AGREEMENT AND PLAN OF REORGANIZATION
Among
PROVIDENT AMERICAN CORPORATION
and
XXXX XXXX AND XXXX XXXX
Relating to the
Capital Stock
of
COASTAL SERVICES, EASTERN, INC.
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (this "Agreement") is made
and entered into as of the 15th day of August, 1996, between PROVIDENT AMERICAN
CORPORATION, a corporation organized under the laws of the Commonwealth of
Pennsylvania ("PAMCO") and XXXX XXXX AND XXXX XXXX (collectively the
"Stockholders"), who own all of the issued and outstanding shares of capital
stock of COASTAL SERVICES, EASTERN, INC. (the "CSE Shares"), a New Jersey
corporation (the "Company").
WITNESSETH:
WHEREAS, the Company is engaged in the business of providing health
care third party administration and cost containment services;
WHEREAS, the Stockholders desire to exchange the CSE Shares for shares
of Common Stock of PAMCO (the "PAMCO Shares") on the terms and conditions set
forth in this Agreement; and
WHEREAS, PAMCO desires to exchange the PAMCO Shares for the CSE Shares
on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, PAMCO and the Stockholders, in consideration of the
agreements, covenants and conditions contained herein, hereby make the following
representations and warranties, give the following covenants and agree as
follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDERS
The Stockholders represent and warrant to PAMCO and agree as follows:
1.1 Organization. As of March 31, 1996, the Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of New Jersey. The Company is not qualified to transact business as a
foreign corporation in any jurisdiction other than Pennsylvania. The Company has
the corporate power and authority and other authorizations necessary or required
in order for it to own or lease and operate its properties and to carry on its
business as now conducted.
1.2 Subsidiaries. As of March 31, 1996, the Company had no
subsidiaries.
1.3 Authority. This Agreement and the transactions contemplated herein
have been duly approved by all necessary action on the part of the Stockholders.
This Agreement, when executed and delivered by the Stockholders, and assuming
the due execution hereof by PAMCO, will constitute the valid, legal and binding
agreement of the Stockholders enforceable in accordance with its terms. Neither
the execution nor the delivery of this Agreement nor the consummation of the
transactions contemplated herein, nor compliance with nor fulfillment of the
terms and provisions hereof, will (i) conflict with or result in a breach of the
terms, conditions or provisions of or constitute a default under the Certificate
of Incorporation or By-laws of the Company, any instrument, agreement, mortgage,
judgment, order, award, decree or other restriction to which the Company or the
Stockholders are a party or by which any of them is bound or, to the knowledge
of the Stockholders, violates any statute or regulatory provision affecting any
of them; (ii) give any party to or with rights under any such instrument,
agreement, mortgage, judgment, order, award, decree or other restriction the
right to terminate, modify or otherwise change the rights or obligations of the
Company under such instrument, agreement, judgment, order, award, decree,
mortgage or other restriction or (iii) require on behalf of the Company or the
Stockholders any approval, consent or authorization of or any filing with or
notification to any federal, state or local court, governmental authority or
regulatory body, except as set forth in this Agreement or except where such
breach or default, right of termination, modification or change or failure to
obtain any approval, consent or authorization or to make any filing or notice
would not have a material adverse effect on the business or prospects of the
Company. The Stockholders have full power and authority to exchange the CSE
Shares with PAMCO pursuant to this Agreement and to do and perform all acts and
things required to be done by the Stockholders under this Agreement. True and
complete copies of the Certificate of Incorporation and By-laws of the Company
have been delivered to PAMCO.
1.4 Capital Structure. The authorized capital stock of the Company
consists of 1,000 shares of common stock, no par value per share, one hundred
(100%) percent of the issued and outstanding shares are owned beneficially and
of record by the Stockholders. None of the CSE Shares are held as treasury
shares. Except for this Agreement, there are no agreements, arrangements,
options, warrants or other rights or commitments of any character relating to
the issuance, sale, purchase or redemption of any shares of capital stock of the
Company, and no such agreements, arrangements, options, warrants or other rights
or commitments will be entered into or granted between the date hereof and the
Closing Date (as hereinafter defined). All of the CSE Shares of the Company are
validly issued, fully paid and nonassessable with no liability attaching to the
ownership thereof, and are owned of record and beneficially by the Stockholders
free and clear of any liens, claims, encumbrances or restrictions of any kind
and the exchange of the CSE Shares with PAMCO by the Stockholders as
contemplated by this Agreement will be sufficient to transfer good and
marketable record and beneficial title to such outstanding shares to PAMCO, free
and clear of liens, claims, encumbrances or restrictions of any kind.
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1.5 No Distributions on Capital Stock. Since June 30, 1995, the Company
has not purchased or redeemed any shares of its outstanding capital stock, has
not declared or paid any dividend or made any other distribution in respect of
its capital stock, excepting the cancellation of shares of the Company's stock
owned by Xxxxxx Xxxxxx.
1.6 Financial Statements.
(a) The Company has furnished to PAMCO the balance sheets of
the Company as of June 30, 1995, and for the nine months ending March 31, 1996,
the related statements of income and of changes in financial position for the
periods then ended together with appropriate notes to such financial statements
(collectively, the "Financial Statements"). The Financial Statements are correct
and complete in all material respects and fairly present the financial position
of the Company as at the respective dates thereof and the results of its
operations for the respective years covered thereby, and have been prepared in
conformity with generally accepted accounting principles consistently applied
throughout all periods. Such financial statements are included in Schedule
1.6(A) hereto.
(b) There is set forth in Schedule 1.6(B) hereto a correct and
complete list of all (i) accounts, borrowing resolutions and deposit boxes
maintained by the Company at any bank or other financial institution, (ii) the
names of the persons authorized to sign or otherwise act with respect thereto,
and (iii) powers of attorney for the Company as of March 31, 1996.
1.7 Material Changes Since July 1, 1995. To March 31, 1996, the
business of the Company has been operated only in the ordinary course and,
whether or not in the ordinary course of business, there has not been, occurred
or arisen (i) any material adverse change in the financial condition of the
Company from that shown on the Company's March 31, 1996 balance sheet; (ii) any
damage or destruction in the nature of a casualty loss, whether covered by
insurance or not, to any property or business of the Company which is material
to the financial condition, operations or business of the Company; (iv) any
amendment or termination of any agreement or cancellation or reduction of any
debt owing to the Company or waiver or relinquishment of any right of material
value to the Company; or (v) any other event, condition or state of facts of any
character which materially and adversely affects the results of operations or
business, financial condition or property of the Company.
1.8 Availability of Assets and Legality of Use. The assets owned or
leased by the Company as of March 31, 1996 constitute all of the assets which
are being used in its business. To the knowledge of the Stockholders, such
assets are in good and serviceable condition, normal wear and tear excepted, and
suitable for the uses for which intended and such assets and their uses conform
in all material respects to all applicable laws.
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1.9 Title to Property. The Company has good and marketable title to all
of its assets, including the assets reflected on the Company's March 31, 1996
balance sheet and all of the assets thereafter acquired by it, except to the
extent that such assets have thereafter been disposed of for fair value in the
ordinary course of business.
1.10 Governmental Permits. To the knowledge of the Stockholders, as of
March 31, 1996, the Company possessed all licenses, permits and other
authorizations necessary to own or lease and operate its properties and to
conduct its business as now conducted.
1.11 Real Property and Leases. The Company does not own any real
property. Attached hereto as Schedule 1.11(A) are true and correct copies of
every lease or agreement under which the Company is lessee or sublessee of, or
holds or operates, any real property owned by any third party. To the knowledge
of the Stockholders, each of such leases and agreements is in full force and
effect and constitutes a legal, valid and binding obligation of the Company and,
to the knowledge of the Stockholders, the other parties thereto. To the
knowledge of the Stockholders, the Company is not in default in any material
respect under any such lease or agreement nor has any event occurred which, with
the passage of time or giving of notice or both, would constitute such a default
nor will the Company take any action or fail to take required action between the
date hereof and the Closing Date which would permit any such default or event to
occur. None of such leases and agreements requires the consent of any party
thereto to the transactions contemplated by this Agreement.
1.12 Insurance. As of March 31, 1996, the Company was not insured under
any insurance policy.
1.13 Insurance Claims. As of March 31, 1996, there are no claims which
are pending or, to the knowledge of the Stockholders, threatened against the
Company.
1.14 No Undisclosed Liabilities. As of March 31, 1996, the Company is
not subject to any material liability which is not shown or which is in excess
of amounts shown or reserved for in the Company's March 31, 1996 balance sheet
referred to in Section 1.6 hereof.
1.15 No Default, Violation or Litigation. As of March 31, 1996, the
Company was not in default in any material respect under any agreement, lease or
other document to which it is a party, or in violation of any law, rule, order,
writ, injunction or decree of any court or federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality.
As of March 31, 1996, there were no lawsuits, proceedings, claims or
governmental investigations pending or, to the knowledge of the Stockholders,
threatened, against the Company or against the properties or business thereof,
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and the Stockholders know of no factual basis for any such lawsuit, proceeding,
claim or investigation and there is no action, suit, proceeding or investigation
pending, threatened or contemplated which questions the legality, validity or
propriety of the transactions contemplated by this Agreement.
1.16 Tax Liabilities. The amounts reflected as liabilities for taxes on
the Company's March 31, 1996 balance sheet referred to in Section 1.6 hereof are
sufficient for the payment of all unpaid federal, state, county, local and
foreign taxes of the Company accrued for or applicable to the period ended on
such balance sheet date and all years and periods prior thereto. To the
knowledge of the Stockholders, all federal, state, county, local and foreign
income, use, excise, property, sales, business activity and other tax returns
which are required to be filed by or in respect of the Company up to and
including the date hereof have been filed and all taxes, including any interest
and penalties thereon, which have become due pursuant to such returns or
pursuant to any assessment have been paid and no extension of the time for
filing of any such return is presently in effect. To the knowledge of the
Stockholders, all such returns which have been filed or will be filed by or in
respect of the Company for any period ending on or before the Closing Date are
or will be true and correct.
1.17 Contracts. Except as set forth in Schedule 1.17 hereto or any
other schedule referred to herein, the Company is not a party to any contract as
of March 31, 1996.
1.18 Employee Agreements.
(a) The Company is a party to an Employment Agreement dated
as of July 20, 1994 between it and Xxxxxx Xxxxxx, a copy of which is attached to
Schedule 1.18 hereto and no other employment agreements.
(b) There are no plans, contracts and arrangements, oral or
written, including but not limited to union contracts and employee benefit
plans, whereunder the Company has any obligations (other than obligations to
make current wage or salary payments terminable on notice of 30 days or less) to
or on behalf of its officers, employees or their beneficiaries or whereunder any
of such persons owes money to the Company as of March 31, 1996.
1.19 Employee Relations. To the knowledge of the Stockholders, as of
March 31, 1996, (i) the Company has not engaged in any unfair labor practice,
unlawful employment practice or unlawful discriminatory practice in the conduct
of its business, (ii) the Company has complied in all respects with all
applicable laws, rules and regulations relating to wages, hours and collective
bargaining and has withheld all amounts required by agreement to be withheld
from the wages or salaries of its employees and (iii) the Company is not a party
to or affected by or threatened with or, to the knowledge of the Stockholders,
in danger of being a party to or affected by, any labor dispute which materially
interferes or would materially interfere with the conduct of its business. There
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is set forth in Schedule 1.19 hereto the name and total annual compensation,
including bonuses, payable to each of the officers, directors and employees of
the Company whose total annual compensation, including bonuses, during the year
ended December 31, 1995 exceeded the sum of $100,000. Since December 31, 1995,
there has been no material increase in the compensation payable to any of such
officers, directors and employees, except as set forth in Schedule 1.19 hereto.
1.20 Employee Retirement Income Security Act. As of March 31, 1996, the
Company had no unpaid liability in respect of any "employee benefit plans"
within the meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended, ("ERISA") established or maintained or to which
contributions are or were made by the Company to the Pension Benefit Guaranty
Corporation ("PBGC") or to any beneficiary of such plans.
1.21 Trademarks and Proprietary Rights. As of March 31, 1996, the
Company owns no trademarks, trade names, copyrights or applications thereto.
1.22 Finders. Neither the Company nor the Stockholders have paid or
become obligated to pay any fee or commission to any broker, finder or
intermediary. Neither the Company nor the Stockholders have any agreement or
obligation whatsoever with entities other than PAMCO regarding any proposed
acquisition of the Company by any such entity and neither of them is engaged in
any negotiations with any such entity for any such acquisition.
1.24 Representations and Warranties to Be True on the Closing Date. All
representations and warranties set forth in this Article I will be true and
correct on the Closing Date or otherwise on the date indicated herein. As used
in this Agreement, the phrase "to the knowledge of the Stockholders" and
variations thereof shall mean the knowledge of Xxxx Xxxx, after due inquiry by
him of the officers of the Company.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PAMCO
PAMCO represents and warrants to the Stockholders and agrees as
follows:
2.1 Organization of PAMCO. PAMCO is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Pennsylvania. Each of PAMCO's subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation. PAMCO has the corporate power and authority
necessary or required to carry on its business as presently conducted.
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2.2 Subsidiaries. PAMCO has no subsidiaries other than Provident
Indemnity Life Insurance Company ("PILIC"), Premarco, Inc., Passages Advance
Planning Agency, Inc., Xxxxxxxxx Agency, Inc., PAMCO Financial Services, Inc.,
and PAMCO Leasing Corp. (collectively, the "PAMCO Subsidiaries"). PILIC has five
subsidiaries, Provident American Life & Health Insurance Company (formerly Union
Benefit Life Insurance Company), PAMCO Realty Co., Inc., Xxxxxxxxxx Management
Corporation, Xxxxxxx X. Field & Associates, Inc., and NIA Corporation.
2.3 Corporate Authority. This Agreement and the transactions
contemplated herein have been duly approved by all necessary corporate action on
the part of PAMCO. This Agreement, when executed and delivered by PAMCO, and
assuming the due execution hereof by the Stockholders, will constitute the
valid, legal and binding agreement of PAMCO enforceable in accordance with its
terms.
2.4 Capital Structure of PAMCO. The authorized capital stock of PAMCO
consists of 25,000,000 shares of common stock, $.10 par value, of which
approximately 9,711,931 shares have been issued and are outstanding, 2,500,000
shares of Class A common voting stock, $.10 par value per share, of which no
shares are issued and outstanding and 5,000,000 shares of preferred stock, $1.00
par value, of which 580,250 shares of Series A Cumulative Convertible Preferred
Stock are issued and outstanding. There are a number of agreements,
arrangements, options, and warrants relating to the issuance, sale, purchase or
redemption of any shares of capital stock of PAMCO. All of the outstanding
shares of capital stock of PAMCO are validly issued, fully paid and
nonassessable with no liability attaching to the ownership thereof.
2.5 Finders. PAMCO has not paid or become obligated to pay any fee or
commission to any broker, finder or intermediary for or on account of the
transactions provided for in this Agreement.
2.6 Nasdaq Listing. The shares of PAMCO's Common Stock (the "PAMCO
Shares") to be issued to the Stockholders pursuant to Section 4.2 hereof will,
upon the issuance thereof, be authorized for quotation on the Nasdaq SmallCap
Market under the symbol "PAMC." To the knowledge of PAMCO, the authorization for
quotation of shares of PAMCO's Common Stock on the Nasdaq Market System, as
defined in Securities and Exchange Commission Rule 11Ac1-2(a)(3), is not
suspended, terminated or prohibited, and PAMCO has no knowledge of any facts
which would lead PAMCO to believe that such authorization for quotation of
shares of PAMCO's Common Stock in the Nasdaq Market System will be suspended,
terminated or prohibited.
2.7 Representations and Warranties to Be True on the Closing Date. All
of the representations and warranties set forth in this Article II will be true
and correct on the Closing Date.
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ARTICLE III
ACTION PRIOR TO THE CLOSING DATE
The parties covenant to take the following action between the date
hereof and the Closing Date:
3.1 Investigation.
(a) The Stockholders and the Company shall afford to the
officers, employees and authorized representatives, including, without
limitation, independent public accountants and attorneys, of PAMCO such access
during normal working hours to the offices, properties, business and financial
and other records of the Company as PAMCO shall deem necessary or desirable, and
shall furnish to PAMCO and its authorized representatives such additional
financial and operating and other data as shall be reasonably requested,
including all such information and data as shall be necessary in order to enable
PAMCO and its representatives to verify to their satisfaction the accuracy of
the financial statements of the Company and the representations and warranties
of the Stockholders contained in Article I of this Agreement.
(b) PAMCO shall afford to the Stockholders and their
authorized representatives, including, without limitation, their independent
public accountants and attorneys, such access during normal working hours to the
offices, properties, business and financial and other records of PAMCO as the
Stockholders shall deem necessary or desirable, and shall furnish to the
Stockholders and their authorized representatives such additional financial and
operating and other data as shall be reasonably requested, including all such
information and data as shall be necessary in order to enable the Stockholders
and their representatives to verify to their satisfaction the accuracy of the
consolidated financial statements of PAMCO and the representations and
warranties of PAMCO contained in Article II of this Agreement.
3.2 Confidential Nature of Information. PAMCO, the Stockholders and the
Company agree that, in the event that the transactions contemplated herein shall
not be consummated, each will treat in confidence all documents, materials and
other information which it shall have obtained during the course of the
negotiations leading to this Agreement, the investigation of the other party
hereto and the preparation of this Agreement and other documents relating to
this Agreement, and shall return to the other party all copies of non-public
documents and materials which have been furnished in connection therewith.
3.3 Preserve Accuracy of Representations and Warranties.
(a) The Stockholders shall refrain from taking any action, and
shall cause the Company to refrain from taking any action, which would render
any representation or warranty contained in Article I of this Agreement
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inaccurate as of the Closing Date hereunder. The Stockholders will promptly
notify PAMCO of any lawsuits, claims, proceedings or investigations that, to the
knowledge of the Stockholders, may be threatened, brought, asserted or commenced
against the Company, its officers or directors or the Stockholders (i) involving
in any way the transactions contemplated by this Agreement or (ii) which would,
if determined adversely to the Company, have a material adverse impact on the
business, properties or assets of the Company.
(b) PAMCO shall refrain from taking any action and shall cause
the PAMCO Subsidiaries to refrain from taking any action which would render any
representation or warranty contained in Article II of this Agreement inaccurate
as of the Closing Date. PAMCO will promptly notify the Stockholders of any
lawsuits, claims, proceedings or investigations that, to the knowledge of PAMCO,
may be threatened, brought, asserted or commenced against PAMCO or the PAMCO
Subsidiaries or their respective officers and directors (i) involving in any way
the transactions contemplated by this Agreement or (ii) which would, if
determined adversely, have a material adverse impact on the business, properties
or assets of PAMCO or the PAMCO Subsidiaries.
3.4 Insurance Law Compliance. PAMCO and the Stockholders shall file as
promptly as possible after the date hereof with the Pennsylvania Insurance
Department the notifications, requests for exemptions and other information
required to be filed under the insurance company laws of the Commonwealth of
Pennsylvania (the "Law"), or any rules and regulations promulgated thereunder,
with respect to the transactions contemplated hereby. Each party warrants that
all such filings by it will be, as of the date filed, true and accurate and in
accordance with the requirements of the Law and any such rules and regulations.
Each of PAMCO and the Stockholders agrees to make available to the other such
information as each of them may reasonably request relative to its business,
assets and property as may be required of each of them to file any additional
information requested by the Pennsylvania Insurance Department under the Law and
any such rules and regulations. PAMCO shall be responsible for, and shall bear
the expense of, all such filings.
ARTICLE IV
EXCHANGE AND CLOSING
4.1 Closing Date. Subject to the fulfillment of the conditions
precedent specified in Articles V, VI and VII hereof, the transactions
contemplated by this Agreement shall be consummated at 3:00 p.m. on August 15,
1996 (the "Closing Date") at the offices of PAMCO, 0000 XxXxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxxxxxx 00000.
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4.2 Exchange. On the Closing Date, and subject to the terms and
conditions set forth herein, PAMCO will issue and deliver 123,937 PAMCO Shares
to the Stockholders in exchange for delivery of the CSE Shares to PAMCO by the
Stockholders. PAMCO and the Stockholders agree that the exchange of the PAMCO
Shares for the CSE Shares contemplated by this Agreement is intended to result
in a tax-free reorganization within the meaning of Section 368(a)(1)(B) of the
Internal Revenue Code of 1986 as amended (the "Code"). PAMCO and the
Stockholders further agree to adopt and file any documentation to comply with
the Code in order to preserve the tax-free treatment of the exchange of the
PAMCO Shares for the CSE Shares.
4.3 Delivery by the Stockholders. In addition to the deliveries called
for by Article VI hereof, the Stockholders shall deliver to PAMCO a certificate
or certificates representing all of the CSE Shares, together with fully executed
and witnessed stock powers in blank attached thereto with signatures guaranteed
by a bank or trust company or a New York Stock Exchange Medallion Signature
Program participant.
4.4 Delivery by PAMCO. In addition to the deliveries called for by
Article VII hereof, PAMCO shall deliver to the Stockholders a certificate or
certificates representing the PAMCO Shares. The Stockholders acknowledge that
the PAMCO Shares will not have been registered under the Securities Act of 1933,
as amended, and accordingly, shall bear a restrictive legend similar to that set
forth in Section 6.8 hereof.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF BOTH PARTIES
The obligations of PAMCO to purchase and pay for the CSE Shares and the
obligations of the Stockholders to sell and deliver the CSE Shares shall be
subject to the satisfaction, on or prior to the Closing Date, of the following
conditions:
5.1 Insurance Regulatory Approval. To the extent approval of the
issuance of the PAMCO Shares to the Stockholders is required under Section
1402(a) of the Law, the Stockholders shall have received an order of the
Pennsylvania Insurance Department approving the issuance of the PAMCO Shares to
the Stockholders or an order of the Pennsylvania Insurance Department exempting
the issuance of the PAMCO Shares to the Stockholders from the requirements of
Section 1402(a) of the Law.
5.2 Certain Legal Proceedings. There shall not be pending by any
governmental entity any action, suit or proceeding challenging the exchange of
the PAMCO Shares by PAMCO for the CSE Shares or seeking to restrain or prohibit
the making or consummation of the exchange of the CSE Shares for the PAMCO
Shares; or seeking to prohibit or materially limit the ownership of operation by
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PAMCO of a material portion of the business or assets of the Company or to
compel PAMCO to dispose of or hold separate any material portion of the business
or assets of the Company; or seeking to impose material limitations on the
ability of PAMCO to acquire, hold or exercise full rights of ownership of any of
the CSE Shares or seeking to prohibit PAMCO or any of its subsidiaries from
effectively controlling in any material respect any material portion of the
business or operations of the Company.
5.3 Xxxxxx Release. Xxxxxx Xxxxxx shall have executed and delivered to
PAMCO a Release by Xxxxxx Xxxxxx of PAMCO, its subsidiaries, affiliates,
officers and directors, agents and employees and CSE in form satisfactory to the
parties.
5.4 Releases.
(a) On the Closing Date, the Stockholders shall have executed
and delivered to PAMCO a release by the Stockholders of PAMCO, its subsidiaries,
affiliates, officers and directors, agents and employees in form and substance
satisfactory to counsel, and the Stockholders shall have caused Residential
Health Care, Inc., t/a Medical Resource, and National Hospital Network, Inc. to
execute and deliver to PAMCO a release by each of them of PAMCO, its
subsidiaries, affiliates, officers and directors, agents and employees.
(b) On the Closing Date, PAMCO shall have executed and
delivered to the Stockholders a release by PAMCO of the Stockholders, its
subsidiaries, affiliates, officers and directors, agents and employees,
including Residential Health Care, Inc., t/a Medical Resource, and National
Hospital Network, Inc., in form and substance satisfactory to counsel.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF PAMCO
The obligations of PAMCO under this Agreement to purchase and pay for
the CSE Shares shall, at the option of PAMCO, be subject to the satisfaction, on
or prior to the Closing Date, of the following conditions:
6.1 Termination of Contracts. All Contracts of the Company, other than
those with PAMCO, any subsidiary or affiliate of PAMCO, or the Xxxxxx Employment
Agreement shall have been terminated. With regard to the Xxxxxx Employment
Agreement, a fully executed original shall be delivered to PAMCO at or prior to
the Closing Date.
6.2 No Misrepresentation or Breach of Covenants and Warranties. There
shall have been no breach by the Stockholders in the performance of any of their
covenants and agreements herein, each of the representations and warranties of
the Stockholders contained or referred to in this Agreement shall be true and
correct in all material respects on the Closing Date as though made on the
Closing Date and there shall have been delivered to PAMCO a certificate or
certificates to that effect, dated the Closing Date and signed by the
Stockholders.
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6.3 No Changes in or Destruction of Property. There shall have been,
prior to March 31, 1996, (i) no material adverse change in the condition,
financial or otherwise, of the Company; (ii) no adverse federal, state or local
legislative or regulatory change affecting in any material respect the services
or business of the Company and (iii) the properties and assets of the Company
shall not have been materially damaged by fire, flood, casualty, act of God or
the public enemy or other cause, regardless of insurance coverage for such
damage, so as to impair in any material respect the ability of the Company to
render services or continue operations. There shall have been delivered to PAMCO
a certificate, dated the Closing Date, and signed by the Stockholders (a) to the
effect that prior to March 31, 1996, there was no such material adverse change
as stated in clause (i) hereof and no such material damage as stated in clause
(iii) hereof and (b) further stating that nothing has come to the Stockholders'
attention since March 31, 1996, in the course of their activities on behalf of
the Company, which causes them to believe that during such period there occurred
any adverse federal, state or local legislative or regulatory change affecting
in any material respect the services or business of the Company.
6.4 Legal Matters. All approvals required under the Law shall have been
obtained and no action, suit, investigation or proceeding shall have been
instituted or threatened by any person, corporation or governmental agency to
restrain, prohibit, collect damages arising out of or otherwise challenge the
legality or validity of the transactions contemplated herein.
6.5 Resignation of Company Directors. There shall have been delivered
to PAMCO, dated the Closing Date, the written resignation of each director of
the Company.
6.6 Opinion of Counsel for the Stockholders. PAMCO shall have received
from Xxxxxx Xxxxxxxx, counsel to the Stockholders, an opinion dated the Closing
Date, in form and substance satisfactory to PAMCO and its counsel, to the effect
that:
(a) As of March 31, 1996, the Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New Jersey. The Company is not qualified to transact business as a foreign
corporation in any jurisdiction other than the Commonwealth of Pennsylvania
where the Company is duly qualified to do business and is good standing as a
foreign corporation. The Company has full corporate power and authority and
other authorizations necessary or required for it to own or lease and operate
its properties and to carry on its business as now conducted.
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(b) The authorized capital stock of the Company consists of
1,000 shares of common stock, no par value per share; one hundred (100%) percent
of the issued and outstanding shares are owned beneficially and of record by the
Stockholders. Except for this Agreement, to the knowledge of such counsel, there
are no agreements, arrangements, options, warrants or other rights or
commitments of any character relating to the issuance, sale, purchase or
redemption of any shares of capital stock of the Company and all of the issued
and outstanding shares of common stock of the Company on the Closing Date are
validly issued, fully paid and nonassessable with no liability attaching to the
ownership thereof.
(c) This Agreement has been duly and validly executed and
delivered by the Stockholders and such agreement, assuming due execution by
PAMCO, is the valid and binding agreement of the Stockholders enforceable
against the Stockholders in accordance with its terms except as enforcement of
the Agreement may be limited by bankruptcy, insolvency or other similar laws
affecting creditors' rights generally and that the remedy of specific
performance is subject to the discretion of the court before which proceedings
therefor are brought.
(d) The Stockholders have full power and authority to execute
and deliver this Agreement and to perform their obligations thereunder. Neither
the execution and delivery of this Agreement, nor the consummation of the
transactions contemplated herein, nor compliance with and fulfillment of the
terms and provisions hereof (i) conflicts with or results in the breach of the
terms, conditions or provisions of, or constitutes a default under any agreement
or instrument known to such counsel to which the Company or the Stockholders is
a party or by which any of them is bound; (ii) gives any party to or with rights
under any such agreement or instrument the right to terminate, modify or
otherwise change the rights or obligations of the Company under any such
agreement or instrument or (iii) requires the consent, approval or authorization
of or any filing with or notification to any federal, state or local court,
governmental authority or regulatory body not already obtained or made, as the
case may be.
(e) Such counsel do not know of any action, suit, proceeding
or investigation pending or threatened against the Stockholders or the Company
which might result in a material adverse change in the properties, business or
assets or in the condition (financial or otherwise) of the Company, or that any
action, suit, proceeding or investigation is pending or to their knowledge
threatened which questions the legality, validity or propriety of this Agreement
or of any action taken or to be taken by the Stockholders pursuant to or in
connection with this Agreement.
- 13 -
(f) After due inquiry and examination of the stock records of
the Company, to the knowledge of such counsel, the Stockholders are the lawful
owners of the CSE Shares, free and clear of all adverse claims, with
unrestricted right and power to exchange the CSE Shares with PAMCO. The
Stockholders have executed and delivered to PAMCO such instruments as are
sufficient to vest good and marketable title to the CSE Shares in PAMCO free and
clear of all adverse claims.
(g) To such further effect with respect to legal matters
relating to this agreement as PAMCO or its counsel may reasonably request.
In giving such opinion, counsel for the Stockholders may rely, as to
matters of fact, upon certificates of officers of the Company, and as to matters
relating to the law of any state other than the State of New Jersey, upon
opinions of other counsel satisfactory to them, provided that such counsel shall
state that they believe that they are justified in relying upon such
certificates and opinions and deliver copies thereof to PAMCO prior to the
Closing Date.
6.7 Access to Books and Records. The Stockholders and the Company have
provided reasonable access to the Company's books and records as provided in
Section 3.1(a) hereof.
6.8 Investment Representation. The Stockholders acknowledge that the
PAMCO Shares have not been registered under the Securities Act of 1933, as
amended (the "Act"), and agree that they are acquiring the PAMCO Shares for
investment purposes only and not with a view to any sale or other distribution
thereof in a manner that would violate the Act. The Stockholders consent to the
placement of the following legend on the certificate or certificates
representing the PAMCO Shares to be issued to them:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS. THESE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO
THE SECURITIES UNDER SAID ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR AN EXEMPTION FROM SUCH REQUIREMENTS."
6.9 Board Approval. PAMCO's Board of Directors shall have approved this
Agreement and the consummation of the transactions contemplated hereby.
6.10 Stockholder Approval. The transactions contemplated by this
Agreement shall have been approved on or before the Closing Date by the
requisite vote of the stockholders of the Company as is required under the New
Jersey Business Corporation Act.
- 14 -
6.11 Approval by Counsel. All matters, proceedings, instruments and
documents required to carry out this Agreement or incidental thereto and all
other relevant legal matters shall have been approved at or before the Closing
Date by Butera, Beausang, Xxxxx & Xxxxxxx, counsel to PAMCO, which approval
shall not be unreasonably withheld.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF
THE STOCKHOLDERS
The obligations of the Stockholders under this Agreement to sell and
deliver the CSE Shares shall, at the option of the Stockholders, be subject to
the satisfaction, on or prior to the Closing Date, of the following conditions:
7.1 No Misrepresentation or Breach of Covenants and Warranties. There
shall have been no breach by PAMCO in the performance of any of its covenants
herein, each of the representations and warranties of PAMCO contained or
referred to in this Agreement shall be true and correct in all material respects
on the Closing Date as though made on the Closing Date, and there shall have
been delivered to the Stockholders a certificate or certificates to that effect,
dated the Closing Date and signed on behalf of PAMCO by the President or any
Vice President of PAMCO.
7.2 Opinion of Counsel for PAMCO. The Stockholders shall have received
from Butera, Beausang, Xxxxx & Xxxxxxx, counsel to PAMCO, an opinion dated the
Closing Date, in form and substance satisfactory to the Stockholders and their
counsel, to the effect that:
(a) PAMCO is a duly organized and validly existing corporation
in good standing under the laws of the Commonwealth of Pennsylvania and PAMCO
has the corporate power and authority to consummate the transactions as provided
for herein.
(b) The authorized capital stock of PAMCO consists of
25,000,000 shares of common stock, $.10 par value, of which 9,711,931 shares
have been issued and are outstanding, 2,500,000 shares of Class A common voting
stock, $.10 par value per share, of which no shares are issued or outstanding,
and 5,000,000 shares of preferred stock, $1.00 par value, of which 580,250
shares of Series A Cumulative Convertible Preferred Stock are issued and
outstanding. All of the outstanding shares of PAMCO are validly issued, fully
paid, and nonassessable with no liability attaching to the ownership thereof.
(c) This Agreement and the transactions contemplated herein
have been duly approved by all necessary corporate action on the part of PAMCO
and this Agreement has been duly and validly executed and delivered by PAMCO;
this Agreement, assuming due execution hereof by the Stockholders, is the valid
and binding agreement of PAMCO enforceable against PAMCO in accordance with its
terms, except as enforcement of this Agreement may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors' rights
generally and that the remedy of specific performance is subject to the
discretion of the court before which proceedings therefor are brought.
- 15 -
(d) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated herein, nor compliance with
and fulfillment of the terms and provisions hereof (i) conflicts with or results
in the breach of the terms, conditions or provisions of the governing
instruments of PAMCO or any agreement or instrument known to such counsel to
which PAMCO is a party or by which it is bound; (ii) gives any party to or with
rights under any such agreement or instrument the right to terminate, modify or
otherwise change the rights or obligations of PAMCO under any such agreement or
instrument or (iii) requires the consent, approval or authorization of or any
filing with or notification to any federal, state or local court, governmental
authority or regulatory body not already obtained or made, as the case may be.
(e) Such counsel do not know of any action, suit, proceeding
or investigation pending or threatened against PAMCO and which questions the
legality, validity or propriety of (i) this Agreement or of (ii) any action
taken or to be taken by PAMCO hereto pursuant to or in connection with this
Agreement.
(f) The PAMCO Shares are authorized for quotation on the
Nasdaq SmallCap Market and, to the knowledge of such counsel, such authorization
has not been suspended, terminated or prohibited nor are there any facts which
cause such counsel to believe such authorization will be suspended, terminated
or prohibited.
(g) To such further effect with respect to legal matters
relating to this Agreement as the Stockholders or their counsel may reasonably
request.
In giving such opinion, Butera, Beausang, Xxxxx & Xxxxxxx may rely, as
to matters of fact, upon certificates of officers of PAMCO and, as to matters
relating to the law of any jurisdiction other than the Commonwealth of
Pennsylvania, upon the opinions of other counsel satisfactory to them, provided
that such counsel shall state that they believe that they are justified in
relying upon such certificates and opinions and deliver copies thereof to the
Stockholders prior to the Closing Date.
7.4 Approval by Counsel. All matters, proceedings, instruments and
documents required to carry out this Agreement or incidental thereto and all
other relevant legal matters shall have been approved at or before the Closing
Date by Xxxxxxx X. Xxxxxxxx, P.A., special counsel to the Stockholders, which
approval shall not be unreasonably withheld.
-16 -
7.5 Registration. Provident shall have agreed to register the PAMCO
Shares under the Act by filing Form S-3 with the United States Securities and
Exchange Commission promptly following the completion of Closing hereunder, and
at Provident's expense to use its best effort to cause the S-3 to become
effective.
ARTICLE VIII
TERMINATION
8.1 Termination. This Agreement shall be terminated and there shall
thereafter be no liability of any party to any other party hereunder, at any
time prior to the Closing Date:
(a) By the mutual consent of PAMCO and the Stockholders.
(b) By PAMCO or the Stockholders, if the transactions
contemplated herein are not closed on or before August 16, 1996; provided,
however, that nothing in this Section 8.1 shall relieve any party of liability
for breach of this Agreement.
ARTICLE IX
SURVIVAL OF OBLIGATIONS; INDEMNIFICATION
9.1 Survival of Obligations. All certifications, representations and
warranties made herein by the Stockholders and their obligations to be performed
pursuant to the terms hereof, shall survive the Closing Date hereunder. All
representations and warranties contained herein shall terminate on March 31,
1997; provided, that: (i) the representations and warranties contained in
Section 1.16 hereof shall expire on March 31, 1999, or with respect to any
dispute with the Internal Revenue Service, upon the earlier to occur of (x)
final settlement and satisfaction of any judgment or full payment of any
resolution of such dispute and the payment of all taxes, interest and penalties
arising therefrom, as the case may be or (y) such time, if any, as the claim
shall be barred by the applicable statute of limitations, and (ii) the
representations and warranties contained in Section 1.4 hereof shall not
terminate.
9.2 Indemnification.
(a) The Stockholders agree to jointly and severally indemnify
and hold harmless PAMCO, the Company and their successors and assigns
(collectively, the "Indemnified Persons") from and against any and all (x)
liabilities, losses, costs, deficiencies or damages ("Loss") and (y) reasonable
attorneys' and accountants' fees and expenses, court costs and all other
reasonable out-of-pocket expenses ("Expense") incurred by any Indemnified
- 17 -
Person, in each case net of any insurance proceeds received and retained by such
Indemnified Person, in connection with or arising from (i) any claim that the
Stockholders did not convey to PAMCO good and marketable title to all of the
issued and outstanding capital stock of the Company pursuant to this Agreement,
(ii) any breach by the Stockholders of any of their covenants in, or any failure
of the Stockholders to perform any of their obligations under, this Agreement or
(iii) any breach of any warranty or the inaccuracy of any representation of the
Stockholders contained or referred to in this Agreement or in any certificate
delivered by or on behalf of the Stockholders pursuant hereto. This
indemnification shall not extend to any claim by PAMCO for monies due PAMCO from
the Company through March 31, 1996.
(b) If PAMCO believes that any Indemnified Person has suffered
or incurred any Loss or incurred any Expense, PAMCO shall so notify the
Stockholders promptly in writing describing such Loss or Expense, the amount
thereof, if known, and the method of computation of such Loss or Expense, all
with reasonable particularity and containing a reference to the provision of
this Agreement or any certificate delivered pursuant hereto in respect of which
such Loss or Expense shall have occurred. If any action at law or suit in equity
is instituted by or against a third party with respect to which any Indemnified
Person intends to claim any liability or expense as Loss or Expense under this
Section 9.2, such Indemnified Person shall promptly notify the Stockholders of
such action or suit.
(c) Subject to paragraph (d) of this Section 9.2, the
Indemnified Persons shall have the right to conduct and control, through counsel
of their choosing, any third party claim, action or suit and may compromise or
settle the same, provided that any of the Indemnified Persons shall give the
Stockholders advance notice of any proposed compromise or settlement. The
Indemnified Persons shall permit the Stockholders to participate in the defense
of any such action or suit through counsel chosen by it, provided that the fees
and expenses of such counsel shall be borne by the Stockholders. Any compromise
or settlement with respect to a claim for money damages effected after the
Stockholders, by notice to the Indemnified Persons, shall have disapproved such
compromise or settlement, shall discharge the Stockholders from liability with
respect to the subject matter thereof and no amount in respect thereof shall be
claimed as Loss or Expense under this Section 9.2.
(d) If the remedy sought in any action or suit referred to in
paragraph (c) of this Section 9.2 is solely money damages and the sum of (i) the
amount claimed in such action or suit and (ii) all amounts claimed in all
pending claims for indemnity under this Section 9.2 does not exceed the
aggregate liability of the Stockholders under this Section 9.2, the Stockholders
shall have 15 business days after receipt of the notice referred to in the last
sentence of paragraph (b) of this Section 9.2 to notify the Indemnified Persons
that they elect to conduct and control such action or suit. If the Stockholders
do not give the foregoing notice, the Indemnified Persons shall have the right
to defend, contest, settle or compromise such action or suit in the exercise of
their exclusive discretion and the Stockholders shall, upon request from any of
- 18 -
the Indemnified Persons, promptly pay to such Indemnified Persons in accordance
with the other terms of this Section 9.2 the amount of any Loss resulting from
its liability to the third party claimant and all related Expense. If the
Stockholders give the foregoing notice, the Stockholders shall have the right to
undertake, conduct and control, through counsel of their own choosing and at the
sole expense of the Stockholders, the conduct and settlement of such action or
suit, and the Indemnified Persons shall cooperate with the Stockholders in
connection therewith; provided that (x) the Stockholders shall not thereby
permit to exist any lien, encumbrance or other adverse charge upon any asset of
any Indemnified Person, (y) the Stockholders shall permit the Indemnified
Persons to participate in such conduct or settlement through counsel chosen by
the Indemnified Persons, but the fees and expenses of such counsel shall be
borne by the Indemnified Persons, except as provided in clause (z) hereof and
(z) the Stockholders shall agree promptly to reimburse to the extent required
under this Section 9.2 the Indemnified Persons for the full amount of any Loss
resulting from such action or suit and all related Expense incurred by the
Indemnified Persons, except fees and expenses of counsel for the Indemnified
Persons incurred after the assumption of the conduct and control of such action
or suit by the Stockholders. So long as the Stockholders are contesting any such
action or suit in good faith, the Indemnified Persons shall not pay or settle
any such action or suit. Notwithstanding the foregoing, the Indemnified Persons
shall have the right to pay or settle any such action or suit, provided that in
such event the Indemnified Persons shall waive any right to indemnity therefor
by the Stockholders and no amount in respect thereof shall be claimed as Loss or
Expense under this Section 9.2.
ARTICLE X
POST-CLOSING OBLIGATIONS
10.1 Registration of PAMCO Shares. Promptly following the Closing Date
hereunder, but in no event later than twelve (12) months from the Closing Date,
PAMCO shall file a Registration Statement on Form S-3 ("Registration Statement")
with the United States Securities and Exchange Commission ("SEC") to register
the PAMCO Shares issued to the Stockholders hereunder, and shall use its best
effort to cause the Registration Statement to become effective as soon as
practicable thereafter. All expenses incurred in connection with the
registration of the PAMCO Shares issued to the Stockholders pursuant to this
Agreement shall be borne by PAMCO. Notwithstanding the foregoing, the
Stockholders shall be responsible for any underwriter's fees, discounts, or
commissions related to the sale by them to third parties of the PAMCO Shares and
any legal fees incurred by the Stockholders in connection therewith.
- 19 -
10.2 Aggregate Transaction Value; Payment of Additional PAMCO Shares.
In the event that the aggregate value of the PAMCO Shares on the date on which
the Registration Statement is declared effective by the SEC is less than
$1,239,370 ("Aggregate Transaction Value"), PAMCO shall, within ten (10)
business days following the effective date of the Registration Statement, issue
to the Stockholders such additional number of PAMCO Shares as shall be necessary
to increase the value of the PAMCO Shares to the Aggregate Transaction Value.
For purposes hereof, the value of the PAMCO Shares shall be determined by
ascertaining the Market Price of the PAMCO Shares on the date the Registration
Statement becomes effective. As used herein, the term "Market Price" shall mean,
with respect to one share of PAMCO Common Stock at any date, the average of the
daily closing prices for the PAMCO Common Stock on the Nasdaq SmallCap Market
for the 30 consecutive business days before the day in question, as adjusted for
any stock dividend, split, combination, or reclassification that took effect
during such 30 business day period, or, in case no sales took place on any day
in question during such 30 business day period, the last bid price on such day,
in either case on the principal national securities exchange on which the PAMCO
Common Stock is then listed or admitted to trading, or on the National
Association of Securities Dealers Automated Quotations System ("NASDAQ"),
National Market System, or, if the PAMCO Common Stock is not listed or admitted
for trading on any such exchange or on the NASDAQ National Market System on any
day in question, then such price as shall be deemed to be the last bid price
quoted on the NASDAQ interdealer quotation system on such day, or, if the PAMCO
Common Stock is not listed or admitted for trading on the NASDAQ interdealer
quotation system, then the price shall be deemed to be the last reported bid
price on such day as reported by the National Quotation Bureau, Inc., provided,
however, that if the Common Stock is not traded in such matter that the
quotations referred to in this subsection are available for the period required
hereunder, the Market Price shall be determined in good faith by at least a
majority of the members of the Board of Directors of PAMCO. If the PAMCO Common
Stock is not then traded, or the Market Price cannot be ascertained by the
method described above, the Market Price shall be as agreed between PAMCO and
the Stockholders, or in the absence of an agreement, each shall appoint an
appraiser, the appraisers so chosen shall appoint a third appraiser, and the
Market Price shall be equal to the average price per share determined by the
three appraisers.
10.3 Obligation of PAMCO to File Registration Statement to Survive
Closing. The obligation of PAMCO to file a Registration Statement to register
the PAMCO Shares shall survive the Closing hereunder.
- 20 -
ARTICLE XI
MISCELLANEOUS
11.1 Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be given by confirmed telex or telecopy
or registered mail addressed,
If to PAMCO, to:
Provident American Corporation
X.X. Xxx 000
0000 XxXxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxx,
Chairman of the Board
and Chief Executive Officer
with a copy to:
Butera, Beausang, Xxxxx & Xxxxxxx
Suite 212
630 Freedom Business Center
King of Prussia, PA 19406
Attention: Xxxxxxx X. Xxxxxxxx, Xx., Esq.
If to the Stockholders, to:
Xxxx Xxxx, D.O. and Xxxx Xxxx
0000 X.X. 00xx Xxxxxx
Xxxx Xxxxx, XX 00000
with a copy to:
Xxxxxx Xxxxxxxx, Esq.
X.X. Xxx 000
00 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
and to:
Xxxxxxx X. Xxxxxxxx, P.A.
000 Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
11.2 Expenses. Except as may be otherwise provided herein, each party
hereto shall pay its own expenses, including, without limitation, legal and
accounting fees and expenses, incident to its negotiation and preparation of
this Agreement and to its performance and compliance with the provisions
contained herein.
- 21 -
11.3 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania without regard
to its rules on conflicts of law.
11.4 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, provided that the rights of the Stockholders herein may not be assigned
and the rights of PAMCO may only be assigned (a) to such other business
organization which shall succeed to substantially all the assets, liabilities
and business of PAMCO or (b) to a wholly owned subsidiary of PAMCO in which
event such assignment shall not relieve PAMCO of any of PAMCO's obligations to
the Stockholders under this Agreement.
11.5 Partial Invalidity. In case any one or more of the provisions
contained herein shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement, but this Agreement shall
be construed as if such invalid, illegal or unenforceable provision or
provisions had never been contained herein unless the deletion of such provision
or provisions would result in such a material change as to cause completion of
the transactions contemplated herein to be unreasonable.
11.6 Waivers. The Stockholders and PAMCO may, by written instrument,
extend the time for the performance of any of the obligations or other acts of
the other party and with respect to this Agreement, (a) waive any inaccuracies
in the representations and warranties of the other party in this Agreement or in
any document delivered pursuant to this Agreement, (b) waive compliance with any
of the covenants or the other party contained in this Agreement and (c) waive
the other party's performance of any of its obligations set out in this
Agreement. Any agreement on the part of the parties hereto for any such
extension or waiver shall be validly and sufficiently authorized for the
purposes of this Agreement if, as to PAMCO, it is authorized by Xxxxx X. Xxxxxxx
and, as to the Stockholders, it is authorized by Xxxx Xxxx.
11.7 Execution in Counterparts. This Agreement may be executed in two
or more counterparts, all of which shall be considered one and the same
agreement and shall become a binding agreement when one or more counterparts
have been signed by each of the parties and delivered to each of the other
parties.
11.8 Titles and Headings. Titles and headings to Articles and Sections
herein are inserted for convenience of reference only and are not intended to be
a part of or to affect the meaning or interpretation of this Agreement.
11.9 Schedules. The Schedules to this Agreement shall be construed with
and as an integral part of this Agreement to the same extent as if the same had
been set forth verbatim herein.
- 22 -
11.10 Entire Agreement; Amendments and Waivers. This Agreement,
including the Appendices and the Schedules hereto, contains the entire
understanding of the parties hereto with regard to the subject matter contained
herein. The parties hereto, by mutual agreement in writing, may amend, modify
and supplement this Agreement. The failure of any party hereto to enforce at any
time any provision of this Agreement shall not be construed to be a waiver of
such provision, nor in any way to affect the validity of this Agreement or any
part hereof or the right of such party hereafter to enforce each and every such
provision. No waiver of any breach of this Agreement shall be held to constitute
a waiver of any other or subsequent breach.
IN WITNESS WHEREOF, the parties hereto have executed these presents the
day and year first above written.
PROVIDENT AMERICAN CORPORATION
By:
------------------------------
Xxxxxxx X. Xxxxx, Treasurer
and Chief Financial Officer
STOCKHOLDERS:
---------------------------------
Xxxx Xxxx
---------------------------------
Xxxx Xxxx
- 23 -
SCHEDULE 1.6(A)
---------------
FINANCIAL STATEMENTS OF THE COMPANY
-----------------------------------
1. COMPILED FINANCIAL STATEMENTS -- MARCH 31, 1996
2. U.S. CORPORATION INCOME TAX RETURN FOR THE PERIOD BEGINNING
JULY 20, 1994 AND ENDING JUNE 30, 1995
SCHEDULE 1.6(B)
LIST OF CSE BANK ACCOUNTS, BORROWING RESOLUTIONS
AND DEPOSIT BOXES
JULY 26, 1994 -- $150,000 LINE OF CREDIT AGREEMENT WITH MEDICAL
RESOURCE
JULY 26, 1994 -- $20,000 ADVANCE AGAINST $150,000 LINE OF CREDIT
AUGUST 9, 1994 -- $5,000 ADVANCE AGAINST $150,000 LINE OF CREDIT
AUGUST 15, 1994 -- CONSENT OF SHAREHOLDERS TO CANCELLATION OF LINE OF
CREDIT WITH MEDICAL RESOURCE
SCHEDULE 1.11(A)
LEASES
LEASE AGREEMENT BETWEEN COASTAL SERVICES, EASTERN, INC. TRADING AS COASTAL
SERVICES AND PROVIDENT INDEMNITY LIFE INSURANCE COMPANY DATED JANUARY 1, 1995
SCHEDULE 1.17
CONTRACTS
1. ADMINISTRATIVE AGREEMENT DATED AS OF SEPTEMBER 1, 1994 BY AND BETWEEN CSE,
INC. AND PROVIDENT INDEMNITY LIFE INSURANCE COMPANY
2. ADOPTION AGREEMENT DATED AS OF JANUARY 1, 1995 BY AND BETWEEN COASTAL
SERVICES, EASTERN, INC. AND PROVIDENT INDEMNITY LIFE INSURANCE COMPANY
SCHEDULE 1.18
EMPLOYMENT AGREEMENTS
ATTACHED HERETO IS A TRUE AND CORRECT COPY OF THE EMPLOYMENT AGREEMENT DATED AS
OF JULY 20, 1994 BETWEEN COASTAL SERVICES, EASTERN, INC. AND XXXXXX XXXXXX.
SCHEDULE 1.19
MATERIAL INCREASE IN COMPENSATION PAYABLE TO
OFFICERS, DIRECTORS AND EMPLOYEES SINCE DECEMBER 31, 1995
NONE
