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STOCK PURCHASE AGREEMENT
BETWEEN
INTERNATIONAL MERCANTILE CORPORATION
AND
UNION EXPRESS MORTGAGE CORPORATION
XXXXXX XXXXXXXX
XXXXXXX X. JUMP
DATED SEPTEMBER 24, 1998
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is effective the 24th day
of September, 1997, by and among Union Express Mortgage Corporation, a Florida
corporation ("UEMC" or the (A)Company@); Xxxxxx Xxxxxxxx, an individual, and
Xxxxxxx X. Jump, an individual (collectively, the "UEMC Shareholders or
(A)Seller"); and International Mercantile Corporation, a Missouri corporation
((A)IMC@ or the ABuyer@) whereby Buyer agrees to acquire 100% of the outstanding
shares of capital stock of the Company pursuant to a tax-free reorganization and
subject to the following terms and conditions.
WHEREAS, Seller owns, free and clear of all adverse claims, all of the
issued and outstanding shares of common stock of Union Express Mortgage
Corporation; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, all of the
issued and outstanding common shares of Union Express Mortgage Corporation in a
tax-free reorganization, for the consideration and upon the terms and subject to
the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises, the provisions and the
respective agreements hereinafter set forth, the parties hereto hereby agree as
follows:
1. PURCHASE AND SALE OF STOCK.
1.1 AGREEMENT TO PURCHASE AND SELL. Upon the terms and subject to the
conditions set forth in this Agreement and in reliance upon the representations,
warranties, covenants, and agreements contained herein, on the Closing Date (as
hereinafter defined), Seller shall sell, grant, convey, assign, transfer, and
deliver to Buyer, and Buyer shall purchase and acquire from Seller, all of the
issued and outstanding shares of common stock of the Company (collectively, the
"Company Shares"). The exact number of Company Shares to be sold by Seller
hereunder is __________ shares of common stock.
1.2 PURCHASE PRICE. Upon the terms and subject to the conditions set
forth in this Agreement, in reliance upon the representations, warranties,
covenants, and agreements of Sellers contained herein, and in exchange for the
Company Shares, the purchase price for the Company Shares (the (A)Purchase
Price@) shall be four hundred thousand dollars ($400,000).
1.3 TERMS OF PAYMENT.
1.3.1 The Purchase Price will be paid by the Buyer through the
delivery of two hundred thousand (200,000) shares of voting common stock
of IMC (the "IMC Stock"), at a deemed price of $2.00 per share. All of the
issued and outstanding Company Shares shall be exchanged for the IMC
Stock.
1.3.2 The Purchase Price will be allocated among the Sellers as
provided on Exhibit 1.
1.3.3 The number of common shares of IMC Stock issued will be
subject to adjustment to take into account stock dividends, stock splits,
reorganizations, recapitalizations, or other dilutive transactions that
may occur before the Closing; provided that the Seller shall not require
IMC to adjust the number of shares for transactions in which the Board of
Directors of IMC has determined that IMC has received fair value.
1.4 CLOSING. The closing of the purchase and sale of the Company
Shares provided herein (the "Closing") will be at the offices of the Buyer at
10:00 a.m., local time, on October 7, 1998, or at such other place or at such
other date and time as Seller and Buyer may mutually agree. Such date and time
of Closing
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is herein referred to as the "Closing Date".
1.5 ADDITIONAL TERMS AND CONDITIONS.
1.5.1 IMC agrees to arrange or provide all capital resources
necessary to support UEMC in the implementation of a mutually agreeable
business plan (estimated to be $150,000).
1.5.2 Prior to closing, UEMC will enter into employment
agreements with certain key personnel, including without limitation
Xxxxxxx X. Jump and Xxxxxx Xxxxxxxx, subject to IMC's approval. Said
agreements will contain non-compete provisions.
1.5.3 Both Mr. Jump and Xx. Xxxxxxxx'x employment agreement will
include a bonus for successfully bringing other acquisition or investment
targets to IMC. Said bonus shall be paid in kind at the following rate:
10% of the first $500,000 purchase price, and Xxxxxx formula thereafter.
1.5.4 It is expected that UEMC will operate as a standalone
mortgage company for at least 6 months after closing. After that
time, IMC's existing mortgage subsidiary will become licensed in
Florida and other jurisdictions in which UEMC writes substantial
business, and all UEMC business will close in the name of said
subsidiary.
1.5.5 UEMC and IMC's mortgage subsidiary will work together to
reduce expenses and eliminate duplicate efforts in legal, accounting,
licensing, compliance, quality control, underwriting, secondary marketing,
human resources, and other areas.
1.5.6 All expenses incurred by or on behalf of any party to this
Agreement with respect to the preparation, negotiation and execution of
this Agreement, related documentation, and closing shall be borne entirely
by the party incurring same.
2. REPRESENTATIONS AND WARRANTIES OF SELLER.
Each Seller, as to itself only, represents and warrants to Buyer as
follows:
2.1 SUBSIDIARIES; EXISTENCE; GOOD STANDING; CORPORATE AUTHORITY;
COMPLIANCE WITH LAW.
2.1.1 The Company owns and operates no subsidiaries.
2.1.2 The Company is a private corporation duly incorporated,
validly existing and in good standing under the laws of the State of
Florida. The Company has all requisite corporate power and authority to
own its properties and carry on its business as now conducted. The Company
is not in default with respect to any order of any court, governmental
authority, or arbitration board or tribunal to which the Company is a
party or is subject, and the Company is not in violation of any laws,
ordinances, governmental rules, or regulations to which it is subject. The
Company has obtained all licenses, permits, and other authorizations and
has taken all actions required by applicable laws or governmental
regulations in connection with its business as now conducted.
2.2 VALIDITY AND EFFECT OF AGREEMENTS. This Agreement constitutes, and
all agreements and documents contemplated hereby when executed and delivered
pursuant hereto for value received will constitute, the valid and legally
binding obligations of Seller enforceable in accordance with their terms, and
the Buyer hereby is granted the right of specific performance. The execution and
delivery of this Agreement does not and the consummation of the transactions
contemplated hereby will not (a) require the consent of any third party (except
as set forth in Section 5.1 of this Agreement), (b) result in the breach of any
term or
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provision of, or constitute a default under, or result in the acceleration of or
entitle any party to accelerate (whether after the giving of notice or the lapse
of time or both) any obligation under, or result in the creation or imposition
of any lien, charge, pledge, security interest or other encumbrance upon any
part of the property of the Company pursuant to any provision of, any order,
judgment, arbitration award, injunction, decree, indenture, mortgage, lease,
license, lien, or other agreement or instrument to which Seller or the company
is a party or by which any of them is bound, or violate or conflict with any
provision of the Bylaws or Articles/ Certificate of Incorporation of the Company
as amended to the date of this Agreement.
2.3 CAPITALIZATION. The Company has the following capital structure:
Authorized Capital Issued Capital
------------------ --------------
______ Common Shares Preferred Shares Common Shares Preferred Shares
------------- ---------------- ------------- ----------------
No shares other than listed herein will be presently issued and outstanding as
of the Closing Date. Except for rights granted pursuant to this Agreement and as
described in Schedule 2.3.3 attached hereto, there are no outstanding rights,
warrants, options, subscriptions, agreements or commitments giving anyone any
right to require the Company to sell or issue, or the Seller to sell, any
capital stock or other securities.
2.4 RECORDS. The corporate minute books of the Company to be delivered
to Buyer at the Closing shall contain true and complete copies of the Articles
of Incorporation, as amended to the Closing Date, bylaws, as amended to the
Closing Date, and the minutes of all meetings of directors and shareholders and
certificates reflecting all actions taken by the directors or shareholders
without a meeting, from the date of incorporation of the Company to the Closing
Date.
2.5 OFFICERS AND DIRECTORS; BANK ACCOUNTS; POWERS OF ATTORNEY;
INSURANCE. The officers and directors of the Company are as set forth in
Schedule 2.5. Schedule 2.5 also sets forth (a) the name of each bank, savings
institution or other person with which the Company has an account or safe
deposit box and the names and identifications of all persons authorized to draw
thereon or have access thereto, (b) the names of all persons, if any, holding
powers of attorney from the Company and a summary statement of the terms
thereof, and (c) a list of all insurance policies owned by the Company (other
than those required to be listed in Schedule 2.14 hereof), together with a brief
statement of the coverage thereof.
2.6 FINANCIAL STATEMENTS. Seller has furnished to Buyer (a) an
unaudited balance sheet of the Company as of March 31, 1997 (the "Unaudited
Balance Sheet"), and (b) an unaudited income statement of the Company for the
three months ending March 31, 1998. The unaudited balance sheets and unaudited
income statements referred to above are hereinafter collectively referred to as
the "Financial Statements". The Financial Statements fully and fairly set forth
the financial condition of the Company as of the dates indicated, and the
results of its operations for the periods indicated, in accordance with
generally accepted accounting principles consistently applied, except as
otherwise stated therein and in the related reports of independent accountants
and other data, copies of which are attached hereto as Exhibit 2.6.
2.7 UNDISCLOSED LIABILITIES. The Company has no liabilities or
obligations whatsoever, either accrued, absolute, contingent, or otherwise,
which are not reflected or provided for in the Financial Statements except (a)
those arising after the date of the Unaudited Balance Sheet which are in the
ordinary course of business, in each case in normal amounts and none of which is
materially adverse, and (b) as and to the extent specifically described in the
Schedules hereto.
2.8 ABSENCE OF CERTAIN CHANGES OR EVENTS SINCE THE DATE OF THE
UNAUDITED BALANCE
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SHEET. Since the date of the Unaudited Balance Sheet, the Company has not, with
the exception of those items enumerated on Schedule 2.8 which is attached hereto
and made a part hereof:
2.8.1 incurred any obligation or liability (fixed or contingent),
except normal trade or business obligations incurred in the ordinary
course of business and consistent with past practice, none of which is
materially adverse, and except in connection with this Agreement and the
transactions contemplated hereby;
2.8.2 discharged or satisfied any lien, security interest or
encumbrance or paid any obligation or liability (fixed or contingent),
other than in the ordinary course of business and consistent with past
practice;
2.8.3 mortgaged, pledged or subjected to any lien, security
interest or other encumbrance any of its assets or properties (other than
mechanic's, materialman's, and similar statutory liens arising in the
ordinary course of business and purchase money security interests arising
as a matter of law between the date of delivery and payment);
2.8.4 transferred, leased or otherwise disposed of any of its
assets or properties except for a fair consideration in the ordinary
course of business and consistent with past practice or, except in the
ordinary course of business and consistent with past practice, acquired
any assets or properties;
2.8.5 canceled or compromised any debt or claim, except in the
ordinary course of business and consistent with past practice;
2.8.6 waived or released any rights of material value;
2.8.7 transferred or granted any rights under any concessions,
leases, licenses, agreements, patents, inventions, trademarks, trade
names, service marks or copyrights or with respect to any know-how;
2.8.8 made or granted any wage or salary increase applicable to
any group or classification of employees generally entered into any
employment contract with, or made any loan to, or entered into any
material transaction of any other nature with any officer or employee of
the Company;
2.8.9 entered into any transaction, contract or commitment,
except in the ordinary course of business;
2.8.10 suffered any casualty loss or damage (whether or not such
loss or damage shall have been covered by insurance) which affects in any
material respect its ability to conduct business; or
2.8.11 declared any dividends or bonuses, or authorized or
affected any amendment or restatement of the Article of Incorporation or
bylaws of the Company or taken any steps looking toward the dissolution or
liquidation of the Company. Between the date of this Agreement and the
Closing hereunder, the Company will not, without the prior written consent
of Buyer, do any of the things listed in Sections 2.8.1 through 2.8.11
above.
2.9 TAXES. The Company (a) has duly and timely filed or caused to be
filed all federal, state, local, and foreign tax returns (including, without
limitation, consolidated and/or combined tax returns) required to be filed by it
prior to the date of this Agreement which relate to the Company or with respect
to which the Company or the Assets or properties of the Company are liable or
otherwise in any way subject,
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(b) has paid or fully accrued for all taxes shown to be due and payable on such
returns (which taxes are all the taxes due and payable under the laws and
regulations pursuant to which such returns were filed), and (c) has properly
accrued for all such taxes accrued in respect of the Company or the assets and
properties of the Company for periods subsequent to the periods covered by such
returns. No deficiency in payment of taxes for any period has been asserted by
any taxing body and remains unsettled at the date of this Agreement. Copies of
all federal, state, local, and foreign tax returns of the Company have been made
available for inspection by Buyer.
2.10 TITLE TO COMPANY SHARES. The Company Shares are duly authorized,
validly issued, fully paid and non-assessable and are owned by Seller free and
clear of all liens, encumbrances, charges, assessments and adverse claims. The
Company Shares are subject to no restrictions with respect to transferability to
Buyer in accordance with the terms of this Agreement. Upon transfer of the
Company Shares by Seller, Buyer will, as a result, receive good and marketable
title to all 100 percent of the Company Shares, free and clear of all security
interests, liens, encumbrances, charges, assessments, restrictions, and adverse
claims.
2.11 TITLE TO PROPERTY AND ASSETS. The Company has good and marketable
title to all of the properties and assets used by it in the conduct of its
business (including, without limitation, the properties and assets reflected in
the Balance Sheets except any thereof since disposed of for value in the
ordinary course of business) and none of such properties or assets is, except as
disclosed in said Balance Sheets or the Schedules hereto, subject to a contract
of sale not in the ordinary course of business, or subject to security
interests, mortgages, encumbrances, liens, or charges of any kind or character.
2.12 CONDITION OF PERSONAL PROPERTY. All tangible personal property,
equipment, fixtures and inventories included within the assets of the Company or
required to be used in the ordinary course of business are in good,
merchantable, or in reasonable repairable condition and are suitable for the
purposes for which they are used. No value in excess of applicable reserves has
been given to any inventory with respect to obsolete or discontinued products.
All of the inventories and equipment, including equipment leased to others, are
well maintained and in good operating condition.
2.13 REAL ESTATE. Schedule 2.13 contains a list of all real property
owned by the Company or in which the Company has a leasehold or other interest
and of any lien, charge, or encumbrance thereupon. Such Schedule also contains a
substantially accurate description identifying all such real property and the
significant rental terms (including rents, termination dates, and renewal
conditions). The improvements upon such properties and use thereof by the
Company conforms to all applicable lease restrictions, zoning, and other local
ordinances. To the best of Seller's knowledge, the Company's real property (the
"Property") does not contain any hazardous substance; the Seller has not
conducted or authorized the generation, transportation, storage, treatment or
disposal at the Property of any hazardous substance; that the Seller has not
received any notice of and has no knowledge that any government authority or any
employee or agent thereof, or any private citizen, has determined, or threatens
to determine, or made any claim in any form, that there is a presence, release,
threat of release, placement on or in the Property, or the generation,
transportation, storage, treatment or disposal at the Property, of any hazardous
substance. For purposes of this paragraph, "hazardous substance" means any
matter giving rise to liability under any local, state or federal law, ordinance
or regulation or any common law theory based on nuisance or strict liability;
does not contain unacceptable levels of natural asbestos; has not been used as a
grave site, fill or borrow area; does not contain underground storage tanks on
the Property;
2.14 LIST OF CONTRACTS AND OTHER DATA. Schedule 2.14 sets for the
following:
2.14.1 all collective bargaining agreements, employment and
consulting agreements, executive compensation plans, bonus plans,
profit-sharing plans, deferred compensation
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agreements, employee pension or retirement plans, employee stock purchase
and stock option plans, group life insurance, hospitalization insurance or
other plans or arrangements providing for benefits to employees of the
Company.
2.14.2 all contracts, understandings, and commitments, (including,
without limitation, mortgages, indentures, and loan agreements) to which
the Company is a party, or to which it or any of its assets or properties
are subject and which are not specifically referred to herein.
2.14.3 the names and current annual compensation rates of all
employees of the Company; and
True and complete copies of all documents and complete descriptions of all
oral understandings, if any, referred to in Schedules 2.13 and 2.14 have been
provided or made available to Buyer and its counsel.
2.15 NO BREACH OR DEFAULT. The Company is not in default under any
contract to which it is a party or by which it is bound, nor has any event
occurred which, after the giving of notice or the passage of time or both, would
constitute a default under any such contract. Seller have no reason to believe
that the parties to such contracts will not fulfill their obligations under such
contracts in all material respects or are threatened with insolvency.
2.16 LITIGATION. Except as set forth in Schedule 2.16, there are no
actions, suits or proceedings with respect to the Company involving claims by or
against Seller or the Company which are pending or threatened against Seller or
the Company, at law or in equity, or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency, or
instrumentality. No basis for any action, suit, or proceeding exists, and there
are no orders, judgments, injunctions, or decrees of any court or governmental
agency with respect to which Seller or the company has been named or to which
Seller or the Company is a party, which apply, in whole or in part, to the
business of the Company, or to any of the assets or properties of the Company or
the Company Shares or which would result in any material adverse change in the
business or prospects of the Company.
2.17 NO BROKERS. Neither Seller nor the Company has entered into any
contract, arrangement or understanding with any person or firm which may result
in the obligation of Buyer or the Company to pay any finder's fees, brokerage or
agent's commissions, or other like payments in connection with the negotiations
leading to this Agreement or the consummation of the transactions contemplated
hereby, and neither Seller nor the Company is aware of any claim or basis for
any claim for payment of any finder's fees, brokerage or agent's commissions, or
other like payments in connection with the negotiations leading to this
Agreement or the consummation of the transactions contemplated hereby.
2.18 INVESTMENT REPRESENTATION. The Seller represents that the Company
Shares being sold to Buyer pursuant to this Agreement have not been registered
under the Securities Act of 1933, as amended, and is being issued in reliance
upon the exemption afforded by Section 4(2) thereof for transaction by an issuer
not involving any public offering.
2.19 INDEPENDENT LEGAL ADVICE. The Company and the Seller have sought
and will continue to seek independent legal advice in this transaction. The
Company and the Seller will not seek from nor rely on the Buyer or any
representative of Buyer for any advise relating to this transaction.
2.20 NO MISREPRESENTATIONS OR OMISSIONS. No representation or warranty
by Seller in this Article 2 or in any other Article or Section of this
Agreement, or in any certificate or other document furnished or to be furnished
by Seller pursuant hereto, contains or will contain any untrue statement of a
material fact
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or omits or will omit to state a material fact necessary in order to provide
Buyer with accurate information as to the Company.
3. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants to
Seller as follows:
3.1 EXISTENCE; GOOD STANDING; CORPORATE AUTHORITY; COMPLIANCE WITH
Law. Buyer is a public corporation trading over the counter as IMTL. Buyer is
duly incorporated, validly existing, and in good standing under the laws of the
State of Missouri. Buyer is duly licensed or qualified to do business as a
foreign corporation and is in good standing under the laws of all other
jurisdictions in which the character of the properties owned or leased by it
therein or in which the transaction of its business makes such qualification
necessary. Buyer has all requisite corporate power and authority to own its
properties and carry on its business as now conducted. Buyer is not in default
with respect to any order of any court, governmental authority, or arbitration
board or tribunal to which Buyer is a party or its subject, and Buyer is not in
violation of any laws, ordinances, governmental rules or regulations to which it
is subject. Buyer has obtained all licenses, permits, or other authorizations
and has taken all actions required by applicable laws or governmental
regulations in connection with its business as now conducted.
3.2 AUTHORIZATION; VALIDITY AND EFFECT OF AGREEMENTS. The execution
and delivery of this Agreement and all agreements and documents contemplated
hereby by Buyer, and the consummation by it of the transactions contemplated
hereby, have been duly authorized by all requisite corporate action. This
Agreement constitutes, and all agreements and documents contemplated hereby when
executed and delivered pursuant hereto for value received will constitute, the
valid and legally binding obligations of Buyer enforceable in accordance with
their terms. The execution and delivery of this Agreement does not and the
consummation of the transactions contemplated hereby will not (a) require the
consent of any third party (except as set forth in Section 5.2 of this
Agreement), (b) result in the breach of any term or provision of, or constitute
a default under, or result in the acceleration of, or entitle any party to
accelerate (whether after the giving of notice or the lapse of time or both) any
obligation under, or result in the creation or imposition of any lien, charge,
pledge, security interest or other encumbrance upon any part of the property of
the Company pursuant to any provision of, any order, judgment, arbitration
award, injunction, decree, indenture, mortgage, lease, license, lien, or other
agreement or instrument to which Buyer is a party or by which it is bound, and
(c) violate or conflict with any provision of the bylaws or Articles of
Incorporation of Buyer as amended to the date of this Agreement.
4. OTHER COVENANTS AND AGREEMENTS.
4.1 INDEMNIFICATION BY SELLER. Upon the terms and subject to the
conditions set forth in Section 4.1, each Seller agrees, as to itself only and
solely to the extent of the consideration that it receives, to indemnify and
hold Buyer harmless from and against, and will reimburse Buyer on demand for,
any payment, loss, cost, or expense (including reasonable attorney's fees and
reasonable costs of investigation incurred in defending against any such
payment, loss, cost, or expense, or claim therefor) made or incurred by Buyer at
any time after the Closing Date in respect of:
4.1.1 any and all losses, damage, costs or deficiencies directly
or indirectly resulting from any misrepresentation, breach of warranty or
non-fulfillment of any covenant on the part of such Seller under this
Agreement or from any misrepresentation in or omission from any
certificate or other instrument furnished or to be furnished to Buyer
hereunder; and
4.1.2 any and all actions, suits, proceedings, demands,
assessments, judgements, costs and legal and other expenses incidental to
the foregoing, and Buyer is hereby authorized, at its option, to settle
such claims and make any payment in relation thereto as may be reasonable
in the circumstances.
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4.2 INDEMNIFICATION BY BUYER. Upon the terms and subject to the
conditions set forth in Section 4.2, Buyer agrees to indemnify and hold Seller
harmless from and against, and will reimburse Seller on demand for, any payment,
loss, cost, or expense (including reasonable attorney's fees and reasonable
costs of investigation incurred in defending against any such payment, loss,
cost, or expense, or claim therefor) made or incurred by Seller at any time
after the Closing Date in respect of:
4.2.1 any and all losses, damage, costs or deficiencies directly
or indirectly resulting from any misrepresentation, breach of warranty or
non-fulfillment of any covenant on the part of such Seller under this
Agreement or from any misrepresentation in or omission from any
certificate or other instrument furnished or to be furnished to Seller
hereunder; and
4.2.2 any and all actions, suits, proceedings, demands,
assessments, judgements, costs and legal and other expenses incidental to
the foregoing, and Seller is hereby authorized, at its option, to settle
such claims and make any payment in relation thereto as may be reasonable
in the circumstances.
4.3 TAX INDEMNITY. Upon the terms and subject to the conditions set
forth in Section 4.3, Seller agrees to indemnify and hold Buyer and the Company
harmless against, and will reimburse Buyer (or the Company if Buyer so requests)
on demand for:
4.3.1 any and all tax deficiencies in respect of federal, state,
local, and foreign sales, use, income, or franchise tax or taxes based on
or measured by income, including any interest or penalties thereon and
legal fees and expenses incurred by Buyer and the Company with respect to
the taxable year ended December 31, 1997, and all prior taxable years; and
4.3.2 any and all such taxes, interest, penalties, and legal fees
and expenses in respect of the period from January 1, 1998 up to and
including the Closing Date, but only to the extent that such deficiencies,
taxes, interest, penalties, and legal fees and expenses exceed, in the
aggregate, the amount of the aggregate reserves for such taxes, if any,
shown as liabilities on the Unaudited Balance Sheet.
The indemnity provided for in this Section 4.3 shall be independent of and
in addition to any other indemnity provision of this Agreement and, anything in
this Agreement to the contrary notwithstanding, shall survive until the
expiration of the applicable statutes of limitation for the taxes referred to
herein.
5. CONDITIONS OF CLOSING.
5.1 BUYER'S CONDITIONS OF CLOSING. The obligation of Buyer to purchase
and pay for the Company shares shall be subject to and conditioned upon the
satisfaction at the Closing of each of the following conditions:
5.1.1 All representations and warranties of Seller contained in
this Agreement and the Schedules hereto shall be true and correct at and
as of the Closing Date, Seller shall have performed all agreements and
covenants and satisfied all conditions on their part to be performed or
satisfied by the Closing Date pursuant to the terms of this Agreement, and
Buyer shall have received a certificate of the Seller dated the Closing
Date to such effect.
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5.1.2 There shall have been no material adverse change since the
date of the Unaudited Balance Sheet in the financial condition, business
or affairs of the Company, and the Company shall not have suffered any
material loss (whether or not insured) by reason of physical damage caused
by fire, earthquake, accident, or other calamity which substantially
affects the value of its assets, properties or business, and Buyer shall
have received a certificate of the Seller dated the Closing Date to such
effect.
5.1.3 Seller shall have delivered to Buyer a Certificate of the
Secretary of State (or other authorized officer) of the Company's
jurisdiction of incorporation certifying as of a date reasonably close to
the Closing Date that the Company has filed all required reports, paid all
required fees and taxes, and is, as of such date, in good standing and
authorized to transact business as a domestic corporation.
5.1.4 Seller shall have delivered to Buyer certificates and other
instruments representing all of the Company Shares, duly endorsed for
transfer or accompanied by appropriate stock powers (in either case
executed in blank or in favor of Buyer with the execution thereof
guaranteed by a bank or trust company), together with all other documents
necessary or appropriate to validly transfer the Company Shares to Buyer
free and clear of all security interests, liens, encumbrances, and adverse
claims.
5.1.5 Neither any investigation of the Company by Buyer, nor the
Schedules attached hereto or any supplement thereto nor any other document
delivered to Buyer as contemplated by this Agreement, shall have revealed
any facts or circumstances which, in the sole and exclusive judgment of
Buyer and regardless of the cause thereof, reflect in an adverse way on
the Company or its financial condition, assets, liabilities (absolute,
accrued, contingent, or otherwise), reserves, business, operations, or
prospects.
5.1.6 No suit, action, investigation, inquiry, or other
proceeding by any governmental body or other person or legal or
administrative proceeding shall have been instituted or threatened which
questions the validity or legality of the transactions contemplated
hereby.
5.1.7 As of the Closing, there shall be no effective injunction,
writ, preliminary restraining order, or any order of any nature issued by
a court of competent jurisdiction directing that the transactions provided
for herein or any of them not be consummated as so provided or imposing
any conditions on the consummation of the transactions contemplated
hereby, which is unduly burdensome on Buyer.
5.2 SELLER'S CONDITIONS OF CLOSING. The obligation of Seller to sell
the Company Shares shall be subject to and conditioned upon the satisfaction at
the Closing of each of the following conditions:
5.2.1 All representations and warranties of Buyer contained in
this Agreement shall be true and correct at and as of the Closing Date and
Buyer shall have performed all agreements and covenants and satisfied all
conditions on its part to be performed or satisfied by the Closing Date
pursuant to the terms of this Agreement; and Seller shall have received a
certificate of Buyer dated the Closing Date to such effect.
5.2.2 Buyer shall have effected payment of the Purchase Price in
accordance with this Agreement.
5.2.3 Buyer shall have delivered to Seller certificates
representing the IMC Stock to be issued pursuant to Section 1.3 of this
Agreement.
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5.2.4 Buyer shall have delivered to Seller a certificate of its
corporate secretary certifying: (a) Resolutions of its Board of Directors
authorizing execution of this Agreement and the execution, performance,
and delivery of all agreements, documents, and transactions contemplated
hereby; and
(b) The incumbency of its officers executing this Agreement
and all agreements and documents contemplated hereby.
5.2.5 As of the Closing, there shall be no effective injunction,
writ, preliminary restraining order, or any order of any nature issued by
court of competent jurisdiction directing that the transactions provided
for herein or any of them not be consummated as so provided or imposing
any conditions on the consummation of the transactions contemplated
hereby, which is unduly burdensome on Seller.
5.2.6 At Closing, the Company will enter into employment
agreements with Xxxxxxx X. Jump and Xxxxxx Xxxxxxxx in accordance with the
provisions of Schedule 5.2.6 attached hereto.
6. TERMINATION AND ABANDONMENT; ARBITRATION.
6.1 METHODS OF TERMINATION. The transactions contemplated herein may be
terminated and/or abandoned at any time before or after approval thereof by
Seller and Buyer, but not later than the Closing:
6.1.1 by mutual consent of Buyer and Seller; or
6.1.2 by Buyer if any of the conditions provided for in Section
5.1 hereof shall not have been met or waived in writing by Buyer prior to
such date.
6.1.3 by Seller if any of the conditions provided for in Section
5.2 hereof shall not have been met or waived in writing by Seller prior to
such date.
6.2 PROCEDURE UPON TERMINATION. In the event of termination and/or
abandonment by Buyer, pursuant to Section 6.1 hereof, written notice thereof
shall forthwith be given to the other party and the transactions contemplated by
this Agreement shall be terminated and/or abandoned, without further action by
Buyer or Seller. If the transactions contemplated by this Agreement are
terminated and/or abandoned as provided herein:
6.2.1 Each party will redeliver all documents, work papers, and
other material of any other party relating to the transactions
contemplated hereby, whether so obtained before or after the execution of
this Agreement, to the party furnishing the same; and
6.2.2 No party hereto shall have any liability or further
obligation to any other party to this Agreement except as stated in this
Section 6.2, as the case may be; provided, however, that: (a) if such
termination and/or abandonment is a result of the failure of any condition
set forth in Section 5.1 hereof, then Buyer shall be entitled to recover
from Seller all out-of-pocket costs which Buyer has incurred (including
reasonable attorney's fees, accounting fees, and expenses); and (b) if
such termination and/or abandonment is a result of the failure of any
condition set forth in Section 5.2 hereof, then Seller shall be entitled
to recover from Buyer all out-of-pocket costs which Seller has incurred
(including reasonable attorney's fees, accounting fees, and expenses).
7. MISCELLANEOUS.
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7.1 NOTICES. Any notice required or permitted hereunder shall be in
writing and shall be sufficiently given if personally delivered or mailed by
certified or registered mail, return receipt requested, addressed as follows:
If to Buyer:
International Mercantile Corporation
X.X. Xxx 000
Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxxx, Chairman
If to Seller:
Union Express Mortgage Corporation
0000 Xxxx Xxxxx Xxxxx Xxxx.
Xxxxx 0000
Xxxx Xxxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Jump, President
7.2 EXECUTION OF ADDITIONAL DOCUMENTS. The parties hereto will at any
time, and from time to time after the Closing Date, upon request of the other
party, execute, acknowledge and deliver all such further acts, deeds,
assignments, transfers, conveyances, powers of attorney, and assurances as may
be required to carry out the intent of this Agreement, and to transfer and vest
title to any Company Shares being transferred hereunder, and to protect the
right, title, and interest in and enjoyment of all of the Company Shares sold,
granted, assigned, transferred, delivered, and conveyed pursuant to this
Agreement; provided, however, that this Agreement shall be effective regardless
of whether any such additional documents are executed.
7.3 BINDING EFFECT, BENEFITS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
successors, executors, administrators, and assigns. Notwithstanding anything
contained in this Agreement to the contrary, nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto or their respective heirs, successors, executors, administrators, and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
7.4 ENTIRE AGREEMENT. This Agreement, together with the Exhibits,
Schedules, and other documents contemplated hereby, constitute the final written
expression of all of the agreements between the parties, and is a complete and
exclusive statement of those terms. It supersedes all understandings and
negotiations concerning the matters specified herein. Any representations,
promises, warranties, or statements made by either party that differ in any way
from the terms of this written Agreement and the Exhibits, Schedules, and other
documents contemplated hereby, shall be given no force or effect. The parties
specifically represent, each to the other, that there are no additional or
supplemental agreements between them related in any way to the matters herein
contained unless specifically included or referred to herein. No addition to or
modification of any provision of this Agreement shall be binding upon any party
unless made in writing and signed by all parties.
7.5 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Maryland exclusive of the conflict
of law provisions thereof.
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7.6 SURVIVAL. All of the terms, conditions, warranties, and
representations contained in this Agreement shall survive, in accordance with
their terms, delivery by Buyer of the consideration to be given by him hereunder
and delivery by Seller of the consideration to be given by them hereunder, and
shall survive the execution hereof and the Closing hereunder.
7.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. Until manually signed counterparts have
been exchanged between the parties, the parties agree to be bound by
counterparts delivered by facsimile containing facsimile representations of
actual signatures affixed by the parties.
7.8 HEADINGS. Headings of the Articles and Sections of this Agreement
are for the convenience of the parties only, and shall be given no substantive
or interpretive effect whatsoever.
7.9 WAIVERS. Either Buyer or Seller may, by written notice to the
other; (a) extend the time for the performance of any of the obligations or
other actions of the other under this Agreement; (b) waive any inaccuracies in
the representations or warranties of the other contained in this Agreement or in
any document delivered pursuant to this Agreement; (c) waive compliance with any
of the conditions or covenants of the other contained in this Agreement; or (d)
waive performance of any of the obligations of the other under this Agreement.
Except as provided in the preceding sentence, no action taken pursuant to this
Agreement, including without limitation any investigation by or on behalf of any
party, shall be deemed to constitute a waiver by the party taking such action of
compliance with any representations, warranties, covenants, or agreements
contained in this Agreement. The waiver by any party hereto of a breach of any
provision hereunder shall not operate or be construed as a waiver of any prior
or subsequent breach of the same or any other provision hereunder.
7.10 MERGER OF DOCUMENTS. This Agreement and all agreements and
documents contemplated hereby constitute one agreement and are interdependent
upon each other in all respects.
7.11 INCORPORATION OF EXHIBITS AND SCHEDULES. All Exhibits and
Schedules attached hereto are by this reference incorporated herein and made a
part hereof for all purposes as if fully set forth herein.
7.12 SEVERABILITY. If for any reason whatsoever, any one or more of the
provisions of this Agreement shall be held or deemed to be inoperative,
unenforceable, or invalid as applied to any particular case or in all cases,
such circumstances shall not have the effect of rendering such provision invalid
in any other case or of rendering any of the other provisions of this Agreement
inoperative, unenforceable, or invalid.
7.13 ASSIGNABILITY. Neither this Agreement nor any of the parties'
rights hereunder shall be assignable to any party hereto without the prior
written consent of the other parties hereto.
(THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK)
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IN WITNESS WHEREOF the respective parties hereto have hereunto affixed
their respective hands and/or seals on the day, month, and year first above
written.
XXXXXX XXXXXXXX ("SELLER")
By: /s/ XXXXXX XXXXXXXX
-----------------------------------------
Xxxxxx Xxxxxxxx, Individually
XXXXXXX X. JUMP ("SELLER")
By: /s/ XXXXXXX X. JUMP
-----------------------------------------
Xxxxxxx X. Jump, Individually
UNION EXPRESS MORTGAGE CORPORATION ("COMPANY")
By: /s/ XXXXXXX X. JUMP
-----------------------------------------
Xxxxxxx X. Jump, President
INTERNATIONAL MERCANTILE CORPORATION ("BUYER")
By: /s/ XXXXXXXX X. XXXXXXXXXX
-----------------------------------------
Xxxxxxxx X. Xxxxxxxxxx, Chairman
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SCHEDULE 1
SELLING SHAREHOLDERS
Common
Shareholder Shares*
----------- ------
Xxxxxx Xxxxxxxx
----------
Xxxxxxx X. Jump
----------
Total
----------
* Number of common shares of Union Express Mortgage Corporation owned as of
Closing.
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SCHEDULE 1.3.2
ALLOCATION OF PURCHASE PRICE
Shareholder Number of IMC Shares
----------- --------------------
Xxxxxx Xxxxxxxx 100,000
Xxxxxxx X. Jump 100,000
Total 200,000
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EXHIBIT 2.6
UNION EXPRESS MORTGAGE CORPORATION
FINANCIAL STATEMENTS
ATTACH MARCH 31, 1998 FINANCIAL STATEMENTS
ATTACH 1998 YEAR-TO-DATE FINANCIAL STATEMENTS
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SCHEDULE 2.8
ABSENCE OF CERTAIN CHANGES OR EVENTS SINCE
THE DATE OF THE UNAUDITED BALANCE SHEET
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SCHEDULE 2.13
REAL ESTATE
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SCHEDULE 2.14
CONTRACTS
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SCHEDULE 2.16
LITIGATION
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SCHEDULE 5.2.6
PROVISIONS OF MANAGEMENT AGREEMENTS FOR
XXXXXXX X. JUMP AND XXXXXX XXXXXXXX
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