Exhibit 2
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STOCK PURCHASE AGREEMENT
BY AND AMONG
UNITED FINANCIAL ADJUSTING COMPANY, INC. ("SELLER")
MERRYMEETING, INC. ("BUYER")
AND
FRONTIER ADJUSTERS OF AMERICA, INC. (THE "COMPANY")
Dated as of April 27, 2001
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This STOCK PURCHASE AGREEMENT, dated as of April 27, 2001, by and among
UNITED FINANCIAL ADJUSTING COMPANY, INC., an Ohio corporation ("Seller"),
MERRYMEETING INC., a Delaware corporation ("Buyer"), and FRONTIER ADJUSTERS OF
AMERICA, INC., an Arizona corporation (the "Company").
W I T N E S S E T H:
WHEREAS, Seller owns 5,258,513 shares of common stock, par value $.01
per share of the Company, out of 8,957,660 shares of such common stock of the
Company which are issued and outstanding (the "Common Stock"), constituting
approximately 58.70% of the issued and outstanding shares of the Common Stock;
and
WHEREAS, Seller wishes to sell to Buyer and Buyer wishes to purchase
from Seller all of such 5,258,513 shares of the Company owned by Seller (the
"Purchase Shares"); and
WHEREAS, in connection with the purchase and sale of the Purchase
Shares, the parties hereto desire to make such other arrangements and
agreements, and to enter into certain other ancillary agreements, all as more
specifically provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and undertakings contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1. DEFINITIONS
SECTION 1.1 SPECIFIC DEFINITIONS. In addition to the other definitions
contained in Section 1.2, the following terms will, when used in this Agreement,
have the following respective meanings:
"AFFILIATES" shall mean, with respect to any Person, any Persons
directly or indirectly through one or more Subsidiaries controlling or
controlled by, or under common control with, such other Person at any time
during the period for which the determination of affiliation is being made; it
being understood that none of Buyer, Seller or any of their respective
Affiliates shall be considered Affiliates under this Agreement simply by virtue
of this Agreement, the Ancillary Agreements or any other agreements entered into
in connection with the transactions contemplated by this Agreement. For purposes
of this definition, the term "control" (including the correlative meanings of
the terms "controlled by" and "under common control with"), as used with respect
to any Person, shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.
"AGREEMENT" shall mean this Stock Purchase Agreement, as the same may
be amended or supplemented from time to time in accordance with the terms
hereof.
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"ANCILLARY AGREEMENTS" shall mean all closing and other related
documents under the Agreement.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a
day on which banks in New York City are authorized or obligated by Law or
executive order to close.
"BUYER" shall have the meaning set forth in the Preamble.
"BUYER GROUP MEMBER" shall mean each of Buyer and its Affiliates and
their directors, officers, employees, agents and their respective successors and
assigns, and Company and its Subsidiaries (as constituted after the Closing).
"CLAIM NOTICE" shall have the meaning set forth in Section 9.4.
"CLOSING" shall mean the closing of the Transaction.
"CLOSING DATE" shall mean April 30, 2001 or such other date as shall be
agreed by Seller and Buyer.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMPANY" shall have the meaning set forth in the Recitals.
"COMPANY COMMON STOCK" shall have the meaning set forth in Section 5.3.
"COMPANY MATERIAL ADVERSE EFFECT" shall mean a material adverse effect
on the businesses, properties, assets, liabilities, results of operations or
financial condition of Company and its Subsidiaries, taken as a whole.
"COMPANY STOCK" shall mean 100% of the outstanding shares of Company
Common Stock.
"COMPANY SUBSIDIARIES" shall mean the Subsidiaries of Company.
"CONTRACTS" shall mean all leases, including, without limitation, real
property leases and personal property leases, contracts, agreements, indentures,
promissory notes, guarantees, licenses, arrangements, commitments and
understandings of any kind, whether written or oral, to which a Person is a
party or by which such Person or any of its assets may be bound, and all rights
arising under any of them.
"DAMAGES" shall mean losses, obligations, liabilities, settlement
payments, awards, judgments, fines, penalties, deficiencies, Taxes and
reasonable expenses and costs, including reasonable attorneys' and auditors'
fees (and any reasonable expert's fees).
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"GAAP" shall mean generally accepted accounting principles consistently
applied.
"GOVERNMENTAL AUTHORITY" shall mean any federal, state, municipal or
other governmental authority, department, commission, board, agency or
instrumentality.
"GOVERNMENTAL AUTHORIZATIONS" shall mean, with respect to a business,
all licenses, permits, certificates and other authorizations and approvals
required under applicable Law to carry on such business as conducted as of the
Closing.
"GOVERNMENTAL ENTITY" shall mean any local, state, federal, national,
provincial, regional or other government, including all of their respective
branches, departments, agencies, courts, instrumentalities or other
subdivisions.
"INDEMNIFIED PARTIES" shall mean the Seller Group Members and the Buyer
Group Members.
"INDEMNITEE" shall have the meaning set forth in Section 9.4.
"INDEMNITOR" shall have the meaning set forth in Section 9.4.
"IRS" shall mean the Internal Revenue Service.
"LAW" shall mean any law, statute, ordinance, rule, regulation, code,
order, judgment, injunction or decree promulgated or issued by any Governmental
Entity.
"MATERIAL ADVERSE CHANGE" shall mean, with respect to a business, any
change, effect, event, occurrence or state of facts that is, or would reasonably
be likely to be, materially adverse to such business, or to its respective
properties, assets, liabilities, results of operations or financial condition.
"ORDINARY COURSE OF BUSINESS" shall mean, with respect to a business,
the conduct of such business in accordance with the customs, practices and
procedures of such business.
"PERSON" shall mean any individual, corporation, partnership, limited
liability company, trust, association or other entity or organization.
"SELLER" shall have the meaning set forth in the Preamble.
"SELLER GROUP MEMBER" shall mean each of Seller and its Affiliates and
their directors, officers, employees, agents and their respective successors and
assigns.
"SUBSIDIARY" shall mean any partnership, corporation, limited liability
company, branch or similar entity that is required by GAAP to be consolidated by
Seller, Buyer or Company.
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"TAX RETURN" shall mean any reports, declaration, report, claim for
fraud, or information returns or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"TAXES" shall mean all taxes imposed by any Governmental Entity
anywhere in the world, including income, gross receipts, windfall profits, value
added, severance, property, production, sales, use, license, excise, franchise,
employment, withholding or similar taxes, together with any interest, additions
or penalties with respect thereto and any interest in respect of such additions
or penalties.
"TRANSACTION" shall mean, collectively, all of the transactions
contemplated by this Agreement and the Ancillary Agreements.
"TRANSFER" shall mean sell, assign, transfer, pledge, encumber,
hypothecate, dispose or convey, directly or indirectly, whether in one
transaction or a series of related transactions.
SECTION 1.2 INTERPRETATION.
(a) the words "hereof," "herein," and "hereunder" and words of similar
import refer to this Agreement as a whole and not to any particular provision of
this Agreement;
(b) references to "Article" or "Section" are to the respective Articles
and Sections of this Agreement, and references to "Exhibit" or "Schedule" are to
the respective Exhibits and Schedules annexed hereto;
(c) references to a "party" means a party to this Agreement and
includes references to such party's successors and assigns;
(d) the terms "Dollars" and "$" shall mean United States dollars;
(e) terms defined in the singular shall have a comparable meaning when
used in the plural, and vice versa;
(f) the masculine pronoun includes the feminine and the neuter, and
visa versa, as appropriate in the context;
(g) wherever the word "include," "includes," or "including" is used in
this Agreement, it will be deemed to be followed by the words "without
limitation" unless clearly indicated otherwise; and
(h) the word "or" shall not be deemed to be exclusive but shall be
interpreted as "and/or."
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ARTICLE 2. CLOSING PURCHASE AND SALE
SECTION 2.1 THE CLOSING. The closing (the "Closing") of the
transactions set forth in this Article 2.1 shall take place at 10:00 A.M., New
York time, on April 30, 2001, or at such other time or such other date as the
Buyer and the Seller may agree, at the offices of Seller, 000 Xxxxx Xxxxxxx
Xxxx, Xxxxxxxx, Xxx Xxxx. (Hereinafter, such date is referred to as the "Closing
Date" and such time on the Closing Date is referred to as the "Closing Time".)
SECTION 2.2 SALE AND PURCHASE OF THE PURCHASE SHARES. Subject to the
terms and conditions and in reliance upon the representations and warranties
herein set forth, at the Closing, the Seller agrees to sell, convey, transfer,
assign and deliver to the Buyer certificates for the Purchase Shares, duly
endorsed in blank or accompanied by stock powers in blank, free and clear of all
Liens and the Buyer agrees to purchase from the Seller the Purchase Shares.
ARTICLE 3. PURCHASE PRICE
SECTION 3.1 THE PURCHASE PRICE. The Buyer shall purchase the Purchase
Shares for an aggregate amount of $8,330,000.00 (the "Purchase Price").
SECTION 3.2 DELIVERY OF PURCHASE PRICE. At the Closing, the Purchase
Price shall be paid by the Buyer to the Seller by wire transfer of immediately
available funds to an account designated in writing by the Seller at least two
business days prior to the Closing.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
SECTION 4.1 ORGANIZATION. Buyer is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite power and authority, and all necessary permits and
licenses, to own and operate its assets and to carry on its business as
presently conducted.
SECTION 4.2 CORPORATE AUTHORIZATION. Buyer has full requisite power and
authority to execute and deliver this Agreement, and each Ancillary Agreement to
which it is a party, and to perform its obligations hereunder and thereunder.
The execution, delivery and performance by Buyer of this Agreement and each
Ancillary Agreement to which it is a party have been duly and validly authorized
on behalf of Buyer, and no additional corporate or shareholder authorization or
consent is or will be required in connection with the execution, delivery and
performance by Buyer of this Agreement and each Ancillary Agreement to which it
is a party.
SECTION 4.3 CONSENTS AND APPROVALS. There are no consents, approvals,
waivers or authorizations that are required to be obtained by Buyer from, and no
notices
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or filings that are required to be given by Buyer to, or made by Buyer with, any
Governmental Entity or other Person, in connection with the execution, delivery
and performance by Buyer of this Agreement or any Ancillary Agreement.
SECTION 4.4 NONCONTRAVENTION. The execution, delivery and performance
by Buyer of this Agreement and each Ancillary Agreement, and the consummation by
Buyer of the Transaction, do not and will not (i) violate any provisions of the
Articles of Incorporation, By-Laws or other organizational documents of Buyer or
(ii) conflict with, or result in the breach of, or constitute a default under,
or result in the termination, cancellation or acceleration (whether after the
filing of notice or the lapse of time or both) of any right or obligation of
Buyer under any Contract or result in the creation of any Encumbrance upon the
Purchase Shares or (iii) violate or result in a breach of or constitute a
default under any Law or other restriction of any court or governmental
authority to which Buyer is subject, including any Governmental Authorization of
the Transaction.
SECTION 4.5 BINDING EFFECT. This Agreement, and each Ancillary
Agreement to which Buyer is a party, when executed and delivered by the other
parties thereto, will constitute valid and legally binding obligations of Buyer,
enforceable against Buyer in accordance with their respective terms.
SECTION 4.6 LITIGATION AND CLAIMS. There is no civil, criminal or
administrative action, suit, demand, claim, hearing, proceeding or investigation
pending or, to the knowledge of Buyer, threatened, against or relating to Buyer
in connection with the Purchase Shares, or with respect to the Transaction.
SECTION 4.7 FINDERS' FEES. There is no investment banker, broker,
finder or other intermediary that has been retained by or is or has been
authorized to act on behalf of Buyer who might be entitled to any fee or
commission from Buyer in connection with the Transaction.
SECTION 4.8 SECURITIES LAW REPRESENTATIONS.
(a) Seller has granted Buyer full and unrestricted access to the
business premises, offices, properties, and business, corporate and financial
books and records of the Company. Buyer has been permitted to examine the
foregoing records, to question officers of the Company, and to make such other
investigations as it considered appropriate to determine or verify the business
and financial condition of the Company. Seller furnished to Buyer all
information regarding the business and affairs of the Company that Seller
requested.
(b) Because of Buyer's considerable knowledge and experience in
financial and business matters, Buyer is able to evaluate the merits, risks, and
other factors bearing on the suitability of the Purchase Shares as an
investment.
(c) The Buyer's financial condition is such that it would not be, and
does not contemplate being, required to dispose of any investment in the
Purchase
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Shares, or sell, transfer, pledge, or otherwise dispose of any of the Purchase
Shares for an indefinite period.
(d) Buyer's acquisition of the Purchase Shares will be solely for its
own account, as principal, for investment, and not with a view to, or for resale
in connection with, any underwriting or distribution.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF SELLER
Except for the following express representations and warranties made in
this Article 5, Seller makes no representation or warranty as to the business,
assets, operations, liabilities or financial condition of the Company, or as to
any other matter. Seller represents and warrants to Buyer as follows:
SECTION 5.1 ORGANIZATION.
(a) Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Ohio and has all requisite
corporate power and authority, and all necessary permits and licenses, to own
and operate its assets, and to carry on its business as presently conducted.
(b) Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Arizona and has all requisite
corporate power and authority to own and operate its assets, and to carry on its
business as presently conducted.
SECTION 5.2 CORPORATE AUTHORIZATION. Seller has full corporate power
and authority to execute and deliver this Agreement and each Ancillary Agreement
to which it is a party, and to perform its obligations hereunder and thereunder.
The execution, delivery and performance by Seller of this Agreement and each
Ancillary Agreement to which it is a party have been duly and validly authorized
on behalf of Seller, and no additional corporate or shareholder authorization or
consent is or will be required in connection with the execution, delivery and
performance by Seller of this Agreement and each Ancillary Agreement to which it
is a party.
SECTION 5.3 CAPITAL STOCK. (a) The entire authorized capital stock of
Company consists of (i) 100,000,000 shares of preferred stock, none of which are
issued or outstanding and (ii) 100,000,000 shares of common stock, par value
$.01 per share (the "Company Common Stock"), 8,957,660 of which are issued and
outstanding. Seller holds of record and owns beneficially 5,258,513 of the
outstanding shares of Company Common Stock, constituting approximately 58.7% of
all of the issued and outstanding Company Common Stock, and has good and valid
title to all such shares. The Purchase Shares are now, and at the Closing Date
will be, free and clear of all Encumbrances. Except as set forth in Schedule
5.3.1, no shares of Company Common Stock are held in the treasury of Company.
All of the shares of outstanding Company Common Stock have been duly authorized
and are validly issued, fully paid and nonassessable.
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(b) Except as set forth in Schedule 5.3.2, there are no outstanding or
authorized warrants, options, rights (including stock appreciation, phantom
stock, profit participation or similar rights and rights to demand registration
or to sell in connection with a registration by Company under the federal
securities laws), calls or other commitments of any nature relating to the
shares of Company Common Stock or other securities of Company, and there are no
outstanding securities of Company that are now or in the future are convertible
into or exchangeable for shares of capital stock of Company. Company is not
obligated to issue any shares of the Common Stock for any purpose, and, except
as contemplated hereby, no person has entered into any contract, whether oral or
written, or option or any right or privilege (whether pre-emptive or
contractual) capable of becoming a contract or option for the purchase,
subscription or issuance of any unissued shares or other securities of Company.
Seller is not a party to any voting trusts, proxies or other agreements or
understandings with respect to the Company Common Stock or other securities of
Company.
SECTION 5.4. NONCONTRAVENTION. The execution, delivery and performance
by Seller of this Agreement and each Ancillary Agreement, and the consummation
by Seller of the Transaction, do not and will not (i) violate any provision of
the certificate of incorporation, by-laws or other organizational documents of
Seller, (ii) conflict with, or result in the breach of, or constitute a default
under, or result in the termination, cancellation or acceleration (whether after
the filing of notice or the lapse of time or both) of any right or obligation of
Seller under, any Contract or result in the creation of any Encumbrance upon the
Purchase Shares or (iii) violate or result in a breach of or constitute a
default under any Law or other restriction of any court or governmental
authority to which Seller is subject, including any Governmental Authorization
of the Transaction.
SECTION 5.5. LITIGATION AND CLAIMS. There is no civil, criminal or
administrative action, suit, demand, claim, hearing, proceeding or investigation
pending or, to the knowledge of Seller, threatened, against or relating to
Seller in connection with the Purchase Shares, or with respect to the
Transaction.
SECTION 5.6 BINDING EFFECT. This Agreement and each Ancillary Agreement
to which Seller is a party, when executed and delivered by the other parties
thereto, will constitute valid and legally binding obligations of Seller,
enforceable against Seller in accordance with their respective terms.
SECTION 5.7 FINDERS' FEES. There is no investment banker, broker,
finder or other intermediary that has been retained by or is or has been
authorized to act on behalf of Seller or Company who might be entitled to any
fee or commission from Seller or Company in connection with the Transaction.
SECTION 5.8 TAXES. To the best of Seller's knowledge:
(a) All taxes owed by or with respect to the Company have been paid or
provided for.
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(b) Neither the IRS nor any other tax entity is now asserting or
threatening to assert against the Company any deficiency or claim for additional
taxes or any tax adjustment which could result in a Material Adverse Change to
the Company.
ARTICLE 6. COVENANTS
SECTION 6.1 CONDUCT OF BUSINESS. During the period from the date hereof
to the Closing Date, except as otherwise specifically contemplated by this
Agreement or as Buyer shall otherwise agree in writing, Seller covenants and
agrees that it will use all reasonable efforts to cause the Company to (1)
continue to conduct its business, maintain its assets and carry on its business
practices in the same manner as heretofore, (2) preserve its business
organization intact, will not interfere with or take action that undermines
Company's efforts to retain the services of its employees and preserve the
present business relationships and goodwill of its suppliers and customers and
others having business relations with it, (3) pay and perform in all material
respects all of its liabilities and obligations as and when due and all
contracts and leases to which it is a party in accordance with the terms and
provisions thereof and (4) comply in all material respects with all Laws that
are applicable to it and its business. In addition, Seller covenants and agrees
that Company shall not, and Seller shall not permit Company, or any Company
Subsidiary, directly or indirectly, to do any of the following without the
express prior written consent of Buyer:
(a) make or adopt any changes to or otherwise alter its certificate or
articles of incorporation, by-laws or any other governing or constitutive
documents;
(b) purchase or enter into any Contract to purchase or lease any real
property;
(c) grant any salary increase or permit any advance to any director,
officer or employee, other than in accordance with past practice, or enter into
any new, or amend or otherwise alter, any employee benefit plan, or any
employment or consulting Contract, or any Contract providing for the payment of
severance;
(d) enter into any transaction other than in the normal and ordinary
course of business;
(e) form any Subsidiary or Affiliate, or issue, grant, sell, redeem,
subdivide, combine, change or purchase any of Company's capital stock, notes or
other securities, whether debt or equity, or make any Contract or commitments to
do so;
(f) merge or consolidate, or agree to merge or consolidate, with or
into any other Person or acquire or agree to acquire or be acquired by any
Person;
(g) (i) change any of its methods of accounting in effect as at June
30, 2000, or (ii) make or rescind any express or deemed election relating to
Taxes, or change any of its methods of reporting income or deductions for income
tax purposes from those employed in the preparation of Tax Returns for the
taxable year ended June 30, 2000 except as may be required by applicable Law,
the IRS or GAAP; or
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(h) enter into any Contract or other commitment to do any of the
foregoing.
SECTION 6.2 REASONABLE EFFORTS. Seller and Buyer will cooperate and use
their respective commercially reasonable efforts to fulfill the conditions
precedent to the other party's obligations hereunder, including securing as
promptly as practicable all consents, approvals, waivers and authorizations
required in connection with the Transaction.
SECTION 6.3 FURTHER ASSURANCES. From time to time after the Closing
Date, Seller and Buyer shall promptly execute, acknowledge and deliver any other
assurances or documents reasonably requested by the requesting party (and at
such requesting party's expense) and necessary for the other party to satisfy
its obligations hereunder or to obtain the benefits of the Transaction.
SECTION 6.4 INTERCOMPANY LIABILITIES. Seller shall, on or prior to the
Closing Date, eliminate all intercompany transactions.
SECTION 6.5 NO BREACH OF REPRESENTATIONS AND WARRANTIES. Neither Seller
nor Buyer will take any action prior to the Closing Date which would cause or
constitute a breach, or would, if it had been taken immediately prior to the
date hereof have caused or constituted a breach, of any of such party's
representations and warranties set forth in this Agreement. Each of Seller and
Buyer will, in the event of and promptly after the occurrence of, or promptly
after becoming aware of the occurrence of, or promptly after becoming aware of
the occurrence of or the impending or threatened occurrence of, any occurrence
or event prior to the Closing Date which would cause or constitute a breach or
would if it had occurred immediately prior to the date hereof, have caused or
constituted a breach of any of the representations or warranties set forth in
this Agreement, give detailed notice thereof to the other party and use its
reasonable efforts to prevent or promptly remedy such breach.
SECTION 6.6 ACCESS. Buyer and its officers, employees and
representatives (including independent public accountants and counsel) will at
reasonable times during regular business hours be permitted reasonable access
to, and will be permitted to make copies of or abstracts from, all of the books
and records, financial and operating data and other information of Company and
its Subsidiaries, will have reasonable access to the premises and physical
properties of Company and its Subsidiaries as Buyer deems necessary or advisable
for purposes of consummating the transactions contemplated hereby, and will be
permitted to discuss the affairs, finances and accounts of Company and its
Subsidiaries with the directors, officers, employees, counsel, accountants,
suppliers and customers of Company and its Subsidiaries. Buyer agrees that,
prior to the consummation of the Transaction, it shall not disclose, divulge,
furnish or make accessible to anyone, other than those of its employees,
representatives, attorneys, accountants or lenders with a need to know, any
information concerning Company or its Subsidiaries which is not or does not
become commonly known by or available to the general public.
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ARTICLE 7. TAX MATTERS
SECTION 7.1 INDEMNIFICATION.
(a) Seller's Indemnification. Notwithstanding any other provision of
this Agreement, Seller shall indemnify and hold harmless the Buyer Group Members
from, against and in respect of any Taxes imposed with respect to the transfer
to the Buyer of the Purchase Shares or any income or gain derived by Seller with
respect to such transfer for any taxable period, or portion thereof, ended on or
before the Closing Date.
(b) Buyer's Indemnification. Buyer shall indemnify and hold harmless
the Seller Group Members from, against and in respect of any Taxes imposed with
respect to the Company whether before or after the Closing Date.
SECTION 7.2 TAX RETURNS. Buyer shall be responsible for causing the
Company to timely complete and file all Tax Returns and the prompt payment of
all Taxes of the Company, whether attributable to before or after the Closing
Date. Buyer shall provide the Seller the opportunity to review any Tax Return to
be filed by the Company (prior to the filing thereof) which Tax Return is
attributable to a period, in whole or in part, prior to the Closing Date.
ARTICLE 8. CONDITIONS TO CLOSING
SECTION 8.1 CONDITIONS TO THE OBLIGATIONS OF THE PARTIES. The
obligations of the parties to effect the Closing are subject to the satisfaction
(or waiver) prior to the Closing of the following conditions:
(a) No Injunctions. No Law prohibiting the consummation of the
Transaction shall be in effect on the Closing Date.
SECTION 8.2 CONDITIONS TO THE OBLIGATION OF BUYER. The obligation of
Buyer to effect the Closing is subject to the satisfaction (or waiver) prior to
the Closing of the following conditions:
(a) Representations and Warranties. The representations and warranties
of Seller contained herein shall have been true and correct in all material
respects when made and shall be true and correct in all material respects as of
the Closing, as if made as of the Closing (except representations and warranties
that are made as of a specific date need be true only as of such date).
(b) Covenants. The covenants and agreements of Seller to be performed
on or prior to the Closing shall have been duly performed in all material
respects.
(c) Certificates. Buyer shall have received (i) a certificate of an
executive officer of Seller, dated the Closing Date, and certifying to the
fulfillment on the part of Seller of
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the conditions specified in paragraphs (a) and (b) above (ii) resignations of
Xxxxx X. Xxxxxxxxx, Xxxxxxx X. Xxxxxx, Xxxxx X. Xxxxxxx, and Xxxxxxx X. Xxxxxxx
as officers and/or directors of the Company, and (iii) such other evidence with
respect to the fulfillment of said conditions as Buyer may reasonably request.
(d) No Change in Business. Between the date of this Agreement and the
Closing Date, Company and its Subsidiaries shall not have suffered or
experienced a Material Adverse Effect, and there shall have been delivered to
Buyer a certificate from Seller, signed by an executive officer of Seller, to
such effect.
(e) Ancillary Agreements. Seller shall have executed and delivered (or
shall have caused to be executed and delivered) this Agreement and each of the
Ancillary Agreements.
SECTION 8.3 CONDITIONS TO THE OBLIGATION OF SELLER. The obligation of
Seller to effect the Closing is subject to the satisfaction (or waiver) prior to
the Closing of the following conditions:
(a) Representations and Warranties. The representations and warranties
of Buyer contained herein shall have been true and correct in all material
respects when made and shall be true and correct in all material respects as of
the Closing, as if made as of the Closing (except that representations and
warranties that are made as of a specific date need be true only as of such
date).
(b) Covenants. The covenants and agreements of Buyer to be performed on
or prior to the Closing shall have been duly performed in all material respects.
(c) Certificates. Seller shall have received (i) a certificate of an
executive officer of Buyer, dated the Closing Date, and certifying to the
fulfillment on the part of Buyer of the conditions specified in paragraphs (a)
and (b) above and (ii) such other evidence with respect to the fulfillment of
said conditions as Seller may reasonably request.
(d) Ancillary Agreements. Buyer shall have executed and delivered (or
shall have cause to be executed and delivered) this Agreement and each of the
Ancillary Agreements.
ARTICLE 9. SURVIVAL; INDEMNIFICATION
SECTION 9.1 SURVIVAL OF REPRESENTATIONS. All statements,
certifications, indemnifications, representations and warranties made herein by
the parties to this Agreement, and their respective obligations to be performed
pursuant to the terms hereof, shall survive the Closing; provided, however,
that, the representations and warranties made by the parties hereunder shall
terminate on the date one year after the Closing Date, except to the extent a
party gives written notice to the other party of any breach thereof on or before
such date (which notice shall identify the Section of this Agreement alleged to
have been breached and a reasonable description of the breach and of all
material facts relating thereto then known by the party providing such notice),
and then only with respect to the matters described in such notice.
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SECTION 9.2 INDEMNIFICATION BY SELLER. Seller shall indemnify and hold
harmless any Buyer Group Member from and against any and all Damages incurred by
such Buyer Group Member arising from, or in connection with:
(a) any failure by Seller to perform any of its covenants or other
obligations herein or in any document executed in connection with this
Agreement, including, without limitation, the Ancillary Agreements;
(b) any breach of any representation or warranty of Seller contained or
referred to herein or in any Schedule, certificate, exhibit or other instrument
delivered by or on behalf of Seller pursuant to this Agreement;
(c) the allegation in writing by any third party of the existence of
any liability, obligation, lease, agreement, contract, other commitment or state
of facts which, if such allegation were true, would constitute a breach by
Seller of any representation or warranty of Seller contained or referred to
herein or in any Schedule, certificate, exhibit or other instrument delivered by
or on behalf of Seller pursuant to this Agreement; and
(d) the tax matters set forth in Section 7.1(a).
SECTION 9.3 INDEMNIFICATION BY BUYER. Buyer shall indemnify and hold
harmless any Seller Group Member from and against any and all Damages incurred
by such Seller Group Member arising from, or in connection with:
(a) any failure by Buyer to perform any of its covenants or other
obligations herein or in any other document executed in connection with this
Agreement, including, without limitation, the Ancillary Agreements;
(b) any breach of any representation or warranty of Buyer contained or
referred to herein or in any Schedule, certificate, exhibit or other instrument
delivered by or on behalf of Buyer pursuant to this Agreement;
(c) the allegation in writing by any third party of the existence of
any liability, obligation, lease, agreement, contract, other commitment or state
of facts which, if such allegation were true, would constitute a breach by Buyer
of any representation or warranty of Buyer contained or referred to herein or in
any Schedule, certificate, exhibit or other instrument delivered by or on behalf
of Buyer pursuant to this Agreement; and
(d) the tax matters set forth in Section 7.1(b).
SECTION 9.4 NOTICE OF CLAIMS. Any Buyer Group Member or Seller Group
Member seeking indemnification hereunder (an "Indemnitee") shall promptly give
to the party or parties obligated to provide indemnification to such Indemnitee
(an "Indemnitor") a notice ("Claim Notice") describing in reasonable detail the
facts giving rise to any claim for indemnification hereunder and shall include
in such Claim Notice (if then known) the amount or the method of computation of
the amount of such claim, and a reference to the provision of this Agreement,
the Ancillary Agreements, or any other
14
agreement, document or instrument executed hereunder or in connection herewith
upon which such claim is based.
SECTION 9.5 THIRD PARTY CLAIMS.
(a) Subject to paragraph (b) below, in the case of any third party
claim, action or suit as to which indemnification is sought by an Indemnitee,
the Indemnitor shall have 15 business days after receipt of the notice referred
to in Section 9.4 to notify the Indemnitee that it elects to conduct and control
such claim, action or suit. If the Indemnitor does not give the foregoing
notice, the Indemnitee shall have the right to defend, contest, settle or
compromise such action or suit in the exercise of its exclusive but reasonable
discretion, and the Indemnitor shall, upon request from any Indemnitee, promptly
pay to such Indemnitee in accordance with the other terms of this Article 9 the
amount of any Damages. If the Indemnitor gives the foregoing notice, the
Indemnitor shall have the right to undertake, conduct and control, through
counsel of its own choosing and at the sole expense of the Indemnitor, the
conduct and settlement of such action or suit, and the Indemnitee shall
cooperate with the Indemnitor in connection therewith; provided, that (x) the
Indemnitor shall permit the Indemnitee to participate in such conduct or
settlement through counsel chosen by the Indemnitee, but the fees and expenses
of such counsel shall be borne by the Indemnitee and (y) the Indemnitor shall
agree promptly to reimburse the Indemnitee for the full amount of any Damages
resulting from such action or suit, except fees and expenses of counsel for the
Indemnitee incurred after the assumption of the conduct and control of such
action or suit by the Indemnitor and (z) the Indemnitor may not settle any such
action or suit if the Indemnitor would not be fully liable for all Damages
resulting from such action or suit. So long as the Indemnitor is contesting any
such action or suit in good faith, the Indemnitee shall not pay or settle any
such action or suit or make any statement or take any action that would
prejudice the right or ability of the Indemnitor to defend or settle such action
or suit or that would effect the amount of Damages relating thereto.
(b) In the case of any third party claim, action or suit as to which
indemnification is sought by an Indemnitee which involves a claim for Damages
other than money Damages together with money Damages or involves a claim solely
for such other Damages and, in either case, could result in a Material Adverse
Change in the business of the Indemnitee, the Indemnitee shall have the right to
conduct and control, through counsel of its choosing, such claim, action or
suit. The Indemnitee shall permit the Indemnitor to participate in the defense
of any such action or suit through counsel chosen by it, provided that the fees
and expenses of such counsel shall be borne by the Indemnitor. The Indemnitee
may compromise or settle any such claim, action or suit; provided, that, any
compromise or settlement with respect to a claim for money Damages effected
after the Indemnitor, by notice to the Indemnitee, shall have reasonably
disapproved in its reasonable judgment such compromise or settlement shall
discharge the Indemnitor from liability with respect to the subject matter
thereof, and no amount in respect thereof shall be claimed as Damages.
15
ARTICLE 10. TERMINATION
SECTION 10.1 TERMINATION. This Agreement may be terminated at any time
prior to the Closing:
(a) by mutual agreement of Seller and Buyer;
(b) by either Seller or Buyer, by giving written notice of such
termination to the other party, if the Closing shall not have occurred on or
prior to June 15, 2001; provided that the terminating party is not in material
breach of its obligations under this Agreement; and
(c) by either Seller or Buyer if there shall be in effect any Law that
prohibits the Closing or if the Closing would violate any non-appealable final
order, decree or judgment of any court or governmental body having competent
jurisdiction. a
SECTION 10.2 EFFECT OF TERMINATION. In the event of the termination of
this Agreement in accordance with Section 10.1, this Agreement shall thereafter
become void and have no effect, and no party hereto shall have any liability to
any other party hereto or their respective Affiliates, directors, officers or
employees, except that nothing in this Section 10.2 shall relieve any party from
liability for any breach of this Agreement that arose prior to such termination,
for which liability the provisions of Article 9 shall remain in effect in
accordance with the provisions and limitations of such Article.
ARTICLE 11. MISCELLANEOUS
SECTION 11.1 NOTICES. All notices or other communications under this
Agreement shall be in writing and shall be deemed duly given, effective (i)
three Business Days later, if sent by registered or certified mail, return
receipt requested, postage prepaid, (ii) when sent if sent by telecopier or fax,
provided that the telecopy or fax is promptly confirmed by telephone, (iii) when
served, if delivered personally to the intended recipient, and (iv) one Business
Day later, if sent by overnight delivery via a national courier service, and, in
each case, addressed to the intended recipient at the address set forth below.
Any party may change the address to which notices or other communications
hereunder are to be delivered by giving each other party notice in the manner
herein set forth.
If to Seller: UNITED FINANCIAL ADJUSTING COMPANY, INC.
c/o Netrex Capital Group LLC
000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attn: Xxxxx X. Xxxxxxxxx, General Counsel
With a copy to: UNITED FINANCIAL ADJUSTING COMPANY, INC.
c/o Netrex Capital Group LLC
000 Xxxxx Xxxxxxx Xxxx
00
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attn: Xxxxx X. Xxxxxxxxx, General Counsel
If to Buyer: MERRYMEETING, INC.
0 Xxxxxxxxxxxx Xxxx
Xxxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
Attn: Xxxx X. Xxxxxx
With a copy to: XXXXX & BERNE LLP
Bond Court Building
0000 Xxxx Xxxxx Xx., Xxxxx 000
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx
SECTION 11.2 AMENDMENT; WAIVER. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Seller and Buyer, or in the case of a
waiver, by the party against whom the waiver is to be effective. No failure or
delay by either party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. Except as otherwise provided herein, the rights
and remedies herein provided shall be cumulative and not exclusive of any rights
or remedies provided by Law or at equity.
SECTION 11.3 NO ASSIGNMENT OR BENEFIT TO THIRD PARTIES. No party to
this Agreement may assign any of its rights or delegate any of its obligations
under this Agreement, by operation of Law or otherwise, without the prior
written consent of the other party hereto. Nothing in this Agreement, express or
implied, is intended to confer upon any Person other than the parties hereto and
their respective successors or permitted assigns and the Indemnified Parties,
any rights or remedies under or by reason of this Agreement. Any attempted
assignment in violation of this Section 11.3 shall be null and void.
SECTION 11.4 ENTIRE AGREEMENT. This Agreement (including all Schedules
and Exhibits), and the Ancillary Agreements contain the entire agreement among
the parties hereto with respect to the subject matter hereof and supersede all
prior agreements and understandings, oral or written, with respect to such
matters.
SECTION 11.5 CONFIDENTIALITY. Neither Seller nor Buyer nor any of their
respective Affiliates shall issue a press release or make any public
announcement relating to this Agreement or any matters referred to or
contemplated herein or in the Ancillary Agreements, in each case without the
express written consent of the other party, except as may be required to comply
with the requirements of any applicable Law or rules and regulations of any
stock exchange upon which the securities of such party are listed or
17
quoted, or of any regulatory authority with jurisdiction over either of the
parties hereto, or any of their respective Affiliates, in which case such
disclosing party shall consult with and provide a reasonable opportunity to
comment to the other party. It is understood that this Section 11.5 shall not
prevent compliance by Seller or any Subsidiary of Company with the rules and
regulations of any stock exchange upon which the securities of such party are
listed or quoted.
SECTION 11.6 EXPENSES. Except as otherwise expressly provided in this
Agreement, whether or not the transactions contemplated by this Agreement are
consummated, all costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be borne by the party incurring
such expenses.
SECTION 11.7 GOVERNING LAW. This Agreement shall be governed by the
laws of the State of New York without regard to principles of conflicts of law.
The parties hereto irrevocably agree to the exclusive jurisdiction of the State
and Federal courts located in the Counties of Nassau or Suffolk, State of New
York with respect to any action arising hereunder.
SECTION 11.8 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, and all of which
shall constitute one and the same Agreement.
SECTION 11.9 HEADINGS. The heading references herein are for
convenience purposes only, do not constitute a part of this Agreement and shall
not be deemed to alter or affect the meaning or interpretation of any of the
provisions hereof.
SECTION 11.10 SEVERABILITY. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. To the
extent permitted by Law, if any provision of this Agreement, or the application
thereof to any Person or any circumstances is invalid or unenforceable, (a) a
suitable and equitable provision shall be substituted therefor in order to carry
out, so far as may be valid and enforceable, the intent and purpose of such
invalid or unenforceable provision and (b) the remainder of this Agreement and
the application of such provision to other Persons or circumstances shall not be
affected by such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
SECTION 11.11 INFERENCES. Inasmuch as this Agreement is the result of
negotiations between sophisticated parties of equal bargaining power represented
by counsel, no inference in favor of or against either party will be drawn from
the fact that any portion of this Agreement has been drafted by or on behalf of
such party.
18
IN WITNESS WHEREOF, the parties have executed or caused this Agreement
to be executed as of the date first written above.
UNITED FINANCIAL ADJUSTING
COMPANY, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Xxxxx X. Xxxxxxxxx
Secretary
MERRYMEETING, INC.
By: /s/ Xxxx Xxxxxx
--------------------------------
Xxxx Xxxxxx
President
FRONTIER ADJUSTERS OF AMERICA, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Xxxxx X. Xxxxxxxxx
Secretary
19
Stock Purchase Agreement
SCHEDULE 5.3.1
TREASURY STOCK
There are currently 61,399 shares of the Common Stock of the Company
held in treasury.
Stock Purchase Agreement
SCHEDULE 5.3.2
OUTSTANDING WARRANTS, OPTIONS, ETC.
1. There are no outstanding warrants.
2. See the attached list.
