Exhibit 10.4
AGREEMENT
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By this Agreement, entered into as of this ___ day of April, 1998, the parties
identified below state, confirm, represent, warrant and agree as follows:
1. PARTIES
1.1. Champion. Champion Financial Corporation ("Champion") is a
corporation organized and existing under and by virtue of the
laws of the State of Utah, with its principal place of
business in Scottsdale, Arizona.
1.2. Xxxxxxxx. Xxxx X. Xxxxxxxx ("Xxxxxxxx") is, and was at all
times material hereto, a resident of Maricopa County, Arizona.
1.3. Xxxxxx. Xxxxxxx X. Xxxxxx ("Xxxxxx") is, and was at all times
material hereto, a resident of Maricopa County, Arizona.
1.4. Xxxxxxxxxxx. Zirk Xxxxxxxxxxx ("Xxxx") and Xxxxx Xxxxxxxxxxx
("Xxxxx") (hereinafter sometimes collectively referred to as
"Xxxxxxxxxxx") are, and at all times material hereto, were
residents of the State of Maryland.
1.5. InfoPlan. InfoPlan Partners LLC is, and was at all times
material hereto, a limited liability company for which
InfoPlan Inc., serves as the managing member. At all times
material hereto, Xxxxxxxxxxx has controlled, and at this time
controls, InfoPlan Partners LLC through their control of
InfoPlan Inc.
1.6. Pension Trust. The Law Office of Xxxxx X. Xxxxxxx Pension Plan
("Pension Trust") is, and was at all times material hereto,
the beneficial owner of 200,000 shares of the common stock of
Champion.
1.7. RRG: Risk Resolution Group ("RRG') was, at certain times
material hereto, the beneficial owner of up to 1.5 million
shares of the common stock of Champion.
1.8. InfoPlan Parties. Xxxxxxxxxxx, InfoPlan Partners, LLC,
InfoPlan, Inc., Pension Trust and RRG shall hereunder
sometimes be referred to as the "InfoPlan Parties."
2. RECITALS
2.1. Merger Agreement. On or about January 6, 1997, Champion
entered into an Agreement and Plan of Merger with National
Health Benefits and Casualty Corporation ("NHBC") pursuant to
which NHBC became a wholly owned subsidiary of Champion and
Xxxxxx and Xxxxxxxx, as the sole shareholders of NHBC, each
received 1.1 million shares of the common stock of Champion
(the "NHBC Merger'). Pursuant to the Agreement and Plan of
Merger, Xxxxxx and Xxxxxxxx were elected to the Board of
Directors of Champion, Xxxxxxxx was appointed to serve as
Champion's President and Chief Executive Officer and Xxxxxx
was appointed to serve as Champion's Executive Vice President
and Chief Financial Officer.
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2.2. RRG Proxy. On or about January 8, 1997, RRG, acting through
its authorized agent, Zirk, executed and delivered to Xxxxxx
and Xxxxxxxx an irrevocable proxy granting to Xxxxxx and
Xxxxxxxx the right to vote 1.5 million shares of the common
stock of Champion beneficially owned by RRG. A copy of that
proxy is attached hereto and incorporated herein as Exhibit
"A."
2.3. InfoPlan Proxy. On or about April 1, 1997, InfoPlan LLC,
acting through its authorized agent Zirk, executed and
delivered to Xxxxxx and Xxxxxxxx an irrevocable proxy with
respect to 1 million shares of the common stock of Champion
and beneficially held by InfoPlan Partners LLC, in the form
attached hereto and incorporated herein as Exhibit "B."
2.4. Pension Trust Proxy. On or about May 29, 1997, the Pension
Trust, acting through its authorized agent Xxxxx, executed and
delivered to Xxxxxxxx a proxy with respect to 200,000 shares
of the common stock of Champion, in the form attached hereto
and incorporated herein as Exhibit "C."
2.5. Subscription Agreement. On or about October 24, 1997, InfoPlan
Inc. executed and delivered to Champion a Subscription
Agreement which provided for the purchase by InfoPlan LLC of
500,000 shares of the common stock of Champion at $6.00 per
share, in the form attached hereto and incorporated herein as
Exhibit "D."
2.6. Stock Trading Activity. At various times since the NHBC
Merger, Caliendo, Carder, InfoPlan and Xxxxxxxxxxx have
engaged in one or more transactions with respect to the common
stock of Champion owned by each of them.
2.7. Proxy Solicitation Activity. At various times since the NHBC
Merger, the InfoPlan Parties and their affiliates and agents,
have obtained and/or attempted to obtain proxy appointments
for purposes of permitting them to vote a majority of the
outstanding issued common stock of Champion.
2.8. January 20, 1998 Letter; Board of Directors Inquiry. On or
about January 20, 1998, InfoPlan Partners LLC, acting through
its authorized agents, Xxxxxxxxxxx, executed and delivered to
Xxxxxxxx, the letter which is attached hereto and incorporated
herein as Exhibit "E." As a result of that letter, the Board
of Directors of Champion has undertaken a formal inquiry into
the allegations and statements made in that letter.
2.9. Xxxxxxxx Transaction. The InfoPlan Parties have entered into
certain agreements with Xxxxxx Xxxxxxxx and/or his affiliates
with respect to the registration rights of certain common
stock of Champion held by Xxxxxx Xxxxxxxx (the "Xxxxxxxx
Agreement') and may have entered into agreements with other
third parties relating to Champion and its securities.
2.10. Purpose of Agreement. Various disputes have arisen between and
among the parties to this Agreement concerning the NHBC
Merger, the RRG Proxy, the InfoPlan Proxy, the Pension Trust
Proxy, certain stock transactions and certain proxy
solicitation activity, as well as with respect to the
management of the business affairs of Champion. Without
admitting or denying the existence of any past violations of
any law or regulation or any liability one to the other, the
parties desire to enter into this Agreement for the purpose of
resolving their disputes to assure that their future actions
with respect to Champion are conducted in strict conformity
with all federal and state laws applicable to Champion and its
securities.
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2.11. Recitals Part of Agreement. The matters set forth in Articles
1 and 2 of this Agreement are and shall be deemed to be
material and operative provisions of this Agreement and not
mere recitals.
3. TERMS OF AGREEMENT
3.1. Changes in the Management of Champion. Effective immediately,
Champion, acting through its Board of Directors, shall effect
certain management and personnel changes. Specifically,
Xxxxxxxx resigned as Chairman and a Director of Champion
immediately after the adjournment of the April 9, 1998 Board
of Directors' meeting. Xxxxxx shall immediately become the
President and Chief Executive Officer of Champion. Champion
agrees to pay Xxxxxxxx a xxxxxxxxx payment of $294,000 payable
in twenty-four (24) equal payments of $12,250.00, with the
first payment due May 1, 1998 and a like payment on the first
day of each of the next succeeding twenty-three (23) months.
Caliendo's current medical insurance coverage shall continue
and be paid through Champion up to and including April 30,
1999. Xxxxxxxx will be on paid vacation through April 30,
1998. Champion and Xxxxxxxx agree that Xxxxxxxx will not be
re-employed or re-appointed to the Champion Board of Directors
so long as the Proxy granted in Section 3.6 remains in effect.
3.2. Stock Transfers. Xxxxxxxx and Xxxxxx shall each immediately
request transfer of and promptly cause delivery to InfoPlan
LLC 25,000 shares of common stock of Champion. In recognition
for all services performed and consideration granted or
claimed to be performed or granted by InfoPlan Partners in
connection with Champion's recent HealthStar acquisition,
Champion shall immediately issue to InfoPlan Partners LLC
100,000 shares of its common stock, which shall, upon
issuance, be fully paid and non-assessable.
3.3. Legend. InfoPlan Partners LLC and the other InfoPlan Parties
acknowledge that the shares to be transferred pursuant to
Section 3.2 will be "restricted shares" and that they will
bear the following legend:
The securities represented by this Certificate have
not been registered under the Securities Act of 1933
or any state securities law. Such securities may not
be sold or transferred in the absence of such
registration unless an exemption from registration is
available.
3.4. Retention of Appropriate Advisors. Champion will use its best
efforts to retain within one hundred twenty (120) days such
investment banking and investment relations advisory
professionals as the Board of Directors, in its discretion,
deems necessary and appropriate.
3.5. No Proxy Contest. In consideration for the commitments,
undertakings and stock transfers provided for herein, the
InfoPlan Parties agree that neither they, nor any of their
respective Affiliates, directors, agents, members,
shareholders or beneficial owners will, either alone, or in
concert with each other or any other person or entity,
solicit, induce, encourage or seek to obtain, or cause,
solicit, encourage or induce any other person or entity to
solicit or seek to obtain, a proxy or other authority to vote
with respect to any securities of Champion, including but not
limited to the common stock of Champion, until the earlier of
(i) a date which is two (2) years from the date of this
Agreement; or (ii) the date which is ninety days
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prior to the third annual meeting of shareholders of Champion
held following the date of this Agreement. Notwithstanding the
foregoing, nothing in this Agreement shall prohibit InfoPlan
Parties from engaging in communications which encourage other
shareholders of Champion to grant their proxy to vote Champion
securities to those persons appointed by the Board of
Directors of Champion to solicit proxies in connection with
any meeting of Champion shareholders.
3.6. Grant of Proxy. InfoPlan Partners LLC, InfoPlan Inc., RRG,
Xxxxxxxxxxx and the Pension Trust, hereby irrevocably appoint
the Board of Directors of Champion, or its designees, with
full power of substitution, as their proxy agent(s) ("Proxy
Agent") with the authority to vote any and all shares of the
common stock of Champion held by them or any Affiliate (as
hereinunder defined) on this date, or on any record date
established by the Board of Directors with respect to the
Annual Meeting of the Shareholders of Champion to be conducted
during calendar year 1998 ("1998 Annual Meeting"), or any
adjournments thereof with respect to any and all matters to be
submitted to the shareholders at such meeting, including but
not limited to, the election of directors, the ratification of
auditors, the adoption of one or more stock option or other
benefit plans, reincorporation of Champion in a state other
than Utah pursuant to a change of domicile merger, and any
shareholder proposals, or any other matter to be presented at
such 1998 Annual Meeting. The InfoPlan Parties further agree
to execute and deliver upon request and without the payment of
additional consideration, such additional documentation as the
Board of Directors of Champion may deem necessary and
appropriate to effectuate the foregoing proxy appointment,
including but not limited to the execution of separate proxy
documentation. Notwithstanding the foregoing commitment to
execute such additional documentation, the parties hereto
agree that a copy of this Agreement may be presented to the
Inspector of Elections appointed in connection with the 1998
Annual Meeting for purposes of evidencing the grant of the
proxy contained herein. InfoPlan Partners LLC, InfoPlan Inc.,
RRG, Xxxxxxxxxxx, and the Pension Trust hereby agree to waive
any right that they or any Affiliate may have to cancel this
irrevocable proxy at any time prior to the 1998 Annual Meeting
and further acknowledge and agree that the irrevocable proxy
granted hereby meets the standards for irrevocability under
Utah Code Annotated Section 16-10(a)-722 and that it is
coupled with an interest. For purposes of this Agreement, as
it relates to the InfoPlan Parties, the term "Affiliate" shall
mean (i) any person or entity who controls, who is controlled
by, or is under common control with any of the InfoPlan
Parties; or (ii) any person who has a contract, agreement,
arrangement or understanding with any of the InfoPlan Parties,
with respect to the voting, acquisition or disposition of
Champion Securities.
3.7. Securities Compliance. The InfoPlan Parties hereby agree to
conduct all future activities with respect to the sale,
purchase, or transfer of the securities of Champion and/or the
solicitation of proxies with respect to voting rights of
Champion securities in strict compliance with all federal and
state securities laws. Without limiting the generality of the
foregoing, the InfoPlan parties agree to immediately amend the
Report on Form 13D previously filed by some of such parties
with respect to the securities of Champion to accurately
reflect the relationships between and among the InfoPlan
Parties, and to accurately describe the provisions of Sections
3.5 and 3.6 of this Agreement as they may affect voting rights
of the InfoPlan Parties with respect to the common stock of
Champion. Additionally, the InfoPlan parties agree that they
will file and keep current all reports required by Section 16
of the Securities and Exchange Act of 1934.
3.8. Limitations on Company Communications. The InfoPlan parties
agree that, for purposes of assisting them in their compliance
with federal and state securities laws, that all future
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communications between the InfoPlan Parties and Champion shall
be made through Champion's General Counsel, Xxxxx X. Xxxx,
Esq. or any successor appointed by the Board of Directors for
such purpose but pursuant to Notice given in accordance with
Section 5.1 herein.
3.9. Limitation on Activities. From and after the date of this
Agreement, the InfoPlan Parties agree that they will refrain,
and will cause their respective directors officers, members
and Affiliates to refrain from, engaging in investment
banking, shareholder relations, investor relations, market
relations or any other similar activities for or on behalf of
Champion and that the only communications or activities that
they will engage in with respect to Champion or its securities
will be those activities appropriate for a non-employee
shareholder of a public company.
3.10. Availability of Equitable Relief. The InfoPlan Parties
acknowledge and agree that the obligations undertaken by them
under this Agreement are special, unique and of an
extraordinary character, and that Champion and it
shareholders, officers and directors could not be adequately
compensated by money damages for a breach of any of the
provisions of this Agreement by the InfoPlan Parties. In the
event that any provision of this Agreement is breached by the
InfoPlan Parties, Champion shall be entitled to obtain (i) an
injunction restraining such breach or threatened breach; (ii)
specific performance of any provision of this Agreement
including but not limited to the provisions of Sections 3.5,
3.6, 3.7, 3.8 and 3.9 or (iii) an order in the nature of a
declaratory judgment declaring that the proxy granted by
Section 3.6 is valid and irrevocable, in addition to any other
right or remedy available to Champion. The InfoPlan Parties
agree that a bond or other security shall not be a condition
to the issuance of such injunction and/or for the ordering of
such specific performance.
3.11. Xxxxxxxx Agreement. The InfoPlan Parties acknowledge that they
shall have sole responsibility to Xxxxxxxx for the Xxxxxxxx
Agreement and that they will hold Champion and its officers,
directors, agents and affiliates harmless from any and all
costs, expenses and damages relating thereto, or to any other
agreements, arrangements or understandings between any of The
InfoPlan parties and any other person or entity.
3.12. Relief. The InfoPlan parties hereby release and discharge
Champion, Xxxxxxxx and Xxxxxx, and their present and future
directors, officers, representatives, employees, attorneys,
advisors, agents, affiliates, subsidiaries, associates,
predecessors, heirs, executors, administrators, successors and
assigns from any and all claims, actions, complaints, causes
of action, debts, liabilities, demands or suits (each
individually a "Claim" and collectively "Claims") at law or in
equity, known or unknown, fixed or contingent, contract or
tort, which they now have or could assert by reason of
actions, events or transactions in any way relating to the
Subscription Agreement, the InfoPlan Proxy, the RRG Proxy, or
the Pension Trust Proxy. Champion, Xxxxxx and Xxxxxxxx hereby
release and discharge the InfoPlan parties and their
respective present, former and future directors, officers,
members, representatives, employees, agents, attorneys,
advisors, affiliates, associates, predecessors, heirs,
executors, administrators, successors and assigns from any and
all Claims at law or in equity, known or unknown, fixed or
contingent, contract or tort, which they now have or could
assert by reason of actions, events or transactions, in any
way relating to the Subscription Agreement, the InfoPlan
Proxy, the RRG Proxy, or the Pension Trust Proxy.
Champion hereby releases and discharges Xxxxxxxx from any and
all claims, in any way relating to Champion and its
subsidiaries, on or prior to the date of this Agreement,
including any claims relating to Caliendo's acting as a
director or officer of Champion. Champion agrees to indemnify
and hold Xxxxxxxx harmless from any Claims made against
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him arising from acts as an Officer or Director of Champion
provided such acts were done in good faith and did not
constitute gross negligence or willful misconduct. Xxxxxxxx
hereby releases Champion and its subsidiaries and their
respective present, former and future directors, officers,
members, representatives, employees, agents, attorneys,
advisors, affiliates, associates, predecessors, heirs,
executors, administrators, successors and assigns from any and
all claims, in any way relating to National Health Benefits
Corporation, an Arizona corporation, including any claim by
Xxx Xxxxxxxx against National Health Benefits Corporation.
3.13. No Disparagement. The InfoPlan Parties, Xxxxxxxx, Xxxxxx and
Champion each agree that none of the parties shall make any
disparaging or negative statement (or statements construed to
be such), oral or written to anyone concerning or in any way
relating to the issues covered in this Agreement.
4. GENERAL
4.1. Notices. Any notice or other communication relating to this
Agreement and any and all communications which might become
necessary to effectuate the purposes of this Agreement, shall
be delivered to the parties by certified mail, facsimile, a
recognized overnight national delivery service, at the
following addresses:
If to any of the
InfoPlan Parties: Zirk Xxxxxxxxxxx, President
InfoPlan Inc.
00 Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
If to Champion: Champion Financial Corporation
0000 Xxxx Xxx Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
Attention: President
with copies to: Xxxxx X. Xxxx, Esq.
Vice President & General Counsel
Champion Financial Corporation
0000 Xxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
and: Xxxxx Xxxx LLP
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
If to Xxxxxxxx: Xxxx X. Xxxxxxxx
0000 Xxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
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If to Xxxxxx: Xxxxxxx X. Xxxxxx
Champion Financial Corporation
0000 Xxxx Xxx Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
4.2. Parties Benefited. This Agreement is made for the benefit and
protection of the parties hereto. No other person or
organization shall have any right of action or defense based
hereon.
4.3. Modifications. No modification or amendment to this Agreement
shall be valid, unless in writing and signed by the parties to
this Agreement.
4.4. Parties Bound. This Agreement shall be binding on and inure to
the benefit of the heirs, personal representatives,
predecessors, successors and assigns of the parties hereto.
4.5. Revocation of Prior Proxies. This Agreement shall serve as a
revocation of, and a consent to the revocation of, the RRG
Proxy, the InfoPlan Proxy and the Pension Trust Proxy by all
parties thereto and hereto.
4.6. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their
respective successors and legal representatives.
4.7. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the
State of Arizona applicable to agreements made or to be
performed entirely within such state, without regard to the
conflict of law principles of such state.
4.8. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall together be considered one
and the same agreement, and shall become effective when one or
more of such counterparts have been signed by each of the
parties.
4.9. Severability. In the event that any terminal provision of this
Agreement is declared to be invalid or illegal, for any
reason, this Agreement shall remain in full force and effect
and the same shall be interpreted as though such invalid or
illegal provision was not a part hereof.
4.10. Attorneys' Fees. In the event that any party hereto is
required to commence or otherwise participate in an action or
other proceeding to enforce any right arising under this
Agreement, the party prevailing in such action or other
proceeding shall be entitled to recover all costs and
attorneys' fees, such fees to be set by the court or other
tribunal, and not by the jury.
4.11. Additional Instruments and Actions. The parties hereto
expressly agree to execute any or further additional
instruments as may be required, or to perform any other act
necessary to effectuate and carry out the purposes of this
Agreement, without the payment of additional consideration.
4.12. Integration. This Agreement and its exhibits, together with
any documents executed and delivered pursuant hereto, embody
the full and complete understanding and agreement of the
parties hereto with respect to the matters addressed herein
and supersedes all prior understandings or agreements, whether
oral or in writing, and all contemporaneous oral
understandings or agreements.
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4.13. Headings; Interpretation. The headings used herein are used
for convenience and reference only and are not intended to
define, limit or describe the scope or intent of any provision
of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly and
delivered as of the date hereof.
CHAMPION FINANCIAL CORPORATION
By:
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Its
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Acting President and Chief
Operating Officer
XXXX X. XXXXXXXX
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XXXXXXX X. XXXXXX
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ZIRK XXXXXXXXXXX
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XXXXX XXXXXXXXXXX
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INFOPLAN PARTNERS LLC, by
INFOPLAN PARTNERS INC.
By:
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Its
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INFOPLAN INC.
By:
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Its
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RISK RESOLUTION GROUP
By:
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Its
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LAW OFFICE OF XXXXX X. XXXXXXX PENSION PLAN
By:
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Its
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