EXHIBIT 2.1
MERGER AGREEMENT
This Merger Agreement (the "Agreement"), dated November 12, 2001 is by
and among eInsure Networks Corporation, a Delaware corporation ("eInsure"),
having its principal offices at 00000 Xxxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxx,
Xxxxxxxxxx 00000, Trans-Century Resources, Inc., Texas corporation
("Trans-Century"), having its offices at 0000 X. Xx-Xxx, Xxxxxxxx XXX, Xxxxx
000, Xxxxxx, Xxxxx 00000, Xxxx X. Xxxxxxxxx and X. X. Xxxxxxxxx (collectively
the "Principal Trans-Century Shareholders") and the other holders of common
stock of Trans-Century listed on Exhibit A to this Agreement (together with the
Principal Trans-Century Shareholders, the "Trans-Century Shareholders").
RECITALS:
A. The Board of Directors of eInsure and the Board of Directors of
Trans-Century, respectively, believe it is in the long-term strategic interests
of eInsure and of Trans-Century that eInsure and Trans-Century effect the
transactions contemplated hereby.
B. Trans-Century and eInsure desire to adopt a plan of reorganization
pursuant to the provisions of Section 368(a)(1)(A) of the Internal Revenue Code
of 1986, as amended (the "Code"), providing for the merger of Trans-Century with
and into eInsure (the "Merger") pursuant to which all of the issued and
outstanding shares without par value of Trans-Century ("Trans-Century Common
Stock") will be converted into and exchanged for shares of Common Stock, par
value $0.001 per share, of eInsure ("eInsure Common Stock"), all pursuant to the
plan of reorganization set forth herein.
C. It is the intention of the parties hereto that the Merger shall
qualify as a transaction in securities exempt from registration or qualification
under the Securities Act of 1933, as amended, and under the applicable
securities laws of each state or jurisdiction where the Trans-Century
Shareholders reside.
D. eInsure and Trans-Century desire to effect the Merger and the other
transactions contemplated hereby.
E. The parties hereto desire to set forth certain representations,
warranties, covenants and agreements as an inducement to the consummation of the
Merger and the other transactions contemplated hereby.
NOW, THEREFORE, in consideration of the premises and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
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SECTION 1. MERGER AND CERTAIN RELATED TRANSACTIONS
1.1 Merger. At the Effective Time of the Merger, as hereinafter
defined, Trans-Century shall be merged with and into eInsure (the "Surviving
Corporation") pursuant to the Agreement and Plan of Merger ("Plan of Merger")
between Trans-Century and eInsure, a form of which is attached hereto as Exhibit
B and incorporated herein by reference.
1.2 Closing. The closing of the Merger (the "Closing") shall take place
at the offices of Graves, Dougherty, Xxxxxx & Xxxxx, 000 Xxxxxxxx Xxxxxx, Xxxxx
0000, Xxxxxx, Xxxxx 00000, at 10:00 a.m., Austin time, on November 14, 2001 at
such other time and place or on such other date as eInsure and Trans-Century
shall mutually agree (the "Closing Date"). At the Closing, subject to and in
accordance with the terms and conditions herein, eInsure and Trans-Century shall
effect the merger by executing and filing a Certificate of Merger in the manner
provided in the Delaware General Corporation Law and Articles of Merger in the
manner provided in the Texas Business Corporation Act. At the Closing, upon
confirmation of the filing of the Certificate of Merger in Delaware and the
Articles of Merger in Texas as described above, there shall be delivered to the
shareholders certificates representing common stock of the Surviving Corporation
upon surrender of certificates representing the outstanding shares of
Trans-Century and eInsure (the "Constituent Corporations").
1.3 Further Action. Each of Trans-Century and eInsure shall take all
such reasonable and lawful action as may be necessary or appropriate in order to
effectuate the Merger as promptly as possible. If, at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of the Constituent Corporations, the directors and officers of
each of the Constituent Corporations are fully authorized and empowered in the
name and on behalf of their respective corporation or otherwise to take, and
shall take, all such further action.
1.4 Restricted Securities. The Common Stock of the Surviving
Corporation to be issued to the Trans-Century Shareholders in the Merger
(collectively, the "eInsure Shares") will be restricted against resale pursuant
to the provisions of Federal and state securities laws. The eInsure Shares have
not been registered under the Securities Act of 1933, as amended (the
"Securities Act"), and may not be resold unless the resale thereof is registered
under the Securities Act or an exemption from such registration is available.
Each certificate representing the eInsure Shares will have a legend thereon in
substantially the form set forth in Section 2.7 hereof.
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SECTION 2. REPRESENTATIONS AND WARRANTIES OF TRANS-CENTURY AND THE TRANS-CENTURY
SHAREHOLDERS
Trans-Century represents and warrants to eInsure as set forth in
Sections 2.1, 2.2, and 2.10 through 2.25 hereof. Each Trans-Century Shareholder,
severally and not jointly, represents and warrants (as to himself only) to
eInsure as set forth in Sections 2.3 through 2.9 hereof.
2.1 Organization and Good Standing. Trans-Century is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas. Trans-Century has the corporate power and authority to carry on its
business as presently conducted. Trans-Century is qualified to do business in
all jurisdictions where the failure to be so qualified would have a material
adverse effect on its business.
2.2 Corporate Authority. Trans-Century has the corporate power to enter
into this Agreement and to perform its obligations hereunder. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by the Trans-Century Shareholders and by the
directors of Trans-Century.
2.3 Ownership of Shares. Each Trans-Century Shareholder represents with
respect to himself only, that he is the owner of record of the issued and
outstanding Trans-Century Common Stock set forth with respect to him on Exhibit
A. Such Trans-Century Shareholder represents and warrants that he or she owns
such shares free and clear of all rights, claims, liens and encumbrances, and
the shares have not been sold, pledged, assigned or otherwise transferred except
pursuant to this Agreement.
2.4 Independent Investigation. Each Trans-Century Shareholder
acknowledges that in making his or her decision to execute and deliver this
Agreement and approve the Merger, he or she will rely, in part, upon independent
investigations made by such Trans-Century Shareholder or his or her
representatives, if any.
2.5 Risks. Each Trans-Century Shareholder acknowledges and understands
that his acquisition of eInsure Shares involves a high degree of risk and is
suitable only for persons of adequate financial means who have no need for
liquidity in this investment in that (i) the Trans-Century Shareholder may not
be able to liquidate the investment in the event of an emergency; (ii)
transferability is extremely limited; and (iii) in the event of a disposition,
the Shareholder could sustain a complete loss of his entire investment. The
Trans-Century Shareholder is sufficiently experienced in financial and business
matters to be capable of evaluating the merits and risks of an investment in
eInsure; has evaluated such merits and risks, including risks particular to the
Trans-Century Shareholder's situation; and the Trans-Century Shareholder has
determined that this investment is suitable for the Trans-Century Shareholder.
The Trans-Century Shareholder has adequate financial resources and can bear a
complete loss of the Trans-Century Shareholder's investment.
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2.6 Investment Intent. Each Trans-Century Shareholder hereby represents
that the eInsure Shares he or she is acquiring are being acquired for the
Trans-Century Shareholder's own account with no intention of distributing such
securities to others. The Trans-Century Shareholder has no contract,
undertaking, agreement or arrangement with any person to sell, transfer or
otherwise distribute to any person or to have any person sell, transfer or
otherwise distribute the eInsure Shares for the Trans-Century Shareholder. The
Trans-Century Shareholder is presently not engaged, nor does the Trans-Century
Shareholder plan to engage within the presently foreseeable future, in any
discussion with any person regarding such a sale, transfer or other distribution
of the eInsure Shares or any interest therein.
2.7 Compliance with Federal and State Securities Laws. Each
Trans-Century Shareholder understands that the eInsure Shares have not been
registered under the Securities Act. Such Trans-Century Shareholder understands
that the eInsure Shares must be held indefinitely unless the sale or other
transfer thereof is subsequently registered under the Securities Act or an
exemption from such registration is available. Moreover, such Trans-Century
Shareholder understands that his right to transfer the eInsure Shares will be
subject to certain restrictions, which include restrictions against transfer
under the Securities Act and applicable state securities laws. In addition to
such restrictions, such Trans-Century Shareholder realizes that he or she may
not be able to sell or dispose of the eInsure Shares as there may be no public
or other market for them. Such Trans-Century Shareholder understands that
certificates evidencing the Shares shall bear a legend substantially as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY APPLICABLE
STATE LAW. THEY MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR PLEDGED UNLESS
REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE LAW OR PURSUANT TO
AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
2.8 No General Solicitation. Such Trans-Century Shareholder is not
acquiring the eInsure Shares because of or following any advertisement, article,
notice or other communication published in any newspaper, magazine or similar
media or broadcast over television or radio, or presented at any seminar or
meeting, or any solicitation or subscription by a person other than a
representative of eInsure.
2.9 Approvals with Respect to Trans-Century Shareholder. No approval,
authorization, consent, order or other action of, or filing with, any person,
firm or corporation or any court, administrative agency or other governmental
authority is required in connection with the execution and delivery of this
Agreement by such Trans-Century Shareholder or for the consummation by such
Trans-Century Shareholder of the transactions described herein.
2.10 Approvals with Respect to Trans-Century. No approval,
authorization, consent, order or other action of, or filing with, any person,
firm or corporation or any court, administrative agency or other governmental
authority is required in connection with the execution and delivery of this
Agreement by Trans-Century or for the consummation by Trans-Century of the
transactions described herein.
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2.11 Financial Statements; Books and Records. Attached as Schedule 2.11
are the audited financial statements of TCO Trans-Century Limited, a Texas
limited partnership and the predecessor of Trans-Century (the "Trans-Century
Predecessor"), as of and for the years ended December 31, 1999 and December 31,
2000 and unaudited financial statements of the Trans-Century Predecessor as of
and for the six months ended June 30, 2001 (the "Trans-Century Financial
Statements"). The books of account and other financial records of the
Trans-Century Predecessor and Trans-Century are complete and correct in all
material respects and are maintained in accordance with good business and
accounting practices; provided, however, that subsequent to June 30, 2001,
Trans-Century elected to charge against equity the organization and development
costs associated with its efforts (and those of Community Health Risk
Corporation, its captive insurance company) to establish insurance lines of
business. The Trans-Century Shareholders acknowledge that a minimum of two (2)
years of audited financial information (or such shorter period that
Trans-Century was in existence) will be required to be filed with the Securities
and Exchange Commission within 75 days of the Closing Date.
2.12 No Material Adverse Changes. Except as set forth on Schedule
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2.12, since June 30, 2001 there has not been:
(i) any material adverse change in the financial position of
Trans-Century;
(ii) any damage, destruction or loss materially and adversely
affecting the assets, properties, operations or condition (financial or
otherwise) of Trans-Century, whether or not covered by insurance;
(iii) any declaration, setting aside or payment of any
dividend or distribution with respect to, or any redemption or
repurchase of, Trans-Century capital stock;
(iv) any sale of an asset (other than in the ordinary course
of business) or any mortgage or pledge by Trans-Century of any
properties or assets;
(v) any adoption by Trans-Century of any pension, profit
sharing, retirement, stock bonus, stock option or similar plan or
arrangement;
(vi) any indebtedness of Trans-Century incurred for borrowed
money;
(vii) any loan or advance by Trans-Century to any shareholder,
officer, director, consultant, agent or other representative of
Trans-Century;
(viii) any material increase in the annual level of
compensation of any executive employee of Trans-Century;
(ix) any entry into or modification by Trans-Century of any
contract, agreement or transaction except in the ordinary course of
business; or
(x) any issuance by Trans-Century of any equity security.
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2.13 Taxes. Trans-Century has filed all material tax forms and reports
(or extensions thereof) due or required to be filed and has paid or made
adequate provisions for all taxes or assessments which have become due as of the
date hereof, and there are no deficiency notices outstanding. No extensions of
time for the assessment of deficiencies for any year is in effect. No deficiency
notice is proposed or, to the knowledge of the Principal Trans-Century
Shareholders after reasonable inquiry, threatened against Trans-Century. The tax
returns of Trans-Century have never been audited.
2.14 Compliance with Laws. Trans-Century has complied with all federal,
state, county and local laws, ordinances, regulations, inspections, orders,
judgments, injunctions, awards or decrees applicable to it or its business
which, if not complied with, would materially and adversely affect the business
of Trans-Century.
2.15 No Breach. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby will not:
(i) violate any provision of the Articles of Incorporation or
the Bylaws of Trans-Century;
(ii) violate, conflict with or result in the material breach
of any of the terms of, result in a material modification of, otherwise
give any other contracting party the right to terminate, or constitute
(or with notice or lapse of time, or both constitute) a default under,
any material contract or other agreement to which Trans-Century is a
party or by or to which it or any of its assets or properties is bound
or subject;
(iii) violate any order, judgment, injunction, award or decree
of any court, arbitrator or governmental or regulatory body against
Trans-Century; or
(iv) violate any statute, rule or regulation applicable to and
that would have a material adverse effect on Trans-Century, its
properties or assets.
2.16 Actions and Proceedings. Trans-Century is not a party to any
material pending litigation or, to the knowledge of the Trans-Century
Shareholders, after reasonable inquiry, any governmental investigation or
proceeding not reflected in the Trans-Century Financial Statements and, to their
best knowledge, no material litigation, claims, assessments or non-governmental
proceedings are threatened against Trans-Century.
2.17 Capitalization. The authorized capital of Trans-Century consists
of 2,000 shares of Trans-Century Common Stock without par value of which 1,200
shares are issued and outstanding. Trans-Century is current with respect to all
dividend obligations. Trans-Century has not granted, issued or agreed to grant,
issue or make any warrants, options, subscription rights or any other
commitments of any character relating to the issued or unissued shares of
capital stock of Trans-Century, except for the Merger and except as set forth on
Schedule 2.17 attached hereto and made a part hereof.
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2.18 Agreements. Schedule 2.18 sets forth a list of any material
contract or arrangement to which Trans-Century is a party or by or to which it
or its assets, properties or business are bound or subject, whether written or
oral.
2.19 Brokers or Finders. No broker's or finder's fee will be payable by
Trans-Century in connection with the transactions contemplated by this
Agreement, nor will any such fee be incurred as a result of any actions by
Trans-Century or any of its Shareholders.
2.20 Real Estate. Except as set forth on Schedule 2.20, Trans-Century
owns no real property nor is a party to any leasehold agreement. All uses of the
real property leased by Trans-Century or its subsidiaries conform in all
material respects to all applicable building and zoning ordinances, laws and
regulations.
2.21 OSHA and Environmental Compliance. To the knowledge of the
Principal Trans-Century Shareholders, Trans-Century has duly complied with, and
its offices, real property, business, assets, leaseholds and equipment are in
compliance in all material respects with, the provisions of the Federal
Occupational Safety and Health Act, the Environmental Protection Act, and all
other environmental laws. There have been no outstanding citations, notices or
orders of non-compliance issued to Trans-Century or relating to its business,
assets, property, leaseholders or equipment under such environmental laws, rules
or regulations. Trans-Century has been issued all required federal, state and
local licenses, certificates or permits relating to all applicable environmental
laws. To the best of the Principal Trans-Century Shareholders' knowledge, after
reasonable inquiry, no hazardous substances are present on any premises leased
by Trans-Century excepting such quantities as are handled in accordance with all
applicable manufacturer's instructions and governmental regulations and in the
proper storage containers and as are necessary for the operation of the
commercial business of Trans-Century.
2.22 Assets. Trans-Century holds good and valid title to the assets
shown on its balance sheet dated June 30, 2000 (the "Balance Sheet"), free and
clear of all liens, pledges, mortgages, security interests, conditional sales
contracts or any other encumbrances (each, a "Lien") (other than Permitted
Liens, as defined below). All of Trans-Century's material assets are in good
operating condition and repair and are usable in the ordinary course of business
of Trans-Century and conform in all material respects to all applicable laws,
ordinances and government orders, rules and regulations relating to their
construction and operation. To the best knowledge of Trans-Century,
Trans-Century has clear title to all of its business names, trading names,
registered trademarks, service marks and applications. "Permitted Liens" means
any Lien that: (a) secures indebtedness reflected on the Balance Sheet; (b) are
Liens filed of record; (c) are Liens for taxes accrued but not yet payable; (d)
are Liens arising as a matter of law in the ordinary course of business with
respect to obligations incurred after the date of the Balance Sheet; provided
that the obligations secured by such Liens are not delinquent or are being
contested in good faith; or (e) involve only such imperfections of title and
encumbrances, if any, which do not materially detract from the value or
materially interfere with the use, as currently used, of the properties subject
thereto or affected thereby or otherwise materially impair the business
operations being conducted thereon.
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2.23 Liabilities. Except as disclosed elsewhere in this Agreement or
the Schedules hereto, Trans-Century does not have any material indebtedness,
liability, claim, loss, damage, deficiency, obligation or responsibility,
secured or unsecured, accrued or absolute, contingent or otherwise (all of the
foregoing are collectively defined as "Liabilities"), which were not fully,
fairly and adequately reflected on the Financial Statements, as of the date
thereof. As of the Closing Date, Trans-Century will not have any Liabilities,
other than Liabilities fully and adequately reflected on the Financial
Statements, Liabilities incurred after June 30, 2001, and Liabilities that in
the aggregate are not material to Trans-Century's business or financial
condition. To the best knowledge of the Trans-Century Shareholders, there is no
circumstance, condition, event or arrangement which would hereafter give rise to
any material Liabilities of Trans-Century not in the ordinary course of
business.
2.24 Access to Records. The corporate financial records, minute books
and other documents and records of Trans-Century have been made available to
eInsure prior to the Closing. Trans-Century has provided eInsure with the
opportunity to ask questions of and receive answers from Trans-Century
concerning the terms and conditions of this Agreement and to obtain any
additional information that Trans-Century possesses or can acquire without
unreasonable effort or expense necessary to verify the accuracy of the
information provided.
2.25 Full Disclosure. No representation or warranty by Trans-Century or
the Trans-Century Shareholders in this Agreement or in any document or schedule
to be delivered by them pursuant hereto, and no written statement, certificate
or instrument furnished or to be furnished by Trans-Century pursuant hereto or
in connection with the negotiation, execution or performance of this Agreement
contains or will contain any untrue statement of a material fact or omits or
will omit to state any fact necessary to make any statement herein or therein
not materially misleading.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF EINSURE
eInsure hereby represents and warrants to Trans-Century and the Trans-
Century Shareholders as follows:
3.1 Organization and Good Standing. eInsure is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. It has the corporate power and authority to own its own property and
to carry on its business as now being conducted and is duly qualified to do
business in any jurisdiction where so required except where the failure to so
qualify would have no material adverse effect on its business.
3.2 Corporate Authority. eInsure has the corporate power to enter into
this Agreement and to perform its obligations hereunder. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by the Board of Directors of eInsure and, if
required, by the shareholders of eInsure.
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3.3 Shares of the Surviving Corporation. At the Closing, the shares to
be issued and delivered to the Trans-Century Shareholders hereunder will, when
so issued and delivered, constitute valid and legally issued shares of Common
Stock of the Surviving Corporation, fully paid and nonassessable.
3.4 Approvals. No approval, authorization, consent, order or other
action of, or filing with, any person, firm or corporation or any court,
administrative agency or other governmental authority is required in connection
with the execution and delivery of this Agreement by eInsure or for the
consummation of the transactions described herein.
3.5 Financial Statements; Books and Records. Attached as Schedule 3.5
are the audited financial statements of eInsure as of and for the years ended
December 31, 1999 and December 31, 2000 and unaudited financial statements of
eInsure as of and for the six months ended June 30, 2001 (collectively the
"eInsure Financial Statements"), all of which are on file with the U.S.
Securities and Exchange Commission (the "SEC"). The eInsure Financial Statements
fairly represent the financial position of eInsure as at such dates and the
results of its operations for the periods then ended. The eInsure Financial
Statements were prepared in accordance with generally accepted accounting
principles applied on a consistent basis, except as otherwise stated therein.
The books of account and other financial records of eInsure are complete and
correct in all material respects and are maintained in accordance with good
business and accounting practices.
3.6 No Material Adverse Changes.
Except as described on Schedule 3.6, since June 30, 2001, there has not
been:
(i) any material adverse changes in the financial position of
eInsure;
(ii) any damage, destruction or loss materially affecting the
assets, properties, prospective business, operations or condition
(financial or otherwise) of eInsure, whether or not covered by
insurance;
(iii) any declaration, setting aside or payment of any
dividend or distribution with respect to, or any redemption or
repurchase of, eInsure capital stock;
(iv) any sale of an asset (other than in the ordinary course
of business) or any mortgage or pledge by eInsure of any properties or
assets;
(v) any adoption or modification by eInsure of any pension,
profit sharing, retirement, stock bonus, stock option or similar plan
or arrangement;
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(vi) any incurred or assumed indebtedness or liability of
eInsure, whether or not currently due and payable, except in the
ordinary course of business;
(vii) any loan or advance by eInsure to any shareholder,
officer, director, employee, consultant, agent or other representative,
or any other loan or advance by eInsure otherwise than in the ordinary
course of business;
(viii) any material increase in the annual level of
compensation of any executive employee of eInsure;
(ix) any entry into or modification by eInsure of any
contract, agreement or transaction except in the ordinary course of
business; or
(x) any issuance by eInsure of any equity securities or rights
to acquire equity securities, other than as set forth in Schedule 3.6.
3.7 Taxes. eInsure has filed all tax, governmental and/or related forms
and reports (or extensions thereof) due or required to be filed by it, and has
paid all taxes due for all periods prior to the date hereof. There are no
deficiency notices outstanding with respect to any taxes or assessments nor are
there any extensions of time for the assessment of deficiencies for any year in
effect. No deficiency notice is proposed or, to the knowledge of eInsure, after
reasonable inquiry, threatened against eInsure. No tax return of eInsure has
ever been audited.
3.8 Compliance with Laws. eInsure has complied with all federal, state,
county and local laws, ordinances, regulations, inspections, orders, judgments,
injunctions, awards or decrees applicable to it or its business, which, if not
complied with, would materially and adversely affect the business of eInsure.
3.9 No Breach. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby will not:
(i) violate any provision of the Certificate of Incorporation
or By-Laws of eInsure;
(ii) violate, conflict with or result in the breach of any of
the material terms of, result in a material modification of, otherwise
give any other contracting party the right to terminate, or constitute
(or with notice or lapse of time or both constitute) a default under,
any contract or other agreement to which eInsure is a party or by or to
which it or any of its assets or properties may be bound or subject;
(iii) violate any order, judgment, injunction, award or decree
of any court, arbitrator or governmental or regulatory body against, or
binding upon, eInsure or upon the securities, properties or business of
eInsure; or
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(iv) violate any statute, rule or regulation applicable to and
that would have a material adverse effect on eInsure, its business,
operations, properties or assets.
3.10 Actions and Proceedings. eInsure is not a party to any material
pending litigation or governmental investigation or proceeding or other claim,
assessment or non-governmental proceeding, nor to its knowledge is any such
litigation or governmental investigation or proceeding or other claim,
assessment or non-governmental proceeding threatened against eInsure.
3.11 Periodic Reports. eInsure is a Section 12(g) reporting company and
therefore must file periodic reports to be filed pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act"). Except as set forth on
Schedule 3.11 hereto, each report or filing (the "1934 Act Filings") required to
be made by eInsure pursuant to the 1934 Act was timely made. Each such 1934 Act
Filing complied as to form with the requirements under the 1934 Act and the
regulations promulgated thereunder. Each such 1934 Act Filing did not misstate
any material fact or omit to state a material fact required to be stated in
order to make the information contained in such filing not misleading.
3.12 Capitalization. Attached as Schedule 3.12 is a true and correct
copy of the stockholder list of eInsure as of the date hereof. An updated list
of all stockholders of eInsure (including a list of all persons and entities who
are members, stockholders, or otherwise who hold or control any ownership
interest in AppleTree Investment Company and PageOne Productions, L.L.C. and
showing the respective ownership interest of each such entity or person) will be
provided by eInsure to the Trans-Century Shareholders at the Closing. eInsure
has 100,000,000 shares of eInsure Common Stock authorized, of which 2,000,000
shares are issued and outstanding, and 8,000,000 shares of preferred stock, par
value $0.01 per share, authorized, none of which have been issued. eInsure has
not granted, issued or agreed to grant, issue or make any warrants, options,
subscription rights or any other commitments of any character relating to the
issued or unissued shares of eInsure capital stock, except as set forth on
Schedule 3.12 and except that AppleTree Investment Company and PageOne Business
Productions, LLC will have anti-dilution rights for a period of two years from
the date of the Closing.
3.13 Agreements. Schedule 3.13 sets forth a list of any material
contract or arrangement to which eInsure is a party or by or to which it or its
assets, properties or business are bound or subject, whether written or oral.
3.14 Brokers or Finders. No broker's or finder's fee will be payable by
eInsure in connection with the transactions contemplated by this Agreement, nor
will any such fee be incurred as a result of any actions of eInsure.
3.15 Real Estate. eInsure owns no real property nor is a party to any
leasehold agreement.
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3.16 OSHA and Environmental Compliance. To the knowledge of eInsure,
eInsure has duly complied with, and its offices, real property, business,
assets, leaseholds and equipment are in compliance in all material respects
with, the provisions of the Federal Occupational Safety and Health Act, the
Environmental Protection Act, and all other environmental laws. There have been
no outstanding citations, notices or orders of non-compliance issued to eInsure
or relating to its business, assets, property, leaseholders or equipment under
such environmental laws, rules or regulations. eInsure has been issued all
required federal, state and local licenses, certificates or permits relating to
all applicable environmental laws. To the best of the eInsure's knowledge, after
reasonable inquiry, no hazardous substances are present on any premises leased
by eInsure excepting such quantities as are handled in accordance with all
applicable manufacturer's instructions and governmental regulations and in the
proper storage containers and as are necessary for the operation of the
commercial business of eInsure.
3.17 Assets. eInsure holds good and valid title to the assets shown in
the eInsure Financial Statements, free and clear of all Liens (other than
eInsure Permitted Liens, as defined below). All of the material assets of
eInsure are in good operating condition and repair and are usable in the
ordinary course of business of eInsure and conform to all applicable laws,
ordinances and government orders, rules and regulations relating to their
construction and operation. To the best knowledge of eInsure, eInsure has clear
title to all of its business names, trading names, registered trademarks,
service marks and applications. "eInsure Permitted Liens" means any Lien that:
(a) secures indebtedness reflected on the June 30, 2001 balance sheet of eInsure
that is included in the eInsure Financial Statements; (b) are Liens filed of
record; (c) are Liens for taxes accrued but not yet payable; or (d) involves
only such imperfections of title and encumbrances, if any, which do not
materially detract from the value or materially interfere with the use, as
currently used, of the properties subject thereto or affected thereby or
otherwise materially impair the business operations being conducted thereon.
3.18 Liabilities. eInsure does not have any material Liabilities which
were not fully, fairly and adequately reflected on the eInsure Financial
Statements, as of the date thereof. As of the Closing Date, eInsure will not
have any Liabilities, other than Liabilities fully and adequately reflected on
the eInsure Financial Statements, Liabilities incurred after June 30, 2001 in
the ordinary course of business, and Liabilities that in the aggregate are not
material to eInsure's business or financial condition. To the best knowledge of
eInsure, there is no circumstance, condition, event or arrangement which may
hereafter give rise to any material Liabilities not in the ordinary course of
business.
3.19 Access to Records. eInsure has provided Trans-Century and the
Trans-Century Shareholders with each of the 1934 Act Filings, and with the
records, minute books, and other documents listed on Schedule 3.19 hereto.
eInsure has provided Trans-Century with the opportunity to ask questions of and
receive answers from eInsure concerning the terms and conditions of this
Agreement and to obtain any additional information that eInsure possesses or can
acquire without unreasonable effort or expense necessary to verify the accuracy
of the information provided.
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3.20 No Claims Outstanding. eInsure represents that it is not subject
to any claims, litigation, or other charges against its assets, has no real
estate or real estate holdings, has no employees, and has one officer and two
directors, serving without pay. Therefore there can be no OSHA or other
personnel claims outstanding or potentially assertable against the company.
Furthermore, there have been no material changes in the company's position, and
the company has conducted no other business, since January 1, 2001, other than
as set forth in the 34 Act Filings.
3.21 Securities Issuances. eInsure represents that all its issued and
outstanding shares are fully paid and non-assessable, not subject to preemptive
rights, and were duly and validly issued in compliance with all laws, including
the Securities Act, and are fully described in the eInsure Financial Statements.
3.22 Full Disclosure. No representation or warranty by eInsure in this
Agreement or in any document or schedule to be delivered by them pursuant
hereto, and no written statement, certificate or instrument furnished or to be
furnished by eInsure pursuant hereto or in connection with the negotiation,
execution or performance of this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to state any fact necessary
to make any statement herein or therein not materially misleading or necessary
to complete and correct presentation of all material aspects of the business of
eInsure.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions Precedent to the Obligations of Trans-Century and the
Trans-Century Shareholders. All obligations of Trans-Century and the
Trans-Century Shareholders under this Agreement are subject to the fulfillment,
prior to or as of the Closing Date, of each of the following conditions (any one
or more of which may be waived by Trans-Century and the Trans-Century
Shareholders):
(a) The representations and warranties of eInsure contained in this
Agreement or in any certificate or document delivered pursuant to the provisions
hereof shall be true in all material respects at and as of the Closing Date as
though such representations and warranties were made at and as of such time.
(b) eInsure shall have performed and complied in all material respects
with all covenants, agreements, and conditions set forth in this Agreement to be
performed or complied with by it prior to or at the Closing.
(c) Prior to the Closing, the Board of Directors and, if required,
shareholders of eInsure shall have approved, in accordance with Delaware law,
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby, and authorized all necessary and proper
action to enable eInsure to comply with the terms of this Agreement.
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(d) eInsure shall have executed and delivered each instrument and
document to be delivered by it pursuant to this Agreement, including without
limitation the items set forth in Section 8.3 hereof.
(e) All instruments and documents to be delivered to Trans-Century and
the Trans-Century Shareholders pursuant to the provisions hereof shall be
reasonably satisfactory to legal counsel for Trans-Century.
(f) There shall be no order, decree, or ruling by any court or
governmental agency or threat thereof, or any other fact or circumstance that
would prohibit or render illegal the transactions provided for in this
Agreement.
(g) No litigation or proceeding shall be pending that will have the
probable effect of enjoining or preventing the consummation of any of the
transactions provided for in this Agreement. No litigation or proceeding shall
be pending which could reasonably be expected to have a material adverse effect
on the financial condition or results of operations of eInsure.
(h) eInsure shall have obtained and shall have delivered to
Trans-Century copies of (i) all governmental approvals required to be obtained
by eInsure in connection with the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby and (ii) all consents
necessary to be obtained by eInsure in order to consummate the Merger pursuant
to this Agreement.
(i) eInsure shall have provided Trans-Century a copy of its Annual
Report on Form 10-K for the year ended December 31, 2000 and its Quarterly
Reports on Form 10-Q for the periods ended March 31, 2001 and June 30, 2001, the
financial statements, form and substance of which shall be acceptable to
Trans-Century in its sole discretion. Such filings shall have been made with the
SEC prior to the Closing.
4.2 Conditions Precedent to the Obligations of eInsure. All obligations
of eInsure under this Agreement are subject to the fulfillment, prior to or as
of the Closing Date, of each of the following conditions (any one or more of
which may be waived by eInsure):
(a) The representations and warranties by Trans-Century and the
Trans-Century Shareholders contained in this Agreement or in any certificate or
document delivered pursuant to the provisions hereof shall be true in all
material respects at and as of the Closing Date as though such representations
and warranties were made at and as of such time.
(b) Trans-Century and the Trans-Century Shareholders shall have
performed and complied in all material respects with all covenants, agreements,
and conditions set forth in this Agreement to be performed or complied with by
them prior to or at the Closing.
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(c) Trans-Century and the Trans-Century Shareholders shall have
executed and delivered each instrument and document to be delivered by them
pursuant to this Agreement, including without limitation the items set forth in
Sections 8.1 and 8.2 hereof.
(d) All instruments and documents to be delivered by Trans-Century and
the Trans-Century Shareholders pursuant to the provisions hereof shall be
reasonably satisfactory to legal counsel for eInsure.
(e) There shall be no order, decree, or ruling by any court or
governmental agency or threat thereof, or any other fact or circumstance that
would prohibit or render illegal the transactions provided for in this
Agreement.
(f) No litigation or proceeding shall be pending that will have the
probable effect of enjoining or preventing the consummation of any of the
transactions provided for in this Agreement.
SECTION 5. COVENANTS
5.1 Conduct of Business. On and after the date hereof and until the
Closing Date, except as expressly permitted or required by this Agreement or as
otherwise expressly consented to by Trans-Century in writing, eInsure will:
(a) carry on its business in, and only in, the ordinary course, in
substantially the same manner as heretofore conducted, and use all commercially
reasonable efforts to preserve intact its present business organization, and
maintain its properties in good operating condition and repair;
(b) maintain its books of account and records in the usual, regular and
ordinary manner consistent with past policies and practices and not change such
policies and practices;
(c) comply in all material respects with all laws applicable to it and
its business;
(d) use all reasonable efforts to maintain its good standing in its
jurisdiction of incorporation and in the jurisdictions in which it is qualified
to do business as a foreign corporation and to maintain all governmental
approvals and consents necessary for, or otherwise material to, it and its
business;
(e) not merge or consolidate with, or agree to merge or consolidate
with, or purchase substantially all of the assets of, or otherwise acquire, any
business, business organization or division thereof, of any other person;
(f) not issue or sell any shares of any class of its capital stock, or
any securities convertible into or exchangeable for any such shares, or issue,
sell, grant or enter into any subscriptions, options, warrants, conversion or
other rights, agreements, commitments, arrangements or understandings of any
kind, contingently or otherwise, to purchase or otherwise acquire any such
shares or any securities convertible into or exchangeable for any such shares;
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(g) not incur any indebtedness for borrowed money, issue or sell any
debt securities or prepay any debt (including, without limitation, any
borrowings from or prepayments to any shareholder or other affiliate);
(h) not mortgage, pledge or otherwise subject to any Lien, any of its
properties or assets, tangible or intangible;
(i) not pay or commit to pay any bonus, other incentive compensation,
change in control or similar compensation to any officer, director, employee,
shareholder or affiliate or grant or commit to grant to any officer, director,
employee, shareholder or affiliate any other increase in, or additional,
compensation in any form;
(j) not amend either its certificate of incorporation or bylaws;
(k) not incur, assume, guarantee or otherwise become directly or
indirectly liable with respect to any Liability or obligation in excess of
$1,000 in each case or $5,000 in the aggregate at any one time outstanding
(whether absolute, accrued, contingent or otherwise and whether direct or
indirect, or as guarantor or otherwise with respect to any liability or
obligation of any other person); and
(l) not liquidate, dissolve or wind-up its affairs.
5.2 No Solicitation. From the date hereof until the earlier of the
Closing or the termination of this Agreement in accordance with the terms
hereof, eInsure agrees:
(a) that it shall not, and shall direct and use its best efforts to
cause its officers, directors, employees, agents and representatives (including,
without limitation, any investment banker, attorney or accountant retained by
it) not to, initiate, solicit or encourage, directly or indirectly, any
inquiries or the making or implementation of any proposal or offer (including,
without limitation, any proposal or offer to its shareholders) with respect to a
merger, acquisition, consolidation or similar transaction involving, or any
purchase of all or any significant portion of the assets or equity securities
of, eInsure (any such proposal or offer being hereinafter referred to as an
"Acquisition Proposal") or engage in any negotiations concerning, or provide any
confidential information or data to, or have any discussions with, any person
relating to an Acquisition Proposal, or otherwise facilitate any effort or
attempt to make or implement an Acquisition Proposal;
(b) that it will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing and will take the necessary
steps to inform the individuals or entities referred to above of the obligations
undertaken in this Section 5.2; and
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(c) that it will notify Trans-Century immediately of the identity of
the potential acquiror and the terms of such person's or entity's proposal if
any such inquiries or proposals are received by, any such information is
requested from, or any such negotiations or discussions are sought to be
initiated or continued with, it; provided, however, that nothing contained in
this Section 5.2 shall prohibit the Board of Directors of eInsure from (i)
furnishing information to or entering into discussions or negotiations with any
person or entity that makes an unsolicited written proposal to acquire such
company pursuant to a merger, consolidation, share exchange, purchase of a
substantial portion of the assets, business combination or other similar
transaction, if, and only to the extent that, (A) the Board of Directors of such
company determines in good faith that such action is required for the Board of
Directors to comply with its fiduciary duties to shareholders, (B) prior to
furnishing such information to, or entering into discussions or negotiations
with, such person or entity, eInsure provides written notice to Trans-Century to
the effect that it is furnishing information to, or entering into discussions or
negotiations with, such person or entity, and (C) subject to any confidentiality
agreement with such person or entity (which eInsure determined in good faith was
required to be executed in order for the Board of Directors to comply with its
fiduciary duties to shareholders), eInsure keeps Trans-Century informed of the
status of any such discussions or negotiations and (ii) to the extent
applicable, complying with Rule 14e-2 promulgated under the 1934 Act with regard
to an Acquisition Proposal.
5.3 Corporate Examinations and Investigations. From the date hereof
until the earlier of the Closing or the termination of this Agreement in
accordance with the terms hereof, each of the parties hereto will give the other
parties hereto and such other parties' accountants, counsel, consultants,
employees and agents, access at all reasonable times to, and furnish them with
all documents, records, work papers and information with respect to, all of the
assets, properties, books, contracts, commitments, reports and records of such
party, as any of the other parties hereto shall from time to time reasonably
request. No investigations by a party hereto shall, however, diminish or waive
any of the representations, warranties, covenants or agreements of the party
under this Agreement.
5.4 Further Assurances. Each of the parties hereto agrees to use and to
cause all persons acting on its behalf to use all reasonable good faith efforts
to take all actions and to do all things necessary, proper or advisable to
consummate the transactions contemplated hereby by the Closing Date. Each of the
parties hereto will, and will cause all persons acting on its or their behalf
to, coordinate and cooperate with the other parties hereto in exchanging such
information and supplying such assistance as may be reasonably requested by the
other parties hereto in connection with the filings and other actions
contemplated hereby. Following the Closing, each of the parties hereto shall,
and shall cause all persons acting on its or their behalf to, from time to time,
execute and deliver such additional instruments, documents, conveyances or
assurances and take such other actions as shall be necessary, or otherwise
reasonably requested by any of the other parties hereto, to confirm and assure
the rights and obligations provided for in this Agreement and render effective
the consummation of the transactions contemplated hereby.
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5.5 Confidentiality. In the event the transactions contemplated by this
Agreement are not consummated, eInsure, Trans-Century and the Principal
Trans-Century Shareholders agree to keep confidential any information disclosed
to each other in connection therewith for a period of one (1) year from the date
hereof; provided, however, such obligation shall not apply to information which:
(i) at the time of the disclosure was public knowledge;
(ii) after the time of disclosure becomes public knowledge
(except due to the action of the receiving party);
(iii) the receiving party had within its possession at the
time of disclosure; or
(iv) is ordered disclosed by a Court of proper jurisdiction.
SECTION 6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties contained in this Agreement shall
survive the execution and delivery hereof and the Closing hereunder for one year
following the Closing.
SECTION 7. INDEMNIFICATION
7.1 For a period of one (1) year from the Closing, Trans-Century agrees
to indemnify and hold harmless eInsure, its officers, directors and principal
shareholders, and eInsure agrees to indemnify and hold harmless Trans-Century,
the Trans-Century Shareholders and Trans-Century's officers and directors, at
all times up to one (1) year after the date of this Agreement against and in
respect of any liability, damage, or deficiency, all actions, suits,
proceedings, demands, assessments, judgments, costs and expenses, including
attorneys' fees incident to any of the foregoing (collectively referred to
herein as "Damages"), resulting from (i) any material misrepresentation made
herein by any indemnifying party to an indemnified party, (ii) an indemnifying
party's breach of a covenant or warranty or an indemnifying party's
nonfulfillment of any agreement hereunder, or (iii) any material
misrepresentation or omission from any report, certificate, financial statement
or tax return furnished or to be furnished by any party hereto for any period up
to and including 120 days after execution of this Agreement. THIS PROVISION
SHALL NOT BE CONSTRUED TO BE A WAIVER OF ANY LAWFUL INDEMNIFICATION PROVISION
CONTAINED IN A PARTY'S CERTIFICATE OF INCORPORATION OR BY-LAWS, AS PERMITTED BY
FEDERAL OR STATE LAW.
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7.2 If the indemnified party receives written notice of the
commencement of any legal action, suit or proceeding with respect to which the
indemnifying party is or may be obligated to provide indemnification pursuant to
this Section, the indemnified party shall, within 30 days of the receipt of such
written notice, give the indemnifying party written notice thereof (a "Claim
Notice"). Failure to give such Claim Notice within such 30 day period shall not
constitute a waiver by the indemnified party or its rights to indemnity
hereunder with respect to such action, suit or proceeding unless the defense
thereof is prejudiced thereby. Upon receipt by the indemnifying party of a Claim
Notice from the indemnified party with respect to any claim for indemnification
which is based upon a claim made by a third party ("Third Party Claim"), the
indemnifying party may assume the defense of the Third Party Claim with counsel
of its own choosing, as described below. The indemnified party shall cooperate
in the defense of the Third Party Claim and shall furnish such records,
information and testimony and attend all such conferences, discovery
proceedings, hearings, trials and appeals as may be reasonably required in
connection therewith. The indemnified party shall have the right to employ its
own counsel in any such action, but the fees and expenses of such counsel shall
be at the expense of the indemnified party unless the indemnifying party shall
not have with reasonable promptness employed counsel to assume the defense of
the Third Party Claim, in which event such fees and expenses shall be borne
solely by the indemnifying party. The indemnifying party shall not satisfy or
settle any Third Party Claim for which indemnification has been sought and is
available hereunder, without the prior written consent of the indemnified party,
which consent shall not be delayed or which shall not be required if the
indemnified party is granted a release in connection therewith. If the
indemnifying party shall fail with reasonable promptness to defend such Third
Party Claim, the indemnified party may defend, satisfy or settle the Third Party
Claim at the expense of the indemnifying party and the indemnifying party shall
pay to the indemnified party the amount of such loss within ten days after
written demand thereof. The indemnification provisions hereof shall survive the
termination of this Agreement.
7.3 Notwithstanding anything to the contrary herein, the
indemnification provided for in this Section 7 will not apply unless and until
the aggregate Damages for which one or more indemnified persons seeks
indemnification under Section 7 exceeds $250,000, in which event the
indemnification provided for in Section 7 will include all Damages in excess of
such sum. The provisions of this Section 7 shall be the sole remedy against a
party for breach of Sections 2 and 3 hereof.
SECTION 8. ITEMS TO BE DELIVERED AT CLOSING
At the Closing, in addition to any other documents to be delivered
under other provisions of this Agreement, the following items shall be
delivered, all of such deliveries being deemed to occur simultaneously:
8.1 Items to be Delivered by Trans-Century. Trans-Century will deliver,
or will cause to be delivered, to eInsure the following, the form and substance
of which shall be reasonably acceptable to eInsure and its legal counsel:
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(i) A certificate executed by the President and Secretary of
Trans-Century to the effect that the representations and warranties made by
Trans-Century in this Agreement are true and correct in all material respects as
of the Closing Date, with the same effect as though made on and as of such date.
(ii) A certificate from the Secretary of State of Texas dated
within 15 days of the Closing Date to the effect that Trans-Century is a
corporation in good standing under the laws of said State.
(iii) An opinion of its legal counsel, limited as to any
portion of the opinion as to an aspect of this Agreement governed by the
application of Texas law, to eInsure to the effect that:
(1) Trans-Century is a corporation validly existing and in
good standing under the laws of the State of Texas;
(2) Trans-Century has the corporate power to carry on its
business as presently conducted; and
(3) this Agreement has been duly authorized, executed and
delivered by Trans-Century.
Such opinion shall also cover such additional matters as eInsure and
its counsel may reasonably request.
8.2 Items to be Delivered by the Trans-Century Shareholders. Each
Trans-Century Shareholder will deliver to eInsure certificates representing the
Trans-Century Stock of such shareholder to be exchanged for certificates
representing common stock of the Surviving Corporation pursuant to the Plan of
Merger.
8.3 Items to be Delivered by eInsure. eInsure will deliver, or cause to
be delivered, to Trans-Century and/or the Trans-Century Shareholders the
following, the form and substance of which shall be reasonably acceptable to
Trans-Century and its legal counsel:
(i) A certificate executed by the President and Secretary of
eInsure, to the effect that the representations and warranties of eInsure made
in this Agreement are true and correct in all material respects as of the
Closing Date, with the same effect as though made on and as of such date.
(ii) Certified copies of the certificate of incorporation and
by-laws of eInsure, as in effect on the Closing Date.
(iii) Certified copy of resolutions of the eInsure Board of
Directors authorizing this Agreement and the transactions contemplated hereby.
(iv) Certified copies of resolutions of shareholders of
eInsure approving the Merger.
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(v) A certificate from the Secretary of State of Delaware
dated within 15 days of the Closing Date to the effect that eInsure is a
corporation in good standing under the laws of said State.
(vi) An opinion of its legal counsel, limited as to any
portion of the opinion as to an aspect of this Agreement governed by the
application of Delaware law, to Trans-Century to the effect that
(1) eInsure is a corporation validly existing and in
good standing under the laws of the State of Delaware;
(2) eInsure has the corporate power to carry on its
business as presently conducted;
(3) This Agreement and the other documents and
instruments delivered by eInsure hereunder have been duly authorized,
executed and delivered by eInsure and each is a valid and binding
obligation of eInsure, enforceable in accordance with its terms;
(4) eInsure has taken all corporate action necessary
for performance under this Agreement; and
(5) The shares of eInsure Common Stock issued to the
Trans-Century Shareholders pursuant to this Agreement have been duly
authorized and are validly issued, fully paid and non-assessable.
Such opinion shall also cover such additional matters as Trans-Century
and its counsel may reasonably request.
(vii) Resignations of all of the officers of eInsure and of
all of its directors other than Xxxxxx Xxxx.
(viii) A written consent of Xxxxxx Xxxx, as the sole remaining
director of eInsure, designating Xxxx X. Xxxxxxxxx, X. X. Xxxxxxxxx, Xxxx
Xxxxxxx, Xxxxx Xxxxxxxx, Xxx Xxxxxxx and Xxxx Xxxxxxx to fill the vacancies
created by the resignation of the former directors of eInsure, and the
simultaneous resignation of Xxxxxx Xxxx as a director of eInsure.
(ix) A release of claims in the form attached hereto as
Exhibit "C", executed by PageOne Business Productions, LLC, Appletree Investment
Company, and each of the resigning directors and officers of eInsure.
(x) Certificates representing common stock of the Surviving
Corporation pursuant to the Plan of Merger.
(xi) Evidence satisfactory to Trans-Century of the filing of
all 1934 Act Filings due by eInsure for periods prior to the Closing Date.
(xii) A list of the stockholders of eInsure pursuant to
Section 3.12 hereof.
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SECTION 9. TERMINATION
9.1 Termination Generally. This Agreement may be terminated at any time
prior to the Closing:
(a) by the written agreement of Trans-Century and eInsure;
(b) by Trans-Century or eInsure, by written notice to the other party
on or after December 31, 2001 if the Closing shall not have occurred by such
date (unless the failure of the Closing to occur shall be due to any breach of
this Agreement by the party seeking to terminate), unless such date shall be
extended by the mutual written consent of Trans-Century and eInsure;
(c) by eInsure, if there has been a material breach on the part of
Trans-Century in the representations, warranties or covenants of Trans-Century
or the Trans-Century Shareholders set forth herein, or a failure on the part of
Trans-Century or the Trans-Century Shareholders to perform their respective
obligations hereunder; provided that eInsure shall have performed and complied
with, in all material respects, all agreements and covenants required by this
Agreement to have been performed and complied with by it prior to such time, or
any other events or circumstances shall have occurred such that, in any such
case, any of the conditions to the Closing set forth in Section 4.2 could not be
satisfied on or prior to the termination date contemplated by Section 9.1(b)
hereof; or
(d) by Trans-Century, if there has been a material breach on the part
of eInsure in the representations, warranties or covenants of eInsure set forth
herein or any failure on the part of eInsure to perform its obligations
hereunder; provided that Trans-Century shall have performed and complied with,
in all material respects, all agreements and covenants required by this
Agreement to have been performed or complied with by it prior to such time, or
any other events or circumstances shall have occurred such that, in any case,
any of the conditions to the Closing set forth in Section 4.1 could not be
satisfied on or prior to the termination date contemplated by Section 9.1(b)
hereof.
9.2 Effect of Termination.
(a) In the event of the termination of this Agreement pursuant to the
provisions of Section 9.1, this Agreement shall become void and have no effect
and all obligations of the parties hereto shall terminate, except the
obligations of the parties pursuant to Section 5.5 hereof and this Section 9.2.
(b) In the event of termination of this Agreement pursuant to Sections
9.1(c) or 9.1(d), nothing herein shall prejudice the ability of the
non-breaching party from seeking damages from any other party for any breach of
this Agreement, including, without limitation, attorneys' fees and the right to
pursue any remedy at law or in equity.
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(c) At any time prior to the Closing, any party hereto, by action taken
by its Board of Directors, may, to the extent legally allowed, (i) extend the
time for the performance of any of the obligations or other acts of the other
parties hereto, (ii) waive any inaccuracies in the representations and
warranties made to such party contained herein or in any document delivered
pursuant hereto and (iii) waive compliance with any of the agreements or
conditions for the benefit of such party contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party.
SECTION 10. MISCELLANEOUS
10.1 Waivers. The waiver of a breach of this Agreement or the failure
of any party hereto to exercise any right under this Agreement shall in no way
constitute waiver as to any future breach, whether similar or dissimilar in
nature, or as to the exercise of any further right under this Agreement.
10.2 Amendment. Any term or provision of this Agreement may be amended,
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only by
a writing signed by the party to be bound thereby.
10.3 Assignment. This Agreement is not assignable except by operation
of law.
10.4 Notice. Until otherwise specified in writing, the mailing
addresses and fax numbers of the parties of this Agreement shall be as follows:
To: eInsure Communications, Inc.
Xxxxxx X. Xxxx, President
00000 Xxxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
To: Trans-Century, Inc.
0000 X. Xxxxx
Xxxxxxxx XXX, Xxxxx 000
Xxxxxx, Xxxxx 00000
To: Any of the Trans-Century Shareholders
To the address of such person
set forth on Exhibit A
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Any notice or other communication required or permitted to be given
under this Agreement will be in writing, will be delivered personally or by
facsimile, mail or express delivery, postage prepaid, and will be deemed given
upon actual delivery or, if mailed by registered or certified mail, on the third
business day following deposit in the mails, addressed as indicated above or at
such other address which shall have been furnished in writing to the addressor.
10.5 Governing Law. This Agreement shall be construed, and the legal
relations between the parties determined, in accordance with the laws of the
State of Delaware, thereby precluding any choice of law rules which may direct
the application of the laws of any other jurisdiction.
10.6 Publicity. No publicity release or announcement concerning this
Agreement or the transactions contemplated hereby shall be issued by either
party hereto at any time from the signing hereof through the Closing Date,
without advance approval in writing of the form and substance by the other
party.
10.7 Entire Agreement. This Agreement (including the Exhibits and
Schedules to be attached hereto) and the collateral agreements executed in
connection with the consummation of the transactions contemplated herein contain
the entire agreement among the parties with respect to the Merger and issuance
of the eInsure Shares and related transactions, and supersede all prior
agreements, written or oral, with respect thereto.
10.8 Headings. The headings in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
10.9 Severability of Provisions. The invalidity or unenforceability of
any term, phrase, clause, paragraph, restriction, covenant, agreement or
provision of this Agreement shall in no way affect the validity or enforcement
of any other provision or any part thereof.
10.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall constitute an original copy
hereof, but all of which together shall be considered but one and the same
document.
10.11 Binding Effect. This Agreement shall be binding upon the parties
hereto and inure to the benefit of the parties, their respective heirs,
administrators, executors, successors and assigns.
10.12 Tax Treatment. eInsure, Trans-Century and the Trans-Century
Shareholders acknowledge that they each have been represented by their own tax
advisors in connection with this transaction; that none of them has made a
representation or warranty to any of the other parties with respect to the tax
treatment accorded this transaction, or the effect individually or corporately
on any party under the applicable tax laws, regulations, or interpretations; and
that no opinion of counsel or private revenue ruling has been obtained with
respect to the effects of this transaction under the Code.
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10.13 Press Releases. The parties will mutually agree as to the wording
and timing of any informational releases concerning this transaction prior to
and through the first such release to follow the Closing.
10.14 Mediation.
(a) The parties shall make a good faith attempt to settle any dispute
hereunder ("Dispute") by mediation pursuant to the provisions of this Section
10.14 before resorting to litigation or any other dispute resolution procedure.
(b) Unless the parties agree otherwise, the mediation shall be
conducted in accordance with the Commercial Mediation Rules of the American
Arbitration Association (the "AAA") then in effect by a mediator who (i) has the
qualifications and experience set forth in paragraph (c) of this Section 10.14
and (ii) is selected as provided in paragraph (d) of this Section 10.14.
(c) Unless the parties agree otherwise, the mediator shall be a neutral
and impartial lawyer with excellent academic and professional credentials (i)
who is or has been practicing law for at least 15 years, specializing in either
general commercial litigation or general corporate and commercial matters, and
(ii) who has had both training and experience as a mediator and who has
successfully mediated at least ten cases.
(d) Either party (the "Initiating Party") may initiate mediation of the
Dispute by giving the other party (the "Recipient Party") written notice (a
"Mediation Notice") setting forth a list of the names and resumes of
qualifications and experience of three impartial persons who the Initiating
Party believes would be qualified as a mediator pursuant to the provisions of
paragraph (c) hereof. Within 15 days after the delivery of the Mediation Notice,
the Recipient Party shall give a counter-notice (the "Counter-Notice") to the
Initiating Party in which the Recipient Party may designate a person to serve as
the mediator from among the three persons listed by the Initiating Party in the
Mediation Notice (in which event such designated person shall be the mediator).
If none of the persons listed in the Mediation Notice is designated by the
Recipient Party to serve as the mediator, the Counter-Notice should set forth a
list of the names and resumes of three impartial persons who the Recipient Party
believes would be qualified as a mediator pursuant to the provisions of
paragraph (c) hereof. Within 10 days after the delivery of the Counter-Notice,
the Initiating Party may designate a person to serve as the mediator from among
the three persons listed by the Recipient Party in the Counter-Notice (in which
event such designated person shall be the mediator). If the parties cannot agree
on a mediator from the three impartial nominees submitted by each party, each
party shall strike two names from the other party's list and the two remaining
persons on both lists will jointly select as the mediator any person who has the
qualifications and experience set forth in paragraph (c) hereof. If they are
unable to agree, then the President of the Xxxxxx County, Texas Bar Association
shall select as the mediator any person who, in his or her opinion, has such
qualifications and experience.
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(e) Within 30 days after the mediator has been selected as provided
above, both parties and their respective attorneys shall meet with the mediator
for one mediation session of at least four hours, it being agreed that each
party representative attending such mediation session shall have authority to
settle the Dispute. If the Dispute cannot be settled at such mediation session
or at any mutually agreed continuation thereof, either party may give the other
and the mediator a written notice declaring the mediation process at an end, in
which event then the Dispute shall be resolved by arbitration as hereinafter
provided.
(f) All conferences and discussions which occur in connection with the
mediation conducted pursuant to this Agreement shall be deemed settlement
discussions, and nothing said or disclosed, nor any document produced, which is
not otherwise independently discoverable shall be offered or received as
evidence or used for impeachment or for any other purpose in any current or
future arbitration or litigation.
(g) The costs of the mediation shall be shared equally between the
parties.
10.15 Attorney-in-Fact. Each of the Trans-Century Shareholders, by the
execution of this Agreement, hereby irrevocably appoints X. X. Xxxxxxxxx as the
agent, proxy and attorney-in-fact of such Trans-Century Shareholder for all
purposes of this Agreement, including without limitation full power and
authority to receive the eInsure Shares on behalf of such Trans-Century
Shareholder, to execute on behalf of such Trans-Century Shareholder any
amendment hereto (provided that such amendment does not enlarge the scope of
such Trans-Century Shareholder's liability beyond that provided herein), to
execute and deliver all certificates, to take all other actions to be taken by
or on behalf of the Trans-Century Shareholders on or before the Closing, and to
do each and every act and exercise any and all rights which the Trans-Century
Shareholders are permitted or required to do or exercise under this Agreement.
Each of the Trans-Century Shareholders agrees that such agency and proxy are
coupled with an interest.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
TRANS-CENTURY RESOURCES, INC.,
a Texas corporation
By: /s/ Xxxx X. Xxxxxxxxx
------------------------
Name: Xxxx X. Xxxxxxxxx
Title: President
EINSURE COMMUNICATIONS, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxx
-----------------------
Name: Xxxxxx X. Xxxx
Title: President
TRANS-CENTURY SHAREHOLDERS:
/s/ Xxxx X. Xxxxxxxxx
---------------------
Xxxx X. Xxxxxxxxx
/s/ Xxxxx Xxxxxxxx
---------------------
Xxxxx Xxxxxxxx
/s/ X. X. Xxxxxxxxx
---------------------
X. X. Xxxxxxxxx
/s/ Xxxx X. Xxxxxx
---------------------
Xxxx X. Xxxxxx
/s/ Xxxxx Xxxxxx
---------------------
Xxxxx Xxxxxx
/s/ Xxxxx Xxxxx
---------------------
Xxxxx Xxxxx
/s/ Xxxxx Xxxx
---------------------
Xxxxx Xxxx
/s/ Xxx Xxx Xxxxxxxx
---------------------
Xxx Xxx Xxxxxxxx
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/s/ Xxxxx Xxxxxx
---------------------
Xxxxx Xxxxxx
/s/ Xxx X. Short
---------------------
Xxx X. Short
/s/ Xxxx Xxx Xxxxxx
---------------------
Xxxx Xxx Xxxxxx
/s/ Xxxxxx X. Xxxx
---------------------
Xxxxxx X. Xxxx
/s/ Xxxxxx X. Xxxxxxx
---------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxxx X. XxXxxx
---------------------
Xxxxx X. XxXxxx
/s/ Xxxxxx X. Xxxxxxxxx
-----------------------
Xxxxxx X. Xxxxxxxxx
/s/ Xxxx Xxxxxxx
---------------------
Xxxx Xxxxxxx
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