UNITED STAES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No.2)*
ADEN ENTERPRISES, INC.
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(Name of Issuer)
COMMON STOCK $0.01 PAR VALUE
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(Title of Class of Securities)
006852 20 6
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(CUSIP Number)
MICHAEL S. LUTHER
1611 S. 91ST AVENUE
OMAHA, NE 68124
402-398-9703
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
AUGUST 31, 1998
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(Date of Event which Requires Filing
of this Statement)
<PAGE>
CUSIP No. 006852 20 6 13D
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
MICHAEL S. LUTHER
###-##-####
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
NEBRASKA, USA
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NUMBER OF 7 SOLE VOTING POWER
SHARES 50,852,669
BENEFICIALLY
OWNED BY --------------------------------------------------------------
EACH 8 SHARED VOTING POWER
EACH 0
REPORTING
PERSON --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 50,852,669
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
51,031,240
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
71.60%
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14 TYPE OF REPORTING PERSON*
INDIVIDUAL
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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Item 1.
The title of the class of equity securities subject to this Schedule 13D
is the
Common Stock of Aden Enterprises, Inc., a California corporation (the "Issue
r"), with principal executive offices at 13314 I Street, Omaha, NE 68137.
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Item 2. Identity and Background
The following table sets forth the identity and background information for e
achson filing this statement. The following person is a citizen of the
United States and he has not, during the past five years, (i) been convicted in
a criminal proceeding (excluding traffic violations or similar
middemeansors) or (ii) been a party to a civil proceeding of a judicial
or administrative body of competent juridiction and as a result of such
proceeding was or is subject to a judgement, decree or final order enjoining
rohibiting or mandating activities subject to, federal or state securities
laws or finding any violation of such laws.
Name Residence Address Business Address Principal Occupation
Michael S. Luther 1611 So. 81st Avenue 13314 I Street or Employment
Omaha, NE 68124 Omaha, NE 68137 investor
Item 3. Source and Amount of funds or Other Consideration
The person filing this statement (the "Purchaser") entered into an
Assignment and Assumption Agreement, dated February 16, 1998 whereby
Mr. Luther agreed to guarantee and/or assume certain liabilities of the
Company in exchange for 15 million shares of stock. Subsequently, The
Agreement was amended whereby Mr. Luther would guarantee and/or assume all
actual and contingent liabilities of Aden Enterprises, Inc. in exchange for
40 million shares of common stock. and signed on June 10, 1998. The
Agreement is According to the Revised Assignment and Assumption Agreement,
Mr. Luther will assume and/or guarantee approximately $4 million of debt
and/or contingent liabilities of Aden Enterprises, Inc.
On May 20, 1998 Mr.Luther entered into an agreement whereby he and Capstone
Group, Inc. sold their interest in Liberty Court Travel, Inc. to Aden
Enterprises, Inc. for total consideration of 10 million shares of common
stock. Mr. Luther cancelled certain indeptedness of Capstone Group, Inc.
to him personally in exchange for its share of the Aden Enterprises, Inc.
stock in the transaction. The Agreement is attached as Exhibit 2.
On August 31, 1998, Mr. Luther entered purchased 178,571 shares of common
stock from another shareholder for total consideration of $25,000 in cash
in a private transaction.
Item 4 Purpose of the Transaction
The purpose of the Assignment and Assumption Agreement was to relieve Aden
Enterprises, Inc. of financial obligations in order attract additional
capital and provide a more favorable financial environment to conduct
future business as the Board of Directors might determine is appropriate.
The purpose of the Stock Purchase Agreement whereby Mr. Luther and Capstone
Group, Inc. contributed 100% of the outstanding stock in Liberty Court
Travel, Inc. is to provide Aden Enterprises, Inc. with an operating
business that may produce profitability in the future.
The purpose of the private stock acquisition was to obtain additional
stock that a third party had a desire to liquidate.
Item 5 Interest in Securities of the Issuer.
The information supplied in the Information Statement is hereby incorporated by
this reference. Except as described in Item 3 herein, none of the persons
identified at Item 2 has effected any transactions with respect to the class of
securities described at Item 1 during the past sixty days or since the
most recent filing on Schedule 13D, whichever is less.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
Except as described at Items 3 and 4 herein, there are no contracts,
arrangements, understandings or relationships (legal or otherwi8se) among
the persons named in Item 2 hereof or between such persons and any other
person with respect to any securities of the Issuer.
Item 7 Material to be Filed as Exhibits.
The following documents are appended hereto as exhibits to the Schedule 13D:
Exhibit No. Description
1 Assignment and Assumption Agreement
2 Contribution Agreement
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true,
complete and correct.
/s/Michael S. Luther
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement"), dated as of
June 10, 1998, by and between ADEN ENTERPRISES, INC., a California
corporation (the "Company"), and MICHAEL S. LUTHER ("Shareholder").
WHEREAS, the Company and Shareholder are seeking to restructure the
financial obligations of the Company.
WHEREAS, the Company desires to assign, and Shareholder desires to assume,
all of the indebtedness, liabilities and obligations of the Company
reflected on the balance sheet of the Company set forth on Exhibit A
attached hereto and all liabilities and expenses arising prior to the
date hereof, whether known or unknown, including, without limitation,
those arising out of the litigation matters identified on Exhibit B
attached hereto (collectively, the "Assumed Obligations").
NOW, THEREFORE, for good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties
hereto, intending legally to be bound, hereby agree as follows:
1. Assignment and Assumption. Subject to the terms and conditions hereof,
the Company hereby assigns, and the Shareholder hereby assumes, the Assumed
Obligations.
2. Indemnification. Shareholder agrees to indemnify, defend and hold the
Company harmless from and against the Assumed Obligations.
3. Representation. Shareholder hereby represents and warrants that, to the
best of his knowledge, Exhibits A and B are accurate and complete in all
material respects and set forth all known indebtedness of and claims
against the Company as of the date hereof.
4. Stock Issuance. In consideration of his assumption of the Assumed
Obligations, the Company issued 15,000,000 fully paid and non-assessable
shares of its Common Stock on February 16, 1998 and shall issue to
Shareholder 25,000,000 fully paid and non-assessable shares of its Common
Stock, par value $0.01 per share.
5. Share Restrictions. Shareholder understands that the shares acquired
hereby have not been registered under the Securities Act of 1933, as
amended (the "Act") or any state securities laws, in reliance upon exemptions
from registration for non-public offerings. Shareholder understands that
such shares will constitute "restricted securities" within the meaning
of Rule 144 promulgated under the Act, and must be held indefinitely unless
such shares are subsequently registered under the Act and registered an
The securities evidenced by this certificate were acquired on February 16,
1998 (or June 10, 1998, without registration or qualification under
the Securities Act of 1933, as amended or under any state securities laws.
No transfer or sale of these securities or any interest therein may be made
without such registration and qualification unless the issuer has received
an opinion of counsel satisfactory to it that a proposed transfer or sale
does not require registration or qualification under applicable la
6. Miscellaneous Provisions.
(a) Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective permitted successors
and assigns.
(b) Governing Law. This Agreement and its validity, construction and
performance shall be governed by and construed and enforced in accordance
with the laws of the State of Delaware (without regard to principles of
conflicts of law).
(c) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be an original, but all of which
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
COMPANY:
ADEN ENTERPRISES, INC.
By:
Name:
SHAREHOLDER:
Michael S. Luther
[^] STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of May 20, 1998, by and among Aden Enterprises, Inc., a California
corporation [^]("Aden"), Liberty Court Travel, Inc. (the "Company") , a
Delaware corporation, Capstone Group, Inc. and Michael S. Luther ("Luther").
[^] Aden, Liberty Court Travel, Inc., Capstone Group, Inc. and Luther and
the Shareholders are sometimes referred to herein individually as a "Party"
and collectively as the "Parties."
RECITALS
A. The respective boards of directors of [^] the Parties have determined
that it is advisable and in their respective best interests for Aden
Enterprises to Purchase 100% of the Capital stock of Liberty Court Travel,
Inc.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals, and the mutual
promises herein made, and in consideration of the representations,
warranties and covenants herein contained, the Parties hereby agree
as follows:
1. DEFINITIONS
The capitalized terms not otherwise defined herein have the meanings given to
such terms below:
"Adverse Consequences" means all charges, complaints, actions, suits,
proceedings, hearings, investigations, claims, demands, costs of
defense, judgments, orders, decrees, stipulations, injunctions,
damages, dues, penalties, fines, costs, amounts paid in settlement,
Liabilities, Taxes, Security Interests, losses, expenses, and fees,
including all attorneys' fees and court costs.
"Affiliate" means, with respect to any particular Person, any
Person controlling, controlled by or under common control
with such Person, whether by ownership or control of voting securities,
by contract or otherwise.
"Affiliated Group" means any affiliated group within the meaning of
Section 1504 of the Code.
"Basis" means any past or present fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or could form the
basis for any specified consequence.
[^]"Company Stock" means the common stock, $0.01 par value per share,
of the Company.
[^]"Confidential Information" means any information concerning the businesses
and affairs of a Party other than any such information that (i) is generally
available to or known by the public immediately prior to the time of
disclosure (except through the actions or inaction of the Person to whom
disclosure has been made by or on behalf of such Party) or (ii) has been
acquired or developed independent from such Party.
"DGCL" means the Delaware General Corporation Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any corporation or other business entity that is
included in a controlled group of corporations within which the Company
is also included, as provided in Section 414(b) of the Code; or which is
a trade or business under common control with the Company, as provided
in Section 414(c) of the Code; or which constitutes a member of an
affiliated service group within which the Company is also included, as
provided in Section 414(m) of the Code; or which is required to be
aggregated with th
gulations issued under Section 414(o) of the Code.
"GAAP" means generally accepted accounting principles as in effect from
time to time, applied consistently with the principles used in preparing
the Financial Statements (as defined herein) for the Most Recent Fiscal
Year End.
"Indebtedness" of any Person means all obligations of such Person which
in accordance with GAAP should be classified upon a balance sheet of
such Person as liabilities of such entity, and in any event, regardless
of how classified in accordance with GAAP, shall include: (i) all
obligations of such Person for borrowed money or which have been incurred
in connection with the [^] Aden of property or assets; (ii) obligations
secured by any Security Interest upon property or assets owned by such
Person, even tho
assumed or become liable for the payment of such obligations;
(iii) obligations created or arising under any conditional sale
or other title retention agreement with respect to property acquired by
such Person, notwithstanding the fact that the rights and remedies of the
seller, lender or lessor under such agreement in the event of default are
limited to repossession or sale of the property; and (iv) capitalized lease
obligations.
"Intellectual Property" means any and all of the following which is owned
by, licensed by, licensed to, used or held for use by the Company or its
Subsidiaries (including all copies and embodiments thereof, in electronic,
written or other media): (i) all registered and unregistered trademarks,
trade dress, service marks, logos, trade names, internet domain names,
corporate names (including the name "Liberty Court Travel"[^] and all
derivations thereof) and all applications to register the same (the
"Tradem
yrights"); (iv) all computer software and databases owned or used
(excluding software and databases licensed to the Company or its
Subsidiaries under standard, non-exclusive software licenses granted
to end-user customers by third parties in the ordinary course of such
third parties' business) by the Company or its Subsidiaries or under
development for the Company or its Subsidiaries by third parties
(the "Software"); (v) all categories of trade secrets, know-how,
inventions (whether or not patentable and w
practice), processes, procedures, drawings, specifications, designs,
plans, proposals, technical data, copyrightable works, financial,
marketing, and business data, pricing and cost information, business
and marketing plans, client and supplier lists and information and
other confidential and proprietary information ("Proprietary Rights");
(vi) all licenses and agreements pursuant to which the Company or its
Subsidiaries have acquired rights in or to any of the Trademarks, Patents,
Copyrights, Software or
"); and (vii) all licenses and agreements pursuant to which the Company
or its Subsidiaries have licensed or transferred any rights to any of
the Trademarks, Patents, Copyrights, Software or Proprietary Rights
("Licenses-Out").
"Knowledge" means, in the case of any individual, knowledge that a
reasonable person under similar circumstances would have after reasonable
investigation and inquiry, and in the case of a corporation, the knowledge
(under the same standard as described immediately above) of the directors
and officers of such corporation and the employees of such corporation
having responsibility for the particular subject matter at issue.
"Liability" means any liability (whether known or unknown, whether
absolute or contingent, whether liquidated or unliquidated, and
whether due or to become due), obligation or Indebtedness, including
without limitation, any liability for Taxes.
"Material Adverse Effect" means (i) with respect to any Party, a
material adverse effect or impact upon the assets, financial condition,
results of operations[^] or business [^] of such party and its
Subsidiaries, if any, or (ii) in any case, on the ability of the
Parties to consummate the transactions contemplated hereby.
"Ordinary Course of Business" means the ordinary course of business,
consistent with past custom and practice, of Liberty Court Travel,
[^] Aden, respectively, as the context herein may require (including with
respect to quantity and frequency).
"Person" means any individual, trust, corporation, partnership,
limited partnership, limited liability company or other business
association or entity, court, governmental body or governmental agency.
"Plans" means: (i) all employee benefit plans as defined in Section 3(3)
of ERISA; (ii) all other severance pay, deferred compensation, excess
or supplemental benefit, vacation, stock, stock option, and incentive
plans, contracts, schemes, programs, funds, commitments, or arrangements
of any kind; and (iii) all other plans, contracts, schemes, programs,
funds, commitments, or arrangements providing money, services, property,
or other benefits, whether written or oral, qualified or nonqualified,
funded or un
ny or any ERISA Affiliate of the Company is or has been a party or by
which any of them is or has been bound or (b) with respect to which
the Company or any ERISA Affiliate of the Company has made any
payments or contributions since December 31, 1990 or (c) to which
the Company or any ERISA Affiliate of the Company may otherwise
have any liability (including any such plan or arrangement formerly
maintained by the Company or any ERISA Affiliate of the Company).
"Pro Rata Percentage" means, with respect to each Shareholder, the
percentage equivalent of a fraction, the numerator of which shall
be the number of shares of [^] Aden Common to be issued to such
Shareholder [^] under this Agreement, and the denominator of which
shall be all shares of [^] Aden Common issued to the Shareholders
[^] under this Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Interest" means any mortgage, pledge, security interest,
charge, lien, option or other encumbrance or right of any third party.
"Subsidiary" means any corporation, limited liability company,
limited partnership, partnership, trust or other entity with respect
t
o which another person has the power, directly or indirectly through
one or more intermediaries, to vote or direct the voting of sufficient
securities or interests to elect
a majority of the directors
or management committee or similar governing body.
"Tax" or "Taxes" means any federal,
state, local, or foreign income, gross receipts, sales,
licenses, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental
(including taxes under Section 59A of the Code),
customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property,
personal property, sales, use,
transfer, value added, alternative or add-on minimum,
estimated, or other tax of any kind whats
erest, penalty, or addition thereto, whether disputed or not.
"Tax Return" means any return,
declaration, report, claim for refund, or information
return or statement relating to Taxes,
including any schedule or attachment thereto, and
including any amendment thereof.
2. [^] LIBERTY COURT STOCK TO BE ACQUIRED BY ADEN
2.1. In exchange for 10 million shares of common stock
in Aden Enterprises, Inc., Michael S. Luther and
Capstone Group, Inc. shall provide all of the outstanding
common stock of Liberty Court Travel, Inc. Such stock
shall be equal to 80 shares held by Capstone Group, Inc.
and 920 shares held by Michael S. Luther.
3. REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of the Shareholders. As a
material inducement to [^] Aden, Capstone Group, Inc.,
[^] Liberty Court Travel, Inc. and Michael S. Luther
to enter into this Agreement and consummate the transactions
contemplated hereby, each Shareholder hereby represents and
warrants to [^] Aden that all of the statements contained in
this Section 3.1 are correct and complete with respect to such
Shareholder as of the date of this Agreement, and hereby covenants
that all of said statements
plete with respect to such Shareholder as of the [^] Closing Date
(as though made as of the [^] Closing Date and as though the [^]
Closing Date were substituted for the date of this Agreement throughout
such statements), except, in each case, as set forth in the schedule
attached to this Agreement setting forth exceptions to the representations
and warranties set forth herein (the "Disclosure Schedule"). The
Disclosure Schedule will be arranged in sections corresponding to the
numbered and lettered sections
3.1 and 3.2.
(a) Such Shareholder has good and marketable title to the shares of
Company Stock which are to be exchanged by such Shareholder
pursuant to this Agreement, free and clear of any and all Security
Interests, [^] options or rights of any nature. Section 3.2(d) of
the Disclosure Schedule sets forth a true and correct description
of all shares of Company Stock owned by such Shareholder.
(b) Such Shareholder has all requisite right, power and authority
to execute and deliver this Agreement and all other agreements entered
into in connection herewith by such Shareholder, if any ("Related
Agreements"), to perform such Shareholder's obligations hereunder and
thereunder[^]. This Agreement and the Related Agreements to which such
Shareholder is a party constitute the valid and legally binding
obligations of such Shareholder, enforceable against such Shareholder
in accordance with their respect
(c) Such Shareholder is not a party to, subject to or bound by any
agreement
or any judgment, order, writ, prohibition, injunction or decree of any
court or other governmental body which would prevent the execution or
delivery of this Agreement by such Shareholder[^].
(d) All existing agreements between such Shareholder and the Company
have been (or on or prior to the [^] Closing Date will be) terminated
and such Shareholder is not a party to, subject to or bound by any
agreement, commitment or understanding whatsoever between such
Shareholder and the Company, other than this Agreement and Related
Agreements.
(e) Such Shareholder understands that: (i) the [^] Aden Common to be
issued pursuant to [^] this Agreement has not been, and as of the [^]
Closing Date will not be, registered under the Securities Act or under
any state securities laws; (ii) the [^] Aden Common is being offered
and issued in reliance upon federal and state exemptions for
transactions not involving any public offering; [^] and (iii) such
certificates will (until such time as such [^] Aden Common is otherwise
registered under the Securities
[^] The shares evidenced by this certificate have not been registered
under the Securities Act of 1933, as amended, or any applicable state
securities laws. No transfer or sale of these shares or any interest
therein may be made without such registration and qualification
unless the issuer has received an opinion of counsel satisfactory to
it that a proposed transfer or sale does not require registration or
qualification under applicable law.
(f) [^] Such Shareholder further represents that: (i) such
Shareholder is acquiring the [^] Aden Common to be acquired by
such Shareholder pursuant to [^] this Agreement solely for such
Shareholder's own account for investment purposes and not with a
view to the distribution thereof within the meaning of the
Securities Act; (ii) such Shareholder is a sophisticated investor
with knowledge and experience in business and financial matters;
(iii) such Shareholder has had the opportunity to obtain additional
tion; [^] and (v) such Shareholder is able to bear the economic
risk and lack of liquidity inherent in holding the [^] Aden Common
for an indefinite period.
3.2. Representations and Warranties Concerning the Company.
As a material inducement to [^] Aden and [^] Aden to enter into
this Agreement and consummate the transactions contemplated hereby,
the Company and the Shareholders hereby jointly and severally represent
and warrant to [^] Aden that all of the statements contained in this
Section 3.2 are correct and complete as of the date of this Agreement,
and hereby covenant that said statements will be correct and complete
as of the [^] Closing Date (as thoug
(a) Organization, Qualification and Corporate Power. The Company is
a corporation duly incorporated, validly existing and in good standing
under the laws of Nebraska. The Company has all requisite corporate
power and authority to carry on the business in which it is engaged
and to own and use the properties owned and used by it. True and correct
copies of the articles of incorporation and by-laws, in each case as
amended to date, of the Company have been delivered to [^] Aden. The
Company is qualified
te, have a Material Adverse Effect. Section 3.2(a) of the Disclosure
Schedule lists all jurisdictions in which the Company is qualified to do
business.
(b) Authorization of Transaction. The Company has all requisite
corporate power and authority to execute and deliver this Agreement
and to perform its obligations hereunder. [^] This Agreement
constitutes the valid and legally binding obligation of the Company
enforceable against the Company in accordance with its terms, except
as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
the enforcement of creditors' rights generally,
(c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby
will (i) violate or conflict in any way with any applicable statute,
regulation, law, rule or common law doctrine, (ii) violate or
conflict in any way with any judgment, order, decree, stipulation,
injunction, charge or other restriction of any governmental body,
governmental agency or court to which the Company is subject or
any provision of the articles of incorpor
Company, or (iii) conflict with, result in a breach of, constitute a
default under (with or without notice or lapse of time, or both),
result in the acceleration of, create in any party the right to
accelerate, terminate, modify or cancel, or require any notice under,
or result in the creation of any Security Interest upon any of the assets
of the Company pursuant to the terms of, any contract, agreement, lease,
sublease, license, sublicense, franchise, permit, indenture, agreement
for borrowed money, inst
Security Interest or other arrangement to which the Company is a party
or by which the Company is bound or to which any of its assets are
subject. The Company is not required to give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any
government, governmental agency or court, or any other Person in order
for the parties to consummate the [^] transactions contemplated by this
Agreement or in order that [^] such transactions not constitute a breach
or violation of, o
ermination or acceleration or any encumbrance on any of the Company's
assets pursuant to the provisions of, any agreement, arrangement
or understanding or any license, franchise or permit[^].
(d) Authorization. The authorized stock of Liberty Court
Travel, Inc. consists of [^] 10,000 shares of common stock,
[^] $0.01 par value per share, of which 1,000 shares are issued
and outstanding on the date hereof. [^]The Company has never
authorized, offered, sold or issued stock other than the Company
Stock described above. All offerings, sales and issuances by
the Company of any Company Stock have been conducted in compliance
with and in accordance with or in reliance upon exemptions from all app
e securities laws and all applicable state corporation laws. All
of the issued and outstanding shares of Company Stock have been duly
authorized, validly issued, fully paid, and nonassessable, and not
subject to any preemptive rights. There are no currently outstanding
or authorized options, warrants, rights, contracts, rights of first
refusal or first offer, calls, puts, rights to subscribe,
conversion rights, or other agreements or commitments to which the
Company is a party or which are binding upon th
lders providing for the issuance, disposition, or [^] Liberty Court
Travel Inc's stock or securities convertible or exchangeable for
the Company's stock. There are no outstanding or authorized stock
appreciation, phantom stock, or similar rights with respect to the
Company, there are no contractual or statutory preemptive rights
or similar restrictions with respect to the issuance or transfer
of any shares of stock of the Company. There are no voting
trusts, proxies, or any other agreements, restrictions
espect to the voting of any of the stock of the Company.
(e) Subsidiaries. The Company does not own or control any direct
or indirect equity interest or partici
pation in any corporation, partnership, limited liability company,
trust, or other business association or Subsidiary.
(f) Financial Statements; Books and Records.
(i) The Company has provided [^] Aden with the
following financial statements, correct and complete
copies of which are set forth on Section 3.2(f) of the Disclosure
Schedule (collectively the "Financial Statements"): (A) unaudited
balance sheet and related statements of income, changes in stockholders'
equity and cash flows for the Company as of and for the fiscal years
ended December 31, 1997 and 1996 (December 31, 1997 being the "Most Recent
Fiscal Year End" and the balance sheet as of December 31, 199
nce Sheet"), [^] and (B) unaudited balance sheet (the "Latest Balance
Sheet") and related statements of income, changes in stockholders'
equity and cash flows for the Company as of and for the month ended
January 31, 1998. [^] The Financial Statements are correct and
complete and have been prepared in accordance with GAAP, consistently
applied throughout the periods indicated (except[^] for the absence
of footnotes and nominal year-end adjustments, none of which will be
material), and fairly present the final results of operations of the
Company as of the times and for the periods referred to therein.
(ii) The Company's books and records are and have been properly prepared
and maintained in form and substance adequate for preparing audited
financial statements in accordance with GAAP, and fairly and accurately
reflect all of the assets and Liabilities of the Company and all contracts
and transactions to which the Company is or was a party or by which the
Company or any of its business or assets is or was affected. The corporate
minute books of the Company, correct and complete copies of which have
been oks and stock ledger of the Company are complete and correctly reflect
all issuances and transfers of the capital stock of the Company.
(g) Recent Events. Since the Most Recent Fiscal Year End, the Company has
not experienced or suffered any Material Adverse Effect. Without
limiting the generality of the foregoing, except as set forth on the
Latest Balance Sheet, since the Most Recent Fiscal Year End, the
Company has not:
(i) sold, leased, transferred or assigned any of its assets, tangible or
intangible, other than in the Ordinary Course of Business;
(ii) accelerated, terminated, modified, canceled or committed any breach
of any contract, lease, sublease, license, or sublicense (or series of
related contracts, leases, subleases, licenses, and sublicenses) either
involving more than $10,000 or otherwise outside of the Ordinary Course
of Business;
(iii) canceled, compromised, waived, or released any right or claim
(or series of related rights and claims) either involving more than
$10,000 or outside of the Ordinary Course of Business;
(iv) experienced any damage, destruction, or loss to its property
in excess of $5,000 (whether or not covered by insurance);
(v) created or suffered to exist any Security Interest upon any
of its assets, tangible or intangible, outside the Ordinary Course
of Business or securing any Liabilities in the aggregate in excess
of $5,000;
(vi) issued, sold, or otherwise disposed of any of its capital stock,
or granted any options, warrants, or other rights to purchase or obtain
(including upon conversion or exercise) any of its capital stock, or
any securities convertible or exchangeable into any of its capital stock;
(vii) declared, set aside, or paid any dividend or distribution with
respect to its capital stock (whether in cash or in kind) or redeemed,
purchased, or otherwise acquired any of its capital stock;
(viii) entered into any transaction, arrangement or contract with, or
distributed or transferred any property or other assets to, any officer,
director, Shareholder or other insider or Affiliate of the Company (other
than salaries and employee benefits in the Ordinary Course of Business);
(ix) made or committed to make any capital expenditures or entered into
any other material transaction outside the Ordinary Course of Business
involving an expenditure in excess of $10,000;
(x) amended or modified in any respect any Plan (beyond any amendments
and modifications reflected in true and complete copies of such Plans
delivered to [^] Aden );
(xi) entered into any employment agreement or collective bargaining
agreement or granted any increase in excess of $10,000 in the salary of
any officer or management employee of the Company (or increase in excess
of $5,000 in the case of any non-management employee) or paid or
committed to pay any bonus to any officer or employee;
(xii) changed the manner in which the business has been conducted,
including, without limitation, billing of clients or collection of
accounts receivable, purchases of goods and services or payment of
accounts payable;
(xiii) changed the accounting principles, methods or practices or any
change in the depreciation or amortization policies or rates;
(xiv) changed the relationships with any client, contractor or supplier
which might reasonably be expected to result in a Material Adverse Effect; or
(xv) committed (orally or in writing) to any of the foregoing.
(h) Undisclosed Liabilities. The Company has no Liability (and there
is no Basis for any present or future charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand against the
Company giving rise to any Liability), except for (i) Liabilities
set forth on the face of the Latest Balance Sheet; (ii) Liabilities, in
an aggregate amount less than $10,000 payable to any single Person or
any group of Affiliated Persons, which have arisen after the date of
the Latest Balance Sheet (th
Date") in the Ordinary Course of Business (none of which relates to
any breach of contract, breach of warranty, tort, infringement, or
violation of law or arose out of any charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand); and (iii)
Liabilities otherwise expressly disclosed in this Agreement or on the
Disclosure Schedule.
(i) Tax Matters.
(i) The Company has filed all Tax Returns that it was required to file
on or prior to the date hereof. All such Tax Returns were correct and
complete in all material respects and accurately reflected all Liability
for Taxes for the periods covered thereby. The Company's Liability for
unpaid Taxes, whether to any governmental authority or to another Person
such as under a tax sharing agreement, for all periods ending on or before
the [^] Closing Date do not exceed the amount of the Liability accruals for
s for deferred Tax assets or deferred Tax Liabilities) on the Latest
Balance Sheet. Neither the Company nor any of the Shareholders have
received notice of any claim made by an authority in a jurisdiction where
the Company does not file Tax Returns that the Company is or may be
subject to taxation by that jurisdiction. There are no Security Interests
on any of the assets of the Company that arose in connection with any
failure (or alleged failure) to pay any Tax when due.
(ii) The Company has withheld and paid when due all Taxes required to
have been withheld and paid in connection with amounts paid or owing to
any employee, creditor, independent contractor, or other third party.
(iii) Neither the Company nor any of the Shareholders has any Knowledge of
any Basis on which any taxing authority could assess any additional Taxes
for any period for which Tax Returns have been filed. There is no dispute
or claim concerning any Tax Liability of the Company either (A) claimed
or raised by any taxing authority in writing or (B) as to which any of
the Shareholders or the Company has Knowledge. The Company has previously
provided to [^] Aden correct copies of all Tax Returns filed with res
all taxable periods for which the applicable statue of limitations has not
closed. None of such Tax Returns have been audited, and none currently
are the subject of audit, and there are no examination reports or statements
of deficiencies assessed against or agreed to by the Company for such
taxable periods.
(iv) The Company has disclosed on its federal income tax returns all
positions taken therein that could give rise to a substantial understatement
of federal income tax within the meaning of Section 6662 of the Code.
Neither the Company nor any Subsidiary has made any material payments, is
obligated to make any material payments, and is a party to any agreement
that would obligate it to make any material payments that will not be
deductible under Section 280G of the Code. Neither the Company nor any
Subsid
tates real property holding corporation within the meaning of Section
897(c)(2) of the Code during the applicable period specified in Section
897(c)(A)(ii) of the Code. The Company is not a party to any tax allocation
or sharing agreement. The Company never has been a member of an Affiliated
Group which filed federal income tax returns, other than a group of which
the Company was the common parent. The Company has no Liability for Taxes
owed by any Person (other than the Company), including without limit
(v) The Company has not waived any statute of limitations in respect of
Taxes or agreed to any extension of time with respect to any Tax assessment
or deficiency.
(j) Title and Condition of Properties.
(i) No Owned Real Property. The Company does not own any real property[^].
(ii) Leased Real Property. The leases described in Section 3.2(j) of
the Disclosure Schedule (the "Property Leases") cover all of the real
estate leased, used or occupied by the Company. Each of the Property
Leases is in full force and effect and the Company holds a valid and
existing leasehold interest under each of such Property Leases. The
Company has delivered to [^] Aden complete and accurate copies of each
of the Property Leases and none of such Property Leases has been modified
in any respect, ex such modifications are disclosed by the copies delivered
to [^] Aden.
The Company is not in default, and to the knowledge of the Company and
the Shareholders, no circumstances exist which would result in such default
(including upon the giving of notice or the passage of time, or both), under
any of such Property Leases, and no other party thereto has the right to
terminate, accelerate performance under or otherwise modify any of such
leases. To the Knowledge of the Company and the Shareholders, no lessor
(iii) Title to Assets. The Company owns good and marketable title, free
and clear of all Security Interests, to all of the personal property
and assets reflected on the Latest Balance Sheet or acquired after the
Latest Balance Sheet Date, except for (1) assets with an aggregate
original purchase price of less than $10,000 in the aggregate which have
been disposed of to non-affiliated third parties since the Most Recent
Fiscal Year End in the Ordinary Course of Business, (2) Security Interests
securing lia
e Latest Balance Sheet and (3) Security Interests for current Taxes not
yet due and payable.
(iv) Condition and Sufficiency of Assets. The Company's and the
Subsidiaries' computer hardware, equipment and other tangible personal
property and assets are in good condition and repair, except for ordinary
wear and tear not caused by neglect, and are useable in the Ordinary
Course of Business. The personal property and assets shown on the Latest
Balance Sheet or acquired after the Latest Balance Sheet Date, the lease
rights under the Property Leases and leases of personal property and the
Intellectual
bsidiary or their respective Affiliates owns any rights in any assets,
real or personal, which are used by the Company in its business.
(k) Intellectual Property.
(i) Section 3.2(k) of the Disclosure Schedule contains a complete list
and an accurate functional description by category and indication of
status (completed or in process, registered or unregistered) of all items
of Intellectual Property which are owned, licensed by, licensed to, used
or held for use in or necessary for the conduct of the business of the
Company, as such business is currently conducted and presently contemplated
to be conducted.
(ii) Other than Intellectual Property covered by Licenses-In, the rights of
the Company in and to each item of the Intellectual Property are owned
outright by the Company, free and clear of any Security Interests. Except
to the extent provided in the Licenses-In, all of the Company's rights in
and to such Intellectual Property are freely assignable in its or their
own name, including the right to create derivatives, and the Company is
not under any obligation to pay any royalty or other compensation to any
n any approval or consent for use of any of the Intellectual Property.
None of the Intellectual Property is subject to any outstanding judgment,
order, decree, stipulation, injunction or charge; no charge, complaint,
action, suit, proceeding, hearing, investigation, claim, or demand i
s pending or, to the Knowledge of the Company or any of the Shareholders,
threatened, which challenges the legality, validity, enforceability, use
or ownership of any of the Intellectual Property; and, except pursuant to
the Li
has never agreed to indemnify any Person for or against any interference,
infringement, misappropriation, or other conflict with respect to
Intellectual Property.
(iii) No breach or default (or event which with notice or lapse of time
or both would result in a breach or default) by the Company exists or has
occurred under any License-In or other agreement pursuant to which the
Company uses any Intellectual Property, and the consummation of the
transactions contemplated by this Agreement will not violate or conflict
with or constitute a breach or default (or an event which, with notice or
lapse of time or both, would constitute a breach or default) or result in
a for
tute a material Basis for termination of, any such License-In or other
agreement, except where such breaches, defaults, violations, conflicts
or other events which would not, individually or in the aggregate,
result in a Material Adverse Effect.
(iv) The Company owns or has the right to use all the Intellectual Property
necessary to provide, sell and license the services currently provided,
sold and licensed by the Company, and to conduct the Company's business
as presently conducted, and to satisfy and perform the existing contracts,
commitments, arrangements and understandings with clients of the Company,
and the consummation of the transactions contemplated hereby will not alter
or impair any such rights, including any right of the Company to u
ellectual Property owned by others.
(v) No Intellectual Property owned by the Company, and no product or service
practiced, offered, licensed, sold or under development by the Company,
infringes any trademark, trade name, copyright, trade secret, patent, right
of publicity, right of privacy or other proprietary right of any Person or
would give rise to an obligation to render an accounting to any Person as a
result of co-authorship, co-invention or an express or implied contract for
any use or transfer. Neither the Company nor any of the Sh
edge of any Basis for any charge or claim, threatened claim or any suit or
action asserting any such infringement or conflict or asserting that the
Company does not have the legal right to own, enforce, sell, license,
sublicense, lease or otherwise use any such Intellectual Property,
process, product or service.
(vi) The Company has not sent or otherwise communicated to any other Person
any notice, charge, claim or assertion of, and neither the Company nor any
of the Shareholders has any Knowledge of, any present, impending or
threatened infringement by any other Person of any Intellectual Property.
(vii) The Company has at all times diligently protected its rights in the
Intellectual Property and any related apparatus or processes and have
maintained the confidentiality of its trade secrets, know-how and other
confidential Intellectual Property, and there have been no acts or omissions
by the Company, the result of which would be to compromise the rights
of the Company to apply for or enforce appropriate legal protection of
such Intellectual Property.
(viii) Each of the Company's current or former employees and those
current or former independent contractors retained by the Company who,
either alone or in concert with others, created or creates, developed
or develops, invented or invents, discovered or discovers, derived or
derives, programmed or programs or designed or designs any of the
Intellectual Property, has entered into a written agreement with the
Company irrevocably and exclusively assigning all rights in such
Intellectual Property to the Comp
s or independent contractors of the Company have any claims or rights to
any of the Intellectual Property necessary for the lawful conduct of
the Company's business as now conducted. To the Knowledge of the
Company, no employee of the Company is a party to or otherwise bound
by any agreement with or obligated to any other Person (including,
any former employer) which in any respect conflicts with any obligation,
commitment or job responsibility of such employee to the Company or
any Subsidiary under any ag
ly he or she is a party or otherwise.
(ix) Section 3.2(k) of the Disclosure Schedule identifies each Person
to whom the Company has sold, licensed, leased or otherwise transferred
or granted any interest or rights to any Intellectual Property, and the
date of each such sale, license, lease or other transfer or grant.
(l) Contracts. Section 3.2(l) of the Disclosure Schedule lists
each of the following contracts, agreements, and other written
arrangements to which the Company is a party:
(i) any written arrangement (or group of related written arrangements)
for the lease of personal property from or to third parties with
annual payments exceeding $10,000 or with a term exceeding one year;
(ii) any written arrangement concerning a partnership or joint venture;
(iii) any written arrangement (or group of related written arrangements)
under which the Company has (A) created, incurred, assumed, or guaranteed
(or may create, incur, assume, or guarantee) Indebtedness in excess
of $10,000 or (B) imposed (or may impose) a Security Interest on any of
its assets, tangible or intangible;
(iv) all customer contracts and engagements involving billings of $10,000
or more and under which the Company's work is not yet complete or was
completed within the past two years, or under which the Company otherwise
has on-going obligations;
(v) any written arrangement concerning confidentiality or any written
arrangement concerning non-competition;
(vi) any written arrangement not disclosed in the Disclosure Schedule
pursuant to any other provision in this Section 3.2 under which the
consequences of a default or termination could have a Material Adverse
Effect on the Company;
(vii) any contract with any labor union or contract for the employment of
any officer, individual employee or other Person on a full-time, part-time
or consulting basis, and any contract for the engagement of any consultants
or independent contractors;
(viii) any guaranty of any obligation for borrowed money or otherwise,
other than endorsements made for collection in the Ordinary Course of
Business, or any agreement or commitment with respect to the lending or
investing of funds to or in other Persons;
(ix) any contract or group of related contracts with the same party (or
group of related parties) for or relating to the purchase or sale of
products or services, either (A) which is not terminable by the Company
on sixty (60) days or less notice or (B) under which the undelivered
balance of products and services has a selling price in excess of
$10,000;
(x) any other contract or group of related contracts with the same
party either (A) requiring payments after the date hereof to or by the
Company of more than $10,000 or (B) not terminable by the Company on
sixty (60) days or less notice;
(xi) any agreement with any employee, the benefits of which are contingent
or the terms of which are materially altered upon the occurrence of a
transaction of the nature contemplated by this Agreement involving the
Company;
(xii) any agreement or plan the benefits of which will be increased or
accelerated by the occurrence of the transactions contemplated by this
Agreement; and
(xiii) any other written arrangement or group of related written
arrangements not entered into in the Ordinary Course of Business or the
breach, default or termination of which would have a Material Adverse Effect.
The Company has delivered or otherwise made available to [^] Aden a correct
and complete copy of each written arrangement (including all amendments
thereto) listed in Section 3.2(l) of the Disclosure Schedule. With respect
to each written arrangement so listed: (A) the written arrangement is
legal, valid, binding, enforceable, and in full force and effect; (B) the
written arrangement will continue to be legal, valid, binding, and
enforceable and in full force and effect on identical terms immediately
aft
e; (C) the Company is not (nor, to the Knowledge of the Company and the
Shareholders, is any other party) in material breach or default (including,
with respect to any express or implied warranty), and no event has occurred
which with notice or lapse of time or both would constitute a material
breach or default or permit termination, modification, or acceleration,
under the written arrangement, except for any breaches, defaults,
terminations, modifications or accelerations which have been cured or waived;
udiated any provision of any such written arrangement. The Company is not a
party to any verbal contract, agreement, or other arrangement which, if
reduced to written form, would be required to be listed in the Disclosure
Schedule under the terms of this Section 3.2(l). Correct and complete
copies of the general forms of customer engagement and services agreements
used by the Company have been delivered to [^] Aden.
(m) Notes and Accounts Receivable. All notes and accounts receivable of the
Company are reflected properly on its books and records, such receivables
are valid receivables subject to no set-offs or counterclaims, are current
and collectible in the aggregate amount shown, and will be collected in
accordance with their terms at their recorded amounts, subject only to the
reserve for bad debts set forth on the face of the Latest Balance Sheet,
as adjusted for operations and transactions through the [^] Closi
th the past custom and practice of the Company. Since the Most Recent Fiscal
Year End, there has not been a material adverse change in the aggregate
amount of the accounts receivable of the Company or the aging thereof.
(n) Inventory. The inventory of the Company reflected on the Latest Balance
Sheet (the "Inventory") consists of supplies and goods, all in a quantity
and quality useable and saleable in the Ordinary Course of Business, and
all of which is merchantable and fit for the purpose for which it was
procured or manufactured, and no material amount of which is slow-moving,
obsolete, damaged or defective, subject only to the reserve for inventory
writedown set forth on the face of the Latest Balance Sheet. The curr
nventory is not materially out of balance in relation to prior periods and
is materially consistent with the Company's expectations of the demands of
its customers. Since the Latest Balance Sheet Date there has not been a
material change in the level of the Inventory other than in the Ordinary
Course of Business, or in the method of valuing the Inventory.
(o) Powers of Attorney; Bank Accounts. There are no outstanding powers
of attorney executed by or on behalf of the Company. Section 3.2(o) of the
Disclosure Schedule lists each bank account and credit arrangement
maintained by the Company (together with relevant account information,
authorized signatures and account users).
(p) Litigation. Section 3.2(p) of the Disclosure Schedule sets forth each
instance in which the Company (i) is subject to any unsatisfied judgment,
order, decree, stipulation, injunction or charge or (ii) is a party to or,
to the Knowledge of any of the Shareholders or the Company, is threatened
to be made a party to, any charge, complaint, action, suit, proceeding,
hearing, or investigation of or in any court or quasi-judicial or
administrative agency of any Federal, state, local, or foreign jurisdiction
r. None of the charges, complaints, actions, suits, proceedings, hearings,
and investigations set forth in Section 3.2(p) of the Disclosure Schedule
could reasonably be expected to result in any Material Adverse Effect. None
of the Shareholders or the Company has any reason to believe that there
exists a Basis on which any such charge, complaint, action, suit,
proceeding, hearing, or investigation may be brought or threatened against
the Company.
(q) Employees; Employment Matters.
(i) To the Knowledge of the Shareholders and the Company, no key employee
or group of employees has any plans to terminate their employment with the
Company generally or as a result of the transactions contemplated hereby
or otherwise. The Company is not a party to or bound by any collective
bargaining agreement, and the Company has not experienced any strikes,
grievances, other collective bargaining disputes or, to the Knowledge of
any of the Shareholders or the Company, claims of unfair labor practices.
r any of the Shareholders has any Knowledge of any organizational effort
presently being made or threatened by or on behalf of any labor union with
respect to employees of the Company.
(ii) Section 3.2(q) of the Disclosure Schedule contains a true, correct and
complete list setting forth the names and current salaries or rates of
compensation of all employees of the Company and independent contractors
who render services to the Company on more than a single occasion. Except
as disclosed on Section 3.2(q) of the Disclosure Schedule, the Company has
no unsatisfied Liability to any previously terminated employee or
independent contractor. The Company has disclosed all written (and
summari
(iii) All Persons employed by the Company are employees at will or
otherwise employed such that the Company may lawfully terminate their
employment at any time, with or without cause, without creating any
material cause of action against the Company or otherwise giving rise to
any material Liability of the Company for wrongful discharge, breach of
contract or tort. None of the employees of the Company are subject to
noncompete/nonsolicitation covenants in favor of the Company.
(iv) The Company has materially complied with all applicable laws
relating to labor, including, without limitation, any provisions thereof
relating to wages, termination pay, vacation pay, fringe benefits,
collective bargaining and the payment and/or accrual of the same and all
Taxes, insurance and all other costs and expenses applicable thereto, and
the Company is not liable for any arrearage, or any Taxes, costs or
penalties for failure to comply with any of the foregoing. Without limiting
the generalit
Company has not incurred a violation of Part 6 of Subtitle B of Title I of
ERISA ("COBRA") or other applicable state insurance continuation law.
No material COBRA or other state insurance continuation law violation exists
or will exist with respect to any employees of the Company prior to and
including the [^] Closing Date, nor will any such violation occur as a
result of the transactions contemplated hereby. As of the [^] Closing Date,
the Company will not be, nor has the Company ever been, an enterprise
(v) Each Person whom the Company currently retains as a consultant or
previously retained as a consultant qualifies, or at all times while
performing services for the Company qualified, as an independent
contractor and not as an employee of the Company, under the Code and all
applicable state laws. Neither the execution of this Agreement nor the
consummation of the transactions contemplated hereby shall cause the
Company to be in breach of any agreement with any employee, contractor
or consultant or cause
(r) Employee Benefit Plans.
(i) All employee benefit plans ("Plans") are listed and briefly described
in Section 3.2(r) of the Disclosure Schedule. Each Plan is in compliance
with its terms and with ERISA and other applicable laws (including,
without limitation, compliance with the health care continuation
requirements of COBRA and any proposed regulations promulgated thereunder),
and all agreements and instruments applicable to any Plan. Section 3.2(r)
of the Disclosure Schedule sets forth each former employee of the Company
entit
d the remaining period of such benefits. The Company and each applicable
ERISA Affiliate of the Company have received favorable determination letters
as to the qualification under the Code of each pension plan, as defined
in Section 3(2) of ERISA ("Pension Plan"), and there have been no
amendments or other developments since the date of such determination
letters which would cause the loss of such qualified status. No material
violation of ERISA has at any time occurred in connection with the
administrati
and there are no actions, suits, or claims (other than routine, non-contested
claims for benefits) pending or threatened against the Plans, or any
administrator or fiduciary thereof, which could result in any Liability.
(ii) With respect to all present Plans, the Company and all ERISA Affiliates
of the Company have heretofore delivered to [^] Aden true and complete
copies of each of the following (including descriptions of vacation,
severance pay, sickness, and separation policies):
(A) the Plan documents (and any applicable trust agreement or insurance
contract);
(B) the most recent Internal Revenue Service determination letter request
relating to each of the Pension Plans, if any;
(C) the summary plan description (as currently in effect) and any summary
of material modification for each of the Plans, if any;
(D) the most recent Annual Report (Form 5500 Series), and accompanying
schedules, filed for each of the Plans, if any, and the most recent
summary annual report furnished for each of the Plans;
(E) the most recent actuarial valuations, if applicable, and latest
financial statements for each of the Plans; and
(F) all documents filed with the Internal Revenue Service, Department of
Labor or Pension Benefit Guaranty Corporation since January 1, 1992, if any.
There is and has been no material violation of ERISA known to the Company or
any ERISA Affiliate of the Company with respect to the filing of applicable
reports, documents, and notices regarding such past or present Plans with
the Secretary of Labor or the Secretary of the Treasury or the furnishing
of such documents to the participants or beneficiaries of such Plans.
(iii) Each Plan is maintained by the Company or any ERISA Affiliate of
the Company under a plan document which does not provide for other
participating employers except for the Company or any ERISA Affiliate
of the Company and no Plan provides or has provided credit with respect
to service other than with the Company or any ERISA Affiliate of the
Company.
(iv) Neither the Company nor any ERISA Affiliate of the Company nor any
of their employees, Shareholders, or directors have engaged in any
transaction in connection with which any of them would be subject either
to a civil penalty assessed pursuant to Section 502 of ERISA or a tax
imposed by Section 4975 of the Code. The execution and performance of
this Agreement will not involve any prohibited transaction within
the meaning of Section 406 of ERISA.
(v) None of the assets of any of the Plans is or has been invested in
any property constituting employer real property or any employer
security within the meaning of Section 407(d) of ERISA.
(vi) No Pension Plan or trust created under any such Pension Plan
has, since September 2, 1974, been terminated in whole or in
part. Additionally, there is no reasonable Basis for the Company
or any ERISA Affiliate of the Company to anticipate material
Liability to the Pension Benefit Guaranty Corporation with respect
to a Pension Plan and there has been no reportable event (within the
meaning of Section 4043(c) of ERISA), or any event requiring disclosure
under Section 4063(a) or 4041(c) of ERISA with re
Plan since September 2, 1974. There has been no event or condition which
presents a material risk of termination of any Pension Plan by the
Pension Benefit Guaranty Corporation, and no circumstances exist that
constitute grounds under Section 4042 of ERISA entitling the Pension
Benefit Guaranty Corporation to institute any such proceeding.
(vii) Full payment as of the [^] Closing Date will have been made of
all amounts which the Company and any ERISA Affiliate of the Company are
required, under the terms of all Plans, to have paid as contributions to
such Plans as of the last day of the most recent fiscal year prior
to the [^] Closing Date. Further, no accumulated funding deficiency
(as defined in Section 302 of ERISA and Section 412 of the Code),
whether or not waived, exists with respect to any Plan, nor has there
been any lien imposed un
e Code.
(viii) The execution and performance of this Agreement will not constitute
a stated triggering event under any Plan or employment agreement that will
result in any payment (whether of severance pay or otherwise) becoming due
to any employee of the Company or ERISA Affiliate of the Company.
(ix) Neither the Company nor any ERISA Affiliate of the Company provides,
nor have they at any time provided, coverage under any welfare plan (a
"Welfare Plan" (as defined in Section 3(l) of ERISA) (including, but not
limited to, life insurance, disability, medical, dental, prescription drugs
, or accidental death or dismemberment) to any of their retirees, other than
any continuation or conversion coverage which any such retiree may have
purchased at his own expense, or a defined benefit plan (as defined
A).
(x) The financial statements of each Pension Plan as of the end of the
most recent plan year, and the list of the investments of such Pension
Plan as of the most recent plan year end, accurately reflect the financial
conditions of the Pension Plans, and there have been no material changes
in such investments between such date and the [^] Closing Date.
(xi) There have been no s orders or approvals, and no application for any
of such permits, licenses, orders or approvals will be adversely affected
by the consummation of t he transactions contemplated by this Agreement.
No physician or other regulated personnel of the Company have been
disciplined, sanctioned or excluded from or been subject to any plan of
correction imposed by any professional review body. Since January 1, 1996,
no physician employed by or contracted by the Company on a regular basis
h
pr
her staff pr
ally reduced, surrendered, suspended or terminated at any hospital nor has
any such physician been placed on probation, been subject to mandatory
monitoring or second opinion requirements or otherwise been disciplined,
and to the Company's and the Shareholders' knowledge, there are no, and
have not been any, facts, conditions or incidents that could be reasonably
expected to result in any such revocation, surr contribution required to be
paid to any multiemployer plan or would be
liable
(s) Licenses, Permits and Approvals. Section 3.2(s) of the Disclosure
Schedule lists all governmental and regulatory licenses, permits and
approvals currently held by the Company and its licensed and regulated
employees and contractors. Such listed licenses, permits and approvals
constitute all that are necessary to the conduct of the Company's business
in accordance with applicable law as currently conducted and currently
contemplated to be conducted. There are no violations by the Company or
any of its staff of, or any claims or proceedings, pending or, to the
Knowledge of any of the Shareholders or the Company, threatened,
challenging the validity of or seeking to discontinue, any such licenses,
permits or approvals. All such permits, license, orders and approvals are
in full force and effect and no suspension, cancellation or investigation
of any of them is pending or, to such of the Company's and the
Shareholder's knowledge, threatened. To the knowledge of the Company
and the Shareholders,orders or approvals, and no application for any of
such permits, licenses, orders or approvals will be adversely affected by
the consummation of t he transactions contemplated by this Agreement.
No physician or other regulated personnel of the Company have been
disciplined, sanctioned or excluded from or been subject to any plan of
correction imposed by any professional review body. Since January 1, 1996
, no physician employed by or contracted by the Company on a regular basis
has had her staff pr staff pr her staff pr
, casualty, malpractice, professional liability, errors and omissions and
other general liability protection, and workers' compensation coverage and
bond and surety arrangements) to which the Company is or within the past
three (3) years has been a party, a named insured, or otherwise the
beneficiary of coverage at any time: (A) the name, address, and telephone
number of the agent; (B) the name of the insurer, the name of the
policyholder, and the name of each her staff pr staff pr her staff pr
, casualty, malpractice, professional liability, errors and omissions and
other general liability protection, and workers' compensation coverage and
bond and surety arrangements) to which the Company is or within the past
three (3) years has been a party, a named insured, or otherwise the
beneficiary of coverage at any time: (A) the name, address, and telephone
number of the agent; (B) the name of the insurer, the name of the
policyholder, and the name of each covered insured; (C) the policy number
and the whether the coverage was on a claims made, occurrence, or other
basis) and amount of coverage (including a description of how deductibles
and ceilings are calculated and operate).
(ii) With respect to each such insurance policy: (A) the policy is legal,
valid, binding, enforceable, and in full force and effect; (B) the policy
will continue to be legal, valid, binding, enforceable, and in full force
and effect on identical terms immediately following the consummation of
the transactions contemplated hereby; (C) neither the Company nor, to
the Knowledge of the Company or the Shareholders, any other party to
the policy, is in breach or default (including with respect to the payment
of event has occurred which, with notice or the lapse of time, or both,
would constitute such a breach or default, or permit termination,
modification, or acceleration, under the policy; and (D) no party to the
policy has repudiated any provision thereof.
(w) Warranty and Services Liability. All services rendered by the Company
have been in material conformity with all applicable contractual
commitments and all express and implied warranties, and the Company has no
Liability (and neither the Company nor any of the Shareholders have any
Knowledge of any Basis for any present or future action, suit, proceeding,
hearing, investigation, chs referred to herein as the "Closing Date."
4.2. Conditions to Obligation of Aden. The obligations of Aden to effect
the transactions contemplated hereby are subject to the satisfaction of the
following conditions at or prior to the Closing Date:
(a) The representations and warranties set forth in Sections 3.1 and 3.2
shall be true and correct in all material respects at and as of the [^]
Closing Date as though the [^] Closing Date were substituted for the date
hereof throughout such representations and warranties;
(b) Each of the Company and the Shareholders shall have performed and
complied with all of their respective covenants hereunder through the
[^] Closing Da Liability or obligation to pay any fees or commissions to
any broker,
finder, or agent with respect to the transactions contemplated by this
Agreement.
(y) Potential Conflicts of Interest. No officer, director or Shareholder
of the Company: (i) owns, directly or indirectly, any interest in
(excepting not more than 2% stock holdings for investment purposes in
securities of publicly held and traded companies) or is an officer,
director, employee or consultant of any Person which is a competitor,
lessor, lessee, customer or supplier of the Company; (ii) owns, directly
or indirectly, in whole or in part, any interest in Intellectual Property
which the Compan which is necessary for the business of the Company; (iii)
has any loan outstanding to or any cause of action or other claim
whatsoever against the Company, except for claims in the Ordinary Course of
Business, such as for accrued salary, bonus, vacation pay and benefits
under Benefit Plans and similar matters and agreements existing on the date
hereof; (iv) has made, on behalf of the Company, any payment or commitment
to pay any commission, fee or other amount to, or purchase or obtain or
other otherwise contract, at the offices of Aden, 2410 S. 156th Circle,
Suite 100, Omaha, NE 68130, unless another time, date or place is agreed to
by the Parties. The date of the Closing is referred to herein as the
"Closing Date."
4.2. Conditions to Obligation of Aden. The obligations of Aden to effect
the transactions contemplated hereby are subject to the satisfaction of the
following conditions at or prior to the Closing Date:
(a) The representations and warranties set forth in Sections 3.1 and 3.2
shall be true and correct in all material respects at and as of the [^]
Closing Date as though the [^] Closing Date were substituted for the date
hereof throughout such representations and warranties;
(b) Each of the Company and the Shareholders shall have performed and
complied with all of their respective covenants hereunder through the [^]
Closing Date;
(c) The Company shall have delivered to [^] Aden a certificate signed by
an officer of the Company to the effect that each of the conditions set
forth in Section [^] 4.2(a), (b) and (d) are satisfied in all respects;
(d) There shall not have been, since the Most Recent Fiscal Year End, any
change in or effect on the Company's assets, financial condition, operating
results, customer or employee relations or business prospects which results
or may reasonably be expected to result, in a Material Adverse Effect;
(e) The Company shall have delivered to [^] Aden (i) a copy of the text of
the director [^] resolutions by which the corporate action on the part of
the Company necessary to approve this Agreement [^] were taken, certified
by the Company's Secretary, (ii) an incumbency certificate signed by an
officer of the Company certifying the signature and office of each officer
executing this Agreement or any other agreement, certificate or other
instrument executed pursuant hereto, (iv) a copy of the Company's Artic
hase and sale of the transactions contemplated hereby (the "Closing") will
take place commencing at 10:00 a.m. on February 16_, 1998, or as soon as
practicable thereafter, at the offices of Aden, 2410 S. 156th Circle,
Suite 100, Omaha, NE 68130, unless another time, date or place is agreed to
by the Parties. The date of the Closing is referred to herein as the
"Closing Date."
4.2. Conditions to Obligation of Aden. The obligations of Aden to effect
the transactions contemplated hereby are subject to the satisfaction of the
following conditions at or prior to the Closing Date:
(a) The representations and warranties set forth in Sections 3.1 and 3.2
shall be true and correct in all material respects at and as of the [^]
Closing Date as though the [^] Closing Date were substituted for the date
hereof throughout such representations and warranties;
(b) Each of the Company and the Shareholders shall have performed and
complied with all of their respective covenants hereunder through the
[^] Closing Date;
(c) The Company shall have delivered to [^] Aden a certificate signed by
an officer of the Company to the effect that each of the conditions set
forth in Section [^] 4.2(a), (b) and (d) are satisfied in all respects;
(d) There shall not have been, since the Most Recent Fiscal Year End, any
change in or effect on the Company's assets, financial condition, operating
results, customer or employee relations or business prospects which results
or may reasonably be expected to result, in a Material Adverse Effect;
(e) The Company shall have delivered to [^] Aden (i) a copy of the text of
the director [^] resolutions by which the corporate action on the part of
the Company necessary to approve this Agreement [^] were taken, certified
by the Company's Secretary, (ii) an incumbency certificate signed by an
officer of the Company certifying the signature and office of each officer
executing this Agreement or any other agreement, certificate or other
instrument executed pursuant hereto, (iv) a copy of the Company's Artic
^] the Company.
(b) Confidentiality. Each of the Shareholders will treat and hold as
confidential all of the Confidential Information, and refrain from using
any of the Confidential Information (except, as applicable, in direct
furtherance of such Shareholder's duties on behalf of the [^] Comp business;
(f) [^] That Aden in its discretion shall be satisfied with the results of
its due diligence review of the Company and its assets, business, financial
condition and business prospects;
(g) [^] The Company shall have delivered to [^] Aden certificates, in form
and substance reasonably satisfactory to [^] Aden, signed by the Secretary
of the Company, dated as of the [^] Closing Date, identifying the following
documents to be delivered therewith: (i) the minute books of the Company
which, to the Knowledge of the Secretary of the Company, shall contain
minutes of all meetings (or consents to action in lieu thereof) of the
directors and Shareholders of the Company from their inception to the
corporate seal of the Company; (iii) certified copies of the by-laws of the
Company as in effect on the date thereof; (iv) all stock certificate books
and the stock ledger of the Company; and (v) such other documents or
instruments as [^] Aden may reasonably request in writing not less than
two days prior to the [^] Closing Date to carry out the intents and
purposes of this Agreement, and such minute books, stock certificate
books and other documents shall be complete, accurate and sufficient, to
the reason ntial Infor sclosed as the Compaareholders is, on the advice of
counsel, compelled to disclose any Confidential Information to any tribunal
or else stand liable for contempt, such Shareholders may disclose the
Confidential Information to the tribunal; provided, however, that the
disclosing Shareholders shall, upon the request of [^] Aden, or the [^]
Company and at their expense, exert all reasonable efforts to obtain an
order or other assurance that confidential treatment will be accorded to
su
ential Infor
confidential Infor
disclosed as the Company or [^] Aden shall reasonably designate.
(c) Transfer of [^] Newco Common.
(i) The Shareholders hereby acknowledge and agree that [^], the Closing
Date as it maintained with the Company prior to
rom and after the [^] Closing Date, for a period of not less than three years
following the [^] Closing Date, each of the and option of the [^] Company,
all tangible embodiments (and all copies)
of the Confidential Information which are in such Shareholder's possession.
In Shareholders is requested or required (by oral question or written
request for information or documents in any legal proceeding, interrogatory
, subpoena, civil investigative demand, or similar process) to disclose any
Confidential Information, such Shareholders will notify the Company
promptly of the request or requirement so that the Company may seek an
appropriate protective order or waive compliance with the provisions of
this Section 5.1(d). If, in the absence of a protective order or the
receipt oft of athe Shareholders is, on the advice of counsel, compelled to
disclose any Confidential Information to any tribunal or else stand liable
for contempt, such Shareholders may disclose the Confidential Information
to the tribunal; provided, however, that the disclosing Shareholders
shall, upon the request of [^] Aden, or the [^] Company and at their
expense, exert all reasonable efforts to obtain an order or other assurance
that confidential treatment will be accorded to such portion of the
Confiareholders is, on the advice of counsel, compelled to disclose any
Confidential Information to any tribunal or else stand liable for contempt,
such Shareholders may disclose the Confidential Information to the tribunal
; provided, however, that the disclosing Shareholders shall, upon the
request of [^] Aden, or the [^] Company and at their expense, exert all
reasonable efforts to obtain an order or other assurance that confidential
treatment will be accorded to such portion of the Confidential
Informed confidential Infor losed as the Company or [^] Aden shall
reasonably designate.
(c) Transfer of [^] Newco Common.
(i) The Shareholders hereby acknowledge and agree that [^], the Aden Common
issued pursuant to this Agreement may not be transferred except pursuant to
(a) a registered offering under the Securities Act, (b) Rule 144 of the
Securities Act (or any similar rule or rules then in force) if available,
or (c) subject to the conditions specified in subparagraph (ii) below, any
other legally available means of transfer. Noncompetition.In consideration
of the benefits to be received by the Shareholders in connection with [^]
this Agreement, each Shareholder agrees that for a period ending on the
later of (i) the third anniversary of the [^] Closing Date or (ii) the
first anniversary of such Shareholder's termination of employment with [^]
Aden and its Affiliates (the "Restricted Period"), such Shareholder will
not, directly or indirectly, alone or in association with others, either
rer or member, officer, director, employee, lender, investor, consultant,
manager or in any other capacity:
ender, investor, consultant, manager or in any other capacity:
any obligation to indemnify the Acquiring Parties from and against any
[^] Aden Indemnifiable Losses indemnifiable solely under Section 5.4(b)
(i)(A), unless the Acquiring Parties make a written claim within the
Survival Period with respect to the breach which gives rise to such
[^] Aden Indemnifiable Losses.
(d) Matters Involving Third Parties.
(i) If any third party shall notify any Party (the "Indemnified Party")
with respect to any matter (a "Third Party Claim") which may give rise to a
claim by such Indemnified Party for indemnification against any other Party
(the "Indemnifying Party") under this Agreement, then the Indemnified Party
shall notiincluding any Adverse Consequences any of the Shareholders may
suffer after the end of any applicable Survival Period, resulting from,
arising out of, relating to, in the nature of, or caused by: (A) a of any
representation or warranty of [nt or in the schedules or certificates
delivered by [^] Aden in connection herewith, or (B) any nonfulfillment or
breach of any covenant or agreement on the part of [^] Aden set forth in
this Agreement. All Adverse Consequences for which the Shareholders are
entitled to seek indemnification under this Agreement are referred to
herein as [^]"Shareholder Indemnifiable Losses."
(c) Certain Limits On and Provisions Relating to Shareholders'
Indemnification. The obligation of the Shareholders to indemnify the
Acquiring Parties under Sections 5.4(b)(i) and (ii) of this Agreement shall
be subject to the following:
(i) [^] no Shareholder will have any obligation to indemnify the Acquiring
Parties from and against any [^] Aden Indemnifiable Losses indemnifiable
solely under Section 5.4(b)(i)(A) until the Acquiring Parties have suffered
such aggregate [^] Aden Indemnifiable Losses in excess of [^] $15,000 (at
which point the Shareholders will be obligated to indemnify the Acquiring
Parties from and against all such [^] Aden Indemnifiable Losses relating
back to the first dollar); and
(ii) no Shareholder shall have any obligation to indemnify the Acquiring
Parties from and against any [^] Aden Indemnifiable Losses indemnifiable
solely under Section 5.4(b)(i)(A), unless the Acquiring Parties make a
written claim within the Survival Period with respect to the breach which
gives rise to such [^] Aden Indemnifiable Losses.
(d) Matters Involving Third Parties.
(i) If any third party shall notify any Party (the "Indemnified Party")
with respect to any matter (a "Third Party Claim") which may give rise to
a claim by such Indemnified Party for indemnification against any other
Party (the "Indemnifying Party") under this Agreement, then the Indemnified
Party shall notiincluding any Adverse Consequences any of the Shareholders
may suffer after the end of any applicable Survival Period, resulting from,
arising out of, relating to, in the nature of, or caused by: (A) a of any
representation or warranty ofnt or in the schedules or certificates
delivered by [^] Aden in connection herewith, or (B) any nonfulfillment or
breach of any covenant or agreement on the part of [^] Aden set forth in
this Agreement. All Adverse Consequences for which the Shareholders are
entitled to seek indemnification under this Agreement are referred to
herein as [^]"Shareholder Indemnifiable Losses."
(c) Certain Limits On and Provisions Relating to Shareholders'
Indemnification. The obligation of the Shareholders to indemnify the
Acquiring Parties under Sections 5.4(b)(i) and (ii) of this Agreement shall
be subject to the following:
(i) [^] no Shareholder will have any obligation to indemnify the Acquiring
Parties from and against any [^] Aden Indemnifiable Losses indemnifiable
solely under Section 5.4(b)(i)(A) until the Acquiring Parties have suffered
such aggregate [^] Aden Indemnifiable Losses in excess of [^] $15,000 (at
which point the Shareholders will be obligated to indemnify the Acquiring
Parties from and against all such [^] Aden Indemnifiable Losses relating
back to the first dollar); and
(ii) no Shareholder shall have any obligation to indemnify the Acquiring
Parties from and against any [^] Aden Indemnifiable Losses indemnifiable
solely under Section 5.4(b)(i)(A), unless the Acquiring Parties make a
written claim within the Survival Period with respect to the breach which
gives rise to such [^] Aden Indemnifiable Losses.
(d) Matters Involving Third Parties.
(i) If any third party shall notify any Party (the "Indemnified Party")
with respect to any matter (a "Third Party Claim") which may give rise to
a claim by such Indemnified Party for indemnification against any other
Party (the "Indemnifying Party") under this Agreement, then the Indemnified
Party shall notify each Indemnifying Party thereof promptly; provided,
however, that no delay on the part of the Indemnified Party in notifying
any Indemnifying Party shall relieve the Indemnifying Party from any
liab under unless (and then solely to the extent that) the Indemnifying
Party is damaged thereby.
(ii) Any Indemnifying Party will have the right to defend the Indemnified
Party against the Third Party Claim with counsel of the Indemnifying
Party's choice, reasonably satisfactory to the Indemnified Party, so
long as (A) the Indemnifying Party notifies the Indemnified Party, within
fifteen (15) business days after the Indemnified Party has given notice of
the Third Party Claim to the Indemnifying Party (or by such earlier date as
may be necessary under applicable procedural rules in order to file a time
se) that the Indemnifying Party is assuming the defense of such Third Party
Claim and will indemnify the Indemnified Party against such Third Party
Claim in accordance with the terms and limitations of this Section 5.4,
(B) the Indemnifying Party provides the Indemnified Party with reasonable
evidence that the Indemnifying Party will have the financial resources to
defend against the Third Party Claim and fulfill its indemnification
obligations hereunder with respect thereto, and (C) the Indemnifying
Party
the Third Party Claim actively and diligently.
(iii) So long as the conditions set forth in Section 5.4(d)(ii) are and
remain satisfied, then (A) the Indemnifying Party may conduct the defense
of the Third-Party Claim in accordance with Section 5.4(d)(ii), (B) the
Indemnified Party may retain separate co-counsel at its sole cost and
expense (except that the Indemnifying Party will be responsible for the
fees and expenses of the separate co-counsel to the extent the Indemnified
Party reasonably concludes that the counsel the Indemnifying Party has
selec
ential conflict of interest), (C) the Indemnified Party will not consent to
the entry of any judgment or enter into any settlement with respect to the
Third Party Claim without the prior written consent of the Indemnifying
Party (not to be unreasonably withheld, conditioned or delayed), (D) the
Indemnifying Party will not consent to the entry of any judgment with
respect to the matter, or enter into any settlement which either imposes
an injunction or other equitable relief upon the Indemnified Party or
don whereby the plaintiff or claimant in the matter releases the
Indemnified Party from all Liability with respect thereto, and (E) the
Indemnified Party shall, at the Indemnifying Party's reasonable request
and at the Indemnifying Party's expense, cooperate in the defense of the
matter. In the event that the conditions in Section 5.4(d)(ii) are not or
become unsatisfied in the case of any Third Party Claim, then the
Indemnified Party may assume control of the defense of such claim.
(e) No Contribution or Circular Recovery. None of the Shareholders shall
have any right of contribution against the [^] Company with respect to any
Indemnifiable Losses. Each Shareholder hereby agrees that such Shareholder
will not make any claim for indemnification against either the [^] Aden by
reason of the fact that such Shareholder or any of such Shareholder's
agents or other representatives was a controlling person, director,
officer, employee, agent or other representative of the Company or was
ser
Person at the request of the Company (whether such claim is for losses of
any kind or otherwise and whether such claim is pursuant to any statute,
Articles of Incorporation, By-laws, contractual obligation or otherwise)
with respect to any claim brought by [^] Aden against the Shareholder
(whether such claim is pursuant to this Agreement, applicable law, or
otherwise).
5.4. Dispute Resolution Regarding Indemnification. In the event that any
dispute should arise among the Parties with respect to any claims under
Section 5.4, the Parties shall first use their best efforts to resolve such
dispute among themselves. If the Parties are unable to resolve the dispute
within 30 calendar days after the commencement of efforts to resolve the
dispute, the dispute will be submitted to arbitration in accordance with
Section 5.6 hereof.
5.5. Arbitration.
(a) Either [^] Aden or the Shareholders may submit any matter referred to
in Section 5.4 hereof to binding arbitration by notifying the other Party
hereto, in writing, of such dispute and submission.
(b) Either Party requesting arbitration shall serve a written demand for
arbitration on the other Party in the manner specified in Section 5.6(f).
The demand shall set forth a statement of the nature of the dispute, the
amount involved and the remedies sought. Each party shall have the right
to be represented by counsel and shall have the right to full documentary
discovery.
(c) Except as specifically provided herein, the arbitration shall be
conducted by and in accordance with the commercial rules of the American
Arbitration Association ("AAA") , and the arbitrator's ruling shall be in
accordance with law and the terms of this Agreement. The arbitrator shall
not have the power to amend this Agreement in any respect.
(d) No later than twenty (20) calendar days after a demand for arbitration
is served, the Parties shall jointly select and appoint a single,
disinterested individual to act as the arbitrator. In the event that the
Parties do not agree on the selection of an arbitrator, AAA shall within
thirty (30) more days select an arbitrator from its panel, from a short
list of 5 to 10 names, as to which each party shall have two preemptory
challenges. The panel proposed and the arbitrator chosen shall in any case
pos
to disputes relating to consulting and other personal services businesses
and the [^] buyers of private businesses. Any arbitrator designated
hereunder shall not now or in the three years preceding such arbitration be
an employee, consultant, officer, director or stockholder of any Party
hereto or any Affiliate of any Party to this Agreement or have now or in
the three years preceding such arbitration any business relationship with
any Party hereto or any Affiliate of any Party hereto.
(e) No later than ten (10) calendar days after the arbitrator is appointed,
the arbitrator shall schedule the arbitration for a hearing to commence on
a mutually convenient date. The hearing shall commence no later than
thirty (30) calendar days after the arbitrator is appointed and shall
continue from day to day until completed.
(f) The arbitrator shall use his or her best efforts to rule on each
disputed issue within 30 days after the completion of the hearings described
in paragraph (d) above. The determination of the arbitrator as to the
resolution of any dispute shall be binding and conclusive upon all Parties;
provided, that the arbitrator may not award any punitive damages. All
rulings of the arbitrator shall be in writing, shall set forth the basis
for the decision and shall be delivered to the Parties.
(g) The prevailing Party in any arbitration shall be entitled to an award
of reasonable attorneys' fees incurred in connection with the arbitration
and the disputed issues with respect thereto. The non-prevailing Party
shall pay such fees, together with the fees of the arbitrator and the costs
and expenses of the arbitration. For purposes hereof, a Party seeking
payment of any amount in arbitration shall be deemed to be the prevailing
Party if it is determined that such party is entitled to receive at le
nitially claimed by it to be due to such Party in such arbitration, and the
other Party from which such payment is sought shall be deemed to be the
"prevailing party" if the other Party is not so deemed to be the prevailing
Party.
(h) Any arbitration pursuant to this Section 5.6 shall be conducted in the
[^] Counties of Cook or Lake, State of Illinois[^]. Any arbitration award
may be entered in and enforced by any court having jurisdiction thereof and
the Parties hereby consent and commit themselves to the jurisdiction of the
courts of the State of Illinois and the United States District [^] Court
for the Northern District of Illinois, at Chicago[^], for purposes of the
enforcement of any arbitration award.
5.6. Miscellaneous.
(a) Press Releases and Announcements. No Party shall issue any press
release or announcement relating to the existence or subject matter of this
Agreement without the prior written approval of the other Party; provided,
however, that any Party may make any public disclosure it believes in good
faith is required by law or regulation, including, without limitation, any
disclosures made necessary by [^] Adens' status as a public company (in
which case the disclosing Party will advise the other Party prior to
and shall insofar as may be practicable reflect on such disclosure
substantially all reasonable comments of the other parties.
(b) No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
(c) Entire Agreement. This Agreement (including the other documents
referred to herein) constitutes the entire agreement between the Parties
and supersedes any prior understandings, agreements, or representations by
or between the Parties, written or oral, that may have related in any way
to the subject matter hereof.
(d) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign this Agreement or
any of such Party's rights, interests, or obligations hereunder without
the prior written approval of the other Parties.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given (i)
three (3) business days after it is sent by registered or certified mail,
return receipt requested, postage prepaid, (ii) one day after receipt is
electronically confirmed, if sent by fax (provided that a hard copy shall
be promptly sent by first class mail), or (iii) one (1) business day
following d national overnight courier service for next day delivery,
charges prepaid, and addressed to the intended recipient as set forth below
or in the case of the Shareholders on the signature pages hereto:
If to the Company:[^]
Michael S. Luther
Liberty Court Travel, Inc.,
1410 Gold Coast Road
Papillion, NE 68046
If to Aden
Aden Enterprises, Inc..
2410 South 156th Circle, Suite 100
Omaha, Nebraska 68130
Fax: 402-334-5556
Attn: Judy Sundberg
Any Party may give any notice, request, demand, claim, or other
communication hereunder using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail, or
electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it
actually is delivered to the individual for whom it is intended. Any Party
may change the address to which notices, requests, demands, claims, and
other are to be delivered by giving the other Parties notice in the manner
herein set forth.
(g) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Delaware, without giving
effect to any choice of law or conflict of law provision or rule (whether
of the State of Delaware or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of
Delaware.
(h) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by
[^] Aden, the Company and each of the Shareholders. [^] No waiver by any
Party of any default, misrepresentation or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any
prior or subsequent default, misrepresentation or breach of warranty or
covenant hereunder or affect in any way any rights arising by virtue of
any prence of such kind.
(i) Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the invalid or unenforceable term or
provision in any other situation or in any other jurisdiction. If a final
judgment of a court of competent jurisdiction declares that any term or
provision hereof is invalid or unenforceable, the Parties agree that
termination of invalidity or unenforceability shall have the power to reduce
the scope, duration, or area of the term or provision, to delete specific
words or phrases, or to replace any invalid or unenforceable term or
provision with a term or provision that is valid and enforceable and that
comes closest to expressing the intention of the invalid or unenforceable
term or provision, and this Agreement shall be enforceable as so modified
after the expiration of the time within which the judgment may be appe
(j) Expenses. Except as otherwise explicitly provided in this Agreement,
each of the Parties will bear his or its own direct and indirect costs and
expenses (including fees and expenses of legal counsel, investment bankers
, brokers or other representatives or consultants) incurred in connection
with the negotiation, preparation and execution of this Agreement and the
transactions contemplated hereby, whether or not such transactions are
consummated[^], and all expenses [^] of this transaction of the Company
holders shall be paid by the Shareholders and shall not be paid or accrued
by the Company [^].
(k) Construction. The Parties have jointly participated in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if
drafted jointly by the Parties and no presumptions or burdens of proof
shall arise favoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any Federal, state, local,
or foreign statute or law shall be deemed also to refer to all rules
ted thereunder, unless the context requires otherwise. The Parties intend
that each representation, warranty and covenant contained herein shall have
independent significance. If any Party has breached any representation,
warranty or covenant contained herein in any respect, the fact that there
exists another representation, warranty or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which
the Party has not breached shall not detract from or mitigate the fac
reach of the first representation, warranty, or covenant. Each defined
term used in this Agreement has a comparable meaning when used in its
plural or singular form. Each gender-specific term used herein has a
comparable meaning whether used in a masculine, feminine or gender-neutral
form. The term "include" and its derivatives shall have the same
construction as the phrase "include, without limitation," and its
derivatives. The section headings contained in this Agreement are
inserted for convenience of all not affect in any way the meaning or
interpretation of this Agreement.
(l) Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made
a part hereof.
(m) Directly or Indirectly. Where any provision in this Agreement refers
to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether the action in
question is taken directly or indirectly by such Person.
* * * * *
IN WITNESS WHEREOF, the Parties hereto have executed this [^] Contribution
Agreement [^] as of the date first above written.
[^] LIBERTY COURT TRAVEL, INC.
/s/
Michael S. Luther
ADEN ENTERPRISES, INC.
/s/
Judy Sundberg
