EXHIBIT 10.26
HERITAGE ASSET PURCHASE AGREEMENT
THIS AGREEMENT is dated for reference the 5th day of July, 2000 between Neptune
Acquisition, Inc., a company incorporated under the laws of the State of Oregon
(the "Purchaser"), Heritage Memorial Society, L.L.C., an Oregon limited
liability company ("Heritage"), Xxxxx Xxxxxxxxx, individually, Xxxxxxx Xxxx,
individually, and The Neptune Society, Inc., a company incorporated under the
laws of the State of Florida ("Neptune").
WHEREAS:
A. Heritage operates and carries on a funeral, burial and cremation business
also known by the Trade Names set forth in Schedule B (the "Business");
B. Xxxxx Xxxxxxxxx and Xxxxxxx Xxxx are the current operators of the Business;
C. Neptune is the legal and beneficial owner of 100% of the issued and
outstanding shares of the Purchaser; and
D. Heritage has agreed to sell substantially all of its assets and liabilities
and the Purchaser has agreed to purchase such assets and liabilities on the
terms and conditions set forth herein.
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:
1 INTERPRETATION
1.1 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 Heritage's 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, 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 which Heritage is
reasonably capable of transferring to the 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;
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(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
Heritage in connection with the Business, but does not include the
articles of organization, minutes, operating agreement, resolutions or
any similar documents belonging to Heritage or the files and records
of Heritage's attorney, Xxxxxx X. Xxxxx, P.C., whether or not such
attorney files and records constitute privileged or confidential
communications with Heritage or attorney-client work product of
Heritage;
(d) "Business Day" means any day except Saturday, Sunday or any statutory
holiday in the State of Oregon;
(e) "Cash and Cash Equivalents" means the cash and cash equivalents of
Heritage on hand at the Closing Date including, without limitation,
the proceeds of any claims under the Insurance Policies paid after the
Closing with respect to a claim arising prior to the Closing;
(f) "Claim" means any claim by the Purchaser against Heritage, or Heritage
against the Purchaser, for any breach of representation, warranty,
covenant or other agreement or obligation of Heritage or the Purchaser
pursuant to this Agreement;
(g) "Closing" means the completion of the sale and purchase of the Assets
and assumption of the Liabilities as provided in this Agreement;
(h) "Closing Date" means the close of business (i.e. 6:00 p.m.) on July 5,
2000 or such later date as the parties may agree to in writing;
(i) "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 property (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;
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(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);
but does not include any lien against the Leased Assets for payment of
rent under the Leases.
(j) "Excluded Assets" means the current trade accounts receivable for
performed at-need services of Heritage at the Closing Date, the Cash
and Cash Equivalents and the Pre-Paid Accounts;
(k) "Excluded Liabilities" means all current trade account payables up to
the Closing Date;
(l) "Heritage Entities" means any of Heritage, the Key Executives, their
subsidiaries, affiliates, successors and assigns;
(m) "Heritage Unaudited Financial Statements" means the unaudited
financial statements of Heritage for the 12 month period ending
December 31, 1999, copies of which are incorporated as Schedule I;
(n) "Insurance Policies" means those insurance policies as set forth in
Schedule A;
(o) "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;
(p) "Key Executives" means Xxxxx Xxxxxxxxx and Xxxxxxx Xxxx;
(q) "Land and Buildings" means those interests of Heritage in real
property set forth in Schedule C;
(r) "Leased Assets" means those assets included in the Assets which are
leased by the Heritage and set forth in Schedule D;
(s) "Leases" means the leases under which the Leased Assets are leased by
Heritage;
(t) "Liabilities" means all of Heritage's actual or accrued liabilities up
to the Closing Date but does not include the Excluded Liabilities or
commissions payable, sales tax,
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employee remittances of every kind whatsoever, federal, municipal,
and/or state taxes of any kind whatsoever, with respect to Heritage;
(u) "Material Contracts" means those contracts described in Schedule N;
(v) "Neptune Entities" means any of the Purchaser, Neptune, their
subsidiaries, affiliates, successors or assigns
(w) "Neptune Common Stock" means the common shares of Neptune listed on
the NASD OTC Bulletin Board or other stock exchange in the United
States of America;
(x) "Other Operating and Fixed Assets" means those operating and fixed
assets set forth in Schedule E;
(y) "Person" means an individual, a corporation, a limited liability
company, a partnership, a trust, an unincorporated organization or a
government agency or instrumentality;
(z) "Place of Closing" means the offices of Neptune at 0000 Xxxx Xxxxx,
Xxxxx 0000 Xxxxxxx, XX 00000;
(aa) "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 Heritage, its predecessors and assignees for the
provision of funeral cremation services;
(bb) "Pre-Paid Accounts" means pre-paid insurance, pre-paid taxes other
than income taxes and other pre-paid accounts of a similar nature;
(cc) "Purchase Price" has the meaning ascribed thereto in Section 2;
(dd) "Securities" means the Neptune Shares described in Section 2;
(ee) "Specified Assets" means those specified assets set forth in Schedule
G;
(ff) "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;
(gg) "Trade Names" means those trade and business names set forth in
Schedule B;
(hh) "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 Heritage; (hh)
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1.2 Schedules : The following are the schedules delivered concurrently with,
and incorporated in, this Agreement:
Schedule Description
A List of Insurance Policies
B List of Intangible Assets
C List of Land and Buildings
D List of Leased Assets
E List of Other Operating and Fixed Assets
F List of Pre-Need Contracts
G List of Specified Assets
H List of Trust Accounts
I Heritage Unaudited Financial Statements
J Not Applicable
K Not Applicable
L List of Bank Accounts
M List of Employees and Employee Benefit Plans
N List of Material Contracts
O Not Applicable
P Required Consents
Q Certificate of Investor
R Disclosure and Acknowledgment Statement
1.3 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.
1.4 Genderand Number : Unless the context otherwise requires, words importing
the singular include the plural and vice versa and words importing gender
include both genders.
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1.5 Currency : All dollar amounts referred to in this Agreement are stated in
United States of America currency, unless otherwise expressly stated.
6 PURCHASE AND PURCHASE PRICE
6.1 Purchase : On the Closing Date and subject to the terms and conditions
contained in this Agreement, Heritage shall sell, assign and transfer the
Assets, free from any and all Encumbrances, and the Liabilities; and the
Purchaser shall purchase the Assets, free from any and all Encumbrances,
and assume the Liabilities, for the aggregate price of $300,000.00 (the
"Purchase Price").
6.2 Payment of Purchase Price : At the Time of Closing, the Purchase Price will
be payable by the Purchaser to Heritage by way of the issuance by Neptune
to Heritage of 24,194 shares of Neptune Common Stock (the "Neptune
Shares"), provided, however, as follows:
(i) if the average aggregate closing price of the Neptune Shares on the
NASD OTC Bulletin Board, or other stock exchange in the United States
of America on which the Neptune Common Stock is listed, for the 60 day
period preceding the first trading day following the one year
anniversary of the Closing (the "Price Date") is less than
$300,000.00, Neptune will tender, within fourteen (14) days following
the Price Date, to Heritage, its successors or assigns, additional
consideration equal to the difference between such average aggregate
closing price and $300,000.00 (the "Additional Consideration"), with
the Additional Consideration tendered, at Neptune's option, either (1)
in shares of Neptune Common Stock, with the number determined by the
average closing price of the Neptune Common Stock on the NASD OTC
Bulletin Board, or other stock exchange in the United States of
America on which the Neptune Common Stock is listed, for the 60 day
period preceding the Price Date (the "Anniversary Deemed Price"); (2)
in cash and/or a one-year promissory note with an interest rate per
annum equal to the prime rate as set forth in the Wall Street Journal
(or any successor publication) as of the Price Date; or (3) a
combination of (1) and (2) above; and
(ii) No certificates or scrip representing fractional shares of Neptune
Common Stock shall be issued for the Additional Consideration. The
aggregate number of shares of Neptune Common Stock Heritage is
entitled to receive for the Additional Consideration shall be rounded
to the nearest whole number of shares, with .5 being rounded up.
6.3. Closing Date : All transactions contemplated in this Agreement will be
effective on the Closing Date. All income from deaths occurring on or
before the Closing Date shall be the income of Heritage and all income from
deaths occurring after the Closing Date shall be the income of Purchaser.
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6.4 Excluded Assets and Excluded Liabilities : From and after the Closing Date,
the Purchaser will have operational control and responsibility of the
management of the Excluded Assets and the Excluded Liabilities.
6.5 Reconciliation: On or before the day which is 120 days following the
Closing Date (the "Reconciliation Date"), the Purchaser will provide to
Heritage a reconciliation of the Excluded Assets and Excluded Liabilities,
being that amount of cash, collections and amounts paid, respectively, from
the Closing Date.
6.6 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 Heritage, its successor or assigns on or before the day which
is 60 days following the Reconciliation Date (the "Reconciliation Payment
Date"). 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 (the "Heritage Reconciliation Payment") will be
paid by Heritage to the Purchaser on or before the Reconciliation Payment
Date, at the option of Heritage, in cash or by way of Heritage returning to
the Purchaser that amount of the Neptune Shares which equals the Heritage
Reconciliation Payment divided by the average aggregate closing price of
the Neptune Shares on the NASD OTC Bulletin Board, or other stock exchange
in the United States of America on which the Neptune Common Stock is
listed, for the 30 day period preceding the first trading day following the
Reconciliation Date and rounding the quotient to the nearest whole number.
6.7 Right of Set-Off: In the event that Heritage 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 Heritage from the Purchaser or Neptune under this or
any other agreement, provided, however, as follows:
(a) the Purchaser and/or Neptune give written notification to Heritage
prior to set-off of the amount of the set-off (the "Reconciliation
Set-off Notice"); and
(b) Heritage shall have the right, to be exercised within thirty (30) days
from the date the Reconciliation Set-off Notice is delivered to
Heritage, to pay the Purchaser or Neptune any such set-off amount in
immediately available funds and so satisfy such obligation.
6.8 Allocation of Purchase Price: The Purchase Price shall be allocated amongst
the Assets as follows:
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Description Purchase Price
Personal Property $ 50,000.00
Intangible Assets (Goodwill $ 250,000.00
and Non-Compete) ============
TOTAL $ 300,000.00
7 JOINT AND SEVERAL REPRESENTATIONS AND WARRANTIESOF HERITAGE AND THE KEY
EXECUTIVES
Heritage and the Key Executives 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 and
the assumption of the Liabilities:
7.1 Limited Liability Company Status and Authority:
Heritage is duly organized and validly subsisting under the laws of the
State of Oregon and has all requisite power and capacity to own or lease
the Assets. Heritage is duly qualified and licensed to carry on the
Business in all jurisdictions in which the nature of the Business or the
properties and assets owned or leased by it make such qualification and
licensing necessary and where the failure to be so qualified and licensed
would have a material adverse effect on the Assets.
7.2 Capitalization:
(a) Share Capital: There are no authorized or issued membership units of
Heritage; and
(b) Rights to Acquire Securities: No person has any agreement, option,
right or privilege (whether by law, pre-emptive, or contractual), or
any interest capable of becoming an agreement, including convertible
securities, warrants, or convertible obligations of any nature, for
the purchase, subscription, allotment or issuance of any equity
interest in Heritage.
7.3 Authority to Sell:
Heritage 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 from all Encumbrances;
7.4 Assets:
(a) Ownership: Except for the Leased Assets, Heritage has good and
marketable title to all of the Assets free and clear of all
Encumbrances;
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(b) 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 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
Heritage is a party which have a capitalized value in excess of
$1,000. Heritage has not previously assigned the Leases nor sublet its
interest in any of the Leased Assets under the Leases. Heritage has
not released any of the other parties to such leases from the
performance of any of their obligations thereunder. Heritage is not in
breach of any of the terms of any Leases, and Heritage 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 current actual knowledge
of Heritage and the Key Executives, 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 Heritage is a
sublessor. Heritage and the Key Executives have 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;
(c) Condition of Assets: To the best of the current actual knowledge of
Heritage and the Key Executives, all fixed assets and equipment owned
or used by Heritage in the conduct of the Business, all of which are
listed in either Schedules E and/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;
(d) Rights to Assets: No present or former member of Heritage 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
Heritage;
(e) Zoning: All real property at which Heritage carries on the Business is
zoned to permit the particular activity carried out on such property;
(f) Land and Buildings: The list of the Land and Buildings set out in
Schedule C accurately reflects all interests of Heritage in real
property used in the conduct of the Business. Heritage and the Key
Executives represent that all agreements with respect to Heritage'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;
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(g) 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 Heritage on the date hereof free of Encumbrances; and
(h) Other Operating and Fixed Assets and Specified Assets: The list of the
Other Operating and Fixed Assets and Specified Assets set out in
Schedules E and G, respectively, accurately reflects all operating and
fixed assets owned or held by Heritage having an original capital cost
of $500 or more which are not disclosed elsewhere in this Subsection
3.4. Except for sales and purchases in the ordinary course of business
since December 31, 1999, Heritage owns such Assets on the date hereof
free of Encumbrances.
7.5 Trust Accounts :
(a) The Trust Accounts described in Schedule H accurately reflects all
funds received by Heritage 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 current actual knowledge of Heritage and the Key
Executives, 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.
7.6 Business Operations :
(a) Operating Authorities: Heritage 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;
(b) Compliance with Laws: To the best of the current actual knowledge of
Heritage and the Key Executives, Heritage is operating and using the
Assets and conducting the Business in compliance with all applicable
laws and regulations of each jurisdiction in which the Assets are
located or in which Heritage conducts the Business;
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(c) Subsidiaries: Heritage does not own, directly or indirectly, any
ownership, equity, or voting interest in any corporation, partnership,
joint venture or other entity, and has no agreement or commitment to
purchase any such interest.
(d) Jurisdictions in which Business is Carried On: Heritage does not carry
on the Business or own or lease any assets in any jurisdiction other
than in the State of Oregon which would require registration or
licensing in such jurisdiction.
7.7 Financial :
(a) Unaudited Financial Statements: The Heritage Unaudited Financial
Statements present fairly in all material respects the financial
position of Heritage as at the respective dates of the said statements
and the results of Heritage's operations for the 12 month period then
ended in accordance with accounting principles used by Heritage
consistently applied.
(b) No Material Change: Since December 31, 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 business, nor has there been any
development or threatened or probable development of which Heritage
and/or the Key Executives are 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 December 31, 1999 and up to
the date hereof Heritage has not:
(i) issued any shares, units or other securities;
(ii) incurred any liability or obligation which as to their nature and
amount are inconsistent with the Business as carried on;
(iii)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;
(iv) declared, paid, authorized or made any dividend, payment or
distribution of any kind or nature to its shareholders or members
in their capacity as such or redeemed or purchased or otherwise
acquired any of its capital stock or agreed to do so;
(v) subjected any of the Assets to any Encumbrances;
(vi) 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;
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(vii) waived any rights of material value;
(viii)entered into any transaction or into any contracts or
agreements or modifications or cancellations thereof, other than
in the ordinary course of business;
(ix) 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;
(x) used any funds other than in the ordinary course of business as
theretofore carried on; and
(xi) 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 value of the Assets and the
Business and all material transactions relating to the Assets and the
Business have been accurately recorded in the Books and Records;
(d) Liabilities: Heritage 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
Heritage Unaudited Financial Statements;
(ii) other liabilities disclosed in this Agreement; or
(iii)liabilities incurred in the ordinary course of its businesses
since December 31, 1999;
(e) Receivables: All accounts receivable recorded on the books of Heritage
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
(f) Accountants: Heritage 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 Assets or the Business.
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7.8 Banking:
(a) Loans and Credit Facilities: Heritage 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 Heritage is not
obligated to create or issue any bonds, debentures, mortgages, notes
or other similar indebtedness;
(b) Bank Facilities: Schedule L contains a complete and accurate listing
showing the name of each bank, trust company or similar financial
institution in which Heritage 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: Heritage 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.
7.9 Insurance:
(a) List of Policies: Schedule A contains a complete and accurate listing
of all insurance policies of Heritage 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 Heritage 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 Heritage and the Key Executives have no knowledge
of any facts which might render any of the policies invalid,
unenforceable or non-renewable; and
(c) Outstanding Claims: To the best of the current actual knowledge of
Heritage and the Key Executives, no threatened or actual claims
against any of the policies described in Schedule A have been made in
the last two years. Heritage has given notice of or has otherwise
presented in a timely fashion every claim under each such insurance
policy.
7.10 Tax Matters:
(a) Filings: Heritage 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
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paid. To the best of the current actual knowledge of Heritage and the
Key Executives, no such returns, elections or designations contain any
material misstatement or omit any material statements that should have
been included and each return, election and designation, including
accompanying schedules and statements is true, correct and complete in
all material respects;
(b) Payment: Heritage 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 Heritage
nor with respect to the issuance of any assessment or reassessment;
(d) Adverse Proceedings: To the best of the current actual knowledge of
Heritage and the Key Executives, there are no actions, suits,
proceedings, investigations or claims by any governmental authority
pending or threatened against Heritage 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: Heritage 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: Heritage has not acquired property from, or disposed of
property to, any Person with whom it does not deal at arm's length
since the date of its formation; and
(g) Other Jurisdictions: To the best of the current actual knowledge of
the Key Executives, Heritage has not filed or is not currently
required to file any returns, elections or designations with any state
or local taxation authority located in any jurisdiction other than the
State of Oregon.
7.11 Employee Matters :
(a) List of Employees: The list of employees set out in Schedule M is a
comprehensive list of the employees and commissioned sales people of
Heritage and the Business
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as at the Closing Date and includes an accurate description of their
compensation, and/or commission structure, position and job
classification;
(b) Employment Contracts: Except as disclosed herein as a Material
Contract, Heritage is not a party to any oral or written consulting
contract, management contract, labor services contract or similar
agreement for the services of a particular individual and none of the
employees of Heritage or 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 M 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 Heritage and 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 Heritage 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: Heritage does not have nor have they ever had a pension
plan for any of its employees; and
(e) Employer Associations: Heritage is not a member of any employer,
management, industry or other trade or business association under
which Heritage or 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.
7.12 Litigation and Claims :
(a) Adverse Proceedings: There are no outstanding actions, claims,
demands, lawsuits, prosecutions or governmental investigations by or
against Heritage, the Assets and the Business and there is no other
adverse proceeding which is to the knowledge of Heritage or the Key
Executives pending or threatened by, against, or relating to Heritage,
the Assets or the Business. Heritage or the Key Executives 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 Heritage or the Key Executives are aware
relating to the Assets or the Business, from any police or fire
department, sanitation or health authorities,
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environmental agencies, or from any other federal, state or municipal
authority, department or agency, nor do Heritage or the Key Executives
have notice that there are any matters currently under formal
consideration by any such authorities relating to any of the Assets or
the Business;
(c) Notice of Default/Claims: Except as expressly disclosed in this
Agreement, Heritage 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 Heritage 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 Heritage
or the Key Executives has been threatened against Heritage; and
(e) Trademark and Patent Infringement: The conduct of the Business by
Heritage 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.
7.13 Contracts and Commitments :
(a) Material Contracts: Other than the Pre-Need Contracts and the Leases,
Schedule N contains a complete and accurate listing of all material
contracts, agreements, leases, commitments, instruments or other
dealings to which Heritage is a party, by which Heritage is bound or
under which Heritage 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 March 31, 2000; and
(c) Good Standing: Except as disclosed herein, Heritage is not in breach
or default of any of the terms of the Material Contracts or Pre-Need
Contracts, and neither
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Heritage nor the Key Executives are 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. To the best of
the current actual knowledge of Heritage and the Key Executives, 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
Subsection 3.13(c) would have a material adverse effect on the Assets
or the Business.
3.14 Environmental Liabilities :
(a) Compliance: To the best of the current actual knowledge of Heritage
and the Key Executives, Heritage and the Business are in compliance in
all material respects with all federal, state and municipal
environmental laws and regulations (the "Environmental Laws"). The
existing activities of Heritage and the Business and, to the best
knowledge of Heritage and the Key Executives, their prior uses and
activities and the uses and activities of other property now or
previously owned or operated by Heritage, comply and at all times have
complied with all Environmental Laws. Heritage has filed all
environmental reports and notifications required to be filed under
applicable laws and regulations;
(b) Notice of Non-Compliance: Neither Heritage or, to the best knowledge
of Heritage or the Key Executives, any prior owner or occupant of the
property now leased or operated by Heritage, have 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. Heritage 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: Save and except for an underground oil storage
tank properly removed and abated, neither Heritage or, to the best
knowledge of Heritage and the Key Executives, any other Person has
engaged in or permitted any operations or activities upon, or any use
or occupancy of property now or previously owned or operated by
Heritage, resulting in the storage, emission, release, discharge or
disposal of any hazardous materials on, in, under or from any property
used for or by Heritage or the Business; and
(d) Cremation Residue: Heritage 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.
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3.15 Effect of this Transaction :
(a) No Adverse Implications: Except as disclosed in Schedule P 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:
(i) give any Person the right to terminate or cancel any contractual
or other rights with Heritage 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 Heritage 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 Heritage 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 Heritage is a party or by which Heritage is 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: Heritage 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
3.15, would constitute a breach of any of the representations and
warranties set out in this Section 3 (the "Disclosed Fact"). Such
notice shall state that it is being given pursuant to this Subsection
3.15 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; or
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(iii)if the Disclosed Fact is material to the condition of the Assets
or the Business, terminate this agreement without further
obligation on the part of any party to this Agreement.
4 REPRESENTATIONS AND WARRANTIES WITH RESPECT TO ISSUANCE OF SECURITIES
Heritage represents and warrants 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:
4.1 Individual Authority: Heritage has the legal capacity, power and authority
to hold the Securities to be owned by it at the Time of
Closing;
4.2 Receipt of the Securities : Heritage is accepting the Securities as the
Purchase Price as set out in Section 2 only for investment purposes on its
own account and, except as provided in Subsection 4.5, not for the purpose
of selling the Securities in connection with any distribution of Neptune's
securities. Heritage acknowledges that the Securities have not been
registered under the Securities Act of 1933, as amended (the "Securities
Act") 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 REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT") OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. 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 ANY SUCH EXEMPT TRANSACTION THE
CORPORATION SHALL HAVE RECEIVED AN OPINION OF COUNSEL OF RECOGNIZED
STANDING, IN FORM AND
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SUBSTANCE SATISFACTORY TO IT, AS TO THE AVAILABILITY OF AN EXEMPTION."
4.3 Solicitation : Heritage 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.
4.4 Accredited Investor : Heritage is an "accredited investor" or a
"sophisticated investor" as such terms are defined in Regulation D
promulgated by the Securities and Exchange Commission under the Securities
Act.
4.5 No Trades: Heritage has not traded in the shares of the Neptune Common
Stock and will refrain from trading in the Neptune Shares or selling short
any shares in the Neptune Common Stock or entering into any derivative
transactions of same prior to the Closing Date and for one year following
the Closing Date, provided, however, that Heritage may distribute the
Neptune Shares to its members at any time following the Closing Date in
accordance with all laws and regulations of the Securities Act.
4.6 Residency : Heritage is an Oregon limited liability company.
5 COVENANTS OF HERITAGE
Heritage covenants and agrees with the Purchaser as follows and acknowledges
that the Purchaser is relying upon such covenants and agreements in connection
with the purchase of the Assets:
5.1 Access to the Business: Heritage has made available to the Purchaser and
its authorized representatives and, if requested by the Purchaser, has
provided 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. Heritage has afforded 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, Heritage has executed or has
caused 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 reasonable request, Heritage has cooperated with the Purchaser
in arranging meetings 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, Heritage has permitted 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 5.1 shall not mitigate or otherwise affect
the representations and warranties of Heritage and the Key Executives
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.
5.2 Delivery of Books and Records : At the Time of Closing there shall be
delivered to the Purchaser by Heritage 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
Heritage, the Key Executives, their successors or assigns to defend any
claim against Heritage which could result in a Claim hereunder, with the
understanding that the Books and Records need not be retained after June
15, 2010. The Purchaser will permit Heritage, the Key Executives, their
successors or assigns or their authorized representatives reasonable access
thereto in connection with matters involving the Purchaser that Heritage,
the Key Executives, their successors or assigns have a valid business
reason to review. The Purchaser shall not be responsible or liable to
Heritage, the Key Executives, their successors or assigns for or as a
result of any loss or destruction of or damage to any such Books or
Records, unless the Purchaser's negligence or wilful misconduct caused the
loss, destruction or damage.
5.3 Conduct Prior to Closing : Without in any way limiting any other
obligations of Heritage hereunder, during the period from the date hereof
to the Time of Closing:
(a) Conduct Business in the Ordinary Course: Heritage shall conduct the
Business in its ordinary and normal course and Heritage 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 December 31, 1999 and before the date
of this Agreement, would constitute a breach of any representation,
warranty, covenant or other obligation of Heritage and the Key
Executives contained herein. In particular Heritage 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: Heritage 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
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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: Heritage shall use reasonable commercial efforts to
preserve, intact, the Assets, the Business and to promote and preserve
for the Purchaser the goodwill of suppliers, customers and others
having business relations with the Business.
5.4 Delivery of Documents : Heritage 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;
5.5 Vendors Taxes : Heritage 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
6 JOINT AND SEVERAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
PURCHASER AND NEPTUNE
The Purchaser and Neptune jointly and severally represent, warrant and covenant
to and with Heritage as follows and acknowledge that Heritage is relying upon
such representations, warranties and covenants in connection with the sale of
the Assets and the assumption of the Liabilities:
6.1 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 Oregon and the State of 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.
6.2 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.
6.3 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 of 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
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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. The Purchaser and Neptune know of no reason
why the Mortuary Board, as hereinafter defined, would not approve them to
operate the Business.
6.4 Share Transfer 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 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.
6.5 Issued Share Capital: As at May 1, 2000 the authorized capital of Neptune
is 50,000,000 shares of which 13,437,152 shares are issued and outstanding
(on or about May 22, 2000, Neptune effected a two for one reverse split of
the Neptune Common Stock).
6.6 Fully Paid Shares : Upon completion of the transactions contemplated in
this Agreement, the Neptune Common Stock issued by Neptune to Heritage will
be fully paid and non-assessable Neptune Common Stock.
6.7 Access to the Business, Completion of Due Diligence: Neptune has completed,
to its full satisfaction, all of its due diligence with respect to
Heritage. Heritage has made available to the Purchaser and its authorized
representatives and, if requested by the Purchaser, has provided 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. Heritage has afforded 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,
Heritage has executed or has caused 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 reasonable request, Heritage
has cooperated with the Purchaser in arranging meetings 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
(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.
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In particular, without limitation, Heritage has permitted 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
6.7 shall not mitigate or otherwise affect the representations and
warranties of the Purchaser and Neptune hereunder, which shall
continue in full force and effect.
6.8 Notice Procedure: The Purchaser and Neptune 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 Heritage advising it of any fact which, except for this
Subsection 6.8, would constitute a breach of any of the representations and
warranties set out in this Section 6 (the "Disclosed Fact"). Such notice
shall state that it is being given pursuant to this Subsection 6.8 and
shall set out sufficient information to enable Heritage to make a reasoned
business judgment with respect to the choices set out herein. Upon receipt
of such notice, Heritage may:
(i) postpone the Closing;
(ii) complete the Closing, in which case this Agreement shall be
deemed to be amended so that the representation, warranty or
covenant in respect of which the notice was given shall
incorporate the disclosure set out in the notice; or
(iii)if the Disclosed Fact is material to the financial position of
the Purchaser or Neptune, terminate this agreement without
further obligation on the part of any party to this Agreement.
7 CONDITIONS OF CLOSING
7.1 Conditions of Closing in Favour of the Purchaser: The obligation of the
Purchaser to complete the sale and purchase of the Assets and Liabilities
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) Representations and Warranties: The representations and warranties of
Heritage and the Key Executives 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 Heritage and the
Key Executives 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;
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(b) Covenants: All of the covenants and agreements of Heritage and all
other terms of this Agreement to be complied with or performed by
Heritage at or before the Time of Closing shall have been complied
with or performed and certificates of Heritage and the Key Executives
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) Certificate of Investor: Heritage has delivered to the Purchaser and
Neptune a certificate of investor in the form attached as Schedule Q
to this Agreement;
(d) 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 P, 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. Notwithstanding anything in this
Section 7.1 to the contrary, the parties hereto concur that, as soon
as reasonably possible after the Time of Closing (i) Heritage and the
Company will notify the Oregon State Mortuary & Cemetery Board (the
"Mortuary Board") of the purchase and sale of the Assets and the
assumption of the Liabilities as required by Oregon Administrative
Rules ("OAR") 000-00-000, and (ii) the Purchaser and Neptune will
comply with the requisite transfer of ownership licensing requirements
and regulations of the Mortuary Board under OAR Chapter 830, Division
40 necessary to consummate the purchase and sale of the Assets and the
assumption of the Liabilities and operate the Business ((i) and (ii),
collectively, the "Transfer of Ownership Licensing Requirements"). The
Purchaser and Neptune's obligation to complete the purchase and sale
of the Assets and the assumption of the Liabilities is subject to
fulfilment of the Transfer of Ownership Licensing Requirements within
ninety (90) days following the Closing Date;
(e) 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;
(f) 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 and the assumption of the
Liabilities contemplated hereby;
(g) No Material Damage: No material 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 which would have a material adverse
change in the condition of the Assets or the Business;
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(h) Xxxxxxxxx Non-Compete Agreement: Xxxxx Xxxxxxxxx has entered into a
three year non-competition agreement with one of the Neptune Entities
and CMC has terminated its employment agreement with Xxxxx Xxxxxxxxx;
(i) Xxxx Employment/Non-Compete Agreement: Xxxxxxx Xxxx has entered into a
three year employment and non-competition agreement with one of the
Neptune Entities;
(j) Apogee Non-Compete Agreement: The Apogee Companies, Inc. has entered
into a three year non-competition agreement with one of the Neptune
Entities;
(k) Disclosure Statement: Heritage has acknowledged receipt of the
Disclosure and Acknowledgement Statement in the form attached as
Schedule R to this Agreement;
(l) CMC Asset Agreement: Community Memorial Centers, L.L.C. ("CMC") has
entered into an asset purchase agreement with the Neptune Entities in
respect of the sale of the assets of CMC (the "CMC Agreement");
(m) Merger Agreement: CMC has entered into a merger agreement with one of
the Neptune Entities with respect to the merger of the shares of
Xxxxxxx Mortuary, Inc. (the "Merger Agreement"); and
(n) Opinion of Vendor's Attorney: The Purchaser and Neptune have received
legal opinions of Heritage's attorneys, dated as of the date of
Closing, respecting the transactions contemplated in this Agreement,
consistent with standard agreements for the purchase and sale of
funeral and cremation businesses.
If any of the conditions contained in this Subsection 7.1 shall not be
performed or fulfilled at or prior to the Time of Closing to the
satisfaction of the Purchaser and Neptune, acting reasonably, the Purchaser
may, by notice to Heritage, terminate this Agreement and the obligations of
Heritage, the Purchaser and Neptune under this Agreement, provided that the
Purchaser may also bring an action against Heritage 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
3.15(b) by Heritage). 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
7.2 Conditions of Closing in Favour of Heritage : The obligation of
Heritage to complete the sale and purchase of the Assets and
Liabilities is subject to the following terms and conditions for the
exclusive benefit of Heritage, to be fulfilled or performed at or
prior to the Time of Closing or waived in whole or in part by Heritage
at its sole discretion without prejudice to any rights Heritage may
otherwise have:
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(a) Representations and Warranties: The representations and warranties of
the Purchaser and Neptune 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 the Purchaser and Neptune dated the Closing
Date to that effect shall have been delivered to Heritage, such
certificate to be in form and substance satisfactory to Heritage
acting reasonably; and
(b) Covenants: All of the terms, covenants and conditions of this
Agreement to be complied with or performed by the Purchaser and
Neptune at or before the Time of Closing shall have been complied with
or performed and a certificate of the Purchaser and Neptune dated the
Closing Date to that effect shall have been delivered to Heritage,
such certificate to be in form and substance satisfactory to Heritage
acting reasonably.
(c) 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 and assumption of the
Liabilities contemplated hereby;
(d) Xxxxxxxxx Non-Compete Agreement: One of the Neptune Entities has
entered into a three year non-competition agreement with Xxxxx
Xxxxxxxxx;
(e) Xxxx Employment/Non-Compete Agreement: One of the Neptune Entities has
entered into a three year employment/non-competition agreement with
Xxxxxxx Xxxx;
(f) Apogee Non-Compete Agreement: One of the Neptune Entities has entered
into a three year non-competition agreement with The Apogee Companies,
Inc.;
(g) CMC Asset Agreement: The Purchaser and Neptune have entered into the
CMC Agreement;
(h) Merger Agreement: The Purchaser and Neptune have entered into the
Merger Agreement; and
(i) Opinion of Purchaser's Attorney: Heritage has received legal opinions
from attorneys for the Purchaser and Neptune, dated as of the date of
Closing, respecting the transactions contemplated in this Agreement,
consistent with standard agreements for the purchase and sale of
funeral and cremation businesses.
If any of the conditions contained in this Subsection 7.2 shall not be
performed or fulfilled at or prior to the Time of Closing to the
satisfaction of Heritage, acting reasonably, Heritage may, by notice to the
Purchaser and Neptune, terminate this Agreement and the obligations of
Heritage, the Purchaser and Neptune under this Agreement, provided that
Heritage may also bring an action against the Purchaser and Neptune for
damages suffered by Heritage where the non-performance or non-fulfilment of
the relevant condition is as a result of a
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breach of covenant, representation or warranty (as the same may be modified
by a notice pursuant to Subsection 6.8 by the Purchaser or Neptune). Any
such condition may be waived in whole or in part by Heritage without
prejudice to any claims they may have for breach of covenant,
representation or warranty.
7.3 Parties Efforts : The parties shall use reasonable commercial efforts to
satisfy the conditions contained in Section 7.
8 CLOSING ARRANGEMENTS
8.1 Place of Closing : The Closing shall take place at the Time of Closing at
the Place of Closing.
8.2 Transfer : At the Time of Closing, upon fulfilment of all the conditions
set out in Section 7 that have not been waived in writing by the Purchaser
and Neptune or Heritage as the case may be, Neptune will issue the Neptune
Shares to Heritage and deliver same to Heritage's attorney.
8.3 Reconciliation of Pre-Paid Accounts: All Pre-Paid Accounts will be
reconciled at the Closing and the cash component of the Purchase Price in
the CMC Agreement will be adjusted as required to effect such
reconciliation.
8.4 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.
9 SURVIVAL; INDEMNITY
9.1 Survival: The covenants, agreements, representations and warranties of the
parties hereto contained in this Agreement or in any certificate or other
writing delivered pursuant hereto or in connection herewith shall survive
the Closing, subject to Subsection 9.2. Notwithstanding the preceding
sentence, any covenant, agreement, representation or warranty in respect of
which indemnity may be sought under Subsection 9.2 shall survive the time
at which it would otherwise terminate pursuant to the preceding sentence,
if notice of the inaccuracy or breach thereof giving rise to such right to
indemnity shall have been given to the party against whom such indemnity
may be sought prior to such time.
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9.2 Indemnification:
(a) Heritage and the Key Executives hereby indemnify 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 Closing Date) for renewals up to December 31, 2000 and
expenses of any kind whatsoever (including without limitation
reasonable expenses of investigation and reasonable attorney's fees
and expenses in connection with any action, suit or proceeding and the
costs of cross-claiming or claiming against third parties) ("Damages")
which at any time or from time to time may be paid, incurred, asserted
or suffered by the Neptune Entities (1) as a direct or indirect result
of the operating of Heritage and/or the Business, or the use of the
Assets, up to and including the Closing Date (provided that such
liability is not the result of any actions taken by the Neptune
Entities after the Closing Date) or (2) arising out of any
misrepresentation or breach of warranty, covenant or agreement made or
to be performed by Heritage or the Key Executives pursuant to this
Agreement, provided, however as follows:
(i) no claims shall be made under this Subsection 9.2(a) unless the
cumulative amount of all claims under this Subsection 9.2(a)
equals or exceeds $100,000.00 and equals or is less than
$1,000,000.00; and
(ii) no claims shall be made under this Subsection 9.2(a) after the 18
month anniversary of the Closing Date.
(b) Neptune hereby indemnifies the Heritage Entities against and agrees to
hold them harmless from any and all Damages which at any time and from
time to time may be incurred or suffered by the Heritage Entities (1)
as a direct or indirect result of the operating of the Business, or
the use of the Assets, after the Closing Date (provided that such
liability is not the result of any actions taken by Heritage after the
Closing Date) or (2) arising out of any misrepresentation or breach of
warranty, covenant or agreement made or to be performed by the
Purchaser or Neptune pursuant to this Agreement, provided, however as
follows:
(i) no claims shall be made under this Subsection 9.2(b) unless the
cumulative amount of all claims under this Subsection 9.2(b)
equals or exceeds $100,000.00, save and except for the
Liabilities assumed hereunder, and equals or is less than
$1,000,000.00; and
(ii) no claims shall be made under this Subsection 9.2(b) after the 18
month anniversary of the Closing Date.
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9.3 Procedures:
(a) Notice: The party seeking indemnification under Subsection 9.2
("Indemnified Party") shall give prompt notice to the party or parties
against whom indemnity is or may be sought (the "Indemnifying Party")
of the assertion of any claim, or the commencement of any suit, action
or proceeding in respect of which indemnity may be sought under such
Subsection 9.2 (collectively, an "Indemnity Claim"). Such notice shall
include the Indemnified Party's reasonable estimate of the potential
amount of potential losses with respect to such Indemnity Claim;
(b) Indemnity Claim Not Involving Litigation: If the Indemnity Claim does
not involve a pending suit or proceeding, then the Indemnifying Party
shall first have a period of sixty (60) calendar days from the date of
delivery of notice of an Indemnity Claim to it (the "Cure Period") to
cure, settle or otherwise resolve the Indemnity Claim. During such
period the Indemnified Party shall provide the Indemnifying Party with
such information and documentation as the Indemnifying Party may
reasonably request to assist the Indemnifying Party in curing,
settling or resolving the Indemnity Claim. Any settlement or
resolution of such Indemnity Claim and the continued handling of any
Indemnity Claim which has not been cured, settled or resolved within
the Cure Period, shall be handled in accordance with the balance of
this Section 9;
(c) Defense of Indemnity Claim: The Indemnifying Party shall defend,
contest or otherwise protect the Indemnified Party against any
Indemnity Claim and shall control the defense and settlement thereof.
The Indemnified Party shall have the right, but not the obligation, to
participate at its own expense in the defense thereof by counsel of
its own choice. In the event the Indemnifying Party fails or refuses,
within a reasonable period of time after its receipt of notice of the
Indemnity Claim to defend, contest or otherwise protect against such
Indemnity Claim, then the Indemnified Party shall have the right to do
so and to control the defense thereof; and
(d) Settlement of Indemnity Claim:
(i) If the Indemnifying Party has assumed the defense of the
Indemnity Claim, the Indemnifying Party may pay, settle or
compromise such Indemnity Claim without the consent of the
Indemnified Party provided that the payment, settlement or
compromise does not require the Indemnified Party to take action
or refrain from taking action not reasonable under the
circumstances;
(ii) If the Indemnifying Party failed or refused to defend the
Indemnity Claim, then the Indemnified Party shall have the right
to pay, settle or compromise such Indemnity Claim provided
however that it gives the Indemnifying Party at least fifteen
calendar days prior written notice of the proposed payment,
settlement or compromise. In such event, the Indemnifying Party
shall again
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have the right to assume and control the defense or participate
in the joint defense thereof within such fifteen day period
provided the Indemnifying Party provides reasonably adequate
assurance to the Indemnified Party that adequate funds exist to
fully indemnify the Indemnified Party in respect of such
Indemnity Claim;
(iii)Unless the Indemnifying Party has failed or refused to
participate in the defense of any Indemnity Claim, the
Indemnifying Party shall not be liable in respect of losses under
Subsection 9.2 for any payment, settlement or compromise of any
Indemnity Claim effected without its consent, which consent shall
not be unreasonably withheld; and
(iv) The Indemnified Party shall cooperate with the Indemnifying Party
in executing any settlement documents, including releases, as may
be reasonably requested by the Indemnifying Party.
9.4 Exclusivity After the Closing, Subsection 9.2 will provide the exclusive
remedy for any Indemnity Claim.9.5Right to Set-Off : The Purchaser and
Neptune have the right to set-off any amount owed by Heritage to any of the
Neptune Entities pursuant to Subsection 9.2 against any money due and owing
to Heritage from the Purchaser or Neptune under this or any other agreement
between any of the Neptune Entities and Community Memorial Centers, L.L.C.,
Xxxxxxx Mortuary, Inc., Heritage, Xxxxx Xxxxxxxxx, Xxxxxxx Xxxx or The
Apogee Companies, Inc. provided, however, as follows:
9.5 Right to Set-Off: The Purchaser and Neptune have the right to set-off any
amount owed by Heritage to any of the Neptune Entities pursuant to
Subsection 9.2 against any money due and owing to Heritage from the
Purchaser or Neptune under this or any other agreement between any of the
Neptune Entities and Community Memorial Centers, L.L.C., Xxxxxxx Mortuary,
Inc., Heritage, Xxxxx Xxxxxxxxx, Xxxxxxx Xxxx or The Apogee Companies, Inc.
provided, however, as follows:
(a) the Purchaser and/or Neptune give written notification to Heritage
prior to set-off of the amount of the set-off (the "Set-off Notice");
and
(b) Heritage shall have the right, to be exercised within thirty (30) days
from the date the Set-off Notice is delivered to Heritage, to pay the
Purchaser or Neptune any such set-off amount in immediately available
funds and so satisfy such obligation.
10 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 Heritage to the Purchaser will release or affect the
obligation of Neptune. No omission or delay on the part of Heritage 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
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obligation of Neptune hereunder. This guaranty is given for the benefit of
Heritage. The Purchaser and Neptune shall be jointly and severally liable for
said obligations, indebtedness, or liabilities.
11 GENERAL MATTERS
11.1 Governing Law and Arbitration: This Agreement shall be governed by and
construed in accordance with the laws of the State of Oregon.
Notwithstanding the fact that one or more of the parties to this Agreement
is now or may become a resident or citizen of a different state, all of the
terms and conditions set forth herein shall be governed by and construed in
accordance with the laws of the State of Oregon. 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 commercial arbitration 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 Portland, Oregon. The language of arbitration
shall be English. The parties shall be entitled to conduct discovery in
accordance with the Federal Rules of Civil Procedure, subject to limitation
by the arbitrator to secure just and efficient resolution of the dispute.
If the amount in controversy exceeds $10,000, the arbitrator's decision
shall include a statement specifying in reasonable detail the basis for and
computation of the amount of the award, if any. 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 substantially prevailing parties shall also be entitled
to an award of their costs and reasonable attorney's fees. Judgment upon
the arbitration award may be entered in any court having competent
jurisdiction. Nothing, herein, however, shall prevent a party from resort
to a court of competent jurisdiction in those instances where injunctive
relief may be appropriate.
11.2 Entire Agreement; Amendment: 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 purchase and sale of the Assets and assumption of the
Liabilities and there are no oral statements, warranties, representations
or other agreements between or among the parties in connection with the
purchase and sale of the Assets and assumption of the Liabilities 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 general waiver or a
waiver of any other provision nor shall any such waiver constitute a
continuing waiver unless otherwise expressly provided nor estop any party
from demanding that the other parties fully perform all promises and
obligations contained herein and shall in no way affect any party's rights
to enforce the same. A waiver by any party of any breach of this Agreement
shall not be held to be a waiver of any succeeding breach or a waiver of
this non-waiver clause.
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11.3 Assignment: Heritage will not assign their interests in this Agreement
without prior written consent of Neptune. The Purchaser and Neptune will
not assign their interests in this Agreement without prior written consent
of Heritage.
11.4 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 Heritage, the Purchaser or
Neptune without the prior approval of the others, such approval not to be
unreasonably withheld.
11.5 Confidential Information: Confidential Each of the parties hereto covenant
to hold in strict confidence all information obtained in connection with
the transactions which are the subject matter of this Agreement. If the
purchase and sale of the Assets and assumption of the Liabilities is not
consummated, this covenant shall continue in full force and effect. All
confidentiality obligations of the Purchaser and Neptune with respect to
Heritage shall cease upon Closing, provided, however, that neither Neptune
nor the Purchaser shall reveal the details of any contracts of employment
between either of them and the Key Executives without the prior written
consent of the Key Executives, 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 Neptune,
the Purchaser or their representatives. Notwithstanding the Closing,
Heritage covenants to maintain as confidential all confidential information
respecting the Purchaser and Neptune and Heritage in Heritage'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, Heritage, the Purchaser or Neptune other than any
contracts of employment and non-compete agreements between the Purchaser
and Neptune and the Key Executives or 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 Heritage or its
representatives.
11.6 Non-Waiver: No investigations made by or on behalf of the Purchaser or
Neptune 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 Heritage 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.
11.7 Indemnification in Respect of Brokers or Agents: Heritage shall indemnify
and save harmless the Purchaser and Neptune from and against any claim for
commission or other remuneration payable or alleged to be payable to any
broker, agent or other intermediary who claims to be so entitled by virtue
of a contract or other arrangement with Heritage in connection with the
transaction contemplated herein. The Purchaser and Neptune shall indemnify
and save harmless Heritage and the Key Executives from and against any
claim for commission or other remuneration payable or alleged to be payable
to any broker, agent or other intermediary who claims to be so entitled by
virtue of a contract or other arrangement with the Purchaser or Neptune in
connection with the transaction contemplated herein.
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11.8 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 and Neptune shall not bear any legal,
accounting or other costs incurred Heritage. Heritage shall not bear any
legal, accounting or other costs incurred by the Purchaser or Neptune.
11.9 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:
If to the Purchaser and Neptune:
Neptune Management Corp.
Neptune Society
0000 Xxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
If to Heritage or the Key Executives:
c/o The Apogee Companies, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx X. Xxxxx, Esq.
Attorney at Law
0000 X.X. Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000-0000
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.
11.10 Time of the Essence: Time shall be of the essence of this Agreement.
11.11 Severability: 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, 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.
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11.12 Counterparts: 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 telefaxed copy of this Agreement shall be
effectual and valid proof of execution and delivery
11.13 Binding Effect: he provisions of this Agreement shall inure to the
benefit of and be binding on the parties, their successors, assigns, and
legal representatives. The term "successor" includes any Person who
succeeds to any rights or obligations under this Agreement, whether by
merger, consolidation, transfer of all or substantially all assets, or
otherwise.
11.14 Attorney's Fees: In the event the services of an attorney at law are
necessary to enforce any of the terms of this Agreement or to resolve any
disputes arising hereunder outside the confines of Subsection 11.1 above,
the prevailing party shall be entitled to recover its costs and reasonable
attorney's fees from the losing party as determined at trial or on appeal.
11.15 Third-Party Beneficiaries: The provisions of this Agreement are intended
solely for the benefit of the parties hereto and shall create no rights
or obligations enforceable by any third party, including creditors of any
party, except as otherwise provided herein or by applicable law.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the
date first hereinabove written.
NEPTUNE ACQUISITION, INC. THE NEPTUNE SOCIETY, INC.
Per: ----------------------------- Per: -----------------------------
Authorized Signatory Authorized Signatory
HERITAGE MEMORIAL SOCIETY
L.L.C.
Per: -----------------------------
Authorized Signatory
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SIGNED, SEALED AND DELIVERED by )
XXXXX XXXXXXXXX in the presence of: )
)
----------------------------------------)
Witness )
)
----------------------------------------) -----------------------------------
Address ) Xxxxx Xxxxxxxxx
)
----------------------------------------)
Occupation
SIGNED, SEALED AND DELIVERED by )
XXXXXXX XXXX in the presence of: )
)
----------------------------------------)
Witness )
)
----------------------------------------) -----------------------------------
Address ) Xxxxxxx Xxxx
)
----------------------------------------)
Occupation
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Schedule "A"
to the Heritage Asset Purchase Agreement dated July 5, 2000
-----------------------------------------------------------
See Attached List of Insurance Policies
---------------------------------------
-38-
Schedule "B"
to the Heritage Asset Purchase Agreement dated July 5, 2000
-----------------------------------------------------------
List of Intangible Assets
-------------------------
1. Trade Names: Heritage Memorial, Heritage Memorial Society, Heritage
Memorial Cremation Society, The Heritage Society, Heritage
Cremation Society
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Schedule "C"
to the Heritage Asset Purchase Agreement dated July 5, 2000
-----------------------------------------------------------
List of Land and Buildings
--------------------------
Description Nature of Interest Base Rent/Month Expiry Renewal
Date
6637 SE Milwaukie Use of Real Property n/A n/a n/a
Ave., Portland, OR and Improvements
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Schedule "D"
to the Heritage Asset Purchase Agreement dated July 5, 2000
-----------------------------------------------------------
List of Leased Assets
---------------------
In Agreement with Nature of Lease Total Expiry Date
Payments
per Month
Xxxxxxx Mini Storage Archives Storage $147.00 month to
month
Xxxxx Water Systems Water Cooler $30.00 n/a
Francotyp-Postalia, Inc. Postage Equipment $36.00 (yr
1); $41.25
(yr 2);
$46.50 (yr 3)
Pitney Xxxxx Postage Equipment $380.00 June, 2002
(quarterly)
TRM Photo Copy Machine $125.00 April 5, 2004
-41-
Schedule "E"
to the Heritage Asset Purchase Agreement dated July 5, 2000
-----------------------------------------------------------
List of Other Operating and Fixed Assets
----------------------------------------
Off-site Xxxxxxx Street Storage Facility
----------------------------------------
2 Metal four drawer filing cabinets
2 Metal two drawer filing cabinets
1 Large erasable white death board
Misc. cardboard file boxes of archive case files 1979-1997
2 Rear seats from first call vans
Chapel Loft Storage
-------------------
5 Metal four drawer vertical pre-need filing cabinets
3 Open metalfile racks
1 Metal four drawer filing cabinet
1 Metal two drawer filing cabinet
1 Wood bookshelves
1 Open small metal file rack Numerous printed supplies
Funeral Directors Office
------------------------
2 Wood Desk
2 Wood computer desks
1 Wood printer table
1 Wood typewriter stand
6 Swivel desk chairs
2 Wood two drawer underdesk file cabinets
2 HP monitors
2 HP computer towers
1 Oki laser printer
1 HP Inkjet printer
1 HP Scanner
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2 Wood desktop filers
1 IBM typewriter
6 Plastic floor mat protectors
1 Window mounted AC unit
1 TV monitor
1 Office fan on metal stand
3 Calculators
Kitchen
-------
1 Microwave
1 Metal four drawer filing cabinet
1 Paper cutter
1 Metal five drawer vertical filing cabinet
Misc. Office supplies - pens - tape - paper clips - rubber bands
Arrangement Office
------------------
1 Glass conference table
3 Wood rolling conference chairs
2 Wall urn displays
2 Urn pedestals
1 Wood two drawer file cabinet
1 Picture
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Schedule "F"
to the Heritage Asset Purchase Agreement dated July 5, 2000
-----------------------------------------------------------
See Attached List of Pre-Need Contracts
---------------------------------------
-45-
Schedule "G"
to the Heritage Asset Purchase Agreement dated July 5, 2000
-----------------------------------------------------------
List of Specified Assets
------------------------
1. Power Pack Model II IE43-PP11 Retort, Serial #0740997
-45-
Schedule "H"
to the Heritage Asset Purchase Agreement dated July 5, 2000
-----------------------------------------------------------
See Attached List of Trust Accounts
-----------------------------------
-46
Schedule "I"
to the Heritage Asset Purchase Agreement dated July 5, 2000
-----------------------------------------------------------
See Attached Unaudited Financial Statements of Heritage
-------------------------------------------------------
-47-
Schedule "J"
to the Heritage Asset Purchase Agreement dated July 5, 2000
-----------------------------------------------------------
Not Applicable
--------------
-48-
Schedule "K"
to the Heritage Asset Purchase Agreement dated July 5, 2000
-----------------------------------------------------------
Not Applicable
--------------
-49-
Schedule "L"
to the Heritage Asset Purchase Agreement dated July 5, 2000
-----------------------------------------------------------
List of Bank Accounts
---------------------
1. U.S. Bank, Portland, Oregon under name of Heritage Cremation Society
(Account Number: 1-536-0703-3021)
-50-
Schedule "M"
to the Heritage Asset Purchase Agreement dated July 5, 2000
-----------------------------------------------------------
List of Employees and Employee Benefit Plans
--------------------------------------------
Name Position Estimated 1999 Compensation
---- -------- ---------------------------
Xxxxxxxx Xxxx Apprentice Funeral Provider $24,960
Jo Xxxx Xxxxx Receptionist $18,144 (Part Time)
All employees receive a health benefits package. As at November 24, 1998
Heritage offered bonuses, on the 1999 fiscal year end financial achievements, to
Managers (3.5% EBITDA), Funeral Director Staff (1% EBITDA) and Support Staff
(1/2 of 1% EBITDA). Bonuses are only payable upon certain conditions being met.
(i.e. accounts receivable do not exceed $60,000, pre-need sales amount to at
least $500,000 and an EBITDA amount of $299,276 is reached) on a consolidated
basis with Xxxxxxx Mortuary, Inc.
-51-
Schedule "N"
to the Heritage Asset Purchase Agreement dated July 5, 2000
-----------------------------------------------------------
List of Material Contracts
--------------------------
1. Employee Handbook
2. 1999 Manager's Bonus Criteria
3. 1999 Funeral Director Staff Bonus Pool
4. 1999 Support Staff Bonus Pool
5. Agreement between OregonLive and Heritage dated November 16, 1999 (Heritage
Website)
6. Agreement Not To Compete between The Prestige Group, Inc. and Xxxxxxx X.
Xxxxxx dated March 26, 1997
7. Consulting Agreement between The Prestige Group, Inc. and Xxxxxxx X. Xxxxxx
dated March 26, 1997
8. Option Agreement from The Heritage Society, Inc. and Xxxxxxx X. Xxxxxx, in
favor of The Prestige Group, Inc. dated March 26, 1997
9. Agreement between Heritage Memorial Society, L.L.C. and American Funeral &
Cemetery Trust Services dated July 08, 1999
10. Crematory System Lease between The Prestige Group, Inc. and Oregon Funeral
Service, Inc. dated December 1, 1997
-52-
Schedule "O"
to the Heritage Asset Purchase Agreement dated July 5, 2000
-----------------------------------------------------------
Not Applicable
--------------
-53-
Schedule "P"
to the Heritage Asset Purchase Agreement dated July 5, 2000
-----------------------------------------------------------
Required Consents
-----------------
Contractual Consents
--------------------
1. Assignment of the leases described in Schedule D
2. Assignment of the Material Contracts described in items 5 through 11 in
Schedule N
Regulatory Consents
-------------------
3. State of Oregon Mortuary & Cemetery Board Immediate Disposition Company
license re: Heritage Memorial
-54-
Schedule "Q"
to the Heritage Asset Purchase Agreement dated July 5, 2000
-----------------------------------------------------------
See Attached Certificate of Investor
------------------------------------
-55-
Schedule "R"
to the Heritage Asset Purchase Agreement dated July 5, 2000
-----------------------------------------------------------
See Attached Disclosure and Acknowledgement Statement
-----------------------------------------------------
