EXHIBIT 99.4
December 11, 2002
Xxxxx Xxxxx Xxxx
Xxxxxxxx Asset Management, Inc.
0000 X. Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Re: Letter of Intent to Acquire Assets of Xxxxxxxx Asset Management, Inc.,
as Amended
Dear Xx. Xxxx:
This Letter of Intent ("LOI") is for the purpose of setting forth our
mutual understanding and agreement in principle pursuant to which WSN
Group, Inc., ("WSNG") a Nevada corporation will acquire the assets of
Xxxxxxxx Asset Management, Inc. ("HAMI"), a privately held entity
doing business in the State of California. WSNG and HAMI are
sometimes hereinafter referred to singularly as "Company" and
together as the "Companies"), or a subsidiary of WSNG.
1. ASSET PURCHASE. Following the mergers of First American Family Financial
Services Corporation and United Recovery with and into WSNG or a subsidiary of
WSNG upon the terms described in each respective Letter of Intent (the
"Mergers"), WSNG will acquire ninety-five percent (95%) of the assets of HAMI
in exchange for units to be issued by WSNG (the "Purchase Price"). Each
unit shall be comprised of shares of WSNG restricted common stock
("Shares") and a warrant to purchase shares of WSNG restricted common
stock at $0.01 per share (Warrant A) and a warrant to purchase shares
of WSNG restricted common stock at $0.05 per share (Warrant B).
1.1 Assets.
Subject to the terms and conditions set forth in the definitive
agreement, XXXX agrees to sell, assign, transfer, convey and deliver
to WSNG, and WSNG agrees to purchase and acquire from HAMI, at the
closing date (as defined herein), all right, title and interest of
HAMI in and to the following assets, properties and rights as they
shall exist on the closing date (as defined herein):
1.2. Liabilities Not Assumed.
WSNG shall have no liability whatsoever for any liabilities of HAMI,
including, without limitation any liability or obligation in respect
of any federal, state or local income or other tax payable with
respect to the business or the assets for any period prior to the
Closing Date.
2. OTHER TRANSACTIONS. Entering into this LOI and execution of a
definitive asset purchase agreement by and between WSNG and XXXX is
contingent upon the following other transactions:
(a) consummation of the Mergers;
(b) acquisition of the assets of Cash Asset Management,
Inc.("CAMI") and Money Asset Management, Inc. ("MAMI") through asset
purchase agreements;
(c) at XXXX's expense, rendering of a fairness opinion by an
independent broker-dealer firm in connection with all contemplated
transactions that the transaction is fair to WSNG, the officers,
directors and shareholders of CAMI, HAMI, and MAMI;
(d) at XXXX's expense, rendering of a solvency opinion in
connection with all contemplated transactions;
(e) at XXXX's expense, valuations and preparation of books and
records in accordance with generally accepted accounting principles (GAAP);
(f) at HAMI's expenses, HAMI shall engage the services of an
accountant familiar with preparing financial statements for inclusion
in documents to be filed with the Securities and Exchange Commission;
and,
(g) incorporation of all entities under the laws of the state of
Nevada.
3. CLOSING CONDITIONS. The consummation of the asset purchase and
related transactions contemplated hereby by each of the Companies
shall be subject to the fulfillment of customary conditions,
including the following conditions precedent:
(a) the acknowledgement of adverse interests and
conflicts of Xxxx X. Xxx & Associates, APC, (counsel to WSNG) and
execution of a waiver thereof.
(b) the negotiation and execution of definitive merger
agreements and other definitive agreements with respect to the
transactions contemplated hereby including CAMI and MAMI asset
acquisitions and the Mergers;
(c) the formal approval of the Board of Directors;
(d) receipt of all required third-party, regulatory and
governmental approvals, if any; and
(e) the completion by each of the Companies of its due
diligence investigation concerning the other Company.
4. CLOSING. It is anticipated that the consummation of the HAMI asset
purchase contemplated herein will occur on or before January 31,
2003, or such other date as the parties may agree ("Closing Date").
5. DEFINITIVE AGREEMENTS. The definitive agreements with respect to
the transactions contemplated hereby will contain mutually agreeable
representations and warranties, mutually agreeable provisions for
indemnification and other appropriate and customary terms and conditions.
6. POST-CLOSING OBLIGATIONS.
(a) Xxxxx Xxxx shall be engaged as consultant and receive shares in
consideration for consulting services rendered to the Company.
(b) HAMI shall distribute to its original shareholders WSNG shares
to the extent of their respective investments.
(c) Except as contemplated or otherwise consented to by WSNG in
writing, after the date of this Agreement HAMI shall carry on the
business in the ordinary course. In furtherance of and in addition to
such restriction, (a) HAMI shall not: amend its Charter Documents or
bylaws; merge or consolidate with, or purchase substantially all of
the assets of, or otherwise acquire any business of, any corporation,
partnership or other business organization or business division
thereof; split, combine or reclassify its outstanding capital stock;
enter into any contract or otherwise incur any liability outside the
ordinary course of business; discharge or satisfy any encumbrance or
pay or satisfy any material liability except pursuant to the terms
thereof; compromise, settle or otherwise adjust any material claim or
litigation; make any capital expenditure involving in any individual
case more than $5,000; incur any indebtedness for borrowed money or
issue any debt securities; declare or pay any dividend or other
distribution on its capital stock; materially decrease its working
capital; increase the salaries or other compensation payable to any
employee, or take any action, or fail to take any reasonable action
within its control, as a result of which a material event would be
likely to occur, and (b) HAMI preserve intact the current business
organization of HAMI.
(d) The Board of Directors will include a total of five (5)
people. Collectively, HAMI, CAMI and MAMI is entitled to three
(3) representatives on the Company's Board of Directors. WSNG
will have two (2) designees to the board, one of which must be
the CEO of the Company.
(e) Xxxx Xxxxx shall resign his current position and be engaged as a
consultant to the Company for a term of year. The Board of Directors
shall appoint a new president of the Company.
(f) A decision will be made upon the mutual agreement of the parties
regarding whether or not WSN Group shall be closed, however, if the
necessary capital is not committed to fund the WSN Group operation
the sole decision shall be made by Xxxx Xxxxx
7. CONFIDENTIALITY. Except to the extent that information with
respect to either Company provided by it, or discovered by the other
Company, is in the public domain without breach of any obligation of
confidentiality, such information concerning each Company is
hereinafter referred to as "Confidential Information." Prior to the
consummation of the purchase, neither Company shall disclose
Confidential Information of the other, except on a confidential
basis, to its respective employees, accountants, attorneys and other
professional advisors or as otherwise expressly provided herein,
without the prior written consent of the other Company. If at any
time either Company is requested or required (by oral questions,
interrogatories, requests for information or documents, subpoenas or
similar legal process) to disclose any Confidential
Information of the other Company, it (to the extent reasonably
practical) shall promptly notify the Company so that such Company may
seek an appropriate protective order and/or waive compliance with the
provisions hereof. If, in the absence of a protective order or the
receipt of a waiver hereunder, in the reasonable opinion of counsel
for either Company, such Company is compelled to disclose
Confidential Information of the other Company to any tribunal or any
governmental agency, it may disclose such information to such
tribunal or agency without liability hereunder.
8. EXPENSES. Except as may be otherwise provided in the definitive
agreement, the Companies shall each pay their respective expenses
(including fees and expenses of legal counsel) in connection with the
transactions contemplated hereby, except the extent a separate
agreement has been reached with respect to the audit of WSNG.
9. EXCLUSIVITY. Unless this Agreement has been terminated, during the
period ending 60 days following the date of this LOI, the Board of
Directors and officers of HAMI agree that they will not solicit
proposals or provide any information to any third party for the
purpose of sale, tender offer or asset purchase with any entity
except WSNG. Each such officer or director agrees that he will vote
his capital stock in favor of the asset purchase. Should any officer
or director sell or otherwise dispose of any capital stock during
this period, he will retain legal proxy rights to such shares and
will vote such shares in favor of the asset purchase.
10. PUBLIC DISCLOSURE. Subject to any applicable requirements of law,
neither of the Companies shall make any public disclosure concerning
the subject matter hereof or the transactions contemplated hereby
without the prior written consent of the other. The parties agree to
prepare a mutually acceptable press release or releases with respect
to the transactions contemplated hereby, which will be released by
the Companies on or about the date of the execution of this LOI.
11. PREPARATION. Each of the Companies agrees to provide the other
Company and its advisors full access to its books, records and
premises in order to enable them to complete their "due diligence"
with respect to the asset purchase and related transactions. Subject
to Section 12, each of the Companies agrees to negotiate in good
faith and cooperate with the other party in connection with the
preparation of definitive agreements, to use its commercially
reasonable efforts to complete such preparation and execute and
deliver definitive agreements prior to December 15, 2002 and to close
the transactions contemplated hereby as expeditiously as possible
thereafter; provided that, if the Companies conclude prior to
December 15, 2002 that it is impractical for them to consummate the
purchase, subject to Section 12, each of the Companies agrees to
negotiate in good faith and cooperate with the other party in
connection with the preparation of definitive documents concerning
another business combination intended to achieve, as nearly as
practicable, similar economic results for the Companies as the
purchase, if any such business combination is practicable, to use
commercially reasonable efforts to execute and deliver definitive
agreements with respect thereto prior to December 15, 2002 and to
close the transactions contemplated hereby as soon as practicable
thereafter. The parties further agree to cooperate in connection with
the preparation of any required governmental or regulatory filings.
12. TERMINATION. The obligations of the Companies under this LOI may
be terminated (a) by mutual agreement of the Companies; (b) by either
Company if the definitive agreements have not been executed on or
prior to December 15, 2002; or (c) prior thereto, if the other
Company is no longer negotiating in good faith as provided in Section
11 or if the Board of Directors of such Company determines in the
good faith exercise of its fiduciary duties that such termination is
in the best interests of such Company. In the event either of the
Companies decides to terminate this Agreement, it shall, to the
extent reasonably practical, endeavor to inform the other Company of
the reasons for such decision, to provide the other Company ten days'
prior written notice of its intention to terminate and to afford the
other party an opportunity during such ten-business day period to
address the reasons for such termination.
13. NATURE OF AGREEMENT. The Companies acknowledge that this LOI is a
statement of their mutual intention only, and unless definitive
agreements are executed and delivered by the Companies, there are no
legally binding agreements between the Companies with respect to the
transactions contemplated hereby. Notwithstanding the foregoing, the
provisions of paragraphs 7, 8, 9, 10, 11 and 12 hereof shall
constitute binding legal agreements, shall be enforceable against the
parties in accordance with their respective terms and shall survive
any termination of the transactions contemplated hereby.
14. GOVERNING LAW. This LOI shall be governed by, and construed in
accordance with, the laws of the State of California applicably to
contracts made and wholly to be performed within such state.
If you are in agreement with the terms and conditions of this LOI,
please sign and date the enclosed duplicate of this LOI in the space
provided below and return it to the undersigned.
Very truly yours,
WSN GROUP, INC
/s/ Xxxx Xxxxx
Xxxx Xxxxx
President/CEO
Accepted and agreed as of the ______ day of __________________, 2002:
XXXXXXXX ASSET MANAGEMENT, INC.
By: /s/ Xxxxx Xxxxx Xxxx
Print Name: Xxxxx Xxxxx Xxxx
Title: Chairman
