MERGER AGREEMENT
THIS MERGER AGREEMENT dated as of November 19, 1997 (this "Agreement"),
among CARRIAGE SERVICES, INC., a Delaware corporation (the "Purchaser"),
CARRIAGE SERVICES OF FLORIDA, INC., a Florida corporation (the "Acquisition
Subsidiary"), FOREST LAWN/EVERGREEN MANAGEMENT CORP., a Florida corporation (the
"Company"), and XXXX X. XXXXXXXXX and XXXXXXX X. XXXX, residents of Bay County,
Florida (together, the "Shareholders");
WITNESSETH:
WHEREAS, the Company owns and operates the Forest Lawn Memorial Cemetery
located at 0000 Xxxxxxxx Xxxxxx, the Evergreen Memorial Gardens Cemetery located
at 0000 X.X. Xxxxxxx 000 Xxxxx, and the Garden of Memories Cemetery located at
0000 Xxxx 00xx Xxxxxx, all in Panama City, Bay County, Florida (collectively,
the "Cemeteries"), and the Kent Forest Lawn Funeral Home located at 0000
Xxxxxxxx Xxxxxx in Panama City, Bay County, Florida and the Emerald Coast
Funeral Home located at 000 Xxxxxxxxx Xxxx, X.X. in Fort Xxxxxx Beach, Okaloosa
County, Florida (collectively, the "Homes"), and the Shareholders collectively
own all of the issued and outstanding capital stock of the Company in the
respective amounts shown on Schedule I hereto; and
WHEREAS, the parties desire that the Company merge with and into the
Acquisition Subsidiary in a statutory merger (the "Merger") to be consummated
under the laws of the State of Florida and upon the terms and conditions and for
the consideration herein set forth and in the Plan of Merger among the
Purchaser, the Acquisition Subsidiary and the Company in the form attached as
Exhibit A hereto (the "Plan of Merger");
NOW, THEREFORE, the parties agree as follows:
1. REORGANIZATION AND MERGER.
1.1. THE MERGER. Simultaneously with the execution of this Agreement, the
Plan of Merger shall be executed and delivered by the Purchaser, the Acquisition
Subsidiary and the Company. Subject to the terms and conditions set forth in
this Agreement and in the Plan of Merger, at the Effective Time of the Merger
(as defined in the Plan of Merger), the Company shall be merged with and into
the Acquisition Subsidiary in accordance with the laws of the State of Florida
and the Plan of Merger. The corporation surviving the Merger is sometimes herein
referred to as the "Surviving Corporation."
1.2. SS.368 REORGANIZATION. It is the intention of the parties that the
Merger constitute a "reorganization" within the meaning of Section 368 (a) (1)
(A) of the Internal Revenue Code of 1986, as amended (the "Code"), in accordance
with Section 368 (a) (2) (D) of the
Code. The parties agree to file all of their respective tax returns and reports
in a manner consistent with such intention, and to not take any filing position
in a manner inconsistent with such intention unless compelled to do so by court
order or administrative decree. Each party agrees to furnish such information
and take such action as may be reasonably requested of the other party in
connection with the foregoing (which action shall not include any change in the
commercial terms of the Merger and the other transactions incident thereto) . In
no event, however, shall the Purchaser or the Surviving Corporation be required
to incur any out-of-pocket expenses in defending such position or providing such
information or taking such action, nor shall the foregoing constitute a warranty
or guaranty on the part of the Purchaser or the Surviving Corporation that the
Merger will in fact constitute such a reorganization.
1.3. SHAREHOLDER CONSENT; WAIVER OF DISSENTERS' RIGHTS. The Shareholders,
in their capacities as shareholders of the Company, and the Purchaser, in its
capacity as a shareholder of the Acquisition Subsidiary, hereby (i) consent to
the Merger pursuant to Section 607.1103 of the Florida Statutes Annotated, and
(ii) irrevocably and unconditionally waive all dissenters' and other similar
rights with respect to the Merger under and pursuant to Sections 607.1302 and
607.1320 of the Florida Statutes Annotated.
1.4. FURTHER ASSURANCES. The Shareholders jointly and severally agree to
execute and deliver from time to time after the Effective Time of the Merger, at
the reasonable request of the Purchaser, and without further consideration, such
additional instruments of conveyance and transfer, and to take such other action
as the Purchaser may reasonably require to more effectively carry out the terms
and provisions of the Merger and the other transaction contemplated by this
Agreement and the Plan of Merger.
2. THE CLOSING.
2.1. TIME AND PLACE. The Closing of the Merger (the "Closing") shall occur
at the offices of Xxxxxxxx Xxxx, 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxx 00000
on November 20, 1997, or at such other date, time or place as may be mutually
agreed upon by the parties, but in no event later than November 30, 1997. The
date and time of the Closing is herein called the "Closing Date". At the
Closing, the Shareholders shall surrender for cancellation pursuant to the
Merger all certificates representi4g their respective shares of capital stock of
the Company, against receipt from the Purchaser of the Merger Consideration. All
action to be taken at the Closing as hereinafter set forth, and all documents
and instruments executed and delivered, and all payments made with
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respect thereto, shall be considered to have been taken, delivered or made
simultaneously, and no such action or delivery or payment shall be considered as
complete until all action incident to the Closing has been completed.
2.2. RELATED TRANSACTIONS. In addition to the Merger, at or prior to the
Closing (as specified below) the following transactions shall occur:
(a) The Acquisition Subsidiary, on the one hand, and each of Xxxx X.
Xxxxxxxxx ("Xxxxxxxxx"), Xxxxxxx X. Xxxx ("Xxxx"), Xxxxxxx Xxxx, Xx.
("Kent, Jr."), and Xxxxx Xxxxxx ("Xxxxxx"), on the other, shall each
execute and deliver to the other an Employment Agreement to be dated the
Closing Date and in substantially the forms of Exhibits X-0, X-0, X-0 and
B-4, respectively, hereto (collectively, the "Employment Agreements");
(b) The number of positions on the Purchaser's Board of Directors
shall be increased by one (1), and Xxxxxxxxx shall be elected to the
vacancy created by such increase;
(c) The Acquisition Subsidiary shall establish its Carriage Partners
Program for Northern Florida, Southern Georgia and Alabama in substantially
the form of Exhibit C hereto (the "Program"), and each Shareholder shall
become a participant in the Program in accordance with the terms and
provisions thereof; and
(d) Immediately prior to the Closing, the Company shall distribute (by
dividend, distribution or bonus) to the Shareholders (or a corporation or
other entity controlled by them) all of the capital stock owned by the
Company in LaGrange Funeral Home, Inc., a Georgia corporation (the
"LaGrange Corporation"), which owns and operates the LaGrange Funeral Home
in LaGrange, Georgia (the "LaGrange Location"), provided that from and
after the Closing the Surviving Corporation shall have no liability in
respect thereof.
3. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS. The Shareholders
jointly and severally represent and warrant to and agree with the Purchaser and
the Acquisition Subsidiary that:
3.1. TITLE TO SHARES. The Shareholders are the owners and holders,
beneficially and of record, of all of the issued and outstanding shares of
capital stock of the Company as shown on Schedule I, and the Shareholders have
good and marketable title to all of such issued and outstanding shares, free and
clear of any and all liens, encumbrances, pledges, security interests, mortgages
or claims of any other person (collectively, "Liens"), other than a Lien on such
stock in
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favor of People's First Community Bank to secure loans to the Company (which
Liens will be released at or prior to Closing).
3.2. ORGANIZATION AND EXISTENCE. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida, and has all requisite corporate power to enter into and perform its
obligations under this Agreement and to carry on its business as now conducted.
The Shareholders have delivered to the Purchaser complete and correct copies of
the Articles of Incorporation, certified by the Secretary of State of Florida,
and the Bylaws, certified by its Secretary, of the Company, all as in effect on
the date hereof.
3.3. CAPITALIZATION. The authorized capital stock of the Company consists
of 500 shares of Common Stock, $1.00 par value, all of which shares are issued
and outstanding and held by the Shareholders. All such issued and outstanding
shares are validly issued and outstanding, fully paid and nonassessable and not
issued in violation of the preemptive rights of any person. No such shares of
capital stock are held by the Company as treasury stock. The Company does not
have any outstanding subscriptions, options or other agreements or commitments
obligating it to issue shares of its capital stock. There are no shareholders,
buy-sell, voting or other similar agreements or commitments affecting the voting
or transferability of any such shares.
3.4. NO SUBSIDIARIES. Other than the La Grange Corporation (which will be
transferred out of the Company by the time of Closing), the Company does not
have any subsidiaries or any investment or ownership interest in any
corporation, joint venture or other business enterprise.
3.5. FINANCIAL INFORMATION. The Shareholders have delivered to the
Purchaser (i) the unaudited balance of the Company at May 31, 1997 (the "Company
Balance Sheet") and the related unaudited income statement of the Company for
the nine months then ended, and (ii) the unaudited balance sheet of the Company
at August 31, 1996 and the related unaudited income statement of the Company for
the twelve months then ended. All such financial statements are true and
correct, have been prepared in accordance with the books and records of the
Company, and present fairly the respective financial positions of the Company at
the dates indicated and its results of operations for the periods then ended in
accordance with the federal income tax method of accounting applied on a
consistent basis. Each Home performed the number of adult funeral services in
each of the twelve-month periods ended December 31, 1994 through 1996 and for
the seven months ended July 31, 1997 as set forth on Schedule 3.5 hereto. Each
Cemetery performed at least the number of interments for each
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of such twelve-month and seven-month periods as set forth on Schedule 3.5.
3.6. REAL PROPERTY.
(a) DESCRIPTION AND TITLE. Schedule 3.6 sets forth a legal description
of all parcels of real property in which the Company have any interest or
which is used in its business (collectively, the "Real Property"), other
than the Excluded Real Property described on Schedule 5.1(a). Schedule 3.6
also briefly describes each building and major structure and improvement
located on the Real Property. No person other than the Company has any
ownership, leasehold or other interest of any kind in the Real Property,
except for the real property on which the Emerald Coast Funeral Home is
located (the "Emerald Coast Real Property"), which is leased to the Company
as described in paragraph (b) below. The Real Property is the only interest
in real property required for the conduct of the business of the Homes and
the Cemeteries as presently conducted. All of the buildings, structures and
improvements located on the Real Property are in good operating condition,
ordinary wear and tear excepted. None of such buildings, structures or
improvements, or the operation or maintenance thereof as now operated or
maintained, contravenes any zoning ordinance or other administrative
regulation or violates any restrictive covenant or any provision of law,
the effect of which would interfere with or prevent their continued use for
the purposes for which they are now being used. There is not pending nor,
to the knowledge of either Shareholder, threatened any proceeding for the
taking or condemnation of the Real Property or any portion thereof. The
Company has good and marketable fee simple title to all of its respective
Real Property (other than the Emerald Coast Real Property), free and clear
of all Liens, other than easements and other similar title exceptions
described on Schedule 3.6 ("Permitted Liens").
(b) EMERALD COAST LEASE. All of the Emerald Coast Real Property is
validly leased to the Company under the Lease Agreement dated March 1, 1996
between the Company, as tenant, and Xxxxxx Xxxxxxxx, Trustee, as landlord
(such Lease Agreement, together with all amendments thereto, being
hereafter referred to as the "Emerald Coast Lease"); the Company is the
current lessee under the Emerald Coast Lease; a true and complete copy of
the Emerald Coast Lease has been provided to the Purchaser; there have been
no amendments or modifications to the Emerald Coast Lease except for those
for which copies have been provided to the Purchaser; the Emerald Coast
Lease is in full force and effect and valid and binding on the parties
thereto, and neither the Company nor (to
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the Shareholders' knowledge) the landlord thereunder is in default
thereunder.
(c) FIRPTA. Neither the Company nor either Shareholder is a "foreign
person" (as defined in Section 1445(f) (3) of the Internal Revenue Code of
1986, as amended (the "Code"), and the regulations issued thereunder), and
the Shareholders shall deliver at Closing one or more non-foreign
affidavits in recordable form containing such information as shall be
required by Code Section 1445(b) (2) and the regulations issued thereunder.
(d) BILLS PAID. All bills and other payments due with respect to the
ownership, operation, and maintenance of the Real Property have been (and
on the Closing Date will be) paid, and no Liens or other claims for the
same have been filed or asserted against any part of the Real Property.
(e) NO FLOOD HAZARDS. No portion of the Real Property is located
within an area that has been designated by the Federal Insurance
Administration, the Army Corp of Engineers, or any other governmental
agency or body as being subject to special flooding hazards.
(f) STATUS OF CEMETERY PROPERTIES. All of the Real Property used in
the business of each Cemetery has been plotted for cemetery use. Each
Cemetery consists of the number of developed and undeveloped acres and the
number of unsold individual grave spaces, unsold niches, unsold mausoleum
crypts and unsold lawn crypts as set forth below:
NO. OF NO. OF NO. OF
NO. OF NO. OF UNSOLD NO. OF UNSOLD UNSOLD
DEVELOPED UNDEVELOPED GRAVE UNSOLD MAUSOLEUM LAWN
ACRES ACRES SPACES NICHES CRYPTS CRYPTS
--------- ----------- -------- -------- --------- -------
Forest Lawn ................... 9.75 12.25 645 251 145 16
Evergreen ..................... 26 15 420 45 198 (260)
Garden of Memories ............ 8 9 4,125 12 157 N/A
3.7. TITLE TO AND STATUS OF PROPERTIES. All assets, rights and properties
utilized in the conduct of the business of the Homes and the Cemeteries are
owned by the Company, and none of such assets, rights or properties is subject
to any lease or license, except for Emerald Coast Real Property that is leased
to the Company as described in Section 3.6. The Company is in actual possession
and control of all properties owned by it, and has good and marketable title to
all of its assets, rights and properties, including without limitation, all
properties and assets reflected in the Company Balance Sheet, free and clear of
all Liens, except for (i) Liens to be
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discharged and released at or prior to Closing, and (ii) Permitted Liens against
Real Property.
3.8. ABSENCE OF CHANGES OR EVENTS. Since the date of the Company Balance
Sheet, there has not been:
(i) any material adverse change in the financial condition,
operations, business, properties or prospects of the Company;
(ii) any change in the authorized capital or outstanding securities of
the Company;
(iii) any capital stock, bonds or other securities which the Company
has issued, sold, delivered or agreed to issue, sell or deliver, nor has
the Company granted or agreed to grant any options, warrants or other
rights calling for the issue, sale or delivery thereof;
(iv) any borrowing or agreement by the Company to borrow any funds,
nor has the Company incurred, or become subject to, any absolute or
contingent obligation or liability, except trade payables incurred in the
ordinary course of business;
(v) any declaration or payment of any bonus or other extraordinary
compensation to any employee of the Company;
(vi) any hiring, firing, reassignment or other change in any key
personnel of the Company;
(vii) any sale, transfer or other disposition of, or agreement to
sell, transfer or otherwise dispose of, any of the inventories 6r other
assets or properties of the Company, except in the ordinary course of
business;
(viii) any damage, destruction or losses against the Company or any
waiver any rights of material value to the Company;
(ix) any labor strike or labor dispute, or the entering into of any
collective bargaining agreement, with respect to employees of the Company;
(x) any claim or liability for any material damages for any actual or
alleged negligence or other tort or breach of contract against or affecting
the Company;
(xi) any new competitor that has, to the knowledge of either
Shareholder, built, commenced to build or
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announced intentions to build a funeral home or mortuary in direct
competition with either Home or a cemetery or mausoleum in direct
competition with any Cemetery; or
(xii) any other transaction or event entered into or affecting the
Company other than in the ordinary course of business.
3.9. ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth in the Company
Balance Sheet, the Company has no, and none of its assets or properties is
subject to any, liabilities or obligations of any kind or nature, other than
unsecured trade accounts payable, accrued expenses and preneed obligations
(fully funded by insurance or covered by trust) arising in the ordinary course
of the business since the date of the Company Balance Sheet.
3.10. TAX MATTERS. All federal, state, county, local and other taxes due
and payable by the Company on or before the date of this Agreement have been
paid or are adequately provided for in the Company Balance Sheet. The Company
has filed all tax returns and reports required to be filed by each of them with
all taxing authorities, and all such tax returns and reports are true, complete
and correct. True and correct copies of the federal, state and local income tax
returns filed by or for the Company for each of its last three taxable years
have been furnished to the Purchaser. Except as described on Schedule 3.10, no
assessments of deficiencies for taxes of any kind have been made against the
Company which are presently pending or outstanding, and no audits which may
result in any such assessment are pending or, to the Share-holders' knowledge,
threatened. Except as described on Schedule 3.10, no state of facts exists or
has existed which would constitute grounds for the assessment of any tax
liability against the Company with respect to any prior taxable period which has
not been audited by the Internal Revenue Service or which has not been closed by
applicable statute. Except as described on Schedule 3.10, there are no
outstanding agreements or waivers extending the statutory period of limitations
applicable to any income tax return of the Company for any period.
3.11. INVENTORY; ACCOUNTS RECEIVABLE. The inventories reflected in the
Company Balance Sheet, and all items placed in inventory since the date thereof,
are (i) accounted for in accordance with the federal income tax method of
accounting applied on a consistent basis, and (ii) saleable or usable in the
ordinary course of business of the Company at usual and customary prices,
subject to normal returns and markdowns consistent with past practice. All
accounts and notes receivable reflected in the Company Balance Sheet, and all
accounts and notes receivable arising since the date thereof, (x) represent bona
fide claims against customers for
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goods sold or services rendered, and (y) are not subject to offsets or defenses
of any kind. At the Closing, the Shareholders shall deliver to the Purchaser a
list, certified by the Shareholders to be complete and correct, of all of the
inventory of the Company as of the Closing Date and all of their accounts
receivable arising from the preneed sale of services or merchandise by the
Cemeteries as of the Closing Date.
3.12. FIXED ASSETS. Schedule 3.12 lists all motor vehicles and all other
material items of equipment, fixtures, furniture and other fixed assets owned by
the Company. All such items are in good and operating condition and repair,
ordinary wear and tear excepted.
3.13. CONTRACTS AND COMMITMENTS. Schedule 3.13 hereto sets forth a complete
description of:
(i) all loan, credit and similar agreements to which the Company is a
party or by which it is bound, and all notes or other evidences of
indebtedness of, or agreements creating any Lien on any property of, the
Company;
(ii) all employment contracts, noncompetition agreements and other
agreements relating to the employment of any employees of the Company;
(iii) all contracts and agreements affecting the Company which do not
terminate or are not terminable by the Company upon notice of 30 days or
less or which involve an obligation on its part in excess of $1,000 per
annum or $5,000 in the aggregate; and
(iv) all other contracts and commitments of the Company entered into
outside the ordinary course of business.
Each contract and commitment described on Schedule 3.13 is valid and
binding on the parties thereto and in full force and effect, and neither the
Company, as the case may be, nor, to the knowledge of the Shareholders, any of
the other parties thereto, is in default thereunder. The Shareholders have
furnished to the Purchaser a true and complete copy of each document listed on
Schedule 3.13.
3.14. PRENEED CONTRACTS AND TRUST ACCOUNTS. Schedule 3.14 hereto accurately
and completely lists, as of the date of this Agreement (i) all preneed contracts
of the Company unfulfilled as of the date hereof, including contracts for the
sale of funeral merchandise and services, and summaries of contracts for
cemetery merchandise and plots, and (ii) all trust accounts relating to the
Homes and the Cemeteries,
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indicating the location of each and the balance thereof. All preneed contracts
required to be listed on Schedule 3.14 (x) have been entered into in the normal
course of business at regular retail prices, or pursuant to a sales promotion
program, solely for use by the named customers and members of their families on
terms not more favorable than shown on the specimen contracts which have been
delivered to the Purchaser, (y) are subject to the rules and regulations of the
Company as now in force (copies of which have been delivered to the Purchaser),
and (z) on the date hereof are in full force and effect, subject to no offsets,
claims or waivers, and neither the Company, as the case may be, nor such
customer is in default thereunder. All funds received by the Company under
preneed contracts have been deposited in the appropriate accounts and
administered and reported in accordance with the terms thereof and as required
by applicable laws and regulations. The aggregate market value of the preneed
accounts, trusts or other deposits is equal to or greater than the aggregate
preneed liability related to such accounts. The services heretofore provided by
the Company have been rendered in a professional and competent manner consistent
with prevailing professional standards, practices and customs.
3.15. TRADEMARKS. ETC. Schedule 3.15 accurately and completely describes
all trademarks, copyrights, patents and other intellectual property rights, and
applications and licenses for the foregoing (collectively, "Intangible Rights"),
owned by or licensed to or in the name of the Company. The Company owns or
possesses valid rights or adequate licenses for all of such Intangible Rights as
are necessary to the conduct of the business of the Homes and the Cemeteries as
presently conducted. The Company is not charged with infringement of any
Intangible Rights of any other person, nor does either Shareholder know of any
such infringement, whether or not claimed by any person.
3.16. INSURANCE. The Company maintains such policies of insurance in such
amounts, and which insure against such losses and risks, as are generally
maintained for comparable businesses and properties. Valid policies for such
insurance will be outstanding and duly in force at all times prior to the
Closing.
3.17. LICENSES. PERMITS. ETC. Schedule 3.17 hereto correctly and completely
lists all licenses, franchises, permits, certificates, consents, rights and
privileges issued to or held by the Company, which are all that are necessary or
appropriate for the operation of the Homes and the Cemeteries as presently
operated. All such items are in full force and effect.
3.18. LITIGATION. There are no claims, actions, suits, proceedings or
investigations pending or, to the knowl-
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edge of either Shareholder, threatened against or affecting the Company or any
of their respective assets or properties, at law or in equity or before or by
any court or federal, state, municipal or other governmental department,
commission, board, agency or instrumentality. The Company is not subject to any
continuing court or administrative order, writ, injunction or decree, nor is the
Company in default with respect to any order, writ, injunction or decree issued
by any court or foreign, federal, state, municipal or other governmental
department, commission, board, agency or instrumentality.
3.19. COMPLIANCE WITH LAWS. The Company has complied and is in compliance
with all federal, state, municipal and other statutes, rules, ordinances, and
regulations applicable to the Company and its assets, rights and properties, and
to the operation of each Home and each Cemetery (including without limitation
all occupational safety and health rules, regulations and laws, and laws and
regulations applicable to preneed and perpetual care contracts and trust
accounts, including the so-called "FTC Funeral Rule").
3.20. ENVIRONMENTAL MATTERS.
(a) The Company has complied and is in compliance with all
Environmental Laws (as hereinafter defined)
(b) Without limiting the generality of the foregoing, the Company has
obtained, and has complied and is in compliance with, all permits, licenses
and other authorizations that may be required pursuant to Environmental
Laws for the occupation of the Real Property and the operation of the
business of the Company.
(c) The Company has not received any notice, report or other
information regarding any liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise) or investigatory, remedial or
corrective obligations, relating to their respective businesses or any of
the Real Property arising under Environmental Laws.
(d) Except as set forth on Schedule 3.20, none of the following exists
on any portion of the Real Property:
(i) Underground storage tanks or surface impoundments;
(ii) Asbestos-containing material in any form or condition; or
(iii) Materials or equipment containing polychlorinated biphenyls.
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(e) The Company has not treated, stored, disposed of, arranged for or
permitted the disposal of, transported, handled, or Released any substance,
including without limitation any Hazardous Materials, or owned or operated
any facility or property, so as to give rise to liabilities for response
costs, natural resource damages or attorneys fees pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act of
1980 ("CERCLA"), as amended, or similar state Environmental Laws.
(f) Neither this Agreement nor the consummation of the transaction
that is the subject of this Agreement will result in any obligations for
site investigation or cleanup, or notification to or consent of any
governmental authority or third parties, pursuant to any so-called
"transaction-triggered" or "responsible property transfer" Environmental
Laws.
(g) Without limiting the foregoing, no facts, events or conditions
relating to the past or present facilities, properties or operations of the
Company will prevent, hinder or limit continued compliance with
Environmental Laws, give rise to any investigatory, remedial or corrective
obligations pursuant to Environmental Laws, or give rise to any other
liabilities (whether accrued absolute, contingent, unliquidated or
otherwise) pursuant to Environmental Laws, including without limitation any
relating to onsite or offsite Releases or threatened Releases of Hazardous
Materials, substances or wastes, personal injury, property damage or
natural resource damage.
(h) For purposes of this Section 3.20:
"Environmental Laws" means all laws concerning pollution or protection
of the environment (including without limitation all those relating to the
presence, use, production, generation, handling, transportation, treatment,
storage, disposal, distribution, labeling, testing, processing, discharge,
Release, threatened Release, control or cleanup of any Hazardous Materials,
substances or wastes, chemical substances or mixtures, pesticides,
pollutants, contaminants, toxic chemicals, petroleum products or
byproducts, asbestos, polychlorinated biphenyls, noise or radiation).
"Hazardous Materials" means any hazardous, toxic, dangerous or other
waste, substance of material defined as such in, regulated by or for
purposes of any Environmental Law. The Purchaser acknowledges that the
Company uses formaldehyde and other similar chemicals typically associated
with the operation of a funeral
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home, and that such substances constitute "Hazardous Materials."
"Release" has the meaning set forth in CERCLA.
3.21. EMPLOYEES. Schedule 3.21 hereto correctly and completely lists the
names and monthly or hourly rates of salary and other compensation of all the
employees and agents of the Company. Schedule 3.21 also sets forth the date of
the last salary increase for each employee listed thereon, the outstanding
balances of all loans and advances, if any, made by the Company to any employee
or agent thereof, and the number of vacation days or other time off to which
each such employee is presently eligible to take. There are not pending or, to
the knowledge of either Shareholder, threatened against the Company any general
labor disputes, strikes or concerted work stoppages, and there are no
discussions, negotiations, demands or proposals that are pending or have been
conducted or made with or by any labor union or association with respect to any
employees of the Company. No Shareholder is aware of the existence of any
serious health condition of any key management personnel of the Company that
might impair any such person's ability to perform the essential functions of his
or her normal duties into the foreseeable future after the Closing. The
Shareholders believe that the relations between the Company, on the one hand,
and their respective employees, on the other, are good.
3.22. EMPLOYEE BENEFIT PLANS. Schedule 3.22 sets forth a description
of all plans, contracts, commitments, programs and policies (including, without
limitation, pension, profit sharing, thrift, bonus, deferred compensation,
severance, retirement, disability, medical, life, dental and accidental
insurance, vacation, sick leave, death benefit and other similar employee
benefit plans and policies) maintained by the Company which provides benefits to
any employee or former employee of the Company. True and complete copies of all
such benefit plans have been provided to the Purchaser. All obligations of the
Company under the Plans have been fully paid, fully funded or adequate accruals
therefor have been made on the Company Balance Sheet. All necessary governmental
approvals have been obtained for all Plans subject to the Employee Retirement
Income Security Act of 1974 ("ERISA") and have been qualified under Section 401
of the Code, and each trust established for any Plan is exempt from federal
income taxation pursuant to Section 501 (a) of the Code. With respect to any
such Plan, there has been no (i) "reportable event" as defined in Section 4043
of ERISA, (ii) event described in Section 4062(e) or 4063 (a) of ERISA, or (iii)
in the case of any defined benefit plan, termination or partial termination.
3.23. AFFILIATED PARTY TRANSACTIONS. The Company have been operated and are
being operated in a manner separate
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from the personal and other business activities of the Shareholders and their
affiliates1 and neither of the Company nor any of its assets are subject to any
affiliated party commitments or transactions.
3.24. BOOKS AND RECORDS. All books and records of the Company are true,
correct and complete and have been maintained by it in accordance with good
business practices and in accordance with all laws, regulations and other
requirements applicable to the Company. The corporate records of the Company
reflect a true record of all meetings and proceedings of the Board of Directors
and shareholders of the Company.
3.25. FINDERS. Neither the Company nor either Shareholder is a party to or
in any way obligated under any contract or other agreement, and there are no
outstanding claims against any of them, for the payment of any broker's or
finder's fee in connection with the origin, negotiation, execution or
performance of this Agreement.
3.26. AUTHORITY OF THE SHAREHOLDERS. Each Shareholder has the full right,
capacity and authority to enter into and perform this Agreement and the other
documents to be executed by such Shareholder as provided in this Agreement, and
to consummate the transactions contemplated hereby and thereby. This Agreement
constitutes, and upon execution and delivery by each Shareholder, each of such
other documents will constitute, the legal, valid and binding obligations of the
Shareholders enforceable against them in accordance with their respective terms.
Neither the execution, delivery nor performance of this Agreement or any of such
other documents, nor the consummation of the transactions contemplated hereby or
thereby, will: (i) result in a violation or breach of any term or provision of,
constitute a default or acceleration under, require notice to or consent of any
third party to, or result in the creation of any Lien by virtue of (x) the
Articles of Incorporation or Bylaws of the Company, or (y) any contract,
agreement, lease, license or other commitment to which the Company or either
Shareholder is a party or by which the Company or any such Shareholder or his or
its respective assets or properties are bound; nor (ii) violate any statute or
any order, writ, injunction or decree of any court, administrative agency or
governmental body.
3.27. AUTHORITY OF THE COMPANY. The execution, delivery and performance by
the Company of this Agreement have been duly authorized by its Board of
Directors. This Agreement is legally binding and enforceable against the Company
in accordance with their respective terms. Neither the execution, delivery nor
performance by the Company of this Agreement will result in a violation or
breach of, nor constitute a default or accelerate the performance required
under, the
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Articles of Incorporation or Bylaws of the Company or any indenture, mortgage,
deed of trust or other contract or agreement to which the Company is a party or
by which it or its properties are bound, or violate any order, writ, injunction
or decree of any court, administrative agency or governmental body.
3.28. FULL DISCLOSURE. The representations and warranties made by the
Shareholders hereunder or in any Schedules or certificates furnished to the
Purchaser pursuant hereto or thereto, do not and will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated herein or therein necessary to make the representations or warranties
herein or therein, in light of the circumstances in which they are made, not
misleading.
3.29. SCHEDULES. The Schedules referred to in this Section 3 have been
prepared as of the date hereof in a separate binder or volume contemporaneously
with the execution of this Agreement, and have been signed for identification by
the Shareholders.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND THE ACQUISITION
SUBSIDIARY. The Purchaser and the Acquisition Subsidiary jointly and severally
represent and warrant to and agree with the Shareholders that:
4.1. ORGANIZATION AND EXISTENCE. The Acquisition Subsidiary is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Florida, and has all requisite corporate power to enter into and
perform its obligations under this Agreement and the other documents to which it
is a party. The Purchaser is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, and has all requisite
corporate power to enter into and perform its obligations under this Agreement,
including the issuance and delivery of the Purchaser Stock to the Shareholders
as provided in this Agreement. The Purchaser has delivered to the Shareholders
complete and correct copies of the Amended and Restated Certificate of
Incorporation and Bylaws of the Purchaser and the Articles of Incorporation and
Bylaws of the Acquisition Subsidiary, both as in effect on the date hereof.
4.2. CAPITALIZATION. The authorized capital stock of the Purchaser consists
of (i) 40,000,000 shares of Class A Common Stock, $.0l par value, of which
5,541,780 shares were issued and outstanding as of September 30, 1997; (ii)
10,000,000 shares of Class B Common Stock, $.01 par value, of which 5,050,485
shares were issued and outstanding as of September 30, 1997, and (iii)
70,000,000 shares of Preferred Stock, $.0l par value, of which (x) 2,000,000
shares have been designated as Series D Preferred Stock, $.01 par value, of
which
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1,682,500 shares were issued and outstanding as of September 30, 1997; (y)
11,000,000 shares have been designated as Series E Preferred Stock, $.01 par
value, none of which shares were issued and outstanding as of September 30,
1997; and (z) 15,000,000 shares have been designated as Series F Preferred
Stock, $.0l par value, of which 14,611,677 shares were issued and outstanding as
of September 30, 1997.
4.3. REPORTS AND FINANCIAL STATEMENTS. The Purchaser has filed all reports
required to be filed by it under the Securities Exchange Act of 1934, as
amended. The Purchaser has delivered to the Shareholders true and complete
copies of (i) the Prospectus dated June 3, 1997 relating to the shelf
registration of 2,000,000 shares of the Purchaser's Class A Common Stock, and
(ii) its Quarterly Report on Form 10-Q for the quarterly period ended June 30,
1997, both as filed with the Securities and Exchange Commission (collectively,
"SEC Filings"). As of their respective dates, the SEC Filings did not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. All of
the financial statements included in the SEC Filings are true and correct in all
material respects, have been prepared in accordance with the books and records
of the Purchaser and its subsidiaries, and present fairly the consolidated
financial positions of the Purchaser and its subsidiaries at the dates indicated
and the consolidated results of their operations for the periods then ended in
accordance with generally accepted accounting principles consistently applied.
4.4. NO MATERIAL ADVERSE CHANGE. Since June 30, 1997, there has not been
any material adverse change in the financial condition, operations, properties
or prospects of the Purchaser and its consolidated subsidiaries taken as a
whole.
4.5. AUTHORITY. The execution, delivery and performance by the Purchaser
and the Acquisition Subsidiary of this Agreement and the documents contemplated
in this Agreement to be executed and delivered by them have been duly authorized
by their respective Boards of Directors. This Agreement is, and upon their
execution and delivery as herein provided such other documents will be, valid
and binding upon the Purchaser and the Acquisition Subsidiary and enforceable
against each of them in accordance with their respective terms. Neither the
execution, delivery or performance by the Purchaser or the Acquisition
Subsidiary of this Agreement or any such other document will conflict with or
result in a violation or breach of any term or provision of, nor constitute a
default under, the Amended and Restated Certificate of Incorporation or Bylaws
of the Purchaser or the Articles of Incorporation or Bylaws of the Acquisition
Subsidiary, or under any indenture, mortgage, deed of trust or other contract or
agreement to
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which the Purchaser or the Acquisition Subsidiary is a party or by which they or
their respective properties are bound, except for such contracts and commitments
for which all necessary consents have been duly and validly obtained, or violate
any order, writ, injunction or decree of any court, administrative agency or
governmental body. Consummation of the transactions contemplated by this
Agreement will not require the consent or approval of the stockholders of the
Purchaser, under the laws of the State of Delaware, under applicable rules and
regulations of the National Association of Securities Dealers, Inc., or
otherwise.
4.6. FINDERS. Except as described in Section 11.1, neither the Purchaser
nor the Acquisition Subsidiary is a party to or in any way obligated under any
contract or other agreement, and there are no outstanding claims against either
of them, for the payment of any broker's or finder's fee in connection with the
origin, negotiation, execution or performance of this Agreement.
5. COVENANTS PENDING CLOSING.
5.1. COVENANTS OF THE COMPANY AND THE SHAREHOLDERS. The Company and the
Shareholders jointly and severally covenant and agree with the Purchaser that:
(a) CONDUCT OF BUSINESS. From the date of this Agreement to the
Closing Date, the business of the Company will be operated only in the
ordinary course, and, in particular, without the prior written consent of
the Purchaser, the Company will not, and the Shareholders will not cause or
allow the Company to, do any the following:
(i) cancel or permit any insurance to lapse or terminate, unless
renewed or replaced by like coverage;
(ii) amend or otherwise modify its Articles of Incorporation or
Bylaws;
(iii) issue or enter into any subscriptions, options, agreements
or other commitments in respect of the issuance, transfer, sale or
encumbrance of any shares of capital stock of the Company.
(iv) take any action described in Section 3.8;
(v) enter into any contract, agreement or other commitment of the
type described in Section 3.13;
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(vi) hire, fire, reassign or make any other change in key
personnel of the Company, or increase the rate of compensation of or
declare or pay any bonuses to any employee in excess of that listed on
Schedule 3.21; or
(vii) take any other action which would cause any of the
representations and warranties made in Section 3 hereof not to be true
and correct in all material respects on and as of the Closing Date
with the same force and effect as if the same had been made on and as
of the Closing Date.
Notwithstanding the foregoing, the Company may, immediately prior to
the Closing, (x) transfer the stock of the La Grange Corporation to the
Shareholders as contemplated in Section 2.2(d); and (y) sell to the
Shareholders fee simple title to the real estate described on Schedule
5.1(a) (the "Excluded Real Property") for the sum of $400,000.00, as shall
be represented by the Shareholders' Promissory Note payable to the Company
in such amount (the "Shareholders Note").
(b) ACCESS TO INFORMATION. Prior to Closing, the Company will give to
the Purchaser and its counsel, accountants and other representatives, full
and free access to all of the properties, books, contracts, commitments and
records of the Company so that the Purchaser may have full opportunity to
make such investigation as it shall desire to make of the affairs of the
Company.
(c) CONSENTS AND APPROVALS. The Company and the Shareholders will use
their best efforts to obtain the necessary consents and approvals of other
persons which may be required to be obtained on their part to consummate
the transactions contemplated by this Agreement.
(d) NO SHOP. For so long as this Agreement remains in effect, neither
the Company nor either Shareholder shall enter into any agreements or
commitments, or initiate, solicit or encourage any offers, proposals or
expressions of interest, or otherwise hold any discussions with or respond
to any inquiries or expressions of interest with any potential buyers,
investors investment bankers or finders, with respect to the possible sale
or other disposition of all or any substantial portion of the assets and
business of the Company or any other sale of the Company (whether by
merger, consolidation, sale of any shares of capital stock of the Company,
or otherwise), other than with the Purchaser and the Acquisition Subsidiary
as contemplated in this Agreement. If, during such period, the Company or
either Shareholder receives an inquiry or expression of interest regarding
any such
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transaction, the Company or such Shareholder, as the case may be, shall
promptly notify the Purchaser of such fact; provided that the foregoing
shall not require that the source of such expression of interest be
disclosed.
5.2. COVENANTS OF THE PURCHASER AND THE ACQUISITION SUBSIDIARY. The
Purchaser and the Acquisition Subsidiary jointly and severally covenant with the
Shareholders that the Purchaser and the Acquisition Subsidiary will use their
best efforts to obtain the necessary consents and approvals of other persons
which may be required to be obtained on their part to consummate the
transactions contemplated in this Agreement.
5.3. CONFIDENTIALITY. Prior to the Closing, each party will hold in
confidence any data and information obtained with respect to the other party or
parties from any representative, officer, director or employee thereof,
including their accountants or legal counsel, or from any books or records of
any of them, in connection with the transactions contemplated by this Agreement,
except that such party may disclose such information to its outside attorneys
and accountants and to its lenders, provided that the disclosing party shall
remain responsible to the other parties for any unauthorized disclosure thereof
by such attorneys, accountants or lenders. If the transactions contemplated
hereby are not consummated, no party in receipt of such information shall
disclose such data or information to others, except as such data or information
is published or is a matter of public knowledge or is required by an applicable
law or regulation to be disclosed. If this Agreement is terminated for any
reason, any party receiving such confidential information shall return to the
party which provided it all such data and information so obtained which is in
written form.
6. CONDITIONS TO CLOSING.
6.1. CONDITIONS TO OBLIGATIONS OF THE PURCHASER AND THE ACQUISITION
SUBSIDIARY. The obligations of the Purchaser and the Acquisition Subsidiary
under this Agreement shall be subject to the following conditions, any of which
may be expressly waived by the Purchaser in writing:
(a) REPRESENTATIONS AND WARRANTIES TRUE; COVENANTS PERFORMED. The
Purchaser shall not have discovered any error, misstatement or omission in
the representations and warranties made by the Shareholders in Section 3
hereof; the representations and warranties made by the Shareholders herein
shall be deemed to have been made again at and as of the time of Closing
and shall then be true and correct; the Company and the Shareholders shall
have performed and complied with all agreements and conditions required by
this Agreement to be performed or
-19-
complied with by them at or prior to the Closing; and the Purchaser shall have
received a certificate, signed by the Shareholders and an executive officer of
the Company, to the effect of the foregoing provisions of this Section 6.1(a).
(b) OPINION OF LEGAL COUNSEL. The Shareholders shall have caused to be
delivered to the Purchaser an opinion of Xxxxxxxx Xxxx, legal counsel for
the Company and the Shareholders, dated the Closing Date, to the effect
that:
(i) the Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Florida, with full
corporate authority to enter into and perform its obligations under
this Agreement and the Plan of Merger;
(ii) the authorized capital stock of the Company consists of 500
shares of Common Stock, $1.00 par value, all of which shares are
validly issued and outstanding and fully paid and nonassessable;
(iii) to the knowledge of such counsel, after due inquiry, there
are no outstanding subscriptions, options or other agreements or
commitments obligating the Company to issue any shares of its capital
stock or securities convertible into shares of its capital stock;
(iv) the Shareholders are the record and beneficial owners of all
of the issued and outstanding shares of capital stock of the Company,
free and clear of any and all Liens (other than as described in
Section 3.1, and the Shareholders have full capacity to enter into and
perform their obligations in accordance with this Agreement;
(v) the execution, delivery and performance by the Company of
this Agreement and the Plan of Merger have been duly authorized and
approved by all necessary corporate action required on the part of the
Company;
(vi) this Agreement and the Plan of Merger have been duly and
validly executed and delivered by the Company, and this Agreement and
the Plan of Merger constitute the valid and binding obligations of the
Company enforceable against it in accordance with their respective
terms;
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(vii) this Agreement and the other documents to be executed and
delivered hereunder by the Shareholders (as shall be specified in such
opinion) have been duly and validly executed and delivered by the
Shareholders, and this Agreement and such other documents constitute
the valid and binding obligations of the Shareholders enforceable
against them in accordance with their respective terms;
(viii) neither the execution, delivery or consummation of the
transactions contemplated by this Agreement, the Plan of Merger or any
of such other documents will (x) result in the breach of or constitute
a default under the Articles of Incorporation or Bylaws of the Company
or any loan or credit agreement, indenture, mortgage, deed of trust or
other contract or agreement known to such counsel and to which the
Company or either Shareholder is a party or by which they or their
respective assets are bound, or (y) violate any order, writ,
injunction or decree known to such counsel of any court,
administrative agency or governmental body;
(ix) except as specified in such opinion, no authorization,
approval or consent of or declaration or filing with any governmental
authority or regulatory body, federal, state or local, is necessary or
required in connection with the execution and delivery by the Company
and the Shareholders of this Agreement, the Plan of Merger or any of
such other documents;
(x) to the knowledge of such counsel after due inquiry, there are
no claims, actions, suits, proceedings or investigations pending or
threatened against or affecting the Company or any of its assets, at
law or in equity or before or by any court or federal, state,
municipal or other governmental department, commission, board, agency
or instrumentality.
Such opinion may, as to matters of fact, be given in reliance upon
certificates of the Shareholders and officers of the Company and
certificates of public officials, copies of which shall be provided to the
Purchaser at Closing. Any opinion as to the enforceability of any document
may be limited by bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and by principles of equity. Such
opinion may be limited to federal law and the internal laws of the State of
Florida.
-21-
(c) CONSENTS AND APPROVALS. The Company and the Shareholders shall
have obtained all consents and approvals of other persons and governmental
authorities to the transactions contemplated by this Agreement. Without
limiting the generality of the foregoing: (i) the landlord under the
Emerald Coast Lease shall have delivered to the Purchaser a written
instrument pursuant to which such landlord (x) consents to the transactions
hereunder (or certifies that such consent is not required) and (y)
represents to the Purchaser that the Emerald Coast Lease is in full force
and effect and that neither it nor, to its knowledge, the Company is in
default thereunder; and (ii) the Purchaser shall have received written
notice that its application to acquire control of the Cemeteries has been
approved by the Florida Board of Funeral and Cemetery Services, pursuant to
Florida Statutes Xxx. ss.497.007(2), and that all publication and waiting
periods in connection therewith have expired.
(d) NO MATERIAL ADVERSE CHANGE. Prior to the Closing there shall not
have occurred any loss or damage to the assets and properties of the
Company, including (without limitation) any of the Real Property or any
improvements located thereon (regardless of whether such loss or damage was
insured), or any other event or condition, the effect of which could
reasonably be expected to have a material adverse effect on the condition,
business, operations or prospects of the Company.
(e) RELATED TRANSACTIONS. Xxxxxxxxx, Xxxx, Xxxx, Jr. and Xxxxxx shall
have executed and delivered to the Acquisition Subsidiary their respective
Employment Agreements; and each Shareholder shall have executed and
delivered his plan adoption agreement pursuant to the terms of the Program.
(f) ENVIRONMENTAL OSHA AND STRUCTURAL REPORTS. There shall have been
conducted, at the Purchaser's expense, (i) a Phase I (and, if deemed
necessary by Purchaser, a Phase II) environmental audit of each parcel of
Real Property by an environmental consulting firm selected by Purchaser,
(ii) a health and safety inspection of each Home and each building on the
Cemeteries by a person (who may be an employee of the Purchaser) or firm
selected by the Purchaser and who is qualified and experienced in such
matters in the funeral service industry, and (iii) a structural inspection
of each Home and each building on the Cemeteries by an engineering firm
selected by the Purchaser. The Shareholders agree to take the action (and
pay any costs in taking such action) as may be reasonably recommended by
such firms and/or persons, up to $25,000 in the aggregate at the Homes and
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the Cemeteries, as the case may be. In any event, it shall be a condition
to the Purchaser's obligations hereunder that the results of the reports of
such firms or persons (together with any remedial action, if any, taken by
Shareholders, regardless of the cost, in response thereto) shall be
satisfactory to Purchaser in its sole discretion.
(g) TITLE INSURANCE. The Shareholders shall have provided to the
Acquisition Subsidiary a Leasehold Policy of Title Insurance (with respect
to the Emerald Coast Real Property) and one or more Owner's Policies of
Title Insurance (with respect to all other Real Property) issued to the
applicable Acquisition Subsidiary in agreed-upon amounts, issued by
Commonwealth Land Title Insurance Company or another title agency
reasonably acceptable to the parties (the "Title Company"), insuring the
Acquisition Subsidiary's leasehold or ownership interest (as the case may
be) in the Real Property, subject only to the Permitted Liens and any
standard printed exceptions included in a Florida standard form Policy of
Title Insurance; provided, however, that such policy shall have deleted any
exception regarding restrictions or be limited to restrictions that are
Permitted Liens, any standard exception pertaining to discrepancies,
conflicts or shortages in area shall be deleted except for "shortages in
area", and any standard exception for taxes shall be limited to subsequent
years. All premiums and other expenses to the Title Company associated with
the issuance of such title policies shall be borne equally between the
Purchaser and the Shareholders.
(h) SURVEY. The Purchaser shall have received an ALTA/ACSM survey
prepared by a licensed surveyor approved by the Purchaser and acceptable to
the Title Company, with respect to each parcel of Real Property, which
survey shall comply with any applicable standards under Florida law, be
sufficient for Title Company to delete any survey exception contained in
each applicable policy of title insurance referred to in Section 6.1(g),
save and except for the phrase "shortages in area", and otherwise be in
form and content acceptable to the Purchaser. All fees and expenses of such
surveyor shall be borne equally between the Purchaser and the Shareholders.
(i) ZONING. The Purchaser shall have received a letter or other
acceptable form of communication from a responsible officer of each
municipality or other governmental authority having jurisdiction over any
zoning ordinance or regulation of each parcel of Real Property, indicating
the zoning classification for each such parcel, affirmatively stating that
the use thereof as a
-23-
funeral home or cemetery, as the case may be, complies with such
classification, and setting forth (if applicable) the number of parking
spaces required for each such parcel under such ordinance or regulation.
(j) LIEN RELEASES. The holders of the Liens against any assets or
stock of the Company, including any of the Real Property (other than
Permitted Liens) shall have executed and delivered written releases of such
Liens, all in recordable form and otherwise acceptable to the Purchaser.
(k) OTHER MANAGEMENT ARRANGEMENTS. The Shareholders shall have
identified to the Purchaser such other personnel of the Company (in
addition to the parties to the Employment Agreements) as may be key to the
continued effective management and operation of the Homes and the
Cemeteries after the Closing, and the Purchaser shall have entered into
mutually satisfactory arrangements regarding the continued employment of
such personnel at the applicable Home or the Cemeteries following the
Closing.
(1) APPROVED BUDGET. The Purchaser and the Shareholders shall have
reached agreement regarding the proposed Operating Budget for the Homes and
the Cemeteries for the fiscal year ending December 31, 1998; and the
Purchaser shall have received from the Shareholders their certificate,
acceptable in form and substance to the Purchaser, setting forth their
acknowledgement regarding such Budget and their agreement to utilize their
best efforts to achieve the results therein contained.
(m) SHAREHOLDERS NOTE. Effective upon the Closing, the Shareholders
shall have paid in full the amount of the Shareholders Note and the amount
of all other loans and other sums owed by them to the Company.
6.2. CONDITIONS TO OBLIGATIONS OF THE COMPANY AND THE SHAREHOLDERS. The
obligations of the Company and the Shareholders under this Agreement shall be
subject to the following conditions, any of which may be expressly waived by the
Shareholders in writing:
(a) REPRESENTATIONS AND WARRANTIES TRUE; COVENANTS PERFORMED. The
Shareholders shall not have discovered any material error, misstatement or
omission in the representations and warranties made by the Purchaser and
the Acquisition Subsidiary in Section 4 hereof; the representations and
warranties made by the Purchaser and the Acquisition Subsidiary herein
shall be deemed to have been made again at and as of the time of Closing
and
-24-
shall then be true and correct; the Purchaser and the Acquisition
Subsidiary shall have performed and complied with all agreements and
conditions required by this Agreement to be performed or complied with by
them at or prior to the Closing; and the Shareholders shall have received a
certificate, signed by an executive officer of each of the Purchaser and
the Acquisition Subsidiary, to the effect of the foregoing provisions of
this Section 6.2(a).
(b) OPINION OF LEGAL COUNSEL. The Purchaser shall have caused to be
delivered to the Shareholders an opinion of Xxxxx & Xxxxx, A Professional
Corporation, legal counsel for the Purchaser and the Acquisition
Subsidiary, dated the Closing Date, to the effect that:
(i) the Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware,
and has all requisite corporate power to enter into and perform its
obligations under this Agreement and the Plan of Merger; and the
Acquisition Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida,
and has all requisite corporate power to enter into and perform its
obligations under this Agreement and the other documents contemplated
herein to be executed and delivered by the Acquisition Subsidiary (as
shall be specified in such opinion);
(ii) the execution, delivery and performance by the Purchaser and
the Acquisition Subsidiary of this Agreement and such other documents
have been duly authorized and approved by all necessary corporate
action required on their part;
(iii) this Agreement is, and upon execution and delivery as
herein provided such other documents will be, valid and binding upon
the Purchaser and the Acquisition Subsidiary, enforceable against the
Purchaser and the Acquisition Subsidiary in accordance with their
respective terms;
(iv) neither the execution, delivery or performance by the
Purchaser or the Acquisition Subsidiary of this Agreement or any of
such other documents will conflict with or result in a violation or
breach of any term or provision of, nor constitute a default under,
the Certificate of Incorporation or Bylaws of the Purchaser, the
-25-
Articles of Incorporation or Bylaws of the Acquisition Subsidiary or
under any loan or credit agreement, indenture, mortgage, deed of trust
or other contract or agreement known to such counsel and to which the
Purchaser or the Acquisition Subsidiary is a party or by which they or
their respective properties are bound, or violate any order, writ,
injunction or decree known to such counsel and of any court,
administrative agency or governmental body; and
(v) except as specified in such opinion, no authorization,
approval or consent of or declaration or filing with any governmental
authority or regulatory body, federal, state or local, is necessary or
required in connection with the execution and delivery by the
Purchaser or the Acquisition Subsidiary of this Agreement or any of
such other documents, or the performance of its obligations hereunder
or thereunder.
Such opinion may, as to matters of fact, be given in reliance upon
certificates of officers of the Purchaser and the Acquisition Subsidiary,
and on certificates of public officials, copies of which shall be provided
to the Shareholder at Closing. Any opinion as to the enforceability of any
document may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors rights and by
principles of equity. Such opinion may be limited to federal law, the
General Corporation Law of the State of Delaware and the internal laws of
the State of Texas.
(c) CONSENTS AND APPROVALS. The Purchaser and the Acquisition
Subsidiary shall have obtained all consents and approvals of other persons
and governmental authorities to the transactions contemplated by this
Agreement.
(d) NO MATERIAL ADVERSE CHANGE. Prior to the Closing there shall not
have occurred any event or condition, the effect of which could reasonably
be expected to have a material adverse effect on the condition, business,
operations or prospects of the Purchaser and its consolidated subsidiaries,
taken as a whole.
(e) RELATED TRANSACTIONS. The Acquisition Subsidiary shall have
executed and delivered to Xxxxxxxxx, Xxxx, Kent, Jr. and Xxxxxx their
respective Employment Agreements; the number of positions on the
Purchaser's Board of Directors shall have been increased by one (1) and
Xxxxxxxxx shall have been elected to the vacancy created by such increase;
and the Acquisition Subsidiary
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shall have established the Program and executed and delivered to the
Shareholders their plan adoption agreements thereunder.
6.3. MUTUAL CONDITIONS TO CLOSING. The respective obligations of each of
the parties under this Agreement shall be subject to the following mutual
conditions, which may be waived only by the unanimous agreement of all parties:
(a) CLOSING CERTIFICATES. The Company, the Purchaser and the
Acquisition Subsidiary shall have executed and delivered to each other such
certificates as to the incumbency of its officers who are executing and
delivering documents hereunder and as to the adoption of resolutions by its
directors and (where applicable) shareholders, and shall have provided
certificates of public officials certifying as to their existence and good
standing, all as shall be reasonably requested by the other parties
hereunder.
(b) NO INJUNCTIONS. There shall not have been entered or issued any
injunction, writ or order of a court of competent jurisdiction which
prohibits or substantially limits the consummation of the transactions
contemplated by this Agreement.
7. NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
7.1. NATURE OF STATEMENTS. All statements contained in this Agreement or
any Schedule or Exhibit hereto shall be deemed representations and warranties of
the party executing or delivering the same.
7.2. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Regardless of any
investigation made at any time by or on behalf of any party hereto, all
covenants, agreements, representations and warranties made hereunder or pursuant
hereto or any Schedule or Exhibit hereto or in connection with the transactions
contemplated hereby and thereby shall not terminate but shall survive the
Closing and continue in effect thereafter.
8. INDEMNIFICATION.
8.1. INDEMNIFICATION BY THE SHAREHOLDERS. The Shareholders jointly and
severally agree to indemnify and hold harmless the Purchaser and (following the
Effective Time of the Merger) the Surviving Corporation, and their respective
successors and assigns, from and against any and all losses, damages,
liabilities, obligations, costs or expenses (any one such item being herein
called a "Loss" and all such items being herein collectively called "Losses")
which are caused by
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or arise out of (i) any breach or default in the performance by the Company or
either Shareholder of any covenant or agreement of the Company or the
Shareholders contained in this Agreement, (ii) any breach of warranty or
inaccurate or erroneous representation made by either Shareholder herein, in any
Schedule delivered to the Purchaser pursuant hereto or in any certificate or
other instrument delivered by or on behalf of the Company or either Shareholder
pursuant hereto, (iii) any Closing Date Liability (as defined in the Plan of
Merger) of the Company of any kind or nature, whether absolute or contingent,
known or unknown, to the extent not paid or discharged prior to the Effective
Time of the Merger or not disclosed pursuant to the certificate of the
Shareholders delivered to the Purchaser as provided in Sections 5(a) (iii) (F)
and 5(g) of the Plan of Merger, (iv) all liabilities and obligations whatsoever
associated with the ownership and operation of the La Grange Location, and (v)
any and all actions, suits, proceedings, claims, demands, judgments, costs and
expenses (including reasonable legal fees) incident to any of the foregoing.
8.2. INDEMNIFICATION BY THE PURCHASER. The Purchaser and the Acquisition
Subsidiary jointly and severally agree to indemnify and hold harmless the
Shareholders and their heirs and assigns from and against any Losses which are
caused by or arise out of (i) any breach or default in the performance by the
Purchaser or the Acquisition Subsidiary of any covenant or agreement of the
Purchaser or the Acquisition Subsidiary contained in this Agreement, (ii) any
breach of warranty or inaccurate or erroneous representation made by the
Purchaser or the Acquisition Subsidiary herein or in any certificate or other
instrument delivered by or on behalf of the Purchaser or the Acquisition
Subsidiary pursuant hereto, and (iii) any and all actions, suits, proceedings,
claims, demands, judgments, costs and expenses (including reasonable legal fees)
incident to any of the foregoing.
8.3. THIRD PARTY CLAIMS. If any third person asserts a claim against a
party entitled to indemnification hereunder ("indemnified party") that, if
successful, might result in a claim for indemnification against another party
hereunder ("indemnifying party"), the indemnifying party shall be given prompt
written notice thereof and shall have the right (i) to participate in the
defense thereof and be represented, at its own expense, by advisory counsel
selected by it, and (ii) to approve any settlement if the indemnifying party is,
or will be, required to pay any amounts in connection therewith, which approval
shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, if
within ten business days after delivery of the indemnified party's notice
described above, the indemnifying party indicates in writing to the indemnified
party that, as between such parties, such claims shall be fully indemnified for
by the indemnifying party as provided
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herein, then the indemnifying party shall have the right to control the defense
of such claim, provided that the indemnified party shall have the right (i) to
participate in the defense thereof and be represented, at its own expenses, by
advisory counsel selected by it, and (ii) to approve any settlement if the
indemnified party's interests are, or would be, affected thereby.
8.4. OFFSET. If either Shareholder becomes obligated to indemnify the
Surviving Corporation or the Purchaser after the Closing Date pursuant to this
Agreement, at any time when any Deferred Merger Consideration or Contingent
Merger Consideration (as such terms are defined in the Plan of Merger), or any
portion of the Merger Consideration attributable to Closing Date Receivables (as
defined in the Plan of Merger), remains payable, then the Purchaser may, at its
option and without prejudice to any right of the Purchaser to proceed directly
against any of the Shareholders, set-off the amount for which the Shareholders
shall be so obligated against such components of the Merger Consideration. The
exercise of such right of set-off shall be evidenced by means of a written
notice to such effect given by the Purchaser to the Shareholders, describing the
basis for indemnity and set-off hereunder and the amount of the set-off. To the
extent of any offset against Deferred Merger Consideration, the amount offset
against shall be determined based upon present value as of the date of such
offset, at a discount rate of seven percent (7%) per annum.
9. TERMINATION.
9.1. BEST EFFORTS TO SATISFY CONDITIONS. The Company and the Shareholders
agree to use their best efforts to bring about the satisfaction of the
conditions specified in Section 6.1 hereof; and the Purchaser and the
Acquisition Subsidiary agree to use their best efforts to bring about the
satisfaction of the conditions specified in Section 6.2 hereof.
9.2. TERMINATION. This Agreement may be terminated prior to Closing by:
(a) the mutual written consent of the Shareholders and the Purchaser;
(b) the Purchaser if a material default shall be made by the Company
or either Shareholder in the observance or in the due and timely
performance by any of their covenants herein contained, or if there shall
have been a material breach or misrepresentation by the Company or either
Shareholder of any of their warranties and representations herein
contained, or if the conditions of this Agreement to be complied with or
performed
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by the Company or either Shareholder at or before the Closing shall not
have been complied with or performed at the time required for such
compliance or performance and such noncompliance or nonperformance shall
not have been expressly waived by the Purchaser in writing;
(c) the Shareholders if a material default shall be made by the
Purchaser or the Acquisition Subsidiary in the observance or in the due and
timely performance by the Purchaser or the Acquisition Subsidiary of any of
their covenants herein contained, or if there shall have been a material
breach or misrepresentation by the Purchaser or the Acquisition Subsidiary
of any of their warranties and representations herein contained, or if the
conditions of this Agreement to be complied with or performed by the
Purchaser and the Acquisition Subsidiary at or before the Closing shall not
have been complied with or performed at the time required for such
compliance or performance and such noncompliance or nonperformance shall
not have been expressly waived by the Shareholders in writing; or
(d) either the Shareholders or the Purchaser, if the Closing has not
occurred by November 30, 1997.
9.3. LIABILITY UPON TERMINATION. If this Agreement is terminated under
paragraph (a) or (d) of Section 9.2, then no party shall have any liability to
any other parties hereunder. If this Agreement is terminated under paragraph (b)
or (c) of Section 9.2, then (i) the party so terminating this Agreement shall
not have any liability to any other party hereto, provided the terminating party
has not breached any representation or warranty or failed to comply with any of
its covenants in this Agreement, and (ii) such termination shall not prejudice
the rights and remedies of the terminating party against any other party which
has breached any of its representations, warranties or covenants herein prior to
such termination.
10. POST-CLOSING COVENANTS.
10.1. RESTRICTIVE COVENANTS.
(a) NON-COMPETITION. If the Closing occurs, then for a period
commencing on the Closing Date and ending fifteen (15) years thereafter,
neither Shareholder nor by her execution hereof such Shareholder's spouse
(the Shareholders, together with their spouses being hereafter referred to
as the "Covenantors") shall, directly or indirectly:
(i) engage, as principal, agent, trustee or through the agency of
any corporation, partner-
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ship, association or agent or agency, anywhere within a fifty (50)
mile radius of either Home or any Cemetery (the "Territory"), in the
funeral, mortuary, crematory, monument, cemetery or any related line
of business (collectively, the "Business");
(ii) own or hold any beneficial interest in one percent (1%) or
more of the voting securities in any corporation, partnership or other
business entity which conducts its operations, in whole or in part, in
the Business within the Territory;
(iii) become an employee of or consultant to, or otherwise serve
in any similar capacity with, any corporation, partnership or other
business entity that conducts its business, in whole or in part, in
the Business within the Territory; or
(iv) cause or induce any present or future employee of the
Purchaser or any of its affiliates to leave the employ of the
Purchaser or any such affiliate to accept employment with such
Covenantor or with any person, firm, association or corporation with
which such Covenantor may be or become affiliated.
Without limiting the generality of the foregoing, a Covenantor shall
be deemed directly or indirectly engage in the Business if he or she acts
as a funeral director at any funeral establishment within the Territory, if
such Covenantor engages in the sale or marketing of preneed funeral
contracts for services to be performed within the Territory, or if such
Covenantor promotes or finances any family member or affiliate to operate a
Business or engage in any of the foregoing activities within the Territory.
(b) REFORMATION. The above covenants shall not be held invalid or
unenforceable because of the scope of the territory or actions subject
thereto or restricted thereby, or the period of time within which such
covenants are operative; but any judgment of a court of competent
jurisdiction may define the maximum territory and actions subject to and
restricted thereby and the period of time during which such covenants are
enforceable.
(c) REMEDIES. The Covenators agree that any remedy at law for any
actual or threatened breach of any of the foregoing covenants would be
inadequate and that the Purchaser shall be entitled to specific performance
hereof or injunctive relief or both, by temporary or
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permanent injunction or such other appropriate judicial remedy, writ or
order as may be entered into by a court of competent jurisdiction in
addition to any damages that the Purchaser may be legally entitled to
recover together with reasonable expenses of litigation, including
attorneys' fees incurred in connection therewith, as may be approved by
such court.
(d) REPRESENTATIONS. Each Covenator represents and warrants to and
agrees with the Purchaser that (i) such Covenantor understands that the
foregoing restrictions are being made incident to and as a condition of
consummation of the Merger hereunder, and that such covenants are necessary
in order to protect the business and goodwill being acquired thereby, (ii)
such covenants are not oppressive to such Covenantor in any respect, and
(iii) the consideration for such restrictions is included in the Merger
Consideration, which consideration such Covenantor acknowledges is fair and
adequate for the giving of the covenants herein and for which such
Covenantor acknowledges a direct and valuable benefit.
(e) MERGER CONSIDERATION ALLOCATION. The parties agree to allocate
$50,000 of the Merger Consideration to the foregoing covenants for federal
income tax purposes. Such allocation is not intended to be a measure of the
amount or range of damages which the Purchaser may suffer or recover as a
result of any breach of the foregoing covenants, and the Covenantors
acknowledge that in case of any such breach, the Purchaser shall be
entitled to seek in excess of such amount as it may otherwise be able to
demonstrate itself justly entitled to.
10.2. TAX MATTERS. (a) Except as provided in paragraph (b) below, the
Shareholders shall be fully responsible for all federal, state and local taxes
(including, but not limited to, income taxes) of the Company accrued through the
Closing and for completing, filing and handling all tax returns and reports in
respect in of all periods through Closing and consummation of the Merger,
including responding to any inquiries, examinations or audits regarding such
taxes, returns and reports. Without limiting the generality of the foregoing,
the Shareholders will (i) jointly and severally indemnify the Surviving
Corporation and the Purchaser from any Losses (including income tax liability,
assessments, interest and penalties) arising from any disallowance of the Merger
as a "reorganization" under Code Section 368 (other than as a result of any
action taken by the Purchaser or the Surviving Corporation following the
Merger), and (ii) cause the preparation of a short-period federal income tax
return for the Company's current year through the Closing Date (after which time
the Surviving Corporation will be included as part of the consolidated group of
which the Purchaser is the parent
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corporation), and the Shareholders shall pay all federal income taxes in respect
thereof. If after the Closing the Surviving Corporation becomes entitled to and
actually receives any federal or state income tax refund in respect of any tax
period prior to the Closing Date, the Surviving Corporation shall forward such
refund, in the form received, to the Shareholders.
(b) Notwithstanding paragraph (a) above, the Shareholders shall not be
responsible for (and the Surviving Corporation shall retain liability for)
any federal or state income tax liability ("Assumed Tax Liability") which
may be assessed after the Closing in respect of operations of the Company
prior to the Closing, but only insofar as any such tax liability is
directly attributable to the sale of cemetery merchandise and services on a
preneed basis as to which there are accounts receivable in existence on
(and ONLY to the extent of the balance of such accounts receivable as of)
the Closing Date arising from such sales ("Preneed Cemetery Accounts
Receivable"); provided, however, that without limiting the generality of
the foregoing, there is specifically excluded from Assumed Tax Liability
(i) any federal or state income tax liability arising from (a) sales from
funeral merchandise and services; (b) sales of cemetery merchandise and
services on an at-need basis; and (c) sales of cemetery merchandise and
services on a preneed basis1 but only insofar as such sales are not
reflected in the Preneed Cemetery Accounts Receivable; (ii) any penalties
and interest that may be assessed in respect of the Assumed Tax Liability;
and (iii) the professional fees of any attorneys, tax advisors or other
consultants in defending any tax position or in negotiating or settling any
tax liability. The Shareholders shall have the right to control the defense
of any audits or proceedings in which an Assumed Tax liability may be
assessed, provided that the Shareholders shall keep the Purchaser
reasonably advised of all developments in any such audit or proceedings,
the Purchaser may participate in such defense with counsel or advisors of
its own choice (and at the Purchaser's own expense), and the Purchaser
shall have the right to approve any settlement concerning the Assumed Tax
Liability, which consent shall not be unreasonably withheld or delayed. At
such time as any such assessment which may result in Assumed Tax Liability
may become final (whether by judgment or agreement), the Shareholders and
the Purchaser shall provide access to each other's records and otherwise
cooperate with one another so as to properly allocate the total tax based
upon (x) the proportion between sales of preneed cemetery merchandise and
services attributable to Preneed Cemetery Accounts Receivable balances as
of the Closing Date (on the one hand) and such sales for which there are
not such corresponding balances as of the Closing Date (on the other), and
(y) the other principles set forth above. At such time as the Assumed Tax
Liability becomes finally determined in accordance
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with this Section 10.2, the Purchaser shall reimburse the Shareholders for
the amount thereof within ten (10) business days.
10.3. EMPLOYEE MATTERS. At Closing, the Shareholders will cause the Company
to pay or satisfy all vacation, holiday and other accrued benefits to employees
of the Company which are then outstanding. Following the Closing, the
Shareholders shall be fully responsible for funding all necessary contributions
to each pension, profit sharing or other similar employee benefit plan described
on Schedule 3.22 that is required to be qualified under ERISA (collectively,
"Pension Plans") for all periods, and following the Closing the Shareholders
shall take all necessary action to terminate the Pension Plans in accordance
with applicable law in connection with which the Shareholders shall file all
necessary forms and pay all appropriate fees, fines, penalties and other sums
due in respect thereof and make any necessary distributions to plan
beneficiaries. Without limiting the generality of Section 8.1, the "Losses"
against which the Purchaser and the Surviving Corporation shall be indemnified
against shall include all such liabilities1 obligations and responsibilities
arising in connection with the Pension Plans (whether arising before or after
the Closing). The Shareholders shall keep the Purchaser reasonably informed
regarding the progress of the termination, winding up and distribution of the
Pension Plans.
10.4. RESALE OF CARRIAGE STOCK. The parties acknowledge that all shares of
Class A Common Stock of the Purchaser (and all shares of Class A Common Stock
issuable upon conversion of the Purchaser's Series E Preferred Stock)
constituting a portion of the Merger Consideration as provided in the Plan of
Merger ("Carriage Stock") will be registered under the Securities Act of 1933,
as amended, pursuant to a Registration Statement on Form S-4. Notwithstanding
such registration, however, each Shareholder, for himself and for all future
holders of the Carriage Stock, hereby agrees that, for a period of two years
following the Closing, (i) he shall not, without the Purchaser's prior written
consent, sell a number of shares of Carriage Stock, over any three-month period,
in excess of the greater of (x) one percent (1%) of the total number of shares
of Common Stock of the Purchaser then outstanding or (y) the average weekly
reported volume of trading of the Common Stock on any national securities
exchange on which the Common Stock is traded, or as reported on the NASDAQ
National Market Service, as applicable, during the four calendar weeks preceding
the date of the proposed sale; and (ii) if during such two-year period the
Purchaser engages in an underwritten public offering of its Common Stock, and
the managing underwriter(s) request(s) either or both Shareholders to refrain
from selling or otherwise disposing of any Carriage Stock for a certain period
(not to exceed 180 days), then the Shareholders shall enter into the requested
lock-up agreement
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with such underwriter(s) to the extent and in the same manner that members of
the Purchaser's Board of Directors are so requested.
10.5. LA GRANGE LOCATION. Immediately prior to the Closing, as provided in
Section 2.2(d), the Company shall distribute to the Shareholders (or their
designated entity) all of the stock of the La Grange Corporation. The Surviving
Corporation shall have no liability and obligations associated with the La
Grange Corporation or the La Grange Location, and the Surviving Corporation and
the Purchaser shall be indemnified in respect thereof as provided in Section
8.1(iv). Prior to or following the Closing, the Shareholders shall take all
necessary action to obtain all necessary approvals under Georgia law to permit
the transfer of the La Grange Corporation's stock as described in said Section
2.2(d), including any necessary transfers of the La Grange Location's funeral
establishment license to, or to be obtain a new license in the name of, the
Shareholders or their designated entity.
11. MISCELLANEOUS.
11.1. EXPENSES. Regardless of whether the Closing occurs, the parties shall
pay their own expenses in connection with the negotiation, preparation and
carrying out of this Agreement and the consummation of the transactions
contemplated herein. If the transactions contemplated by this Agreement and the
Exhibits hereto are consummated, the Company shall have no obligation for, nor
shall the Company be charged with, any such expenses of the Shareholders. All
finders' and similar fees and expenses of Xxxxxx Xxxxxx & Co. shall be borne
solely by the Purchaser, and in no event shall either Shareholder be charged or
responsible therefor. All sales, transfer, stamp or other similar taxes, if any,
which may be assessed or charged in connection with the transactions hereunder
shall be borne by the Shareholders.
11.2. NOTICES. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been given when
personally delivered or three business days following the date, mailed, first
class, registered or certified mail, postage prepaid, or when sent by facsimile
transmission and receipt is confirmed, as follows:
(i) if to the Company or either Shareholder, to:
Forest Lawn/Evergreen Management Corp.
0000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxxxxx
Facsimile: 850/785-1897
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with a copy to:
Xxxxxxxx Xxxx
X.0. Xxx 00000
Xxxxxx Xxxx, Xxxxxxx 00000
Facsimile: 904/784-9175
(ii) if to the Purchaser or the Acquisition Subsidiary, to:
Carriage Services, Inc.
0000 Xxxx Xxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: President
Facsimile: (000) 000-0000
with a copy to:
Xxxxx & Xxxxx, A Professional Corporation
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Mr. W. Xxxxxxxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
or to such other address as shall be given in writing by any party to
the other parties hereto.
11.3. ASSIGNMENT. This Agreement may not be assigned by any party hereto
without the prior written consent of the other parties; provided, however, that
following the Closing the Purchaser or the Surviving Corporation may assign its
rights hereunder without the consent of the Shareholders to a
successor-in-interest to the Purchaser or the Surviving Corporation, as the case
may be (whether by merger, sale of assets or otherwise).
11.4. SUCCESSORS BOUND. Subject to the provisions of Section 11.3, this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, assigns, heirs and personal representatives.
11.5. SECTION AND PARAGRAPH HEADINGS. The section and paragraph headings in
this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement.
11.6. AMENDMENT. This Agreement may be amended only by an instrument in
writing executed by all of the parties hereto.
11.7. ENTIRE AGREEMENT. This Agreement and the Exhibits, Schedules,
certificates and other documents referred to herein, constitute the entire
agreement of the parties
-36-
hereto, and supersede all prior understandings with respect to the subject
matter hereof and thereof.
11.8. GOVERNING LAW. This Agreement shall be construed and enforced under
and in accordance with and governed by the law of the State of Florida.
11.9. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which shall constitute the same
instrument.
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IN WITNESS WHEREOF, this Agreement has been executed and delivered as of
the date first above written.
THE PURCHASER:
CARRIAGE SERVICES, INC.
By: XXXX X. XXXXXX, President
THE ACQUISITION SUBSIDIARY:
CARRIAGE SERVICES OF FLORIDA, INC.
By: XXXX X. XXXXXX, President
THE COMPANY:
FOREST LAWN/EVERGREEN MANAGEMENT CORP.
By: XXXX X. XXXXXXXXX, President
THE SHAREHOLDERS:
XXXX X. XXXXXXXXX
XXXXXXX X. XXXX
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The undersigned spouses of the Shareholders hereby join in the execution of
this Agreement for purposes of evidencing their agreement to be bound by the
provisions of Section 10.1 hereof.
XXXXXX X. XXXXXXXXX, wife of XXXX X.
XXXXXXXXX
XXXXX XXXX, wife of XXXXXXX X. XXXX
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EXHIBIT DESCRIPTION
A Plan of Merger
B-1 Employment Agreement (Xxxx X. Xxxxxxxxx)
B-2 Employment Agreement (Xxxxxxx X. Xxxx)
B-3 Employment Agreement (Xxxxxxx Xxxx, Xx.)
B-4 Employment Agreement (Xxx Xxxxxx)
C Carriage Partners Program
SCHEDULE DESCRIPTION
I The Shareholders
3.5 Financial Information
3.6 Real Property
3.12 Fixed Assets
3.13 Contracts and Commitments
3.14 Preneed Contracts and Trust Accounts
3.15 Intangible Rights
3.17 Licenses
3.20 Environmental Matters
3.21 Employees
3.22 Employee Benefit Plans
5.1(a) Excluded Real Property
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