EXHIBIT 10.1
AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT OF PURCHASE AND SALE made this 4th day of June, 2002 by and
between Scott Stirkins, ("Seller") as shareholder, or President, of the business
commonly known as Pacific Western Insurance Services and Prevention
Insurance.com ("Buyer"), is made and entered into with reference to the
following facts:
A. SELLER desires to sell and transfer to BUYER shares of stock and assets
of SELLER, and BUYER desires to purchase the same, upon the terms and subject to
the conditions hereinafter set forth.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereby agree as follows:
1. PURCHASE AND EXCHANGE OF SHARES OF STOCK AND ASSETS
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1.1 PURCHASED SHARES OF STOCK AND ASSETS. SELLER agrees to sell to
BUYER, and BUYER agrees to purchase from SELLER 80% of SELLER's shares of stock
and assets for an exchange of their respective stock shares, upon the terms and
subject to the conditions set forth in this Agreement.
1.2 LIABILITIES. BUYER does not assume, nor shall BUYER be liable
for, any of the obligations or liabilities of SELLER and AGENCY, of any kind or
nature whatsoever, whether relating to the SELLER and AGENCY or otherwise.
SELLER and AGENCY shall continue to be solely responsible for all liabilities
and obligations of SELLER and AGENCY.
2. PURCHASE - RECITALS.
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RECITALS
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It is agreed between BUYER and SELLER that the SELLER shall exchange 80%
shares of stock for BUYER'S 292,565 shares of stock.
2.1 TERMS AND CONDITIONS.
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2.1.1. FIRST OPTION. BUYER agrees that SELLER shall have the
first option to repurchase 80% ownership of SELLER'S shares of stock
from the BUYER, and the repurchase price formula to be applied shall
be the same as that formula used in the preceding paragraph, to-wit:
BUYER shall exchange 292,565 shares of stock for SELLER'S 80% share
of stock, and that SELLER shall have this first option to repurchase
within the first twelve (12) month period following the date the
parties entered into this Agreement of Purchase and Sale.
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2.1.2. BUYER'S OPTION. SELLER agrees that BUYER shall have the
option to purchase SELLER'S remaining ownership interest of 20% at
any time after the expiration date of the parties' Management
Contract (see Addendum attached hereto and made part hereof) if the
SELLER so chooses to sell its remaining ownership interest; the
purchase price shall be determined by the then current market value
of SELLER'S stock; and the purchase price to be applied shall be the
same as that formula used in the preceding paragraph, to-wit: BUYER
shall exchange 73,141 shares of stock for SELLER'S 20% shares of
stock.
2.1.3. SELLER'S MANAGEMENT CONTRACT. BUYER agrees that
SELLER'S President/CEO shall receive a management contract for at
least 5 years following the date the parties entered into the
Agreement, and that SELLER'S President/CEO's salary, bonus, and/or
other compensation constituting a deductible corporate expense shall
be negotiable by all parties hereto prior to the parties executing
the final Agreement. SELLER further understands and agrees that
SELLER must earn at least a minimum of ten percent (10%) of the
gross premiums (income) or $50,000, whichever amount constitutes the
greater amount after taxes having been paid.
2.1.4. BUYER'S SERVICE FEE. SELLER agrees that BUYER shall
receive a monthly Service Fee in the amount of $500.00, which shall
constitute as a tax deductible expense. For this monthly Service
Fee, BUYER shall perform services for the SELLER.
2.1.5. ANNUAL DIVIDEND. The parties agree that both BUYER and
SELLER shall receive annual dividends based upon SELLER'S net
profits after taxes, as well as reasonable and customary business
expenses and bonuses.
2.1.6. SELLER'S OPTION. BUYER agrees that SELLER shall have
the option to participate in any marketing plan, advertising, co-op
advertising program and/or new product developed and/or acquired by
BUYER.
3. REPRESENTATION AND WARRANTIES OF SELLER. SELLER hereby represents
and warrants to BUYER that the following statements are true and correct as of
the date of this Agreement, shall be true and correct during the pendency of
this Agreement, and the truth and accuracy of such statements shall constitute a
condition precedent to all of BUYER'S obligations under this Agreement.
3.1. ORGANIZATION, STANDING AND AUTHORITY OF SELLER. Scott
Stirkins is a shareholder in a corporation duly organized, validly existing and
good standing under the laws of the State of Nevada and duly authorized and
qualified to conduct business in the State of Nevada and has all necessary
corporate powers and authority to own and operate as SELLER.
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3.2 AUTHORIZATION. The execution and delivery by SELLER of
this Agreement and the performance by SELLER of its obligations hereunder have
been duly approved and authorized by the Board of Directors and by Shareholders,
pursuant to corporate resolution, and no other approvals are required for the
execution and delivery by SELLER of this Agreement or the performance by SELLER
of its obligations hereunder. The legal, valid and binding obligations of SELLER
and/or Shareholders, as the case may be, are enforceable in accordance with
their respective terms.
3.3 NO VIOLATION OF LAW. (i) SELLER is not in violation of
any judgment, order, writ, injunction or decree of any court or governmental
agency having jurisdiction over SELLER; (ii) there are no pending or threatened
proceedings of any court or governmental agency having jurisdiction over SELLER;
(iii) SELLER has complied with and is in compliance with the requirements
(collectively, "LAWS") and all other requirements of any governmental authority
having jurisdiction over SELLER; (iv) there is no investigation that could
reasonably be expected to result in, any fine, penalty, liability or disability
as the result of SELLER'S failure to comply with any requirements of any laws.
3.4 NO VIOLATION OF AGREEMENT. With respect to the following
items, none shall violate or result in a breach by the SELLER of the following:
(i) any provision or restriction of SELLER'S articles of incorporation or
bylaws, or (ii) any provision or restriction of any agreement, contract,
commitment, loan, note, indenture, mortgage, deed, instrument, lease, sublease,
license, permit, franchise, assignment or easement to which the SELLER is
subject or by which SELLER is subject to or bound by, or that would result in an
imposition of any lien, charge, or encumbrance on the assets of the SELLER.
3.5 LITIGATION. There is no claim, suit, action, arbitration,
or other proceeding, pending or threatened, against SELLER.
3.6 BUSINESS ACTIVITIES. SELLER shall carry on the activities
and operations of the SELLER in substantially the same manner as heretofore
conducted and SELLER shall not change any aspect of the management or operation
with respect to any activities or operations of the SELLER, except (i) in the
ordinary course of SELLER, or (ii) as required by this Agreement with the
written consent of BUYER.
3.7 CORPORATE EXISTENCE; COMPLIANCE WITH LAWS. SELLER shall
take any and all actions as may be necessary or desirable to maintain,
preserve, renew and keep in full force and effect the corporate existence and
rights of SELLER, and SELLER shall duly comply with all laws applicable to
SELLER and the conduct of the SELLER. SELLER immediately shall notify BUYER in
the event of any pending or threatened action of any governmental authority with
respect to SELLER.
3.8 APPROVALS. SELLER shall not take any action, or fail to
take any action, which could result in any legal action or proceeding being
filed against SELLER AND/OR BUYER by any third party or governmental or other
authority.
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3.9 LICENSES. SELLER shall execute or join in the execution
and filing of any application or other document which is required or which
BUYER may reasonably request in order to obtain any licenses, permits,
authorization, consents or approvals of any third party or governmental or other
authority, and shall use all reasonable efforts to assist BUYER in obtaining any
such licenses, permits, authorizations, consents or approvals in connection with
the transfer and assignment by SELLER to BUYER of the SELLER'S assets.
3.10 DISCLOSURE. None of the representations or warranties
made by SELLER in this Agreement shall contain any untrue statements of material
fact, including, without limitation, any addendums attached hereto, or in any
agreement, certificate, instrument or other document furnished to BUYER by
SELLER.
4. REPRESENTATIONS AND WARRANTIES OF BUYER. BUYER represents and
warrants to SELLER that the following statements are true and correct as of the
date of this Agreement and the truth and accuracy of such statements shall
constitute a condition precedent to all of SELLER'S obligations under this
Agreement.
4.1 DUE INCORPORATION; POWER. BUYER is a public corporation
duly organized, validly existing, and in good standing under the laws of the
State of Nevada. BUYER has all requisite power and authority to perform its
obligations under this Agreement.
4.2 AUTHORIZATION. This Agreement has been duly executed and
delivered by BUYER, and all agreements, documents and instruments herein
contemplated to be executed by BUYER, will be duly executed and delivered. This
Agreement constitutes, and all other agreements, documents and instruments when
executed and delivered by BUYER will constitute, the legal, valid and binding
obligations of BUYER enforceable in accordance with their respective terms.
4.3 DISCLOSURE. None of the representations or warranties made
by BUYER in this Agreement shall contain any untrue statements of material fact,
including, without limitation, any addendums attached hereto, or in any
agreement, certificate, instrument or other document furnished to SELLER by
BUYER.
5. INDEMNITIES.
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5.1 SELLER'S OBLIGATIONS. SELLER shall defend, indemnify, and
hold harmless BUYER from and against any and all claims to the extent arising
out of, resulting from or relating to (i) any breach by SELLER of, or failure by
SELLER to perform, any of its representations, warranties, covenants or
agreements in, or any default by SELLER under, this Agreement or in any other
agreement, instrument, Exhibit, certificate or other document furnished or to be
furnished by SELLER pursuant to this Agreement; (ii) SELLER'S failure to file
any tax returns or pay or withhold any taxes or assessments; (iii) any liability
of SELLER under any written or oral employment contract with an employee of
SELLER; (iv) any liability of SELLER under any of its employee benefit plans or
any liability arising out of, resulting from or relating to SELLER'S failure to
file any tax return or pay or withhold any taxes, fund any liability, provide
any notices, obtain any approvals required by and in accordance with any
requirements under any applicable employment
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laws, including, without limitation, ERISA, COBRA or the Worker Adjustment and
Retraining Notification Act, or any other applicable laws with respect to the
termination of employees; (v) SELLER'S accounts payable; (vi) products sold,
services performed or other business conducted by SELLER prior to the Closing;
and (viii) any other matter relating to SELLER'S ownership or operation of its
business operations.
5.2 BUYER'S OBLIGATIONS. BUYER shall defend, indemnify and
hold harmless SELLER from and against any and all claims to the extent arising
out of, resulting from or relating to (i) any breach by BUYER of, or failure by
BUYER to perform, any of its representations, warranties, covenants or
agreements in, or any default by BUYER under, this Agreement or in any
agreement, instrument, Exhibit, certificate or other document furnished or to be
furnished by BUYER pursuant to this Agreement.
6. ADDITIONAL AGREEMENTS OF THE PARTIES.
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6.1 DISABILITY. In the event that BUYER should become disabled
or incapacitated, for any reason whatsoever, and is unable to continue with the
management and operation of SELLER and elects to sell his interest, either in
part or in its entirety, written approval must first be obtained from Seller,
which approval shall not be unreasonably withheld. It is specifically understood
between BUYER and SELLER that any such agreement to sell to a third-party,
either in part or in its entirety, must contain provisions for the immediate
payoff of any and all amounts due SELLER pursuant to the terms of this
Agreement.
6.2 DEFAULT. In the event SELLER defaults on any term or
provision of this Agreement and/or fails to make the payments as scheduled
herein, and said default fails to be cured within 60 days of the date SELLER
receives written notice of said default from BUYER, or its appointed agent,
BUYER may, at its sole and exclusive discretion, sell in part or its entirety,
BUYER'S in SELLER to a third-party for the amount due then under the terms of
this Agreement.
7. COVENANT NOT TO COMPETE. SELLER and Shareholders agree, as of the
Closing, as follows:
7.1 COVENANT NOT TO COMPETE. SELLER will not at any time
within the period commencing on the Closing Date, directly or indirectly engage
in, or have any interest in any person, firm, corporation, or business (whether
as an employee, officer director, agent security holder, creditor, consultant or
otherwise) that engages in, any activity in the State of Nevada (THE "COVENANT
TERRITORY"), which activity is the same as, similar to, or competitive with any
activity in the Convenant Territory as of or within two (2) years after the
Closing Date.
7.2 CONFIDENTIAL DISCLOSURE. SELLER agrees that it will not
for any reason or at any time after the Closing Date disclose to any person any
proprietary, confidential or secret information relating to the SELLER AND/OR
BUYER, nor will it disclose to any person any trade secrets of SELLER AND/OR
BUYER or of any of its customers or suppliers or any other secret or
confidential information relating to SELLER AND/OR BUYER.
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8. MISCELLANEOUS.
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8.1 PUBLICITY. All notices to third parties and any other
publicity concerning the transactions contemplated by this Agreement shall be
jointly planned and coordinated by BUYER without the prior consent of the other
party.
8.2 NOTICES. All notices, requests, demands and other
communications given, or required to be given under this Agreement, shall be in
writing, duly addressed to the parties as follows:
If to Seller: Scott Stirkins
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394 NW 185th
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Shoreline, WA 98177
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With a copy to: Pacific Western Ins. Agency Inc.
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1748 NW 56th St. #103
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Seattle, WA 98107
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If to Buyer: Prevention Insurance
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2770 S. Maryland Pkwy. #416
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Las Vegas, NV 89109
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With a copy to:
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8.3 INTEGRATION. This Agreement constitutes the final,
complete and exclusive agreements of the parties and supersedes all prior and
contemporaneous negotiations, understandings and agreements of the parties with
respect to the subject matter hereof.
8.4 SEVERABILITY. If one or more of the provisions of this
Agreement is hereafter declared invalid or unenforceable by judicial,
legislative or administrative authority of competent jurisdiction, the parties
hereto agree that the invalidity or unenforceability of any of the provisions
shall not in any way affect the validity or enforceability of any other
provisions of this Agreement.
8.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties' successors and assigns.
8.6 COSTS AND EXPENSES. Except as otherwise provided herein,
each of the parties shall be responsible for the payment of its own costs,
expenses and taxes incurred or to be incurred by it in negotiating and preparing
this Agreement and in closing and carrying out the transactions contemplated
hereby.
8.7 AMENDMENT; MODIFICATION. No change or modification of the
terms or provisions of this Agreement shall be deemed valid unless in writing
and signed by both parties.
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8.8 GOVERNING LAW. This Agreement shall be construed,
interpreted and applied in accordance with the laws of the State of Nevada.
8.9 WAIVER. No waiver of any breach or default shall be
construed as a continuing waiver of any provision or as a waiver of any other or
subsequent breach of any provision contained in this Agreement.
8.10 HEADINGS. The headings of Sections of this Agreement have
been inserted for convenience of reference only and shall not affect the
interpretation of any of the provisions of this Agreement.
8.11 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
shall constitute one and the same instrument.
8.12 ASSIGNMENT. Neither party hereto shall assign,
hypothecate, or otherwise transfer such party's rights hereunder, or delegate
such party's duties hereunder, without the prior written consent of the other
party hereto.
8.13 PARTIES IN INTEREST. Nothing in this Agreement, whether
express or implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any persons other than the parties to it and their
respective successors and assigns, nor is anything in this Agreement intended to
relieve or discharge the obligation or liability of any third persons to any
party to this Agreement, nor shall any provision give any third persons any
right of subrogation over or against any party to this Agreement. This Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns.
8.14 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
All representations, warranties, covenants and agreements of the parties
contained in this Agreement, or in any instrument, certificate or other document
provided for herein shall survive the Closing.
8.15 TIME OF ESSENCE. Time is of the essence in complying with
the terms, conditions and provisions of this Agreement, including the Closing.
8.16 ARBITRATION. The parties agree that they are limited to
two (2) remedies with regard to any breach, default and/or violation of any
term, condition and/or covenant set forth herein, which shall be as follows:
arbitration, or mediation. The exercise of any of these remedies by either party
shall not be deemed an election of remedies.
8.17 ATTORNEYS' FEES. In the event that arbitration or
mediation is instituted to enforce or construe any of the provisions of this
Agreement, the prevailing party in such proceeding shall be entitled to
reasonable attorneys' fees and costs.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the day and year first above written.
/s/ Scott Stirkins Date: 6/04/02
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SELLER
Pacific Western Insurance Services
1748 NW 56th St., Suite #103
Seattle, WA 98107
/s/ Scott Goldsmith Date: 12/27/01
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BUYER
Prevention Insurance Co.
2770 S. Maryland Pkwy., Suite #416
Las Vegas, NV 89109
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