and the '34 Act, with
respect to losses, as described in Section 12.1 above and which occur by reason
of the providing by the Seller to LIFE of information relative to the Seller,
its Managing Members or the Business for inclusion in the Registration Statement
and Prospectus or for utilization by LIFE in connection with the consummation of
the transactions provided for herein, which information is materially omissive
or which constitutes information characterized by material misstatements of
fact.
12.3 PROCEDURE FOR INDEMNIFICATION. If any action, suit or proceeding
shall be commenced against or any claim or demand be asserted against either
LIFE or a controlling person thereof, or the Seller or a controlling person
19
thereof, as the case may be, in respect of which such party against which such
claim is asserted proposes to demand indemnification under this Article XII,
such party seeking indemnification ("Indemnitee") shall promptly notify the
other party ("Indemnitor") in writing to that effect and with reasonable
particularity containing a reference to the provisions of this Agreement. The
Indemnitor shall have the right to assume the entire control of, including the
selection of counsel, subject to the right of the Indemnitee to participate (at
its expense and with the counsel of its choice) in the defense, compromise or
settlement thereof, and in connection therewith, the Indemnitee shall cooperate
fully in all respects with the Indemnitor in any such defense, compromise or
settlement thereof, and Indemnitee shall make available to Indemnitor all
pertinent information and documents under the control of the Indemnitee. So long
as the Indemnitor is defending in good faith any such claim or demand asserted
by a third party against the Indemnitee, the Indemnitee shall not settle or
compromise such claim or demand without the prior written consent of the
Indemnitor, which consent will not be unreasonably withheld or delayed. If the
Indemnitor shall fail to defend any such action, suit, proceeding, claim or
demand, then the Indemnitee may defend, through counsel of its own choosing,
such action, suit, proceeding, claim or demand and (so long as Indemnitee gives
the Indemnitor at least five (5) days written notice of the terms of the
proposed settlement thereof and permits the Indemnitor to then undertake the
defense thereof if Indemnitor objects to the proposed settlement) to settle such
action, suit, proceeding, claim or demand and to recover from the Indemnitor the
amount of such losses.
12.4 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND INDEMNITIES. The
representations and warranties of this Agreement, and indemnification in respect
of the same, shall survive the Closing Date for a period of two (2) years, after
which time such representations and warranties, and indemnification in respect
thereof, shall be of no further force and effect unless prior to such time, the
party claiming a breach has served on the other written notice of such claim or
breach.
ARTICLE XIII
GENERAL PROVISIONS
13.1 NOTICES. All notices or other communications required or permitted
under this Agreement shall be in writing and shall be given by mail or by
facsimile transmission (in the event of facsimile transmission, a conforming
copy shall be mailed postage prepaid simultaneously therewith). If notice is to
be given to LIFE, such notice shall be deemed given when provided in the manner
provided herein to LIFE in care of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
P.A., ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, 941/366-4222, facsimile
941/366-4007. If notice is to be given to the Seller, such notice shall be
deemed given when provided in the manner provided herein to
-------------------------------------------------------------------------------
------------------------------------------------------------------------------.
13.2 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the Agreement Parties and their respective successors,
assigns, heirs and representatives.
20
13.3 BACKGROUND STATEMENT AND SCHEDULES. The BACKGROUND statement of
the Agreement and the Schedules shall be construed with and as an integral part
of this Agreement to the same extent as if such Background statement and
Schedules had been set forth verbatim herein.
13.4 ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding on the part of the Agreement Parties, and any and all previous
agreements and understandings are superseded by this Agreement.
13.5 PUBLICITY; PUBLIC ANNOUNCEMENTS. No publicity, release or
announcement concerning this Agreement or the transactions contemplated hereby
shall be issued except upon the written approval thereof by LIFE and any such
communication or announcement, including any communication to the Managing
Members, shall be in form and content which is consistent with this Agreement
and shall be approved by legal counsel for LIFE.
13.6 ATTORNEYS' FEES IN CONNECTION WITH LITIGATION. In the event of any
litigation arising out of or in connection with this Agreement, the prevailing
party shall be entitled to recover from the other its reasonable attorney's fees
and costs.
13.7 COOPERATION. LIFE and the Seller agree to execute such instruments
and take such other actions as contemplated by this Agreement to effectuate
closing.
13.8 APPLICABLE LAW. This Agreement shall be governed by the laws of
the State of Florida except in those instances where the laws of Nevada are
applicable to circumstances relating to the Seller or, with respect to the
Registration Statement and Prospectus prepared and filed with the Commission by
LIFE pursuant to the provisions of the '33 Act and with respect to the
registration of LIFE's Preferred Stock and Common Stock, under the '34 Act, in
which event the '33 Act and the '34 Act shall be applicable.
13.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original of this Agreement, but
all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Agreement Parties have executed this Agreement
as of the date and year first above written.
LIFE INVESTMENT FUNDING ENTERPRISES,
INC., a Nevada corporation
By__________________________________
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, President
21
ATTEST:
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Secretary
22
====================================
a Nevada limited liability company
By__________________________________
By__________________________________
By__________________________________
By__________________________________
By__________________________________
Being all of the Members of the Executive
Committee of the Seller
23
SCHEDULE I
TO
ASSET PURCHASE AGREEMENT
BY AND AMONG
LIFE INVESTMENT FUNDING ENTERPRISES, INC.
AND
______________________________, LLC
PURSUANT TO SECTION 1.1
SCHEDULE OF ASSETS
Status of
Policy Type of Policy Face Premium Premium
Number Policy Issuer Amount Insured Mode Payment
------ -------- ------ ------ ------- -------- -------
* Indicates a ▇▇▇▇▇▇ Policy
OTHER ASSETS TO BE SCHEDULED
SCHEDULE II
TO
ASSET PURCHASE AGREEMENT
BY AND AMONG
LIFE INVESTMENT FUNDING ENTERPRISES, INC.
AND
______________________________, LLC
PURSUANT TO SECTION 1.97
Excluded Assets
----------------
Estimated
Description of Excluded Asset Fair Value
----------------------------- ----------
SCHEDULE III
TO
ASSET PURCHASE AGREEMENT
BY AND AMONG
LIFE INVESTMENT FUNDING ENTERPRISES, INC.
AND
______________________________, LLC
PURSUANT TO SECTION 1.11
List of Managing Members
-------------------------
SEE ATTACHED
SCHEDULE IV
TO
ASSET PURCHASE AGREEMENT
BY AND AMONG
LIFE INVESTMENT FUNDING ENTERPRISES, INC.
AND
______________________________, LLC
PURSUANT TO SECTION 2.5(B)
Schedule of Inter-company Obligations
-------------------------------------
SCHEDULE V
TO
ASSET PURCHASE AGREEMENT
BY AND AMONG
LIFE INVESTMENT FUNDING ENTERPRISES, INC.
AND
_______________________________, LLC
PURSUANT TO SECTION 2.5(C)
Schedule of Accounting and Tax Preparation Fees
------------------------------------------------
SCHEDULE VI
TO
ASSET PURCHASE AGREEMENT
BY AND AMONG
LIFE INVESTMENT FUNDING ENTERPRISES, INC.
AND
______________________________, LLC
PURSUANT TO SECTION 3.5
Form of Opinion of Life's Counsel
---------------------------------
SCHEDULE VII
TO
ASSET PURCHASE AGREEMENT
BY AND AMONG
LIFE INVESTMENT FUNDING ENTERPRISES, INC.
AND
______________________________, LLC
PURSUANT TO SECTION 5.6
Description of Litigation
-------------------------
TABLE OF CONTENTS
Page
-----
BACKGROUND 1
----------
ARTICLE I - FURTHER DEFINITIONS 2
-------------------------------
1.1 ASSETS 2
------
1.2 BUSINESS 2
--------
1.3 CLOSING DATE 2
------------
1.4 COMMISSION 2
----------
1.5 COMMON STOCK 2
------------
1.6 EFFECTIVE DATE 3
--------------
1.7 EXCLUDED ASSETS 3
---------------
1.8 EXECUTIVE COMMITTEE 3
-------------------
1.9 GOVERNMENTAL AUTHORITIES 3
------------------------
1.10 LICENSES AND PERMITS 3
--------------------
1.11 MANAGING MEMBERS 3
----------------
1.12 PREFERRED STOCK 3
---------------
1.13 PROSPECTUS 3
----------
1.14 PURCHASE CONSIDERATION 3
----------------------
1.15 RECORDS 3
-------
1.16 REGISTRATION STATEMENT 4
----------------------
1.17 SCHEDULE OR SCHEDULES 4
---------------------
ARTICLE II - ASSET ACQUISITION 4
------------------------------
2.1 ASSET ACQUISITION 4
-----------------
2.2 CONDITION OF ASSETS 4
-------------------
2.3 EXCLUDED ASSETS 4
---------------
2.4 DELIVERY OF LIFE INSURANCE POLICIES 4
-----------------------------------
2.5 PURCHASE CONSIDERATION 5
----------------------
2.6 CONDITIONS PRECEDENT 6
--------------------
2.7 DETERMINING AGGREGATE FACE AMOUNT 6
---------------------------------
ARTICLE III - CONDITIONS PRECEDENT 6
----------------------------------
3.1 REQUISITE ACTION 6
----------------
A. BY LIFE 6
-------
B. BY THE SELLER 6
-------------
3.2 NECESSARY CONSENTS 7
------------------
3.3 ACCURACY OF REPRESENTATIONS AND WARRANTIES 7
------------------------------------------
3.4 NO ADVERSE CHANGE 7
-----------------
3.5 OPINION OF COUNSEL 7
------------------
i
age
----
3.6 ACCOUNTING AND AUDIT MATTERS 7
----------------------------
3.7 REGISTRATION STATEMENT EFFECTIVE 7
--------------------------------
3.8 ADDITIONAL DOCUMENTS 8
--------------------
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF LIFE 8
---------------------------------------------------
4.1 ORGANIZATION AND GOOD STANDING 8
------------------------------
4.2 AUTHORITY; NO CONFLICT 8
----------------------
4.3 REGISTRATION STATEMENT; PROSPECTUS 8
----------------------------------
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF THE SELLER 9
--------------------------------------------------------
5.1 GOOD STANDING 9
-------------
5.2 AUTHORITY; NO CONFLICT 9
----------------------
5.3 THE ASSETS 9
-----------
5.4 NO AFFILIATES OR SUBSIDIARIES 9
-----------------------------
5.5 TAXES AND TAX RETURNS 9
---------------------
5.6 LITIGATION 10
----------
5.7 SALE AND ISSUANCE OF MANAGING MEMBER INTERESTS 10
----------------------------------------------
5.8 NO CONTRACTS AFFECTING ASSETS 10
-----------------------------
5.9 ACCURACY OF PROVIDED INFORMATION 10
--------------------------------
5.10 NO FINDER'S FEE 10
---------------
ARTICLE VI - PRE-CLOSING COVENANTS OF LIFE 10
------------------------------------------
6.1 REGISTRATION STATEMENT AND PROSPECTUS 10
-------------------------------------
6.2 ACCOUNTING AND AUDIT MATTERS 11
----------------------------
6.3 POST-CLOSING ACTION 11
-------------------
ARTICLE VII - PRE-CLOSING COVENANTS OF THE SELLER 11
-------------------------------------------------
7.1 FULL COOPERATION 11
----------------
7.2 COMMUNICATIONS WITH MANAGING MEMBERS 11
------------------------------------
7.3 MAINTAIN ASSETS 12
---------------
7.4 REPORT OF CURRENT INFORMATION 12
-----------------------------
7.5 FURTHER ACTION RE ASSETS 12
------------------------
7.6 NO INCONSISTENT ACTION 12
----------------------
ARTICLE VIII - CONSUMMATION OF AGREEMENT TRANSACTIONS 12
-----------------------------------------------------
8.1 THE CLOSING DATE 12
----------------
8.2 DELIVERIES AT CLOSING 13
---------------------
8.3 CERTAIN ACKNOWLEDGMENTS 13
-----------------------
ARTICLE IX - POST-CLOSING ACTION 14
--------------------------------
9.1 BY LIFE 14
-------
ii
9.2 BY THE SELLER 14
-------------
Page
----
ARTICLE X - DESCRIPTION OF PREFERRED STOCK AND
COMMON STOCK 14
------------
10.1 PRELIMINARY STATEMENT 14
---------------------
10.2 THE PREFERRED STOCK 15
-------------------
10.3 THE COMMON STOCK 15
----------------
10.4 REGISTERED STATUS 16
-----------------
ARTICLE XI - TERMINATION 16
------------------------
11.1 BY LIFE 16
-------
11.2 BY THE SELLER 16
-------------
11.3 WAIVER 16
------
11.4 EFFECT OF TERMINATION 16
---------------------
ARTICLE XII - INDEMNIFICATION 17
-----------------------------
12.1 BY LIFE 17
-------
12.2 BY THE SELLER 17
-------------
12.3 PROCEDURE FOR INDEMNIFICATION 17
-----------------------------
12.4 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND INDEMNITIES 18
-------------------------------------------------------
ARTICLE XIII - GENERAL PROVISIONS 18
---------------------------------
13.1 NOTICES 18
-------
13.2 SUCCESSORS AND ASSIGNS 18
----------------------
13.3 BACKGROUND STATEMENT AND SCHEDULES 18
----------------------------------
13.4 ENTIRE AGREEMENT 18
----------------
13.5 PUBLICITY; PUBLIC ANNOUNCEMENTS 18
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13.6 ATTORNEYS' FEES IN CONNECTION WITH LITIGATION 19
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13.7 COOPERATION 19
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13.8 APPLICABLE LAW 19
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13.9 COUNTERPARTS 19
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SCHEDULE I - Schedule of Assets
SCHEDULE II - Excluded Assets
SCHEDULE III - List of Managing Members
SCHEDULE IV - Schedule of Inter-company Obligations
SCHEDULE V - Schedule of Accounting and Tax Preparation Fees
SCHEDULE VI - Form of Opinion of LIFE's Counsel
SCHEDULE VII - Schedule of Litigation Matters
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FIRST ADDENDUM TO
ASSET PURCHASE AGREEMENT
THIS FIRST ADDENDUM is made to that certain ASSET PURCHASE AGREEMENT
providing for the sale and purchase of the assets described in such ASSET
PURCHASE AGREEMENT (the "Agreement") which has been entered into by LIFE
INVESTMENT FUNDING ENTERPRISES, INC. ("LIFE") and
________________________________________________, a limited liability company
organized and existing pursuant to the laws of the State of Nevada ("Seller").
BACKGROUND
LIFE and the Seller adopt and restate the information set forth in the
Agreement section captioned BACKGROUND.
LIFE and the Seller wish to provide for certain changes and additions
to the provisions of the Agreement which has been entered into by LIFE and the
Seller in order to more accurately reflect the agreements, as such exist between
LIFE and the Seller. Accordingly, the Agreement is amended as follows:
1. Section 1.1 of Article I is deleted in its entirety and the following
is substituted therefor:
1.1 ASSETS. "Assets" shall mean the life insurance policies of
the Seller and other Assets constituted by cash and cash equivalents as
are being acquired by LIFE in accordance with the terms and provisions
of this Agreement and as are scheduled on Schedule I to this Agreement.
2. A new Section 1.18 shall be added to Article I of the Agreement and
shall provide as follows:
1.18 VALUATION DATE. For purposes of the acquisition
transaction herein provided for, the Assets will be valued as of June
30, 2002 unless a different time for valuation is mutually determined
and agreed to by LIFE and the Seller. The Purchase Consideration shall
be paid by LIFE to the Seller on the Closing Date in accordance with
the provisions of Article II, Section 2.5(a).
3. Section 2.1 of Article II shall be modified by the addition of the
following at the end of such Section:
Assets shall include cash and cash equivalents which shall be valued in
accordance with the provisions of Section 2.5(a).
4. Section 2.5(a) of Article II shall be modified by the addition of the
following language to the end of such Section:
Cash and cash equivalents shall, for purposes of the Purchase
Consideration, be valued at the actual amount thereof on the Closing
Date as determined as of the Valuation Date and the attributed value of
the Preferred Stock and Common Stock of LIFE, as set forth herein,
shall be applicable.
5. There shall be added a new Section 9.3 to Article IX of the Agreement
which shall provide:
9.3 SELLER DISSOLUTION. If appropriate, on and after the
Closing Date, the Seller shall take such action as is necessary to
implement and accomplish its dissolution as a limited liability company
existing under the laws of the State of Nevada.
6. Section 10.1 of Article X is modified by the addition of the following
language after the last sentence of that Section:
The terms of issuance of the Class A Convertible Preferred Stock are
anticipated to involve an undertaking on the part of LIFE to file a
Registration Statement with the Commission registering all of the
Common Stock issuable upon the full conversion of such Class A
Convertible Preferred Stock, assuming that all of such shares of Class
A Convertible Preferred Stock are converted into the Common Stock of
LIFE. Additionally, the outstanding shares of Class A Convertible
Preferred Stock may be attributed an annual ten percent (10%)
cumulative dividend which will be conditional and not required to be
paid by LIFE in the event that the Common Stock issuable upon the
conversion of such Class A Convertible Preferred Stock is listed for
trading on the NASDAQ National System on a date which is 30 months from
the date of the filing of the Registration Statement.
Except as modified by the terms of this First Addendum, LIFE and the Seller
ratify, reaffirm and restate all of the agreements set forth in the Agreement.
LIFE INVESTMENT FUNDING ENTERPRISES, INC., a Nevada
corporation
By__________________________________
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, President
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ATTEST:
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Secretary
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a Nevada limited liability company
By__________________________________
By__________________________________
By__________________________________
By__________________________________
By__________________________________
Being all of the Members of the
Executive Committee of the Seller
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