EXHIBIT 4
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THIS CLAIMS SETTLEMENT AGREEMENT, dated as of December 4, 1998
(this "Agreement"), is made by and among: (1) Xxxx National Corporation, a
California corporation ("Xxxx"); (2) each of the persons and entities
identified in Annex A hereto (each individually, a "Claimant"; and
collectively, The "Claimants"); and (3) Liberty Associates Limited
Partnership, a Delaware limited partnership ("Liberty").
BACKGROUND
Xxxx owes to each Claimant, on account of employment compensation,
management fees or other amounts payable, the dollar amounts specified in
Annex A hereto (the "Claims"). Xxxx and the Claimants wish to settle the
Claims in shares of Common Stock, no par value, of Xxxx ("Common Stock").
Substantially simultaneously with the execution and delivery of
this Agreement, Xxxx is executing and delivering a Stock and Membership
Interest Exchange Agreement (the "InPath Agreement"), pursuant to which
(among other things): (i) Xxxx will acquire all of the outstanding equity
interests in InPath, LLC, a Delaware limited liability company, from the
holders of such equity interests (the "InPath Members"); (ii) Xxxx will
issue and deliver to each InPath Member shares of Common Stock and Warrants
to purchase Common Stock; and (iii) Xxxx, as the ["Company"], and the
InPath Members, as the ["Stockholders"], will enter into a Stockholders
Agreement in the form of Exhibit 9.2 to the InPath Agreement (the
"Stockholders Agreement"), under which (among other things) Xxxx will grant
registration rights covering the shares of Common Stock held by the
"Stockholder" parties thereto and such other parties will make certain
agreements with respect to the voting of such shares.
Liberty is the beneficial and record owner of Warrants to purchase
an aggregate of 957,373 Warrants to Purchase Common Stock originally issued
by Xxxx on November 20, 1989 (the "Liberty Warrants"). It is a condition
precedent to the Closing under (and as defined in) the InPath Agreement
That the Liberty Warrants be cancelled. It is a condition precedent to the
consummation of transactions under to Article I of this Agreement (the
"Main Transactions") that such Closing shall have occurred. It is the
intent of the parties hereto and to The InPath Agreement that such Closing
and the consummation of the Main Transactions occur substantially
simultaneously.
Now, THEREFORE, in consideration of these premises, the mutual
covenants and commitments set forth below, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged
by each of the parties hereto, it is hereby agreed as follows:
ARTICLE I: MAIN TRANSACTIONS
SECTION 1.1. Claims Settlement. (A) Effective automatically upon
and simultaneously with the Closing:
(i) each Claimant does hereby sell, assign, transfer and
deliver to Xxxx, free and clear of any and all claims, liens, pledges,
mortgages, security interests, charges, options, equities, rights of first
refusal and other restrictions and other adverse claims ("Liens"), all of
such Claimant's right, title and interest in and to such Claimant's Claims,
with the result that such Claims shall be cancelled and extinguished; and
(ii) in consideration thereof, Xxxx does hereby issue and
deliver to each Claimant, free and clear of any and all Liens, the number
of shares of Common Stock set forth opposite such Claimant's name on Annex
A attached hereto (or one (1) share of Common Stock per thirty cents ($.30)
of Claims). The shares of Common Stock issued to any particular Claimant
are hereinafter sometimes referred to as "its Claimant Shares"; and the
shares of Common Stock issued to all Claimants hereunder are hereinafter
collectively referred to as "The Claimant Shares.
(B) In order to evidence and further effect the issuance and
delivery provided for under the foregoing subsection (A)(ii), on the
Closing Date (as defined in the InPath Agreement) Xxxx shall issue and
deliver (or cause to be issued and delivered) to each Claimant a
certificate or certificates registered in its name and representing its
Claimant Shares.
(C) The transactions contemplated by this Section 1.1 are
hereinafter sometimes referred to as the "Claims Settlement".
SECTION 1.2. Liberty-Warrants Termination. Liberty and Xxxx
hereby agree that, effective automatically upon and simultaneously with the
Closing, the Liberty Warrants shall be cancelled, terminated and of no
further force or effect. The transactions contemplated by this Section 1.2
are hereinafter sometimes referred to as the "Liberty Warrants
Termination".
SECTION 1.3. Stockholders Agreement. On the Closing Date, Xxxx
and each Claimant shall execute and deliver the Stockholders Agreement.
SECTION 1.4. Conditions. It is a condition precedent to the
obligations of each Party hereto to effect and consummate the Main
Transactions to be effected and consummated by such party:
(A) in the case of all parties with respect to all Main Transactions,
that the Closing under the InPath Agreement shall have occurred (or shall
substantially simultaneously be occurring);
(B) in the case of Xxxx with respect to the Claims Settlement, that the
representations and warranties of the Claimants set forth herein shall be
true and correct in all material respects on and as of the Closing Date;
(C) in the case of Xxxx with respect to the Liberty Warrants
Termination, that the representations and warranties of Liberty set forth
herein shall be true and correct in all material respects on and as of the
Closing Date;
(D) in the case of the Claimants with respect to the Claims Settlement,
that: (i) the representations and warranties of Xxxx set forth herein
shall be true and correct in all material respects on and as of the Closing
Date, and (ii) Xxxx shall have delivered to the Claimants the Common Stock
certificates called for under Section 1.1(B);
(E) in the case of Liberty with respect to the Liberty Warrants
Termination, that the representations and warranties of Xxxx set forth
herein shall be true and correct in all material respects on and as of the
Closing Date; and
(F) in the case of Xxxx and the Claimants with respect to the
Stockholders Agreement, that all of the InPath Members shall have executed
and delivered the Stockholders Agreement.
ARTICLE II: REPRESENTATIONS AND WARRANTIES
SECTION 2.1. All Parties. Each of the parties hereto hereby
represents and warrants, with respect to itself, that:
(A) in the case of each corporate and partnership party hereto, such
party has the full corporate and/or partnership power and authority to
enter into this Agreement and the other agreement(s) and instrument(s)
contemplated hereby to which it is or is to be a party and to carry out its
obligations hereunder and thereunder;
(B) in the case of each corporate and partnership party hereto, the
execution and delivery by such party of this Agreement and other
agreement(s) and instrument(s) contemplated hereby to which it is or is to
be a party and the consummation by such party of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate and/or partnership action on its part;
(C) this Agreement and other agreement(s) and instrument(s)
contemplated hereby to which it is a party have been, and (upon the
execution and delivery thereof) the other agreement(s) and instrument(s)
contemplated hereby to which it is to be a party will be, duly executed and
delivered by such party and constitute the legal, valid and binding
obligations of such party, enforceable against such party in accordance
with their respective terms;
(D) the compliance by such party with all of the provisions of this
Agreement and other agreement(s) and instrument(s) contemplated hereby to
which it is or is to be a party, and the consummation by such party of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default (or an event which, with notice or lapse of time or
both would constitute a default) under, or result in the termination or
amendment of, or accelerate the performance required by, any indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which such party is a party or by which such party is bound,
or to which any of the property or assets of such party are subject, nor
result in any violation of the provisions of the certificate or articles of
incorporation or the bylaws of such party (if it be a corporation) or the
partnership agreement of such party (if it be a partnership), or any
statute, order, judgment, rule or regulation of any court or governmental
agency or body having jurisdiction over such party or the property or
assets of such party; and
(E) no authorization, consent or approval of, or filing with, or notice
to, any public body, court, authority or any other person or entity is
necessary for the execution and delivery by such party of this Agreement or
the other agreement(s) or instrument(s) contemplated hereby to which it is
or is to be a party or for the consummation by such party of the
transactions contemplated herein or therein, other than, in each case, such
authorizations, consents, approvals, filings and notices as have been or
will be obtained, made or given on or prior to the Closing Date.
SECTION 2.2. Liberty. Liberty hereby additionally represents and
warrants that it has good and marketable title to the Liberty Warrants,
free and clear of any and all Liens.
SECTION 2.3. Claimants. (A) Each Claimant hereby additionally
represents and warrants, with respect to itself, that:
(i) he has good and marketable title to the Claims set forth opposite
its name in Annex A hereto, free and clear of any and all Liens; and
(ii) other than the Claims, which will be extinguished as a result of
the Claims Settlement, it has no rights or claims for the payment of money
or the delivery of other value from Xxxx, or any contracts, agreements or
commitments which may give rise to the same.
(B) Each Claimant hereby additionally represents and warrants, with
respect to itself, that:
(i) its Claimant Shares are being acquired for such Claimant's own
account for investment purposes only and without any present intention to
sell, transfer or otherwise dispose of the same (except in compliance with
clause (v) hereof);
(ii) such Claimant has such knowledge and experience in financial
matters that it is capable of evaluating the merits and risks of its
investment in its Claimant Shares;
(iii) such Claimant understands that its Claimant Shares have not been
registered or qualified under the Securities Act of 1933, as amended (the
"Securities Act") or the securities laws of any state of the UniTed States
("Blue Sky Laws");
(iv) such Claimant is fully informed as to the applicable limitations
upon any distribution or resale of its Claimant Shares under the Securities
Act and Blue Sky Laws and that its Claimant Shares may not be distributed
or resold if such distribution or resale would constitute a violation of
the Securities Act or Blue Sky Laws; and
(v) such Claimant will not sell, transfer, assign, pledge or otherwise
distribute any of its Claimant Shares unless; (a) there is an effective
registration statement under the Securities Act and Blue Sky Laws covering
its Claimant Shares, (b) such sale, transfer, assignment, pledge or other
distribution is exempt from the registration or qualification requirements
of the Securities Act and Blue Sky Laws or (C) the Securities Act and Blue
Sky Laws are inapplicable to such transaction.
(C) In connection with the foregoing, each Claimant agrees and consents
to the inclusion on the certificate(s) representing its Claimant Shares of
the following legend:
"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN TAKEN BY THE ACE FOR
INVESTMENT PURPOSES. SAID SECURITIES MAY NOT BE SOLD OR TRANSFERRED (A)
UNLESS THEY HAVE BEEN REGISTERED UNDER SAID ACT, OR (B) UNLESS SUCH
REGISTRATION IS EXPRESSLY WAIVED BY THE COMPANY, OR THE TRANSFER AGENT (OR
THE COMPANY, IF THEN ACTING AS ITS TRANSFER AGENT) IS PRESENTED WITH A
WRITTEN OPINION SATISFACTORY TO COUNSEL FOR THE COMPANY TO THE EFFECT THAT
SUCH REGISTRAtION IS NOT REQUIRED UNDER THE CIRCUMSTANCES OF SUCH SALE OR
TRANSFER."
(D) The representations, warranties and agreements in the foregoing
Section 2.3(B) and (C) may be relied upon by Xxxx and also by: (i) Xxxx'x
counsel on the date hereof, Berlack, Israels & Xxxxxxxx LLP, New York, New
York, in connection with any opinion or other letter that they may deliver
in respect of the issuance and delivery of the Claimant Shares, and (ii)
the Company's Transfer agent, Continental Stock Transfer & Trust Company,
in connection with their effectuation of such issuance and delivery.
ARTICLE III: MISCELLANEOUS
SECTION 3.1. Further Actions. From time to time after the date
hereof, as and when requested by any party hereto, each other party hereto
shall execute and deliver, or cause to be executed and delivered, such
other and further documents and instruments and shall take, or cause to be
taken, such other and further as such requesting party may reasonably deem
necessary or desirable to further effect or evidence the transactions
contemplated hereby and to otherwise carry out the intent and purposes of
this Agreement.
SECTION 3.2. Complete Agreement. This Agreement (which includes
the Annex A hereto) contains the entire agreement among the parties hereto
with respect to subject matter hereof and supersedes all prior written or
oral agreements and understandings among the parties with respect to such
matters.
SECTION 3.3. Governing Law. Consistent with the InPath Agreement,
the execution, interpretation and performance of this Agreement shall be
governed by the laws of State of Illinois.
SECTION 3.4. Headings. The Article, Section and Annex headings in
this Agreement are for convenience of reference purposes only and shall not
control or affect the meaning or construction of any provision of this
Agreement.
SECTION 3.5. Waivers and Amendments. This Agreement may not be
modified or amended, nor may compliance with any of its terms and
conditions be waived, except in a writing executed by each of the parties
hereto.
SECTION 3.6. Gender and Plural Terms. In This Agreement: (i)
words of gender or neuter may be read as masculine, feminine or neuter, as
required or permitted by The context, and (ii) singular and plural forms of
defined and other terms herein may be read as singular or plural, as
required or permitted by the context.
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SECTION 3.7. Counterparts. This Agreement may be executed in one
or more counterparts, which, taken together, shall constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
Xxxx:
XXXX NATIONAL CORPORATION
By: /s/ Xxxxxxxxx X.Xxxxxx
Xxxxxxxxx X. Xxxxxx
President
ATTEST:
By: /s/ Xxxxxx X. Xxxxxxxx Xxxxxx X. Xxxxxxxx
Assistant Secretary
Claimants:
CADMUS CORPORATION
By: /s/ Xxxxxxxxx X. Xxxxxx
Xxxxxxxxx X. Xxxxxx
President
XXXXXX MANAGEMENT INCORPORATED
By: /s/ Xxxxxxxxx X. Xxxxxx
Xxxxxxxxx X. Xxxxxx
President
/s/ Xxxxxxxxx X. Xxxxxx
XXXXXXXXX X. XXXXXX
/s/ Xxxxxx X. Xxxx
XXXXXX X. XXXX
Liberty:
LIBERTY ASSOCIATES LIMITED PARTNERSHIP
By: /s/ Xxxxxxxxx X. Xxxxxx
Xxxxxxxxx X. Xxxxxx
Sole General Partner
