UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report - March 29, 1996
ANUHCO, INC.
State of Incorporation - Delaware
Commission File No. - 0-12321
IRS Employer Identification No. - 46-0278762
8245 Nieman Road, Suite 100
Lenexa, Kansas 66214
(Address of Principal Executive Offices)
Telephone Number - (913)-859-0055
9393 West 110th Street, Suite 100
Overland Park, Kansas 66210
(Former Address of Principal Executive Offices)
</PAGE>
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On March 29, 1996, Anuhco, Inc ("Anuhco" or "the Company")
completed the acquisition of all of the issued and outstanding
stock of Universal Premium Acceptance Corporation and UPAC of
California, Inc. (together referred to as "UPAC"). UPAC offers
short-term collateralized financing of commercial and personal
insurance premiums through approved insurance agencies in over 30
states throughout the United States. At March 31, 1996, UPAC had
outstanding net finance receivables of approximately $30 million.
This transaction will be accounted for as a purchase. Anuhco
utilized a portion of its available cash and short-term investments
to consummate the purchase at a price of approximately $12 million.
UPAC currently maintains certain financing arrangements with an
outstanding balance of $21.3 million at March 31, 1996. The terms
of the acquisition and the purchase price resulted from
negotiations between Anuhco and William H. Kopman, the former sole
shareholder of UPAC.
In addition to the Stock Purchase Agreement by which Anuhco
acquired all of the UPAC stock, Anuhco entered into a consulting
agreement with Mr. Kopman. Under the consulting agreement, Anuhco
is entitled to consult with Mr. Kopman on industry developments as
well as UPAC operations through December 31, 1998. In exchange for
entering into this consulting agreement, Mr. Kopman will receive
fixed consulting fees at an annual rate of $150,000 and may earn
additional annual fees not to exceed $333,333, based on certain
UPAC performance criteria.
In addition to retaining the services of Mr. Kopman under a
consulting agreement, existing executive management personnel of
UPAC have been retained under multiyear employment agreements.
Anuhco's acquisition of UPAC, in combination with its earlier
acquisition of Agency Premium Resource, Inc. ("APR"), gives the
Company a nationwide presence in this financial services industry.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements. It is impracticable at this time to
provide the required financial statements of the businesses
acquired. All of the required financial statements will be
filed as an amendment to this Form 8-K as soon as practicable,
but not later than 60 days after the required filing date of
this Form 8-K.
(b) Pro Forma Financial Information. The required pro forma
financial information will be filed as an amendment to this
Form 8-K at the time the required financial statements are
filed.
(c) Exhibits - Filed herewith
2(a) Stock Purchase Agreement by and between Anuhco,
Inc., and William H. Kopman, dated December 18,
1995.
2(b) First Amendment to Stock Purchase Agreement by and
between Anuhco, Inc. and William H. Kopman, dated
March 7, 1996.
2(c) Second Amendment to Stock Purchase Agreement by and
between Anuhco, Inc. and William H. Kopman, dated
March 28, 1996.
10(a) Consulting Agreement by and between William H.
Kopman and Anuhco, Inc., dated March 29, 1996.
SIGNATURES
Pursuant to the requirements of Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its
behalf by the undersigned, hereunto duly authorized.
ANUHCO, INC.
By: /s/ Timothy P. O'Neil
Timothy P. O'Neil, President &
Chief Financial Officer
Date: April 12, 1996
EXHIBIT INDEX
Exhibit
No. Description
2(a) Stock Purchase Agreement by and between Anuhco, Inc. and
William H. Kopman, dated December 18, 1995.
2(b) First Amendment to Stock Purchase Agreement by and
between Anuhco, Inc. and William H. Kopman, dated March
7, 1996.
2(c) Second Amendment to Stock Purchase Agreement by and
between Anuhco, Inc. and William H. Kopman, dated March
28, 1996.
10(a) Consulting Agreement by and between William H. Kopman and
Anuhco, Inc., dated March 29, 1996.
EXHIBIT 2(a)
STOCK PURCHASE AGREEMENT
By and Between
ANUHCO, INC.
and
WILLIAM H. KOPMAN
Dated December 18, 1995
</PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Section Page
<S> <C> <C>
1. Sale and Purchase. . . . . . . . . . . . . . . . . . . 1
1.1 Purchase Price . . . . . . . . . . . . . . . . . . . . 1
1.2 Deposit . . . . . . . . . . . . . . . . . . . . . . . 2
2. Closing and Deliveries . . . . . . . . . . . . . . . . 2
2.1 Closing. . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Deliveries . . . . . . . . . . . . . . . . . . . . . . 2
3. Representations and Warranties of Kopman . . . . . . . 3
3.1 Organization, Powers and Qualifications. . . . . . . . 3
3.2 Capital Stock. . . . . . . . . . . . . . . . . . . . . 3
3.3 Stock Options, Warrants, Etc . . . . . . . . . . . . . 4
3.4 Articles of Incorporation, By-Laws, Minute Book
and Stock Book . . . . . . . . . . . . . . . . . . . . 4
3.5 Authority; No Violation, Etc . . . . . . . . . . . . . 5
3.6 Books and Records. . . . . . . . . . . . . . . . . . . 6
3.7 Compliance with Law. . . . . . . . . . . . . . . . . . 6
3.8 Financial Statements . . . . . . . . . . . . . . . . . 7
3.9 Liabilities and Obligations. . . . . . . . . . . . . . 7
3.10 Absence of Adverse Changes or Events . . . . . . . . . 8
3.11 Tax Reports. . . . . . . . . . . . . . . . . . . . . . 8
3.12 Dividends and Stock Purchases. . . . . . . . . . . . . 9
3.13 Title to Assets; Operating Authorities . . . . . . . . 9
3.14 Licenses, Permits, Etc . . . . . . . . . . . . . . . . 10
3.15 Contracts. . . . . . . . . . . . . . . . . . . . . . . 10
3.16 Collateral . . . . . . . . . . . . . . . . . . . . . . 11
3.17 Litigation . . . . . . . . . . . . . . . . . . . . . . 11
3.18 Insurance. . . . . . . . . . . . . . . . . . . . . . . 12
3.19 Overtime, Back Wages, Vacation, Discrimination, and
Occupational Safety Claims . . . . . . . . . . . . . . 12
3.20 Contracts for Personal Services. . . . . . . . . . . . 13
3.21 Employee Welfare and Pension Benefit Plans . . . . . . 13
(a) Plans . . . . . . . . . . . . . . . . . . . . . . 13
(b) Compliance with Internal Revenue Code and ERISA . 14
(c) Administration. . . . . . . . . . . . . . . . . . 14
(d) Claims. . . . . . . . . . . . . . . . . . . . . . 14
(e) Prohibited Transactions . . . . . . . . . . . . . 15
(f) Plan Documents. . . . . . . . . . . . . . . . . . 15
(g) No Multi-Employer Plans and No Plans for Retirees 15
(h) Contribution Paid . . . . . . . . . . . . . . . . 16
3.22 Commission Fees. . . . . . . . . . . . . . . . . . . . 16
3.23 Disclosure . . . . . . . . . . . . . . . . . . . . . . 17
3.24 Trademarks and Similar Rights. . . . . . . . . . . . . 17
3.25 Related Party Transactions . . . . . . . . . . . . . . 18
3.26 Environmental. . . . . . . . . . . . . . . . . . . . . 18
4. Representations and Warranties of Anuhco . . . . . . . 20
4.1 Organization, Powers and Qualifications. . . . . . . . 20
4.2 Authority; No Violation, Etc . . . . . . . . . . . . . 21
4.3 Commission Fees. . . . . . . . . . . . . . . . . . . . 21
4.4 Disclosure . . . . . . . . . . . . . . . . . . . . . . 22
5. Conduct of Business of the Company and UPAC. . . . . . 22
5.1 Business . . . . . . . . . . . . . . . . . . . . . . . 22
5.2 Adverse Changes. . . . . . . . . . . . . . . . . . . . 23
5.3 Maintenance of Properties, Permits, Licenses, Etc. . . 23
5.4 Maintain Corporate Existence . . . . . . . . . . . . . 23
5.5 Capital Stock. . . . . . . . . . . . . . . . . . . . . 23
5.6 Dividends. . . . . . . . . . . . . . . . . . . . . . . 23
5.7 Employment; Compensation; Benefits . . . . . . . . . . 24
5.8 Liabilities and Obligations. . . . . . . . . . . . . . 24
5.9 Capital Expenditures . . . . . . . . . . . . . . . . . 25
5.10 Sale of Assets . . . . . . . . . . . . . . . . . . . . 25
5.11 Leases; Contracts. . . . . . . . . . . . . . . . . . . 25
5.12 Insurance. . . . . . . . . . . . . . . . . . . . . . . 25
5.13 Books and Records. . . . . . . . . . . . . . . . . . . 25
5.14 Compliance with the Laws and Regulations . . . . . . . 26
5.15 Encumbrances . . . . . . . . . . . . . . . . . . . . . 26
5.16 Amendment to Articles of Incorporation and By-Laws . . 26
6. Covenants of Kopman and Anuhco . . . . . . . . . . . . 26
6.1 Update of Information. . . . . . . . . . . . . . . . . 26
6.2 Access to Business and Records . . . . . . . . . . . . 27
6.3 Efforts to Consummate. . . . . . . . . . . . . . . . . 27
6.4 Subordinated Debt. . . . . . . . . . . . . . . . . . . 27
6.5 Confidentiality. . . . . . . . . . . . . . . . . . . . 28
6.6 Public Announcement. . . . . . . . . . . . . . . . . . 28
6.7 Adjustments Because of Regulatory Disapproval. . . . . 28
6.8 Pension Plans. . . . . . . . . . . . . . . . . . . . . 29
6.9 Welfare Plans. . . . . . . . . . . . . . . . . . . . . 29
6.10 Claims by the Company. . . . . . . . . . . . . . . . . 29
6.11 Debt Due Company . . . . . . . . . . . . . . . . . . . 30
6.12 Income Tax Matters . . . . . . . . . . . . . . . . . . 30
(a) Federal and State Income Tax Returns. . . . . . . 30
(b) Audits. . . . . . . . . . . . . . . . . . . . . . 31
6.13 Accreditation, Due Diligence and Sophistication
Matters. . . . . . . . . . . . . . . . . . . . . . . . 32
6.14 Automobiles. . . . . . . . . . . . . . . . . . . . . . 33
6.15 Access to Company Records Post Closing . . . . . . . . 33
7. Conditions to Obligations of Anuhco to Consummate
Acquisition. . . . . . . . . . . . . . . . . . . . . . 34
7.1 Representations and Warranties True at Closing . . . . 34
7.2 Opinion of Counsel for Kopman. . . . . . . . . . . . . 34
7.3 Resignations . . . . . . . . . . . . . . . . . . . . . 34
7.4 Consulting Agreement . . . . . . . . . . . . . . . . . 34
7.5 Employment Agreements. . . . . . . . . . . . . . . . . 34
7.6 Bank Financing . . . . . . . . . . . . . . . . . . . . 35
7.7 Licenses, Permits, Etc . . . . . . . . . . . . . . . . 35
7.8 Performance of Covenants . . . . . . . . . . . . . . . 35
7.9 Board Authorization. . . . . . . . . . . . . . . . . . 35
7.10 Due Diligence. . . . . . . . . . . . . . . . . . . . . 35
7.11 Auditors Letter. . . . . . . . . . . . . . . . . . . . 36
7.12 Third Party Approvals. . . . . . . . . . . . . . . . . 37
7.13 Deliveries . . . . . . . . . . . . . . . . . . . . . . 37
7.14 No Action. . . . . . . . . . . . . . . . . . . . . . . 37
7.15 California Approval. . . . . . . . . . . . . . . . . . 37
8. Conditions to Obligation of Kopman to Consummate the
Acquisition. . . . . . . . . . . . . . . . . . . . . . 38
8.1 Representations and Warranties True at Closing. . . . . 38
8.2 Opinion of Counsel for Anuhco . . . . . . . . . . . . . 38
8.3 Consulting Agreement. . . . . . . . . . . . . . . . . . 38
8.4 Performance of Covenants. . . . . . . . . . . . . . . . 38
9. Termination . . . . . . . . . . . . . . . . . . . . . . 38
10. Counterparts. . . . . . . . . . . . . . . . . . . . . . 39
11. Contents of Agreement, Parties in Interest,
Assignment, Etc. . . . . . . . . . . . . . . . . . . . 40
12. Indemnification . . . . . . . . . . . . . . . . . . . . 40
12.1 General Indemnification . . . . . . . . . . . . . . . . 40
12.2 Claims Procedure. . . . . . . . . . . . . . . . . . . . 41
(a) Third Party Claims . . . . . . . . . . . . . . . . 41
(b) Non-Third Party and Other Claims . . . . . . . . . 43
12.3 Timing of Claim Notice. . . . . . . . . . . . . . . . . 44
12.4 Consent to Jurisdiction and Venue . . . . . . . . . . . 45
12.6 Expiration of Indemnity Claims. . . . . . . . . . . . . 46
13. Notices . . . . . . . . . . . . . . . . . . . . . . . . 46
14. Confidentiality . . . . . . . . . . . . . . . . . . . . 47
15. Governing Law . . . . . . . . . . . . . . . . . . . . . 48
</TABLE>
</PAGE>
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement"), is dated
December 18, 1995, by and between ANUHCO, INC., a Delaware
corporation ("Anuhco"), and WILLIAM H. KOPMAN of Jupiter, Florida
("Kopman").
WITNESSETH:
WHEREAS, Kopman owns all of the issued and outstanding
shares of capital stock of Universal Premium Acceptance
Corporation, a Missouri corporation (the "Company") and UPAC of
California, Inc., a California corporation ("UPAC");
WHEREAS, Anuhco wishes to acquire all of the issued and
outstanding shares of both Company and UPAC (the "Shares") and
Kopman is willing to sell the same to Anuhco, on the terms and
provisions hereinafter set forth:
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements herein contained, the parties
hereto, intending to be legally bound, agree as follows:
1. Sale and Purchase.
Kopman agrees to sell and cause to be transferred to Anuhco
at the Closing, as hereinafter defined in Section 2.1, and Anuhco
agrees to purchase at the Closing, the Shares, being 400 shares
of the $100 par value common capital stock of the Company and
1,000 shares of the $1 par value common capital stock of UPAC.
1.1 Purchase Price. Anuhco shall pay Kopman at the
Closing, and upon delivery of certificates representing the
Shares duly endorsed and in proper form for transfer, a purchase
price of $11,500,000, increased by interest on the purchase price
from 70 days after the date hereof until the Closing, at the
Untied States Treasury Bill rate in effect at the commencement of
such period.
1.2 Deposit. Upon the execution hereof, Anuhco shall
deposit the sum of $500,000 in accordance with and pursuant to
the terms of an Escrow Agreement, attached hereto as Exhibit 1.
2. Closing and Deliveries.
2.1 Closing. The Closing shall be at the offices of
Hillix, Brewer, Hoffhaus, Whittaker & Wright, L.L.C., 2420
Pershing Road, Suite 400, Kansas City, Missouri 64108, at 10:00
a.m., C.S.T., on such date, after the conditions herein specified
have been satisfied or waived, as Anuhco shall specify by written
notice to Kopman, delivered not less than three (3) days before
Closing but in no event more than 10 days after satisfaction or
waiver of the last such condition to be fulfilled, or on such
other date or at such other place or time as is agreed upon in
writing by the parties, provided however that in no event shall
the Closing occur or the Closing Date be established later than
March 31, 1996. If Closing does not occur on or before March 31,
1996, this Agreement and any other arrangements or obligations
among the parties (except for Sections 9(c) and 14 hereof) shall
terminate and be of no further force and effect.
2.2 Deliveries. At the Closing, (a) Kopman shall deliver
to Anuhco certificates representing record ownership of the
Shares, duly endorsed and in proper form for transfer, free and
clear of all encumbrances; (b) Anuhco shall deliver to Kopman the
purchase price; and (c) the parties shall deliver such other
documents as are required pursuant to this Agreement to be then
executed and delivered.
3. Representations and Warranties of Kopman. Kopman
represents and warrants to Anuhco as follows:
3.1 Organization, Powers and Qualifications. Except as
disclosed in Schedule 3.1, the Company and UPAC are duly
organized, validly existing and in good standing under the laws
of the States of Missouri and California, respectively, have all
requisite corporate power and authority to own their properties
and assets and carry on their businesses as now conducted, and
are qualified as foreign corporations to do business and are in
good standing in every jurisdiction in which such qualification
is necessary because of the nature or extent of their operations
or property owned, leased or operated, unless the failure to so
qualify would not have a material adverse impact on their ability
to own their respective assets and conduct their respective
operations, all of which jurisdictions are separately listed for
each on Schedule 3.1. The Company does not own any interest,
directly or indirectly, in any corporation, partnership, joint
venture, limited liability company, proprietorship, association,
trust, or other business or entity, and UPAC owns no interest in
any of the above.
3.2 Capital Stock. The Company has authorized capital
stock consisting of 750 shares of common stock, $100 par value,
of which 400 shares are issued and outstanding, all of which are
owned beneficially and of record by Kopman. UPAC has authorized
capital stock consisting of 10,000 shares of common stock, $1 par
value, of which 1,000 shares are issued and outstanding, all of
which are owned beneficially and of record by Kopman. Except as
set forth in Schedule 3.2, the Shares are duly authorized,
validly issued and outstanding, fully paid and nonassessable, and
were not issued in violation of pre-emptive or other statutory or
contractual rights.
3.3 Stock Options, Warrants, Etc. Except as disclosed in
Schedule 3.3, neither the Company nor UPAC has outstanding any
options, warrants, calls, convertible securities, rights,
agreements, or obligations to purchase, redeem, issue, sell,
distribute, dividend, or otherwise acquire or dispose of any
shares of its stock, and Kopman has no right or obligation to
sell, acquire or otherwise trade in any of the Shares.
3.4 Articles of Incorporation, By-Laws, Minute Book and
Stock Book. The Articles of Incorporation and all amendments
thereto and the by-laws, as amended, of the Company and UPAC
which have been made available to Anuhco for its inspection are
true, correct and complete, and such Articles and by-laws shall
be the Articles and by-laws in effect at the Closing. The minute
books of the Company and UPAC which have been made available to
Anuhco for its inspection contain accurate minutes of all
meetings and accurate consents in lieu of meetings of the Board
of Directors (and any committee thereof) and of the stockholders
of the Company and UPAC since their respective incorporations,
and accurately reflect all transactions referred to in such
minutes and consents in lieu of meetings during the periods
reflected therein. Except as reflected in such minute books,
there are no minutes of meetings or consents in lieu of meetings
of the Board of Directors (or any committee thereof) or of the
stockholders of the Company or UPAC, except for minutes or
consents which may be missing but which would evidence actions
that have been consented to by the Stockholders and Directors and
which reflect transactions that are not material to the Company
or UPAC. The stock ledgers of the Company and UPAC, which have
been made available to Anuhco for its inspection, contain
accurate records of all issuances and transfers of record of the
capital stock of the Company and UPAC since their respective
dates of incorporation.
3.5 Authority; No Violation, Etc. Except as reflected in
Schedule 3.5, the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have
been duly and validly authorized by all necessary action on the
part of Kopman, and this Agreement is the valid and binding
obligation of Kopman, enforceable in accordance with its terms
(except as may be limited by general principles of equity as to
the enforcement of remedies or applicable bankruptcy,
reorganization, insolvency, moratorium and similar laws affecting
creditors' rights generally, now or hereafter in effect). Except
as provided in Schedule 3.5, neither the execution and delivery
by Kopman of this Agreement nor the consummation by him of the
transactions contemplated hereby will cause a default (or give
rise to any right or termination, cancellation or acceleration)
under (a) any of the terms, conditions or provisions of any
agreement, instrument or obligation to which either he, the
Company or UPAC is a party, or by which any of them or any of
their respective properties or assets may be bound, except for
such conflict, breach or default as to which requisite waivers or
consents shall have been obtained prior to the Closing (all of
which are identified in Schedule 3.5); (b) the required licenses
or approvals of the state regulatory authorities referred to in
Section 3.14 hereof; or (c) any statute, rule or regulation or
any judgment, order, writ, injunction or decree of any court,
arbitrator, mediator, administrative agency or governmental body,
in each case applicable to either Kopman, the Company or UPAC or
any of their properties or assets.
3.6 Books and Records. The books and records of the
Company and UPAC fairly reflect the transactions to which either
is a party or by which the properties of either are subject or
bound, and such books and records have been kept and maintained
accurately and in sufficient detail to permit the preparation of
periodic financial statements in accordance with generally
accepted accounting principles consistently applied.
3.7 Compliance with Law. The Company and UPAC and their
use and occupancy of their assets and properties wherever located
are in substantial compliance with all federal, state and local
laws and ordinances and any order, rule or regulation of any
federal, state, local or other governmental agency or body,
except where the failure to comply, individually or in the
aggregate, would not have a materially adverse effect on their
respective business or operations.
3.8 Financial Statements. Kopman has delivered to Anuhco
true and complete copies of the unconsolidated audited financial
statements of the Company and UPAC as of and for the fiscal years
ended December 31, 1993 and 1994, certified by Brown, Smith,
Wallace, L.L.C., and true and complete copies of the
unconsolidated unaudited financial statements of the Company and
UPAC as of and for the nine months ended September 30, 1995.
Except, with respect to the unaudited September 30, 1995
financial statements, for (i) the absence of notes, (ii) the
absence of certain adjustments normally made at year end, and
(iii) exceptions set forth therein, if any, all such financial
statements (the "Financial Statements"), including the related
notes, have been prepared in accordance with generally accepted
accounting principles consistently applied and fairly present the
unconsolidated financial condition, results of operations, and
changes in financial position of the Company and UPAC at the
dates and for the periods indicated.
3.9 Liabilities and Obligations. Except as described in
Schedule 3.9, neither the Company nor UPAC has any material
liability or obligation (direct or indirect, contingent or fixed,
matured or unmatured) of any nature, whether arising out of
contract, tort, statute or otherwise, except liabilities and
obligations in the amounts and categories reflected, reserved
against or given effect to in the Financial Statements, and
liabilities subsequently incurred in the ordinary course of
business consistent with past practice.
3.10 Absence of Adverse Changes or Events. Except as
provided in Schedule 3.10, since December 31, 1994, the Company
and UPAC have been operated in all material respects in the
ordinary course of their businesses consistent with past practice
in prior periods and have not changed or altered their past
practices with respect to recording income and expenses and
establishing reserves for uncollectible accounts.
3.11 Tax Reports.
(a) Except as disclosed in Schedule 3.11, (a) all tax
returns and reports (or timely extensions thereof) (including but
not limited to all income tax, unemployment compensation, social
security, payroll, sales and use, excise, privilege, property, ad
valorem, franchise, license, school and any other tax under the
laws of the United States or any state or municipal or political
subdivision thereof) required to be filed by or for the Company
and UPAC (the "Tax Returns") have been filed with and the taxes
paid to the appropriate governmental agencies in all
jurisdictions in which such returns and reports are required to
be filed and taxes paid, and all such returns and reports
correctly reflect the taxes of the Company and UPAC for the
periods covered thereby; (b) neither the Company, UPAC, nor
Kopman has received any notice of assessment or proposed
assessment by the Internal Revenue Service or any other taxing
authority in connection with any Tax Returns; and (c) there are
no pending tax examinations of or tax claims asserted against the
Company or UPAC or their properties or operations.
(b) Since January 1, 1988 with respect to the Company, and
since the date of the acquisition of its stock by Kopman with
respect to UPAC, both of such companies have maintained valid
elections to be treated as Subchapter "S" corporations under the
Internal Revenue Code and such states as recognize "S"
corporation status for state income tax purposes.
3.12 Dividends and Stock Purchases. Except as indicated in
Schedule 3.12, since December 31, 1994, neither the Company nor
UPAC has declared, set aside or made payment of any dividend or
other distribution in respect of any shares of its capital stock,
or repurchased, redeemed or otherwise acquired any shares of its
capital stock.
3.13 Title to Assets; Operating Authorities. Except as
disclosed in Schedule 3.13, the Company and UPAC have good and
marketable title to all of their properties and assets material
to the operation of their business and reflected in the Financial
Statements and those acquired by the Company or UPAC thereafter,
except properties and assets sold or otherwise disposed of in the
ordinary course of business consistent with past practice in
prior periods, free and clear of all mortgages, liens, pledges,
charges or encumbrances or other third party interests of any
nature whatsoever, except (a) as reflected or reserved for in the
Financial Statements, or (b) the lien of current taxes not yet
due and payable (collectively "Permitted Liens").
3.14 Licenses, Permits, Etc. The Company and UPAC have all
licenses and permits, (all of which are listed on Schedule 3.14),
each of which is properly and validly issued and in full force
and effect, necessary for the operation of the business of the
Company and UPAC as now and, with respect to the Company and,
since the date of acquisition by Kopman, with respect to UPAC, in
the past conducted, except where the failure to secure such a
permit would not have a materially adverse effect on the business
or operations of the Company or UPAC.
3.15 Contracts.
(a) All written contracts, agreements, leases, mortgages or
commitments, excluding premium finance agreements and such as
involve payments of less than $5,000 on an annualized basis or
such as are terminable by the Company or UPAC without penalty on
30 days or less written notice, to which the Company or UPAC is a
party or may be bound or to which their assets are subject are
listed on Schedule 3.15 ("Contracts"). All Contracts are valid,
binding on and enforceable against the parties to them, and in
full force and effect on the date hereof, and neither the Company
nor UPAC has violated any provision of, or committed or failed to
perform any act which with notice, lapse of time or both would
constitute a material default under the provisions of any
Contract. Copies of all Contracts disclosed on Schedule 3.15
have been made available to Anuhco for inspection. Schedule 3.15
also separately identifies all Contracts otherwise required to be
listed thereon which require the consent or approval of third
parties to the execution and delivery of this Agreement or to the
consummation and performance of the transactions contemplated
hereby, and Kopman agrees to use his best efforts to obtain prior
to the Closing all such consents or approvals.
(b) Except as set forth in Schedule 3.15, all premium
finance agreements to which the Company or UPAC is a party are
valid and binding upon and enforceable against the parties to
them, in full force and effect, in compliance with all applicable
laws and regulations, and neither the Company nor UPAC has
violated any provision of, or committed or failed to perform any
act which with notice, lapse of time, or both would constitute a
material default under the provisions of any such premium finance
agreements.
3.16 Collateral. With respect to each premium finance
agreement to which the Company or UPAC is a party, the Company or
UPAC has been validly authorized to cancel and recover the
unearned premium on one or more insurance policies, the premiums
for which have been advanced by the Company or UPAC, and neither
the Company nor UPAC has cancelled any such policy without prior
delivery to all persons entitled thereto of all required written
notice of intention to do so.
3.17 Litigation. Except as disclosed in Schedule 3.17, (a)
no claim, action, suit, arbitration, investigation or other
proceeding, whether civil or criminal in nature, is pending, or
to Kopman's knowledge, contemplated against the Company or UPAC
or any of their properties or with respect to the transactions
pursuant to this Agreement before any court, governmental agency,
authority or commission, arbitrator or mediator; and (b) there
are no judgments, consent decrees, injunctions, or any other
judicial or administrative or other mandates outstanding against
or which might be expected to adversely affect the Company or
UPAC or their assets, liabilities, income, financial condition,
results of operations or business prospects or their right to
conduct their business as presently conducted.
3.18 Insurance. Schedule 3.18 lists all policies of
insurance held by or maintained on behalf of the Company or UPAC.
Copies of all such insurance policies disclosed on Section 3.18
have been made available to Anuhco for inspection. All such
policies of insurance are in full force and effect. No notices
of cancellation or nonrenewal have been received and all premiums
to date have been paid in full. Kopman has furnished to Anuhco a
list of all claims notices which have been given to any of such
insurers.
3.19 Overtime, Back Wages, Vacation, Discrimination, and
Occupational Safety Claims. Except as disclosed in Schedule 3.19
or as fully reserved in the Financial Statements, to the best of
Kopman's knowledge there are no outstanding or contemplated
claims against the Company or UPAC (whether under federal or
state law, under any employment agreement or otherwise) asserted
by any applicant for employment, or present or former employee,
on account of or for (a) overtime pay, other than overtime pay
for work done on the current payroll period; (b) wages or salary
for any period other than the current payroll period; (c) any
amount of vacation pay or pay in lieu of vacation time off; or
(d) any material violation of any other term or condition of
employment or of any statute, ordinance or regulation relating to
discrimination, occupational safety, leave, condition of
premises, disability or employment practices.
3.20 Contracts for Personal Services. Except as set forth
in Schedule 3.20, neither the Company nor UPAC is a party to or
bound by any contract, agreement or undertaking with any person
for or related to personal services rendered or to be rendered by
any person, and neither the Company nor UPAC has any policy for
payment of severance pay.
3.21 Employee Welfare and Pension Benefit Plans.
(a) Plans. Attached hereto as Schedule 3.21 is a true and
complete list of all plans, funds and programs that are or within
the three year period preceding the date hereof have been
maintained by Company or UPAC, or for which either contributes or
is required to contribute, which constitute "employee welfare
benefit plans" or "employee pension benefit plans" within the
meaning of Section 3(1) and (2) of the Employee Retirement Income
Security Act ("ERISA"). Such plans, funds and programs are
hereinafter collectively referred to as the "Plans".
(b) Compliance with Internal Revenue Code and ERISA. With
respect to all such Plans, and all related trust agreements,
annuity contracts or other funding instruments, Company and UPAC
are now in material compliance with, and have materially complied
in the past, both as to form and operation, with all applicable
provisions of ERISA and of the Internal Revenue Code, as amended
(the "Code"), including sections of the Code relating to
coverage, where required in order to be tax-qualified. All
necessary governmental approvals for such Plans have been
obtained, or applied for, and a favorable determination as to the
qualification under the Code of each employee pension benefit
plan and each material amendment thereto has been made by the
Internal Revenue Service or a request for such a determination
has been filed with the Internal Revenue Service within the
remedial amendment period provided by Code SS 401(b) and
regulatory guidance thereunder.
(c) Administration. Each such Plan has been administered
to date in material compliance with the requirements of the Code
and of ERISA, and all reports required by any governmental agency
with respect thereto have been timely filed.
(d) Claims. There is no litigation and there are no
proceedings before the U.S. Department of Labor, the Internal
Revenue Service or any other commission or administrative or
regulatory authority pending against the Company, UPAC or any
fiduciary of any such Plan relating to claims for benefits
thereunder or relating in any way to the maintenance or operation
of such Plans; and, to the knowledge of Kopman, no such
litigation or proceeding has been threatened. There are no
audits now being conducted of any such Plan by the Department of
Labor or Internal Revenue Service, and, to the knowledge of
Kopman, none have been scheduled or noticed.
(e) Prohibited Transactions. Neither the Company, UPAC nor
any fiduciary under such Plan has engaged in (A) any transactions
in violation of Section 406 of ERISA for which no exemption
exists under Section 408 of ERISA, or (B) any "prohibited
transaction", as that term is defined in Section 4975(c) of the
Code, for which no exemption exists under Section 4975(d) of the
Code.
(f) Plan Documents. Kopman has delivered to Anuhco, with
respect to each of the Plans, correct and complete copies of (A)
all current Plan documents and amendments, trust agreements and
insurance contracts, (B) the most recent IRS determination
letter, (C) the Annual Report (Form 5500 Series) and
accompanying schedules, for each of the last three years as
filed, (D) the current summary plan description and summaries of
material modifications relating to each Plan, and (E) the most
recent financial statements.
(g) No Multi-Employer Plans and No Plans for Retirees.
Except as set forth in Schedule 3.21(g), neither the Company nor
UPAC is now or in the preceding six (6) years has been obligated
to contribute to a multi-employer pension plan as defined in
Section 37(A) of ERISA, and has not incurred any liability on
account of a "partial withdrawal" or a "complete withdrawal"
(within the meaning of Sections 4203 and 4205, respectively, of
ERISA) with respect to any multi-employer plan, and no Plan
provides medical or death benefits (whether or not insured) with
respect to current or former employees of the Company or UPAC
beyond their retirement or other termination of service (other
than (A) coverage mandated by law, or (B) death benefits under
any Plan intended to qualify under Section 401(a) of the Code.
(h) Contribution Paid. All accrued obligations of the
Company and UPAC whether arising by operation of law, by contract
or by past custom, for payments to trusts or other funds or to
any governmental body, with respect to unemployment compensation,
social security, any Plan or any other benefits for employees of
the Company or UPAC as of the date hereof, have been paid when
due, or adequate accruals therefor have been provided on the
Financial Statements. All reasonably anticipated obligations of
the Company and UPAC (whether arising by operation of law, by
contract, by past custom or otherwise) for salaries, vacation,
sick pay, personal day and holiday pay, bonuses and other forms
of compensation which were payable to the employees of the
Company or UPAC as of date hereof have been paid or adequate
accruals therefor have been made in the Financial Statements.
3.22 Commission Fees. In connection with the transactions
contemplated by this Agreement, other than Ernst & Young LLP, no
broker, finder or similar agent has been employed by or on behalf
of Kopman, the Company or UPAC, and no person with which any of
them has had dealings or communications of any kind is entitled
to a commission or other compensation for which Anuhco, the
Company or UPAC may be liable.
3.23 Disclosure. No representation or warranty herein,
including the Schedules hereto, nor any information contained in
the Financial Statements, the Exhibits to this Agreement or any
certificate, statement, or other document delivered by Kopman,
the Company or UPAC hereunder, contains any untrue statement of
material fact or omits to state a material fact necessary in
order to make the statements contained therein or herein, in
light of the circumstances under which they were made, not
misleading.
3.24 Trademarks and Similar Rights. The Company or UPAC own
or are licensed or otherwise have the right to use all patents,
trademarks, service marks, common trade names, copyrights,
inventions, trade secrets, proprietary processes and other
intellectual property rights listed on Schedule 3.24. No person
or party has asserted or threatened to assert, any claim that the
rights used by the Company or UPAC in the operation of their
businesses infringes any rights owned or held by any other
person, and there is no pending, or to Kopman's knowledge,
contemplated claim or litigation against the Company or UPAC
contesting their right to use such.
3.25 Related Party Transactions.
(a) Except as disclosed in Schedule 3.25, neither the
Company nor UPAC is a party to or bound by any oral or written
contract, agreement or understanding with or affecting Kopman or
any Affiliate of Kopman (as hereinafter defined) (i) related to
the sharing of employees, services, facilities, credit
arrangements or other assets; (ii) related to expense (including
tax) sharing or the provision of management services; (iii)
whereby they or either of them guarantee or otherwise assume a
contingent obligation in respect of the obligation of another; or
(iv) whereby they or either of them are co-debtor, co-insured or
share joint or common ownership of property with another.
(b) Except as disclosed in Schedule 3.25, neither Kopman
nor any Affiliate of Kopman has any direct or indirect interest
in, or serves as an officer, director, employee or consultant of
any competitor, client or supplier (whether present or potential)
of the Company or UPAC. Relationships described in this Section
3.25 (a) or (b) are herein collectively referred to as "Related
Party Transactions".
(c) For purposes of this Section 3.25, an Affiliate is one
who controls, is controlled by, or is under common control with
Kopman.
3.26 Environmental. Neither the Company nor UPAC, since the
Company's date of incorporation, and the date of acquisition by
Kopman of the stock of UPAC, has owned any interest in real
property, or been the operator of any site containing, or
transported any hazardous materials. Neither the Company nor
UPAC, since their respective dates of incorporation, has, as an
occupant or tenant of real property, handled or used any
Hazardous Material and no leak, spill, release, deposit, leach,
migration, discharge, emission or disposal of any hazardous
materials has occurred on any real property occupied or leased by
either the Company or UPAC. Kopman represents and warrants to
Anuhco that the Company and UPAC have incurred no liability for
any Hazardous Materials while occupying or leasing any real
property. For purposes of this Section 3.26, "hazardous
materials" means without limitation any substance: (i) the
presence of which requires investigation or remediation under any
federal, state or local statute, regulation, order, ordinance,
action, guideline, requirement, permit, notice or policy; or (ii)
which is reasonably considered to pose an actual or potential
threat to the health or safety of persons; or (iii) which is or
at any time becomes regulated as "hazardous," "toxic," a
"pollutant", or a "contaminant" under any local, state or federal
governmental authority; or (iv) which is toxic, explosive,
corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic, or otherwise hazardous which is or becomes regulated
by any governmental authority; or (v) that contains gasoline,
diesel fuel or other petroleum hydrocarbons or fraction thereof.
Such terms also includes, without limitation: (i) asbestos and
PCB-containing and polychlorinated biphenyl-containing equipment
including transformers; (ii) any material, substance or waste
defined as "hazardous waste" pursuant to Section 1004 of the
Resource Conservation and Recovery Act (42 U.S.C. SS 6901 et
seq.); (iii) any material, substance or waste defined as
"hazardous substance" pursuant to Section 101 of the
Comprehensive Environmental Response, Compensation and Liability
Act (42 U.S.C. SS 9601, et seq.) or (iv) any material, substance
or waste defined as "regulated substance" pursuant to Subchapter
9 of the Solid Waste Disposal Act (42 U.S.C. SS 6991, et seq.) or
(v) any material, substance or waste regulated by the hazardous
Materials Transportation Act (49 U.S. C. Appendix SS 1801, et
seq.), the Federal Insecticide, Fungicide and Rodenticide Act,
Federal Pesticide Act (7 U.S.C. SS 136, et seq.), the Federal
Safe Drinking Water Act (42 U.S.C. SS 300(f), et seq.), the Toxic
Substances Control Act (15 U.S.C. SS 2061, et seq.), the Clean
Air Act (42 U.S.C. SS 7401, et seq.) or the Clean Water Act (33
U.S.C. SS 1251, et seq.), and all other federal, state and local
laws, statutes and ordinances applicable to Hazardous Materials,
or any regulations promulgated pursuant thereto as well as any
judicial or administrative interpretation thereof; all of the
foregoing of which are hereinafter collectively referred to as
the "laws".
4. Representations and Warranties of Anuhco. Anuhco
represents and warrants to Kopman as follows:
4.1 Organization, Powers and Qualifications. Anuhco is
duly organized, validly existing and in good standing under the
laws of the State of Delaware, has all requisite corporate power
and authority to own its properties and assets and carry on its
business as now conducted.
4.2 Authority; No Violation, Etc. When the execution and
delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly
authorized by a majority of the directors of Anuhco, this
Agreement will be a valid and binding obligation of Anuhco,
enforceable in accordance with its terms (except as may be
limited by general principles of equity to the enforcement of
remedies or applicable bankruptcy, reorganization, insolvency,
moratorium and similar laws affecting creditors' rights generally
now or hereafter in effect). Neither the execution and delivery
by Anuhco of this Agreement nor the consummation by it of the
transactions contemplated hereby will violate, cause a default
(or give rise to any right of termination, cancellation or
acceleration) under or require any consent, approval, notice or
filing pursuant to (a) any of the terms, conditions or provisions
of any agreement, instrument or obligation to which Anuhco is a
party, or by which it or any of its properties or assets may be
bound, (b) the Certificate of Incorporation or Bylaws of Anuhco,
or (c) any statute, rule or regulation or any judgment, order,
writ, injunction or decree of any court, arbitrator, mediator,
administrative agency or governmental body, in each case
applicable to either Anuhco or any of its properties or assets.
4.3 Commission Fees. In connection with this Agreement and
the transactions contemplated hereby, no broker, finder or
similar agent has been employed by or on behalf of Anuhco, and no
person with which Anuhco has had any dealings or communications
of any kind is entitled to any brokerage commission, finder's fee
or any similar compensation for which Kopman would be liable.
4.4 Disclosure. No representation or warranty herein,
including the Schedules hereto prepared by Anuhco, nor any
information contained in the Exhibits to this Agreement or any
certificate, statement, or other document delivered by Anuhco
hereunder, contains any untrue statement of material fact or
omits to state a material fact necessary in order to make the
statements contained therein or herein, in light of the
circumstances under which they were made, not misleading.
5. Conduct of Business of the Company and UPAC. Kopman
warrants and covenants that, from and after the date hereof
through the Closing, he will cause the Company and UPAC to
conduct their businesses as follows:
5.1 Business. The Company and UPAC will conduct and
operate their businesses substantially in the ordinary course
consistent with past practice so as to protect and maintain such
businesses and the goodwill they now enjoy. The Company and UPAC
will preserve intact their present business organizations, keep
available the services of their present officers and employees,
and make good faith efforts to preserve their relationships with
customers and others having business dealings with them. Except
with the written approval of Anuhco, neither Kopman, the Company
nor UPAC will execute, agree to, or allow to continue any Related
Party Transaction except those disclosed in Schedule 3.24.
5.2 Adverse Changes. Neither the Company nor UPAC will
take or omit to take any action which would cause any adverse
change to occur in any material respect in their businesses,
assets, liabilities, income, financial conditions, results of
operations or prospects or waive any statute of limitations so as
to expand any tax or other liability.
5.3 Maintenance of Properties, Permits, Licenses, Etc. The
Company and UPAC will maintain all of their properties, assets,
licenses and permits, used or useful in their businesses in
present or better repair, order, and condition, except for
reasonable wear and use and damage by fire and unavoidable
casualty (subject, however, to the provisions of Section 5.12).
5.4 Maintain Corporate Existence. The Company and UPAC
will maintain their corporate existences in good standing in
their states of incorporation and their due qualifications in
good standing in all jurisdictions in which they are qualified to
do business.
5.5 Capital Stock. Neither the Company nor UPAC will make
any change in their authorized, issued or outstanding capital
stock or other securities or grant any options or other right to
acquire, whether directly or contingently, any of their capital
stock or other securities.
5.6 Dividends. Except as provided in Section 6.12 hereof,
neither the Company nor UPAC will declare, set aside, or pay any
dividend or make any redemption, repurchase or other distribution
in respect of their capital stock and other securities.
5.7 Employment; Compensation; Benefits. Except as provided
in Section 6.12 hereof, or as consented to in writing by Anuhco,
neither the Company nor UPAC will enter into any employment
contract, increase the rate of compensation payable or to become
payable by it to any officer or any other employee, or accrue or
pay to any of its officers or employees any bonus,
profit-sharing, retirement pay, insurance, death benefit, fringe
benefit or other compensation, except that which shall have
accrued in the ordinary course in connection with increases in
compensation of non-officer employees or the operation of the
existing employee benefit plans disclosed in Schedule 3.20, none
of which shall be terminated or cancelled except as contemplated
by this Agreement or as approved by Anuhco in writing.
5.8 Liabilities and Obligations. Neither the Company nor
UPAC will incur or otherwise become liable for any liabilities or
obligations (direct or indirect, contingent or fixed, matured or
unmatured) of any material nature, whether arising out of
contract, tort, statute or otherwise, including federal or state
income tax liabilities, except (a) liabilities and obligations
which are in the ordinary course of business consistent with past
practice in prior periods and which do not have a material
adverse effect on their financial condition and (b) liabilities
and obligations fully covered by insurance other than any
retained amounts.
5.9 Capital Expenditures. Neither the Company nor UPAC
will, without the prior written approval of Anuhco, enter into or
make commitments of a capital expenditure nature in excess of
$5,000 in the aggregate.
5.10 Sale of Assets. Neither the Company nor UPAC will
sell or dispose of any of their assets other than in the ordinary
course consistent with past practice in prior periods.
5.11 Leases; Contracts. Neither the Company nor UPAC will
enter into any lease or do or permit any act or omission to act
which act or omission will cause a breach of or a default in any
Contract.
5.12 Insurance. The Company and UPAC will maintain in full
force and effect all policies of insurance listed in Schedule
3.17. If any of the assets or properties owned or used by the
Company or UPAC are damaged or destroyed by fire or other
casualty, whether insured or uninsured, then, subject to the
rights, if any, of the lessors or mortgagees thereof, either the
Company or UPAC, as is the case, will promptly proceed with the
repair, restoration or replacement thereof in such manner and at
such location as Anuhco shall determine.
5.13 Books and Records. The Company and UPAC will maintain
their books and records in the manner in which they are presently
maintained.
5.14 Compliance with the Laws and Regulations. The Company
and UPAC will operate their businesses in compliance in all
material respects with all laws, rules and regulations applicable
to them and to the conduct of their businesses.
5.15 Encumbrances. Except for Permitted Liens, neither the
Company nor UPAC will mortgage, pledge or otherwise subject to
any lien, security interest, encumbrance or charge of any nature
any of their property or assets, or become committed so to do, or
permit or suffer any of such property or assets to become subject
to any mortgage, pledge, lien, security interest, encumbrance or
charge of any nature.
5.16 Amendment to Articles of Incorporation and By-Laws.
Neither the Company nor UPAC will amend its Articles of
Incorporation or By-Laws.
6. Covenants of Kopman and Anuhco. Kopman and Anuhco
covenant and agree to and with each other as follows:
6.1 Update of Information. Between the date hereof and the
Closing, Kopman will promptly disclose to Anuhco in writing, and
Anuhco will promptly disclose to Kopman in writing, information
of which they have knowledge (i) concerning any event that would
render any of their respective representations or warranties
untrue if made as of the date of such event, (ii) which renders
any information set forth in the Exhibits or Schedules to be no
longer correct in all material respects or (iii) which is known
to arise after the date hereof and which would have been required
to be included in the Exhibits and Schedules if such information
had existed on the date hereof.
6.2 Access to Business and Records. Between the date
hereof and the Closing, Anuhco and its officers, employees,
attorneys, accountants and agents shall have full reasonable
access to and the right to inspect and copy the books, records,
contracts, properties, and assets of the Company and UPAC, and to
consult with officers, employees, attorneys, accountants and
agents of and lenders to the Company and UPAC.
6.3 Efforts to Consummate. Subject to the terms and
provisions of this Agreement, each of the parties shall use its
or his best efforts to take or cause to be taken all action and
to do or cause to be done all things necessary, proper or
advisable under applicable laws and regulations to consummate and
make effective the transactions contemplated hereby, including,
without limitation, the obtaining of all consents,
authorizations, orders and approvals of any third party, whether
private or governmental, required or appropriate in connection
with such parties' performance of such transactions, and each of
the parties hereto shall cooperate with the others in all of the
foregoing.
6.4 Subordinated Debt. Anuhco agrees, at the Closing, to
deliver to Kopman its written guarantee of the payment of the
promissory note of the Company, dated December 31, 1993, payable
to Kopman in the principal amount of $1,000,000, plus unpaid
interest accrued thereon.
6.5 Confidentiality. From and after the Closing, Kopman
will keep secret and confidential all trade secrets and
confidential information heretofore or hereafter possessed by him
concerning the Company, UPAC, Anuhco and any affiliates of any
thereof and further agrees that he will at no time use for any
purpose whatsoever or disclose to any person, firm or corporation
(other than the Company, UPAC or Anuhco) any such information,
except to the extent that such information is no longer a trade
secret or confidential. Unless this Agreement is fully
consummated, Anuhco will (i) keep secret and confidential all
trade secrets and confidential information heretofore or
hereafter acquired by it concerning the Company and UPAC, and
(ii) will at no time use or disclose any such information to any
person, firm or corporation, except to the extent that such
information is no longer a trade secret or confidential.
6.6 Public Announcement. No party hereto shall, prior to
Closing, make any public announcement regarding the transaction
contemplated hereby without prior notice to the other party
hereto.
6.7 Adjustments Because of Regulatory Disapproval. The
parties agree that in the event any license or permit required in
the operation of the business of the Company or UPAC is revoked,
suspended or terminated as a result of the transaction
contemplated hereby (other than the fact that Anuhco is the
purchaser), or any act occurring before the Closing, the Purchase
Price shall be adjusted and an amount computed as hereinafter set
forth shall be immediately repaid by Kopman to Anuhco: For each
month, or major fraction thereof, not to exceed 12 months, in
which any such license shall be so revoked suspended or
terminated so as to prevent the Company or UPAC from conducting
its normal business in the state issuing the same, the purchase
price shall be reduced, and Kopman shall repay to Anuhco, an
amount equal to the actual loss incurred by the Company or UPAC
which, for purposes of this Agreement, shall be defined as the
amount of loans in place by the Company or UPAC in the
jurisdiction in which the license or permit is revoked, suspended
or terminated, multiplied by 6% per annum for the period between
revocation, suspension, or termination and the date that a
validly issued permit or license is reinstated; provided,
however, that no such Purchase Price adjustment shall be made
with respect to the revocation, suspension or termination of a
license in any state if Anuhco, or any corporation controlled by
it, has a license in such state which permits the continued
conduct of the business of the Company or UPAC therein. Anuhco
agrees to use its best efforts to promptly obtain re-licensure.
6.8 Pension Plans. [Left blank intentionally]
6.9 Welfare Plans. [Left blank intentionally]
6.10 Claims by the Company. At or before the Closing, the
Company shall assign to Kopman all of its rights in and to three
actions instituted by the Company and styled Universal Premium
Acceptance Corporation v. Phico Ins. Co., Universal Premium
Acceptance Corporation v. York Bank and Universal Premium
Acceptance Corporation v. Antimo S. Cesaro and Kopman agrees to
pay all costs incurred in connection with such action from and
after the date of such assignment, and indemnify the Company, and
all others liable on its behalf, from all loss, damage, liability
and expense, including attorneys and accountants fees, arising
from or related to such action and the facts and circumstances
from which it arises. Anuhco agrees to cause the Company, after
the Closing, to provide to Kopman reasonable access to such files
and other documents of the Company as shall be necessary to the
continuation of such actions.
6.11 Debt Due Company. Kopman agrees, at the Closing, to
pay to the Company and UPAC all notes and other indebtedness due
from him, or any of his Affiliates, including drawings by him or
any such affiliate on the Company's credit facility with Bank of
Boston, and to deliver to the Company and UPAC a release of any
and all claims which he may have against either, except as
provided in this Agreement.
6.12 Income Tax Matters.
(a) Federal and State Income Tax Returns. Pursuant to an
election made, Kopman is taxed for federal and certain state
purposes on all of the taxable income of the Company and UPAC.
At any time between the date hereof and the Closing, the Company
or UPAC may distribute to Kopman an amount, in the aggregate,
estimated to equal the state and federal taxes, computed at
maximum rates, to be due from him with respect to the operations
of the Company and UPAC for all periods through December 31,
1995, not to exceed in the aggregate the sum of $400,000. After
the Closing the Company and UPAC shall distribute to Kopman an
amount, in the aggregate, equal to the state and federal taxes,
computed at his effective rates, to be due from him with respect
to the operations of the Company and UPAC from January 1, 1996 to
the Closing. After said payments are made, neither the Company
nor UPAC shall have any further obligation to Kopman with respect
to taxes, and shall have no rights in any overpayments Company or
UPAC may have made to Kopman or any taxing authority.
Furthermore and regardless of any provision of this Agreement to
the contrary notwithstanding, any adjustments to such income tax
returns for tax periods ending on or prior to the Closing Date
which are attributable to the Company and UPAC tax items and
which result in either an assessment or a refund of state or
federal income tax will be paid or collected by Kopman.
(b) Audits. In the event of an income tax audit with
respect to a year ending on or before the Closing, Anuhco shall
cause Company and UPAC to cooperate with Kopman and shall provide
Kopman with any documents or other information reasonably
requested by him.
6.13 Accreditation, Due Diligence and Sophistication
Matters.
(a) Anuhco has been provided an opportunity to ask
questions of, and Anuhco has received answers thereto
satisfactory to it from Kopman and his representatives regarding
the terms and conditions of this Agreement and other matters
pertaining to this transaction. Anuhco has investigated and is
familiar with the affairs and financial condition of the Company
and UPAC and has been given sufficient access to and has acquired
sufficient information including the Schedules to this Agreement
and all other information and documents as requested by Anuhco
including but not limited to financial information, corporate
records, tax returns, contracts, forms, leases and premium
finance contracts and related documents about the Company and
UPAC to reach an informed and knowledgeable decision to acquire
the Shares.
(b) Anuhco has such knowledge and experience in financial
affairs that it is capable of evaluating the merits and risks of
this transaction. Anuhco's financial situation is such that it
can afford to bear the economic risk of holding the Shares for an
indefinite period of time.
(c) Anuhco is acquiring the Shares pursuant to this
Agreement for its own account and not with a view to or for sale
in connection with any distribution of all or any part of the
Shares. Anuhco acknowledges Kopman's understanding that the sale
of the Shares hereunder is intended to be exempt from
registration under the Securities Act of 1933, as amended (the
"Securities Act").
(d) Anuhco is an "Accredited Investor" within the
definitions set forth in Securities Act Rule 501(a).
(e) Nothing contained in this Section 6.13 is intended to
limit in any way (i) any representation, warranty or covenant of
Kopman, contained herein or in any document delivered pursuant
hereto, or (ii) Anuhco's right to rely thereon.
6.14 Automobiles. Kopman shall, at the Closing, purchase
the Mercedes Benz automobile owned by the Company at a cash price
equal to the depreciated book value for the same on the Company's
books, and assume all obligations of the Company pursuant to the
lease of a BMW automobile in which the Company is lessee.
Company shall at such time assign such lease to Kopman, and from
and after such date Kopman shall indemnify the Company against
all liability, loss, damage and expense, including attorneys
fees, arising from such lease and the operation of such
automobile.
6.15 Access to Company Records Post Closing. Anuhco shall
cause Company to provide all reasonably necessary access and
provide copies of business records or documents of Company or
UPAC to Kopman, at his cost and expense, for any reasonably
necessary business or regulatory need post closing. Anuhco will
provide to Kopman copies of the financial statements of the
Company and UPAC for the period ending on the Closing promptly
after the same are available in final form. Such access shall
include attorney and accountant privileged or confidential
information, subject to Kopman's agreement to maintain the
privilege with respect to privileged documents supplied to him
hereunder, and not waive such privilege without prior notice to
and consent of the Company.
7. Conditions to Obligations of Anuhco to Consummate
Acquisition. The obligations of Anuhco to consummate the
transactions provided for in this Agreement shall be subject to
satisfaction, on or before the Closing, of the following
conditions:
7.1 Representations and Warranties True at Closing. All
representations and warranties of Kopman shall be true on and as
of the Closing as though such representations and warranties were
made at and as of such date, except as otherwise expressly stated
herein.
7.2 Opinion of Counsel for Kopman. Anuhco shall have
received an opinion of counsel for Kopman, in the form of Exhibit
5 hereto.
7.3 Resignations. Anuhco shall have received signed
resignations of such of the officers and directors of the Company
and UPAC as Anuhco designates.
7.4 Consulting Agreement. Kopman shall have executed the
Consulting Agreement in the form of Exhibit 2.
7.5 Employment Agreements. LeRoy Serpe and Elizabeth
Dodson-Pursley shall have executed the Employment Agreements in
the form of Exhibit 3 and 4, respectively.
7.6 Bank Financing. Bank of Boston shall have agreed in
writing to amendments to its credit facility with the Company
dated as of August 14, 1995, to continue financing of the
Company's and UPAC's operations, on terms not less advantageous
to the Company than existing at the date hereof and otherwise
satisfactory to Anuhco, or Clipper Receivables Corporation shall
have agreed in writing to amendments to its Receivables Purchase
Agreement, dated as of October 20, 1995, to provide financing of
the Company's and UPAC's operations to the extent and upon terms
not less satisfactory than provided to the Company by Bank of
Boston as of the date hereof, and otherwise satisfactory to
Anuhco.
7.7 Licenses, Permits, Etc. Each state or other
governmental unit identified on Schedule 3.14 by which the
Company or UPAC, as of the date hereof, is licensed to conduct
its business, and which shall require, as a condition of such
license, prior approval, notice or application for approval of
the transactions contemplated hereby, shall have so approved or
be so notified or a request for approval shall be filed with such
state or governmental unit prior to the Closing.
7.8 Performance of Covenants. Kopman shall have materially
performed each and every obligation to be performed by him
hereunder at or before the Closing.
7.9 Board Authorization. [Left blank intentionally]
7.10 Due Diligence. Anuhco shall have completed its
investigation of the business of the Company and UPAC without
becoming aware of material adverse facts or circumstances, all of
which Anuhco agrees to conclude within 14 days of the date
hereof, except that Anuhco shall have to and including January
15, 1996, within which to satisfy itself as to the sales force of
the Company and UPAC.
7.11 Auditors Letter. If the Closing takes place after
February 15, 1996, Anuhco shall have received from and at the
expense of the Company the unqualified opinion of the auditors of
the financial statements of the Company and UPAC to the effect
that the same fairly present the financial condition and results
of operations thereof as of and for the year ended December 31,
1995, and, if the Closing takes place prior to February 15, 1996,
Anuhco shall have received from such auditors, dated not more
than 10 days before the Closing, a report, based upon such
auditor's review (without audit) of the most recently completed
month-end balance sheet and income statement of the Company and
UPAC, from which such auditors conclude that nothing has come to
their attention which has caused them to believe that:
(a) Such most recently completed balance sheet and income
statement were not prepared in accordance with accounting
principles and practice consistent in all material respects with
those followed in the preparation of the Financial Statements;
(b) Such most recently completed balance sheet and income
statement would require any material adjustment for a fair
presentation of the financial condition and results of operations
of the Company and UPAC as of and for the period ended at the
date thereof;
(c) There is any necessity for the restatement of the
Company's Financial Statements as of December 31, 1994, or the
withdrawal or amendment of the auditors report thereon;
(d) There have been any material decreases in net Finance
Receivables or in the relationship between finance charges earned
and interest expense.
7.12 Third Party Approvals. Anuhco shall have received
evidence satisfactory to it that approvals have been received
from all third parties whose approval or consent is required to
consummate the transaction contemplated by this Agreement.
7.13 Deliveries. All deliveries required to be made under
this Agreement to Anuhco on or before the Closing shall have been
received.
7.14 No Action. No action, suit or proceeding shall have
been commenced, and no investigation by any governmental or
regulatory authority shall have been commenced, seeking to
restrain, prevent or change the transactions contemplated hereby
or seeking judgments against Anuhco, the Company or UPAC in
respect to the transactions contemplated hereby.
7.15 California Approval. Anuhco shall have received from
the California Corporations Commission all approvals required
with respect to the purchase of the stock of UPAC.
7.16 Conditions to Obligation of Kopman to Consummate the
Acquisition.
The obligation of Kopman to consummate this transaction
shall be subject to satisfaction, on or prior to the Closing, of
the following conditions:
8.1 Representations and Warranties True at Closing. The
representations and warranties of Anuhco shall be true on and as
of the Closing, as though such representations and warranties
were made at and as of such date, except as is otherwise
expressly contemplated herein.
8.2 Opinion of Counsel for Anuhco. Kopman shall have
received an opinion of counsel for Anuhco, reasonably
satisfactory to Kopman and his counsel.
8.3 Consulting Agreement. Anuhco shall have executed, or
caused the Company to execute and deliver, the Consulting
Agreement referred to in Sections 7.4 hereof.
8.4 Performance of Covenants. Anuhco shall have materially
performed each and every obligation to be performed by it
hereunder at or before the Closing.
9. Termination.
On or prior to Closing
(a) Kopman, by written notice to Anuhco, may terminate this
Agreement in the event that any of the conditions precedent
contained in Section 8 hereof to the performance of his
obligations which are to be performed at or prior to such date
shall not have been fulfilled prior to and cannot be fulfilled
concurrent with the Closing and shall not have been waived by
him, which termination shall not prejudice any claim for damages
or other relief which he may have at law or in equity against
Anuhco; and
(b) Anuhco, by written notice to Kopman, may terminate this
Agreement in the event that any of the conditions precedent
contained in Section 7 hereof to the performance of Anuhco's
obligations shall not have been fulfilled prior to and cannot be
fulfilled concurrent with the Closing and shall not have been
waived by Anuhco, which termination shall not prejudice any claim
for damages or other relief which Anuhco may have at law or in
equity against Kopman.
(c) Except as otherwise provided herein, each of the
parties to this Agreement shall pay all of its or his expenses
incurred in connection with this Agreement and the transactions
contemplated hereby, including without limitation the expenses of
lawyers, accountants, investment bankers, appraisers, and other
advisors.
(d) Either party may terminate this Agreement if the
transaction contemplated herein does not close on or before March
31, 1996.
10. Counterparts. This Agreement may be executed in two or
more counterparts each of which shall be deemed an original, but
all of such counterparts together shall be deemed to be one and
the same instrument. It shall not be necessary in making proof
of this Agreement or any counterpart hereof to produce or account
for any of the other counterparts.
11. Contents of Agreement, Parties in Interest, Assignment,
Etc.
This Agreement and the Exhibits and Schedules which are
attached hereto and are incorporated herein set forth the entire
understanding of the parties with respect to the subject matter
hereof. Any previous agreements or understandings between the
parties regarding the subject matter hereof are merged into and
superseded by this Agreement; provided however that if this
transaction is not closed Anuhco will continue to be bound by its
confidentiality agreement with Kopman. This Agreement may not be
assigned without the written consent of the parties. All
representations, warranties, covenants, terms and conditions of
this Agreement shall be binding upon and inure to the benefit of
and be enforceable by the respective successors and permitted
assigns of the parties hereto. Nothing herein express or implied
is intended or shall be construed to confer upon or to give any
person, other than the parties and their respective successors
and permitted assigns, any rights or remedies under or by reason
of this Agreement.
12. Indemnification.
12.1 General Indemnification. Subject to the terms and
conditions hereinafter set forth, the Company, UPAC and Anuhco,
and their respective officers and directors, and the successors
and assigns of all thereof, shall be indemnified by Kopman from
and against any and all damages, losses, liabilities and expenses
resulting from (a) any inaccuracy in or breach or nonfulfillment
of any representation, warranty, obligation, covenant, or
agreement made or undertaken in or under this Agreement by
Kopman; (b) any third party claims arising from or as the result
of any inaccuracy in or breach or nonfulfillment of any of the
foregoing; and (c) all actions, suits, judgments, costs and
expenses (including, without limitation, attorneys' fees)
incident to items (a) or (b) of this sentence. Subject to the
terms and conditions hereinafter set forth, Kopman, and his
successors, representatives and permitted assigns, shall be
indemnified by Anuhco from and against any and all damages,
losses, liabilities and expenses resulting from (a) any
inaccuracy in or breach or nonfulfillment of any representation,
warranty, obligation, covenant or agreement made or undertaken in
or under this Agreement by Anuhco; (b) any third party claims
arising from or as the result of any inaccuracy in or breach or
nonfulfillment of any of the foregoing; (c) all actions, suits,
judgments, costs and expenses (including, without limitation,
attorneys' fees) incident to items (a), or (b) of this sentence.
12.2 Claims Procedure. Claims for indemnification hereunder
shall be made as follows:
(a) Third Party Claims. In the event that any claim or
demand for which any party hereto would be entitled to
indemnification under this Agreement is asserted or sought to be
collected by a third party, the party(ies) seeking indemnity
shall give a Claim Notice (as described in Section 12.3 hereof)
to the party or parties from whom indemnity is sought. The
party(ies) from whom indemnity is sought shall have thirty (30)
days from the date of delivery of the Claim Notice (the "Notice
Period") to notify the party(ies) seeking indemnity whether or
not the right to indemnity for such claim is disputed and, if
disputed, the reasons therefor.
(1) If the right to indemnity is not disputed by the
party(ies) from whom indemnity is sought, such party(ies) shall
assume the control and defense and/or settlement of such claim or
demand, and the amount of any settlement or judgment and the
costs and expenses of such defense shall be paid by such
party(ies). If the party(ies) seeking indemnity shall desire to
participate in any such defense, such party(ies) may do so at its
or their sole cost and expense, in which event no settlement of
any claim or demand which would adversely affect the rights of
the party(ies) seeking indemnity may be made without the written
consent(s) of such party(ies), which consent(s) may not be
unreasonably withheld. Without limiting the generality of the
foregoing, it shall not be deemed unreasonable to withhold
consent to a settlement involving injunctive or other relief
against the party(ies) seeking indemnity or their respective
assets, employees or businesses. The party(ies) seeking
indemnity shall be kept fully informed of the status of any such
claim or demand at all stages thereof, regardless of whether or
not they participate in any such defense.
(2) If the right to indemnity is disputed by the
party(ies) from whom indemnity is sought or if such party(ies)
shall fail to respond within the Notice Period, the party(ies)
seeking indemnity shall have the right to control the defense
and/or settlement of such claim or demand, and the amount of any
settlement or judgment and the costs and expenses of such defense
(including, without limitation, attorneys' fees incurred in
connection therewith) may be the subject of a claim for
indemnification under Section 12.2(b) hereof. Nothing herein
contained shall prohibit or limit the right of the party(ies)
seeking indemnity hereunder to pursue such legal remedies as may
be available to it or them to enforce such right of indemnity
prior to or after the resolution of the third party's claim or
demand.
(3) The party(ies) seeking indemnity shall make
available to the party(ies) from whom indemnity is sought and
their attorneys and accountants all books and records of the
party(ies) seeking indemnity relating to any such claim or demand
and the parties agree to render each other such assistance as
they may reasonably require in order to ensure the proper and
adequate defense of any such claim or demand.
(b) Non-Third Party and Other Claims. In the event of a
claim or demand for which any party hereto would be entitled to
indemnification under this Agreement which does not involve a
claim or demand being asserted or sought to be collected by a
third party, the party(ies) seeking indemnity shall give a Claim
Notice, or in the case of claims or demands which have proceeded
in the manner described in Section 12.2(a)(2), a second Claim
Notice, with respect to such claim or demand to the party(ies)
from whom indemnity is sought. Unless disputed by the party(ies)
from whom indemnity is sought by written notice within thirty
(30) days of receipt of the claim notice to the party(ies)
seeking indemnity stating the reasons therefor, each claim under
this Section shall be paid within forty-five (45) days after the
date of receipt of the Claim Notice therefor. If any claim under
this Section shall not be paid within such forty-five (45) day
period, or if the party(ies) from whom indemnity is sought
dispute such claim by written notices within such thirty (30) day
period to the party(ies) seeking indemnity stating the reasons
therefor, the party(ies) seeking indemnity shall have the right
to commence legal proceedings for the enforcement of their rights
hereunder, and shall be entitled to recover interest thereon at
the rate of ten percent (10%) per year.
12.3 Timing of Claim Notice. Each Claim Notice shall be
given by the party(ies) seeking indemnity as promptly as
practicable after such party(ies) becomes or become aware of the
claim or demand and the facts indicating that a claim for
indemnification in respect of the same may be warranted;
provided, however, that no such claim notice may be sent after
the expiration of the time period provided in Section 12.5
herein. Each Claim Notice shall specify the nature of the claim
or demand, the applicable provision(s) of this Agreement or other
instrument under which the claim for indemnity arises and the
amount or the estimated amount thereof. No failure or delay in
giving a Claim Notice and no failure to include any specific
information or any reference to the provisions of this Agreement
or other instrument under which the claim for indemnification
arises shall affect the obligation of the party(ies) from whom
indemnification is sought, except to the extent that such failure
or delay shall adversely affect the ability of such party(ies) to
defend, settle or satisfy the claim or demand.
12.4 Consent to Jurisdiction and Venue. Kopman consents,
for the purposes of any suit, action or proceeding which may be
instituted with respect to this Agreement, the breach on non-
performance hereof, or the transaction contemplated hereby, to
the jurisdiction of the state or federal courts sitting in the
State of Missouri, agrees that venue is properly in such courts,
and agree that service of process maybe properly be had on him,
by mailing to him at the address provided in Section 13 hereof,
the papers or other documents sought to be so served.
12.5 Limits on Indemnity. The maximum liability of Kopman
with respect to claims arising from breaches of warranty or
representation, together with related legal expenses ("Warranty
Claims") shall be $600,000 (the "Maximum Claim Amount"). Anuhco
may not make any Warranty Claims against Kopman until Anuhco has
incurred damage, loss liability or expense with respect to
Warranty Claims that collectively equal $50,000 in the aggregate.
Indemnity claims with respect to a breach by Kopman of any
covenant (as opposed to an alleged breach of warranty or
representation) contained herein shall not be subject to such
Maximum Claim Amount, or the $50,000 threshold, but shall be
brought within the period provided in Section 12.6 hereof.
Additionally, indemnity claims with respect to the purchase price
adjustment set forth in Section 6.7 shall not be subject to the
$50,000 threshold.
12.6 Expiration of Indemnity Claims. All claims against
Kopman under this Article 12 must be asserted in writing by
Anuhco on or before March 31, 1997, except that claims for breach
of any warranty with respect to compliance by the Company or UPAC
with the Code, ERISA or state taxes may be brought within the
time provided in the statutes of limitation applicable thereto.
13. Notices. Any notices or other communications required
or permitted hereunder shall be deemed to have been given when
sent by certified or registered mail, postage prepaid, addressed
as follows:
if to Kopman, to: William H. Kopman
125 Commodore Drive
Jupiter, Florida 33477
Fax: (407) 575-5213
with a copy to: Richard S. Marx
Blumenfeld, Kaplan & Sandweiss PC
168 N. Meramec Avenue
St. Louis, Missouri 63105
Fax: (314) 863-9388
and if to Anuhco: Anuhco, Inc.
Attn: President
9393 W. 110th Street, Suite 100
Overland Park, KS 66210
with a copy to: Kent E. Whittaker, Esq.
Hillix, Brewer, Hoffhaus,
Whittaker & Wright, L.L.C.
2420 Pershing Road, Suite 400
Kansas City, MO 64108
or to such other persons and addresses as have been furnished by
either party to the other in writing. No notice, waiver, consent
or approval required or permitted hereunder shall be deemed
effective unless given in writing.
14. Confidentiality. Until the Closing, (i) any party may
make such disclosures as it reasonably considers are required by
law, but each party will notify the other parties in advance of
any such disclosure, (ii) advisors to the parties may place
"tombstone" notices of the transaction in financial and legal
newspapers and periodicals and (iii) the parties may disclose
this Agreement, but not its terms, in such manner as such party
deems in the exercise of good faith necessary or appropriate. In
the event that the transactions contemplated by this Agreement
are not consummated for any reason whatsoever, the parties hereto
agree not to disclose or use any confidential information they
may have concerning the affairs of the other parties, except for
information which is required by law to be disclosed.
Confidential information includes, but is not limited to:
customer lists and files, prices and costs, business and
financial records, surveys, reports, plans, proposals, financial
information, information relating to personnel contracts, stock
ownership, liabilities and litigation. At the Closing, Kopman
shall assign to Anuhco, without further compensation, all
confidentiality agreements, and his rights thereunder, with
persons to whom he has disclosed information about the Company or
UPAC in connection with the possible sale of the stock or assets
thereof.
15. Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Missouri
without reference or regard to the conflicts of laws and rules of
said state.
IN WITNESS WHEREOF, this Agreement has been executed on the
day and year first above written.
ANUHCO, INC.,
By: /s/ Timothy P. O'Neil
TIMOTHY P. O'NEIL
ATTEST:
/s/ Barbara J. Wackly
Secretary
/s/ William H. Kopman
WILLIAM H. KOPMAN
Exhibit 2(b)
FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made this 7th day of March, 1996, by and
between ANUHCO, INC., a Delaware corporation ("Anuhco") and
WILLIAM H. KOPMAN ("Kopman").
WITNESSETH:
WHEREAS, Anuhco and Kopman earlier entered into a Stock
Purchase Agreement (the "Agreement"), dated December 18, 1995,
pursuant to which Anuhco agrees to purchase and Kopman agrees to
sell all of the issued and outstanding shares of capital stock of
Universal Premium Acceptance Corporation ("Company") and UPAC of
California, Inc.; and
WHEREAS, the parties agree that there is good reason to
amend and supplement the terms of the Agreement; and
WHEREAS, the parties desire to here set forth the additional
terms which the parties desire to add to and change in the
Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1. Section 1.1 of the Agreement is hereby amended by
deleting all of paragraph 1.1 thereof, and substituting therefor
the following:
"1.1 Purchase Price. Anuhco shall pay Kopman at the
Closing, and upon delivery of certificates representing the
Shares duly endorsed and in proper form for transfer, a purchase
price of $11,250,000, increased by interest on the purchase price
from 70 days after the date hereof until the Closing, at the
United States Treasury Bill rate in effect at the commencement of
such period."
2. Section 5.7 of the Agreement is hereby amended by adding
to the end thereof the following:
"Anuhco hereby consents to the payment to Mr. LeRoy Serpe of
the sum of $250,000, which payment shall be in addition to his
ordinary compensation, prior to Closing."
3. Nothing contained hereto shall be deemed to amend,
modify or otherwise alter the terms of the Agreement, or the
rights and obligations of the parties thereunder, except as
herein expressly provided.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement the day and year first above written.
ANUHCO, INC.
By /s/ Timothy P. O'Neil
Timothy P. O'Neil
President
ATTEST:
/s/ Barbara Wackly
/s/ William H. Kopman
William H. Kopman
EXHIBIT 2(c)
SECOND AMENDMENT TO STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made this 28th day of March, 1996, by and
between ANUHCO, INC., a Delaware corporation ("Anuhco") and
WILLIAM H. KOPMAN ("Kopman").
WITNESSETH:
WHEREAS, Anuhco and Kopman earlier entered into a Stock
Purchase Agreement dated December 18, 1995, which has been
amended by a First Amendment to Stock Purchase Agreement, dated
March 7, 1996 (collectively the "Agreement"), pursuant to which
Anuhco agrees to purchase and Kopman agrees to sell all of the
issued and outstanding shares of capital stock of Universal
Premium Acceptance Corporation ("Company") and UPAC of
California, Inc.; and
WHEREAS, Section 7.7 of the Agreement provides that Anuhco
shall not be required to consummate such purchase unless and
until each state in which the Company is licensed, and which
shall require prior approval of such purchase, shall have so
approved the same; and
WHEREAS, such approval has not been obtained from the State
of Florida, though the laws of such state require the same, but
further provide that the purchase may be concluded so long as it
is conditioned upon obtaining such approval; and
WHEREAS, the parties desire to amend the Agreement to so
condition the acquisition of the stock of the Company, and to
provide for other amendments.
NOW, THEREFORE, the parties hereto agree as follows:
1. The Agreement is hereby amended by the addition thereto
of a new Section 16 providing as follows:
"16. Conditional Closing. Notwithstanding the
provisions of Section 7.7 hereof, and that the State of
Florida has not approved the acquisition contemplated
hereby, Anuhco agrees to close the acquisition on March
29, 1996, Anuhco and Kopman agree that the finality of
such closing is conditioned upon obtaining approval of
the Florida Department of Insurance, and Anuhco agrees
that, if such approval is not forthcoming, it will
remove such condition to finality by causing the
Company to surrender its Florida license. Anuhco and
Kopman further agree that the surrender of such license
shall not constitute cessation of the Company's doing
business in the State of Florida, for the purposes of
paragraph 2 of that certain Consulting Agreement
between the parties hereto dated March 29, 1996, if
Anuhco thereupon causes the existing Florida business
of the Company to be transferred to, and the future
business of the Company in Florida to be conducted by,
Agency Premium Resource, Inc., a subsidiary of Anuhco,
duly licensed to do business in the State of Florida."
2. Section 1.1 of the Agreement is hereby amended by
deleting all thereof, and substituting therefore the following:
"1.1 Purchase Price. Anuhco shall pay Kopman at the
closing, and upon delivery of certificates representing
the Shares duly endorsed and in proper form for
transfer, a purchase price of $11,901,558, increased by
interest on the purchase price from 70 days after the
date hereof until the Closing, at the United States
Treasury Bill rate in effect at the commencement of
such period."
3. Section 5.7 of the Agreement is hereby amended by
deleting the addition thereto effected by the First Amendment to
Stock Purchase Agreement, dated March 7, 1996, and substituting
therefor the following:
"Anuhco hereby consents to the payment to Leroy Serpe
of the sum of $250,000, which payment shall be in
addition to his ordinary compensation, and to the
payment of $48,442 (including FICA taxes) to certain
existing employees of the Company, all prior to
Closing."
4. The Agreement is further amended by adding thereto a
new Section 16, reading as follows:
16. Election Under Internal Revenue Code. The parties
agree to jointly and timely elect under I.R.C. SS
338(h)(10) to treat the transaction contemplated hereby
as if the Company and UPAC sold to Anuhco all of their
assets and distributed the Purchase Price in complete
liquidation, all while owned by Kopman. The parties
further agree to execute and timely file with the
Internal Revenue Service and required state taxing
authorities Form 8023-A, with appropriate attachments,
and any other documents required to reflect the
foregoing election. Kopman shall file all required tax
returns for 1996 which shall reflect the deemed sale of
assets under the said SS 338(h)(10), shall be solely
liable for all taxes resulting from such election, and
indemnify Anuhco, the Company and UPAC from any such
tax resulting from such election, including reasonable
expenses and attorneys fees. Notices and other
provisions with respect to any such indemnity claim
shall be pursuant to Section 12 hereof.
5. Nothing contained herein shall be deemed to amend,
modify or otherwise alter the terms of the Agreement, the
Consulting Agreement, or the rights and obligations of the
parties under either thereof, except as herein expressly
provided.
IN WITNESS WHEREOF, the parties have executed this Agreement
the day and year first above written.
ANUHCO, INC.
By: /s/ Timothy P. O'Neil
Timothy P. O'Neil, President
/s/ William H. Kopman
William H. Kopman
EXHIBIT 10(a)
CONSULTING AGREEMENT
This Consulting Agreement is entered into this 29th day of
March, 1996, by and between William H. Kopman ("Kopman"), and
Anuhco, Inc., a Delaware corporation ("Anuhco").
WITNESSETH:
WHEREAS, the parties hereto have entered into a Stock
Purchase Agreement (the "Agreement"), providing for the sale from
Kopman to Anuhco of shares of capital stock of Universal Premium
Acceptance Corporation and UPAC of California, Inc.,
(collectively the "Companies"), and
WHEREAS, prior to such sale Kopman has been a director and
Chief Executive Officer of and has been involved in and familiar
with the business of the Companies, and has provided to or
assisted the Companies with a number of matters involved in their
operations, including, but not limited to, negotiation and
administration of bank financing, software development, state
licenses and relationships with insurance agents in several
states, and
WHEREAS, Anuhco desires to have all of the services of
Kopman available for the benefit of the Companies, principally
for the purpose of maintaining the volume and profitability of
the Companies' business in their four major markets (the states
of Massachusetts, Florida, Illinois and California), and Kopman
is willing to consult on the same.
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements hereinafter set forth, the parties
hereto do hereby agree as follows:
1. Anuhco hereby engages Kopman, upon the terms and
conditions herein set forth, and through December 31, 1998, to
consult on the matters referred to in the recitals hereof, the
sub-leasing or other mitigation of lease expense on the
Companies' St. Louis, Missouri offices, and such other matters,
not inconsistent with Kopman's position as a consultant, as shall
from time to time be assigned to him by the Chief Executive
Officers of the Companies or Anuhco (the "Consulting Services").
Kopman accepts such engagement, and agrees through December 31,
1998, to provide to the Companies all such Consulting Services.
The parties hereto contemplate that substantially all of the
Consulting Services shall be performed by Kopman at Jupiter,
Florida or the Companies' offices in the metropolitan areas of
St. Louis and Kansas City, and that travel to other locations is
expected to be infrequent.
2. In consideration of the agreement to provide such
consultation, Anuhco agrees through 1998 to (a) monthly reimburse
all reasonable travel and other related expenses from Jupiter,
Florida, incurred by Kopman at the request of Anuhco or the
Companies and incident to Consulting Services provided hereunder,
at the rates and in accordance with expense reimbursement
policies of the Companies, (b) quarterly pay compensation to
Kopman at the annual rate of $150,000, and, (c) within 90 days
after the end of each of the years 1996, 1997 and 1998, pay to
Kopman $333,333 for the retention and profitability of the
Companies' business in the states of Massachusetts, Florida,
Illinois and California, minus, with respect to each such state
and each such year, a percentage of $83,333 computed as follows:
the greater of X or Y, where X is the percentage by which the
total notes receivable financed by the Companies in such state in
such year is less than the total notes receivable financed by the
Companies in such state in 1995; and where Y is the percentage by
which the average interest rate charged by the Companies in such
state in such year is less than the average interest rate charged
by the Companies in such state in 1995; provided, however, that
(a) in computing notes receivable financed and average interest
rates charged in California, all business done by the Companies
in that State with Lockton Insurance Agency shall be excluded;
(b) the average interest rate for each of such three years and in
each of such four states shall be adjusted up or down if, and to
the same percentage as, the annual average prime rate charged by
the Bank of Boston for such year shall be increased or decreased
from the average prime rate charged by such Bank for the year
1995; and (c) no amount shall be payable to Kopman with respect
to each such state if either X or Y shall, for such year show a
decline of 30% or more from the comparable amount in 1995. If
Anuhco, in any of the years 1996, 1997 and 1998, causes the
Companies to cease doing business in any one or more of the
states of Massachusetts, Florida, Illinois or California, Anuhco
shall pay Kopman for any such state, and for the year of
cessation and each year thereafter through 1998, the same
percentage of $83,333 that it paid him in the previous year.
3. The term of this Agreement shall end on March 31, 1999.
4. Kopman shall report to the Chief Executive Officers of
the Companies, and agrees to devote such time, attention and
oversight to the Companies' salespersons in Massachusetts,
Florida, Illinois and California, and the insurance agents
producing premium finance agreements in such states, as shall be
reasonably designed to achieve the retention and profitability of
the Companies' business therein.
5. This Agreement constitutes the full and complete
agreement of the parties with respect to the subject matter
hereof, and may be modified or amended only by a subsequent
written document executed by each of them.
6. The rights and obligations of the parties under this
Agreement shall inure to the benefit of and be enforceable by the
parties hereto and the Companies, and the respective successors
and personal representations of all thereof. Kopman may assign
this Agreement to a corporation or other entity of which he is
the sole owner, which must, as a condition of such assignment
agree to be bound by all the provisions of this Agreement
including the requirement that Kopman alone must provide the
services required by this Agreement.
7. The parties agree that Kopman is an independent
contractor, and not an employee or agent of Anuhco or the
Companies, that he has no authority to contract on behalf of,
obligate or bind Anuhco or the Companies, that no withholdings
shall be made by Anuhco from the payments provided herein and
that Kopman shall not be eligible to participate in benefit or
welfare plans sponsored by Anuhco or the Companies for their
employees.
8. This Agreement shall be governed by and construed in
accordance with the laws of the State of Missouri.
9. In the event of a dispute between the parties hereto
with respect to their rights or obligations hereunder, the
parties agree that venue and jurisdiction shall be proper in the
state or federal courts sitting in the State of Missouri, and
consent thereto.
10. Kopman acknowledges that, as a result of his past and
future connections with the Companies, Anuhco and its affiliates,
he will be making use of, acquiring and/or adding to confidential
information of a special and unique nature and value relating to
such matters as lists of clients and accounts, systems,
financing, procedures, policies, manuals, trade secrets and
confidential reports ("Confidential Information"). As a material
inducement to enter into this Agreement and to pay to Kopman the
compensation referred to in Paragraph 2 hereof, Kopman covenants
and agrees that he shall not, at any time during or following the
term hereof, directly or indirectly, use, disseminate, divulge or
disclose, for any purpose whatsoever, any Confidential
Information which has been given to or obtained by him or
disclosed to him as a result of such connections. In the event
of a breach or threatened breach by Kopman of any of the
provisions of this Paragraph 10 or of Paragraph 12 hereafter,
Anuhco and the Companies, in addition to and not in limitation of
any other rights, remedies or damages available at law or in
equity, shall be entitled to a restraining order and injunction
in order to prevent or to restrain any such breach by Kopman, or
by his partner, agents, representatives, servants, employers,
employees and/or any and all persons directly or indirectly
acting for or with him.
11. Upon termination hereof for whatever reason, all
documents, records, notebooks and similar repositories of or
documents containing any Confidential Information, including all
existing copies thereof, then in Kopman's possession, whether
prepared by him or others, shall be returned to Anuhco as its
sole property.
12. Kopman acknowledges that his services heretofore
rendered to the Companies, and to be hereafter rendered hereunder
are of a special and unusual character which have a unique value,
the loss of which cannot adequately be compensated by damages in
an action at law. In view of the unique value of such services
and the Confidential Information to be obtained by or disclosed
during the term hereof, as an inducement for executing and
consummating the Agreement, and as a material inducement to enter
into this Agreement, Kopman covenants and agrees that, during the
term of this Agreement and for a period of three (3) years from
and after the date this Agreement is terminated, for whatever
reason, he shall not, directly or indirectly:
a. Solicit business from or divert business from any
client or account of the Companies or any other business owned
directly or indirectly by them or their affiliates; or
b. Solicit for employment or employ any person who in the
prior six (6) months has been an employee of the Companies or any
such affiliate; or
c. Directly or indirectly, individually or through any
corporation, partnership, joint venture, trust, limited liability
company or person, engage in any business competitive with the
business then being conducted by the Companies, or any such
affiliate, at any place and in any state in which they, or either
of them or such affiliate is then conducting its business.
d. An affiliate is defined as one who controls, is
controlled by or is under common control with either of the
Companies.
13. Kopman covenants and agrees that if he shall violate
any of his covenants or agreements under Paragraphs 10 or 12
hereof, Anuhco and the Companies shall be entitled, in addition
to damages suffered, to an accounting and repayment of all
profits, compensation, commissions, remunerations or benefits
which Kopman directly or indirectly has realized and/or may
realize as a result of, growing out of or in connection with any
such violation. Such remedy shall be in addition to and not in
limitation of any injunctive relief or other rights or remedies
to which Anuhco or the Companies is or may be entitled at law or
in equity or under this Agreement.
14. Kopman has carefully read the provisions of this
Agreement, including Paragraphs 10, 12 and 13 hereof and, having
done so, agrees that the restrictions set forth therein
(including, but not limited to, the time period and geographic
extent of restriction) are fair and reasonable and are reasonably
required for the protection of the interests of Anuhco and the
Companies.
15. The parties hereby acknowledge and agree that the
executive, managerial, other services to be rendered by Kopman
hereunder are of a special, unique and extraordinary character
which gives them a peculiar value to Anuhco and the Companies
which is impossible of replacement and the loss of which cannot
reasonably or adequately be compensated in damages, and Kopman
acknowledges and agrees that a breach by him of the provisions of
this Agreement will cause irreparable injury and damage. Kopman,
therefore, expressly agrees that Anuhco and the Companies shall
be entitled to injunctive and other equitable relief to prevent a
breach of this Agreement, or any part thereof, and to secure its
enforcement, in addition to any other remedy to which they may be
entitled. Any and all remedies for the breach of this Agreement
shall be cumulative and the pursuit of one remedy shall not be
deemed to exclude any and all other remedies with respect to the
subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Consulting Agreement to be executed as of the day and year first
above written.
/s/ William H. Kopman
WILLIAM H. KOPMAN
ANUHCO, INC.
By: /s/ Timothy P. O'Neil
TIMOTHY P. O'NEIL
