AGREEMENT
This Agreement dated as of October 3, 2000 (the "Agreement") is made and entered
into by and among Alternative Lending Group, Inc., an Illinois corporation
("ALG"), Whitehall Enterprises, Inc., a Delaware corporation ("Whitehall"), MiB
Group, Ltd., an Indiana Corporation and MiB Financial Services, Inc., an Indiana
Corporation and a wholly owned subsidiary of MiB Group, Ltd. (collectively known
as the "Company"), and Scott J. Weaver ("Weaver") and Michael Beasley
("Beasley") (collectively the "Shareholders").
RECITALS:
A. ALG is engaged in the mortgage banking and brokerage business, the
principal office of which business is located at 1430 E. Missouri,
Suite 125, Phoenix, Arizona 85014 and is a wholly owned subsidiary of
Whitehall.
B. The Company is engaged in the telemarketing and mortgage brokerage
business, the principal office of which business is located at 9830
Bauer Dr., Suite 200, Indianapolis, IN 46280.
C. The Shareholders own 100% of the outstanding shares in the Company and
all ownership interests in the Company's real, personal and
intellectual property (collectively, " Shareholders' interests").
D. ALG desires to acquire and the Shareholders desires to sell to ALG 100%
of Shareholders' interests in the Company.
E. Whitehall is willing to issue shares of its stock as consideration for
the acquisition of 100% of Shareholders' interests in the Company and
is willing to facilitate the transaction in the manner set forth
herein.
COVENANTS:
NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties, and agreements herein contained, the parties hereto agree as
follows:
1. SALE AND PURCHASE OF THE COMPANY AND SHAREHOLDERS' INTERESTS
1.1 Sale and Purchase of Company and Shareholders' Interests. Shareholders
hereby agree to sell and transfer to ALG all of the Shareholders'
interests in the Company and ALG hereby agrees to purchase from the
Shareholders all of Shareholders' interests. ALG's purchase includes, but
is not limited to, the goodwill of the Company, restrictive covenants in
favor of ALG as set forth herein, all Company office supplies, equipment
and furnishings, customer lists, rights to access and business with
customers and prospective customers, accounts receivable, existing books
of business, proprietary and confidential information as defined in the
Employment Agreement attached hereto as Exhibit A, and any and all other
interests in real, personal or intellectual property owned by the
Company.
1.2 Distribution of Whitehall shares to Weaver and Health Insurance Premium
Reimbursement. Whitehall agrees, in consideration of the sale and
transfer of the Shareholders' interests to ALG, to issue to Weaver four
hundred fifty thousand (450,000) shares of the common stock of Whitehall
(the "Whitehall shares") at the
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Closing (as hereinafter described) which shall take place on or before
October 3, 2000. Of the 450,000 Whitehall shares, Whitehall guarantees
that two hundred twenty five thousand (225,000) of those Whitehall shares
will have a value twelve (12) months from the Closing Date (as set forth
in Section 1.4 herein) of two hundred twenty five thousand dollars
($225,000.00) (the "Guaranteed Shares"). In the event the Guaranteed
Shares are valued at less than $225,000.00 twelve months from the Closing
Date, Whitehall agrees to issue additional Whitehall shares (the
"Additional Shares") to Weaver to make up the difference between the
then-existing value of the Guaranteed Shares and the target value of
$225,000.00 worth of Whitehall shares. The value of the Additional Shares
will be determined as the value of the Additional Shares at the close of
the OTCBB on the twelve month anniversary date of the Closing Date, which
is October 3, 2001, or the next date the OTCBB is operating if the twelve
month anniversary date falls on a weekend or holiday. Those Additional
Shares shall be free-trading shares as of the twelve month anniversary
date of the Closing Date. As additional consideration, ALG agrees to
retain Weaver as a consultant to be paid an annual salary of one dollar
($1.00). ALG also agrees that so long as Weaver is not specifically
excluded from coverage by any insurer, ALG shall keep Weaver insured
under any existing health/dental plan of the Company through December
31,2001 and shall pay all premiums therefore.
1.3 Distribution of Whitehall Shares to Beasley. Whitehall agrees, in
consideration of the sale and transfer of the Shareholders interests to
ALG, to issue to Beasley four hundred fifty thousand (450,000) shares of
the common stock of Whitehall (the "Whitehall shares") at the Closing (as
hereinafter described) which shall take place on or before October 3,
2000. Of the 450,000 Whitehall shares, Whitehall guarantees that two
hundred twenty five thousand (225,000) of those Whitehall shares will
have a value twelve (12) months from the Closing Date (as set forth in
Section 1.4 herein) of two hundred twenty five thousand dollars
($225,000.00) (the "Guaranteed Shares"). In the event the Guaranteed
Shares are valued at less than $225,000.00 twelve months from the Closing
Date, Whitehall agrees to issue additional Whitehall shares (the "
Additional Shares") to Beasley to make up the difference between the
then-existing value of the Guaranteed Shares and the target value
of$225,000.00 worth of Whitehall shares. The value of the Additional
Shares will be determined as the value of the Additional Shares at the
close of the OTCBB on the twelve month anniversary date of the Closing
Date, which is October 3, 2001, or the next date the OTCBB is operating
if the twelve month anniversary date falls on a weekend or holiday. Those
Additional Shares shall be free-trading shares as of the twelve month
anniversary date of the Closing Date.
1.4 Other Agreements. In addition to the consideration referred to above, the
parties respectively agree as follows:
(a) Beasley agrees to sign the individual Employment Agreement attached
hereto as Exhibit A.
1.5 Protected Interests of ALG. ALG recognizes, and Shareholders acknowledge,
that Shareholders' industry experience, know-how and knowledge of the
Company's markets, employees and their respective duties, customers,
prospective customers, the Company's technology and the use thereof, as
well as the administration of the Company, are valuable commodities and
are protectable interests of ALG.
(a) Weaver's Non-Compete. Weaver agrees that as part of this Agreement, he is
receiving adequate consideration in exchange for his promise not to
compete with ALG or any of its subsidiaries, including the Company, in
the areas of mortgage and/or home improvement telemarketing, either
directly, indirectly, through ownership, employment or by providing
services as a consultant for three years from the Closing Date. Further,
Weaver acknowledges that ALG does business in markets nationwide, ALG has
a protectable interest in Shareholders' interests, and ALG would suffer
irreparable harm if Weaver was to compete with ALG in violation
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of this Agreement. Therefore, Weaver agrees not to compete as defined
above within any state in which ALG and/or the Company are licensed to do
business for three years from the Closing Date.
(b) Beasley's Non-compete. Beasley agrees that as part of this Agreement, he
is receiving adequate consideration in exchange for his promise not to
compete with ALG or any of its subsidiaries, including the Company,
either directly, indirectly, through ownership, employment or by
providing services as a consultant for a period of six years from the
Closing Date (the "Non-compete Period"). In the event Beasley is
dismissed from his employment with ALG for any reason or if he terminates
his employment with ALG before five years from the Closing Date, the
Non-compete Period shall be reduced by one year for every full year
Beasley is employed with ALG per the terms of the Employment Agreement
attached hereto as Exhibit A. (For example, if Beasley is terminated or
quits his employment with ALG one year after the Closing Date, the
Non-compete Period will be reduced to five years from the Closing Date.
If Beasley is terminated or quits his employment with ALG two years after
the Closing Date, the Non-compete Period will be reduced to four years
from the Closing Date, etc.). If Beasley remains employed with ALG for
the entire term of this Agreement, including option periods, then Beasley
agrees not to compete with ALG for a period of one year from the date he
is no longer employed with ALG. At no time shall the Non-compete Period
be less than one year from the date Beasley is no longer employed with
ALG. Further, Beasley acknowledges that ALG does business in markets
nationwide, ALG has a protectable interest in Shareholders' interests,
and ALG would suffer irreparable harm if Beasley was to compete with ALG
in violation of this Agreement. Therefore, Beasley agrees not to compete
as defined above within any state in which ALG and/or the Company are
licensed to do business for the entire Non-compete Period as defined in
the above-described formula.
(c) Arizona Law Controls. Shareholders acknowledge that the non-compete and
anti-piracy laws of Arizona shall apply to this Agreement, and
Shareholders agree to waive any conflicts of laws in that regard. In the
event that Beasley should terminate his employment with the Company prior
to the conclusion of five years from the commencement of his employment,
ALG may, at its sole election, by written notice to the parties,
terminate this Agreement and the attached employment agreement.
1.6 Breach of Non-compete by Weaver. In the event Weaver violates the terms
of this Section 1.5 above, Weaver agrees to reimburse ALG an amount equal
to the value of the Whitehall shares tendered to him pursuant to Section
1.2 above (including the Additional Shares and the Guaranteed Shares as
defined in Section 1.2 above) on the 365th day after the Closing Date or
the next business day if such day falls on a weekend or holiday (the
"Valuation Date"). The value is determined as the amount at which
Whitehall stock traded on the OTCBB at the close of trading on the
Valuation Date. This remedy is non-exclusive, and Weaver agrees that ALG
and/or the Company may pursue any and all other remedies available under
Arizona statutory or common law.
Breach of Non-compete by Beasley. In the event Beasley violates the terms
of this Section 1.5 above, Beasley agrees to reimburse ALG an amount
equal to the value of the Whitehall shares as defined in Section 1.3
above (including the Additional Shares and the Guaranteed Shares as
defined in Section 1.3 above), on the 365111 day after the Closing Date
or the next business day if such day falls on a weekend or holiday (the
"Valuation Date"). The value is determined as the amount at which
Whitehall stock traded on the OTCBB at the close of trading on the
Valuation Date. This remedy is non-exclusive, and Beasley agrees that ALG
and/or Company may pursue any and all other remedies available under
Arizona statutory or common law.
1. 7 Closing. Subject to the provisions of this Agreement, the Closing of
the transactions contemplated by this Agreement shall take place at the
offices of MiB Group, Ltd., 9830 Bauer Dr., Suite 200, Indianapolis, IN
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46280 on October 3, 2000 at 9:00 a.m., or at such other time, place or
date, or by the use of mail and overnight deliveries as the parties may
mutually agree. Provided, however, that if a condition to Closing set
forth in Article 7 or elsewhere herein shall not have been fulfilled or
waived at such time, any party hereto entitled to the benefits of such
condition may postpone the Closing by notice to the other parties until
such condition or conditions shall have been met or waived, except that
in no event shall the Closing occur after October 3, 2000, without the
written agreement of all parties hereto. The date and time of such
Closing are herein referred to as the "Closing Date".
2. REPRESENTATIONS AND WARRANTIES OF
THE COMPANY AND THE SHAREHOLDERS
Except as otherwise disclosed in writing to ALG or excepted in the
schedules delivered by the Company and Shareholders to ALG (the
"Disclosure Schedule"), the Company and the Shareholders covenant,
represent and warrant, which representations and warranties shall be true
and accurate as of the Closing Date as if such representations and
warranties had been made as of the Closing Date, with and to ALG and
Whitehall, their successors and assigns, as follows:
2.1 Organization. The Company is a corporation duly organized and validly
existing and in good standing under the laws of the state of Indiana and
has full power and authority to own, lease and operate all of its
properties and assets and to carry on its business as it is now being
conducted. No action has been taken by the Shareholders or any of them or
by the Company which would prevent or make unlawful the agreements set
forth herein.
2.2 Shareholders Interests. The Shareholders collectively, are the owners of
100% of the shares in the Company. Neither the Shareholders nor any other
persons or entities have any options or rights to acquire any additional
other shares in the Company.
2.3 Authorization. This Agreement, the execution and delivery of this
Agreement by the Company, and the performance by the Company of its
obligations and undertakings referenced herein, have been duly authorized
and approved by the Shareholders of the Company, and the Shareholders
executing this Agreement on behalf of the Company have authority to do so
and upon execution of this Agreement by such Shareholders, this Agreement
shall be a valid and binding obligation of the Company and the
Shareholders.
2.4 No Violation. Consents and Approvals. Neither the execution and delivery
of this Agreement, nor the consummation of the transactions contemplated
hereby and thereby, will conflict with, result in a breach of, permit any
party to terminate or accelerate the provisions of, or result in the
imposition of any lien, encumbrance or restriction upon the property or
assets of the Company under:
(a) the provisions of the Articles of Incorporation or the By-Laws of MiB
Group, Ltd., ("MGL") and/or MiB Financial Services, Inc. ("MFSI").
(b) the provisions of any obligation, indenture, agreement, permit or other
instrument to which the Company is a party or which the Company holds; or
(c) any statute or law or any order, decree, judgment, rule or regulation of
any court or governmental agency or authority having jurisdiction over
the Company. No permit, consent, approval or authorization of, or
declaration, filing or registration with, any governmental or regulatory
authority or other person
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(either governmental or private) is necessary in connection with the
execution and delivery by the Company or the Shareholders of this
Agreement or the consummation by them of the transactions contemplated
hereby and thereby.
2.5 Financial Statements.
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(a) Section 2.5 of the Disclosure Schedule sets forth true and correct copies
of the audited balance sheets and profit and loss statements of MGL and
MFSI as of October 3,2000. Also attached to Section 2.6 of the Disclosure
Schedule are true and correct copies of the unaudited balance sheets and
income statements for the period ended September 30, 2000. Each of the
unaudited financial statements has been reviewed by the Company's
independent accountants. The foregoing financial statements are
collectively referred to herein as the "Financial Statements" and the
balance sheets alone as of September 30, 2000, are referred to
collectively as the "Balance Sheet."
(b) The Financial Statements have been prepared from the books and records of
the Company as, at and for the periods indicated and have been prepared
in accordance with generally accepted accounting principles consistently
followed throughout the periods indicated, and present fairly the
financial position of the Company, and the results of its operations, as,
at and for the periods indicated. The Company has in its possession, and
will deliver to ALG upon request, all supporting documentation and work
papers relating to the Financial Statements to permit ALG to restate its
Financial Statements if required by rules and regulations of the SEC in
connection with filings of Whitehall.
2.6 Absence of Undisclosed Liabilities. Except to the extent shown on the
Balance Sheet or in Section 2.6 of the Disclosure Schedule:
(a) as of the date hereof, the Company did not have any liabilities or
obligations of any nature, whether accrued, absolute, contingent or
otherwise, and
(b) at the Closing Date, the Company will not have any liabilities or
obligations of any nature, whether accrued, absolute, contingent or
otherwise, and the Company does not now, and will not at the Closing
Date, know or have any reason to know of any basis for the assertion of
any such other obligation or liability against the Company, except as
incurred in the normal course of business.
2. 7 Absence of Certain Changes or Events. Except as set forth in Section
2.7 of the Disclosure Schedule, since April 1 , 2000, there has not been,
and through the Closing Date there will not be:
(a) any adverse change in the business, properties, assets, financial
condition or results of operation which would be material to the Company;
(b) any damage, destruction or loss, whether covered by insurance or not,
materially and adversely affecting the properties or business of the
Company;
(c) any distribution to the Shareholders or adoption of a plan of
distribution of MGL's or MFSI's assets, whether from capital or accrued
income, except for compensation regularly paid for Shareholders services
as employees prior to this Agreement;
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(d) any increase in the compensation payable or to become payable by the
Company to its managers or key employees, or any material increase in any
bonus, insurance, pension or other employee benefit plan, payment or
arrangement made to, for or with any such managers or key employees;
(e) any labor or employee dispute involving the Company, other than routine
matters, none of which is material;
(f) any borrowing or lending of money or guarantee of any obligation by the
Company;
(g) any adoption, amendment or termination of any employee benefit plan or
arrangement of the Company;
(h) any disposition of any material properties or assets used in the business
of the Company other than sales of inventory in the ordinary course of
its business;
(i) any engagement by the Company in activities outside the ordinary course
of its business;
(j) the incurring of any liability of the Company (whether absolute or
contingent) except liabilities which were incurred in the ordinary course
of business; or
(k) any agreement (whether oral or written) to do any of the foregoing.
2.8 Title to and Condition of Non-Real Estate Assets. All non-real estate
assets, including those on lease, are set forth in Section 2.8 of the
Disclosure Schedule. Except for such assets as have been disposed of in
the ordinary conduct of the Company's business between April l , 2000,
and the Closing Date, the Company has good and marketable title to, or
valid leasehold interests in, all non-real estate assets reflected on the
Balance Sheet or acquired by it after April 1, 2000, or otherwise used in
the operation of the Company's business, free and clear of all liens,
claims, mortgages, charges, easements or other encumbrances of any kind
whatsoever except:
(a) to the extent reflected or reserved against on the Balance Sheet, or
(b) for liens for taxes not yet due.
All the fixed assets reflected on the Balance Sheet, and those assets
acquired since the date thereof, and not disposed of as permitted
hereunder, constitute all the fixed assets now used by the Company and
necessary to conduct its business as it is being conducted on the date
hereof and all leases of such fixed assets will, at the Closing, be in
full force and effect. All such fixed assets, including all mechanical
and component parts thereof, are in good working condition, in a state of
reasonable maintenance and repair, ordinary wear and tear excepted, and
are free from any known defects.
2.9 Real Property. Attached to Section 2.9 of the Disclosure Schedule are
copies of all real estate lease agreements to which the Company is a
party and copies of any deeds to real property owned by the Company. The
Company has good and marketable title to all property owned by the
Company and such property is free and clear of all liens, claims,
mortgages, charges, easements or any kind, except to the extent reflected
or reserved in the Financial Statements and disclosed in Section 2.9 of
the Disclosure Schedule.
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2.10 Equipment. The Company shall deliver to ALG, prior to Closing, a computer
generated Fixed Asset Register which will list all items of furniture,
machinery, equipment and similar property (including vehicles) owned by
the Company on the Closing Date.
2.11 Trademarks and Similar Rights. Section 2.11 of the Disclosure Schedule
sets forth all registered trademarks and service marks with dates and
places of registration, and all other copyrights, trademarks, service
marks, trade, assumed and divisional names, licenses and rights in any
thereof owned in whole or in part or used by the Company in the conduct
of its business, whether or not registered. Except as indicated in
Section 2.12 of the Disclosure Schedule, neither the validity of, nor the
Company's rights under, any of the items listed therein, is being
questioned or contested by others.
2.12 Insurance. Schedule 2.12 sets forth a list and brief description of all
policies or binders of insurance, including (but not limited to) key-man
insurance, workmen's compensation and employer liability, automobile
insurance, product liability and title insurance (the "Policies"). The
Policies on Schedule 2.13 are valid and enforceable in accordance with
their terms and are in full force and effect.
2.13 Contracts and Agreements. Section 2.13 of the Disclosure Schedule sets
forth a description of:
(a) all contracts and agreements (whether written or oral) and all amendments
thereto or modifications thereof to which the Company is a party or by
which it is bound which involve future payments by or to the Company of
$25,000 or more other than,
(i) contracts which are covered by Section 2.26 of the Disclosure
Schedule or;
(ii) contracts which are terminable by the Company upon thirty (30)
days or less notice without cost or expense to the Company, and;
(b) all notes, mortgages, pledges, deeds of trust, security, loan or credit
agreements and similar instruments or arrangements to which the Company
is a party or by which it is bound and all amendments or modifications
thereof (collectively (a) and (b) referred to as the "Contracts"),
together in each case with copies of all such agreements, contracts and
other instruments as ALG may reasonably request. Except as set forth in
Section 2.14 of the Disclosure Schedule:
(i) each contract is a valid and binding agreement of the Company and,
to the best o(the Shareholders and Company's knowledge, is a valid
and binding agreement of the other parties thereto;
(ii) the Company has fulfilled all obligations required pursuant to
each Contract to have been performed by the Company on its part
prior to the date hereof, and the Company has no reason to believe
that it will not be able to fulfill, when due, all of the
Company's obligations under the Contracts which remain to be
performed after the date hereof;
(iii) there has not occurred any default under any Contract on the part
of the Company; the Company does not have any knowledge that any
default under any Contract on the part of the other parties
thereto has occurred; and the Company does not have any knowledge
that any event has occurred which with the giving of notice or the
lapse of time, or both, would constitute any default under any of
the Contracts.
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2.14 Bank Accounts. Section 2.14 of the Disclosure Schedule sets forth the
name and address of each bank in which the Company has an account or
safety deposit box, the designation of such account and the names of all
persons authorized to draw thereon or enter therein, as may be the case.
2.15 Litigation. Section 2.15 of the Disclosure Schedule sets forth any and
all actions, suits, claims, proceedings, investigations or inspections
pending or threatened against or affecting the Company or any of its
properties or rights in any court or before any governmental authority,
whether or not reflected in the Balance Sheet.
2.16 Employee Benefit Plans. Section 2.16 of the Disclosure Schedule sets
forth a description of all bonus, incentive compensation, profit sharing,
retirement, pension, group insurance, death benefit or other fringe
benefit plans, trust agreements or arrangements of the Company, and
copies of all documents relating to each of said benefit plans have been
separately delivered to ALG. Such plans and arrangements which are
subject to the Employee Retirement Income Security Act of 1974
("ERISA")are referred to hereafter as the "Benefit Plans." The Company
has made available to ALG for inspection all annual reports filed on
Internal Revenue Service ("IRS") Form 5500 with respect to any Benefit
Plans and other reports filed with the Pension Benefit Guaranty
Corporation since the inception of such Benefit Plan to the extent
applicable.
With respect to the Benefit Plans:
(a) The Internal Revenue Service has issued, and the Company has made
available to ALG for inspection, favorable determination letters with
respect to the qualification of all Benefit Plans and all amendments
thereto, as currently in effect and as required to be amended to comply
with the Tax Reform Act of 1986 and all subsequent legislation and, which
are intended to be qualified retirement plans under the Internal Revenue
Code of 1986 (the "Code");
(b) None of the Benefit Plans or any assets thereof has engaged in, or been a
party to any " prohibited transaction" as defined in ERISA or the Code;
(c) There is no liability arising from the termination or partial termination
of any Benefit Plan, except for liabilities as to which adequate reserves
are reflected in the Balance Sheet, and there exists no condition
presenting a material risk of such liability,
(d) All Benefit Plans have been operated in compliance with ERISA, the Code
and other applicable law, and all reports have been filed with respect to
the Benefit Plans in accordance with ERISA and the Code.
(e) None of the Benefit Plans is a "multi employer" pension plan which is
subject to the Multi Employer Pension Plan Amendment Act of 1980.
(f) The Company has no obligation for the payment of any unfunded or
withdrawal liability under any Benefit Plan or other plan listed in
Section 2.16 of the Disclosure Schedule.
2.17 Employee Compensation. Section 2.17 of the Disclosure Schedule sets forth
the names, positions, dates of hire and current compensation, including
bonuses and customary commissions, of all present Shareholders
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and management employees of the Company whose annual compensation was
$30,000 or more in calendar year 1999 or is expected to exceed $30,000 in
calendar year 2000.
2.18 Collective Bargaining, Employment and Non-Competition Agreements. The
Company is not a party to any collective bargaining or similar labor
agreement. Section 2.18 of the Disclosure Schedule sets forth:
(a) all consulting agreements to which the Company is a party, and;
(b) all employment, non-competition, non-disclosure and compensation
agreements (whether written or oral) with Shareholders or other employees
of the Company, together with a copy, or in the case of any oral
agreement, a summary, of each such agreement. If a form employment,
non-competition or non-disclosure agreement is used, a copy of such form
need only be included with a list of all such employees which have signed
such form.
2.19 Purchase Orders. All written or oral purchase orders or purchase
commitments with an aggregate remaining commitment of $20,000 or more are
listed in Section 2.19 of the Disclosure Schedule.
2.20 Accounts Receivable. A complete list of all accounts, notes and other
receivables of Company as of September 30,2000, and the aging thereof has
been separately delivered to ALG. All such accounts receivable arose in
the ordinary course of business and no entitlements to or claims of
offset or reduction have been made or exist and, subject to any allowance
for doubtful accounts set forth on the Balance Sheet, all such accounts
are fully collectible without offset or compromise within 90 days of
Closing, except as otherwise disclosed in Section 2.20 of the Disclosure
Schedule.
2.21 Licenses and Permits. Section 2.21 of the Disclosure Schedule sets forth
a list of, and the Company is in possession of, all licenses, permits and
authorizations required for the conduct of the Company's business (the
"Permits" ) and the Permits are valid and in full force and effect.
Except as set forth in Section 2.21 of the Disclosure Schedule, to the
best of its knowledge, the Company is in compliance with all conditions
or requirements imposed by or in connection with the Permits and with
respect to the conduct of its business and the Company has received no
notice and the Company has no knowledge or reason to believe that any
authority intends to cancel, terminate or modify any of the Permits or
adopt or modify rules and regulations which would adversely affect the
Permits. The Company is an FHA approved mortgage or loan correspondent
and a VA approved lender.
2.22 Employee Matters. Except as set forth in Section 2.22 of the Disclosure
Schedule:
(a) The Company is in compliance with all federal and state laws respecting
employment and employment practices, terms and conditions of employment,
and wages and hours, and is not engaged in any unfair labor practices and
neither the Company nor the Shareholders have knowledge or any reason to
believe that any violations of any of said laws have occurred.
(b) All obligations of the Company, whether arising by operation of law, by
contract or by past custom, for payments by the Company directly to its
employees or to trusts or other funds or to any governmental agency, for
employment compensation benefits, workers compensation benefits,
accident, sickness and disability benefits, pension, profit sharing and
any other retirement benefits, social security benefits, vacation and
holiday pay, bonuses and other forms of compensation, or any other
benefits, have been paid or adequate accruals therefore have been made on
the Balance Sheet, to the best of the Company's knowledge, or, with
respect to accruals required from
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September 30, 2000, through the Closing, have been made in accordance
with Company's normal accounting procedures and in compliance with
generally accepted accounting principles, consistently applied.
2.23 Taxes and Tax Returns. The Company will, between the date hereof and the
Closing Date, and through the date of this Agreement has, duly and timely
filed all federal, state and local (United States and all foreign
jurisdictions) tax returns required to be filed by it (unless a valid
extension therefore has been granted), and all such returns are, or will
be when filed, true, complete and correct in all material respects. The
Company has, or will have prior to the Closing Date, duly and timely paid
or made adequate provision in the Balance Sheet and for the payment of
all taxes, assessments and other governmental charges which have been
incurred as set forth in the aforementioned tax returns or are otherwise
due and payable with respect to periods ending on or prior to the Closing
Date. All sales or other excise taxes required through the date of this
Agreement to be collected and remitted by the Company have been properly
collected and remitted. No tax return filed by the Company is under audit
or examination by any taxing authority and there are no applications or
agreements for the extension of the time for the filing of any tax return
or for the assessment of any amounts of tax nor any consent to an
extension of the period of limitations applicable to such assessment or
to the collection of any tax. No issue or issues have been raised in
connection with any prior or pending inquiry into, or audit of, any tax
filings of the Company and the Company has no reason to know of any
issues which may be expected to be raised in the future by such taxing
authorities and no facts exist or have existed which would constitute
grounds for the assessment of any further tax liabilities, which
individually or in the aggregate are material with respect to the periods
which have not been examined by the IRS or any other state or local
taxing authority. The Company has made available to ALG true and complete
copies of all federal, state and local (United States and foreign) income
tax returns for each of the past three (3) years as set forth in Section
2.23 of the Disclosure Schedule which it has filed together with copies
of all schedules, work papers, elections, tax depreciation schedules and
other documents which were used in the preparation of each such tax
return. There are no liens for taxes upon the assets of the Company,
except for liens for taxes not yet due. As used herein, " taxes" mean:
(a) all net income, gross income, gross receipts, sales, use, transfer,
franchise, profits, withholding, payroll, employment, excise, severance,
property or windfall profits taxes, or other taxes of any kind
whatsoever, together with any interest and any penalties, additions to
tax or additional amounts imposed by any taxing authority (domestic or
foreign) upon the Company with respect to all periods or portions thereof
ending on or before the Closing Date or any extension thereof;
(b) any liability of the Company for the payment of any amounts of the type
described in the immediately preceding clause (a) as a result of being a
member of an affiliated or combined group.
2.24 Transactions With Affiliates. Except as set forth in Section 2.24 of the
Disclosure Schedule and except for compensation or other customary
employee benefits provided in the ordinary course of business, since
September 30, 2000, the Company has not entered into or been a party to
any transaction which provided for payment to or from, or the transfer
of, any Company property to or from Shareholders or employees of the
Company, to any member of the family of any such person or to any
corporation, partnership, trust or other entity in which any such person
has an ownership interest or is an officer, director, partner or trustee.
2.25 Compliance with Applicable Law Except as set forth in Section 2.25 of the
Disclosure Schedule, the Company is conducting and has conducted its
business so as to comply with all applicable laws, ordinances,
regulations, decrees and orders, of any governmental entity, including
without limitation those specifically referred in Sections 2.21 and 2.22
hereof and all city, county, state and Federal statutes, regulations,
laws and ordinances
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applicable to air or water pollution, environmental protection, soil
contamination, hazardous substances (as defined in any of the following
statutes which shall be deemed to include, without limitation, asbestos
and PCB's), hazardous waste generation, transportation, storage and
disposal or other environmental matters including the Resource,
Conservation and Recovery Act of 1976, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Clean Air Act, the
Toxic Substances Control Act, the Federal Water Pollution Control Act,
the Federal Hazardous Substances Act, the Solid Waste Disposal Act and
other similar and related Federal and state laws and regulations
regulating the protection of the environment, all as amended and
effective through the Closing Date, compliance with the National Labor
Relations Act as amended, the Welfare and Pension Plans Disclosure Act,
the Fair Labor Standards Act and Equal Pay Act, Title VII of the Civil
Rights Act of 1964, the Age Discrimination in Employment Act of 1967, the
Occupational Safety and Health Act of 1970, the Americans With
Disabilities Act of 1990, and the Employees Retirement Income Security
Act of 1974, and any other law, ordinance, regulation, decree or order,
the failure to comply with which might have a material adverse effect on
the financial condition, business, properties, reputation, results of
operations or prospects of the Company and ALG. None of the Company's
operations or assets have contaminated the lands or waters of others with
hazardous waste or hazardous substances.
2.26 Relationships with Principal Customers. No customer or client of the
Company which accounts for in excess of 10% of its revenues or group of
customers which account in the aggregate for in excess of 20% of the
revenue of the Company, has expressed any intention to terminate, curtail
or otherwise limit their relationship with the Company or the level of
business placed with the Company. .
2.27 No Modifications. The Company has not modified any mortgage note or
mortgage loan in any respect, nor has it satisfied, canceled, or
subordinated the related mortgage note in whole or in part, nor released
the mortgaged property in whole or in part from the lien on the related
mortgage, nor has it executed any instrument of release, cancellation,
modification or satisfaction.
2.28 Employee or Supplier Problems. The Company and Shareholders know of no
conflict or problem with any manager or other key employee of the Company
that would likely result in the termination or resignation of employment
of any such person.
2.29 Court and Governmental Orders. The Company is not a party to, nor are the
assets of the Company subject to or bound by or affected by, any
provision of any order of any court or other agency of government or any
indenture, agreement or other instrument or commitment which adversely
affects the operations of the Company.
2.30 General Disclosure Matters. No representation or warranty by the Company
or Shareholders contained in this Agreement, the Disclosure Schedule
attached hereto or in any statement or certification furnished or to be
furnished to ALG or Whitehall pursuant hereto or in connection with the
transactions contemplated hereby, contains or will contain any untrue
statement of a material fact or omits or will omit to state a material
fact necessary to make the statements contained herein or therein not
misleading.
3. REPRESENTATIONS AND WARRANTIES OF
ALG AND WHITEHALL
ALG and Whitehall, jointly and severally covenant, represent and warrant,
which representations and warranties shall be true and accurate as of the
Closing bate as if such representations and warranties had been made at
the Closing Date, with and to the Company and to the Shareholders, their
heirs, successors or assigns, as follows:
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3.1 Organization. ALG is a corporation duly organized, validly existing and
in good standing under the laws of the state of Illinois and duly
authorized under its Articles of Incorporation and under applicable laws
to engage in the business conducted by it. Whitehall is a corporation
duly organized, validly existing and in good standing under the laws of
Delaware and is duly authorized under its Articles of Incorporation and
under applicable law to engage in the business conducted by it.
3.2 Capitalization. The authorized capital stock of Whitehall consists of:
(a) 200,000,000 shares of Whitehall Common Stock, 132,900,000 of which were
issued and outstanding on June 30, 2000, and;
(b) all issued and outstanding shares ofWhitehal1 Common Stock have been duly
and validly issued and are fully paid and non-assessable and free of any
claim of pre-emptive rights. Except as disclosed or to be disclosed in
fi1ings with the SEC or as otherwise disclosed to the Shareholders there
are no outstanding rights to purchase or receive, or options, warrants,
puts, calls, contracts, commitments or demands of any character relating
to Whitehall' s authorized or issued capital stock or which could require
the issuance of capital stock by Whitehall.
3.3 Authorization. The respective Boards of Directors of ALG and Whitehall
each have approved, or will approve prior to Closing, the execution and
delivery of this Agreement and the performance by each of its respective
obligations and undertakings hereunder and thereunder and the officers
executing this Agreement on behalf of ALG and Whitehall have the
authority to do so and upon execution by such officers this agreement
shall be the valid and binding obligation of ALG and Whitehall.
3.4 No Violation, Consents and Approvals. Neither the execution nor delivery
of this Agreement by ALG or Whitehall nor the consummation of the
transactions contemplated hereby and thereby will conflict with, result
in a breach of, permit any party to terminate or accelerate the
provisions of, or result in the imposition of any lien, encumbrance or
restriction upon the property or assets of Whitehall or any of its
subsidiaries under:
(a) he provisions of their respective charters or by-laws;
(b he provisions of any obligation, indenture, agreement, permit or other
instrument to which Whitehall or any of its subsidiaries is a party or
which Whitehall or any of its subsidiaries holds, or
(c) any statute or law or any order, decree, judgment, rule or regulation of
any court or governmental agency or authority having jurisdiction over
Whitehall or any of its subsidiaries, except in the case of clause ( c )
where such violations individually or in the aggregate with all such
other violations would not have a material adverse effect on the
financial condition, business, properties, results of operations or
prospects of Whitehall and its subsidiaries considered as a whole. No
permit, consent, approval or authorization of, or declaration, filing or
registration with, any governmental or regulatory authority or other
person (either governmental or private) is necessary in connection with
the execution and delivery by ALG and Whitehall of this Agreement or the
consummation by them of the transactions contemplated hereby.
3.5 SEC Filings and Financial Statements.
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(a) Whitehall has furnished or, upon filing with the SEC, will furnish to the
Shareholders true and complete copies of its Annual Report on Form 10-K
for the fiscal years ended 1998 and 1999, as filed with the SEC pursuant
to the Securities Exchange Act of 1934, as amended (the " Act" );
(b) The Whitehall SEC filings did not, or will not, as of their respective
dates of filing, contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements contained therein, in light of the circumstances
under which they were made, not misleading.
(c) Whitehall's Annual Report on Form l0-K for the fiscal years ended 1998
and 1999, contains true and complete copies of Whitehall's audited
consolidated Balance Sheets as of 1998 and 1999, audited consolidated
statements of income, statements of common stockholder equity and
statements of cash flows for each of the years ended 1998 and 1999,
respectively, and notes to the consolidated financial statements
(collectively, with the audited consolidated Balance Sheet and audited
consolidated statements of income, statement of common stockholders'
equity and statements of cash flows for the years ended 1998 and 1999,
respectively, which have been separately delivered to the Shareholders,
the " Whitehall Financial Statements" ). The Whitehall Financial
Statements have been prepared from the books and records of Whitehall and
present fairly the consolidated financial position of Whitehall and its
subsidiaries as at 1998 and 1999, all in conformity with United States
generally accepted accounting principles applied on a consistent basis
for such periods.
3.6 Whitehall Stock. The Whitehall Common Stock to be issued in exchange for
100% of the Company's shares will, when issued and delivered, be duly
authorized, validly issued, fully paid, non-assessable shares of
Whitehall Common Stock free of all claims of preemptive rights.
3.7 Litigation. Except to the extent disclosed in Whitehall's SEC filings:
(a) there are no actions, suits, claims, proceedings, investigations or
inspections, pending or threatened, against or affecting Whitehall or its
subsidiaries which could have a material adverse affect on Whitehall and
its subsidiaries considered as a whole and to Whitehall's best knowledge
formed after reasonable inquiry there are no matters of litigation or
governmental proceedings expected to be brought against it or its
subsidiaries which could have a material adverse affect on the financial
condition of Whitehall and its subsidiaries considered as a whole.
(b) there are no actions, suits, claims, proceedings, investigations or
inspections, pending or threatened, against or affecting ALG or its
subsidiaries which could have a material adverse affect on ALG and its
subsidiaries considered as a whole and to ALG's best knowledge formed
after reasonable inquiry there are no matters of litigation or
governmental proceedings expected to be brought against it or its
subsidiaries which could have a material adverse affect on the financial
condition of ALG and its subsidiaries considered as a whole.
3.8 General Disclosure Matters. No representation or warranty by ALG and
Whitehall contained in this Agreement or in any statement or
certification furnished or to be furnished to Company or Shareholders
pursuant hereto or in connection with the transactions contemplated
hereby, contains or will contain any untrue statement of a material fact
or omits or will omit to state a material fact necessary to make the
statements contained herein or therein not misleading.
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<PAGE>
4. COVENANTS OF THE SHAREHOLDERS AND THE COMPANY
4.1 Announcements and Communications. Neither the Company nor the
Shareholders shall, without the prior approval of Whitehall, make any
public announcement or furnish any information to the public concerning
the transactions contemplated by this Agreement. The Company and
Shareholders shall promptly advise Whitehall of all communications which
they receive pertaining to the transactions contemplated by this
Agreement, including, without limitation, communications from
governmental agencies and authorities.
4.2 Fees for Professional Services. The Company shall pay all fees for
professional services rendered to the Company and the Shareholders in
connection with the transactions contemplated by this Agreement,
including all attorney and accountant fees as operating expenses of the
Company. Any unpaid or unbilled professional services to be paid by the
Company shall be reflected as liabilities or reserves on the post 1999
Financial Statements.
4.3 Competing Transactions. Until the Closing Date the Shareholders
(a) shall not seek to merge the Company into any entity other than ALG or an
affiliate of ALG;
(b) shall not negotiate or entertain any offer with respect to the sale of
all or part of the shares in the Company or substantially all of the
Company's assets, and;
(c) shall not, and shall not authorize or pern1it any Shareholder employee,
investment banker, attorney, accountant or other representative to,
solicit or encourage the making of any proposals reasonably expected to
lead to the acquisition of all or part of the capital stock of the
Company or substantially all of the Company's assets. The Company and
Shareholders shall promptly notify ALG and Whitehall in writing of any
such proposal.
4.4 Conduct of Business Pending the Closing. The Shareholders and Company
covenant and agree that, prior to the closing, unless ALG or Whitehall
shall otherwise agree in writing or as otherwise expressly permitted or
contemplated by this Agreement that:
(a) the business of the Company shall be conducted only in the ordinary
course and consistent with past practice and the Company shall not:
(i) make any material change in its operations, or
(ii) purchase or sell any significant properties or assets outside of
the ordinary course of business or which would result in the
Company owning in the aggregate an amount of properties and assets
less than the aggregate amount of properties and assets owned by
the Company on the date hereof;
(b) the Company shall not make or commit the Company to make any payment in
cash or property in respect of any of its Shareholders ' interests,
except for payments due to Shareholders for their personal loan
production and for normal distribution of net profits in accordance with
past practices of the Company;
(c) the Company shall not amend its respective Articles of Incorporation
and/or By-Laws, except for amendments to its By-Laws necessary to
authorize this transaction, create or sell any additional portions of
Shareholders' interests, incur any indebtedness, repurchase, retire or
cancel any of its present Shareholders' interests, cancel or decrease any
existing insurance coverage or modify any existing contract agreement,
commitment or arrangement with respect to any of the foregoing;
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<PAGE>
(d) the Company shall use its best efforts to preserve intact its business
organization, to keep available the services of its current managers and
key employees, and to preserve the goodwill of those having business
relationships with it;
(e) the Company shall not make any capital expenditures or commitments for
capital expenditures which individually exceed $5,000 or which in the
aggregate exceed $25,000;
(f) the Company shall not make any additional commitments or contracts with
lenders or investors unless such commitments or contracts are with the
same quality of lender or investor on substantially the same terms and
for the same pricing considerations as are in existence with the
Company's current lender or investor, and a list of all such new lender
or investor contracts will be delivered to ALG prior to Closing;
(g) other than in the ordinary course of business and consistent with past
practice, the Company shall not waive any rights of substantial value or
make any payment, direct or indirect, of any material liability of the
Company before the same comes due in accordance with its terms,
(h) the Company shall not borrow any money or lease, mortgage, encumber or
otherwise grant any interest in any of its assets or properties, except
for liens for current taxes not yet due and liens or encumbrances that
are not substantial in amount and do not materially detract from the
value or impair the use of the property subject thereto;
(i) the Company shall, at all times up to .and including the Closing Date or
any extension thereof, maintain its existing insurance coverage of all
types in effect or procure substantially similar substitute insurance
policies with financially sound and reputable insurance companies in at
least such amounts and against such risks as are currently covered by
such policies; and
(j) the Company shall not agree, in writing or otherwise, to take any of the
actions prohibited by the foregoing clauses (a) through (i).
4.5 Notice of Certain Actions. The Company shall promptly notify ALG, of any
actions, suits, claims, investigations, or proceedings commenced or, to
the best of its knowledge, threatened against, relating to or involving
or otherwise affecting the Company which, if pending on the date hereof,
would have been required to have been disclosed in writing pursuant to
this Agreement.
5. COVENANTS OF ALG AND WHITEHALL
5.1 Announcements and Communications. Neither ALG nor Whitehall shall,
without the prior approval of the other parties, which approval shall not
be unreasonably withheld or delayed, make any public announcement or
furnish any information to the public concerning the transactions
contemplated by this Agreement prior to Closing unless such announcement
or furnishing of information is necessitated by SEC rules and
regulations, Federal securities laws or other applicable laws, as
reasonably determined by counsel for Whitehall. Whitehall shall promptly
advise the Company and Shareholders of all communications which it
receives pertaining to the transactions contemplated by this Agreement,
including, without limitation, communications from governmental agencies
and authorities.
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<PAGE>
5.2 Corporate Transactions. Until the Closing Date, neither ALG nor Whitehall
shall, and neither shall authorize or permit any manager, employee,
investment banker, attorney, accountant or other representative to,
solicit or encourage the making of any proposals reasonably expected to
lead to the acquisition of all or substantially all of the capital stock
of Whitehall or substantially all of Whitehall's assets. Whitehall shall
promptly notify the Shareholders in writing of any such proposal.
6. WHITEHALL COMMON STOCK
6.1 Whitehall Common Stock to be Issued. The Whitehall Common Stock to be
issued at closing to the Shareholders and additional Whitehall stock
issued pursuant to this Agreement, including Exhibit A, will not be
registered under the Securities Act of 1933 (the " Act" ) at the time of
issuance and will be issued pursuant to an exemption from registration.
As a result, such shares must be held indefinitely unless subsequently
registered under the Act or unless an exemption from such registration is
available. Neither ALG nor Whitehall assumes obligation to register the
shares of Common Stock except as provided below. In certain
circumstances, sales of the Common Stock may be made in reliance upon SEC
Rules 144 and 145 pursuant to the terms and conditions of those rules.
Whitehall will supply the holders of such Common Stock with such
information as is necessary to enable them to make sales of the Common
Stock under SEC Rules 144 and 145.
6.2 Restrictive Legend. The certificates for shares issued pursuant to this
Agreement will each bear a legend substantially as follows:
The securities represented by this Certificate have not been registered
under the Securities Act of 1933 or the laws of any state and may not be
transferred in the absence of (a) an effective registration statement for
the securities under the Securities Act of 1933 and applicable state laws
or (b ) an opinion of counsel to Whitehall that such registration is not
required.
6.3 Information. The Company and Shareholders acknowledge receipt of the
documents filed by Whitehall with the SEC and enumerated in Section 3.5
herein. The Shareholders acknowledge the willingness of Whitehall to
provide appropriate officers to answer any questions that the
Shareholders have had with respect to the contents of the above listed
documents.
7. ALG AND WHITEHALL DUE DILIGENCE
7.1 Due Diligence.
--------------
(a) ALG and Whitehall Due Diligence. During the period prior to the Closing
Date, the Company and the Shareholders will give to ALG and Whitehall and
their counsel, accountants, actuaries and other expert persons and other
representatives, full access, during normal business hours, to the
Company's and Shareholders (to the extent such items are used by the
Company in its business) assets, properties, books, contracts,
commitments and other records (including computer files, retrieval
programs and other documentation relating to the Company's business) and
will furnish ALG and Whitehall or such representatives, with all such
information and data concerning the affairs of the Company as ALG or
Whitehall or such representatives reasonably may request for the purposes
of verifying the representations and warranties made herein and further
investigating the business and affairs of the Company prior to the
Closing, and in furtherance thereof, the Company will permit ALG and
Whitehall, together with their representatives, in a manner approved by
the Company, to make contact with members of management, and with such
other persons, firms or corporations with which the Company has been
conducting business. The performance of the due diligence of ALG and
Whitehall or the acquisition of information
16
<PAGE>
by ALG and Whitehall shall not relieve the Company or the Shareholders
from any representation, warranty or covenant made by the Company or the
Shareholders in this Agreement.
(b) Shareholder's and the Company's Financial Due Diligence. During the
period prior to the Closing Date, ALG and Whitehall will give to the
Shareholders and the Company and their counsel, accountants, actuaries,
and other expert persons and other representatives full access, during
normal business hours, to ALG's and Whitehall's assets, properties, book,
contracts, commitments, and other records, including computer files,
retrievable programs and other documentation relating to ALG's and
Whitehall's business and will furnish the Company and the Shareholders or
such representatives, with all such information and data concerning the
affairs of ALG and Whitehall as the Company and the Shareholders or such
representatives reasonably may request for the purposes of verifying the
representations and warranties made herein and further investigating the
business and affairs of ALG and Whitehall prior to the Closing, and in
furtherance thereof, ALG and Whitehall will permit the Company and the
Shareholders, together with ALG's and Whitehall's representatives, in a
manner approved by the ALG and Whitehall, to make contact with members of
management, and with such other persons, firms or corporations with which
ALG and Whitehall have been conducting business. The performance of the
due diligence of the Company and the Shareholders or the acquisition of
information by the Company or the Shareholders shall not relieve ALG or
Whitehall from any representation, warranty or covenant made by the
Shareholders in this Agreement.
7 .3 Supplemental Disclosure. The parties shall each have the .continuing
obligation to promptly supplement or amend the Disclosure Schedules with
respect to any matter hereafter arising or discovered which, if existing
or known at the date hereof, would have been req4ired to be set forth or
described in the Disclosure Schedules; provided, however, that for the
purpose of the rights and obligations of the parties hereunder, any such
supplemental or amended disclosure shall not be deemed to have been
disclosed as of the date hereof unless so agreed to in writing by the
parties.
8. CONDITIONS PRECEDENT
8.1 Conditions Precedent to ALG's and Whitehall's Obligations. The
performance of the obligations of ALG and Whitehall under this Agreement
are subject, at the election of Whitehall to the fulfillment or written
waiver of each of the following conditions on or before the Closing:
(a) All proceedings taken in connection with the transactions contemplated by
this Agreement and all instruments and documents required in connection
therewith or incident thereto shall be reasonably satisfactory in form
and substance to Whitehall.
(b) The representations and warranties of the Company and Shareholders
contained in this Agreement, the Disclosure Schedule or in any
certificate or document delivered to ALG or Whitehall pursuant hereto
shall be true and correct on the date hereof and shall be deemed to have
been made again on the Closing Date and speak as of the Closing and shall
then also be true and correct, subject to any changes and exceptions
thereto which are contemplated in this Agreement or consented to in
writing by ALG or Whitehall.
(c) There shall have been obtained the written consents, in form and
substance reasonably satisfactory to ALG, of each party whose consent to
the transactions contemplated hereby is required.
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<PAGE>
(d) No bona fide litigation or proceeding shall be pending or threatened to
restrain, set aside or invalidate the transactions contemplated by this
Agreement.
(e) The Company shall have delivered to ALG and Whitehall full financial
statements for the fiscal year ended December 31, 1999, and the current
year prior to the Closing Date with full supporting documentation in form
satisfactory to ALG and Whitehall.
(f) The Company shall have delivered to ALG and Whitehall the documents
required to be delivered hereunder, including those to be delivered at
the Closing pursuant to Section 9.1 hereof.
8.2 Conditions Precedent to the Shareholders Obligations. The perforn1ance of
the Shareholders and the Company under this Agreement is subject, at the
election of the Shareholders, to the fulfillment or written waiver of
each of the following conditions on or before the Closing:
(a) All proceedings taken in connection with the transactions contemplated by
this Agreement and all instruments and documents required in connection
therewith or incident thereto shall be reasonably satisfactory in form
and substance to the Shareholders.
(b ) The representations of ALG and Whitehall contained in this Agreement or
in any certificate or document delivered to Shareholders pursuant hereto
shall be true and correct on the date hereof and shall be deemed to have
been made again on the Closing Date and shall speak as of the Closing and
shall then be true and correct subject to any changes and exceptions
thereto which are contemplated in this Agreement or consented to in
writing by the Shareholders.
(c) There shall have been obtained the written consents, in form and
substance reasonably satisfactory to the Shareholders, of each party
whose consent to the transactions contemplated hereby is required.
(d) No bonafide litigation or administrative procedure shall be pending or
threatened to restrain, set aside or invalidate the transactions
contemplated by this Agreement.
(e) ALG and Whitehall shall have delivered to the Shareholders at the Closing
the documents required to be delivered hereunder, including those to be
delivered at the Closing pursuant to Section 9.1 hereof.
9. DOCUMENTS TO BE DELIVERED AT CLOSING
9.1 Documents to be Delivered by the Company or the Shareholders at the
Closing. At the Closing, the Company or Shareholders shall deliver to ALG
and Whitehall:
(a) The written consents, in form and substance reasonably satisfactory to
ALG and Whitehall, of each party whose consent to the transactions
contemplated hereby is required, including consents of the Shareholders
to the admission of ALG as a substitute for the Shareholders of the
Company and assignments of the Company shares to ALG .
(b) Custody to all of the Company's books, records, papers and other documents
including minute books.
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(c) Copies of the Articles of Incorporation of the Company and all amendments
thereto as certified by the State of Indiana and a copy of the By-Laws
certified by the Shareholders.
(d) Certificate of Good Standing issued by the State of Indiana for MGL and
MFSI, dated within ten ( 10) days of the Closing Date.
(e) The Employment Agreement as provided in Section 1.2 and Exhibit A of this
Agreement, executed by the respective employees.
(f) The documents set forth in Section 8.1 to be delivered by the Company and
the Shareholders and such other certificates and documents as ALG or
Whitehall may reasonably request.
9.2 Documents to be Delivered by ALG and Whitehall at the Closing. Within
fifteen days (15) of closing, ALG and Whitehall shall deliver to the
Company and Shareholders:
(a) Certified copies of the respective resolutions of the Board of Directors
of ALG and Whitehall approving this Agreement and authorizing the
transactions contemplated hereby and, in the case of Whitehall,
authorizing the issuance of the shares of Whitehall Common Stock to be
exchanged for the Shareholders interests in the Company.
(b) Confirmation of the transfer of the Whitehall Shares to Shareholders as
described in Sections 1.2 and 1.3 herein. Whitehall will submit a letter
of instruction to the transfer agent. The transfer agent will then make
arrangements to have the Whitehall Shares certificates to be issued
directly to Shareholders.
(c) The Employment Agreement as provided in Section 1.2 and Exhibit A
executed by ALG .
(d) The documents set forth in Section 8.2 to be delivered by ALG and
Whitehall and such other certificates and documents as the Shareholders
may reasonably request.
10. INDEMNIFICATION
10.1 Survival of Rel2resentations and Warranties. All of the terms and
conditions of this Agreement, together with the warranties,
representations and covenants contained herein or in any instrument or
document delivered or to be delivered pursuant to or in connection with
this Agreement, shall survive the execution of this Agreement and the
Closing notwithstanding any investigation or due diligence heretofore or
hereafter made by or on behalf of any party hereto, provided, however,
that (i) the agreements set forth in Articles 6, 10 and 11 hereof shall
continue and survive until all obligations set forth therein shall have
been performed and satisfied, and (ii) all other representations,
warranties and agreements, including but not limited to, the agreements
of ALG, Whitehall and Shareholders to indemnify one another set forth in
Article 10 hereof, shall terminate on the six (6) year anniversary of the
date of termination of this Agreement except (a) as to matters with
respect to which a party shall have given written notice of any claim
within such period and (b ) as to the matters set forth in Sections 2.25
and 2.27 which shall continue and survive until such time as the
applicable statute of limitations or tolling period for such acts, laws,
regulations or agreements shall have expired. Notwithstanding the above
limitations, indemnification for matters fraudulently misrepresented,
omitted or otherwise concealed by any party hereto shall extend
indefinitely or until the applicable statute of limitations period has
expired.
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10.2 Indemnification.
(a) Subject to the following provisions of this Article 10, commencing on the
Closing Date, the Shareholders shall defend, indemnify and hold harmless,
ALG, Whitehall and any of their respective officers, directors, employees
and affiliates, from any and all claims, damages, losses, liabilities,
costs or expenses (including, without limitation, amounts paid in
settlement, reasonable attorneys' fees and costs of investigation),
whether fixed or contingent, matured or unmatured, liquidated or
unliquidated, which any of them may incur or suffer as a result of or
arising out of any breach of the representations, warranties, covenants
or agreements of the Company or the Shareholders set forth in this
Agreement and for which a claim has been made during the applicable
periods hereunder except for those claims, or portion of a claim, which
are covered by insurance maintained by the Company prior to Closing.
(b) Subject to the following provisions of this Article 10, commencing on the
Closing Date, ALG and Whitehall, jointly and severally, shall indemnify
and hold the Shareholders harmless from any claim, damage, loss or
expense (including, without limitation, amounts paid in settlement,
reasonable attorneys' fees and costs of investigation), whether fixed or
contingent, matured or unmatured, liquidated or unliquidated, which they
may incur or suffer as a result of or arising out of any breach of the
representations, warranties, covenants or agreements of ALG and
Whitehall, set forth in this Agreement for which a claim has been made
during the applicable periods hereunder except for those claims, or
portion of a claim, which are covered by insurance maintained by the
Company prior to Closing.
(c) Except as specifically set forth in this Agreement, the indemnification
provisions contained in this Article 10 shall be the exclusive basis for
the assertion of claims or the imposition of liability by one party
against another party to this Agreement arising from actions or claims
resulting from the breach or default of any representation, warranty,
covenant or agreement contained herein. This Article 10 shall not,
however, be the exclusive basis for asserting claims arising from any
subsequently entered into document or agreement.
11. CERTAIN AGREEMENTS
11.1 Confidential Information. In the event the transactions contemplated by
this Agreement are not consummated, each party hereto will hold all
non-public confidential information which it obtained from the other
parties hereto in the course of negotiating this Agreement, which it did
not previously know or which was not previously in the public domain,
confidential; no party will directly or indirectly use such information
until the same shall become in the public domain (other than by
disclosure by a party hereto receiving such information for use pursuant
hereto ), and each party will return to the applicable party all
documents, objects and records obtained from such other party pursuant
hereto which are not in the public domain.
11.2 Destruction of Assets. Notwithstanding any other provision of this
Agreement, if, on or prior to the Closing Date, any of the assets or other
material properties of the Company or the Shareholders used in the
Company's business have suffered loss or damage on account of fire, flood,
accident, act of war, civil commotion, or any other cause or event beyond
the reasonable power and control of the Company to an extent which
materially adversely affects the value of the Company, ALG shall have the
right, at its election, exercisable not later than ten (10) days after it
receives notice of such loss or damage, either to consummate the
transaction contemplated by this Agreement, or, in lieu of every other
right or remedy whatsoever, to terminate this Agreement or amend this
Agreement with the consent of the Shareholders. In the event ALG terminates
this Agreement, all parties shall be released from liability hereunder
except as set forth in Section 11. 1 herein. In the absence of a contrary
election,
20
<PAGE>
it shall be presumed that ALG has elected to complete the transaction
hereunder. If the transaction hereunder is closed, there shall be no
adjustment in the Purchase Price payable hereunder as a result of such
loss or damage unless agreed upon in writing by the parties prior to
Closing, and ALG shall then be entitled to retain all insurance proceeds
and correct the damage itself through use of insurance proceeds and other
funds available to it.
11.3 Termination. Except for those obligations set forth in Section 11. 1
herein which shall not terminate, either ALG or the Company may, under
circumstances provided herein, as applicable, on or prior to the Closing
Date, terminate this Agreement without liability as set forth below
(provided the terminating party is not responsible for the event which
permits termination hereunder):
(a) By ALG or the Shareholders, if a bona fide action or proceeding brought
by a person not a party to this Agreement is pending wherein an
unfavorable judgment, decree or order would prevent or make unlawful the
carrying out of the transaction contemplated by this Agreement,
(b) By ALG or WTHL if, following examination by it of all matters set forth
in Section 7.1 or following completion of all other acts necessary to
accomplish its due diligence, should it be determined by ALG or WTHL in
its reasonable discretion that the nature of the Company's business,
assets, inventory, financial condition, the condition of the real estate,
improvements or other matters material to this Agreement are
substantially not as represented by the Company and the Shareholders then
consistent with the acknowledgment of the parties that ALG or WTHL
executed this Agreement based upon the representations of the Company and
the Shareholders, without the opportunity of fully examining the
Company's business, assets and other factors, ALG and WTHL shall have the
right to terminate this Agreement without any liability whatsoever upon
written notice to the Shareholders, which notice shall be sent at any
time prior to the Closing Date;
(c) By ALG or the Shareholders if any governmental body or agency having
jurisdiction and authority to prevent consummation of the transactions
required hereunder, has formally asserted that consummation of such
transaction violates or would violate any applicable law, or any rule or
regulation of such body or agency; or
(d) By ALG or the Shareholders if any condition precedent to the obligation
of such party to consummate the transaction has not been satisfied or
waived.
(e) In no event will the party entitled to terminate this Agreement pursuant
to this Section 11.3 be liable to the other party for money or other
damages (liquidated or otherwise) for failure to consummate the
transactions contemplated in this Agreement for any reason set out in
this Section 11.3.
12. MISCELLANEOUS
12.1 Shareholders Actions. Wherever an act under the Agreement is required to
be done by the Shareholders as a group or a waiver is to be granted by
the Shareholders as a group, the signatures of one (1) out of the two (2)
Shareholders shall constitute action for or on behalf of all of the
Shareholders.
12.2 Expense. Except as provided for herein, each of the parties hereto shall
bear all expenses incurred by it in connection with this Agreement and in
consummation of the transactions contemplated hereby and in preparation
therefor. ,
21
<PAGE>
12.3 Notices. All notices, demands and requests required or permitted to be
given under the provisions of this Agreement shall be deemed duly given
if mailed by registered mail, postage prepaid, return receipt requested,
or by Federal Express or similar overnight delivery service, or if
delivered personally, at the following addresses pending the designation
of another address in accordance with the provisions hereof.
(a) If to ALG:
Alternative Lending Group, Inc.
1430 E. Missouri, Suite 125
Phoenix, Arizona 85014
Attention: President
With a copy to:
Jeffery J. Hernandez, Esq.
Law Office of Jeffery J. Hernandez
5060 N. 401h St., Suite 220
Phoenix, AZ 85018
(b) If to Whitehall:
Whitehall Enterprises, Inc.
1825 Ponce de Leon Blvd., Suite 138
Coral Gables, FL 33134
Attention: Luis Alvarez
If to Shareholders:
Scott J. Weaver Michael L. Beasley
8350 Union Chapel Rd. 1054 Churchill Ct.
Indianapolis, IN 46240 Indianapolis, IN 46280
With a copy to their attorney:
Thomas Blackwell, Esq. Kightlinger & Gray
151 N. Delaware 8t., #660
Indianapolis, IN 46204
All deliveries required to be made or received from the Company, ALG or
Whitehall shall be satisfied by delivery or receipt from the Company, ALG
or Whitehall and from the Shareholders by delivery or receipt by one of
the Shareholders.
12.3 Entire Agreement. This Agreement and the other exhibits attached hereto
contain all the terms agreed upon between the parties with respect to the
subject matter hereof and supersede all prior agreements, arrangements
and communications, whether oral or written. This Agreement may not be
changed or modified, except by agreement in writing, signed by all of the
parties hereto.
22
<PAGE>
12.5 Headings. The headings of the Sections of this Agreement are for
convenience of reference only and shall not be deemed to explain, limit
or amplify the provisions hereof.
12.6 Successors in Interest. Except as otherwise specifically provided herein,
this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, legal representatives,
personal representatives, successors and assigns.
12.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
shall be deemed but one and the same instrument.
12.8 Governing Law. This Agreement shall be construed and interpreted in
accordance with and governed in all respects by the laws of the State of
Arizona and venue is proper only in Maricopa County, Arizona.
12.9 Brokerage. The Company, the Shareholders, ALG and Whitehall represent and
warrant that all negotiations relative to this Agreement have been
carried on by them directly between the parties without the intervention
of any person or firm, and the Company, Shareholders, ALG and Whitehall
shall each indemnify the others and hold them harmless against and in
respect of any claim for brokerage, finders fees, or other fees or
commissions relative to this Agreement or to the transactions
contemplated hereby caused by their actions relative to brokerage or
similar fees.
12.10 Waiver. At any time prior to Closing, the parties hereto, by action taken
by the Board of Directors of ALG and Company pursuant to its By-laws,
may:
(a) extend the time for the performance of any of the obligations or other
acts of the other parties hereto;
(b) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto, and;
(c) waive compliance with any of the agreements or conditions contained
herein to the extent permitted by law. Any agreement on the part of a
party hereto to any extension or waiver shall be valid only if set forth
in an instrument in writing signed on behalf of such party .
12.11 Remedies for Breach. Specific Performance. Each of the parties
acknowledges and agrees that the other party or parties would be
irreparably damaged in the event any covenant or agreement contained in
this Agreement is not performed in accordance with its specific terms or
is otherwise breached. Accordingly, each of the parties will be entitled,
without bond or other security, to an injunction or injunctions to
prevent breaches of the covenants or agreements contained in this
Agreement and to enforce specifically this Agreement and the covenants
and agreements contained herein or therein in any action instituted in
any court of the United States or any state thereof having subject matter
jurisdiction, in addition to any other remedy to which such party may be
entitled, at law or in equity .Each party agrees that should any court or
other competent authority hold any provision of this Agreement or part
hereof to be null, void or unenforceable, or order any party to take any
action inconsistent herewith or not to take any action required herein,
the other party shall not be entitled to specific performance of such
provision or part hereof or to any other remedy, including money damages,
for breach hereof as a result of such holding or order.
23
<PAGE>
12.12 Severability .If any provision of this Agreement or any exhibit attached
hereto or the application hereof to any party or circumstance is deemed
invalid, illegal or unenforceable to any extent, the remainder of this
Agreement including its exhibits and the application thereof shall not be
affected and shall be enforceable to the fullest extent permitted by law.
12.13 Litigation/Attorney's Fees. In the event a party should bring a lawsuit
to enforce the terms of this Agreement, the prevailing party or parties
in such action shall be entitled to recover their reasonable attorneys'
fees and costs (including costs of expert witnesses) to be determined by
the court.
12.14 Construction. This Agreement is to be deemed to have been prepared
jointly by the parties hereto after arms-length negotiations, and any
uncertainty or ambiguity existing herein shall not be interpreted against
any party, but according to the application of the rules of
interpretation of contracts.
12.15 Independent Advice of Counsel. Each party hereto acknowledges that each
has sought the independent advice of their own counsel with respect to
this Agreement and the potential consequences for and issues relating to
entering into this Agreement, including, but not limited to, tax
consequences, and securities issues.
IN WITNESS WHEREOF, the Company, Shareholders, ALG and Whitehall each has
caused this Agreement to be duly executed in its name and on its behalf,
all as October 3,2000.
WHITEHALL ENTERPRISES, INC.
a Delaware corporation,
BY: _________________________
Name:
Title:
ALTERNATIVE LENDING GROUP,
an Illinois corporation, "ALG"
BY: _________________________
Name:
Title:
MiB GROUP, LTD.,
an Indiana corporation, "the Company"
BY: _________________________
Name:
Title:
MiB FINANCIAL SERVICES, INC.,
an Indiana corporation, "the Company"
BY: _________________________
Name:
Title:
-------------------------
Scott J. Weaver, "Shareholder"
-------------------------
Michael Beasley, "Shareholder"
24
<PAGE>
EXHIBIT A
EMPLOYMENT AGREEMENT
This Employment Agreement ("the Agreement") is entered into between MiB Group,
Ltd., an Indiana corporation ("MGL"), and Michael Beasley ("Beasley").
MGL agrees to employ Beasley and Beasley agrees to employment by MGL on the
following terms and conditions:
I. Position.
---------
MGL employs Beasley as Vice President of MGL.
2. Duties.
-------
Beasley's primary responsibility will be to oversee and manage all of MGL's
operations and to act as a liaison between MGL and Alternative Lending Group
("ALG"), the parent company of MGL. His responsibility is to ensure that the
personnel of MGL's marketing, processing and sales departments fully understand
the departments' respective responsibilities and comply with their respective
terms that they work together to achieve the goals of the company consistent
with any loan productions and revenue projections submitted to and approved by
the President of ALG.
3. Term of Employment.
-------------------
The employment will begin on the 3 day of October , 2000 and shall continue
through 10/03 , 2005. In the absence of written notice of non-renewal of this
Agreement by either of the parties no later than sixty (60) days prior to the
end of the term of this Agreement, the Agreement shall be renewed for an
additional period of one year. Thereafter, this contract shall be subject to
termination by a similar notice given to the other party not later than sixty
(60) days before the expiration of each year of the contract in the absence of
which the contract will continue to be renewed for additional one year periods
of time.
4. Compensation.
-------------
A. MGL shall pay to Beasley an annual salary of $75,000.00 payable in
bi-monthly installments on the first day and the 15th day of each month.
B. Taxes. All salaries and bonuses shall be paid less required state and
federal withholding of income and payroll taxes.
25
<PAGE>
5. Profitsharing and Bonus.
------------------------
MGL shall pay Beasley a quarterly bonus, which shall be based upon the quarterly
net profit of the MGL Marketing Division (the " TM Division") and the ALG
Indianapolis mortgage operation (the "IN Retail Division"). In order for Beasley
to earn a quarterly bonus, the TM Division must maintain an average base
production level of eighty thousand dollars ($80,000.00) in gross revenues per
month, (the "Goals"). The TM Division and the IN Retail Division will consist of
the present operations of the TM Division and the IN Retail Division. Net profit
shall be determined utilizing generally accepted accounting principles
consistent with the periodic financial reporting required by the Securities and
Exchange Commission. In calculating the net profits of the TM Division and the
IN Retail Division, the salary and benefits of Beasley shall be deemed expenses
of the division. The following shall be the net profits and the percentages of
each increment of those profits to be paid as a bonus to Beasley provided the
Goals are met:
QUARTERLY PROFITS RATE OF PROFITSHARING
----------------- ---------------------
$30,000 -75,000 10%
75,001 -100,000 12%
100,001 -130,000 15%
130,001 -175,000 18%
175,001 and up 20%
Any bonuses shall be paid in two equal payments over the two pay periods
following the end of each quarter .
6. Full-time Employment.
---------------------
Beasley will devote his efforts full-time to the business of MGL and ALG, which
shall include whatever time is necessary to accomplish Beasley's duties. Beasley
will not engage in any other business activity of any kind for any purpose.
Beasley may make personal investments in other businesses or ventures, provided
those investments do not require active involvement by Beasley in the operation
of those businesses or investments and provided those personal investments are
not in businesses or ventures competing with MGL and/or ALG. Beasley
acknowledges that he has a duty of loyalty to MGL and ALG once employed.
7. Medical and Hospital Insurance.
-------------------------------
Beasley shall be covered at MGL 's expense by such medical and hospital
insurance program in which other executive or managerial employees of MGL are
included. Beasley may include members of his family on such coverage at his
expense.
26
<PAGE>
8. Vacation.
---------
Beasley will be entitled to a yearly paid vacation of two (2) weeks.
9. Sick Leave.
-----------
Beasley shall be entitled to ten ( 10) business days of sick leave per year at
full salary ("sick days"). These sick days shall expire at the end of each year
of employment if not used and shall not rollover to subsequent years, with no
payment for days unused.
10. Automobile.
-----------
MGL will pay or reimburse Beasley (at MGL '5 sole discretion) a total not to
exceed $600.00 per month to pay for the rental or purchase of an automobile for
his use in connection with his employment duties and/or to pay for collision,
liability , and comprehensive insurance coverage for any such vehicle.
11. Termination of Agreement.
-------------------------
A. Either party may terminate this Agreement at any time, with or without
cause, upon 90 days' written notice to the other party .
B. Notwithstanding Sections 3 and 11(A) of this Agreement, this Agreement
shall be immediately terminable under the following conditions:
i. If MGL or ALG ceases to do business, or otherwise terminates its
business operations or if there is a material change in control of
or ALG; or
ii. If MGL shall fail to secure or renew any license, permit,
authorization or approval of the conduct of its business in any
significant county or area of the country to be managed by Beasley
for reasons enumerated in Section 11 ( c) hereof, or if any such
license, permit, authorization or approval is revoked or
suspended; or
iii. If MGL breaches any provision of this Agreement and fails to fully
cure such breach within 30 days of written notice from Beasley
describing the breach; or
iv. If MGL, ALG and/or Whitehall Enterprises, Inc. ("Whitehall"), the
parent company of ALG, shall seek protection under any bankruptcy,
receivership, trust deed, creditors arrangement, composition or
comparable proceeding, or if any such proceeding is instituted
against MGL, ALG and/or Whitehall.
C. Notwithstanding Sections 3 and 11 (A) of this Agreement, this Agreement
shall be immediately terminable by MGL for cause, which shall include,
without limitation, one or more of the following:
27
<PAGE>
i. Failure of Beasley to perform his duties per this Agreement. In
the event that .MGL desires to exercise its right to terminate
this Agreement, MGL must first give Beasley a written notice
setting forth the specific deficiencies in Beasley's performance.
In such event, Beasley shall have ten ( 10) days from receipt of
the written notice to correct such deficiencies to MGL's
satisfaction.
ii. Beasley's disability, defined as a substantial inability to
perform his duties for a period of more than ninety (90) calendar
days.
iii. Misappropriation of MGL 's property or funds.
iv. Beasley's unfitness to perform his duties on behalf of MGL and/or
ALG due to abuse of alcohol, use of illegal drugs or adjudication
of a felony.
v. Insubordination.
vi. Beasley's commission of fraud, consumer fraud, conversion, theft
or any unlawful taking of MGL, ALG or client property or
conspiracy to commit any of the foregoing.
vii. Gross negligence and/or recklessness in handling, managing or
overseeing operations and accounts of MGL and/or A.LG.
viii. Beasley's breach of duty of loyalty to MGL and/or ALG.
D. Upon termination of this Agreement by either party or naturally at
the end of the term:
i. All rights and benefits of Beasley hereunder and all obligations of
MGL hereunder shall terminate, except Beasley's rights to payment of
salary and bonuses accrued prior to termination of this Agreement.
Beasley specifically waives any rights to payments of any bonuses
upon termination of this Agreement in the event that he is terminated
pursuant to Section II ( c ).
ii. Beasley will immediately return to MGL all Proprietary Information
(as defined below) in Beasley's possession, custody or control in
whatever form held (including copies or embodiments thereof relating
thereto) upon termination of this Agreement or at any time or from
time to time upon written request by MGL.
iii.Except as otherwise provided herein, and not including termination of
salary and bonuses, the provisions of this Agreement shall remain in
effect after termination (including, without limitation, the natural
expiration hereof).
28
<PAGE>
12. Proprietary Information; Proprietary Rights.
--------------------------------------------
A. Beasley acknowledges that, in the course of performing his duties under
this Agreement, he may obtain information relating to products and
services of MGL, ALG and/or Whitehall which are of a confidential and
proprietary nature ("Proprietary Information"). Such Proprietary
Information may include, without limitation, confidential information as
defined in Section 14 of this Agreement, computer codes, trade secrets,
know-how, inventions, techniques, processes, programs, algorithms,
schematics, data, customer lists, financial information and sales and
marketing plans. Beasley is responsible for ensuring that he and all of
MGL's employees and agents shall, at all times, both during and after the
term of this Agreement keep in trust and confidence all such Proprietary
Information, and shall not use such Proprietary Information other than in
the course of MGL's, ALG's, Whitehall's or Beasley's duties as expressly
provided in this Agreement; nor shall Beasley or his subordinates or
agents disclose any such Proprietary Information to any person without
ALG's prior written consent. Beasley acknowledges that any such
Proprietary Information received by Beasley shall be received as a
fiduciary of MGL, ALG and/or Whitehall. Beasley shall not be bound by
this Section 12(A) with respect to information Beasley can document (i)
at the date hereof has entered or later enters the public domain as a
result of no act or omission of Beasley or employees or agents of MGL,
ALG or Whitehall or (ii) is lawfully received by Beasley from third
parties without restriction and without breach of any duty of
nondisclosure by any such third party .
B. Beasley agrees (i) not to create- or attempt to create, by reverse
engineering or otherwise, the source code or internal structure of any of
MGL's, ALG's or Whitehall's software products or any part thereof from
the object code or from the information made available to him, (ii) not
to remove any product identification or notices of any proprietary or
copyright restrictions from such software/hardware products or any
support material, (iii) not to list or otherwise display or copy the
object code of any software product, and (iv) not to copy the software
products, develop any derivative works thereof or include any portion
thereof in any other software program, and (v) prior to disposing of any
media or apparatus, to destroy completely any Proprietary Information
contained therein.
13. Non- Solicitation of Employees.
-------------------------------
During the term of this Agreement and for twenty-four (24) months after
its termination, Beasley shall not directly or indirectly, for himself,
on behalf of, or in conjunction with any other person, company,
partnership, corporation, or other entity, seek to hire any of MGL's
personnel or employees for the purpose of having such employee engage in
services that are the same, similar, or related to the services that MGL
or any employee thereof provides.
14. Confidential Information.
-------------------------
For the purposes hereof, confidential information shall include any trade
secrets, knowledge, or information with respect to methods of operation,
marketing, technology , sales, financial information and sources of
funding; any operating procedures or techniques; any business methods or
forms; any business policies or other information related to the
foregoing subjects (the
29
<PAGE>
"confidential information"). Beasley shall maintain in strict confidence
all confidential information, whether or not patentable or copyrightable,
relating to the business of MGL, ALG and/or Whitehall, and Beasley shall
not, unless first authorized in writing by ALG, disclose, or use for
Beasley' benefit or for the benefit of any person, firm or entity at any
time either during or subsequent to the term of Beasley' employment, any
confidential information, except as required in the performance of
Beasley's duties on behalf of MGL.
15. Reimbursement of Business Expenses.
-----------------------------------
MGL shall reimburse Beasley for any reasonable expenses incurred by
Beasley in the course and scope of his employment with MGL for the
benefit of MGL, ALG and/or Whitehall. Such reasonable expenses shall
include, but not be limited to, cellular phone charges, travel, meals,
room and board and any reasonable incidental charges incurred in the
course and scope of employment. MGL shall have sole discretion to
determine reasonableness of expenses incurred.
16. Applicable Law.
---------------
This contract shall be deemed to have been entered into in Arizona
regardless of where executed and shall be construed and enforced in
accordance with Arizona law without reference to conflicts of the laws
principles. .
17. Venue and forum.
----------------
Venue and forum for any dispute between the parties hereto are proper
only in Maricopa County , Arizona.
18. Attorneys' Fees.
----------------
In the event either party shall bring action to enforce the terms of this
Agreement, the prevailing party in such action shall be entitled to his
or its reasonable attorneys' fees and costs, including without limitation
court costs, expert witness fees and paralegal fees1 as the case may be,
with said sums to be fixed by the court or arbitrator .
19. Arbitration of Disputes.
------------------------
Notwithstanding injunctive relief, in the event of a dispute arising out
of this Agreement, such dispute shall be resolved by arbitration. Either
party may demand arbitration in accordance with the then-governing rules
of the American Arbitration Association ("AAA"). A single arbitrator
shall be selected in accordance with AAA rules from the arbitrators
proposed by the AAA and all proceedings shall be conducted in accordance
with AAA rules.
30
<PAGE>
20. Complete Agreement.
-------------------
This Agreement constitutes the entire agreement between the parties and
supersedes any prior agreement between the parties whether oral or
written. This Agreement may be modified only in writing.
21. Waiver.
-------
No delay or failure by MOL to exercise or enforce any right hereunder and
no partial or single exercise of any such right shall constitute a waiver
of that or any other right unless expressly waived in writing.
22. Severability.
-------------
If any provision of this Agreement or the application thereof to either
party or circumstance is deemed invalid, illegal or unenforceable to any
extent, the remainder of this Agreement and the application thereof shall
not be affected and shall be enforceable to the fullest extent permitted
by law.
23. Headings.
---------
The headings in this Agreement are for reference purposes only and shall
not in any way affect the meaning or interpretation of this Agreement.
Dated this 3 day of October , 00 .
----- ------------ -------
MiB Group, Ltd., an Indiana
Corporation
By: __________________________
R. Jeffrey Mertz, President
---------------------------
Michael Beasley, Employee
31
<PAGE>
INCENTIVE AGREEMENT
-------------------
This Incentive Agreement ("Agreement") is entered into between Alternative
Lending Group, Inc., an Illinois Corporation (" ALG"), Whitehall Enterprises,
Inc., a Delaware Corporation ("Whitehall") and Michael Beasley ("Beasley").
1. This Agreement is intended as a separate agreement from the Employment
Agreement entered into between Beasley and MiB Group, Ltd. ("MGL ") dated
September 30, 2000, (the "Employment Agreement") and shall not supersede
nor invalidate any conflicting provisions of such Employment Agreement.
2. As an additional incentive for Beasley to achieve top line revenue goals,
Whitehall agrees that Beasley shall be entitled to as much as an
additional 500,000 (split adjusted if applicable) Whitehall shares (as
described in the Purchase Agreement between ALG and MGL dated September
30, 2000 hereinafter the "Purchaser Agreement") to be paid in increments
of 100,000 (split adjusted if applicable) Whitehall Shares for each year
beginning October 1 of each year subsequent to the Closing Date of the
Purchase Agreement under the following conditions:
A. If the TM division (as described in Section 5 of the Beasley
Employment Agreement) achieves growth of gross revenues at a
minimum of 5% per quarter during the period beginning October
1,2000, through September 30,2001, ALG shall instruct Whitehall to
distribute to Beasley 100,000 (split adjusted if applicable)
Whitehall shares. In other words, in order for Beasley to obtain
any such bonus, he must achieve a 20% gross revenue increase
between October 1, 2000 and September 30, 2001, in order to
receive a distribution of 100,000 (split adjusted if applicable)
Whitehall shares.
32
<PAGE>
B. If the TM division (as described in Section 5 of the Beasley Employment
Agreement) achieves growth of gross revenues at a minimum of 5% per
quarter during the period beginning October 1, 2001, through September
30, 2002, ALG shall instruct Whitehall distribute to Beasley 100,000
(split adjusted if applicable) shares.
C. If the TM division (as described in Section 5 of the Beasley Employment
Agreement) achieves growth of gross revenues at a minimum of 5% per
quarter during the period beginning October 1, 2002, through September
30, 2003, ALG shall instruct Whitehall distribute to Beasley 100,000
(split adjusted if applicable) shares.
D. If the TM division (as described in Section 5 of the Beasley Employment
Agreement) achieves growth of gross revenues at a minimum of 5% per
quarter during the period beginning October 1, 2003, through September
30, 2004, ALG shall instruct Whitehall distribute to Beasley 100,000
(split adjusted if applicable) shares.
E. If the TM division (as described in Section 5 of the Beasley Employment
Agreement) achieves growth of gross revenues at a minimum of 5% per
quarter during the period beginning October 1,30, 2004, through September
30, 2005, ALG shall instruct Whitehall distribute to Beasley 100,000
(split adjusted if applicable) shares.
3. ALG agrees to review this Agreement for possible changes to the incentive
package after one year from the closing date of this Agreement. ALG shall
have the sole discretion to make any changes to this Agreement after the
one year anniversary from the closing date of this Agreement.
4. This Agreement shall be modified only in writing upon the agreement of
the parties hereto.
33
<PAGE>
5. Jurisdiction, venue and forum are proper only in Maricopa County,
Arizona, and Beasley waives any conflicts of laws which may allow the
laws of a different jurisdiction to apply or the removal of the
jurisdiction, venue and forum from Maricopa County, Arizona.
6. In the event the parties hereto enter into litigation in connection with
this Agreement, the prevailing party shall be entitled to its reasonable
attorneys fees and costs.
7. If any provision of this Agreement is deemed invalid, illegal or
unenforceable, the remainder of the Agreement shall not be affected and
shall be enforceable to the fullest extent permitted by law.
8. The laws of Arizona shall apply to this Agreement.
Alternative Lending Group (" ALG"),
an Illinois corporation
BY: Date:
------------------------- ----------------------
Name:
Title:
Whitehall Enterprises, Inc. ("Whitehall"),
a Delaware corporation
BY: Date:
------------------------- ----------------------
Name:
Title:
Date:
------------------------- ----------------------
Michael Beasley
34
<PAGE>
Unconditional Release
I, Scott J. Weaver, personally release MiB Group Limited from the American
Express Optima credit card account number 37 15-400963-31000 with a balance of
$25,873.26
Signed this 3rd day of October 2000.
-----------------------------
Signature
35
<PAGE>
DISCLOSURE SCHEDULE
2.6 Attached are unaudited financial statements for MGL and MFSI.
2.7 There are no undisclosed liabilities.
2.8 There is no real estate.
2.10 Attached is the fixed asset register as reflected on the books as of
October 3, 2000.
2.12 Attached is a copy of our insurance certificate.
2.13 Attached is the Leased Employees Agreement between MiB Group Limited and
WorkSmart, Inc.
2.14 Attached are copies of checks from each of the banks where MiB Group has
relationships.
2.15 MiB has the following actions:
o Absolute Approval, LLC $2,300.00
o Annax Brothers $900.00
o Yeager and George, Etal. $unknown
o Jeffers and Associated $4,000.00
o Sigman Mortgage $3,960.00
o In addition there may be other disputes that are not currently known to
the company as of October 3, 2000.
2.16 Company leases all employees through WorkSmart, Inc.
2.17 James Sears, Sales Manager $25,000 draw against commissions. Edward
Medina, Telemarketing Manager $32,500.00 Kendell Moore, Sales, $20,000
draw against commissions.
2.18 No current employees have non-compete or non-disclosure agreements.
2.19 There are no purchase orders outstanding in an amount in excess of
$20,000.00
2.20 Attached is a copy of the accounts receivable as of October 3, 2000.
2.21 Attached are copies of all licenses and certificates.
2.22 The company has no employees.
2.23 Attached are copies of the 1998 and 1999 federal and state tax returns
for MiB Group Limited and the 1999 federal and state tax returns for MiB
Financial Services, Inc.
2.24 MiB Group Limited has had numerous transactions with MiB Financial
Services, Inc. and are documented within the books and record of both
companies.
2.25 The company is in compliance with all known laws as of October 3, 2000.
2.26 The only customer that exceeds 20% of the business is Alternative Lending
Group.
36
<PAGE>
RESOLUTIONS OF THE SHAREHOLDERS OF MiB GROUP. LTD
MiB GROUP , LTD hereby enacts the following Resolutions by means of the
unanimous vote of its Shareholders.
RESOLVED THAT Scott J. Weaver and Michael Beasley are hereby authorized to act
on behalf of MiB GROUP , LTD in negotiating and executing a Stock Purchase
Agreement whereby all of the shares of MiB GROUP, LTD shall be sold ALTERNATIVE
LENDING GROUP, INC., an Illinois corporation. Upon the completion of such
transaction, 100% of the ownership interest in MiB GROUP , L TD shall
effectively be transferred to the ownership of ALTERNATIVE LENDING GROUP, INC.
Dates: October 3, 2000
MiB GROUP, LTD
By: ------------------------------
Scott J. Weaver
By: ------------------------------
Michael Beasley
