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EXHIBIT 10.3
STOCK PURCHASE AGREEMENT
BY AND AMONG
MUTUAL INSURANCE CORPORATION OF AMERICA
("BUYER")
AND
XXXXXXX X. XXXXXXXXX
XXXXXXX X. XXXXXXX
("SELLERS")
AUGUST 31, 1999
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TABLE OF CONTENTS
ARTICLE I SALE AND TRANSFER OF SHARES; CLOSING.........................................................................1
1.1 Sale and Purchase of Shares..................................................................................1
1.2 Purchase Price...............................................................................................1
1.3 Payment of Purchase Price....................................................................................1
1.4 Closing......................................................................................................3
1.5 Closing Obligations..........................................................................................4
1.6 Purchase Price Adjustment....................................................................................5
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER.....................................................................5
2.1 Organization and Good Standing...............................................................................5
2.2 Authority/Enforceability.....................................................................................6
2.3 No Conflict..................................................................................................6
2.4 Capitalization...............................................................................................6
2.5 Financial Statements.........................................................................................7
2.6 Books and Records............................................................................................7
2.7 Title to Properties; Encumbrances............................................................................7
2.8 Real Property................................................................................................7
2.9 Condition and Sufficiency of Assets..........................................................................7
2.10 No Undisclosed Liabilities...................................................................................8
2.11 Taxes........................................................................................................8
2.12 No Material Adverse Change...................................................................................9
2.13 Employee Benefits............................................................................................9
2.14 Compliance with Legal Requirements..........................................................................10
2.15 Governmental Authorizations.................................................................................11
2.16 Legal Proceedings; Orders...................................................................................11
2.17 Absence of Certain Changes and Events.......................................................................12
2.18 Contracts; No Defaults......................................................................................13
2.19 Insurance...................................................................................................15
2.20 Environmental Matters.......................................................................................16
2.21 Employees/Representatives...................................................................................16
2.22 Labor Relations; Compliance.................................................................................17
2.23 Subsidiaries................................................................................................17
2.24 Finders or Broker Fees......................................................................................17
2.25 Related Party Transactions..................................................................................17
2.26 Assets of Xxxxxxxxx.........................................................................................18
ARTICLE III REPRESENTATIONS AND WARRANTIES OF BUYER.....................................................................18
3.1 Organization and Good Standing..............................................................................18
3.2 Authority; No Conflict......................................................................................18
3.3 Certain Proceedings.........................................................................................19
3.4 Finders or Brokers Fees.....................................................................................19
3.5 Purchase for Own Account....................................................................................19
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ARTICLE IV COVENANTS OF SELLERS........................................................................................19
4.1 Access and Investigation....................................................................................19
4.2 Operation of the Business of the Company....................................................................19
4.3 Requirement; Approvals......................................................................................20
4.4 Notification................................................................................................20
4.5 Payment of Indebtedness by Related Persons..................................................................21
4.6 No Negotiation..............................................................................................21
4.7 Best Efforts................................................................................................21
4.9 Section 338(h)(10) Election.................................................................................22
ARTICLE V COVENANTS OF BUYER PRIOR TO CLOSING DATE....................................................................23
5.1 Approvals of Governmental Bodies............................................................................23
5.2 Best Efforts................................................................................................23
ARTICLE VI CONDITIONS PRECEDENT OF BUYER'S OBLIGATION TO CLOSE.........................................................24
6.1 Accuracy of Representations.................................................................................24
6.2 Satisfactory Due Diligence and Approval of the Board of Directors...........................................24
6.3 Sellers' Performance........................................................................................24
6.4 Consents....................................................................................................24
6.5 Additional Documents........................................................................................24
6.6 No Proceedings..............................................................................................25
6.7 No Claim Regarding Stock Ownership of Sale Proceeds.........................................................25
6.8 No Prohibition..............................................................................................25
6.9 Resignation of Officers.....................................................................................25
6.10 Financing...................................................................................................25
6.11 Employment Agreements.......................................................................................25
ARTICLE VII CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE........................................................25
7.1 Accuracy of Representations.................................................................................26
7.2 Buyer's Performance.........................................................................................26
7.3 Additional Documents........................................................................................26
7.4 No Injunction...............................................................................................26
7.6 Opinion.....................................................................................................26
7.8 Modification of Management Agreement........................................................................26
ARTICLE VIII TERMINATION.................................................................................................26
8.1 Termination Events..........................................................................................26
8.2 Effect of Termination.......................................................................................27
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ARTICLE IX INDEMNIFICATION, REMEDIES AND POST CLOSING COVENANTS........................................................27
9.1 Indemnification and Payment of Damages by Xxxxxxxxx.........................................................27
9.2 Indemnification by Gaugier..................................................................................28
9.3 Indemnification and Payment of Damages by Buyer.............................................................28
9.4 Limitations on Indemnity....................................................................................28
9.5 Survival Representations, Warranties, Covenants and Agreements..............................................28
9.6 Survival of Representations, Warranties, Covenants and Agreements by Buyer..................................29
9.7 Exclusive Remedy............................................................................................29
ARTICLE X DEFINITIONS.................................................................................................29
10.1 "Acquired Companies.........................................................................................29
10.2 "Acquired Company...........................................................................................29
10.3 "Agreement".................................................................................................29
10.4 "Best Efforts"..............................................................................................29
10.5 "Breach"....................................................................................................29
10.6 "Change in Control..........................................................................................29
10.7 "Closing Date"..............................................................................................30
10.8 "Consent"...................................................................................................30
10.9 "Contemplated Transactions".................................................................................30
10.10 "Contract"..................................................................................................30
10.11 "Employee Benefit Plan".....................................................................................31
10.12 "Encumbrance"...............................................................................................31
10.13 "Employment Agreements".....................................................................................31
10.14 "Environment"...............................................................................................31
10.15 "Environmental, Health, and Safety Liabilities".............................................................31
10.16 "Environmental Law".........................................................................................32
10.17 "ERISA".....................................................................................................32
10.18 "Fiduciary".................................................................................................32
10.19 "Financial Statements"......................................................................................32
10.20 "GAAP"......................................................................................................32
10.21 "Governmental Authorization"................................................................................32
10.22 "Governmental Body".........................................................................................33
10.23 "Hazardous Activity"........................................................................................33
10.24 "Hazardous Materials".......................................................................................33
10.25 "IRC" ......................................................................................................33
10.26 "IRS".......................................................................................................33
10.27 "Knowledge".................................................................................................33
10.28 "Legal Requirement".........................................................................................33
10.29 "Liability".................................................................................................33
10.30 "Management Agreement.......................................................................................34
10.31 "Material Adverse Change (or Effect)".......................................................................34
10.32 "Occupational Safety and Health Law"........................................................................34
10.33 "Order".....................................................................................................34
10.34 "Ordinary Course of Business"...............................................................................34
10.35 "Organizational Documents"..................................................................................34
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10.36 "Person"....................................................................................................34
10.37 "Proceeding"................................................................................................34
10.38 "Release"...................................................................................................34
10.39 "Sellers....................................................................................................35
10.40 "Tax".......................................................................................................35
10.41 "Tax Return"................................................................................................35
10.42 "Threat of Release".........................................................................................35
10.43 "Threatened"................................................................................................35
ARTICLE XI GENERAL PROVISIONS..........................................................................................35
11.1 Confidentiality.............................................................................................35
11.2 Expenses....................................................................................................36
11.3 Schedules...................................................................................................36
11.4 Public Announcements........................................................................................36
11.5 Arbitration.................................................................................................36
11.7 Notices.....................................................................................................37
11.8 Certain Taxes...............................................................................................38
11.9 Further Assurances..........................................................................................38
11.10 Waiver......................................................................................................38
11.11 Entire Agreement and Modification...........................................................................38
11.12 Construction................................................................................................38
11.13 Assignments; Successors; No Third Party Rights..............................................................39
11.14 Severability................................................................................................39
11.15 Section Headings............................................................................................39
11.16 Time of Essence.............................................................................................39
11.17 Governing Law...............................................................................................39
11.18 Arm's Length Negotiations...................................................................................39
11.19 Counterparts................................................................................................40
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made and entered into as
of August 31, 1999, by and among MUTUAL INSURANCE CORPORATION OF AMERICA, a
Michigan Mutual Insurance corporation ("Buyer"), and XXXXXXX X. XXXXXXXXX
("Xxxxxxxxx"), a Michigan resident and XXXXXXX X. XXXXXXX ("Gaugier"), a
Michigan resident (individually referred to herein as "Seller" and collectively
and jointly and severally referred to herein as "Sellers"). Certain other
capitalized terms used herein are defined in Article X and throughout this
Agreement.
R E C I T A L S :
A. Sellers are the owners of all the issued and outstanding shares (the
"Shares") of the capital stock of Xxxxxxxx-Xxxxxxxxx Management Company, a
Michigan corporation (the "Company").
B. The Company is the owner of all the outstanding shares of
Xxxxxxxx-Xxxxxxxxx Management Company of Kentucky, Inc., a Kentucky corporation
(the "Subsidiary").
X. Xxxxxxx desire to sell and Buyer desires to purchase all of the
Shares on the terms and subject to the conditions, representation, warranties
and covenants contained in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
promises representations, warranties and covenants herein contained, the parties
agree as follows:
ARTICLE I
SALE AND TRANSFER OF SHARES; CLOSING
1.1 SALE AND PURCHASE OF SHARES. Subject to the terms and conditions of
this Agreement, at the Closing, Sellers will sell, convey, assign, deliver and
transfer the Shares to Buyer, and Buyer will purchase the Shares from Sellers
free and clear of any Encumbrances.
1.2 PURCHASE PRICE. The purchase price (the "Purchase Price") for the
Shares will be Nineteen Million Five Hundred Thousand and No/100
($19,500,000.00) Dollars, subject to the adjustments set forth in Sections
1.3.10 and 1.6.
1.3 PAYMENT OF PURCHASE PRICE. The Purchase Price shall be payable, as
follows:
1.3.1 At the Closing, the sum of Nine Million Five Hundred Thousand
and No/100 Dollars ($9,500,000.00) by bank cashier's or certified
checks or by inter-bank wire
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transfer, in the amounts payable as to each Seller as set forth in
Schedule 1.3.1 hereof ("Cash Payment"); and
1.3.2 Commencing eighteen (18) months after the Closing Date
and annually thereafter, the Buyer shall pay to Xxxxxxxxx the annual
payments ("Annual Payments"), subject to the adjustments set forth in
Section 1.6 set forth below.
(a) The first, second, third, fourth and fifth Annual
Payments shall be One Million ($1,000,000.00) Dollars each.
(b) The sixth and seventh Annual Payments shall be
One Million Five Hundred Thousand ($1,500,000.00) Dollars
each.
(c) The eighth Annual Payment shall be Two Million
($2,000,000.00) Dollars.
1.3.3 Within ninety (90) days of the death or Disability (as
defined in Xxxxxxxxx'x Employment Agreement with Buyer) of Xxxxxxxxx,
the Buyer shall pay Xxxxxxxxx (or his heirs) in lieu of any remaining
Annual Payments, an amount equal to the unpaid Annual Payments as of
the date of his death or disability, using Buyer's A.M. Best Rating as
of the date of Xxxxxxxxx'x death or disability for purposes of
calculating the Adjustment Amount (as hereinafter defined in Section
1.6).
1.3.4 The Annual Payments will be fully insured against
Xxxxxxxxx'x death or disability by an insurance product(s) purchased by
the Buyer or by a self insurance program established by the Buyer
reasonably acceptable to Xxxxxxxxx.
1.3.5 In the event that Xxxxxxxxx'x employment with the Buyer
or an affiliate of the Buyer is terminated for "Cause" (as defined in
Xxxxxxxxx'x Employment Agreement with Buyer) which results in the Buyer
suffering damages, or if it is voluntarily terminated by Cheeseman
without Cause (as defined in Xxxxxxxxx'x Employment Agreement with
Buyer), Xxxxxxxxx shall forfeit any remaining Annual Payments to be
paid him.
1.3.6 In the event that Xxxxxxxxx'x employment with the Buyer
or an affiliate of the Buyer is terminated by the Buyer (or an
affiliate of Buyer) without Cause (as defined in Xxxxxxxxx'x Employment
Agreement with Buyer) or if Xxxxxxxxx terminates his employment with
the Buyer or an affiliate with the Buyer for Cause (as defined in
Xxxxxxxxx'x Employment Agreement), Buyer shall pay to Xxxxxxxxx the
unpaid Annual Payments as of the date his employment is terminated
using Buyer's A.M. Best Rating as of the date Xxxxxxxxx'x employment is
terminated, for purposes of calculating the Adjustment Amount (as
hereinafter defined in Section 1.6), except that where Cause on the
part of Xxxxxxxxx is for extenuating personal reasons the Adjustment
Amount shall be discounted at the rate of eight (8%) percent per annum.
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1.3.7 In the event there is a Change in Control of the Buyer,
Xxxxxxxxx may, during the sixty (60) day period following the date on
which a Change in Control occurs, accelerate the payment of the unpaid
Annual Payments. If Xxxxxxxxx so elects, the amount due to a Change in
Control shall be equal to the unpaid Annual Payments, using Buyer's
A.M. Best Rating as of the date of Change in Control. If Xxxxxxxxx
fails to elect to accelerate the payment of the Annual Payments within
the time frame set forth herein, the Annual Payments shall continue to
be made in accordance with the terms of this Agreement.
1.3.8 Except as set forth below, the Parties acknowledge that
any outstanding Annual Payment will not accrue any interest and that
Buyer will not owe to Xxxxxxxxx any interest in connection with the
Annual Payments. In the event that Buyer shall fail to make any payment
within thirty (30) days after Xxxxxxxxx gives written notice to Buyer
of its failure to make any payment when due, in addition to any
payment, Buyer shall pay Xxxxxxxxx interest on said payment at the rate
of eight percent (8%) per annum from the date on which said payment was
first due.
1.3.9 In the event that a dispute arises between Xxxxxxxxx and
the Buyer relating to any matter contained in this Agreement, pending
the resolution of the dispute, Buyer, in lieu of making Annual Payment,
may deposit any Annual Payment then due to Xxxxxxxxx with an escrow
agent and pursuant to an escrow agreement, mutually acceptable to both
Buyer and Xxxxxxxxx pending the resolution of any and all disputes in
conformance with Section 11.5 below. In the event that Xxxxxxxxx and
the Buyer are unable to agree to a mutually acceptable escrow agent and
escrow agreement, Buyer shall then deposit the Annual Payment in a
separate interest bearing bank account for the benefit of Xxxxxxxxx.
1.3.10 As additional Purchase Price, Buyer shall pay to
Sellers any incentive payments due under the Management Agreement which
cannot be determined as of the Closing Date, in accordance with Section
5.3.
1.3.11 Buyer and Sellers agree to allocate the Purchase Price
as of the Closing among the Company Assets for all purposes in
accordance with an allocation to be mutually agreed upon based on the
Acquired Company's most recently prepared financial statement. Buyer
and Sellers also agree to file all tax returns consistent with the
allocation set forth on Exhibit 1.3.11.
1.4 CLOSING. Unless this Agreement is terminated pursuant to Section
8.1, the purchase and sale (the "Closing") provided for in this Agreement will
take place at the offices of Xxxx, Xxxxxxx and Xxxxx, PLC at Detroit Center, 000
Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, at 10:00 a.m. (local time)
on the last day of the month in which all conditions precedent have been
satisfied or waived, or at such other time and place as the parties may agree.
Provided, unless otherwise agreed, the Closing will not take place on December
31, 1999 if all conditions precedent have been either satisfied or waived in
December; however, the Closing will take place
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on January 31, 2000. Subject to the provisions of Article 8, failure to
consummate the purchase and sale provided for in this Agreement on the date and
time and at the place determined pursuant to this Section 1.4 will not result in
the termination of this Agreement and will not relieve any party of any
obligation under this Agreement.
1.5 CLOSING OBLIGATIONS. At the Closing:
1.5.1 Sellers will deliver to Buyer (collectively the
"Sellers' Closing Document"):
(a) Certificates representing the Shares, duly
endorsed (or accompanied by duly executed stock powers);
(b) Releases in the form of Exhibit 1.5.1(b) executed
by Sellers indicating each Seller shall release the Company
from certain claims, liabilities or obligations (collectively
"Sellers' Releases");
(c) Noncompetition agreements in the form of Exhibit
1.5.1(c), executed by Sellers (the "Noncompetition
Agreements");
(d) A certificate executed by Sellers representing
and warranting to Buyer that each of Sellers' representations
and warranties in this Agreement were accurate in all respects
as of the date of this Agreement and are accurate in all
respects as of the Closing Date as if made on the Closing
Date;
(e) The Consents;
(f) The resignations of those persons listed on
Schedule 1.5.1 as officers and/or directors of any Acquired
Company, if applicable; and
(g) The documents and instruments required by Article
VI hereof.
1.5.2 Buyer will deliver to Sellers:
(a) The Cash Payment;
(b) A certificate executed by Buyer representing and
warranting to Sellers that each of Buyer's representations and
warranties in this Agreement were accurate in all respects as
of the date of this Agreement and are accurate in all respects
as of the Closing Date as if made on the Closing Date; and
(c) The documents and instruments required by Article
VII hereof.
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(d) Releases in the form of Exhibit 1.5.2(d) executed
by Buyer, indicating that Buyer and the Company shall release
the Sellers from certain claims, liabilities or obligations
(collectively "Buyer's Releases").
(e) The Consents.
1.6 PURCHASE PRICE ADJUSTMENT. Buyer and Sellers agree and acknowledge
that the Buyer's current A.M. Best Rating as of the Closing Date is A- ("Base
Rating"). In the event that the Buyer's A.M. Best Rating on each date on which
an Annual Payment is due is other than the Base Rating, such Annual Payment
shall be subject to the adjustments contained herein. In the event that Buyer's
A.M. Best Rating is improved, the Annual Payment then due shall be increased by
an amount equal to the product of (a) Two Hundred Thousand Dollars ($200,000.00)
("Adjustment Amount"), multiplied by (b) the number of grade levels by which the
Buyer's A.M. Best Rating has been improved over the Base Rating. In the event
that the Buyer's A.M. Best Rating has been downgraded, the Annual Payment then
due shall be decreased by an amount equal to the product of (a) the Adjustment
Amount multiplied by (b) the number of grade levels by which the Buyer's A.M.
Best Rating has been decreased below the Base Rating.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
As a material inducement to Buyer entering into this Agreement and
knowing and acknowledging that Buyer is relying upon the same, each Seller
hereby makes, jointly and severally, as of the date hereof and as of the Closing
Date, the following representations and warranties to Buyer.
2.1 ORGANIZATION AND GOOD STANDING. Each Acquired Company is a
corporation duly organized, validly existing, and in good standing under the
respective laws of the State of its incorporation as set forth on Schedule 2.1,
with full power and authority to conduct its business as it is now being
conducted, to own, lease and use the properties and assets that it purports to
own, lease or use, and to perform all its obligations under Contracts. Each
Acquired Company is, and has been, duly qualified to do business as a foreign
corporation and is and has been in good standing under the laws of each state or
other jurisdiction during all such times in which either the ownership, leasing
or use of the properties owned, leased or used by it, or the nature of the
activities conducted by it, required such qualification.
2.2 AUTHORITY/ENFORCEABILITY. This Agreement constitutes the legal,
valid, and binding obligation of Sellers, enforceable against each of them in
accordance with its terms. Upon the execution and delivery by Sellers of the
Sellers' Closing Documents, the Sellers' Closing Documents will constitute the
legal, valid, and binding obligations of Sellers, enforceable against each of
them in accordance with their respective terms. Sellers have the absolute and
unrestricted right, power, authority, and capacity to execute and deliver this
Agreement and the Sellers'
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Closing Documents and to perform their obligations under this Agreement and the
Sellers' Closing Documents.
2.3 NO CONFLICT. Except as set forth in Schedule 2.3, neither the
execution and delivery of this Agreement nor the consummation or performance of
any of the Contemplated Transactions will, directly or indirectly (with or
without notice or lapse of time): (a) contravene, conflict with, result in a
violation of or have any adverse affect upon (i) any provision of the
Organizational Documents of any Acquired Company, or (ii) any resolution adopted
by the Board of Directors or the stockholders of the any Acquired Company; (b)
contravene, conflict with, or result in a violation of, or give any Governmental
Body or other Person the right to challenge any of the Contemplated Transactions
or to exercise any remedy or obtain any relief under any Legal Requirement, any
Order to which any Acquired Company or Sellers, or any of the assets owned or
used by any Acquired Company, may be subject; (c) contravene, conflict with, or
result in a violation of any of the terms or requirements of, or give any
Governmental Body the right to revoke, withdraw, suspend, cancel, terminate, or
modify, any Governmental Authorization that is held by any Acquired Company or
that otherwise relates to the business of, or any of the assets owned or used
by, any Acquired Company; (d) contravene, conflict with, or result in a
violation or breach of any provision of, or give any Person the right to declare
a default or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify, any Contract; or (e) result
in the imposition or creation of any Encumbrance upon or with respect to any of
the assets owned or used by any Acquired Company. Except as set forth in
Schedule 2.3 neither Sellers nor any Acquired Company is or will be required to
give any notice to or obtain any Consent from any Person in connection with the
execution and delivery of this Agreement or the consummation or performance of
any of the Contemplated Transactions.
2.4 CAPITALIZATION. The outstanding equity securities of each Acquired
Company are duly authorized, validly issued, fully paid and non-assessable,
consist solely of the equity security described in Schedule 2.4 and, in the case
of the Company, constitute the Shares for purposes of this Agreement. At the
Closing, the Shares shall represent all of the issued and outstanding shares of
capital stock of the Company. Sellers are and will be on the Closing Date, the
legal, record and beneficial owners and holders of the Shares, free and clear of
all Encumbrances, and shall transfer ownership and marketable title to the
Shares to the Buyer, free of all Encumbrances at the Closing. The Company is,
and will be on the Closing Date, the legal, record and beneficiary owners of all
the issued and outstanding stock of the Subsidiary, free of all Encumbrances.
There are no Contracts relating to the issuance, sale, or transfer of any equity
securities or other securities of any Acquired Company, no Person has any rights
to acquire any shares of the capital stock of any Acquired Company, and there
are no options, calls, warrants or other securities or rights outstanding which
relate to, are convertible into or exercisable for any securities of any
Acquired Company.
2.5 FINANCIAL STATEMENTS. Sellers have delivered to Buyer the following
financial statements of the Companies ("Financial Statements"): (a) the audited
consolidated balance sheet of the Acquired Companies as of December 31 for 199_
through 1998, and the related consolidated statements of income, changes in
stockholders' equity, and cash flow for each of the fiscal years then ended,
together with the accountant's report and opinion thereon and (b) a consolidated
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balance sheet of the Acquired Companies as of , 1999 and the
related unaudited statements of income, changes in stockholders' equity, and
cash flow for the months then ended (collectively the "Interim Financial
Statements"). All Financial Statements are true, accurate, complete, and fully
and accurately present the properties, financial condition, results of
operations, changes in stockholders' equity, and cash flow of the Acquired
Companies as of the respective dates of and for the periods referred to in such
Financial Statements, all in accordance with and pursuant to GAAP consistently
applied.
2.6 BOOKS AND RECORDS. The books of account, business and accounting
records, minute books, stock record books, and other records of each Acquired
Company, all of which have been made available to Buyer, are complete, accurate
and correct and have been maintained in accordance with sound business
practices. The minute books of each Acquired Company contain accurate and
complete records of all meetings held of, and corporate action taken by, the
stockholders, the Boards of Directors, and committees of the Boards of Directors
of the Company, and no meeting of any such stockholders, Board of Directors or
committee has been held for which minutes have not been prepared and maintained
in such minute books. At the Closing, all of said books and records will be
delivered to the Buyer.
2.7 TITLE TO PROPERTIES; ENCUMBRANCES. Except as indicated in Schedule
2.7 and for those properties provided to the Acquired Companies by the Buyer,
each Acquired Company owns and has absolute, good and marketable title to all of
the properties and assets (whether real, personal, or mixed and whether tangible
or intangible), used in the business or operations of such Acquired Company, or
reflected in the books, records or Financial Statements of such Acquired
Company, and all properties and assets purchased or otherwise acquired by such
Acquired Company since the date of the Interim Financial Statements including,
without limitations, all of the assets described in Schedule 2.7 (collectively
"Company Assets"). All Company Assets are free and clear of all Encumbrances,
except those Encumbrances described in Schedule 2.7.
2.8 REAL PROPERTY. The Company does not own or lease any parcel of real
property.
2.9 CONDITION AND SUFFICIENCY OF ASSETS. The Company Assets are
structurally sound, in good operating condition and repair, and are adequate for
the uses to which they are being put, and none of the Company Assets are in need
of maintenance or repairs except for ordinary, routine maintenance and repairs
that are not material in nature or cost. The Company Assets are sufficient for
the continued conduct of the Company's businesses after the Closing in
substantially the same manner as conducted prior to the Closing.
2.10 NO UNDISCLOSED LIABILITIES. Except as set forth in Schedule 2.10,
no Acquired Company has any Liabilities except for liabilities reflected in the
Interim Financial Statements and current liabilities for trade payables and
accrued operating expenses incurred in the Ordinary Course of Business since the
date of the Interim Financial Statements.
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2.11 TAXES.
2.11.1 Each Acquired Company has filed or caused to be filed,
on a timely basis, all Tax Returns that are or were required to be
filed by or with respect to it. Each Acquired Company has paid all
Taxes that have or may have become due pursuant to those Tax Returns,
any Legal Requirement or otherwise, or pursuant to any assessment
received by Sellers or the Company.
2.11.2 Schedule 2.11.2 contains a complete and accurate list
of all audits of or adjustments to all Tax Returns of each Acquired
Company (or their predecessors) ending within the ten (10) year period
immediately preceding the date of the Interim Financial Statements,
including a reasonably detailed description of the nature, proposed
adjustments and outcome of each audit. Except as described in Schedule
2.11.2, neither Sellers nor any Acquired Company has given or been
requested to give waivers or extensions (or are or would be subject to
a waiver or extension given by any other Person) of any statute of
limitations relating to the payment of Taxes by any Acquired Company or
for which any Acquired Company may be liable. All deficiencies proposed
as a result of such audits have been paid.
2.11.3 The charges, accruals, and reserves with respect to
Taxes in the Financial Statements of the Acquired Company are correctly
determined in accordance with GAAP and are at least equal the Acquired
Company's entire liability for Taxes for the periods indicated therein.
All Taxes that the Acquired Companies are or were required by Legal
Requirements to pay, withhold or collect have been duly paid, withheld
or collected and, to the full extent required, have been timely paid to
the proper Governmental Body or other Person. No Acquired Company has
any Liability for Taxes, except for Taxes reserved in its Interim
Financial Statement and accrued in the Ordinary Course of Business
since the date thereof.
2.11.4 All Tax Returns filed by the Acquired Companies are
true, correct, and complete and exact copies of all Tax Returns filed
by the Acquired Companies during the six (6) year period preceding the
date hereof have been delivered to the Buyer. There is no tax sharing
agreement that will require any payment by the Company after the date
of this Agreement.
2.11.5 Schedule 2.11.5 describes all tax elections and
consents filed by the Acquired Companies with any Governmental Body.
2.12 NO MATERIAL ADVERSE CHANGE. Since December 31, 1998, there has not
been any Material Adverse Change to any Acquired Company or its assets or
business, and no event has occurred or circumstance exists that may result in a
Material Adverse Change to the Company.
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2.13 EMPLOYEE BENEFITS.
2.13.1 Schedule 2.13.1 describes each Employee Benefit Plan
that any Acquired Company maintains or to which any Acquired Company
contributes and each Employee Benefit Plan that any Acquired Company
formerly maintained or to which any Acquired Company ever contributed
in the past.
2.13.2 Each Employee Benefit Plan (and each related trust,
insurance contract or fund) complies in form and in operation in all
respects with the applicable requirements of ERISA, the IRC and all
other Legal Requirements.
2.13.3 All required filings, returns, reports and descriptions
(including Form 5500 Annual Reports, Summary Annual Reports, PBGC-1's
and Summary Plan Descriptions) have been timely filed or distributed
appropriately with respect to each such Employee Benefit Plan as
required by ERISA, the IRC and all Legal Requirements.
2.13.4 All required contributions (including all employer
contributions and employee salary reduction contributions) have been
paid to each Employee Benefit Plan and all required contributions for
any period ending on or before the Closing Date which are not yet due
have been and shall be accrued and reserved in each Acquired Company's
Interim Financial Statements and books and records. All premiums or
other payments for all periods ending on or before the Closing Date
have been paid with respect to each such Employee Benefit Plan.
2.13.5 The market value of assets under each such Employee
Benefit Plan equals or exceeds the present value of all vested and
nonvested Liabilities thereunder determined in accordance with
applicable PBGC methods, factors and assumptions and GAAP, and no
funding deficiency of any kind exists under any Employee Benefit Plan.
2.13.6 Sellers have delivered to Buyer correct and complete
copies of all Employee Benefit Plans, including without limitation, all
agreements, plan documents and summary plan descriptions, the most
recent determination letter received from the IRS, the five (5) most
recent Form 5500 Annual Reports, and all related trust agreements,
insurance contracts and other funding agreements which implement or
relate to each Employee Benefit Plan.
2.13.7 No such Employee Benefit Plan has been completely or
partially terminated or been the subject of a reportable event as to
which notices would be required to be filed with the PBGC. No
proceeding by the PBGC to terminate any such Employee Benefit Plan has
been instituted or threatened.
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2.13.8 There have been no prohibited transactions with respect
to any such Employee Benefit Plan. No Fiduciary has any Liability for
breach of fiduciary duty or any other failure to act or comply in
connection with the administration or investment of the assets of any
such Employee Benefit Plan. No action, suit, proceeding, complaint,
grievance, hearing or investigation with respect to the administration
or the investment of the assets of any such Employee Benefit Plan
(other than routine claims for benefits) is pending or threatened.
Neither any Acquired Company (or employees with responsibility for
employee benefits matters) nor the Sellers have any Knowledge of any
basis for any such action, suit, grievance, complaint, proceeding,
hearing or investigation.
2.13.9 No Acquired Company has incurred, and neither the
Seller nor the directors and officers (and employees with
responsibility for employee benefits matters) of any Acquired Company
has any reason to expect that any Acquired Company will incur any
Liability to the PBGC (other than PBGC premium payments) or otherwise
under Title IV of ERISA (including any withdrawal Liability) or under
the Code with respect to any such Employee Benefit Plan which is an
Employee Benefit Plan.
2.13.10 No Acquired Company contributes to, ever has
contributed to, or ever has been required to contribute to any
Multi-Employer Plan or has any Liability (including withdrawal
Liability) under any Multi-Employer Plan.
2.13.11 Except as set forth in Schedule 2.13.11, no Acquired
Company maintains, ever has maintained, ever has contributed, or never
has been required to contribute to any Employee Benefit Plan or other
arrangement providing medical, health or life insurance or other
welfare-type benefits for current or future retired or terminated
employees, their spouses or their dependents.
2.13.12 No Acquired Company has any Liability arising from any
Employee Plan, except for any liability reflected in the Interim
Financial Statement or as accrued in the Ordinary Course of Business
since the date of such Interim Financial Statement.
2.14 COMPLIANCE WITH LEGAL REQUIREMENTS. Except as set forth in
Schedule 2.14:
2.14.1 Each Acquired Company is, and at all times has been, in
full compliance with each Legal Requirement that is or was applicable
to it or to the conduct or operation of its business or the ownership
or use of any of its assets;
2.14.2 No event has occurred or circumstance exists that (with
or without notice or lapse of time) (i) may constitute or result in a
violation by any Acquired Company under, or a failure on the part of
any Acquired Company to comply with, any Legal Requirement, or (ii) may
give rise to any obligation on the part of any Acquired Company to
undertake, or to bear all or any portion of the cost of, any remedial
action of any nature; and
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2.14.3 No Company has received any notice nor other
communication (whether oral or written) from any Governmental Body or
any other Person regarding (i) any actual, alleged, possible, or
potential violation of, or failure to comply with, any Legal
Requirement, or (ii) any actual, alleged, possible, or potential
obligation on the part of any Acquired Company to undertake, or to bear
all or any portion of the cost of, any remedial action of any nature.
2.15 GOVERNMENTAL AUTHORIZATIONS.
2.15.1 Schedule 2.15.1 contains a complete and accurate list
of each Governmental Authorization that is held by the Acquired
Companies or that otherwise relates to the business of, or to any of
the assets owned or used by, any Acquired Company. Each Governmental
Authorization listed or required to be listed in Schedule 2.15.1 is
valid and in full force and effect. Each Acquired Company has fully
complied with all conditions and requirements for, or relating to, all
Governmental Authorizations.
2.15.2 The Governmental Authorizations listed in Schedule
2.15.1 collectively constitute all of the Governmental Authorizations
necessary to permit each Acquired Company to lawfully conduct and
operate its business in the manner as currently conducted and as
conducted during the previous five (5) years, and to permit each
Acquired Company to own and use its assets in the manner in which it
currently owns and uses such assets.
2.15.3 No Acquired Company has received any notice or other
communication regarding any actual, alleged or potential (i) violation
or failure to comply with any Governmental Authorization or (ii)
revocation, withdrawal, suspension, cancellation, termination or
modification of any Governmental Authorization.
2.16 LEGAL PROCEEDINGS; ORDERS.
2.16.1 There is no pending Proceeding: (a) that has been
commenced by or against any Acquired Company or that otherwise relates
to or may affect the business of, or any of the assets owned, leased or
used by any Acquired Company; or (b) that challenges, or that may have
the effect of preventing, delaying, making illegal, or otherwise
interfering with, any of the Contemplated Transactions. No such
Proceeding has been Threatened and no Proceeding has been terminated
(by adjudication, settlement or otherwise) within the last five (5)
years. No event has occurred or circumstance exists that may give rise
to or serve as a basis for the commencement of any such Proceeding; and
2.16.2 There is currently no Order to which any Acquired
Company, Seller, any Acquired Company's business or any of the assets
owned, leased or used by any Acquired Company, is subject. Each
Acquired Company has complied with all Orders to which its, or any of
the assets owned or used by it has been subject.
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2.17 ABSENCE OF CERTAIN CHANGES AND EVENTS. Except as set forth in
Schedule 2.17, since December 31, 1998, each Acquired Company has conducted its
business only in the Ordinary Course of Business and there has not been any:
2.17.1 Change in any Acquired Company's authorized or issued
capital stock; grant of any stock option or right to purchase shares of
capital stock of any Acquired Company; issuance of any security
convertible into such capital stock; grant of any registration rights;
or declaration or payment of any dividend or other distribution or
payment in respect of shares of capital stock;
2.17.2 Amendment to the Organizational Documents of any
Acquired Company;
2.17.3 Payment or increase by any Acquired Company of any
bonuses, salaries, or other compensation to any stockholder, director,
officer, or employee or entry into any employment, severance, or
similar Contract with any director, officer, or employee;
2.17.4 Adoption of, or increase in the payments to or benefits
under, any profit sharing, bonus, deferred compensation, savings,
insurance, pension, retirement, or other Employee Benefit Plan;
2.17.5 Damage to or destruction or loss of any asset or
property of any Acquired Company, whether or not covered by insurance,
in excess of $10,000;
2.17.6 Entry into, termination of, or receipt of notice of
termination of any Contract or transaction outside the Ordinary Course
of Business or which involves a total remaining commitment by or to the
Company of at least $10,000;
2.17.7 Sale (other than sales of inventory in the Ordinary
Course of Business), license, lease, or other disposition of any asset
or property of the Company in excess of $10,000 or imposition of any
Encumbrance on any asset or property of any Acquired Company;
2.17.8 Cancellation, settlement, or waiver of any claims or
rights of or against any Acquired Company in excess of $10,000;
2.17.9 Change in any of the accounting methods or principles
used by any Acquired Company; or
2.17.10 The entry into any Contract by any Acquired Company to
do any of the foregoing.
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2.18 CONTRACTS; NO DEFAULTS.
2.18.1 Schedule 2.18.1 contains a complete and accurate list,
and Buyer acknowledges that it has had an opportunity to review true
and complete copies of the following Contracts other than those
Agreements with the Buyer or affiliates of the Buyer:
(a) Each Contract that involves the furnishing or
performance of services, or the delivery, sale, lease or
transfer of goods, materials or products, by any Acquired
Company in an amount or value in excess of $10,000, including,
but not limited to, purchase orders received by any Acquired
Company;
(b) Each Contract that involves the furnishing or
performance of services, or the purchase, lease or receipt of
goods, materials, inventory, supplies, products or other
personal property by any Acquired Company in an amount or
value in excess of $10,000, including, but not limited to,
purchase orders issued by any Acquired Company;
(c) Each lease, rental or occupancy agreement,
license, installment and conditional sale agreement, and other
Contract affecting the ownership of, leasing of, title to, use
of, or any leasehold or other interest in, any real or
personal property;
(d) Each Contract under which any Acquired Company
has created, incurred, assumed or guaranteed any indebtedness
for borrowed money, has incurred any capitalized lease
obligation, or under which any of its tangible or intangible
assets, are Encumbered;
(e) Each collective bargaining agreement and other
Contract to or with any labor union or other employee
representative of a group of employees or which involves any
Acquired Company or any former or present employees, agents or
representatives of any Acquired Company;
(f) Each profit sharing, stock option, stock
purchase, stock appreciation, deferred compensation,
severance, or other plan, arrangement, contract or Employee
Benefit Plan for the benefit of its current or former
directors, officers, and employees;
(g) Each offer or agreement for the employment of or
receipt of any services from any Person on a full-time,
part-time, consulting, commission or any other basis;
(h) Each Contract containing covenants that in any
way purport to restrict the business activity of any Acquired
Company or limit the freedom of any
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Acquired Company to engage in any line of business or to
compete with any Person;
(i) Each Contract for capital expenditures;
(j) Each Contract under which any Acquired Company
has advanced, guaranteed or loaned any amount to or for the
benefit of any of its directors, officers, employees or
Representatives;
(k) Each Contract with any employee, officer,
director, shareholder, sale representative, consultant,
distributor, Representative or agent of any Acquired Company;
(l) Each Contract providing for a payment or
involving an aggregate consideration or value in excess of
$10,000;
(m) Each Contract not entered into in the Ordinary
Course of Business;
(n) Each power of attorney granted by, on behalf of,
or to any Acquired Company;
(o) Each Contract relating to confidentiality or
noncompetition except those Contracts by which Buyer is also
bound;
(p) Each Contract for the performance of services by
an Acquired Company having a term or period of performance in
excess of 90 days; and
(q) Each proposed or actual amendment, supplement, or
modification (whether oral or written) in respect of any of
the foregoing.
2.18.2 Except as set forth in Schedule 2.18.2:
(a) The Sellers do not have any fixed or contingent
rights or obligations under any Contract that relates to the
business of, or any of the assets owned or used by, any
Acquired Company; and
(b) No Person listed on Schedule 2.18.2 is bound by
any Contract that purports to limit the ability of such Person
to (i) engage in or continue any conduct, activity, practice
or business related to the operations of any Acquired Company,
or (ii) assign to any Acquired Company or to any other Person
any rights to any invention, improvement, or discovery of
Intellectual Property Asset related to the operations of the
Acquired Companies.
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2.18.3 Except as set forth in Schedule 2.18.3, each Contract
is in full force and effect and is valid and enforceable in accordance
with its terms.
2.18.4 Except as set forth in Schedule 2.18.4 with respect to
each Contract (including, without limitation, those Contracts and
agreements disclosed or required to be disclosed in Schedule 2.18.1):
(a) Each Acquired Company is, and at all times has
been, in full compliance with all applicable terms and
requirements of each Contract;
(b) Each other Person that has or had any obligation
or liability under any Contract is, and at all times has been,
in full compliance with all applicable terms and requirements
of such Contract;
(c) No event has occurred or circumstance exists that
(with or without notice or lapse of time) may contravene,
conflict with, or result in a violation or breach of, or give
any Acquired Company or other Person the right to declare a
default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate, or
modify, any Contract; and
(d) No Acquired Company has given to nor received
from any other Person any notice or other communication
(whether oral or written) regarding any actual, alleged,
possible, or potential violation or breach of, default under
or termination or cancellation of, any Contract.
2.19 INSURANCE. Schedule 2.19 sets forth a description with
respect to each insurance policy (including policies providing
property, casualty, liability and workers' compensation coverage and
bond and surety arrangements) to which any Acquired Company has been a
party, a named insured or otherwise the beneficiary of coverage at any
time within the past six (6) years, including (a) the name, address and
telephone number of the agent; (b) the name of the insurer, the name of
the policyholder, and the name of each covered insured;(c) the policy
number and the period of coverage; (d) the scope (including an
indication of whether the coverage was on a claims made, occurrence or
other basis) and amount (including a description of how deductibles and
ceilings are calculated and operate) of coverage; and (e) a description
of any retroactive premium adjustments or other loss-sharing
arrangements. With respect to each such insurance policy: (i) the
policy is legal, valid, binding, enforceable and in full force and
effect; (ii) the policy will continue to be legal, valid, binding,
enforceable and in full force and effect on identical terms following
the consummation of the transaction contemplated hereby; (iii) no
Acquired Company or any other Person is in breach or default (including
with respect to the payment of premiums or the giving of notices), and
no event has occurred which, with notice or the lapse of time, would
constitute such a breach or default, or permit termination,
modification or acceleration, under the policy; and (iv) no Person has
repudiated any provision thereof. Each Acquired Company has been
covered during the
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past six years by insurance in scope and amount customary and
reasonable for the business in which they have engaged during the
aforementioned period. Schedule 2.19 describes any self-insurance
arrangements affecting the Company.
2.20 ENVIRONMENTAL MATTERS. Except as set forth in Schedule 2.20, the
Acquired Companies are, and at all times have been, in full compliance with, and
have not been and are not in violation of or liable under, any Environmental Law
and do not engage in any Hazardous Activity. Neither Sellers, nor any Acquired
Company, has any basis to expect, nor has any of them or any other Person for
whose conduct they are or may be held to be responsible, received, any actual or
Threatened Order, notice, or other communication from any Governmental Body or
Person, of any actual or potential violation or failure to comply with any
Environmental Law, or of any actual or Threatened obligation to undertake or
bear the cost of any Environmental, Health, and Safety Liabilities.
2.21 EMPLOYEES/REPRESENTATIVES.
2.21.1 Schedule 2.21.1 contains a complete and accurate list
of the following information for each employee or director of each
Acquired Company, including each employee on leave of absence or layoff
status: (a) name; (b) job title; (c) current compensation and bonus
paid or payable; (d) vacation accrued; (e) service credited for
purposes of vesting and eligibility to participate under any Employee
Benefit Plan and (f) all other compensation, bonus and overtime pay, as
applicable for the year ended on the date of the Interim Financial
Statement.
2.21.2 Except for Contracts executed on behalf of Buyer and
except as set forth on Schedule 2.21.2, no Person listed on Schedule
2.21.2 is a party to, or is otherwise bound by, any agreement or
arrangement, such as any confidentiality, noncompetition, or
proprietary rights agreement, between such employee, officer or
director and any other Person which limits their ability to perform
services for any Acquired Company.
2.21.3 Schedule 2.21.3 also contains a complete and accurate
list of the following information for each retired employee or director
of any Acquired Company, or their dependents, receiving benefits or
eligible to receive benefits in the future: (a) name, (b) benefit, (c)
payment option election, (d) retiree medical insurance coverage, (e)
retiree life insurance coverage, and (f) other benefits.
2.22 LABOR RELATIONS; COMPLIANCE. Except as set forth in Schedule 2.22,
no Acquired Company has been nor is a party to any collective bargaining or
other labor Contract. There has not been, there is not presently pending or
existing, and there is not Threatened, (a) any strike, slowdown, picketing, work
stoppage, or employee grievance process, (b) any Proceeding against or affecting
any Acquired Company relating to the alleged violation of any Legal Requirement
pertaining to labor relations or employment matters, including any charge or
complaint filed by an employee or union with the National Labor Relations Board,
the Equal Employment Opportunity Commission, or any comparable Governmental
Body, organizational activity, or other
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labor or employment dispute against or affecting the Company or its premises, or
(c) any application for certification of a collective bargaining agent. No event
has occurred or circumstance exists that could provide the basis for any work
stoppage or other labor dispute. There is no lockout of any employees by any
Acquired Company, and no such action is contemplated by any Acquired Company.
Each Acquired Company has complied in all respects with all Legal Requirements
relating to employment, equal employment opportunity, nondiscrimination,
immigration, wages, hours, benefits, collective bargaining, the payment of
social security and similar taxes, occupational safety and health, and plant
closing. No Acquired Company is liable for the payment of any compensation,
damages, taxes, fines, penalties, or other amounts, however designated, for
failure to comply with any of the foregoing or other Legal Requirements.
2.23 SUBSIDIARIES. Except for the (i) Subsidiary, (ii) the
Xxxxxxxx-Xxxxxxxxx Charitable Foundation, which has been dissolved, and (iii)
stock in a publicly traded company which does not exceed one (1%) percent of the
outstanding equity interest of such publicly traded company, the Company does
not own nor has ever owned, directly or indirectly, any equity, profit or other
interest in any subsidiary, or other Person which may result in any Liability to
the Company.
2.24 FINDERS OR BROKER FEES. There are no broker commissions, finders
fees or other payments of like nature payable to any Person in connection with
the Contemplated Transactions and in no event will Buyer or any Acquired Company
have any Liability for any fee or commission including, but not limited to, any
finders, originators or brokers fee in connection with the Contemplated
Transactions.
2.25 RELATED PARTY TRANSACTIONS. Except as described in Schedule 2.25
and except as otherwise disclosed in this Agreement or any of the Schedules
attached hereto, no Acquired Company has engaged in any purchase, lease, sale or
other transaction involving any Seller, any officer, director, employee or
Representative of any Acquired Company, any of their respective representatives,
or any Person owned or controlled, in whole or in part, by any such parties,
within the last five (5) years. No Acquired Company has any outstanding loan or
other advances, directly or indirectly, to or from any of the Sellers, any
officer, director or employee or Representative or any Acquired Company, any
affiliate or relative of Sellers or any entity in which either Sellers or any
Acquired Company have a direct or indirect interest. Except for the obligations
set forth in this Agreement and the obligations arising from the ordinary course
of employment by the Acquired Companies (including, but not limited to any
compensation and accrued benefits or right to reimbursement), no Acquired
Company has, or after Closing shall have, any Liability to the Sellers.
2.26 ASSETS OF XXXXXXXXX. Xxxxxxxxx shall furnish a sworn statement
relating to his assets which is subject to a confidentiality agreement. Such
sworn statement is true, accurate and complete in all respects and is
incorporated herein by reference.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
As a material inducement of Sellers entering into this Agreement and
knowing and acknowledging that Seller is relying upon the same, Buyer hereby
makes, as of the date hereof and as of the Closing Date, the following
representations and warranties to Seller:
3.1 ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Michigan.
3.2 AUTHORITY; NO CONFLICT.
3.2.1 This Agreement constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its
terms. Buyer has the absolute and unrestricted right, power, and
authority to execute and deliver this Agreement and to perform its
obligations under this Agreement.
3.2.2 Except as set forth in Schedule 3.2.2, neither the
execution and delivery of this Agreement by Buyer, nor the consummation
or performance of any of the Contemplated Transactions by Buyer will
give any Person the right to prevent, delay, or otherwise interfere
with any of the Contemplated Transactions pursuant to:
(a) Any provision of Buyer's Organizational
Documents;
(b) Any resolution adopted by the board of directors
or the policyholders of Buyer;
(c) Any Legal Requirement or Order to which Buyer may
be subject; or
(d) Any Contract to which Buyer is a party or by
which Buyer may be bound.
Except as set forth in Schedule 3.2.2, Buyer is not and will not be
required to obtain any Consent from any Person in connection with the
execution and delivery of this Agreement or the consummation or
performance of any of the Contemplated Transactions.
3.3 CERTAIN PROCEEDINGS. There is no pending Proceeding that has been
commenced against Buyer and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions. To Buyer's Knowledge, no such Proceeding has been
Threatened.
3.4 FINDERS OR BROKERS FEES. There are no broker commissions, finders
fees or other payments of like nature payable to any Person retained by Buyer in
connection with the
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Contemplated Transactions and in no event will Sellers have any liability for
any fee or commission including, but not limited to, any finders, originator or
broker's fee in connection with the Contemplated Transaction.
3.5 PURCHASE FOR OWN ACCOUNT. Buyer has acquired the Shares for its own
account, for investment purposes only, not for the account of others and not
with the intent toward the distribution or transfer thereof.
ARTICLE IV
COVENANTS OF SELLERS
Sellers, jointly and severally, make the following covenants to Buyer:
4.1 ACCESS AND INVESTIGATION. Between the date of this Agreement and
the Closing Date, Sellers will, and will cause each Acquired Company to (a)
afford Buyer and its representatives and prospective lenders and their
representatives (collectively, "Buyer's Advisors") full and free access to each
Acquired Company's personnel, properties, Contracts, books and records, and
other documents and data, (b) furnish Buyer and Buyer's Advisors with copies of
all such Contracts, books and records, and other existing documents and data as
Buyer may request, and (c) furnish Buyer and Buyer's Advisors with such
additional financial, operating, and other data and information as Buyer may
request.
4.2 OPERATION OF THE BUSINESS OF THE COMPANY. Between the date of this
Agreement and the Closing Date, Sellers will, and will cause each Acquired
Company to:
4.2.1 Conduct the business of such Acquired Company only in
the Ordinary Course of Business;
4.2.2 Preserve intact the current business organization of the
Company, keep available the services of the current officers,
employees, and Representatives of each Acquired Company, and maintain
the relations and good will with suppliers, customers, landlords,
creditors, employees, agents, and others having business relationships
with each Acquired Company;
4.2.3 Confer with Buyer concerning operational matters of a
material nature;
4.2.4 Report periodically to Buyer concerning the status of
the business, operations, and finances of each Acquired Company;
4.2.5 Not enter into any transaction or conduct any activity
described in Section 2.17 of this Agreement other than in the Ordinary
Course of Business;
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4.2.6 Not to take any affirmative action, or fail to take any
action which may reasonably result in any breach, failure, error or
misrepresentation under any representation, warranty, covenant or
provision of this Agreement or in any Material Adverse Effect to the
Company or its business, prospects, assets, liabilities or rights;
4.3 REQUIREMENT; APPROVALS. As promptly as practicable after the date
of this Agreement, Sellers will, and will cause each Acquired Company to, make
all filings required by Legal Requirements to be made by it in order to
consummate the Contemplated Transactions. Between the date of this Agreement and
the Closing Date, Sellers will, and will cause each Acquired Company to, (a)
cooperate with Buyer with respect to all filings that Buyer elects to make or is
required by Legal Requirements to make in connection with the Contemplated
Transaction, and (b) cooperate with Buyer in obtaining all Consents identified
in Schedule 2.3. Any expenses to be paid to Governmental Bodies for Governmental
Authorization shall be paid one-half (1/2) by Sellers and one-half (1/2) by
Buyer.
4.4 NOTIFICATION. Between the date of this Agreement and the Closing
Date, each of the Sellers will promptly notify Buyer in writing if any Seller or
any Acquired Company becomes aware of any fact or condition that causes or
constitutes a Breach of any of Seller's representations and warranties as of the
date of this Agreement, or if any Seller or any Acquired Company becomes aware
of the occurrence after the date of this Agreement of any fact or condition that
would cause or constitute a Breach of any such representation or warranty had
such representation or warranty been made as of the time of occurrence or
discovery of such fact or condition. Should any such fact or condition require
any change in the Schedules if the Schedules were dated as of the date of the
occurrence or discovery of any such fact or condition, Sellers will promptly
deliver to Buyer a supplement to the Schedules specifying such change. During
the same period, each Seller will promptly notify Buyer of the occurrence of any
Breach of any covenant of a Seller in this Article 4 or of the occurrence of any
event that may make the satisfaction of the conditions in Article 6 impossible
or unlikely. Notwithstanding anything contained in this Section 4.4, no
disclosure, supplement to Schedule or other action taken by Sellers as required
or described herein shall be deemed to amend or supplement this Agreement or any
Schedule, or to cure any misrepresentation, Breach or failure of Sellers under
this Agreement or to waive any right or remedy of Buyer for such
misrepresentation, Breach or failure.
4.5 PAYMENT OF INDEBTEDNESS BY RELATED PERSONS. Except as expressly
provided in this Agreement, Sellers will cause all indebtedness owed to any
Acquired Company by Sellers or any related Person of Sellers to be paid in full
prior to Closing.
4.6 NO NEGOTIATION. Until such time, if any, as this Agreement is
terminated pursuant to Article 8, Sellers will not, and will cause any Acquired
Company and its representatives not to, directly or indirectly solicit,
initiate, or encourage any inquiries or proposals from, discuss or negotiate
with, provide any non-public information to, or consider the merits of any
unsolicited inquiries or proposals from, any Person (other than Buyer) relating
to any transaction involving the sale of the business or assets (other than in
the Ordinary Course of Business) of the Company,
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or any of the Shares or any capital stock of the Company, or any merger,
consolidation, shares exchange, reorganization, business combination, or similar
transaction involving the Company.
4.7 BEST EFFORTS. Between the date of this Agreement and the Closing
Date, Sellers will use their Best Efforts to cause the conditions in Article 6
to be satisfied.
4.8 XXXXXXXX, XXXXXXXXX AND XXXXX, INC. Xxxxxxxxx shall, or shall cause
Xxxxxxxx, Xxxxxxxxx and Xxxxx, Inc., a Michigan corporation ("SC&W"), to perform
all of the following:
4.8.1 Within 12 months of the Closing Date, SC&W's corporate
name must be changed to eliminate permanently Xxxxxxxxx'x surname. Such
action shall be documented and confirmed in writing to Buyer
immediately. Changing SC&W's corporate name to SCW Agency Group, Inc.
is an acceptable name change in compliance with this section.
4.8.2 On or before the Closing Date, Xxxxxxxxx shall resign
from the Board of Directors of SC&W and resign from all other positions
he may hold as an officer or employee of SC&W. Such action shall be
documented and confirmed in writing to Buyer immediately.
4.8.3 Without the prior written consent of the Buyer, at any
time after the Closing Date while Xxxxxxxxx is employed by the Buyer,
Cheeseman shall not serve as a director, officer, employee or
consultant of SC&W or otherwise provide services to SC&W.
4.8.4 Without the prior written consent of the Buyer, as an
employee of the Buyer or an affiliate of the Buyer after the Closing
Date, and during any period subject to Xxxxxxxxx'x non-competition with
MICOA arising from his employment, Xxxxxxxxx will be expressly
prohibited from negotiating any Contracts with SC&W, or otherwise
participating in overseeing SC&W's daily affairs. Subject to provisions
contained otherwise in this Agreement, Xxxxxxxxx may, however, address
issues which impact SC&W by virtue of its status as an insurance agency
for Buyer, but may only do so as necessary and appropriate to his role
as an officer of Buyer representing Buyer's interests.
4.8.5 Xxxxxxxxx and his MICOA management team shall use Best
Efforts to cause SC&W to provide at least annual written reports to the
Buyer comparing SC&W's commission rates and performance against other
agents in the markets served by SC&W.
4.8.6 Prior to any transaction between Xxxxxxxxx and SC&W,
except as to actions relating to his stock in the normal course of
business such as voting his SC&W stock for the election of officers or
directors or the receipt of nonextraordinary dividends, Xxxxxxxxx shall
disclose the material facts of the transaction and his interest therein
to MICOA. Thereafter, a majority of Buyer's Board of Directors other
than Xxxxxxxxx must approve or ratify any such disclosed transactions.
In determining whether to approve or ratify the transaction, the Board
of Directors shall not unreasonably withhold approval.
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Prior to the approval or execution of any agreements between Buyer or
its successors and SC&W, Xxxxxxxxx shall so disclose them to MICOA.
Thereafter, a majority of Buyer's Board of Directors other than
Cheeseman must approve or ratify any such disclosed agreements.
4.8.7 Xxxxxxxxx expressly acknowledges and agrees that a
Breach of any of the covenants contained in this Section 4.8 will
result in unmeasurable damages to Buyer. Therefore, the parties agree
that upon breach of Xxxxxxxxx of this Section 4.8, Xxxxxxxxx will pay
Buyer the sum of Two Million ($2,000,000) Dollars as liquidated
damages. The Damages provided in this subparagraph shall not exceed Two
Million Dollars ($2,000,000) in total whether or not multiple breaches
have been alleged or have occurred.
4.9 SECTION 338(h)(10) ELECTION. Each of the Sellers shall join with
Buyer in making an election under IRC Section 338(h)(10) (and any corresponding
elections under state, local, or foreign tax law) (collectively, a "Section
338(h)(10) Election") with respect to the purchase and sale of the Shares.
Sellers will pay any Tax, including any Liability of the Acquired Companies for
Taxes resulting from the application of Treasury Regulation
ss.1.338(h)(10)-1(e)(5), attributable to the making of the Section 338(h)(10)
Election and will indemnify the Buyer, and the Acquired Companies against any
Damages (as hereinafter defined in Article IX) arising out of any failure to pay
such Tax. Sellers will also pay any state, local, or foreign Tax (and indemnify
the Buyer and the Acquired Companies against any Damages arising out of any
failure to pay such Tax) attributable to an election under state, local or
foreign law similar to the election available under IRC Section 338(g) (or which
results from the making of an election under IRC 338(g) of the Code) with
respect to the purchase and sale of the Shares. Buyer and Sellers agree to
follow an allocation of purchase price consistent with the allocation provided
in 1.3.11 and the provisions of Section 338 and the regulations thereunder for
purposes of all relevant tax return filings. Buyer and Sellers will not
voluntarily take any action inconsistent with the validity of the mutual Section
338(h)(10) election or inconsistent with the asset values determined herein for
purposes of all tax returns and examinations thereof.
ARTICLE V
COVENANTS OF BUYER PRIOR TO CLOSING DATE
Buyer makes the following covenants to Sellers:
5.1 APPROVALS OF GOVERNMENTAL BODIES. As promptly as practicable after
the date of this Agreement, Buyer will make all filings required by Legal
Requirements to be made by it to consummate the Contemplated Transactions.
Between the date of this Agreement and the Closing Date, Buyer will cooperate
with Sellers with respect to all filings that Sellers are required by Legal
Requirements to make in connection with the Contemplated Transactions, and
cooperate with Sellers in obtaining all Consents.
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5.2 BEST EFFORTS. Between the date of this Agreement and the Closing
Date, Buyer will use its Best Efforts to cause the conditions in Article 7 to be
satisfied.
5.3 DISTRIBUTIONS BY THE COMPANY. It is the intention of the parties
that the Sellers retain the cash and earnings to the date of Closing. In order
to carry out this intention, the parties will take the following actions:
5.3.1 Notwithstanding the provisions of Section 4.2, the
Company may distribute to the Sellers any and all available cash (or
equivalents). If any cash is held by the Company at Closing, the
Company will distribute it to the Sellers in proportion to their
stockholdings prior to Closing as soon as practicable after Closing.
5.3.2 As soon as practicable following the Closing, the
Company will distribute to the Sellers in proportion to their stock
holdings prior to Closing, the amount of any expense reimbursement to
which the Company is entitled by Buyer or its subsidiaries under
Management Services Agreements as of the Date of Closing which were
paid by the Company on or before the Closing but not yet reimbursed by
Buyer.
5.3.3 As soon as practicable following the Closing, the
Company will distribute to the Sellers, in proportion to their
stockholdings prior to Closing, the amount of any incentive payments
which have been earned prior to the Closing Date pursuant to Management
Services Agreements with Buyer or its subsidiaries. Such distribution
will be an additional purchase price payment as provided in 1.3.10.
5.3.4 As soon as practicable after the amount can be
determined (following the end of the calendar year), the Company shall
distribute to the Sellers, in proportion to their stockholdings prior
to Closing, the amount of incentive payments due to the Company by
Buyer or its subsidiaries pursuant to Management Services Agreements
which cannot be determined prior to the end of the Calendar Year in
which the sale is closed, which incentive payments shall be prorated to
the Closing Date. Such distribution will be an additional purchase
price payment as provided in 1.3.10.
ARTICLE VI
CONDITIONS PRECEDENT OF BUYER'S OBLIGATION TO CLOSE
All of Buyer's obligations under this Agreement, including, without
limitation, Buyer's obligations to purchase the Shares and to take the other
actions required to be taken by Buyer under this Agreement or at the Closing,
are subject to the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived in writing by Buyer, in whole
or in part):
6.1 ACCURACY OF REPRESENTATIONS. All of Sellers' representations and
warranties in this Agreement, individually and in the aggregate, must be and
remain accurate in all respects as of
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the date of this Agreement, and must be accurate in all respects as of the
Closing Date as if made on the Closing Date.
6.2 SATISFACTORY DUE DILIGENCE AND APPROVAL OF THE BOARD OF DIRECTORS.
The Buyer shall be satisfied, in its sole discretion, with the results of its
due diligence investigation and the Buyer's Board of Directors shall have
approved this Agreement, the Contemplated Transactions and all other agreements
in connection therewith.
6.3 SELLERS' PERFORMANCE.
6.3.1 All of the covenants and obligations that Sellers are
required to perform or to comply with pursuant to this Agreement at or
prior to the Closing, individually and in the Aggregate, must have been
duly and fully performed and complied with in all respects.
6.3.2 Each document, agreement, instrument or certificate
required to be executed and/or delivered by Sellers shall have been
duly executed and/or delivered, as applicable.
6.4 CONSENTS. Each of the Consents must have been obtained and must be
in full force and effect.
6.5 ADDITIONAL DOCUMENTS. Each of the following documents must have
been delivered to Buyer:
6.5.1 An opinion of MacLean, Seaman, Xxxxx & Guilford, P.L.C.,
legal counsel to the Sellers, dated as of the Closing Date, in the form
of Exhibit 6.5.1; and
6.5.2 Such other documents as Buyer may reasonably request for
the purpose of (i) evidencing the accuracy of any of Sellers'
representations and warranties, (ii) evidencing the performance by any
Seller of, or the compliance by any Seller with, any covenant or
obligation required to be performed or complied with by such Seller,
(iii) evidencing the satisfaction of any condition referred to in this
Article 6, or (iv) otherwise facilitating the consummation or
performance of any of the Contemplated Transactions.
6.6 NO PROCEEDINGS. Since the date of this Agreement, there must not
have been commenced or Threatened against Buyer, or against any Person
affiliated with Buyer, any Proceeding (a) involving any challenge to, or seeking
damages or other relief in connection with, any of the Contemplated
Transactions, or (b) that may have the effect of preventing, delaying, making
illegal, or otherwise interfering with any of the Contemplated Transactions.
6.7 NO CLAIM REGARDING STOCK OWNERSHIP OF SALE PROCEEDS. There must not
have been made or Threatened by any Person any claim asserting that such Person
(a) is the holder or
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the beneficial owner of, or has the right to acquire or to obtain beneficial
ownership of, any Shares or stock of, or any other voting, equity, or ownership
interest in, and Acquired Company, or (b) is entitled to all or any portion of
the Purchase Price payable for the Shares.
6.8 NO PROHIBITION. Neither the consummation nor the performance of any
of the Contemplated Transactions will, directly or indirectly (with or without
notice or lapse of time), materially contravene, or conflict with, or result in
a material violation of, or cause Buyer or any Person affiliated with Buyer to
suffer any adverse consequence under, (a) any applicable Legal Requirement or
Order, or (b) any Legal Requirement or Order that has been published,
introduced, or otherwise proposed by or before any Governmental Body.
6.9 RESIGNATION OF OFFICERS. Buyer shall have received the
resignations, effective as of the Closing, in accordance with Schedule 1.5.1.
6.10 FINANCING. The Buyer shall have obtained, on terms and conditions
satisfactory to it, all of the financing necessary in order to consummate the
Contemplated Transactions and fund the working capital requirements of the
Company after the Closing.
6.11 EMPLOYMENT AGREEMENTS. The Buyer shall have entered into
Employment Agreements with Sellers, in the form attached hereto as Exhibit 6.11
(Employment Agreements").
ARTICLE VII
CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
All of Sellers' obligations under this Agreement, including, without
limitation, Sellers' obligation to sell the Shares and to take the other actions
required to be taken by Sellers at the Closing are subject to the satisfaction,
at or prior to the Closing, of each of the following conditions (any of which
may be waived in writing by Sellers, in whole or in part):
7.1 ACCURACY OF REPRESENTATIONS. All of Buyer's representations and
warranties in this Agreement, individually and in the Aggregate, must be and
remain accurate in all respects as of the date of this Agreement and must be
accurate in all respects as of the Closing Date as if made on the Closing Date.
7.2 BUYER'S PERFORMANCE.
7.2.1 All of the covenants and obligations that Buyer is
required to perform or to comply with pursuant to this Agreement at or
prior to the Closing, individually and in the aggregate, must have been
duly and fully performed and complied with in all respects.
7.2.2 Each document, agreement, instrument or certificate
required to be executed and/or delivered by Buyer shall have been duly
executed and/or delivered, as applicable.
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7.3 ADDITIONAL DOCUMENTS. Buyer must have caused to be delivered to
Sellers such documents as Sellers may reasonably request for the purpose of (i)
evidencing the accuracy of any representation or warranty of Buyer, (ii)
evidencing the performance by Buyer of, or the compliance by Buyer with, any
covenant or obligation required to be performed or complied with by Buyer, (iii)
evidencing the satisfaction of any condition referred to in this Section 7, or
(iv) otherwise facilitating the consummation of any of the Contemplated
Transactions.
7.4 NO INJUNCTION. There must not be in effect any Legal Requirement or
any injunction or other Order that (a) prohibits the sale of the Shares by
Sellers to Buyer, and (b) has been adopted or issued, or has otherwise become
effective, since the date of this Agreement.
7.5 EMPLOYMENT AGREEMENTS. The Sellers shall have entered into the
Employment Agreements.
7.6 OPINION. An Opinion of Xxxx, Xxxxxxx and Xxxxx, PLC, legal counsel
to the Buyer, dated as of the Closing Date, in the form of Exhibit 7.6.
7.7 CONSENTS. Each of the Consents must have been obtained and be in
full force and effect.
7.8 MODIFICATION OF MANAGEMENT AGREEMENT. The Management Agreements
must have been modified to the mutual satisfaction of the parties.
ARTICLE VIII
TERMINATION
8.1 TERMINATION EVENTS. This Agreement may, by notice given prior to or
at the Closing, be terminated:
8.1.1 By either Buyer or Sellers if a Breach of any provision
of this Agreement has been committed by the other party and such Breach
has not been waived in writing;
8.1.2 By (a) Buyer if any of the conditions in Article 6 have
not been satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure of
Buyer to comply with its obligations under this Agreement) and Buyer
has not waived in writing such condition on or before the Closing Date;
or (b) Sellers, if any of the conditions in Article 7 has not been
satisfied of the Closing Date or if satisfaction of such a condition is
or becomes impossible (other than through the failure of Sellers to
comply with their obligations under this Agreement) and Sellers have
not waived in writing such condition on or before the Closing Date;
8.1.3 By mutual consent of Buyer and Sellers; or
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8.1.4 By either Buyer or Sellers if the Closing has not
occurred (other than through the failure of any party seeking to
terminate this Agreement to fully comply with its obligations under
this Agreement) on or before January 31, 2000, or such later date as
the parties may agree upon.
8.2 EFFECT OF TERMINATION. Each party's right of termination under
Section 8.1 is in addition to any other rights it may have under this Agreement
or otherwise, and the exercise of a right of termination will not be an election
of remedies. If this Agreement is terminated pursuant to Section 8.1, all
further obligations of the parties under this Agreement will terminate, except
that the obligations in Sections 11.2, 11.4 and 11.5 will survive; provided,
however, that if this Agreement is terminated by a party because of the Breach
of the Agreement by the other party or because one or more of the conditions to
the terminating party's obligations under this Agreement is not satisfied as a
result of the other party's failure to comply with its obligations under this
Agreement, the terminating party's right to pursue all legal remedies will
survive such termination unimpaired.
ARTICLE IX
INDEMNIFICATION, REMEDIES AND POST CLOSING COVENANTS
9.1 INDEMNIFICATION AND PAYMENT OF DAMAGES BY XXXXXXXXX. Except for
"Damages" (as hereinafter defined) for which an Acquired Company would have been
reimbursed by the Buyer pursuant to the Management Agreement, Xxxxxxxxx will
indemnify, defend and hold harmless Buyer, and each Acquired Company and their
respective representatives, stockholders, controlling Persons, and affiliates
(collectively, the "Indemnified Persons") for, and will pay to the Indemnified
Persons the amount of, any loss, Liability, claim, damage (including incidental
and consequential damages), expense (including costs of investigation, defense
and reasonable attorneys' fees) or diminution of value (after deduction for any
insurance reimbursement and third party recoveries), whether or not involving a
third-party claim (collectively, "Damages"), arising, directly or indirectly,
from or in connection with:
9.1.1 Any Breach of any representation or warranty made in
this Agreement, the Schedules, the supplements to the Schedules, or any
other certificate or document delivered pursuant to this Agreement;
9.1.2 Any Breach by Cheeseman of any covenant or obligation of
Sellers in this Agreement;
9.1.3 Any Liability or claim for any Tax which relates to any
period prior to the Closing Date and any Tax which is a result of the
338(h)(10) Election;
9.1.4 Any Liability of the Company incurred or arising from
any circumstances or events prior to or as of the Closing Date which is
not reflected on the Interim Financial Statement, except for accounts
payable and accrued expenses incurred from the operations
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of the Company in the Ordinary Course of Business since the date of the
Interim Financial Statement and reflected in the books and records of
the Company;
9.2 INDEMNIFICATION BY GAUGIER. Except for Damages for which an
Acquired Company would have been reimbursed by the Buyer pursuant to the
Management Agreement, Gaugier will indemnify, defend and hold harmless
Indemnified Persons, and will pay to the Indemnified Persons, the amount of any
Damages arising, directly or indirectly, from or connection with any Breach of
any of the representations or warranties made by Seller contained in Sections
2.1, 2.2 and 2.4. The aggregate amount of Damages to which the Buyer shall be
entitled to receive from Gaugier shall not exceed the Purchase Price received by
Gaugier.
9.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER. Buyer will
indemnify and hold harmless Seller, and will pay to Seller the amount of any
Damages arising, directly or indirectly, from or in connection with (a) any
Breach of any representation or warranty made by Buyer in this Agreement or in
any certificate delivered by Buyer pursuant to this Agreement, or (b) any Breach
by Buyer of any covenant or obligation of Buyer in this Agreement.
9.4 LIMITATIONS ON INDEMNITY. Notwithstanding anything in this
Agreement to the contrary, the aggregate amount of Damages to which the Buyer
shall be entitled shall not exceed the Purchase Price (the "Indemnification
Ceiling") and the Buyer shall be entitled to Damages for an amount not in excess
to the Indemnification Ceiling only to the extent that the aggregate amount of
all Damages exceed the sum of One Hundred Thousand ($100,000.00) Dollars.
9.5 SURVIVAL REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS.
Each of the representations, warranties, covenants and agreements made by the
Sellers in this Agreement are pursuant hereto shall survive for a period of
three (3) years after the Closing of the Contemplated Transactions, except that
(i) the representations and warranties contained in Section 2.2 and 2.4 shall
continue indefinitely, (ii) the representations contained in Section 2.11 shall
survive for a period commensurate with any applicable statute of limitations
and, (iii) the covenants contained in Sections 4.8 and 4.9 shall survive for a
period commensurate with any applicable statute of limitations.
9.6 SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS
BY BUYER. Each of the representations, warranties, covenants and agreements made
by the Buyer in this Agreement are pursuant hereto shall survive the Closing for
a period commensurate with any applicable statute of limitations.
9.7 EXCLUSIVE REMEDY. The Buyer and the Sellers acknowledge and agree
that the foregoing indemnification provisions contained in this Article IX shall
be the sole and exclusive remedy of the Buyer and the Seller with respect to the
Contemplated Transactions.
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ARTICLE X
DEFINITIONS
For purposes of this Agreement, the following terms have the following
meanings:
10.1 "ACQUIRED COMPANIES" shall mean the Company and the Subsidiary.
10.2 "ACQUIRED COMPANY" shall mean each of the Company and the
Subsidiary.
10.3 "AGREEMENT" shall mean this Stock Purchase Agreement together with
all Schedules, documents, exhibits and instruments delivered in connection with
this Stock Purchase Agreement.
10.4 "BEST EFFORTS" shall mean the efforts that a prudent Person
desirous of achieving a result would use in similar circumstances to ensure that
such result is achieved as expeditiously as possible.
10.5 "BREACH" shall mean a breach of a representation, warranty,
covenant, obligation, or other provision of this Agreement, any Schedule or any
instrument delivered pursuant to this Agreement which the Party alleging a
Breach reasonably determines to be material in isolation or along with other
breaches. Notwithstanding anything in this Agreement to the contrary, if a
breach is due to any inaccuracy in a representation or Schedule, the other Party
shall be entitled to recover any Damages resulting therefrom as provided under
Article IX of this Agreement, but such breach shall not otherwise be deemed a
breach.
10.6 "CHANGE IN CONTROL" shall occur if there is: a loss of, direct or
indirect, voting or equity control of the Buyer (or of any resulting
organization) by Buyer's policyholders; or, a change of more than 50% of MICOA's
board of directors in any contiguous period of 24 months due to other than
death, disability, retirement of sitting directors, or normal expiration of
director terms. By way of clarification, but not limitation, no Change in
Control shall occur from (a) the reorganization, consolidation or dissolution of
one or more of Buyer's current or future subsidiaries, divisions or affiliates;
(b) as a result of the full or partial completion of a mutual holding company
reorganization, not resulting in the loss of Buyer's policy holders voting or
equity control; (c) the full or partial demutualization of Buyer's absent loss
of policy holder voting or equity control; or (d) any other process firm which
Xxxxxxxxx consents to any proposed transaction which does not displace Buyer's
policy holder voting or equity control.
10.7 "CLOSING DATE" shall mean the date and time as of which the
Closing actually takes place.
10.8 "CONSENT" or "CONSENTS" shall mean any approval, consent,
ratification, waiver, or other authorization (including, without limitation, any
Governmental Authorization) of any Person (i) listed in Schedule 2.3, (ii)
required to be obtained in order to consummate the Contemplated Transactions,
and (iii) listed in Schedule 10.8.
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10.9 "CONTEMPLATED TRANSACTIONS" shall mean all of the transactions
contemplated by this Agreement, including, without limitation:
10.9.1 The sale of the Shares by Sellers to Buyer;
10.9.2 The execution, delivery, and performance of the
Noncompetition Agreements, the Releases and the Employment Agreements;
10.9.3 The performance by Buyer and Sellers of their
respective covenants and obligations under this Agreement; and
10.9.4 Buyer's acquisition and ownership of the Shares and
exercise of control over the Company.
10.10 "CONTRACT" shall mean any agreement (or group of related
agreements), contract, obligation, option, commitment, promise or understanding
(whether written or oral and whether expressed or implied) (a) under which any
Acquired Company has or may acquire any rights, (b) under which any Acquired
Company has or may become subject to any obligation or Liability, (c) by which
any Acquired Company or any of the assets owned or used by it is or may become
bound, or (d) which may relate to, establish or restrict any rights or
obligations affecting the Shares or any present or future securities of any
Acquired Company. Solely for the purposes of any disclosure schedule required
pursuant to this Agreement, the term "Contract" shall not include purchase
commitments made in the ordinary course of business at amounts less than Ten
Thousand ($10,000) Dollars, nor shall include any "Management Agreement" or any
other Management Service Agreement entered into between the Buyer (or any
subsidiary of the Buyer) and the Company (or any subsidiary of the Company).
10.11 "EMPLOYEE BENEFIT PLAN" shall mean any qualified and/or
non-qualified fringe benefit, disability, health, medical, life insurance,
supplemental compensation, incentive, wage continuation, retirement, pension,
profit sharing, bonus, deferred compensation, stock ownership or other plan,
trust, policy or arrangement involving any past, present or future employee,
consultant, representative, or agent of any Acquired Company, including without
limitation any plan, program or arrangement defined in or relevant to any
provision of ERISA.
10.12 "ENCUMBRANCE" shall mean any charge, claim, community property or
dower interest, mortgage, equitable interest, lien, option, pledge, security
interest, right of first refusal, contract, Liability or restriction of any
kind, including any restriction on use, voting, transfer, receipt of income, or
exercise of any other attribute of ownership.
10.13 "EMPLOYMENT AGREEMENTS" shall have the meaning set forth in
Section 6.11.
10.14 "ENVIRONMENT" shall mean any soil, land surface or subsurface
strata, surface waters (including, without limitation, navigable waters, ocean
waters, streams, ponds, drainage basins, and wetlands), ground waters, drinking
water supply, stream, sediments, ambient air
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(including indoor air), plant and animal life, and any other environmental
medium or natural resource.
10.15 "ENVIRONMENTAL, HEALTH, AND SAFETY LIABILITIES" shall mean any
cost, damage, expense, Liability, obligation, or other responsibility arising
from or under Environmental Law or Occupational Safety and Health Law including,
without limitation, any costs, damage, financial responsibility, expenses,
liabilities, obligations or other Liability for, arising out of or relating to:
10.15.1 The Environment;
10.15.2 The presence, generation, use, handling, transport,
recycling, reclamation, disposal, treatment, storage or release of any
Hazardous Material;
10.15.3 Any environmental, health, or safety matters or
conditions (including on-site or off-site contamination, occupational
safety and health, and regulation of chemical substances or products);
10.15.4 Fines, penalties, judgments, awards, settlements,
legal or administrative Proceedings, damages, losses, claims, demands
and response, investigative, remedial and inspection costs and expenses
arising under Environmental Law or Occupational Safety and Health Law;
10.15.5 Any Environmental Law or Occupational Safety and
Health Law for cleanup costs or corrective action, including any
investigation, cleanup, removal, containment, or other remediation or
response actions ("Cleanup") required by any applicable Environmental
Law or any Occupational Safety and Health Law (whether or not such
Cleanup has been required or requested by any Governmental Body or any
other Person) and for any natural resource damages; and/or
10.15.6 Any other compliance, corrective, investigative, or
remedial measures required under any Environmental Law or any
Occupational Safety and Health Law.
The terms "removal," "remedial," and "response action," include,
without limitation, the types of activities covered by the United States
Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C.
ss. 9601 et seq., as amended ("CERCLA").
10.16 "ENVIRONMENTAL LAW" shall mean any Legal Requirement that
governs, regulates, requires or relates to: (a) advising appropriate
authorities, employees, and the public of intended or actual releases of
pollutants or hazardous substances or materials, violations of discharge limits,
or other prohibitions and of the commencements of activities, such as resource
extraction or construction, that could have significant impact on the
Environment; (b) preventing or reducing to acceptable levels the release of
pollutants or Hazardous Materials into the Environment; (c) reducing the
quantities, preventing the Release, or minimizing the hazardous characteristics
of wastes that are generated; (d) assuring that products are designed,
formulated, packaged, and used
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so that they do not present unreasonable risks to human health or the
Environment when used or disposed of; (e) protecting resources, species, or
ecological amenities; (f) reducing to acceptable levels the risks inherent in
the transportation of Hazardous Materials, pollutants, oil, or other potentially
harmful substances; (g) cleaning up pollutants that have been released,
preventing the Threat of Release, or paying the costs of such clean up or
prevention; (h) making responsible parties pay private parties, or groups of
them, for damages done to their health or the Environment, or permitting
self-appointed representatives of the public interest to recover for injuries
done to public assets; (i) Hazardous Activities, Hazardous Materials,
pollutants, petroleum products, oil, asbestos or other potentially harmful
substances; or (j) the protection of the health, safety and welfare of the
public, water health and safety and pollution and/or protection of the
Environment.
10.17 "ERISA" shall mean the Employee Retirement Income Security Act of
1974 or any successor law, and regulations and rules issued pursuant to that Act
or any successor law.
10.18 "FIDUCIARY" shall have the meaning as defined in ERISA ss.3(21).
10.19 "FINANCIAL STATEMENTS" shall have the meaning set forth in
Section 2.5.
10.20 "GAAP" shall mean the United States generally accepted accounting
principles, consistently applied.
10.21 "GOVERNMENTAL AUTHORIZATION" shall mean any approval, consent,
license, permit, waiver, or other authorization issued, granted, given, or
otherwise made available by or under the authority of any Governmental Body or
pursuant to any Legal Requirement.
10.22 "GOVERNMENTAL BODY" shall mean any: (a) federal, state, local,
municipal, foreign, or other government; or (b) governmental or
quasi-governmental authority of any nature, including without limitation, (i)
any governmental agency, branch, department, official, or entity, (ii) any
court, judicial authority or other tribunal, and (iii) any arbitration body or
tribunal;
10.23 "HAZARDOUS ACTIVITY" shall mean the distribution, generation,
handling, importing, management, manufacturing, processing, production,
refinement, Release, storage, transfer, transportation, treatment, or use of
Hazardous Materials in, on, under, about, or from the Facilities or any part
thereof into the Environment, and/or any other act, business, operation, or
action that poses a risk of illness or property damage or diminution in value of
any property resulting from Hazardous Materials.
10.24 "HAZARDOUS MATERIALS" shall mean any waste or other substance
that is listed, regulated, defined, designated, or classified under, or
otherwise determined to be, hazardous, radioactive, toxic, or a pollutant or a
contaminant pursuant to, any Environmental Law and shall include materials or
equipment containing polychlorinated biphenals or asbestos in any form.
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10.25 "IRC" shall mean the Internal Revenue Code of 1986 or any
successor law, and all U. S. Treasury regulations and rulings issued by the IRS
or any Governmental Authority pursuant to the Internal Revenue Code or any
successor law.
10.26 "IRS" shall mean the United States Internal Revenue Service or
any successor agency, and the United States Department of the Treasury.
10.27 "KNOWLEDGE" of any Person shall be deemed to include a particular
fact or other matter if: (a) such Person is actually aware of such fact or other
matter; or (b) a prudent Person could be expected to discover or otherwise
become aware of such fact or other matter in the course of conducting a
reasonably comprehensive investigation concerning the existence of such fact or
other matter. A Person other than an individual will be deemed to have
"Knowledge" of a particular fact or other matter if any individual who is
serving, or who has at any time served, as a director, officer, partner,
executor, or trustee of such Person (or in any similar capacity) has, or at any
time had, Knowledge of such fact or other matter.
10.28 "LEGAL REQUIREMENT" shall mean any federal, state, local,
municipal, foreign, international, multinational, or other administrative order,
constitution, law, operational memorandum, guidance documents, policy, charter,
ordinance, rule, code, principle of common law, case, decision, regulation,
statute, or treaty including, without limitation, Environmental Laws,
Occupational Safety and Health Laws, Orders, ERISA and the IRC.
10.29 "LIABILITY" shall mean any liability or obligation whether known
or unknown, foreseeable or unforeseeable, whether asserted or unasserted,
whether absolute or contingent, whether accrued or unaccrued, whether liquidated
or unliquidated, and whether due or to become due.
10.30 "MANAGEMENT AGREEMENT" shall mean the Management Services
Agreements by and between Buyer (or any subsidiary of the Buyer) and any
Acquired Company.
10.31 "MATERIAL ADVERSE CHANGE (OR EFFECT)" means a change (or effect),
in the condition (financial or otherwise), properties, assets, liabilities,
rights, obligations, business or prospects of any Person which change (or
effect), individually or in the aggregate, is materially adverse to such
condition, properties, assets, liabilities, rights, obligations, business or
prospects of as Person.
10.32 "OCCUPATIONAL SAFETY AND HEALTH LAW" shall mean any Legal
Requirement which governs, regulates or relates to safety and health conditions
or is designed to provide safe and healthful working conditions and to reduce
occupational safety and health hazards, and any program, whether governmental or
private (including those promulgated or sponsored by industry associations and
insurance companies), designed to provide safe and healthful working conditions.
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10.33 "ORDER" shall mean any award, decision, injunction, judgment,
order, ruling, subpoena, or verdict entered, issued, made, or rendered by any
court, administrative agency, or other Governmental Body or by any arbitrator.
10.34 "ORDINARY COURSE OF BUSINESS" shall mean an action taken by a
Person that is consistent with the past practices of such Person and is taken in
the ordinary course of the normal day-to-day operations of such Person and such
action is similar in nature and magnitude to actions customarily taken, without
any authorization by the board of directors (or by any Person or group of
Persons exercising similar authority), in the ordinary course of the normal
day-to-day operations of other Persons that are in the same line of business as
such Person.
10.35 "ORGANIZATIONAL DOCUMENTS" shall mean the articles or
certificates of incorporation and the bylaws of a corporation including any
amendments thereto or restatements thereof, and all resolutions of the Board of
Directors and stockholders of such corporation.
10.36 "PERSON" shall mean any individual, corporation, general or
limited partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union, or other entity or Governmental Body.
10.37 "PROCEEDING" shall mean any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal, administrative,
investigative, or informal) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Body or arbitrator or Person.
10.38 "RELEASE" shall mean any spilling, leaking, emitting,
discharging, depositing, escaping, leaching, dumping, or other releasing into
the Environment, whether intentional or unintentional.
10.39 "SELLERS" shall mean those Persons identified as Sellers in the
introductory Section of this Agreement and shall mean each and every Seller
jointly and severally.
10.40 "TAX" shall mean any federal, state, local or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under IRC
ss.59(A)), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated or other tax, assessment or charge by a Governmental Body of
any kind whatsoever, including any interest, penalty or addition thereto,
whether disputed or not.
10.41 "TAX RETURN" shall mean any return (including any information
return), report, statement, schedule, notice, form, or other document or
information filed with or submitted to, or required to be filed with or
submitted to, any Governmental Body in connection with the determination,
assessment, collection, or payment of any Tax or in connection with the
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administration, implementation, or enforcement of or compliance with any Legal
Requirement relating to any Tax.
10.42 "THREAT OF RELEASE" shall mean a reasonable possibility of a
Release that may require action in order to prevent or mitigate damage to the
Environment that may result from such Release.
10.43 "THREATENED" shall mean a claim, Proceeding, dispute, action, or
other matter if any demand or statement has been made (orally or in writing) or
any notice has been given (orally or in writing), or if any other event has
occurred or any other circumstances exist, that would lead a prudent Person to
conclude that such a claim, Proceeding, dispute, action, or other matter may be
asserted, commenced, taken, or otherwise pursued in the future.
ARTICLE XI
GENERAL PROVISIONS
11.1 CONFIDENTIALITY. Each of the Sellers will maintain and hold in
confidence and not disclose any information concerning the business and affairs
of any Acquired Company that is not already generally available to the public
("Confidential Information"), refrain from using any Confidential Information
except in connection with this Agreement, and deliver promptly to the Buyer or
destroy, at the request and option of the Buyer, all tangible embodiments (and
all copies) of the Confidential Information which are in his possession. In the
event that any of the Sellers is requested or required (by oral question or
request for information or documents in any legal Proceeding, interrogatory,
subpoena, civil investigative demand, or similar process) to disclose any
Confidential Information, such Seller will notify the Buyer promptly of the
request or requirement so that the Buyer may seek an appropriate protective
order or waive compliance with the provisions of this Section. If, in the
absence of a protective order or the receipt of a waiver hereunder, any of the
Sellers is, on the written advice of counsel, compelled to disclose any
Confidential Information to any tribunal or else stand liable for contempt, that
Seller shall use his Best Efforts to obtain, an Order or other assurance that
confidential treatment will be accorded to such portion of the Confidential
Information required to be disclosed.
11.2 EXPENSES. Except as otherwise expressly provided in this
Agreement, the Sellers, on the one hand, and the Buyer, on the other hand, shall
bear their own respective expenses incurred in connection with the preparation,
execution, and performance of this Agreement and the Contemplated Transactions,
including, but not limited to fees and expenses of agents, representatives,
investment bankers, advisors, consultants, counsel, and accountants
(collectively "Transaction Costs"). In the event of termination of this
Agreement, the obligation of each party to pay its own expenses will be subject
to any rights of such party arising from a Breach of this Agreement by another
party.
11.3 SCHEDULES. The Schedules are numbered to correspond to the various
sections of this Agreement relating to the representations and warranties
contained in this Agreement and
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certain other information called for by this Agreement. Unless otherwise
specified, no disclosure made in any particular Schedule shall be deemed made in
any other Schedule unless expressly made therein.
11.4 PUBLIC ANNOUNCEMENTS. Any public announcement or similar publicity
with respect to this Agreement or the Contemplated Transactions will be issued,
if at all, at such time and in such manner as Buyer determines. Unless consented
to by Buyer in advance or required by Legal Requirements, prior to the Closing,
Sellers shall, and shall cause the Company to, keep this Agreement strictly
confidential and may not make any disclosure of this Agreement to any Person.
Sellers and Buyer will consult with each other concerning the means by which the
Company's employees, customers, and suppliers and others having dealings with
the Company will be informed of the Contemplated Transactions, and Buyer will
have the right to be present for any such communication.
11.5 ARBITRATION. Buyer and Sellers shall submit and resolve any
dispute, claim or grievance arising from or relating to the interpretation or
application of this Agreement in accordance with the rules of the American
Arbitration Association as modified by this Agreement. Three arbitrators shall
be chosen: one by Buyer, one by Sellers, and a third by the first two
arbitrators. The initial two arbitrators shall be named within thirty (30) days
of the initiation of proceedings, and they shall choose the third arbitrator,
who must be a neutral attorney licensed in Michigan, within thirty (30) days
following the selection of the arbitrators named by the parties. The third
arbitrator shall function as a hearing officer. Failure to choose any arbitrator
timely shall result in appointment by the American Arbitration Association. Each
party may be represented by legal counsel. Stenographic or other mutually
acceptable record of such proceedings shall be kept. Proceedings shall rely upon
the Michigan Rules of Court and Michigan Rules of Evidence, unless deemed
unreasonable in a particular application by the hearing officer. The arbitrators
shall issue their written opinion within thirty (30) days of the termination of
any hearing. The decision of the arbitrators shall be binding upon Buyer and
Sellers and may be enforced to the fullest extent permitted by law, by a court
of competent jurisdiction, which may enter judgment thereon.
11.6 REPRESENTATIONS. The Buyer acknowledges that the representations
and warranties made by Sellers under this Agreement have been made based upon
their knowledge, information and belief. Notwithstanding the fact that the
representations and warranties contained herein were made by Sellers based upon
their knowledge, information and belief, in the event of a Breach of a
representation or warranty, Buyer shall be entitled to recover the Damages
provided under Article IX of this Agreement regardless of whether Sellers
believed such representation or warranty was true when made.
11.7 NOTICES. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by telecopier (with written confirmation of receipt), provided that a copy
is mailed by registered mail, return receipt requested, (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), or (d) two (2) business days following the deposit of same
in the U.S. mail, in each
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case to the appropriate addresses and telecopier numbers set forth below (or to
such other addresses and telecopier numbers as a party may designate by notice
to the other parties):
Sellers: Xxxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxxxx-Xxxxxxxxx Management Co.
c/o 0000 X. Xxxxxxxx Xxxx
Xxxx Xxxxxxx, XX 00000-0000
Fax No. (000) 000-0000
With a copy to: MacLean, Seaman, Xxxxx & Guilford, P.L.C.
0000 X. Xxxxxxxx Xxxx
Xxxx Xxxxxxx, XX 00000-0000
Attn: Xxxxxxx Xxxxx
Fax No. (000) 000-0000
Buyer: Mutual Insurance Corporation of America
0000 Xxxxx Xxxxxxxx
X.X. Xxx 0000
Xxxx Xxxxxxx, XX 00000-0000
With a copy to: Xxxx, Xxxxxxx and Xxxxx, PLC
000 Xxxxxxxx Xxx., Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
Fax No. (000) 000-0000
11.8 CERTAIN TAXES. All transfer, documentary, sales, use, stamp,
registration and other such Taxes and fees (including any penalties and
interest) incurred in connection with this Agreement and the Contemplated
Transactions, shall be paid by Sellers when due, and Sellers will, at their own
expense, file all necessary Tax Returns and other documentation with respect to
all such transfer, documentary, sales, use, stamp, registration and other Taxes
and fees.
11.9 FURTHER ASSURANCES. The parties agree (i) to furnish upon request
to each other such further information, (ii) to execute and deliver to each
other such other documents, and (iii) to do such other acts and things, all as
the other party may reasonably request for the purpose of carrying out the
intent of this Agreement and the documents referred to in this Agreement.
11.10 WAIVER. The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither the failure nor any delay by any
party in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by
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applicable law, (a) no claim or right arising out of this Agreement or the
documents referred to in this Agreement can be discharged, in whole or in part,
by a waiver or renunciation of the claim or right, unless done so in writing
signed by the party asserting such claim or right; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
11.11 ENTIRE AGREEMENT AND MODIFICATION. This Agreement supersedes all
prior agreements between the parties (including, but not limited to the Term
Sheet dated May 12, 1999) with respect to its subject matter and constitutes
(along with the documents referred to in this Agreement) a complete and
exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended except by a
written agreement executed by the party to be charged with the amendment.
11.12 CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumptions or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authoring of any
of the provisions of this Agreement. Any reference to any federal, state, local
or foreign statute of law shall be deemed and also referred to all rules and
regulations promulgated thereunder, unless the context expressly provides
otherwise. The word "including" shall mean including without limitation. All
words used in this Agreement will be construed to be of such gender or number as
the circumstances may require. If any part has breached any representation,
warranty or covenant relating to the same subject matter (regardless of the
relative levels of specificity) which the party has not breached shall not
detract from or mitigate the fact that the part is in breach of the first
representation, warranty or covenant. In the event of any inconsistency between
the statements in the body of this Agreement and those in the Schedules (other
than an exception expressly set forth as such in the Schedules with respect to a
specifically identified representation or warranty), the statements in the body
of this Agreement will control.
11.13 ASSIGNMENTS; SUCCESSORS; NO THIRD PARTY RIGHTS. Neither party may
assign any of its rights under this Agreement without the prior consent of the
other parties, except that Buyer, subject to not relieving Buyer or its
successors of obligations under this Agreement, may assign any of its rights
under this Agreement to any subsidiary, parent or affiliate of Buyer. Subject to
the preceding sentence, this Agreement will apply to, be binding in all respects
upon, and inure to the benefit of the successors and permitted assigns of the
parties. Nothing expressed or referred to in this Agreement will be construed to
give any Person other than the parties to this Agreement (and their successors
and assigns) and those Persons expressly identified herein as receiving or
obtaining rights or benefits hereunder, any legal or equitable right, remedy, or
claim under or with respect to this Agreement or any provision of this
Agreement.
11.14 SEVERABILITY. If any provision of this Agreement is held invalid
or unenforceable by any court of competent jurisdiction or arbitrator, the other
provisions of this Agreement will
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remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
11.15 SECTION HEADINGS. The headings of Sections in this Agreement are
provided for convenience only and will not affect its construction or
interpretation. All references to "Section" or "Sections" refer to the
corresponding Section or Sections of this Agreement.
11.16 TIME OF ESSENCE. Time is of the essence with regard to each
party's performance under this Agreement and all dates and time periods set
forth or referred to in this Agreement.
11.17 GOVERNING LAW. This Agreement will be governed by the laws of the
State of Michigan without regard to conflicts of laws principles.
11.18 ARM'S LENGTH NEGOTIATIONS. Each party herein expressly represents
and warrants to all other parties hereto that (a) before executing this
Agreement, said party has fully informed itself of the terms, contents,
conditions and effects of this Agreement, (b) said party has relied solely and
completely upon its own judgment in executing this Agreement, (c) said party has
had the opportunity to seek and has obtained the advice of counsel before
executing this Agreement, (d) said party has acted voluntarily and of its own
free will and executing this Agreement, (e) said party is not acting under
duress, whether economic or physical, in executing this Agreement, and (f) this
Agreement is the result of arm's length negotiations conducted by and among the
parties and their respective counsel.
11.19 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original of this Agreement
and all of which, when taken together, will be deemed to constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
WITNESSES: BUYER:
MUTUAL INSURANCE CORPORATION
OF AMERICA, A MICHIGAN INSURANCE
CORPORATION
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxx, M.D.
---------------------------- -----------------------------------------
Its: Secretary-Treasurer
----------------------------------------
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SELLERS:
/s/ Xxxxxxxx Oppenwall /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------- --------------------------------------------
XXXXXXX X. XXXXXXXXX
/s/ Xxxxxxx Xxxxx /s/ Xxxxxxx X. Xxxxxxx
---------------------------- --------------------------------------------
XXXXXXX X. XXXXXXX
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