EXHIBIT 10.62
ASSET SALE AGREEMENT
ASSET SALE AGREEMENT ("Agreement"), dated this _____ day of ___________,
2004, by and between Neptune Management Corporation (hereinafter the "Seller")
and Xxxxxx Funeral Care and Xxxxxx Xxxxxx, (hereinafter collectively the
"Buyer"). WITNESSETH:
WHEREAS, Seller has rights to sell certain business and certain of its
business assets, which conduct business under the name and at the address that
follows: Neptune Society of Iowa, 000 XX Xxxxxxx Xxxxx, Xxxxxx, XX 00000 and 000
XX Xxxxxxxx Xx., Xxxxxx, Xxxx 00000
The business named above is herein sometimes referred to in this Agreement
as the "Business"; and
WHEREAS, the parties desire to provide for the sale and transfer of certain
assets of the Business, including certain of the personal property located at,
used exclusively in connection with, or arising out of such Business, together
with certain leased real estate utilized in the Business, and including the
assumption of certain obligations of the Business, in exchange for cash and
other consideration, upon the terms and subject to the conditions herein set
forth; and
WHEREAS, this Agreement sets forth the terms and conditions to which the
parties have agreed.
NOW, THEREFORE, in consideration of these premises, and the mutual
covenants, agreements, representations and warranties herein made, and of the
mutual benefits to be derived hereby, the parties, intending to be legally bound
hereby, agree as follows:
ARTICLE I
Purchase and Sale
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Section 1.1. Sale and Transfer of Assets. Subject to the terms and
conditions of this
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Agreement, Seller does hereby agree to sell, transfer, convey and deliver to
Buyer, and Buyer does hereby agree to purchase and accept from Seller, at the
Closing, the following property and rights located at, used exclusively in
connection with or arising out of the operation of the Business:
(a) The leased property used in connection with the crematorium aspect of
the Business located at 000 XX Xxxxxxxx Xx., Xxxxxx, Xxxx 00000 (the
"Crematorium"), but shall not include the leased property utilized for office
purposes located at 000 XX Xxxxxxx Xxxxx, Xxxxxx, Xxxx (the "Office Property").
Seller assumes responsibility for providing Buyer, prior to Closing, written
landlord approval for the assignment of the lease of the Crematorium.;
(b) The equipment, and other tangible personal property owned by Seller
located at the Crematorium and the Office Property and used by the Business
exclusively in the operation thereof;
(c) To the extent available to Seller, all computer, electronic and HMIS
system hardware of the Business, exclusive of any rights to proprietary or
licensed computer software, operating systems or intellectual property rights;
(d) All preneed merchandise and/or service agreements, contracts and
rights, together with the full value of all entitlements and accounts receivable
arising from and related thereto, including all contracts, notes, accounts
receivable and insurance payments arising from or related thereto, and any other
contracts, leases, rental agreements, tenancies, licenses, engagements and
commitments entered into by and related to the operation of the Business, plus
or minus any changes in said entitlements and receivables which result from
sales and deliveries made in the ordinary course of the operation of the
Business subsequent to the effective date hereof or of such schedules, and until
the Closing;
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(e) All rights, title and interest of Seller and/or the Business in and to
any bank, trust or other funds or accounts, together with income thereon, and
insurance contracts, relating to and arising from preneed agreements for funeral
merchandise and/or services as to which the Business is the provider of such
services and/or merchandise, and related payments, benefits claims, or
assignments, as well as the proceeds of insurance policies or similar contracts
related thereto;
(f) Any transferable permits of Seller necessary in connection with the
operation of the Business;
(g) The goodwill and intangible assets associated with, and all rights,
title and interest in and the right to use the trade name Cremation Society of
Iowa.
All property to be sold by Seller to Buyer described above shall be
hereinafter collectively referred to as the "Assets."
Section 1.2. Excluded Assets. Seller shall not transfer, convey, or assign
to Buyer the following assets: (a) cash and cash equivalents, (b) accounting or
administrative systems, that are used in the Business, including related
computer software and information and similar rights, (c) accounts or payment
receivables of Neptune or its affiliates, or those related to tax refunds, (d)
general ledgers and related books and records, (e) any accounts/receivables owed
to the Business by Neptune or its affiliates;, and (f) all other assets of the
Seller which are not used exclusively or primarily in the ownership, operation
or maintenance of the Business including training, promotional materials,
procedure and policy manuals or other intellectual property rights (together the
"Excluded Assets"). The Closing Date shall be on or before April 15, 2004, or
such other date as agreed in writing by the parties.
Section 1.3. Covenant not to Compete. As material consideration for Buyer
entering
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into this Agreement, Seller and its principals, successors and assigns agree not
to compete in the sale of funeral goods or services in the State of Iowa for a
period of ten (10) years from the date of closing on this matter. Buyer and
Seller agree the geographic limitation and time period are reasonable and
rationally based upon the estimated time period for satisfying the obligations
under the preneed contracts being assumed by Buyer. The parties agree such
competition during the time period in which Buyer may be obligated to provide
the services provided for in the preneed contracts would be a violation of the
spirit and intent of this Agreement and would cause Buyer irreparable harm.
Should Seller violate the terms of this covenant, Seller specifically authorizes
Buyer to proceed in law or in equity for an ex parte order immediately enjoining
any actions in violation of this covenant. .
Section 1.4. Consideration for Assets Payable at the Closing. On the terms
and subject to the conditions of this Agreement, Buyer, in consideration for the
transfer and delivery to it of the Assets as herein provided, will, in addition
to the assumption of liabilities set forth in Section 1.4. below, but subject to
appropriate pro-rations and offsets as set forth in the Agreement, pay to Seller
the sum of $180,000.00 ("Purchase Price"). Upon execution of this Agreement,
Buyer agrees to place $20,000.00 ("Xxxxxxx Money") in an non-interest bearing
trust account maintained by Buyer's attorney: Xxxxxxx X. Xxxx of the Xxxxxxxx
Law Firm, 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxx, Xxxx 00000. The balance of
$160,000.00 cash shall be due and payable to Seller at the Closing. Funds to be
delivered by bank wire transfer to Seller at such account as Seller shall
designate to Buyer. The Xxxxxxx Money, as such amount may be adjusted pursuant
to the accountings, pro-rations and offsets set forth in this Agreement, shall
be paid to Seller upon final accounting of the preneed contracts and Trusts
accounts (including associated inventories) as set forth in this Agreement, but
no later than six months from the date of Closing.
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The parties agree that time is of the essence for the consummation of the
transactions contemplated hereby.
Section 1.5. Assumption of Liabilities. From and after the Closing, Buyer
will assume and agree to perform the following liabilities and obligations of
Seller relating to the Business:
(a) The liabilities and obligations of Seller/the Business under and
pursuant to the terms and conditions of any preneed cemetery or funeral,
merchandise, properties and/or services agreements, contracts or commitments
("Preneed Agreements"), whether insurance funded or trust funded, which
agreements and any similar items are performable by the Business, preneed
merchandise and service trusts and trust agreements relating to the Business,
and those Preneed Agreements entered into in the ordinary course of operating
the Business pending the Closing.
(b) The current and future obligations of the Business under and pursuant
to the terms and conditions of any other contracts, rental agreements,
tenancies, licenses, engagements or commitments of the Business.
Section 1.6. Exclusions from Assumptions of Liabilities. The following
obligations are not assumed liabilities hereunder and shall remain the full
responsibility of Seller:
(a) Any obligations of Neptune Management Corporation or its affiliates
(including those incurred under the trade name Cremation Society of Iowa or
reasonable variations) for borrowed money and income taxes; any contracts or
obligations of the Business including without limitation merchandise supply
agreements, master vehicle leases, vehicle leases; any litigation against the
Business; any liabilities or obligations related to the retained assets and
obligations under Neptune "employee benefit plan".
(b) the lease of the Office Property.
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(c) any employment contracts associated with the Business: Seller agrees to
properly terminate any employment agreements and associated liabilities prior to
the Closing Date. Any liabilities or obligations relating to such employment
contracts shall remain the sole and absolute obligation of Seller. Seller agrees
to fully indemnify and hold Buyer harmless from any and all damages whatsoever,
including reasonable attorney fees, associated with the full and proper
termination of such employment contracts and any affiliated obligations.
(d) Any obligations or liabilities not fully disclosed in writing to Buyer
prior to the Closing Date.
Section 1.7. Closing Costs; Transaction Taxes.
At Closing, in addition to the Purchase Price to Seller in cash delivered
via wire transfer, Buyer shall pay to the Seller or assume the liability for all
sales taxes that arise as a result of the transaction provided for in this
Agreement and as a result of business conducted by the Business after the
Closing Date.
Except as provided herein, there is no implied provision regarding closing
prorations.
Section 1.8 Effective Time. The Effective Time of the transfer of the
Assets shall be 11:59 p.m. on the Closing Date.
ARTICLE II
Closing
Section 2.1. Closing. Time is of the essence to the closing of this
transaction. The closing of the transaction provided for in this Agreement (the
"Closing") shall take place at the parties' election, either at the offices of
Seller's Counsel, Xxxxxxx, Block, Xxxxxxxx & Xxxxx, 000 Xxxx Xxxxx Xxxxxx, Xxxxx
000, Xxxxxx, Xxxx, 00000-0000 or by telephone conference and exchange of
documents via facsimile transmission followed by overnight delivery of original
documents, on that ,business day set forth on the Closing Notice to be delivered
by Seller to
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Buyer (the "Closing Date"), or at such other location, time and date as the
parties shall mutually agree in writing. In the event of any postponement
thereof, all references in this Agreement to the Closing Date shall be deemed to
refer to the time and to the date to which the Closing Date shall have been so
postponed as herein provided;
Section 2.2. Instruments of Conveyance and Transfer. At the Closing, Seller
shall deliver to Buyer such special warranty deeds, bills of sale, endorsements,
assignments and other good and sufficient instruments of transfer, conveyance
and assignment, in form reasonably satisfactory to Buyer, to convey such title
as shall be legally sufficient for the use of the Assets of and in the Business
as presently conducted, free and clear of liens, except disclosed permitted
encumbrances. Both Seller and Buyer shall execute and deliver such other
documents and pay such expenses as called for by this Agreement or which are
necessary to close the transaction provided for herein.
ARTICLE III
Representations and Warranties by Seller
Seller hereby represents and warrants to Buyer as follows:
Section 3.1. Organization; Standing; Authorization; Capacity. (a) Seller is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Iowa, with all requisite corporate power and authority to
conduct its business as it is now being conducted. The execution, delivery and
performance of this Agreement by Seller have been duly and effectively
authorized by Seller, and no further action or other authorization or consent is
required. This Agreement has been duly executed and delivered by Seller, and
constitutes the valid and binding obligation of Seller, enforceable against
Seller in accordance with its terms.
(b) The closing of the transaction contemplated by this Agreement will not
result in a breach, violation, acceleration or default by Seller of or under any
judgment, decree, mortgage,
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agreement, indenture or other instrument or agreement, rule, regulation or
statute applicable to Seller or to which Seller is a party or by which Seller is
bound.
Section 3.2. Trusts.
(a) Attached hereto as Schedule 1 is a complete list, as of the date of
this Agreement, of all Preneed Merchandise and Service Trusts and Endowment Care
Trusts relating to the Business or the assumed preneed contracts (the "Trusts").
Considering the Merchandise and Service Trusts of the Business on an aggregate
basis, the total amount of all funds deposited in the merchandise and service
trusts will, as of the Closing Date, equal or exceed in all material respects
the amount to be deposited in such trusts under applicable laws, regulations,
rules, judgments, orders or decrees of governmental entities, if any. With
respect to the Trusts of the Business, the deposits required by, and only the
withdrawals permitted by applicable law have been made.
(b) Consistent with the ordinary course of business, Seller shall, as to
each Trust, hold for deposit funds for newly sold preneed contracts or collected
receivables relating to preneed contracts required to be deposited by applicable
Law and shall make, or be entitled to receive from Buyer, withdrawals from
merchandise and service trusts as preneed contracts are serviced, canceled or
otherwise terminated prior to Closing. As of the Closing Date, or such
reasonable time thereafter as may be reasonably required, Seller and Buyer will
determine if the Trusts are overfunded or underfunded and the amount will be an
adjustment to the Purchase Price or the amount of the Xxxxxxx Money paid to
Seller following Closing.
Section 3.3. Title to Assets. Seller has good and marketable title to all
of the Assets, subject to no mortgage, lien, security interest, material
restriction, or to any other encumbrances. At Closing, Seller will convey to
Buyer title to the Assets relating to the Business, free and clear
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of all liens or claims, except for permitted encumbrances and other
imperfections of title or encumbrances, if any, that would not have,
individually or in the aggregate, a material adverse effect. Any leases pursuant
to which the Business, as lessee, leases personal or real property (which leases
are included in the Assets) are in good standing, valid and enforceable in
accordance with their respective terms. Seller has not entered into any leases,
licenses, easements or other agreements, recorded or unrecorded, granting rights
to third parties in any real or personal property of Seller included in the
Assets, and no person or entity has any right to possession or occupancy of any
of the Assets.
Section 3.4. Descriptions of Properties, Assets, Contracts and Employee
Data. The information contained in or on each Schedule to this Agreement is
accurate as of the date of this Agreement, unless otherwise indicated thereon,
and includes those items located at the real property and used exclusively in
connection with the Business. :
(a) Equipment, Vehicles, Machinery, Furniture, Etc. - Schedule 2. All
vehicles, major items of equipment, machinery, furniture and fixtures, books,
records, and other tangible personal property, included in the Assets;
(b) Merchandise and Inventory. The merchandise and inventory included in
the Assets;
(c) Contracts. All contracts, agreements and commitments of Seller to be
assumed by Buyer, including without limitation or exclusion, service contracts,
lease agreements covering the items described therein, contracts for funeral and
cemetery merchandise or services, assigned to and assumed by Buyer will be
identified and are located at the Business;
(d) Employees - Schedule 3. A list of the name, job description and current
monthly salary or hourly salary rate, commission or incentive compensation
agreement for each employee
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of the Business is attached; however, as set forth in Section 1.6 (c), Seller
agrees all employment contracts will be appropriately terminated as of the
Closing Date, with no obligation of Buyer to assume such employment contracts or
any liability associated with any contracts of employment;
(e) Preneed Contracts. All preneed contracts unfulfilled as of a specified
date providing for the delivery of cemetery merchandise and/or services will be
provided prior to Closing;
(f) Trust Funds/Accounts - Schedule 1. A current list and identification of
each trust account relating to the Business, indicating the location of each and
the amount held in trust; copies of all trust agreements; copies of the most
recent bank statement or other periodic report of the trustee for each trust;
copies of the most recent audit or other report furnished to or prepared by the
state regulatory agency which oversees such trusts; and
(g) Accounts Receivable. All accounts receivable related to the outstanding
installment payments on preneed contracts of the Business, as of the Closing
Date.
Section 3.5. Litigation. No action or proceeding before any court or
governmental body is pending, or to Seller's knowledge, threatened, involving
the Business wherein a judgment, decree or order would have a material adverse
effect if decided adversely on the Assets or the Business taken as a whole, or
which would prevent the carrying out of this Agreement, declare unlawful the
transactions contemplated by this Agreement, cause such transactions to be
rescinded, or require Buyer to divest itself of the Assets or the Business.
Section 3.6. Court Orders and Decrees. There is neither outstanding, nor to
the knowledge of Seller, threatened, any order, writ, injunction or decree of
any court, governmental agency or arbitration tribunal against, affecting or
relating to the Assets or the Business or this transaction.
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Section 3.7. Trade Names. Seller has the legal right to use and transfer
those trade names specified in section 1.1.(g) of this agreement and used
exclusively in connection with the operation of the Business, for use within the
trade areas in which such names are utilized in the Business.
Section 3.8. Preneed and Trust Accounts. In the aggregate with respect to
the Business, all funds received by Seller in connection with preneed
agreements, have been deposited on a timely basis in appropriate accounts to the
extent required by applicable laws and regulations and have been administered
and reported in accordance with the terms of agreements with the purchasers and
as required by applicable laws and regulations.
Section 3.9. Permits for Operation of the Business. As part of this
transaction, Seller will transfer to Buyer, all licenses, permits, certificates
of occupancy and authorizations under applicable laws, regulations, rules and
ordinances as are necessary to the ownership and operation of the Business as
the same has previously been owned and operated, to the extent transferable.
Section 3.10. Environmental Matters. The Business is operated, in
substantial compliance with all applicable federal, state, and local
environmental statutes and regulations applicable to the Business, and to
Seller's knowledge, and there is no existing legal or regulatory action, notice
or requirement pending or threatened against the Business relating to any
"hazardous substance", as that term is defined in the Federal Comprehensive
Environmental Response, Compensation and Liability Act, no petroleum or
petroleum products have been leaked, spilled, deposited or otherwise released,
on the leased Property.
Section 3.11 No Other Representations or Warranties. Except as expressly
stated in this Agreement, Seller makes no other representations or warranties of
any kind whatsoever.
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ARTICLE IV
Representations and Warranties of Buyer
Buyer hereby represents and warrants to Seller as follows:
Section 4.1. Authority and Capacity.
Buyer is a limited liability company duly organized, validly existing and
in good standing under the laws of the State of its domestication and formation,
with all requisite entity and regulatory power and authority to own and conduct
the Business in every jurisdiction it is now being conducted. The execution,
delivery and performance of this Agreement by Buyer have been duly authorized
and consented to by the board of directors/members/governors of Buyer and no
other or additional consent or authorization is required by law. The Closing of
the transactions contemplated by this Agreement will not result in a breach,
violation or default by Buyer of or under any judgment, decree, mortgage,
agreement, indenture or other instrument applicable to Buyer. Upon execution and
delivery hereof, this Agreement shall constitute the valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
Section 4.2. Buyer's Disclosure. As of the date of this Agreement, to the
knowledge of Buyer, there is no event, fact, occurrence or failure to disclose
on the part of the Seller or the Business that would result in the breach of any
representation or warranty made by the Seller herein or that would have a
material adverse effect on the Business.
Section 4.3. Litigation; Court Orders. There is no action, claim, suit,
proceeding, court order or decree pending or threatened by, against or affecting
Buyer that challenges, has or may have the effect of preventing, delaying,
rendering illegal or otherwise interfering with the transactions contemplated by
this Agreement.
Section 4.4. Brokers and Finders. All negotiations relating to this
Agreement and the contemplated transactions have been carried on without the
participation of any person acting in
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behalf of Buyer in any manner other than Xxxxx Consulting, LLC ("Buyer's
Broker"). Buyer has no liability to pay any compensation to any broker, finder,
agent or investment banker with respect to the transactions contemplated in this
Agreement for which Seller could become liable. Buyer assumes full
responsibility for any sums due and owing to Buyer's Broker. Similarly, Seller
represents and warrants to Buyer that no Broker or Finder has participated in
the transactions contemplated by this Agreement for which Buyer could become
liable other than Buyer's Broker. Each party agrees to indemnify and hold the
other harmless from any such Broker or Finder's fees incurred as a result of the
indemnifying parties actions.
Section 4.5. Funds. At the Closing, Buyer will have sufficient unencumbered
funds, or sufficient, readily available credit from a reputable financial
institution or financing source, to pay in cash at the Closing the Purchase
Price and all of Buyer's fees and expenses relating to such Closing.
Section 4.6. No Other Representations or Warranties. Except as expressly
stated in this Agreement, Buyer makes no other representation or warranty of any
kind whatsoever.
ARTICLE V
Covenants
Section 5.1. Access to Business. From and after the date of this Agreement
and prior to Closing, Seller will coordinate a reasonable opportunity through
Neptune' representatives for Buyer and its representatives to access all on-site
properties, during normal business hours, so that Buyer may have the opportunity
to make such investigation as it shall desire to make of the affairs of the
Business, provided that such investigation shall not unreasonably interfere with
the operations of the Business. Buyer covenants and agrees to accept and abide
by the reasonable restrictions and conditions on such access as may be imposed
by Seller.
Section 5.2. Conduct of Business Pending Closing. From and after the date
of this
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Agreement and pending the Closing, except as otherwise permitted by this
Agreement or required by law, Seller covenants that the Business will be
conducted consistent with the ordinary course of business which, without
limitation, shall include the sale of Inventory on a day to day basis, therefore
resulting in fluctuations in the quantity and selection thereof; and include the
deposit into, or withdrawal from, the trusts of the Business in the amounts by
which any such trust is underfunded or overfunded under applicable law; and
include compliance in all material respects with all applicable laws and
regulations, and the maintenance in force of all insurance policies; but does
not include improvements to the Business locations, except to the extent of
routine repair and maintenance.
Section 5.3. Reasonable Efforts. Subject to the terms and conditions of
this Agreement, each of the parties hereto agrees to use its best efforts, to
take, or cause to be taken, all commercially reasonable actions, and to do, or
cause to be done, all things necessary and appropriate to satisfy all conditions
of and to consummate the transaction contemplated by this Agreement, including
cooperating with the other parties to this Agreement; obtaining as soon as
possible all licenses, permits, consents, approvals, loans, authorizations and
orders from governmental entities and contracting parties as are contemplated in
order to consummate the transactions under this Agreement. Specifically, Buyer
shall use commercially reasonable efforts and pay all expenses necessary (i) to
obtain, as soon as possible, any licenses, permits, consents, approvals,
authorizations, qualifications and orders of Governmental Entities and parties
to contracts as are required in connection with the consummation of the
transactions contemplated hereby, (ii) to effect all necessary registrations and
filings immediately after the Effective Date (including, if applicable any HSR
filings) and, as applicable, to obtain approval thereof, and (iii) to supply
Sellers with copies of all registrations, filings, and applications that
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are filed to obtain any such licenses, permits, consents, approvals,
authorizations, qualifications or orders of Governmental Entities.
Section 5.4. Further Assurances. From time to time after the Closing, at
the request of either party, and without further consideration, but at no cost
to Seller, a party will execute and deliver such additional instruments and will
take such other actions as the other reasonably may require to convey, assign,
transfer and deliver the Assets and the Business and otherwise carry out the
terms of this Agreement. Buyer shall obtain all necessary policies of insurance
covering the Business and the Assets to be effective as of the Closing Date.
Section 5.5. Buyer's Trustee and Preneed Trust Funds. Prior to Closing,
Buyer shall secure all licenses, permits and other governmental authorizations
and approvals required by the State of Iowa as a prerequisite to Buyer selling
Preneed Contracts or accepting funds paid by customers toward Preneed Contracts
with the Business. For future funding, buyer shall be free to utilize any
Trustee that is qualified under state law to receive all bank, trust or other
funds or accounts, containing amounts that have been received by the Seller
pursuant to preneed agreements for funeral and cemetery merchandise and/or
services ("Preneed Trust Funds"). As soon as practical after the Closing, Seller
shall take all necessary steps to cause all Preneed Trust Funds to be assumed by
Buyer, and Buyer agrees that all such funds will be held, administered and
withdrawn only in accordance with the Preneed Agreements and state and federal
law. The parties further agree that after the Closing and prior to the Buyer's
assumption of the Preneed Trust Funds, Seller and the Forethought Group shall
have the right hereunder to continue to administer all such Funds, including
making deposits and withdrawals in accordance with state law and the Preneed
Agreements, and to receive all reports and communications from the Forethought
Group all as if the sale provided for in this Agreement had not closed. In
addition to
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adjustments required pursuant to other provisions of this Agreement, the amount
of the Xxxxxxx Money paid to Seller following Closing shall be appropriately
adjusted to reflect the understanding of the parties as set forth in this
Agreement with respect to the amount of the Preneed Trust Funds to be assumed by
Buyer.
Section 5.6. Post Closing Trust Fund Distributions. The parties agree that
if, as of the Closing Date, Seller has earned or is entitled to receive funds
from the Preneed Trust Funds which have not been paid to Seller as of the
Closing Date, the parties will work together to obtain for Seller all such
funds, to which it is entitled allowing Seller reasonable access to the books
and records of the Business and the preparation and execution by Buyer of any
forms, reports or similar documentation necessary or appropriate for such
purpose.
Section 5.7. Post Closing Access to Business and Records Retention. After
the Closing, for a period of 30 days, Buyer shall provide and allow Seller
reasonable access to the facilities of the Business and the Real Property as
reasonably necessary to collect and remove the excluded or retained assets.
If necessary, Buyer agrees to allow representatives of Seller access to the
Business' computers that are being purchased by Buyer pursuant to this Agreement
until 11:59 p.m. Eastern time on the date that is five (5) business days after
the Closing.
Section 5.8. Printed Computer Data. To the extent reasonably available
within Neptune' computer systems, upon Buyer's reasonable request Seller shall
provide to Buyer, from time to time, after the applicable Closing, reports
listing individual account holders and balances of the Trusts, the accounts and
other general customer information available with respect to the operations of
the Business.
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ARTICLE VI
Conditions to Respective Obligations of Buyer and Seller
The respective obligations of Buyer and Seller under this Agreement are
subject to the conditions that:
Section 6.1. Representations and Warranties True When Made and At Closing.
(a) All of the representations and warranties of Buyer shall be true as of
the date of this Agreement and on the Closing Date, and the representations and
warranties of Seller shall be true in all material respects as of the date of
this Agreement and on the Closing Date (unless made as of another designated
date) except for instances where the failure of such representations to be true,
taken in the aggregate, is not materially adverse to the Business as a whole;
(b) Any consents of governmental entities, including without limitation any
applicable regulatory approvals, required to be obtained prior to the
consummation of the transactions contemplated hereby have been obtained;
(c) Buyer shall have executed and delivered an agreement assuming the real
property lease relating to the Business; and
(d) The Closing Purchase Price, less the Xxxxxxx Money, shall have been
paid by Buyer via wire transfer of immediately available funds to an account
designated by Seller.
(e) Buyer shall cause the Xxxxxxx Money, with such additions or
subtractions as may be mutually agreed upon by the parties pursuant to the terms
of this Agreement, to be paid to Seller as soon as reasonably practicable
following Closing.
Section 6.2. Performance of Obligations. The performance of the obligations
of the parties hereto shall be discharged in all material respects prior to or
on the Closing Date to the extent reasonably practicable given the need to
complete the appropriate pro-rations of the preened trust funds and other
aspects of this agreement and otherwise completed as soon as
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possible thereafter.
ARTICLE VII
Employees
Section 7.1. Employee Retention and Hiring. As set forth in Section 1.6(c),
Buyer assumes no responsibility or obligation to hire or retain any individual
employed by Seller in relation to the Business.
Section 7.2. COBRA Coverage. Buyer shall not be responsible for any
liabilities to provide former employees of the Business and their qualified
beneficiaries with COBRA continuation coverage under Section 4980B of the Code,
including without limitation any such liability with respect to qualifying
events that occur as a result of the transactions contemplated by this
Agreement.
ARTICLE VIII
Survival of Representations, Warranties and Covenants; Indemnification
Section 8.1. Survival of Representations, Warranties and Covenants. The
representations, warranties and covenants of the parties made in this Agreement
shall survive pending the Closing and any investigation by the parties with
respect thereto, as follows:
(a) The representations and warranties of the parties set out in Sections,
,3.9, 3.11, 4.4, 5.5, 5.6 and 5.8, for a period equal to six (6) months
following the Closing Notice; and
(b) All other representations and warranties made in this Agreement, until
the Closing Date; and
(c) The covenants of the parties set out in Sections 3.1, 3.3, 3.7, 3.8,
3.10, 5.3, 5.4, and 5.7, without limit.
Section 8.2. Indemnification by Seller.
(a) Seller and its successors and assigns agree to indemnify and hold
Buyerand Buyer's
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successors or assigns harmless from all damages, losses or expenses (including,
without limitation, interest and penalties, reasonable attorneys' fees and
expenses) suffered or paid, directly or indirectly, as a result of or arising
out of:
(i) any breach or default in the performance by the Seller of any
covenant or agreement of the Seller contained in this Agreement or any
related document executed pursuant hereto; and
(ii) any breach of warranty or inaccurate or erroneous representation
made by the Seller herein (unless such breach of warranty or inaccurate or
erroneous representation was known by Buyer to exist prior to consummation
of the Closing hereunder).
Section 8.3. Indemnification by Buyer.
(a) Buyer agrees to indemnify and hold Seller, Seller's successors and
assigns, harmless from all damages, losses or expenses (including without
limitation, interest and penalties, and reasonable attorneys' fees and expenses)
suffered or paid, directly or indirectly, as a result of or arising out of:
(i) any breach or default in the performance by the Buyer of any
covenant or agreement of the Buyer contained in this Agreement or any
related document executed pursuant hereto (unless such breach or
representation was known by Seller prior to closing this transaction);
(ii) any breach of warranty or inaccurate or erroneous representation
made by the Buyer herein; and
(iii) the failure of the Buyer to fully pay and discharge as and when
same are due the obligations, liabilities and/or duties relating to or
arising from the Business from and after the Closing Date, plus those to be
assumed by Buyer as set forth in Section 1.4
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above.
Section 8.4. Assertion of Claims. No claim shall be brought by any
Indemnitee (as defined below) against any Indemnitor (as defined below) under
this Article VIII, and no Indemnitee shall be entitled to receive any payment
with respect thereto, unless the Indemnitee gives the Indemnitor written notice
of the existence of any such claim, specifying in reasonable detail the basis
therefore, prior to the expiration of the applicable time period set forth in
Section 8.1. above. Except as set forth in this Article VIII, if the Indemnitee
and Indemnitor fail to reach a mutually acceptable resolution of such claim
within thirty (30) days after the giving of such notice, the Indemnitee shall
have the right to commence proceedings for the enforcement of their rights
pursuant to Section 8.5. hereof.
Section 8.5. Dispute Resolution.
(a) Any and all disputes among the parties to this Agreement (defined for
the purpose of this provision to include their principals, agents and/or
affiliates) arising out of or in connection with the negotiation, execution,
interpretation, performance or nonperformance of this Agreement and the
transaction contemplated herein shall be solely and finally settled by
arbitration, which shall be conducted in the Des Moines Metropolitan Area (which
shall be deemed to include Ankeny, Iowa) by a panel of three (3) arbitrators
selected by the parties as follows: one by each of the parties and the third by
agreement of the arbitrators selected by the parties.. The arbitrators shall be
experienced in and familiar with business transactions of the type contemplated
in this Agreement who shall not have been previously employed or affiliated with
any of the parties hereto. If the parties or the arbitrators fail to appoint an
arbitrator within thirty (30) days of the date one of them invokes this
arbitration provision, or the parties' arbitrators acknowledge their
participation, either party may apply to the American Arbitration
20
Association to make the appointments.
(b) The parties hereby renounce all recourse to litigation and agree that
the award of the arbitrators may be by simple majority agreement, and shall be
final and subject to no judicial review. The arbitrators shall conduct the
proceedings pursuant to the Commercial Arbitration Rules of the American
Arbitration Association, as now or hereafter amended (the "Rules").
(c) The arbitrators shall decide the issues submitted (i) in accordance
with the provisions and commercial purposes of this Agreement, and (ii) with all
substantive questions of law determined under the laws of the State of Iowa
(without regard to its principles of conflicts of laws). The arbitrators shall
promptly hear and determine (after giving the parties due notice and a
reasonable opportunity to be heard) the issues submitted and shall render a
decision in writing within sixty (60) days after the appointment of the final
arbitrator, unless the parties agree to a reasonable extension.
(d) The parties agree to facilitate the arbitration by (i) conducting
arbitration hearings to the greatest extent possible on successive days, and
(ii) observing strictly the time periods established by the Rules or by the
arbitrators for submission of evidence or briefs.
(e) Judgment on the award of the arbitrators may be entered in any court
having jurisdiction over the party against which enforcement of the award is
being sought and the parties hereby irrevocably consent to the jurisdiction of
any such court for the purpose of enforcing any such award. The arbitrators
shall divide all costs (other than fees and expenses of counsel) incurred in
conducting the arbitration in the final award in accordance with what the
arbitrators deems just and equitable under the circumstances.
(f) The parties hereto agree that the provisions of this Section 8.5. shall
not be construed to prohibit any party from obtaining, in the proper case,
specific performance or injunctive relief
21
with respect to the enforcement of any covenant or agreement of another party to
this Agreement.
Section 8.6. Defense of Claims.
(a) If any claim or action by a third party arises after the Closing Date
for which an Indemnitor is liable under the terms of this Agreement, then the
Indemnitee shall notify the Indemnitor within twenty (20) days after such claim
or action arises and is known to the Indemnitee and shall give the Indemnitor a
reasonable opportunity: (i) to take part in any examination of any books and
records; (ii) to conduct any proceedings or negotiations in connection therewith
and necessary or appropriate to defend the Indemnitee; (iii) to take all other
required steps or proceedings to settle or defend any such claim or action; and
(iv) to employ counsel to contest any such claim or action in the name of the
Indemnitee or otherwise. If the Indemnitor wishes to assume the defense of such
claim or action, it shall give written notice to the Indemnitee and within ten
(10) days thereafter, Indemnitee shall permit, and Indemnitor shall thereafter
assume, the defense of any such claim or liability, through counsel reasonably
satisfactory to the Indemnitee; provided that the Indemnitee may participate in
such defense at its own expense.
(b) If the Indemnitor shall not assume the defense of any such claim or
action, the Indemnitee may defend against any such claim or action in such
manner as it may deem appropriate (provided that the Indemnitor may participate
in such defense at its own expense); provided, however, that the Indemnitee may
not settle such claim or action, without the prior written consent of the
Indemnitor. If no settlement of such claim or action is made, the Indemnitor,
shall satisfy any judgment rendered with respect to such claim or in such
action, before the Indemnitee is required to do so, and pay all expenses, legal
or otherwise, including
22
attorneys' fees and costs reasonably and necessarily incurred by the Indemnitee
in the defense of such claim or action.
Section 8.7. Cooperation. The parties shall cooperate with each other to
maximize the availability of insurance coverage under the policies maintained by
the Business or a party immediately preceding the Closing Date for claims or
actions by third parties which may be subject to indemnification pursuant to
Sections 8.2. and 8.3., and, if the insurance carrier for such policies agrees
to defend such claim, such defense shall be tendered to such insurance carrier
and the rights of the parties between themselves regarding the assumption and
control of such defense shall be subject to the reasonable requirements of such
insurance carrier.
ARTICLE IX
Miscellaneous
Section 9.1. Notices.
(a) All notices provided for hereunder shall be in writing and shall be
deemed to be given:
(i) When delivered to the party to which the notice is directed three
(3) days after the same has been deposited in the United States mail, sent
Certified or Registered mail with Return Receipt Requested, postage prepaid
and addressed as provided in this Section; or
(ii) When delivered by a generally recognized overnight delivery
service, with receipt acknowledged and with all charges prepaid by the
sender addressed as provided in this Section; or
(iii) Upon confirmation of recipient's receipt, when delivered by
telefacsimile transmission. (b) Notices shall be directed as follows:
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if to Buyer, to:
---------------
Xxxxxx Funeral Care,
0000 Xxxxxxxxxx Xxxxxxxxx,
Xxxxx, XX 00000
Fax (000) 000-0000
with a copy to:
--------------
Xxxxxxx X. Xxxx, Esq.
Xxxxxxxx Law Firm
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxx, Xxxx 00000
Fax (000) 000-0000
----------------------------------
if to Seller, to:
----------------
Neptune Management Corporation,
0000 Xxxxxxx Xxxxxx, 0xx Xxxxx,
Xxxxxxx Xxxx, XX 00000
Fax (000) 000-0000
with a copy to:
--------------
----------------------------------
or at such other place or places or to such other person or persons as shall be
designated by like notice by any party hereto.
Section 9.2. Expenses. Each party hereto shall pay its own expenses,
including without limitation, fees and expenses of its agents, representatives,
counsel, auditors, and accountants incidental to the preparation and carrying
out of this Agreement. Except as otherwise provided in Section 1.5 hereof, Buyer
shall pay any excise, stamp, transfer or other tax imposed on the recorded
instruments of sale or transfer of the Assets, consistent with the customary
practices in the state where the Business is located.
Section 9.3. Attorney's Fees. In the event of any controversy, claim or
dispute between
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or among any of the parties hereto arising out of or relating to this Agreement,
or any default or breach or alleged default or breach hereof, each party shall
pay its own attorney's fees, costs and expenses associated with any such action.
If any party hereto shall be joined as a party in any judicial, administrative,
or other legal proceeding arising from or incidental to any obligation, conduct
or action of another party hereto, the party so joined shall be entitled to be
reimbursed by the other party for its reasonable attorney's fees and costs
associated therewith. This reimbursement shall not apply to attorney's fees or
costs associated with or incidental to any obligations, conduct, action or
inaction of the joined party, unless joinder would not have occurred but for the
obligation, conduct, action or inaction of the other party
Section 9.4. Brokers. Buyer agrees to indemnify Seller against any claim by
any third person for any commission, brokerage or finder's fee or other payments
based upon any alleged agreement or understanding between such third party and
Buyer, whether expressed or implied.
Section 9.5. Parties in Interest. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
assigns. This Agreement shall not be assigned by any party hereto without the
prior written consent of the other parties. Nothing in this Agreement, expressed
or implied, is intended to confer upon any third person any rights or remedies
under or by reason of this Agreement.
Section 9.6. Entire Agreement; Amendment; No Waivers.
(a) This Agreement together with the other agreements provided for herein
embodies the whole agreement of the parties. There are no promises, terms,
conditions, or obligations other than those contained herein. All previous
negotiations between the parties, either verbal or written, not herein contained
are hereby withdrawn and annulled. This Agreement shall supersede all previous
communications, representations, or agreements, either verbal or written,
25
between the parties hereto.
(b) This Agreement may not be amended except by an instrument in writing
signed on behalf of each party hereto.
(c) No failure or delay shall be construed by any party in exercising any
right hereunder or operate as a waiver thereof, nor shall any partial exercise
thereof preclude any further or future exercise of any such right thereafter.
Section 9.7. Captions; Counterparts. The section and subsection headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. This Agreement may
be executed simultaneously in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
Section 9.8. Tax Identification Numbers. Buyer's Federal Tax Identification
Number is______________. Seller's Federal Tax Identification Number is
00-0000000.
Section 9.9. Bulk Sales. Seller and Buyer each waive compliance by the
other with the applicable provisions of any so-called "bulk sales law," or
similar law of any applicable jurisdiction.
Section 9.10. Confidentiality. Seller and Buyer agree to maintain in strict
confidence any and all information any party hereto learns or discovers about
any other party hereto during the course of the negotiation, execution and
delivery of this Agreement and agrees to abide by the terms and conditions set
forth in the Confidentiality Letter. This Section shall not apply to any
information that is, or could reasonably be, learned or discovered through any
independent source that is not obligated to maintain such information as
confidential.
Section 9.11. Governing Law.
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This Agreement shall be construed and enforced in accordance with the laws
of the State of Iowa.
IN WITNESS WHEREOF, the undersigned parties hereto have duly executed
this Agreement on the date first above written.
SELLER:
Neptune Management Corporation
By:___________________________________
BUYER:
Xxxxxx Funeral Care
By:___________________________________
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