EXHIBIT 6 (a)
SALES AND PURCHASE AGREEMENT
THIS AGREEMENT is entered into this ___ day of _______,
1998, by and between MAGELLAN TECHNOLOGIES , INC.
("Magellan"), a Utah corporation (the "Seller"), and
INSURDATA INCORPORATED (" Insurdata"), a Texas corporation
(the "Purchaser") for the purpose of Purchaser aquiring
Seller's membership interest in SATELLITE IMAGE SYSTEMS,
LLC, a Texas limited liability company (the "LLC").
WHEREAS, Magellan became a 49% owner of the entity now
known as Satellite Image Systems, LLC, in a certain
transaction styled "Agreement between Magellan Technologies,
Inc. and UICI regarding Satelite Image Systems, Inc.",
effective August 1, 1996 , in which Magellan agreed to
award a total of 5% ownership of LLC to certain key managers
in equal amounts over two years on each August 1, being
August 1, 1997 and August 1, 1998. Magellan agrees to, and
hereby does, advance the August 1, 1998 award date to May 1,
1998 so that the key managers will have been awarded a total
of 5% ownership of LLC as of the effective date of the Sale
and Purchase Agreement; and
WHEREAS, following such accelerated award to key
managers, Magellan is the owner and holder of a forty-four
percent (44%) membership interest in the LLC; and
WHEREAS, Insurdata is the owner and holder of a fifty-
one percent (51%) membership interest in the LLC; and
WHEREAS, the Purchaser desires to purchase from the
Seller and the Seller is willing to sell to the Purchaser
its equity interest in the LLC;
NOW, THEREFORE, for and in consideration of the above
recitals, which are incorporated herein, and the mutual
covenants and agreements hereinafter set forth, the parties
hereto hereby agree as follows:
1. Seller hereby sells, conveys, and assigns to
Purchaser, subject to the terms of this Agreement, its forty-
four percent (44%)membership interest in the LLC.
The purchase price shall be paid in part in cash at closing
and in part by quarterly "Earn-out" payments based upon the
LLC's earnings results for the years 1998, 1999 and the
first two quarters of 2000, as follows:
a)Simultaneously with the execution of this Agreement,
Purchaser shall pay to Sellar, by wire transfer, the sum of
One Million Five Hundred Thousand Dollars ($ 1,500,000).
b)Quarterly "Earn-out" payments shall be made based upon
LLC's results for the years 1998, 1999 an dthe first two
quarters of 2000. Each payment is calculated as 50% of
Profits Before Tax (PBT), subject to a cumulative ceiling of
$ 1,000,000. The parties agree that for the first quarter
of 1998, LLC broke even, and that no Earn-out payment is due
to Seller.
c)Fifty percent of each earn-out payment shall be paid to
Seller in cash. The other fifty of each Earn-out payment
shall be applied to the principal balances of the two notes
payable from Magellan to LLC. The first not is a promissory
note in the amount of $150,000 dated September 5, 1996 and
the second note is a promissory note in the amount of $
350,000 dated October 3, 1996.
d)Earn-out payments shall be made to Seller and applied
to the note within 30 days of the close of each quarter.
e)Magellan would only be required to make principal
payments in cash if the cumulative Earn-out at any point in
time is less than the normal amortization of the notes on a
monthly principal payment due date. After the end of the
Earn-out period , any remaining principal will be paid by
Magellan in accordance with the normal terms of the notes.
Interest payents on the notes will be make as scheduled
based upon the outstanding principal at the time so long as
a balance exists.
2. Seller hereby assigns to Purchaser any right,
title of interest it has as a Member with regard to the
business, property and rights of the LLC, including the
right of its officers, directors, employees, agents or
appointees to serve as members of the "Managing Board" of
LLC. Seller agrees to deliver resignations of all of its
designated or appointed members of the Managing Board at the
time and place of execution of this Agreement or within
three business days thereafter and, if such resignations
cannot be obtained within such a time, then Purchaser may
remove and replace such members as provided for in the
Regulations of the LLC.
3. Purchaser hereby agrees to assume sole
responsibility for any leases, contracts, obligations or
expenses of the LLC.
4. The Seller hereby warrants and represents that it
is the sole owner of and has the sole right to sell,
transfer, and assign its membership interest in the LLC to
Purchaser as set forth in this Agreement and that said
interest is free of any liens or encumbrances. The
execution, delivery and performance of this Agreement have
been duly authorized and approved as may be required as may
be required of Seller and constitutes a valid and binding
agreement of Seller in accordance with its terms.
5. Purchaser represents and acknowledges that it
entered into this Agreement on the basis of its own
examination, personal knowledge and opinion of the value of
the business. Purchaser has not relied on any
representations, warranties or statements made by Seller,
other than those contained in this Agreement .
6. If at any time during the terms of this Agreement
any dispute, difference, or disagreement shall arise upon or
in respect of the Agreement, and the meaning and
construction thereof , every such dispute, difference, and
disagreement shall be referred to a single arbiter agreed
upon by the parties, or if no single arbiter can be agreed
upon, an arbiter or arbiters shall be selected in
accordance with the rules of the American Arbitration
Association, and such dispute, difference, or disagreement
shall be settled by arbitration in accordance with the then
prevailing commercial rules of the American Arbitration
Association, and judgment upon the award rendered by the
arbiter may be entered in any court having jurisdiction
thereof.
7. Each party (the "Indemnifying Party") agrees to
indemnify and hold harmless the other party from and against
any and all losses, claims, demands, liabilities, costs,
damages, and expenses (including reasonable attorney's fees)
arising out of out our caused by the Indemnifying Party's
negligence, breach of this Agreement or misconduct by it,
its employees, or its authorized representatives in the
performance of its obligations under this Agreement.
8. This Agreement contains the entire contract and
supersedes any and all other agreements, oral or written,
between the parties hereto with respect to the subject
matter hereof and contains all of the covenants and
agreements between the parties with respect to such matters.
However, nothing contained herein shall supersede, replace
or modify the terms of any contracts of agreements between
the LLC an dSeller or any affiliate of Seller entered into
prior to the date of the Agreement.
9. This Agreement may not be modified, changed, or
amended in any respect unless agreed upon in writing and
signed by the parties hereto.
10. This Agreement shall be governed by and construed
in accordance with the laws of the State if Texas.
11. This Agreement may be executed in several
counterparts, each of which shall have the same force and
effect of an original.
12. This Agreement shall be binding upon and inure to
the benefit of the parties, their successors, assigns and
legal representatives.
13. The parties hereto shall execute and deliver all
documents, provide all information and take or forbear from
all such action as may be necessary or appropriate to
achieve the purposes of the Agreement.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the day and year first above written, but
effective as of May 1, 1998.
SELLER:
MAGELLAN TECHNOLOGIES INC.
By: /s/ Xxxxxxx X. Fresh
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Xxxxxxx X. Fresh, President and CEO
PURCHASER:
INSURDATA INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx,President & CEO
