EXHIBIT 10.24
EXHIBIT
ASSET PURCHASE AGREEMENT
THIS AGREEMENT is dated for reference the 31st day of December, 1999 between
Neptune Society of America, Inc., a company incorporated under the laws of the
State of California (the "Purchaser"), Cremation Society of Washington, Inc., a
company incorporated under the laws of the State of Washington (the "Vendor"),
Xxxx X. Xxxxx ("Xxxxx") and The Neptune Society, Inc., a company incorporated
under the laws of the State of Florida ("Neptune").
WHEREAS:
A. The Vendor operates and carries on, directly and indirectly, a business
known as "Cremation Society of Washington", "First Choice Cremation" and
"Spokane's Cremation Society" providing funeral, burial and cremation
services including the provision and sale of pre-need cremation services
(the "Business").
B. The Vendor's activities are limited to the operation and carrying on of the
Business.
X. Xxxxx is the legal and beneficial owner of 100% of the issued and
outstanding shares of the Vendor.
D. Xxxxxxx X. Xxxxxxx ("Xxxxxxx") is general manager of the Business.
E. Neptune is the legal and beneficial owner of 100% of the issued and
outstanding shares of the Purchaser.
F. The Vendor has agreed to sell all of the assets of the Business and the
Purchaser has agreed to purchase all of the assets of the Business.
NOW THEREFORE, in consideration of the mutual covenants and agreements contained
in this Agreement and other good and valuable consideration, the receipt and
sufficiency of which is acknowledged, the parties agree as follows:
7 INTERPRETATION
7.1 Definitions : In this Agreement and in any schedules and amendments, the
following terms shall have the meanings set forth below unless the context
otherwise requires:
(a) "Agreement" means this Agreement including the Schedules attached as
the same may be amended or supplemented from time to time;
(b) "Assets" means all of the Vendor's and Xxxxx' rights in the Pre-Need
Contracts, the Trust Accounts, the Intangible Assets, the Land and
Buildings, the Leased Assets, the Leases, the Material Contracts and
all other leases and contracts, subject to the Purchaser's right not
to assume specific contracts, the Specified Assets, the Other
Operating and Fixed Assets and all other fixed assets and equipment
used in connection with the Business, all licenses and other rights
required in order for the
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Purchaser to operate the Business, the Insurance Policies, all
existing and prospective customer lists, lists of suppliers, employee
contracts, promotional material, websites and electronic commerce
sites, price lists, the Books and Records and other information
relating to the day to day carrying on of the Business but does not
include the Excluded Assets, the Excluded Liabilities and any personal
assets of Xxxxx not used in connection with the Business;
(c) "Books and Records" means all files, ledgers, correspondence, lists,
manuals, reports, texts, notes, memoranda, invoices, receipts,
accounts, financial statements, financial working papers, computer
discs, tapes or other means of electronic storage, and all other
records or documents of any nature or kind whatsoever belonging to the
Vendor in connection with the Business;
(d) "Business Day" means any day except Saturday, Sunday or any statutory
holiday in the State of Washington;
(e) "Claim" means any claim by the Purchaser against the Vendor, or the
Vendor against the Purchaser, for any breach of representation,
warranty, covenant or other agreement or obligation of the Vendor or
Purchaser pursuant to this Agreement;
(f) "Closing" means the completion of the sale and purchase of the Assets
as provided in this Agreement;
(g) "Closing Date" means the close of business (i.e. 6:00 p.m.) on
December 31, 1999 or such later date as the parties may agree to in
writing;
(h) "Encumbrances" means and includes, whether or not registered or
recorded, any and all:
(i) mortgages, assignments of rent, liens, licences, leases,
charges, security interests, hypothecs, and pledges against
property (whether real, personal, mixed, tangible or
intangible), or conditional sales contracts or title
retention agreements or equipment trusts or financing leases
relating thereto, or any subordination to any right or claim
of others in respect thereof;
(ii) claims, interests and estates against or in proper (whether
real, personal, mixed, tangible or intangible) including
easements, rights-of-way servitudes or other similar rights
in property granted to or reserved or taken by any person or
any governmental body or authority;
(iii) any option, or other right to acquire, or acquire any
interest in, any property; and
(iv) other encumbrances of whatsoever nature and kind against
property (whether real, personal, mixed, tangible or
intangible); (iv) (i) "Effective Date" means December 31,
1999;
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(j) "Excluded Assets" means the accounts receivable balance for performed
at-need services of the Business at the Effective Date, and, the cash
and cash equivalents of the Business at the Effective Date;
(k) "Excluded Liabilities" means all actual or accrued liabilities,
including but not limited to all trade payables, commissions payable,
sales tax, employee remittances of every kind whatsoever, federal,
municipal, and/or state taxes of any kind whatsoever, with respect to
the Business up to the Effective Date;
(l) "Funeral Insurance Policies" means those insurance polices set forth
in Schedule F, the proceeds of which are to be used to fund funeral
cremation services provided by the Business;
(m) "General Manager " means the duties of Xxxxxxx as of September 30,
1999 overseeing the operations of the Business;
(n) "Gross Spokane Revenues" means gross revenue from the Business
generated by the Spokane Locations, determined in accordance with
generally accepted accounting principles of the United States of
America, consistently applied;
(o) "Insurance Policies" means those insurance policies as set forth in
Schedule A;
(p) "Intangible Assets" means those registered and unregistered names,
trade names, trademarks, designs, copyrights, patents and similar
rights specifically including, but not limited to, the Trade Names and
any proprietary software set forth in Schedule B;
(q) "Land and Buildings" means those interests in real property set forth
in Schedule C;
(r) "Leased Assets" means those assets included in the Assets which are
leased by the Vendor and set forth in Schedule D;
(s) "Leases" means the leases under which the Leased Assets are leased by
the Vendor;
(t) "Material Contracts" means those contracts described in Subsection
4.10;
(u) "Neptune Entities" means the Purchaser, Neptune, their subsidiaries,
affiliates, successors or assigns
(v) "Other Operating and Fixed Assets" means those operating and fixed
assets set forth in Schedule E;
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(w) "Person" means an individual, a corporation, a partnership, a trust,
an unincorporated organization or a government agency or
instrumentality;
(x) "Place of Closing" means the offices of Xxxxxx & Xxxxx, X.X.,
Washington Trust Financial Center, Suite 1600, 000 X. Xxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxx, 00000-0000;
(y) "Pre-Need Contracts" means those pre-need contracts set forth in
Schedule F for cremation services sold prior to the death of the
beneficiary by or for the Business, its predecessors and assignors for
the provision of funeral cremation services;
(z) "Purchase Price" has the meaning ascribed thereto in Subsection 2.1 of
this Agreement;
(aa) "Securities" means the Neptune Shares as described in Subsection 2.2
of this Agreement;
(bb) "Specified Assets" means those specified assets set forth in Schedule
G;
(cc) "Spokane EBITDA" means earnings before income tax, depreciation, and
amortization from the Business generated from the Spokane Locations,
determined in accordance with generally accepted accounting principles
of the United States of America, consistently applied. Schedule K sets
forth more particularly how the Spokane EBITDA will be calculated for
the purposes of this Agreement;
(dd) "Spokane Locations" means the locations of the Business at East 0000
Xxxxxxx Xxxxxx and Xxxxx 000, Xxxxx 0000 Xxxxxxxx Xxxxxx in Spokane,
Washington, including any replacements locations, which the Neptune
Entities operate as they may determine;
(ee) "Time of Closing" means the time at which the Closing takes place,
which shall be 10:00 a.m. at the Place of Closing on the Closing Date
or such other time as the parties may agree upon;
(ff) "Trade Names" means "Cremation Society of Washington", "First Choice
Cremation" and "Spokane's Cremation Society";
(gg) "Trust Accounts" means all cash, funds and accounts and investments
set forth in Schedule H which arise from the sale of the Pre-Need
Contracts which are administered in trust by the Business;
(hh) "Unaudited Financial Statements" means the unaudited financial
statements of the Business for the 12 month periods ending December
31, 1995, December 31, 1996, December 31, 1997, December 31, 1998 and
the interim periods ending March 31, 1999, June 30, 1999 and September
30, 1999, copies of which is incorporated as Schedule I; and
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(ii) "Washington EBITDA" means earnings before income tax, depreciation,
and amortization from the Business generated from any location of the
Business operated by the Neptune Entities in the State of Washington,
including but not limited to the Spokane Locations, or any other
locations of the Business operated by the Neptune Entities in which
Xxxxxxx is General Manager, determined in accordance with generally
accepted accounting principles of the United States of America,
consistently applied. Schedule K sets forth more particularly how the
Washington EBITDA will be calculated for the purposes of this
Agreement.
7.2 Schedules : The following are the schedules delivered concurrently with,
and incorporated in, this Agreement:
Schedule Description Reference
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A List of Insurance Policies 4.6(a)(b)(c)
B List of Intangible Assets 4.1(i)
C List of Land and Buildings 4.1(h)
D List of Leased Assets 4.1(c)
E List of Other Operating and Fixed Assets 4.1(d)(j)
F List of Pre-Need Contracts and Funeral Insurance 4.10(b)
Policies
G List of Specified Assets 4.1(d)
H List of Trust Accounts 4.2
I Unaudited Financial Statements 4.4
J List of Bank Accounts 4.5(b)
K EBITDA 3
L List of Employees and Employee Benefit Plans 4.8(a)(c)
M List of Material Contracts 4.10
N Required Consents 4.12(a), 8.1(a)
O Certificate of Accredited Investor 8.1(d)
P Xxxxx Consulting/Non-compete Agreement 8.1(j)
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Schedule Description Reference
-------- ----------- ---------
Q Xxxxxxx Employment/Non-compete Agreement 8.1(k)
R Lease/Purchase Option Agreement 8.1(l)
7.3 Division, Headings, Index : The division of this Agreement into sections,
subsections and paragraphs and the insertion of headings and any index
provided are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement.
7.4 Genderand Number : Unless the context otherwise requires, words importing
the singular include the plural and vice versa and words importing gender
include both genders.
7.5 Currency : All dollar amounts referred to in this Agreement are stated in
United States of America currency, unless otherwise expressly stated.
8 PURCHASE AND PURCHASE PRICE
8.1 Purchase : On the Closing Date and subject to the terms and conditions
contained in this Agreement, the Vendor shall sell, assign and transfer the
Assets and the Purchaser, shall purchase the Assets for the aggregate price
of $625,000.00 plus the contingent purchase price as described in Section 3
below (the "Purchase Price").
8.2 Payment of Purchase Price : At the Time of Closing, the Purchase Price will
be payable by the Purchaser to the Vendor as follows:
(a) the sum of $20,000.00 by way of a deposit which both parties
acknowledge has been paid by the Purchaser to the Vendor's attorney
pursuant to that certain letter of intent between the parties dated
November 18, 1999;
(b) the sum of $480,000.00 by way of a certified or attorney's check
payable to the Vendor's attorneys, Xxxxxx & Xxxxx, X.X.;
(c) 22,727 common shares of Neptune (the "Neptune Shares") issued by
Neptune to the Vendor, provided that the average closing price of such
shares on the NASD OTC Bulletin Board, or other stock exchange in the
United States of America, for the 30 day period preceding the first
trading day following the one year anniversary of the Closing (the
"Price Date") is equal to or greater than $5.50 per share (the "Deemed
Price"). In the event that the Deemed Price is less that $5.50 per
share on the Price Date, the Purchaser, will deliver to the Vendor,
within fourteen (14) days following the Price Date, at its option,
either (i) that number of common shares of Neptune which will increase
the aggregate deemed value of the Neptune Shares to $125,000.00; (ii)
cash in an amount equal to $125,000.00 less the aggregate deemed value
of the Neptune Shares on the Price Date; or (iii) a combination of
common
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shares of Neptune and cash which, when added to the Neptune Shares,
will equal an aggregate deemed value of $125,000.00; and
(d) the contingent purchase price as described in Section 3 below shall be
determined and paid pursuant to the terms of this Agreement by
delivery to the Vendor of a certified or attorney's check payable to
the Vendor or its assigns
which shall be good and sufficient payment to the Vendor to the extent of
such amounts.
8.3 Effective Date : Notwithstanding the Closing Date, all transactions
contemplated in this Agreement will be effective on the Effective Date. All
income from deaths occurring on or before the Effective Date shall be the
income of Vendor and all income from deaths occurring after the Effective
Date shall be the income of Purchaser.
8.4 Excluded Assets and Excluded Liabilities : From and after the Effective
Date, the Purchaser will have operational control and responsibility of the
management of the Excluded Assets, excluding any personal assets of Xxxxx,
and Excluded Liabilities.
8.5 Reconciliation : On or before March 31, 2000 (the "Reconciliation Date"),
the Purchaser will provide to the Vendor a reconciliation of the Excluded
Assets and Excluded Liabilities, being that amount of cash, collections and
amounts paid, respectively, from the Effective Date.
8.6 Payment of Difference : Any amount of cash and collected receivables that
pertain to the Excluded Assets, which is in excess of the amount of
payments that pertain to the Excluded Liabilities, will be paid by the
Purchaser to the Vendor on or before April 30, 2000. Any amount of cash and
collected receivables that pertain to the Excluded Assets which is less
than the amount of payments that pertain to the Excluded Liabilities will
be paid by the Vendor to the Purchaser on or before April 30, 2000.
8.7 Right of Set-Off : In the event that the Vendor owes the Purchaser any
amounts in connection with the reconciliation set forth in this Section 2,
the Purchaser and Neptune have the right to set-off any such amount against
any money due and owing to the Vendor from the Purchaser or Neptune under
this or any other Agreement.
8.8 Allocation of Purchase Price: The Purchase Price shall be allocated amongst
the Assets of the Business transferred by Vendor to Purchaser as follows:
Asset Purchase Price
Equipment, Furniture and Fixtures $ 54,000
Leasehold Improvements 52,000
Inventory 4,000
Supplies 1,000
Goodwill 514,000
=======
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TOTAL $625,000*
*The contingent Purchase Price paid to Vendor by Purchaser as described
in Section 3 below shall be treated as additional consideration for the
goodwill of Vendor.
9 CONTINGENT PURCHASE PRICE
3.1 First Contingency Purchase Price: Within sixty (60) days of the one year
anniversary of the Closing Date (such anniversary date to be referred to as
the First Contingency Date) the Purchaser will pay the following to the
Vendor, by way of delivery of a certified check to the Vendor:
(a) 3% of the Gross Spokane Revenues from the twelve (12) month period
immediately preceding the First Contingency Date; and
(b) 12.5% of the Spokane EBITDA from the twelve (12) month period
immediately preceding the First Contingency Date.
3.2 Second Contingency Purchase Price: Within sixty (60) days of the two (2)
year anniversary of the Closing Date (such anniversary date to be referred
to as the Second Contingency Date) the Purchaser will pay the following to
the Vendor, by way of delivery of a certified check to the Vendor:
(a) 2.75% of the Gross Spokane Revenues from the twelve (12) month period
immediately preceding the Second Contingency Date; and
(b) 12.5% of the Spokane EBITDA from the twelve (12) month period
immediately preceding the Second Contingency Date.
3.3 Third Contingency Purchase Price: Within sixty (60) days of the three (3)
year anniversary of the Closing Date (such anniversary date to be referred
to as the Third Contingency Date) the Purchaser will pay the following to
the Vendor, by way of delivery of a certified check to the Vendor:
(a) 1% of the Gross Spokane Revenues from the twelve (12) month period
immediately preceding the Third Contingency Date; and
(b) 7.5% of the Spokane EBITDA from the twelve (12) month period
immediately preceding the Third Contingency Date.
3.4 Fourth Contingency Purchase Price: Within sixty (60) days of the four (4)
year anniversary of the Closing Date (such anniversary date to be referred
to as the Fourth Contingency Date) the Purchaser will pay the following to
the Vendor, by way of delivery of a certified check to the Vendor:
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(a) 1% of the Gross Spokane Revenues from the twelve (12) month period
immediately preceding the Fourth Contingency Date; and
(b) 7.5% of the Spokane EBITDA from the twelve (12) month period
immediately preceding the Fourth Contingency Date.
3.5 Bonus Contingency Purchase Price: Within sixty (60) days of the expiration
of each twelve (12) month period following the five (5) year anniversary of
the Closing Date (such expiration dates to be referred to as the Bonus
Contingency Dates) the Purchaser will pay to the Vendor, or its assignee,
by way of delivery of a certified check, 10.0% of the Washington EBITDA
from the twelve (12) month period immediately preceding each respective
Bonus Contingency Date. The payments set forth in this Subsection 3.5 shall
continue so long as either Xxxxx or Xxxxxxx continue as a consultant or
employee of the Purchaser. In the event that Xxxxx ceases to continue as a
consultant or employee of the Purchaser, the payments set forth in this
Subsection 3.5 shall be paid to Xxxxxxx. In the event that both Xxxxx and
Xxxxxxx cease to be a consultant or employee of the Company, the payments
set forth in this Subsection 3.5 shall be prorated according to the number
of months either Xxxxx or Xxxxxxx remained as a consultant or employee of
the Purchaser in the twelve (12) month period immediately preceding each
respective Bonus Contingency Date.
3.5 Interest on Contingency Purchase Price: If the contingent purchase prices
set forth in Subsection 3.1 through 3.4 are not paid in full by the
Purchaser when due, such unpaid amounts shall bear interest at the rate per
annum equal to the prime rate as set forth in the Wall Street Journal as of
the due date of the said contingent purchase prices, plus two basis points,
until paid in full.
3.6 Delivery of Financial Statements: As soon as possible following each
anniversary of the Closing Date, the Purchaser shall deliver copies of
Neptunes consolidated financial statements, any other financial statements
used in determining Gross Spokane Revenues, Spokane EBITDA, and Washington
EBITDA, and calculations of contingent purchase price, along with copies of
any supporting working papers for the same, to the Vendor and Xxxxx.
10 JOINT AND SEVERAL REPRESENTATIONS AND WARRANTIESOF THE VENDOR AND XXXXX
WITH RESPECT TO THE BUSINESS
The Vendor and Xxxxx jointly and severally represent and warrant to the
Purchaser as follows and acknowledge that the Purchaser is relying upon such
representations and warranties in connection with the purchase of the Assets:
10.1 Assets :
(a) Ownership: Except for the Leased Assets, the Vendor has good and
marketable title to all of the Assets free and clear of all
Encumbrances;
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(b) Authority: The Vendor has the legal capacity, power and authority to
enter into this Agreement and to transfer the legal and beneficial
title and ownership of the Assets to the Purchaser free of
Encumbrances;
(c) Leased Assets: The Leased Assets are held under valid and subsisting
Leases, each of which is listed in Schedule D. Each Lease is in full
force and effect and without amendment thereto, and the Leases and the
Leased Assets are free and clear of all Encumbrances. Except for the
Leases, there are no leases, agreements to lease, tenancy arrangements
or licences to which the Vendor is a party which have a capitalized
value in excess of $1,000. The Vendor has not previously assigned the
Leases nor sublet their interest in any of the Leased Assets under the
Leases. The Vendor has not released any of the other parties to such
leases from the performance of any of their obligations thereunder.
The Vendor is not in breach of any of the terms of any Leases, and the
Vendor is not aware of any of the other parties to the Leases being in
breach of any of the terms of the Leases, and, to the best of the
knowledge of the Vendor and Xxxxx, no event or condition has occurred
which, either immediately or after notice or lapse of time or both,
could give rise to the cancellation or termination of any of the
Leases. There are no prepaid rents, rent-free periods or outstanding
lessor's contributions or obligations for lessee incentives under any
of the Leases which consist of subleases under which the Vendor is a
sublessor. The Vendor has no knowledge of anything or matter which
does or shall give any of the sublessees under any of the subleases
any right of abatement, set-off or deduction in respect of the rent
payable by the sublessees;
(d) Condition of Assets: To the best of the knowledge of the Vendor and
Xxxxx, all fixed assets and equipment owned or used by the Vendor in
the conduct of the Business, all of which is listed in either
Schedules E or G, have been properly maintained and are in good
working order and contain no defects which could adversely affect the
operation of the Business to any material degree;
(e) Rights to Assets: No present or former director, officer, shareholder
or partner of the Vendor or any person not dealing at arm's length
with any of the foregoing owns directly or indirectly or has any
agreement, option or commitment to acquire or lease, any property,
asset, right or license used by the Business;
(f) Zoning: All real property at which the Vendor carries on the Business
is zoned to permit the particular activity carried out on such
property;
(g) Rents and Taxes: All rents, operating costs, property taxes (whether
municipal, school, general and special taxes, rates, assessments,
local improvements charges or frontage taxes), business taxes,
development cost charges, other subdivision charges and costs and
other levies which are chargeable against the Land and Buildings
leased by the Vendor have been paid in full unless the same are not
due and payable;
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(h) Land and Buildings: The list of the Land and Buildings set out in
Schedule C accurately reflects all interests of the Vendor in real
property used in the conduct of the Business. The Vendor represents
that all agreements with respect to the Vendor's interest in the Land
and Buildings are in force and effect and without amendment thereto
and the interests in the Land and Buildings are free and clear of all
Encumbrances. To the best of the knowledge of the Vendor and Xxxxx,
neither asbestos nor urea formaldehyde foam is now used, or present,
in any of the buildings listed in Schedule C;
(i) Intangible Assets: The list of the Intangible Assets set out in
Schedule B accurately reflects all registered and unregistered names,
trade names, trademarks, designs, copyrights, patents and similar
rights specifically including but not limited to the Trade Names and
any proprietary software used in connection with the Business and/or
owned or held by the Vendor on the date hereof free of Encumbrances;
and
(j) Other Operating and Fixed Assets: The list of the Other Operating and
Fixed Assets set out in Schedule E accurately reflects all operating
and fixed assets owned or held by the Vendor having an original
capital cost of $500 or more which are not disclosed elsewhere in this
Subsection 1. Except for sales and purchases in the ordinary course of
business since November 18, 1999, the Vendor owns such assets on the
date hereof free of Encumbrances.
10.2 Trust Accounts :
(a) The Trust Accounts described in Schedule H accurately reflects all
funds received by the Vendor in connection with the sale of pre-need
funeral arrangements for the Business or for undelivered funeral
merchandise which has been placed in the Trust Accounts on behalf of
the pre-need customer to the extent required by the terms of the
Pre-Need Contract with the customer and as required by the applicable
laws and regulations governing the Trust Accounts as of the date
indicated in Schedule H; and
(b) To the best of the knowledge of the Vendor and Xxxxx, all investments
of the Trust Accounts are in accordance with all applicable state and
federal laws and regulations pertaining to the investment and
administration of such Trust Accounts.
10.3 Business Operations :
(a) Operating Authorities: The Vendor has acquired, and currently holds,
all permits, licenses, consents, authorizations, approvals,
privileges, waivers, exemptions, orders, certificates, rulings,
agreements and other concessions granted by or entered into with any
governmental or regulatory authority required in connection with the
Assets or the Business, that are material to the Assets or the
Business and all of the foregoing are in good standing and are being
complied with in all material respects;
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(b) Compliance with Laws: To the best of the knowledge of the Vendor and
Xxxxx, the Vendor is operating and using the Assets, and is conducting
the Business, in compliance with all applicable laws and regulations
of each jurisdiction in which the Assets are located or in which it
conducts the Business; and
(c) Jurisdictions in which Business is Carried On: The Vendor does not
carry on the Business or own or lease any assets in any jurisdiction
other than in the State of Washington which would require registration
or licensing in such jurisdiction.
10.4 Financial :
(a) Unaudited Financial Statements: The Unaudited Financial Statements
present fairly in all material respects the financial position of the
Business as at the respective dates of the said statements and the
results of the Vendor's operation of the Business for the 12 month
period then ended in accordance with accounting principles used by the
Vendor consistently applied.
(b) No Material Change: Since September 30, 1999 and up to the date hereof
there has been no material adverse change in the nature or condition
of the Assets or the Business, financial or otherwise, except changes
occurring in the ordinary course of its business, nor has there been
any development or threatened or probable development of which the
Vendor is aware which materially and adversely affects the Assets or
the Business. The Business has been carried on in the ordinary course
as it had previously been carried on. In addition, save as disclosed
herein, since September 30, 1999 and up to the date hereof the Vendor
has not:
(i) incurred any liability or obligation (absolute or
contingent) save current liabilities incurred in the
ordinary course of business which as to their nature and
amount are inconsistent with the Business as carried on;
(ii) discharged or satisfied any Encumbrance or paid any
obligation or liability (absolute or contingent) except for
current liabilities incurred in the ordinary course of
business and except for regularly scheduled payments of term
debt and lease payments;
(iii) subjected any of the Assets to any Encumbrances;
(iv) sold or transferred any of the Assets or cancelled or
released any debts or claims, except, in each case, in the
ordinary course of business;
(v) waived any rights of material value;
(vi) entered into any transaction or into any contracts or
agreements or modifications or cancellations thereof, other
than in the ordinary course of business;
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(vii) made or authorized any payment to officers, directors or
employees in their capacity as such except in the ordinary
course of business and at rates of salary, bonus or other
remuneration consistent with remuneration of previous years;
(viii) used any funds other than in the ordinary course of business
as theretofore carried on; and
(ix) made any capital expenditures greater than $1,000 or entered
into any lease with a capitalized value greater than $1,000;
(c) Books and Records: The Books and Records fairly and correctly set out
and disclose in all material respects the financial position of the
Business and all material financial transactions of the Business have
been accurately recorded in the Books and Records;
(d) Liabilities: The Business does not have any debts or liabilities
(whether accrued, contingent, absolute or otherwise and whether or not
determined or determinable), including liabilities which arise
hereafter based on events which have occurred up to the date hereof,
and including liabilities relating to income and other taxes except:
(i) liabilities disclosed on, reflected in or provided for in
the Unaudited Financial Statements;
(ii) other liabilities disclosed in this Agreement; or
(iii) liabilities incurred in the ordinary course of its
businesses since September 30, 1999;
(e) Current Liabilities: Notwithstanding paragraph 4.4 (d) above, the
Business does not have accounts or trade payables or any other current
liabilities, including any sales tax or commissions payable, which
exceed $10,000.00 at the Effective Date.
(f) Receivables: All accounts receivable recorded on the books of the
Business are due and payable and no right of set off or counterclaim
exists with respect to those accounts, except for the right of
cancellation of Pre-Need Contracts as set forth in those agreements;
and
(g) Accountants: The Vendor has not had any material disagreement or
dispute with their auditors or accountants over the accounting or tax
treatment of the financial information of the Business
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10.5 Banking:
(a) Loans and Credit Facilities: The Vendor has not entered into, or
otherwise arranged for, any loans, operating lines of credit or other
credit facilities (including interest rate or currency swaps, hedging
contracts, forward loan or rate agreements or other financial
instruments), and does not have outstanding any bonds, debentures,
mortgages, notes or other similar indebtedness and the Vendor is not
obligated to create or issue any bonds, debentures, mortgages, notes
or other similar indebtedness;
(b) Bank Facilities: Schedule J contains a complete and accurate listing
showing the name of each bank, trust company or similar financial
institution in which the Vendor has an account, safety deposit box or
other banking facility, including the names of all persons authorized
to transact business in respect of such accounts;
(c) Guarantees/Indemnities: The Vendor has not guaranteed or indemnified,
or agreed to guarantee or indemnify, or agreed to any other like
commitment, in respect of any debt, liability or other obligation of
any person.
10.6 Insurance:
(a) List of Policies: Schedule A contains a complete and accurate listing
of all insurance policies of the Vendor relating to the Assets and the
Business including all property damage, general liability, motor
vehicle, director and officer liability and life policies;
(b) Good Standing: Each of the insurance policies listed in Schedule A is
in good standing, all premiums required to be paid by the Vendor have
been properly paid, there have been no misrepresentations or failures
to disclose material facts, and there has been no refusal to renew any
of the policies and the Vendor and Xxxxx have no knowledge of any
facts which might render any of the policies invalid, unenforceable or
non-renewable; and
(c) Outstanding Claims: No threatened or actual claims against any of the
policies described in Schedule A have been made in the last 3 years.
The Vendor has given notice of or has otherwise presented in a timely
fashion every claim under each such insurance policy.
10.7 Tax Matters:
(a) Filings: The Vendor has duly and timely filed all returns, elections
and designations required to be filed by it with any taxation
authority or if not filed on a timely basis, all fees, penalties,
interest and other amounts payable as a result thereof have been paid.
No such returns, elections or designations contain any material
misstatement or omit any material statements that should have been
included and each return,
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election and designation, including accompanying schedules and
statements is true, correct and complete in all material respects;
(b) Payment: The Vendor has paid in full all amounts (including but not
limited to sales, capital, use and consumption taxes and taxes
measured on income and all instalments of taxes) owing to all federal,
state and municipal taxation authorities due and payable by it up to
the date of this Agreement;
(c) Extensions: There are no agreements, waivers or other arrangements
with any taxation authority providing for an extension of time with
respect to the filing of any return, election or designation by, or
any payment of any amount by or governmental charge against the Vendor
nor with respect to the issuance of any assessment or reassessment;
(d) Adverse Proceedings: To the best of the knowledge of the Vendor and
Xxxxx, there are no actions, suits, proceedings, investigations or
claims by any governmental authority pending or threatened against the
Vendor relating to taxes, governmental charges or assessments. There
are also no matters under discussion with any governmental authority
relating to taxes, governmental charges or assessments asserted or to
be asserted by such authority;
(e) Deductions/Remittances: The Vendor has withheld and remitted all
amounts required to be withheld by it including without limitation,
income tax, Social Security Plan contributions and Employment
Insurance premiums and has paid such amounts including any penalties
or interest due to the appropriate authority on a timely basis and in
the form required under the appropriate legislation;
(f) Acquisitions: The Vendor has not acquired property from, or disposed
of property to, any person, firm or corporation with whom the Vendor
does not deal at arm's length since September 30, 1999; and
(g) Other Jurisdictions: The Vendor has not filed or is not currently
required to file any returns, elections or designations with any
taxation authority located in any jurisdiction other than the State of
Washington and the State of California.
10.8 Employee Matters :
(a) List of Employees: The list of employees set out in Schedule L is a
comprehensive list of the employees and commissioned sales people of
the Business as at the Closing Date and includes an accurate
description of, the compensation, and/or commission structure,
position and job classification save and except for the voluntary
termination of Xx. Xxxxxx Xxxxxxx from the employ of the Vendor on or
about December 15, 1999;
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(b) Employment Contracts: The Vendor is not a party to any oral or written
consulting contract, management contract, labour services contract or
similar agreement for the services of a particular individual and none
of the employees of the Business are employed on other than an
indefinite hiring basis terminable on reasonable notice according to
law without further liability to the Business;
(c) Benefit Plans: Schedule L contains a complete and accurate listing of
all benefit, bonus, profit-sharing, retirement income, termination or
severance, dental, medical, disability, health or other plan, program,
policy or other arrangement in place for the benefit or advantage of
the salaried employees of the Business as at the Closing Date and
there have been no material variations to this list since that date
other than in the ordinary course of business. All contributions
required to be made by the Vendor to such plans have been properly
made and all retirement plans are fully funded, and all returns and
other documents have been filed and all amounts owing to any
governmental or other regulatory authority relating to such plans,
programs, policies or arrangements have been paid;
(d) Pension Plans: The Vendor does not have nor has it ever had a pension
plan for any of its employees; and
(e) Employer Associations: The Vendor is not a member of any employer,
management, industry or other trade or business association under
which the Business is obligated to contribute to any employee or
contractor employee benefit fund, including any pension plans, health
benefit plans or other similar employee entitlements.
10.9 Litigation and Claims :
(a) Adverse Proceedings: There are no outstanding actions, claims,
demands, lawsuits, prosecutions or governmental investigations by or
against the Vendor and the Business and there is no other adverse
proceeding which is to the knowledge of the Vendor or Xxxxx pending or
threatened by, against, or relating to the Vendor, the Assets, or the
Business. The Vendor or Xxxxx are not aware of any basis for any other
action, claim, demand, lawsuit, investigation or other adverse
proceeding which, if pursued would have a significant likelihood of
having a material adverse effect on any of the Assets or the Business;
(b) Compliance Directives: There are no outstanding compliance directives
or work orders of which the Vendor or Xxxxx is aware relating to the
Assets, or the Business, from any police, fire department, sanitation
or health authorities, environmental agencies, or from any other
federal, state or municipal authority, department or agency, nor do
the Vendor or Xxxxx have notice that there are any matters under
formal consideration by any such authorities relating to any of the
Assets or the Business;
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(c) Notice of Default/Claims: Except as expressly disclosed in this
Agreement, the Vendor has not received any notice of any default,
violation or termination of any of the Pre-Need Contracts (other than
individual cancellations of Pre-Need Contracts within the ordinary
course of business), Material Contracts, Leases or other contracts
entered into by the Vendor which will, or is likely to, result in such
a default, violation or termination;
(d) No Seizure: There is no appropriation, expropriation or seizure of any
of the Assets that is pending or, which to the knowledge of the Vendor
or Xxxxx has been threatened against the Vendor; and
(e) Trademark and Patent Infringement: The conduct of the Business by the
Vendor does not infringe upon any patent, trademark or other
proprietary right, domestic or foreign, of any person in respect of
which there is any significant likelihood that it would have a
material adverse effect on the Assets or the Business.
10.10 Contracts and Commitments :
(a) Material Contracts: Other than the Pre-Need Contracts and the Leases,
Schedule M contains a complete and accurate listing of all material
contracts, agreements, leases, commitments, instruments or other
dealings to which the Vendor is a party, by which the Vendor is bound
or under which the Vendor is entitled to any benefits. For the
purposes of this Agreement a contract shall be material if:
(i) performance of any right or obligation by any party to such
contract involves a payment by either party of $1,000 or
more and having a term of more than one year; or
(ii) if an expenditure, receipt or transfer or other disposition
of property with a value of greater than $1,000 may arise
under such contract (other than a contract with a customer
or supplier in the ordinary course of business); or
(iii) if such contract has been entered into out of the ordinary
course of business;
(b) Pre-Need Contracts: Schedule F contains a complete and accurate
listing of all active Pre-Need Contracts as of October 31, 1999;
(c) Funeral Insurance Policies: Schedule F contains a complete and
accurate listing of all active Funeral Insurance Policies as of
October 1, 1999; and
(d) Good Standing: Except as disclosed herein, the Vendor is not in breach
or default of any of the terms of the Material Contracts or Pre-Need
Contracts, and neither the Vendor nor Xxxxx is aware of any breach or
default of any of the terms of the Material Contracts or Pre-Need
Contracts by any other party thereto, and each such contract is in
good standing and in full force and effect without amendment thereto.
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To the best of the knowledge the Vendor and Xxxxx no state of facts
exists, which, after notice or lapse of time or both, would constitute
such a default or breach where there is any significant likelihood
that such breach or default referred to in this paragraph 4.10(c)
would have a material adverse effect on the Assets or the Business.
10.11 Contingency and Environmental Liabilities:
(a) Compliance: To the best of the knowledge of the Vendor and Xxxxx, the
Business is in compliance in all material respects with all federal,
state and municipal environmental laws and regulations (the
"Environmental Laws"). The existing activities of the Business and the
crematories and, to the best knowledge of the Vendor and Xxxxx, its
prior uses and activities and the uses and activities of other
property now or previously owned or operated by the Vendor, comply and
at all times have complied with all Environmental Laws. The Vendor has
filed all environmental reports and notifications required to be filed
under applicable laws and regulations;
(b) Notice of Non-Compliance: The Vendor nor, to the best knowledge of the
Vendor or Xxxxx, any prior owner or occupant of the property now
leased or operated by the Vendor, has received any notice or other
communication alleging that they are not in compliance with any
Environmental Laws, or alleging any liability under any Environmental
Laws. The Vendor and the Business are not subject to, and have not
been subject to, any claim, judgement, decree, order, writ, citation,
fine, penalty, injunction, litigation or proceeding relating to any
Environmental Laws;
(c) Hazardous Material: The Vendor nor, to the best knowledge of the
Vendor and Xxxxx, any other person or entity has engaged in or
permitted any operations or activities upon, or any use or occupancy
of property now or previously owned or operated by the Vendor,
resulting in the storage, emission, release, discharge or disposal of
any hazardous materials on, in, under or from any property used for or
by the Business;
(d) Cremation Residue: The Vendor has not transported or disposed of, or
arranged for the transportation or disposal of, any cremation residue
or other waste to or at a site which is not in accordance with
applicable Environmental Laws; and
(e) No Expenditures: No expenditures will be required in order for the
Assets to comply with Environmental Laws in connection with the
current operation and continued operation of the activities of the
Business.
10.12 Effect of this Transaction :
(a) No Adverse Implications: Except as disclosed in Schedule N with
respect to certain required consents, neither the execution and
delivery of this Agreement nor the completion and performance of the
transactions contemplated hereby will:
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(i) give any person the right to terminate or cancel any
contractual or other rights with the Vendor where such
termination or cancellation would have a material adverse
effect on the Assets or the Business;
(ii) violate any restriction of any nature applicable to the
Vendor or relating to the disposition of the Assets;
(iii) result in the creation of any liens or encumbrances on the
Assets or in the default under any agreement giving a third
party security against the Assets or in the crystallization
of any floating charge in a debenture as general security
interest in a security agreement granted, issued or assumed
by the Vendor where any of such events could have a material
adverse effect on the Assets or the Business; nor
(iv) violate any provision of any indenture, mortgage, lien,
lease, agreement, instrument, order, arbitration award,
judgment or decree to which the Vendor is a party or by
which the Vendor or the Assets are bound the violation of
which could have a material adverse effect on the Assets or
the Business or impair the legality or enforceability of
this Agreement or the transactions contemplated hereby.
(b) Notice Procedure: The Vendor may, at any time up to 5:00 p.m. on the
day which is two Business Days prior to the Closing, give notice to
the Purchaser advising it of any fact which, except for this
Subsection 4.12, would constitute a breach of any of the
representations and warranties set out in this Section 4. Such notice
shall state that it is being given pursuant to this Subsection 4.12
and shall set out sufficient information to enable the Purchaser to
make a reasoned business judgment with respect to the choices set out
herein. Upon receipt of such notice, the Purchaser may:
(i) postpone the Closing;
(ii) complete the Closing, in which case this Agreement shall be
deemed to be amended so that the representation and warranty
in respect of which the notice was given shall incorporate
the disclosure set out in the notice;
(iii) or, terminate this agreement without further obligation on
the part of any party to this Agreement;
(c) Joint and Several: The obligations of the Vendor and Xxxxx shall be
joint and several with respect to all the representations and
warranties set out in this Section 4.
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11 JOINT AND SEVERAL REPRESENTATIONS AND WARRANTIES WITH RESPECT TO ISSUANCE
OF SECURITIES
The Vendor and Xxxxx represent and warrant to the Purchaser and to Neptune as
follows and acknowledges that the Purchaser and Neptune are relying upon such
representations and warranties in connection with the issuance of the
Securities:
11.1 Individual Authority: The Vendor has the legal capacity, power and
authority to hold the Securities to be owned by it at the Time of
Closing;11.2Receipt of the Securities : The Vendor is accepting the
Securities as the Purchase Price as set out in Section 2 only for
investment purposes on its own account and not for the purpose of selling
the Securities in connection with any distribution of the Purchaser
securities. The Vendor acknowledges that the Securities have not been
registered under the Securities Xxx 0000, as amended, or the securities
laws of any state of the United States and may not be offered, sold,
transferred or assigned without registration under such act or compliance
with an exemption from such registration requirement and for this reason,
certificates evidencing the Securities shall display the legend,
substantially in the form as follows:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING SUCH
SECURITIES, AGREES FOR THE BENEFIT OF THE CORPORATION THAT SUCH
SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO
THE CORPORATION, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE
904 OF REGULATION S UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED
STATES IN ACCORDANCE WITH RULE 144A UNDER THE SECURITIES ACT OR RULE
144 UNDER THE SECURITIES ACT, IF APPLICABLE, OR (D) IN A TRANSACTION
THAT IS OTHERWISE EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT
AND APPLICABLE STATE SECURITIES LAWS, PROVIDED THAT PRIOR TO SUCH SALE
THE CORPORATION SHALL HAVE RECEIVED AN OPINION OF COUNSEL OF
RECOGNIZED STANDING, IN FORM AND SUBSTANCE SATISFACTORY TO IT, AS TO
THE AVAILABILITY OF AN EXEMPTION."
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11.3 Solicitation: The Vendor acknowledges that the Securities to be received by
it at Closing were not advertised in printed media of general and regular
paid circulation, radio or television.
11.4 Accredited Investor: The Vendor is an "accredited investor" as such term is
defined in Rule 501 of Regulation D promulgated by the Securities and
Exchange Commission under the Securities Act of 1933, as amended (U.S.).
11.5 No Trades: Other than Xxxxx purchasing 1000 shares of Neptune in and around
December, 1999, the Vendor has not traded in the common stock of Neptune
and will refrain from trading in or selling short any shares in the common
stock of Neptune or entering into any derivative transactions of same prior
to the Closing Date.
11.6 Residency: The Vendor is a company incorporated in the State of Washington.
11.7 Joint and Several: The obligations of the Vendor and Xxxxx shall be joint
and several with respect to all the representations and warranties set out
in this Section 5.
12 COVENANTS OF THE VENDOR
The Vendor covenants and agrees with the Purchaser as follows and acknowledge
that the Purchaser is relying upon such covenants and agreements in connection
with the purchase of the Assets:
12.1 Access to the Business: The Vendor shall forthwith make available to the
Purchaser and its authorized representatives and, if requested by the
Purchaser, provide a copy to the Purchaser of all title documents,
contracts, financial statements, minute books, share certificate books,
share registers, limited partnership agreements and records, plans,
reports, licences, orders, permits, books of account, accounting records,
constating documents and all other documents, information or data relating
to the Business. The Vendor shall afford the Purchaser and its authorized
representatives every reasonable opportunity to have free and unrestricted
access to the property, assets, undertaking, records and documents of the
Business. At the request of the Purchaser, the Vendor shall execute or
cause to be executed such consents, authorizations and directions as may be
necessary to permit any inspection of any property of the Business or to
enable the Purchaser or its authorized representatives to obtain full
access to all files and records relating to any of the assets of the
Business maintained by governmental or other public authorities. At the
Purchaser's request, the Vendor shall co-operate with the Purchaser in
arranging any such meetings as the Purchaser should reasonably request
with:
(a) all employees of the Business;
(b) customers, suppliers, distributors or others who have or have had a
business relationship with the Business; and
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(c) auditors, attorneys or any other persons engaged or previously engaged
to provide services to the Business who have knowledge of matters
relating to the Business.
In particular, without limitation, the Vendor shall permit the
Purchaser's representatives or consultants to conduct such physical
review of the inventory of the Business as is necessary so as to enable
the confirmation of the condition of such inventory, to the reasonable
satisfaction of the Purchaser. The exercise of any rights of inspection
by or on behalf of the Purchaser under this Subsection shall not
mitigate or otherwise affect the representations and warranties of the
Vendor and Xxxxx hereunder, which shall continue in full force and
effect. In exercising its rights hereunder the Purchaser shall use its
reasonable commercial efforts to avoid interfering with the Business to
the extent reasonably practical consistent with the need to complete
its review of the Business and the Assets.
12.2 Delivery of Books and Records: At the Time of Closing there shall be
delivered to the Purchaser by the Vendor all of the Books and Records. The
Purchaser agrees that it will preserve the Books and Records so delivered
to it for so long as such Books and Records may be required to enable the
Vendor to defend any claim against the Vendor which could result in a Claim
hereunder and at least until December 31, 2005. The Purchaser will permit
the Vendor or its authorized representatives reasonable access thereto in
connection with the affairs of the Vendor. The Purchaser shall not be
responsible or liable to the Vendor for or as a result of any accidental
loss or destruction of or damage to any such Books or Records, unless the
Purchaser's negligence caused the loss, destruction or damage.
12.3 Conduct Prior to Closing: Without in any way limiting any other obligations
of the Vendor hereunder, during the period from the date hereof to the Time
of Closing:
(a) Conduct Business in the Ordinary Course: The Vendor shall conduct the
Business in its ordinary and normal course and the Vendor shall not,
without the prior written consent of the Purchaser (such consent not
to be unreasonably withheld), enter into any transaction or take any
action that, if effected after September 30, 1999 and before the date
of this Agreement, would constitute a breach of any representation,
warranty, covenant or other obligation of the Vendor contained herein.
In particular the Vendor shall refrain from entering into any contract
or commitment which would, if entered into prior to the date hereof,
constitute a Material Contract or Lease, save with the consent of the
Purchaser (such consent not to be unreasonably withheld);
(b) Continue Insurance: The Vendor shall continue to maintain in full
force and effect all policies of insurance or renewals thereof now in
effect, shall take out, at the expense of the Purchaser, such
additional insurance as may be reasonably requested by the Purchaser
and shall give all notices and present all claims under all policies
of insurance in a due and timely fashion; and
(c) Preserve Goodwill: The Vendor shall use reasonable commercial efforts
to preserve, intact the Assets, the Business and to promote and
preserve for the Purchaser the
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goodwill of suppliers, customers and others having business relations
with the Business.
12.4 Delivery of Documents: The Vendor shall deliver to the Purchaser all
necessary transfers, assignments and other documentation reasonably
required to transfer to the Purchaser the Assets with a good and marketable
title, free of Encumbrances without any right of set-off;
12.5 Vendors Taxes: Save and expect for Washington State Sales and Use Tax which
will be paid by the Purchaser, or its assigns, as set forth in Section 7.7,
the Vendor is responsible for any federal, state or other taxes which may
be payable by them in connection with the completion of the transactions
contemplated in this Agreement
13 JOINT AND SEVERAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
PURCHASER AND NEPTUNE
The Purchaser and Neptune represent, warrant and covenant to and with the Vendor
as follows and acknowledge that the Vendor is relying upon such representations,
warranties and covenants in connection with the sale of the Assets:
13.1 Corporate Status and Authority: The Purchaser and Neptune are valid and
subsisting corporations, duly incorporated and in good standing under the
laws of the State of California and Florida, respectively, and are duly
qualified to carry on their businesses as they are presently carried on and
are duly qualified and authorized to carry on business and are in good
standing as a foreign corporation in each jurisdiction in which the
character of their properties or the nature of their businesses made such
qualification or authorization necessary and have all requisite power and
authority to carry on their business as they are now carried on and to own,
lease and operate their properties and assets.
13.2 Authorization: The Purchaser and Neptune have full corporate power,
capacity and authority to enter into this Agreement on the terms and
conditions hereof and all necessary corporate acts have been performed in
order to authorize this Agreement.
13.3 Regulatory Approval: The Purchaser and Neptune have complied and will
comply fully with the requirements of all applicable corporate and
securities laws in relation to the issue of the Securities. The entering
into and performance of this Agreement and the transactions contemplated
herein will not result in the violation of any of the terms and provisions
of the articles or incorporation or bylaws of the Purchaser or Neptune, any
shareholders' or directors' resolution or of any indenture or other
agreement, written or oral, to which the Purchaser or Neptune may be a
party or by which the Purchaser or Neptune maybe bound or to which it may
be subject or any judgment, decree, order, rule or regulation of any court
or administrative body by which the Purchaser or Neptune is bound or to the
knowledge of the Purchaser or Neptune, any statute or regulation applicable
to the Purchaser or Neptune.
13.4 ShareTransfer Restrictions: No order ceasing or suspending trading in
securities of the Purchaser or Neptune nor prohibiting the sale of such
securities has been issued to the
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Purchaser or Neptune or its directors, officers or promoters or to any
other companies that have common directors, officers or promoters and no
investigations or proceedings for such purposes are pending or threatened
in writing by an officer or official of a competent authority.
13.5 Issued Share Capital: As at December 1, 1999, the authorized capital of
Neptune is 100,000,000 shares of which 12,889,999 shares are issued and
outstanding. In addition, Neptune has an obligation to issue 276,667 shares
in respect of private placement transactions and has 675,000 warrants (not
including stock options) outstanding as of December 1, 1999 which may by
the Time of Closing be exchanged or exercised into shares of Neptune.
13.6 FullyPaid Shares: Upon completion of the transactions contemplated in this
Agreement, the shares of the common trading stock of Neptune issued by
Neptune to the Vendor will be fully paid and non-assessable shares of the
common trading stock of Neptune.
13.7 Sales Taxes: Notwithstanding Subsection 6.5, the Purchaser is responsible
for the Washington State of Sales and Use Tax on the sale of personal
property associated with the transaction contemplated herein.
14 CONDITIONS OF CLOSING
14.1 Conditions of Closing in Favour of the Purchaser: The obligation of the
Purchaser to complete the sale and purchase of the Assets is subject to the
following terms and conditions for the exclusive benefit of the Purchaser,
to be fulfilled or performed at or prior to the Time of Closing or waived
in whole or in part by the Purchaser at its sole discretion without
prejudice to any rights the Purchaser may otherwise have:
(a) Contractual Consents: The Vendor shall have delivered to the Purchaser
such waivers, consents and certificates, including but not limited to
those described in Schedule N, from parties having contractual
relations with the Business as may be necessary including, without
limitation, waivers under loan agreements to which the Vendor is a
party;
(b) Representations and Warranties: The representations and warranties of
the Vendor and Xxxxx contained in this Agreement shall be true and
correct in all material respects at the Time of Closing, with the same
force and effect as if such representations and warranties were made
at and as of such time, and certificates of the Vendor and Xxxxx dated
the Closing Date to that effect shall have been delivered to the
Purchaser, such certificates to be in form and substance satisfactory
to the Purchaser, acting reasonably;
(c) Covenants: All of the covenants and agreements of the Vendor and all
other terms of this Agreement to be complied with or performed by the
Vendor at or before the Time of Closing shall have been complied with
or performed and certificates of the
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Vendor dated the Closing Date to that effect shall have been delivered
to the Purchaser, such certificates to be in form and substance
satisfactory to the Purchaser, acting reasonably;
(d) Certificate of Accredited Investor: The Vendor has delivered to the
Purchaser and Neptune a certificate of accredited investor in the form
attached as Schedule O to this Agreement;
(e) Regulatory Consents: There shall have been obtained, from all
appropriate federal and state or other governmental or administrative
bodies or stock exchanges, such licences, permits, consents,
approvals, certificates, registrations and authorizations, including
but not limited to those described in Schedule N, as are required to
permit the change of ownership of the Assets and the transactions as
contemplated herein, including, but not limited to, the operation of
the Business by the Purchaser;
(f) Material Adverse Change: There shall have been no material adverse
changes in the condition of the Assets or the Business (financial or
otherwise) since the date of this Agreement up to the Time of Closing;
(g) No Action or Proceeding: No legal or regulatory action or proceeding
shall be pending or threatened by any person to enjoin, restrict or
prohibit the purchase and sale of the Assets contemplated hereby;
(h) No Material Damage: No damage by fire or other hazard to the whole or
any material part of the Assets shall have occurred from the date
hereof to the Time of Closing;
(i) No Agreements on Assets or Business: The Purchaser shall be satisfied
that there is no fact not disclosed in this Agreement relating to the
Assets or the Business which, if known to the Purchaser, might
reasonably be expected to have a material adverse effect on the value
of the Assets;
(j) Xxxxx Consulting/Non-Compete Agreement: Xxxxx has entered into a
consulting and non-competition agreement attached as Schedule P to
this Agreement;
(k) Xxxxxxx Employment/Non-Compete Agreement: Xxxxxxx has entered into an
employment and non-competition agreement attached as Schedule Q to
this Agreement;
(l) Lease/Purchase Option: Xxxxx has entered into a lease and purchase
option agreement attached as Schedule R to this Agreement;
(m) Opinion of Vendor's Attorney: The Purchaser and Neptune have received
legal opinions of the Vendor's attorneys, dated as of the date of
Closing, respecting the
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transactions contemplated in this Agreement, consistent with standard
agreements for the purchase and sale of funeral businesses.
If any of the conditions contained in this Subsection 8.1 shall not be
performed or fulfilled at or prior to the Time of Closing to the
satisfaction of Neptune and the Purchaser and Neptune, acting reasonably,
the Purchaser may, by notice to the Vendor, terminate this Agreement and
the obligations of the Vendor, Neptune and the Purchaser under this
Agreement, provided that the Purchaser may also bring an action against the
Vendor for damages suffered by the Purchaser where the non-performance or
non-fulfilment of the relevant condition is as a result of a breach of
covenant, representation or warranty (as the same may be modified by a
notice pursuant to Subsection 4.12(b) by the Vendor. Any such condition may
be waived in whole or in part by the Purchaser without prejudice to any
claims it may have for breach of covenant, representation or warranty
14.2 Conditions of Closing in Favour of the Vendor: The purchase and sale of the
Assets are subject to the following terms and conditions for the exclusive
benefit of the Vendor to be fulfilled or performed at or prior to the Time
of Closing:
(a) Representations and Warranties: The representations and warranties of
Neptune and the Purchaser contained in this Agreement shall be true
and correct at the Time of Closing, with the same force and effect as
if such representations and warranties were made at and as of such
time and a certificate of Neptune and the Purchaser dated the Closing
Date to that effect shall have been delivered to the Vendor, such
certificate to be in form and substance satisfactory to the Vendor
acting reasonably;
(b) Covenants: All of the terms, covenants and conditions of this
Agreement to be complied with or performed by Neptune and the
Purchaser at or before the Time of Closing shall have been complied
with or performed and a certificate of Neptune and the Purchaser dated
the Closing Date to that effect shall have been delivered to the
Vendor, such certificate to be in form and substance satisfactory to
the Vendor acting reasonably;
(c) Accounting Opinions: The Vendor will have received legal and/or
accounting opinions that satisfy it that the transaction contemplated
herein does not have any unforseen income or other tax consequences to
the Vendor.
If any of the conditions contained in this Subsection 8.2 shall not be
performed or fulfilled at or prior to the Time of Closing to the
satisfaction of the Vendor, acting reasonably, the Vendor may, by notice to
the Purchaser and Neptune, terminate this Agreement and the obligations of
the Vendor, Neptune and the Purchaser under this Agreement, provided that
the Vendor may also bring an action against the Purchase and Neptune for
damages suffered by the Vendor where the non-performance or non-fulfilment
of the relevant condition is as a result of a breach of covenant,
representation or warranty (as the same may be modified by a notice
pursuant to Subsection 4.12(b) by the Purchaser or Neptune. Any such
condition
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may be waived in whole or in part by the Vendor without prejudice to any
claims they may have for breach of covenant, representation or warranty.
14.3 Parties Efforts : The parties shall use reasonable commercial efforts to
satisfy the conditions contained in Section 8.
15 CLOSING ARRANGEMENTS
15.1 Place of Closing: The closing shall take place at the Time of Closing at
the Place of Closing.
15.2 Transfer: At the Time of Closing, upon fulfilment of all the conditions set
out in Section 8 that have not been waived in writing by Neptune and the
Purchaser or the Vendor as the case may be:
(a) the Purchaser will cause to be delivered to the Vendor's attorney
(Xxxxxx & Xxxxx, X.X., Washington Trust Financial Center, Suite 1600,
000 X. Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx, 00000-0000) a certified or
attorney's check in the amount of $480,000.00 payable to the Vendor's
attorney (Xxxxxx & Xxxxx, X.X.) in trust for the Vendor in payment of
the Purchase Price;
(b) the Purchaser will cause to be delivered to the Vendor's attorney
Xxxxxx & Xxxxx, X.X., Washington Trust Financial Center, Suite 1600,
000 X. Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx, 00000-0000) a certified or
attorney's check in the amount of $4,455.00 payable to the Vendor's
attorney (Xxxxxx & Xxxxx, X.X.) in payment of the sales tax provided
for in Subsection 7.7; and
(c) Neptune will issue 22,727 shares in the capital of Neptune to the
Vendor and deliver same to the Vendor's attorney (Xxxxxx & Xxxxx,
X.X., Washington Trust Financial Center, Suite 1600, 000 X. Xxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxx, 00000-0000).
15.3 Further Assurances: Each party to this Agreement covenants and agrees that,
from time to time subsequent to the Closing Date, it will, at the request
and expense of the requesting party, execute and deliver all such
documents, including, without limitation, all such additional conveyances,
transfers, consents and other assurances and do all such other acts and
things as any other party to this Agreement, acting reasonably, may from
time to time request be executed or done in order to better evidence or
perfect or effectuate any provision of this Agreement or of any agreement
or other document executed pursuant to this Agreement or any of the
respective obligations intended to be created by this Agreement.
16 INDEMNITY
16.1 KnownActions and Proceedings: The Vendor and Xxxxx hereby indemnify and
save harmless the Neptune Entities from and against any and all losses,
liabilities, damages, costs, increases in insurance premiums for policies
(comparable to existing coverage at the Effective Date) for renewals to
December 31, 1999, and expenses of any kind whatsoever
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including, without limitation, the costs of defending, cross-claiming or
claiming against third parties in respect of any action, claim or matter,
including attorney's fees, costs and disbursements at all court and
administrative levels, which at any time or from time to time may be paid,
incurred or asserted against the Neptune Entities, as to a direct or
indirect result of the operation of the Business up to and including the
Effective Date, provided that such liability is not the result of any
actions taken by the Neptune Entities after the Effective Date. The
obligations of the Vendor and Xxxxx set forth in this Subsection 10.1 shall
be subject to and limited by the following:
(a) No claim shall be made unless the cumulative amount of all claims
under this Subsection 10.1 equals or exceeds $5,000;
(b) The Purchaser and Neptune shall give written notice to Vendor and
Xxxxx stating specifically the basis for the claim, the amount
thereof, and shall tender defense thereof to Vendor and Xxxxx as
provided in Subsection 10.3 below; and
(c) No claim shall be made after the third anniversary of the Closing
Date.
16.2 Indemnification by Purchaser. The Purchaser hereby indemnifies and saves
harmless the Vendor and Xxxxx against any and all losses, liabilities,
damages, costs, and expenses of any kind whatsoever, including, without
limitation, the cost of defending, cross-claiming, or claiming against
third parties in respect of any action, claim, or matter, including legal
fees, costs, and disbursements of an attorney at all court and
administrative levels, which at the time or from time to time may be paid,
incurred, or asserted against Vendor and Xxxxx as to the direct or indirect
result of the operation of the Business after the Effective Date. The
obligations of the Purchaser set forth in this Subsection 10.1 shall be
subject and limited by the following:
(a) Noclaims shall be made until the cumulative amount of all claims under
this Subsection 10.1 equals or exceeds $5,000;
(b) Vendor and Xxxxx shall give written notice to the Purchaser stating
specifically the basis for the claim, the amount thereof, and shall
tender defense thereof to Purchaser as provided in Subsection 10.3
below; and
(c) No claim shall be made after the third anniversary of the Closing
Date.
10.3 Tender of Defenses. Promptly upon receipt by any party of a notice of a
claim by a third-party which may give rise to a claim under Section 10, the
party seeking indemnification (the Indemnified Party) shall give written
notice thereof to the party obligated to provide indemnification (the
Indemnifying Party). If the Indemnifying Party gives to the Indemnified
Party an agreement in writing, in a form reasonably satisfactory to the
Indemnified Party's counsel, to defend such claim, the Indemnifying Party
may, at its sole expense, undertake the defense against such claim and may
contest or settle such claim on such terms, at such time and in such manner
as the Indemnifying Party, in its sole discretion,
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shall elect and the Indemnified Party shall execute such documents and take
such steps as may be reasonably necessary in the opinion of its counsel to
enable it to conduct the defense of such claim. If the Indemnifying Party
fails or refuses to defend any claim hereunder, the Indemnifying Party may
nevertheless, at its own expense, participate in the defense of such claim
by the Indemnified Party in any and all settlement negotiations relating
thereto. In any and all events, the Indemnifying Party shall have such
access to the records and files of the Business relating to any claim as
may be reasonably necessary to effectively defend or participate in the
defense thereof.
16.3 Right to Set-Off: The Purchaser and Neptune have the right to set-off any
amount owed by the Vendor to the Purchaser or Neptune pursuant to
Subsection 10.1 against any money due and owing to the Vendor from the
Purchaser or Neptune under this or any other agreement between the
Purchaser, Neptune and the Vendor, provided that the Purchaser or Neptune
gives written notification to the Vendor prior to set-off of the amount of
the set-off and any obligation(s) so satisfied.
17 GUARANTEE
Neptune hereby unconditionally guarantees each and every obligation of the
Purchaser arising from or under this Agreement. If the Purchaser should, for any
reason, fail to pay or perform any obligation, indebtedness, or liability
arising out of or pertaining to this Agreement, Neptune promises to pay or
perform the same upon demand. Neptune waives notice of acceptance in this
guaranty and also presentment, demand, protest, notice of protest, and notice of
dishonor of any obligation arising under this Agreement. No extension of time or
other indulgence granted by the Vendor, to the Purchaser will release or affect
the obligation of Neptune. No omission or delay on the part of the Vendor in
exercising any rights hereunder or in taking any action to collect or enforce
payment of any obligation arising under this Agreement will be a waiver of such
right or release or affect the obligation of Neptune hereunder. This guaranty is
given for the benefit of the Vendor and Xxxxx. Neptune shall be jointly and
severally liable for said obligations, indebtedness, or liabilities.
18 GENERAL MATTERS
18.1 Governing Law and Arbitration: This Agreement shall be governed by and
construed in accordance with the laws of the State of Washington. Any
dispute arising out of or in connection with this Agreement, including any
question regarding its existence, validity or termination, shall be
referred to and finally resolved by arbitration under the rules of the
American Arbitration Association which rules are deemed to be incorporated
by reference into this clause. The number of arbitrators shall be one. The
place of arbitration shall be Seattle, Washington. The language of
arbitration shall be English. The parties expressly waive and forego any
right to punitive, exemplary or other similar damages unless an applicable
statute requires the award of such damages or that compensatory damages be
increased in a specified manner. This provision is not intended to apply to
any award of arbitration costs to a party to compensate for dilatory or bad
faith conduct in the arbitration pursuant to this paragraph. The prevailing
parties shall also be entitled to an award of reasonable attorney's fees.
-30-
18.2 Entire Agreement: Except as may be otherwise expressly agreed between the
parties in writing, this Agreement, including any agreements contemplated
herein, constitutes the entire agreement between the parties pertaining to
the subject matter and there are no oral statements, warranties,
representations or other agreements between the parties in connection with
the subject matter except as specifically set forth or referred to herein.
No amendment, waiver or termination of this Agreement shall be binding
unless executed in writing by the party or parties to be bound thereby. No
waiver of any provision of this Agreement shall be deemed or shall
constitute a waiver of any other provision nor shall any such waiver
constitute a continuing waiver unless otherwise expressly provided.
18.3 Assignment: The Vendor will not assign their interests in this Agreement
without prior written consent of the Purchaser. Prior to payment of the
Purchase Price in full, the Purchaser may not assign its interests in this
Agreement without any prior written consent of the Vendor.
18.4 Public Notices: Except as required by applicable law, regulatory authority
or any listing or trading agreement, no press release or other announcement
concerning this transaction shall be made by the Vendor or the Purchaser
without the prior approval of the other, such approval not to be
unreasonably withheld.
18.5 Confidential Information: The Purchaser and the Vendor covenant to hold in
strict confidence all information obtained in connection with the
transactions which are the subject matter of this Agreement. If the
transactions which are the subject matter of this Agreement are not
completed, this covenant shall continue in full force and effect. All
confidentiality obligations of the Purchaser with respect to the Vendor,
shall cease upon Closing. Notwithstanding the Closing, the Vendor covenants
to maintain as confidential all confidential information respecting the
Purchaser in that Vendor's possession prior to Closing and all information
obtained in connection with the transactions which are the subject matter
of this Agreement including all information concerning the Purchaser other
than information provided to that Vendor's personal advisers for the
purpose of filing personal tax returns and other similar matters and other
than as may be required to be disclosed by law and other than information
that becomes generally available to the public other than as a result of a
disclosure by the Vendor its representatives.
18.6 Non-Waiver: No investigations made by or on behalf of the Purchaser at any
time shall have the effect of waiving, diminishing the scope of or
otherwise affecting any representations or warranties made herein or
pursuant hereto. No investigations made by or on behalf of the Vendor at
any time shall have the effect of waiving, diminishing the scope of or
otherwise affecting any representations or warranties made herein or
pursuant hereto.
18.7 Indemnification in Respect of Brokers or Agents: The Vendor and Xxxxx
indemnify and save harmless the Purchaser and the Business from and against
any claim for commission or other remuneration payable or alleged to be
payable to any broker, agent or other intermediary who
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claims to be so entitled by virtue of a contract or other arrangement with
the Vendor in connection with the transaction contemplated herein.
18.8 Expenses: All costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party
incurring such expense. The Purchaser shall not bear any legal, accounting
or other costs incurred by the Vendor. The Vendor shall not bear any legal,
accounting or other costs incurred by the Purchaser.
18.9 Notices: Any notice or other communication required or permitted to be
given hereunder shall be in writing and delivered or sent by overnight
mail, overnight delivery or telefax and, if telefaxed, shall be deemed to
have been received on the next Business Day following transmittal and
acknowledgment of receipt by the recipient's telefax machine or if
delivered by hand shall be deemed to have been received at the time it is
delivered. Notices addressed to an individual shall be validly given if
left on the premises indicated below. Notice of change of address shall
also be governed by this Subsection . Notices shall be delivered or
addressed as follows:
(a) If to the Purchaser and Neptune:
Neptune Management Corp.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
(b) If to the Vendor:
Cremation Society of Washington, Inc.
0000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxx
Any party may give written notice of change of address in the same manner,
in which event such notice shall thereafter be given to it as above
provided at such changed address.
18.10 Time of the Essence: Time shall be of the essence of this Agreement.
18.11Further Assurances: Each of the parties hereto agrees promptly to do,
make, execute, deliver or cause to be done, made, executed or delivered at
their own expense all such further acts, documents and things as the other
party hereto may reasonably require for the purpose of giving effect to
this Agreement whether before or after the Closing.
18.12Severability: If any covenant, obligation or agreement of this Agreement,
or the application thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this Agreement or the
application of such covenant, obligation or agreement to persons or
circumstances other than those as to which it is held invalid or
unenforceable,
-32-
shall not be affected thereby and each covenant, obligation and agreement
of this Agreement shall be separately valid and enforceable to the fullest
extent permitted by the law.
18.13Counterparts: This Agreement may be executed in any number of
counterparts, each of which when delivered shall be deemed to be an
original and all of which together shall constitute one and the same
document. A signed facsimile or telecopied copy of this Agreement shall be
effectual and valid proof of execution and delivery.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the
date first hereinabove written.
NEPTUNE SOCIETY OF AMERICA, INC. THE NEPTUNE SOCIETY, INC.
Per: ------------------------------ Per: ------------------------------
Authorized Signatory Authorized Signatory
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CREMATION SOCIETY OF WASHINGTON, INC.
Per: ------------------------------
Authorized Signatory
SIGNED, SEALED AND DELIVERED by )
XXXX X. XXXXX in the presence of: )
)
-------------------------------------- )
Witness Signature )
)
-------------------------------------- ) -------------------------------
Address ) XXXX X. XXXXX
)
-------------------------------------- )
Occupation )
)
-34-
Schedule "A"
to the Asset Purchase Agreement dated December 31, 1999
See Attached List of Insurance Policies
---------------------------------------
-35-
Schedule "B"
to the Asset Purchase Agreement dated December 31, 1999
List of Intangible Assets
-------------------------
1. Trade Names: Cremation Society of Washington, First Choice Cremation
2. Trademark: Cremation Society of Washington, First Choice Cremation,
Spokane's Cremation Society
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Schedule "C"
to the Asset Purchase Agreement dated December 31, 1999
List of Land and Buildings
--------------------------
Description Nature of Interest Base Rent/Month Expiry Date Renewal
----------- ------------------ --------------- ----------- -------
Xxxx 0000 Xxxxxxx Xxxxxx, Xxxxxxxx owned by Vendor, x/x x/x x/x
Xxxxxxx, XX Xxxxx
Xxxxx 000, Xxxxx 0000 General office space $602.00 36584 month to month
Division Street, Spokane, WA leased from Xxxxxx and option
Xxxxxxx Xxxxxxxxx
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Schedule "D"
to the Asset Purchase Agreement dated December 31, 1999
List of Leased Assets
---------------------
1. See Schedule "C".
2. Other Leased Assets:
In Agreement with Nature of Lease Total Payments per Month Expiry Date
----------------- --------------- ------------------------ -----------
AT&T Capital Leasing Computer equipment $392.94 June 18, 2001
Ikon Office Solutions Ricoh copier $285.00 June 29, 2003
-38-
Schedule "E"
to the Asset Purchase Agreement dated December 31, 1999
See Attached List of Other Operating and Fixed Assets
-----------------------------------------------------
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Schedule "F"
to the Asset Purchase Agreement dated December 31, 1999
See Folder F(1) for List of Pre-Need Contracts
----------------------------------------------
and Folder F(2) for List of Funeral Insurance Polices
-----------------------------------------------------
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Schedule "G"
to the Asset Purchase Agreement dated December 31, 1999
List of Specified Assets
------------------------
1. 1 Power-Pak II Cremator
2. 1 Recorder
3. 1 S.S. Stack
4. 1 13'x15'x9' Walk-In Cooler
5. 1 Infitting Cooler Door
6. 4 Cooler Racks
7. 1 92" Body Lift
-41-
Schedule "H"
to the Asset Purchase Agreement dated December 31, 1999
List of Trust Accounts
----------------------
1. See Schedule "F', Folder F(1).
-42-
Schedule "I"
to the Asset Purchase Agreement dated December 31, 1999
See Attached Unaudited Financial Statements
-------------------------------------------
-43-
Schedule "J"
to the Asset Purchase Agreement dated December 31, 1999
List of Bank Accounts
---------------------
1. USbank, Spokane, WA, Checking Account #1-535-0237-0296
2. USbank, Spokane, WA, Savings Account #2-535-0120-3330
-44-
Schedule "K"
to the Asset Purchase Agreement dated December 31, 1999
EBITDA
------
1. For the purposes of this Agreement, Spokane EBITDA and Washington EBITDA
will be calculated in accordance with generally accepted accounting
principles used in the United States of America, consistently applied, with
the following adjustments:
(i) all consulting fees paid by the Neptune Entities to Xxxxx will not be
included in the calculation of Spokane EBITDA and Washington EBITDA;
and
(ii) all employment compensation paid by the Neptune Entities to Xxxxxxx in
excess of $45,000.00 will not be included in the calculation of
Spokane EBITDA and Washington EBITDA.
2. For the purposes of this Agreement, Spokane EBITDA and Washington EBITDA
shall not reflect an allocation of general administrative expenses or
overhead assessments of the Neptune Entities without the express written
consent of the Vendor or Xxxxx. The parties acknowledge, however, that
certain expenses which are both reasonable and necessary and directly
related to and incurred for the exclusive benefit of the Business conducted
from the Spokane Locations, the State of Washington or any other locations
of the Business operated by the Neptune Entities in which Xxxxxxx is
General Manager, may be allocated and included in the calculation of
Spokane EBITDA and Washington EBITDA.
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Schedule "L"
to the Asset Purchase Agreement dated December 31, 1999
List of Employees and Employee Benefit Plans
--------------------------------------------
Name Position Estimated 1999 Compensation
---- -------- ---------------------------
Xxxx X. Xxxxx Consultant $5,000 - $7,000
Xxxxxxx Xxxxxxx General Manager $60,000
Xxxxxxx Xxxxxxx Location Manager $30,000
Xxxxxxxx Xxxxxxx At-Need Secretary $16,320
Xxxxx Xxxx Pre-Need Sales Manager $60,000
Xxxxx Xxxxx Pre-Need Secretary/Officer $19,200
Manager
Xxxx Xxxxx Telemarketer $5.75 per hour
Full Time Employees receive HMO health coverage and those with professional
designations receive annual registration fees and continuing education costs
associated with those designations
-46-
Schedule "M"
to the Asset Purchase Agreement dated December 31, 1999
List of Material Contracts
--------------------------
1. Agreement to Join and Participate in the Washington State Funeral Directors
Association Master Trust dated April 5, 1995 between Cremation Society of
Washington and WSFDA
2. Trust Agreement dated February 12, 1998 between Cremation Society of
Washington and Forethought National TrustBank
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Schedule "N"
to the Asset Purchase Agreement dated December 31, 1999
List of Required Consents
Contractual Consents
1. Consent to assignment of lease at Xxxxx 000, 0000 Xxxxxxxx Xxxxxx, Xxxxxxx,
XX
2. Consent to assignment of the Leases described in Schedule D.
3. Consent to assignment of the Material Contracts described in Schedule M.
Regulatory Consents
4. Consent to Assignment of trademark certificates for:
a. Cremation Society of Washington
b. First Choice Cremation
c. Spokane's Cremation Society
5. Consent to Assignment of registered tradenames for:
a. Cremation Society of Washington
b. First Choice Cremation
6. Transfer of Agent's License authorization to sell Life and Disability
Insurance from the State of Washington's Office of the Insurance
Commissioner
7. Transfer of the licenses from the State of Washington Endorsement for:
a. Crematory Operation
b. Prearrangement Funeral Services
c. Funeral Establishment
-48-
Schedule "O"
to the Asset Purchase Agreement dated December 31, 1999
See Attached Certificate of Accredited Investor
-----------------------------------------------
-49-
Schedule "P"
to the Asset Purchase Agreement dated December 31, 1999
See Attached Xxxxx Consulting/Non-Compete Agreement
---------------------------------------------------
-50-
Schedule "Q"
to the Asset Purchase Agreement dated December 31, 1999
See Attached Xxxxxxx Employment/Non-Compete Agreement
-----------------------------------------------------
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Schedule "R"
to the Asset Purchase Agreement dated December 31, 1999
See Attached Lease/Purchase Option Agreement
--------------------------------------------
