EXHIBIT 10.80
EXECUTION COPY
PURCHASE AGREEMENT
This Agreement (the "Agreement"), dated as of May 8, 2003, is by and
between Xxxxxx X. Xxxxxx, an individual residing at c/o JFO Group, 0000 Xxxx
Xxxx, Xxxxx 000, Xxxxxx, Xxxxx ("Xxxxxx"), and Xxxxxxx X. Xxxx, an individual
residing at AMLI at Fossil Creek, 0000 X. Xxxxx Xxxxxx #0000, Xxxx Xxxxx, Xxxxx
00000 ("Xxxx").
WHEREAS, Xxxxxxx X. Xxxx serves as a director and president and chief
executive officer of UICI;
WHEREAS, Xxxxxx X. Xxxxxx serves as Chairman of the Board and
significant shareholder of UICI;
WHEREAS, pursuant to the terms of a loan extended in 1998 by Xxxxxx
and/or members of Xxxxxx'x family, the proceeds of which were used to acquire
265,507 shares of UICI common stock, Xxxx currently owes Xxxxxx the amount of
$3,500,000 (the "Xxxx Loan");
WHEREAS, Xxxxxx advanced to Xxxx $1,000,000 in January 2000 as part of
an unwind of various loans and arrangements between them (the "Xxxx Advance"),
and Xxxx desires to repay in full the Xxxx Advance;
WHEREAS, Xxxx and Xxxxxx desire to reach an arrangement pursuant to
which Xxxx will sell back to Xxxxxx the UICI shares originally acquired in 1998
and use the sale proceeds therefrom to pay off in full the Xxxx Loan.
NOW THEREFORE, for and in consideration of the mutual covenants
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto do hereby
agree as follows:
1. Definitions. The following capitalized terms shall have the
respective meanings set forth below:
"Governmental Authority" means the government of the United States or
any foreign country or any state or political subdivision thereof and any
entity, body or authority exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
"Person" means any individual, corporation, proprietorship, firm,
partnership, limited liability company, limited liability partnership, trust,
association or other entity, including a government or government department,
agency or instrumentality.
2. Purchase of UICI Shares. Subject to satisfaction of the conditions
hereinafter set forth, and for and in consideration of the payment on the
Closing Date by Xxxxxx to Xxxx of cash in the aggregate amount of $3,500,000, or
$13.18 per share (the "Purchase Price"), Xxxxxx will purchase, and Xxxx will
sell, 265,507 shares of UICI Common Stock, par value $0.01 per share (the "UICI
Shares"). On the Closing Date Xxxx will deliver to Xxxxxx a certificate or
certificates representing the UICI Shares, accompanied by a duly executed stock
transfer power.
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3. Pay-Off of Xxxx Loan. On the Closing Date, Xxxx will remit to Xxxxxx
cash in the amount of $3,500,000, representing all principal outstanding on the
Xxxx Loan. Upon receipt of the payment herein contemplated, the Xxxx Loan will
be deemed paid and discharged in full, and Xxxxxx will return the original notes
representing the Xxxx Loan to Xxxx marked "paid in full."
4. Closing. The closing of the transaction contemplated hereby (the
"Closing") will take place on Thursday, May 8, 2003, or such later date as
Xxxxxx and Xxxx shall mutually agree (the "Closing Date").
5. Representations and Warranties of Xxxxxx. Xxxxxx represents and
warrants as of the date hereof as follows:
5.1. Standing and Power. Xxxxxx is an individual with capacity
to execute, deliver and perform this Agreement.
5.2. Authority. This Agreement has been duly executed and
delivered by Xxxxxx and constitutes a valid and binding obligation of
Xxxxxx, enforceable against Xxxxxx in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium or other
similar laws relating to creditors' rights and general principles of
equity.
5.3. Receipt of Prior Payment pursuant to Xxxx Advance. Xxxxxx
acknowledges receipt on May 6, 2003 of a payment from Xxxx in the
amount of $1,000,000, which payment, together with the payment to be
made to Xxxxxx by Xxxx pursuant to Section 3 hereof, shall constitute
full and complete settlement and discharge of the Xxxx Advance and all
other indebtedness howsoever and whatsoever owing by Xxxx to Xxxxxx
and/or to any member of Xxxxxx'x family.
6. Covenants, Representations and Warranties of Xxxx. Xxxx covenants,
represents and warrants as of the date hereof as follows:
6.1. Organization, Standing and Power. Xxxx is an individual
with capacity to execute, deliver and perform this Agreement.
6.2. Authority. This Agreement has been duly executed and
delivered by Xxxx and constitutes a valid and binding obligation of
Xxxx, enforceable against Xxxx in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws
relating to creditors' rights and general principles of equity.
6.3. No Liens. Xxxx has full right, power and authority to
sell and deliver the UICI Shares to be delivered by him to Xxxxxx as
contemplated by this Agreement. Upon endorsement and delivery of
certificates or stock powers evidencing the UICI Shares to Xxxxxx at
the Closing and Xxxxxx'x payment of the Purchase Price as contemplated
herein, Xxxxxx shall have acquired from Xxxx good and marketable title
to the UICI Shares, free and clear of all pledges, liens, security
interests, claims, charges of any kind or character, restrictions,
title defects or obligations, rights of third parties, options or
encumbrances of any nature whatsoever (collectively, "Encumbrance"),
other than any Encumbrance that may be caused or created by Xxxxxx or
any Xxxxxx family member before, on or after the Closing Date (it being
acknowledged that Xxxxxx holds the UICI Shares as collateral for
payment of the Xxxx Loan).
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7. Mutual Release.
7.1. In consideration of the payments and promises contained
in this Agreement, and in full compromise and settlement of any of
Xxxxxx'x potential claims and causes of action relating to or arising
out of the Xxxx Loan, the Xxxx Advance or any of the transactions
associated therewith, and any and all other claims or causes of action
that Xxxxxx has or may have against the Xxxx Releasees (as defined
below) up to the Closing Date, effective on the Closing Date Xxxxxx
hereby:
(a) Knowingly and voluntarily agrees to irrevocably
and unconditionally waive and release Xxxx and Xxxx'x heirs,
executors, administrators and assigns (collectively the "Xxxx
Releasees"), from any and all charges, complaints, claims,
liabilities, obligations, promises, sums of money, agreements,
controversies, damages, actions, lawsuits, rights, demands,
sanctions, costs (including attorneys' fees), losses, debts
and expenses of any nature whatsoever, existing on, or at any
time prior to, the date hereof in law, in equity or otherwise,
which Xxxxxx, Xxxxxx'x successors, heirs or assigns had or
have upon or by reason of any fact, matter, cause, or thing
whatsoever, and specifically including any matter that may be
based on the sole or contributory negligence (whether active,
passive or gross) of any Xxxx Releasee. This release includes,
but is not limited to, a release of all claims or causes of
action arising out of or relating to any claim under the
statutes of the State of Texas, or other jurisdictions, and
the facts, circumstances, allegations, and controversies
relating or giving rise thereto that have accrued to the date
of execution of this Agreement; and
(b) Agrees that Xxxxxx will not commence, maintain,
initiate, or prosecute, or cause, encourage, assist,
volunteer, advise or cooperate with any other person to
commence, maintain, initiate or prosecute, any action,
lawsuit, proceeding, investigation, or claim before any court,
legislative body or committee, or administrative agency
(whether state, federal or otherwise) against any of the Xxxx
Releasees relating to any claims, liabilities, obligations,
promises, sums of money, agreements, controversies, damages,
actions, lawsuits, rights, demands, sanctions, costs
(including attorneys' fees), losses, debts and expenses
described in the foregoing subparagraph (a);
provided, however, that, notwithstanding anything to the contrary in
the foregoing, nothing hereunder shall be deemed to affect, impair or
diminish in any respect any rights of Xxxxxx or any rights of any
Xxxxxx Releasee under this Agreement.
7.2. In consideration of the mutual promises contained in this
Agreement, and in full settlement of any of the Xxxx Releasees'
potential claims and causes of action relating to or arising out of the
Xxxx Loan, the Xxxx Advance and the transactions associated therewith
and causes of action that any of the Xxxx Releasees has or may have
against Xxxxxx up to and through the Closing Date, effective upon the
Closing Date Xxxx on behalf of the Xxxx Releasees hereby:
(a) Knowingly and voluntarily agrees to irrevocably
and unconditionally waive and release Xxxxxx and Xxxxxx'x
heirs, executors, administrators and assigns (collectively the
"Xxxxxx Releasees"), from any and all charges, complaints,
claims, liabilities, obligations, promises, sums of money,
agreements, controversies, damages, actions, lawsuits, rights,
demands, sanctions, costs (including attorneys' fees) losses,
debts and expenses of any nature whatsoever, existing on, or
at any time prior to the date of execution of this Agreement
arising in law, in equity or otherwise, which any of the
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Xxxx Affiliates, their successors or assigns had or have upon
or by reason of any fact, matter, cause, or thing whatsoever,
and specifically including any matter that may be based on
your sole or contributory negligence (whether active, passive
or gross). This release includes, but is not limited to, a
release of all claims or causes of action arising out of
alleged contract and tort claims or claims arising under any
federal, state or local law and any claim under the statutes
of the State of Texas, or other jurisdictions, and the facts,
circumstances, allegations, and controversies relating or
giving rise thereto that have accrued to the date of execution
of this Agreement; and
(b) Agrees that the Xxxx Releasees will not commence,
maintain, initiate or prosecute, or cause, encourage, assist,
volunteer, advise or cooperate with any other person to
commence, maintain, initiate or prosecute, any action,
lawsuit, proceeding, investigation, or claim before any court,
legislative body or committee, or administrative agency
(whether state, federal or otherwise) against the Xxxxxx
Releasees relating to any such claims, liabilities,
obligations, promises, sums of money, agreements,
controversies, damages, actions, lawsuits, rights, demands,
sanctions, costs (including attorneys' fees), losses, debts
and expenses described in the foregoing subparagraph (a);
provided, however, that, notwithstanding anything to the contrary in
the foregoing, nothing hereunder shall be deemed to affect, impair or
diminish in any respect any rights of Xxxx or any rights of any Xxxx
Releasee under this Agreement.
8. Closing Conditions.
8.1. Xxxxxx'x Closing Conditions. The obligations of Xxxxxx
under Section 2 of this Agreement are subject to the satisfaction or
waiver by Xxxxxx of the following conditions precedent on or before the
Closing Date:
8.1.1. The representations and warranties of Xxxx
contained herein shall be accurate, true and correct in all
material respects on and as of the Closing Date with the same
force and effect as though made by Xxxx on and as of the
Closing Date.
8.1.2. Xxxx shall have performed and complied with
all of his covenants, obligations and agreements contained in
this Agreement to be performed and complied with by it on or
prior to the Closing Date.
8.1.3. No action or proceeding by any Governmental
Authority or other Person shall have been instituted or
threatened which (a) might have a material adverse effect on
Xxxxxx'x ability to consummate the transactions herein
contemplated or (b) could enjoin, restrain or prohibit, or
result in substantial damages in respect of, any provision of
this Agreement or the consummation of the transactions
contemplated hereby.
8.2. Xxxx'x Closing Conditions. The obligations of Xxxx under
Sections 2 and 3 of this Agreement are subject to the satisfaction or
waiver by Xxxx of the following conditions precedent on or before the
Closing Date:
8.2.1. The representations and warranties of Xxxxxx
contained herein shall be accurate, true and correct in all
material respects on and as of the Closing Date with the same
force and effect as though made by Xxxxxx on and as of the
Closing Date.
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8.2.2. Xxxxxx shall have performed and complied with
all of its covenants, obligations and agreements contained in
this Agreement to be performed and complied with by it on or
prior to the Closing Date.
8.2.3. No action or proceeding by any Governmental
Authority or other Person shall have been instituted or
threatened which (a) might have a material adverse effect on
Xxxx'x ability to enter into this Agreement or consummate the
transactions contemplated hereby or (b) could enjoin, restrain
or prohibit, or result in substantial damages in respect of,
any provision of this Agreement or the consummation of the
transactions contemplated hereby.
9. Miscellaneous.
9.1. Survival of Representations and Warranties. The
representations, warranties and covenants in this Agreement shall not
survive Closing.
9.2. Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be
delivered personally, sent by overnight courier (providing proof of
delivery) to the parties or sent by telecopy (providing confirmation of
transmission) at the following addresses or telecopy numbers (or at
such other address or telecopy number as shall be specified by like
notice):
if to Xxxxxx, to:
c/o JFO Group
0000 Xxxx Xxxx
Xxxxx 000
Xxxxxx, XX 00000-0000
if to Xxxx, to:
Xx. Xxxxxxx X. Xxxx
AMLI at Fossil Creek
0000 X. Xxxxx Xxxxxx
#0000
Xxxx Xxxxx, Xxxxx 00000
9.3. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other party.
9.4. Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both
written and oral, between the parties with respect to the subject
matter of this Agreement.
9.5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS,
REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
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9.6. Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned or
delegated, in whole or in part, by operation of law or otherwise by any
of the parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
/S/ XXXXXX X. XXXXXX
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XXXXXX X. XXXXXX
/S/ XXXXXXX X. XXXX
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XXXXXXX X. XXXX
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