STOCK PURCHASE AGREEMENT
Exhibit 10.1
This Stock Purchase Agreement (this “Agreement”),
dated as of October 11, 2019, is entered into between the Persons identified on Exhibit A (together, “Seller” or “Shareholders”), Xxxxxxxxxx Life Insurance Company, a Louisiana corporation (the “Company”), Security National Life Insurance Company, a Utah corporation (“Buyer”), and Xxxxxx X. Reso, Jr., an individual and resident of Louisiana, solely in
his capacity as Shareholder representative (the “Shareholder Representative”).
RECITALS
WHEREAS, Seller collectively owns all of the issued
and outstanding shares of common stock, par value $1.00 per share (the “Shares”), of the Company;
WHEREAS, Seller wishes to sell to Buyer, and Buyer
wishes to purchase from Seller, the Shares, subject to the terms and conditions set forth herein;
WHEREAS, a portion of the purchase price payable by Buyer to Seller shall be placed in escrow by Buyer, the release of which shall be contingent upon certain events and
conditions, all as set forth in this Agreement and the Escrow Agreement (as defined herein); and
WHEREAS, this Agreement is contingent upon the contemporaneous execution of the Coinsurance Agreement (as defined herein) and approval of
this Agreement and the Coinsurance Agreement by the Louisiana Department of Insurance.
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
“Action” means any claim, action,
cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative,
regulatory or otherwise, whether at law or in equity.
“Affiliate” of a Person means
any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. International Star shall not be deemed an Affiliate. The term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
“Bonds” means debt securities
held by the Company as set forth in Schedule 8.1A to the Coinsurance Agreement.
“Bond Gains” has the same meaning as defined in the Coinsurance Agreement.
“Business Day” means any day except Saturday, Sunday
or any other day on which commercial banks located in Salt Lake City, Utah are authorized or required by Law to be closed for
business.
“CERCLA” means the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601-9675.
“Closing Indebtedness Certificate” means a certificate executed by the Chief Financial Officer of the Company certifying on behalf of the Company an itemized list of all outstanding Indebtedness
of the Company Group as of the open of business on the Closing Date and the Person to whom such outstanding Indebtedness is owed and an aggregate total of such outstanding Indebtedness.
“Coinsurance Agreement” means that certain Coinsurance Agreement entered into
contemporaneously with the execution of this Agreement, by and between the Company and Buyer, attached hereto as Exhibit E.
“Company Group” means the Company and the Company Subsidiaries.
“Company Intellectual Property” means all Intellectual
Property that is owned by the Company.
“Company IP Agreements” means
all licenses, sublicenses, consent to use agreements, settlements, coexistence agreements, covenants not to xxx, waivers, releases, permissions and other Contracts, whether written or oral, relating to Intellectual Property to which the Company is a party, beneficiary or otherwise bound.
“Company IP Registrations” means
all Company Intellectual Property that is subject to any issuance, registration or application by or with any Governmental
Authority or authorized private registrar in any jurisdiction, including issued patents, registered trademarks, domain names and copyrights, and pending applications for any of the foregoing.
“Company IT Systems” means all software, computer hardware, servers, networks, platforms, peripherals, and similar or related items of automated,
computerized, or other information technology (IT) networks and systems (including telecommunications networks and systems for
voice, data, and video) owned, leased, licensed, or used (including through cloud-based or other third-party service providers) by
the Company.
“Company Subsidiaries” means
Xxxxxxxxxx Financial, Inc. (a Louisiana corporation), Care Management Group LLC (a Louisiana limited liability company), KLIC Properties Texas, LLC (a Texas limited liability company) and Bluebonnet Properties, LLC (a Louisiana limited liability company).
“Contracts” means all contracts, leases, deeds,
mortgages, licenses, instruments, notes, commitments, undertakings, indentures, joint ventures and all other agreements, commitments and legally binding arrangements, whether written or oral.
“Disclosure Schedules” means the
Disclosure Schedules delivered by Seller and Buyer concurrently with the execution and delivery of this Agreement.
“Encumbrance” means any charge,
claim, community property interest, pledge, condition, equitable interest, lien (statutory or other), option, security interest, mortgage, easement, encroachment, right of way, right of first refusal, or
restriction of any kind, including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of
ownership.
“Environmental Claim” means any
Action, Governmental Order, lien, fine, penalty, or, as to each, any settlement, other resolution, or judgment arising therefrom, by or from any Person alleging liability of whatever kind or nature (including liability or responsibility for the costs of enforcement proceedings, investigations, cleanup, governmental response, removal or remediation,
natural resources damages, property damages, personal injuries, medical monitoring, penalties, contribution, indemnification and injunctive relief) arising out of, based on or resulting from: (a) the
presence, Release of, or exposure to, any Hazardous Materials; or (b) any actual or
alleged non-compliance with any Environmental Law or term or condition of any Environmental Permit.
“Environmental Law” means any
applicable Law, and any Governmental Order or binding agreement with any Governmental Authority: (a) relating to pollution (or the cleanup thereof) or the protection of natural resources, endangered or threatened
species, human health or safety, or the environment (including ambient air, soil, surface water or groundwater, or subsurface strata); or (b) concerning the presence of, exposure to, or the management, manufacture,
use, containment, storage, recycling, reclamation, reuse, treatment, generation, discharge, transportation, processing, production, disposal or remediation of any Hazardous Materials. The term “Environmental Law” includes, without limitation, the following (including amendments, their
implementing regulations and any state analogs): the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §§ 9601-9675; the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. §§ 6901-6987; Subtitle I of RCRA, 42 U.S.C. §§6991-6991m; the Federal Water Pollution Control Act, 33 U.S.C. §§ 1251 et seq.; the Safe
Drinking Water Act, 42 U.S.C. §§300f et seq.; the Federal Insecticide, Fungicide, and Xxxxxxxxxxx Xxx, 0 X.X.X. §000 et seq.; the Endangered Species Act, 16 U.S.C.
§§1531-1544; the National Environmental Policy Act, 42 U.S.C. §§ 4321-4347; the Toxic Substances Control Act, 15 U.S.C. §§ 2601 et seq.; the
Emergency Planning and Community Xxxxx-xx-Xxxx Xxx, 00 X.X.X. §§ 00000 et seq.; the Clean Air Act, 42 U.S.C. §§ 7401 et seq.; and the Occupational Safety and
Health Act, 29 U.S.C. §§ 651 et seq.
“Environmental Notice” means any
written or oral directive, notice of violation or infraction, or notice respecting any Environmental Claim relating to actual or alleged non-compliance with any Environmental Law or any term or condition of any Environmental
Permit.
“Environmental Permit” means
any Permit, notice of coverage, letter, clearance, consent, waiver, closure, exemption, decision or other action required under or
issued, granted, given, authorized by or made pursuant to Environmental Law.
“ERISA” means the Employee
Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.
“ERISA Affiliate” means all
employers (whether or not incorporated) that would be treated together with the Company or any of its Affiliates as a “single
employer” within the meaning of Section 414 of the Code or Section 4001 of ERISA.
“Escrow Agreement” means the Escrow
Agreement to be entered into by Buyer, Seller and Escrow Agent at the Closing, substantially in the form of Exhibit B.
“Executrix” means Xxxxx X. Xxxxx, as Independent
Executrix for the Estate.
“GAAP” means United States generally accepted
accounting principles in effect from time to time.
“Governmental Authority” means
any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other
non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.
“Governmental Order” means any
order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.
“Hazardous Materials” means: (a)
any material, pollutant, contaminant, substance, chemical, waste, product, derivative, compound, mixture, solid, liquid, mineral or gas, in each case, whether naturally occurring or manmade, that is hazardous, acutely hazardous, toxic, or words of similar import or regulatory effect under Environmental Laws; and (b) any petroleum or petroleum-derived products, radon, radioactive materials or wastes, asbestos in any form, lead or lead-containing materials, mold, pesticide, urea formaldehyde foam insulation, and polychlorinated biphenyls.
“Indebtedness” means, without duplication and with respect to any Person, all (a) indebtedness for borrowed money; (b) obligations for the deferred purchase
price of property or services, (c) long or short-term obligations evidenced by notes, bonds,
debentures or other similar instruments; (d) obligations under any interest rate, currency swap or other hedging agreement
or arrangement; (e) capital lease obligations; (f) reimbursement obligations under any letter of credit, banker's acceptance or similar credit transactions; (g) guarantees made by the Person on behalf of any third party in respect of obligations of the kind referred to in
the foregoing clauses (a) through (f); and (h) any unpaid interest, prepayment penalties, premiums, costs and fees that would arise or become due as a result of the
prepayment of any of the obligations referred to in the foregoing clauses (a) through (g).
“Indemnification Escrow Amount”
means $1,400,000.00 provided that, notwithstanding the forgoing, an amount equal to the Reserve Amount shall be withheld from the Indemnification Escrow Amount and paid to the Shareholder Representative in accordance with Section 10.13.
“Intellectual Property” means
any and all rights in, arising out of, or associated with any of the following in any jurisdiction throughout the world: (a) issued patents and patent applications
(whether provisional or non-provisional), including divisionals, continuations, continuations-in-part, substitutions, reissues, reexaminations, extensions, or restorations of any of the foregoing, and other Governmental Authority-issued indicia of invention ownership (including certificates of
invention, xxxxx patents, and patent utility models) (“Patents”); (b) trademarks, service
marks, brands, certification marks, logos, trade dress, trade names, and other similar indicia of source or origin, together with the goodwill connected with the use of and symbolized by, and all
registrations, applications for registration, and renewals of, any of the foregoing (“Trademarks”); (c) copyrights and works of
authorship, whether or not copyrightable, and all registrations, applications for registration, and renewals of any of the foregoing (“Copyrights”); (d) internet domain names and social media account or user names (including “handles”), whether or
not Trademarks, all associated web addresses, URLs, websites and web pages, social media sites and pages, and all content and data thereon or
relating thereto, whether or not Copyrights; (e) industrial designs, and all Patents, registrations, applications for registration, and
renewals thereof; (f) trade secrets, know-how, inventions (whether or not patentable), discoveries, improvements, technology, business and technical information,
databases, data compilations and collections, tools, methods, processes, techniques, and other confidential and proprietary information and all rights therein (“Trade Secrets”); (g) computer programs, operating systems, applications, firmware, and other code, including all source code, object code, application programming interfaces, data files, databases, protocols, specifications, and other documentation thereof; and (h) all other intellectual or industrial property and proprietary rights.
“International Star” means International Star, Inc., a Nevada corporation.
“Key Employees” means each of Xxx Xxxxxxxx, Xxxxxx X. Xxxxxx, Xxxx Xxxxxx, Xxxxx XxXxxxx, Xx Xxxxx, Xxxxx Xxxxx, Xxx Xxxxx, and Xxxxx Xxxx.
“Law” means any statute, law, ordinance, regulation,
rule, code, order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority.
“Licensed Intellectual Property”
means all Intellectual Property in which the Company Group holds any rights or interests granted by other Persons, including Seller or any of its Affiliates.
“Losses” means losses, damages, liabilities, deficiencies, Actions, judgments, interest, awards, penalties, fines, costs or expenses of whatever kind, including reasonable attorneys' fees and the cost of enforcing any right to indemnification hereunder and the cost of pursuing any insurance providers; provided, however, that “Losses” shall not include punitive damages, except
to the extent actually awarded to a Governmental Authority or other third party, and any indirect, incidental, consequential, special, punitive, or exemplary losses or damages, including any loss of income,
profits or opportunities (collectively, the “Consequential Losses”).
“Louisiana Insurance Department” or “LDI”
means the Department of Insurance of the State of Louisiana.
“Material Adverse Effect” means any event, occurrence,
fact, condition or change that is, or could reasonably be expected to become, individually or in the aggregate, materially adverse
to (a) the business, results of operations, condition (financial or otherwise), prospects or assets of the Company Group, or
(b) the ability of Seller to consummate the transactions contemplated hereby on a timely basis; provided, however, that any such effect
resulting from (a) any change in economic conditions generally or in the industries in which the Company Group operates, (b) national or international political or social conditions, (c) any change in law, rule or regulation or GAAP or statutory
accounting rules prescribed by the Louisiana Insurance Department or interpretations thereof applicable to any member of the Company Group or (d) any actions required to be taken pursuant to this Agreement or any agreement contemplated herein,
shall not be considered when determining whether a Material Adverse Effect has occurred.
“Permits” means all permits,
licenses, franchises, approvals, authorizations, registrations, certificates, variances and similar rights obtained, or required to be obtained, from Governmental Authorities.
“Person” means an individual,
corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.
“Pre-Closing Taxes” means Taxes
of the Company for any Pre-Closing Tax Period plus Taxes of the Company for any Straddle Period that are treated as Pre-Closing Taxes in accordance with Section 6.04.
“Pro Rata Share” means, with respect to each Seller, the percentage set forth in the column entitled “Pro
Rata Share” across from such Seller’s name on Schedule A hereto.
“Real Property” means the real property owned, leased
or subleased by the Company Group, or used in the business of the Company Group, together with all buildings, structures and facilities located thereon.
“Release” means any actual or
threatened release, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, abandonment, disposing or allowing to escape or
migrate into or through the environment (including, without limitation, ambient air (indoor or outdoor),
surface water, groundwater, land surface or subsurface strata or within any building, structure, facility or fixture).
“Representative” means, with
respect to any Person, any and all directors, managers, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person whether serving in such capacities
before or after the Closing.
“Restricted Business” means providing or
offering insurance products, including whole and term life, fire, insurance policies to cover burial expenses, mortgage insurance, hospital indemnity, and ambulance policies.
“Seller's Knowledge” or any other similar knowledge
qualification, means the actual knowledge of Seller, any director, manager, trustee or officer of Seller, or of any director, manager, trustee or officer of any member of the Company Group or what such Person could reasonably be expected to discover or otherwise become aware of in the
course of conducting a reasonable investigation concerning the existence of such fact, event, or matter.
“Shareholder” means each holder of capital stock of
the Company.
“Surplus Note” means that debenture in the aggregate principal amount of
$4,000,000.00, plus interest, in favor of Rose-Neath, as evidenced by that Surplus Debenture executed by the Company, dated April 9, 2009.
“Tax Return” means any return, declaration, report,
claim for refund, information return or statement or other document relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
“Taxes” means all federal,
state, local, foreign and other income, gross receipts, sales, use, production, ad valorem, transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise,
severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest, additions or penalties with respect thereto and
any interest in respect of such additions or penalties.
“Transaction Documents” means this Agreement, the
Escrow Agreement and the Coinsurance Agreement.
Section 2.01 Purchase and Sale. Subject to the terms and conditions set forth herein, at the Closing, Seller shall sell to Buyer, and Buyer shall
purchase from Seller, the Shares, free and clear of all Encumbrances, for the consideration specified in Section
2.02.
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(a)
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$22,000,000.00 to be paid to Sellers in cash; and
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(b)
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either:
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(i)
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in the event the Bond Gains are equal to or greater than $15,000,000.00, one-half (50%) of that amount by which the total amount
of the Bond Gains exceeds $15,000,000.00, which amount, if any, shall be paid to Sellers in cash in addition to the amount set forth in Section 2.02(a); or
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(ii)
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in the event the Bond Gains are less than $15,000,000.00, all (100%) of that amount by which $15,000,000.00 exceeds the total
amount of the Bond Gains shall be deducted from the amount set forth in Section 2.02(a).
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(collectively, the “Purchase Price”), allocable among the Shareholders as set forth on Schedule A.
In addition to Buyer’s payment of the Purchase Price, and subject to the approval of the the LDI, Seller shall cause the Company to satisfy the
total amount owed by the Company to Rose-Neath pursuant to the Surplus Note (the “Surplus Note Payment”), by (i) first offsetting the Surplus Note (plus any accrued interest thereon) against the amounts owed
by Rose-Neath to the Company pursuant to the Company’s loan number 180017, which loan was made by the Company to Rose-Neath and is evidenced by that Commercial Promissory Note dated April 9, 2009, executed by Rose-Neath in the original principal
amount of $4,000,000.00 (the “Rose-Neath Note”), and (ii) second, by paying any remaining amounts owed on the Surplus Note (plus any accrued interest thereon) to Rose-Neath in cash.
Section 2.04 Closing. Subject to the terms and conditions of this Agreement, the purchase and sale of the Shares contemplated hereby shall take place at a closing (the “Closing”) to be held at 9:00 a.m., Central time, no later than two (2) Business Days after the last of the conditions to Closing set forth in ARTICLE VII have been satisfied or waived (other than conditions which, by their nature, are to be satisfied on the
Closing Date), at the offices of Baker, Donelson, Bearman, Xxxxxxxx & Xxxxxxxxx, PC, New Orleans, Louisiana, or at such other time or on such other date or at such other place as Seller and Buyer may mutually agree
upon in writing (the day on which the Closing takes place being the “Closing Date”).
Section 2.05 Withholding Tax. Buyer and the Company shall be entitled to deduct and withhold from the Purchase Price all Taxes
that Buyer and the Company may be required to deduct and withhold under any provision of Tax Law. All such withheld amounts shall be treated as delivered to Seller hereunder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER AND COMPANY
REPRESENTATIONS AND WARRANTIES OF SELLER AND COMPANY
Except as set forth in the correspondingly numbered Section of the Disclosure Schedules, each Seller and the Company, jointly and severally, represent and warrant to Buyer that the statements contained in this ARTICLE III are true and correct as of the date hereof.
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(a)
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If Seller is not a natural person, Seller
is a corporation, trust, limited liability or partnership duly organized, validly existing and in good standing under the Laws of
the state of its organization (as applicable). Seller has full power and authority to enter into the Transaction Documents, to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Seller of the Transaction
Documents, the performance by Seller of its obligations hereunder and thereunder, and the consummation by Seller of the
transactions contemplated hereby and thereby have been duly authorized by all requisite action on the part of Seller.
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(b)
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If Seller is a natural person, Seller
has full legal capacity to enter into the Transaction Documents, to carry out his or her obligations hereunder and thereunder and
to consummate the transactions contemplated hereby and thereby.
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(c)
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The Transaction Documents have been duly executed and delivered by Seller, and
(assuming due authorization, execution and delivery by the other parties thereto) the Transaction Documents constitute a legal, valid and binding obligation of Seller enforceable against
Seller in accordance with its terms.
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Section 3.02 Organization, Authority and Qualification of the Company Group. Each member of the Company Group is a company duly organized, validly existing and in good
standing under the Laws of the state of its organization and has full power and authority to own, operate or lease the properties and assets now owned,
operated or leased by it and to carry on its business as it has been and is currently conducted. Section
3.02 of the Disclosure Schedules sets forth each jurisdiction in which each member of the Company Group is licensed or
qualified to do business, and each member of the Company Group is duly licensed or qualified to do business and is in good
standing in each jurisdiction in which the properties owned or leased by it or the operation of its business as currently conducted makes such licensing or
qualification necessary. All corporate or limited liability company, as applicable, actions taken by each member of the Company
Group in connection with the Transaction Documents will be duly authorized on or prior to the Closing.
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(d)
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(i) The Surplus Note is the only debenture owed by the Company; (ii) that % Surplus Debenture executed by the Company, dated December
3, 2008, was never consummated and is null and void; and (iii) the total amount of the Company’s obligations on all debentures as of the date hereof is $6,411,506.00.
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(a)
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The Company owns 100% of the issued and outstanding common stock or limited liability company interests of the Company Subsidiaries (the “Subsidiary Equity”). All of the Subsidiary Equity has been duly authorized, are validly issued, fully paid and non-assessable, and are owned of record and beneficially by the Company, free and clear of all Encumbrances.
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(b)
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Other than the Company Subsidiaries and International Star, neither the Company
nor any Company Subsidiary owns or has any interest in any shares or have an ownership
interest in any other Person.
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(c)
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Upon consummation of the transactions contemplated by this Agreement, the Company
shall own all of the Subsidiary Equity, free and clear of all Encumbrances.
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(d)
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All of the Subsidiary Equity was issued in compliance with applicable Laws. None of the Subsidiary Equity were issued in violation of any agreement, arrangement or commitment
to which Seller or the Company is a party or is subject to or in violation of
any preemptive or similar rights of any Person.
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(e)
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There are no outstanding or authorized options, warrants, convertible securities or
other rights, agreements, arrangements or commitments of any character relating to the Subsidiary Equity or obligating any Company
Subsidiary or the Company to issue or sell any shares of capital stock or membership interest of, or any other interest in, any Company Subsidiary. No Company Subsidiary has
any outstanding or authorized any stock appreciation, phantom stock, profit participation or similar rights. There are no voting trusts, stockholder
agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of
the Subsidiary Equity.
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Section 3.05 No Conflicts; Consents. Except as set forth on Schedule 3.05, the execution, delivery and performance by Seller of the Transaction Documents, and the consummation of the transactions
contemplated hereby and thereby, do not and will not: (a) conflict with or result in a violation or breach of, or default under, any provision of the certificate of incorporation, by-laws or other organizational documents of
any member of the Company Group; (b) conflict with or result in a violation or breach of any provision of any Law or Governmental Order applicable to Seller or any member of the Company Group; (c) require the consent, notice or other action by any Person under, conflict with, result in a violation or breach of, constitute a default or an event that, with or without notice or lapse of time or both, would constitute a default under, result in the acceleration of or create in any party the right to
accelerate, terminate, modify or cancel any Contract to which Seller or any member of the Company Group
is a party or by which Seller or any member of the Company Group is bound or
to which any of their respective properties and assets are subject (including any Material Contract) or any Permit affecting the properties, assets or business of the Company; or (d) result in the
creation or imposition of any Encumbrance other than Permitted Encumbrances on any properties or assets of any member of the Company Group or Seller. Except as set forth on Schedule 3.05, no consent, approval, Permit, Governmental
Order, declaration or filing with, or notice to, any Governmental Authority is
required by or with respect to Seller or any member of the Company Group in connection with the execution and
delivery of the Transaction Documents and the consummation of the transactions contemplated hereby and thereby, except for consent of the Louisiana Insurance Department and filing of the
required Form A.
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(a)
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Complete copies of the Company Group's audited financial statements consisting of the balance sheet of each member of the Company Group
as of December 31 in each of the years 2016, 2017 and 2018 and the related statements of income and retained earnings, stockholders' equity and cash flow for the years then ended (the “Audited Financial
Statements”), and unaudited financial statements consisting of the balance sheet of each member of the Company Group as of June 30, 2019 and the related statements of income and retained earnings, stockholders' equity and cash
flow for the six-month period then ended (the “Interim Financial Statements” and together with the Audited Financial Statements, “Financial Statements”) are
included in the Disclosure Schedules. The Financial Statements have been prepared have been prepared in accordance with the statutory accounting rules prescribed or permitted by the Louisiana Insurance Department, applied on a consistent
basis throughout the periods indicated. The Financial Statements are based on the books and records of the relevant member of the Company Group, and fairly present the financial condition of such member of the Company Group as of the
respective dates they were prepared and the results of the operations of such member of the Company Group for the periods indicated. The balance sheet of the Company as of December 31, 2018 is referred to herein as the “Balance Sheet” and the date thereof as the “Balance Sheet Date” and the balance sheet of the Company as of June 30, 2019 is referred to herein as the “Interim Balance Sheet” and the date thereof as the “Interim Balance Sheet Date”. The Company Group maintains a standard system of accounting established and
administered in accordance with the statutory accounting rules prescribed by the Louisiana Insurance Department.
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(b)
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For the last three (3) calendar years and 2019 year to date, the Company (and each
Company Subsidiary, if applicable) has filed all required Financial Statements, together with all exhibits, interrogatories,
notes, actuarial opinions, affirmations, certifications, schedules or other material supporting documents in connection therewith, required to be filed with the Louisiana Insurance Department on
forms prescribed or permitted by the Louisiana Insurance Department.
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(c)
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Except as set forth in Schedule 3.06(c) or in the notes to the Financial Statements, no material weakness or significant
deficiency with respect to any of the Financial Statements has been asserted in writing or otherwise communicated to any member of the Company Group.
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(d)
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The Company has delivered to Buyer copies
of all material actuarial reports prepared by appointed actuaries with respect to any member of the Company Group and the business of the Company Group for
the last three (3) calendar years and 2019 year to date, and all attachments, opinions, certifications, addenda, supplements and modifications thereto.
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(e)
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The Company has delivered to Buyer true and
complete copies of all risk-based capital calculations and accompanying analyses and reports submitted by the Company (or any other Company Subsidiary)
to the Louisiana Insurance Department for the last three (3) calendar years. Except as indicated in the Financial Statements or in any amended calculations submitted to the Louisiana Insurance Department as
reflected in Schedule 3.06(e), such calculations were true and accurate, in all material respects, as of the respective dates as of which such calculations were prepared.
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(f)
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Except for the Financial Statements, and except for monthly internal income
statements and balance sheets prepared by the Company Group, copies of which have previously been delivered to Buyer, and except as set forth in Section 3.06(f)
of the Disclosure Schedules, no other financial statements have been prepared by or with respect to any member of the Company Group (whether on a GAAP, statutory, consolidated, hybrid or other basis).
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(g)
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Except as set forth in the Financial Statements or Schedule 3.06(g), (a) there are no Liabilities between a member of
Company Group, on the one hand, and Seller or any of its Affiliates (other than a member of the Company Group), on the other hand, and (b) neither Seller nor any of its Affiliates (other than a member of the Company Group) provide or
cause to be provided to the Company Group any products, services, equipment, facilities, or similar items that, in the case of this clause (b), individually or in the aggregate are material to the business or condition of the Company
Group.
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Section 3.07 Liabilities. The Company Group has no liabilities, obligations or commitments of any nature whatsoever, asserted or unasserted, known or unknown, absolute or contingent,
accrued or unaccrued, matured or unmatured or otherwise (“Liabilities”), except (a) those which are adequately reflected or reserved against in the Interim Balance Sheet or Financial
Statements as of the Interim Balance Sheet Date, (b) those which have been incurred in the ordinary course of business consistent with past practice since the Interim Balance Sheet Date and that are not reasonably likely to have a Material Adverse Effect, (c) in the case of the Financial Statements, liabilities and obligations of a type or nature not required under statutory accounting principles to be reflected in the Financial
Statements or (d) liabilities set forth in the Closing Indebtedness Certificate.
Section 3.08 Absence of Certain Changes, Events and Conditions. Except as set forth on Schedule 3.08, since the Balance Sheet
Date, and other than in the ordinary course of business consistent with past practice, there has not been, with respect to the Company Group, any:
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(a)
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event, occurrence or development that has had, or
could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;
|
|
(e)
|
declaration or payment of any dividends or distributions on or in respect of any of its capital stock or redemption, purchase or acquisition
of its capital stock;
|
|
(f)
|
material change in any method of accounting or accounting
practice of the Company Group, except as required by statuary accounting or as disclosed in the notes to the Financial Statements;
|
|
(h)
|
entry into any Contract that would constitute a Material
Contract or amend or terminate any Material Contract;
|
|
(j)
|
transfer, assignment, sale or other disposition of any of
the assets shown or reflected in the Financial Statements or cancellation of any debts or entitlements;
|
|
(k)
|
transfer or assignment of or grant of any license or sublicense under or with respect to any Company Intellectual Property or Company IP Agreements;
|
|
(l)
|
abandonment or lapse of or failure to maintain in full force and effect any Company IP Registration;
|
|
(q)
|
imposition of any Encumbrance upon any of the Company Group
properties, capital stock or assets, tangible or intangible, except for Permitted Encumbrances;
|
|
(s)
|
hiring or promoting any person as or to (as the case may be) an officer or hiring or promoting any employee below officer except to fill a
vacancy in the ordinary course of business;
|
|
(u)
|
any loan to (or forgiveness of any loan to), or entry into any other transaction with, any of its stockholders or current or former directors, managers, officers and employees;
|
|
(v)
|
|
|
(y)
|
acquisition by merger or consolidation with, or by purchase of a substantial portion of the assets or stock of, or by any other manner, any business or any Person or any division thereof;
|
|
(aa)
|
action by any member of the Company Group to amend the
employment relationship with any Key Employee; or
|
|
(bb)
|
any Contract to do any of the foregoing, or any
action or omission that would result in any of the foregoing.
|
|
(ii)
|
all Contracts that require the Company Group to purchase its total requirements of any product or service from a third party or that contain “take or pay” provisions;
|
|
(iii)
|
all Contracts that provide for the indemnification by the
Company Group of any Person or the assumption of any Tax, environmental or other liability of any Person;
|
|
(vi)
|
all Contracts or arrangements with employees, independent
contractors, Producers or consultants (or similar arrangements) to which any member of the Company Group is a party;
|
|
(viii)
|
all reinsurance, coinsurance or other similar Contracts;
|
|
(ix)
|
except for Contracts relating to trade receivables, all Contracts relating to indebtedness (including, without limitation, guarantees) of the Company Group;
|
|
(x)
|
all Contracts with any Governmental Authority to which any member of the Company Group is a party (“Government Contracts”);
|
|
(xii)
|
any Contracts to which any member of the Company
Group is a party that provide for any joint venture, partnership or similar arrangement by the Company Group;
|
|
(xiii)
|
all Contracts between or among any member of the Company Group on the one hand and any Affiliate of any member of the Company Group (which shall be also identified on Schedule 3.23(n));
|
|
(xiv)
|
all Contracts between or among any member
of the Company Group on the one hand and Seller or any Affiliate of Seller (other
than any member of the Company Group) on the other hand (other than those set forth in the immediately preceding subparagraph);
|
|
(xv)
|
all Contracts between any member of the Company Group, on the one hand, and International Star, on the other hand;
|
|
(xvi)
|
all collective bargaining agreements or Contracts with any Union
to which any member of the Company Group is a party; and
|
|
(xvii)
|
any other Contract that is material to any member of the Company
Group and not previously disclosed pursuant to this Section 3.09.
|
|
(c)
|
The Lease, by and between the Company, as lessor, and A & M Xxxxxx Interests, LLC, as lessee, dated as of April 16, 2014 (the “A&M Xxxxxx Lease”) is still in effect as a reconducted lease on a “month to month” basis;
|
|
(d)
|
The option to purchase referenced in the A&M Xxxxxx Lease has not been exercised, and Seller has received no communications
related to the exercise of such option.
|
Section 3.11 Condition and Sufficiency of Assets. Except as set forth on Schedule 3.11, to Seller’s Knowledge, the
buildings, plants, structures, furniture, fixtures, machinery, equipment, vehicles and other items of tangible personal property of the Company Group are in all material respects, in good condition and
fit for use in the ordinary course of business consistent with past practices (in all cases, giving due account to the
age and length of use of such assets and normal wear and tear excepted).
Section 3.13 Insurance. Section 3.13 of the Disclosure Schedules
sets forth a true and complete list of all current policies or binders of fire, liability, product liability, umbrella liability, real and personal property, workers'
compensation, vehicular, directors' and officers' liability, fiduciary liability and other casualty and property insurance maintained by Seller or its Affiliates (including the Company Group) relating to the assets, business, operations, employees, officers, managers and directors of the Company Group (collectively, the “Insurance Policies”) and true and complete copies of such Insurance Policies have been delivered to Buyer. Such Insurance Policies are in full force and effect and shall remain in full force and effect following the
consummation of the transactions contemplated by the Transaction Documents. Neither Seller nor any of its Affiliates (including the Company Group) has received any written notice of cancellation of, premium increase with respect to, or alteration of coverage under, any
of such Insurance Policies. All premiums due on such Insurance Policies have either been paid or, if due and
payable prior to Closing, will be paid prior to Closing in accordance with the payment terms of each Insurance Policy. The Insurance Policies do not provide for any retrospective premium adjustment or other experience-based liability on the part of the Company
Group. All such Insurance Policies (a) are valid and binding in accordance with their terms; (b) to Seller’s Knowledge, are
provided by carriers who are financially solvent; and (c) have not been subject to any lapse in coverage. There are no claims related to the business of the
Company Group pending under any such Insurance Policies as to which coverage has been questioned, denied or disputed
or in respect of which there is an outstanding reservation of rights. None of Seller or any of its Affiliates (including
the Company Group) is in default under, or has otherwise failed to comply with any provision contained in any such Insurance
Policy. To Seller’s Knowledge, the Insurance Policies are of the type and in the amounts customarily carried by Persons
conducting a business similar to the Company Group and are sufficient, in all material respects, for compliance with all applicable Laws and Contracts to which any member of the Company Group is a party or by which it is bound.
|
(e)
|
Neither the Company Group nor Seller has allowed or created a condition likely to result in a violation of Environmental Law.
|
|
(f)
|
Section 3.16(f) of the Disclosure Schedules contains a complete and accurate list
of all active, inactive, or abandoned aboveground or underground storage tanks owned or operated by the Company
Group.
|
|
(h)
|
Neither Seller nor the Company Group has retained or assumed, by contract or operation of Law, any liabilities or obligations of third parties under Environmental Law.
|
No pension plan (other than a Multiemployer Plan)
which is subject to minimum funding requirements, including any multiple employer plan, (each, a “Single Employer Plan”) in which
employees of the Company Group or any ERISA Affiliate participate or have participated has an “accumulated funding deficiency”,
whether or not waived, or is subject to a lien for unpaid contributions under Section 303(k) of ERISA or Section 430(k) of the Code. No Single Employer Plan covering employees of the Company Group which is a defined benefit plan has an
“adjusted funding target attainment percentage,” as defined in Section 436 of the Code, less than 80%. Except as set forth in Section 3.17(c) of the Disclosure
Schedules, all benefits, contributions and premiums relating to each Benefit Plan have been timely paid in accordance with the terms of such Benefit Plan and all applicable Laws and accounting principles, and all benefits accrued under any unfunded Benefit Plan have been paid, accrued or otherwise adequately reserved to the extent required by, and in accordance with, GAAP. All Non-U.S. Benefit Plans that are intended to be funded
and/or book-reserved are funded and/or book-reserved, as appropriate, based upon reasonable actuarial assumptions.
|
(j)
|
Each Benefit Plan that is subject to Section 409A of the Code has been administered in compliance with its terms and the operational and documentary requirements of Section 409A of the Code and all applicable regulatory guidance (including
notices, rulings and proposed and final regulations) thereunder. The Company Group does not have any obligation to gross up, indemnify or otherwise reimburse any individual for any excise taxes, interest or penalties incurred pursuant to Section 409A of the Code.
|
|
(k)
|
Each individual who is classified by the Company Group as an
independent contractor has been properly classified for purposes of participation and benefit accrual under each Benefit Plan.
|
|
(m)
|
Except as set forth in Section 3.17(m) of the Disclosure Schedules, no service
provider to the Company Group or any ERISA Affiliate provides such services under any form of leasing agreement.
|
|
(n)
|
Except as set forth in Section 3.17(n) of the Disclosure Schedules, no Producer
who is not an employee of the Company Group or an ERISA Affiliate, nor any independent contractor, consultant or other individual who is not an employee of the Company Group or an ERISA Affiliate, is eligible for coverage under any Benefit
Plan.
|
|
(d)
|
Except as set forth on Schedule 3.18(d), no director, manager, officer, employee, agent, Producer, consultant, or contractor of the
Company Group, or any other Person, has any rights under, or is a party to, any agreement to receive payment in connection with the change of control of a member of the Company Group.
|
|
(b)
|
The Company Group has withheld and paid each Tax required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, customer, shareholder or other party, and complied with all information reporting and backup withholding provisions of applicable Law.
|
|
(c)
|
The Company Group has properly collected and remitted all sales, use, value added,
and similar Taxes with respect to sales or leases made to, purchases made from, or services provided to, as applicable,
its customers or has properly received and retained any appropriate Tax exemption certificates and other documentation for all sales, leases, or purchases made, or services provided, without charging or remitting sales, use, value added, and similar Taxes.
|
|
(d)
|
No claim has been made by any taxing authority in any jurisdiction where the Company Group does not file Tax Returns that it is, or may be, subject to Tax by
that jurisdiction.
|
|
(e)
|
No extensions or waivers of statutes of limitations have been given or requested with respect to any Taxes of the Company Group.
|
|
(f)
|
The amount of the Company Group's Liability for
unpaid Taxes for all periods ending on or before Interim Balance Sheet Date does not, in the aggregate, exceed the
amount of accruals for Taxes (excluding reserves for deferred Taxes) reflected on the Interim Balance Sheet. The amount
of the Company Group's Liability for unpaid Taxes for all periods following the Interim Balance Sheet Date shall not, in the aggregate, exceed the amount of accruals for Taxes (excluding reserves for deferred Taxes) as adjusted for the
passage of time in accordance with the past custom and practice of the Company Group (and which accruals shall not exceed comparable amounts incurred in similar periods in prior years). Since the
Interim Balance Sheet Date, the Company Group has not incurred any liability for Taxes arising from gains or losses
from unusual or infrequent events, which events would necessitate a separate disclosure under GAAP.
|
|
(g)
|
Section 3.19(g) of the Disclosure Schedules sets forth:
|
|
(i)
|
the taxable years of the Company Group as to which the
applicable statutes of limitations on the assessment and collection of Taxes have not expired; and
|
|
(ii)
|
those years, if any, in past five (5) tax years for which examinations by the taxing authorities have been completed or those taxable
years for which examinations are presently being conducted.
|
|
(h)
|
All deficiencies asserted, or assessments made, against the
Company Group as a result of any examinations by any taxing authority have been fully paid.
|
|
(i)
|
The Company Group is not a party to any Action by any taxing authority. There are no pending or, threatened Actions by any taxing authority, and the Company Group has not received from any taxing authority any request for information related to Tax matters.
|
|
(j)
|
Seller has delivered to Buyer copies of all federal, state, local and foreign
income, franchise and similar Tax Returns, examination reports, and statements of deficiencies assessed against, or agreed to by, the Company Group for all Tax periods ending on or after December 31, 2014.
|
|
(k)
|
There are no Encumbrances for Taxes (other
than for current Taxes not yet due and payable) upon the assets of the Company Group.
|
|
(l)
|
The Company Group is not a party to, or bound
by, any Tax indemnity, Tax sharing or Tax allocation agreement.
|
|
(m)
|
No private letter rulings, technical advice memoranda or similar agreement
or rulings have been requested, entered into or issued by any taxing authority with respect to the Company Group.
|
|
(n)
|
The Company Group has not been a member of an affiliated, combined, consolidated or
unitary Tax group for Tax purposes. The Company Group has no Liability for Taxes of any Person (other than the Company Group) under Treasury Regulations Section 1.1502-6 (or any corresponding provision of state, local or foreign Law), as transferee or successor, by contract or otherwise.
|
|
(o)
|
The Company Group will not be required to include any item of income in, or exclude any item or deduction from, taxable income for any taxable period or portion
thereof ending after the Closing Date as a result of:
|
|
(ii)
|
an installment sale or open transaction occurring on or prior to the Closing Date;
|
|
(iii)
|
any intercompany transaction or excess loss account described in Treasury
Regulations under Section 1502 of the Code, or similar provision of state, local or foreign
law;
|
|
(iv)
|
a prepaid amount received or deferred revenue accrued on or before the Closing Date;
|
|
(v)
|
any closing agreement under Section 7121 of the Code, or similar provision of state, local or foreign Law; or
|
|
(vi)
|
any election under Section 108(i) of the Code.
|
|
(p)
|
Seller is not a “foreign person” as that term is used in Treasury
Regulations Section 1.1445-2. The Company Group is not, nor has it been, a United States real property holding corporation (as defined in Section 897(c)(2) of the Code) during the applicable period specified in Section 897(c)(1)(a) of the Code.
|
|
(q)
|
The Company Group has not (i) been a “distributing corporation” or a “controlled corporation” in connection with a distribution described in Section 355 of the Code or (ii) otherwise distributed stock of another Person, or had its stock distributed by another Person, in a transaction that was purported or intended
to be governed in whole or in part by Sections 355 and/or 361 of the Code.
|
|
(r)
|
The Company Group is not, and has not been, a party to, or a promoter of, a “reportable transaction” within the meaning of Section 6707A(c)(1) of the Code and Treasury Regulations Section 1.6011 4(b).
|
|
(s)
|
The Company Group is not, and has not been, a party to any Contract, agreement, plan or arrangement, including the Transaction Documents, which could give rise to the payment of any amount that would not be
deductible or on which a penalty or excise tax could be imposed, either on the payor or payee, pursuant to Sections
404, 409A or 4999 of the Code;
|
|
(t)
|
The Company Group is not subject to any applicable Tax holidays or other similar preferential programs that could terminate as a result of the transactions contemplated by the Transaction Documents;
|
|
(u)
|
The Company Group is not, and has not been, a party to any Contract, agreement, plan or arrangement, including the Transaction Documents, that has resulted or could result
in the payment of any “excess parachute payment” within the meaning of Section 280G of the Code, or similar provision of state, local or foreign Law;
|
|
(v)
|
The Company Group does not have, and has not had, a permanent establishment
(within the meaning of an applicable Tax treaty) or otherwise have, or had, an office or fixed place of business in a country other than the United States of America; or
|
|
(w)
|
Each Company Subsidiary (other than Xxxxxxxxxx Financial, Inc.) is and has been since its formation treated
as a partnership or entity disregarded as an entity separate from its owner for Tax purposes and (ii) no Governmental Authority responsible for the assessment or collection of Tax has challenged the treatment described in clause (i).
|
|
(x)
|
No Company Group member has ever been an "S" corporation and no "S" election has ever been filed with respect to a Company Subsidiary.
|
|
(a)
|
The minute books and stock record books of the Company Group, all of which have been delivered to Buyer, are complete and correct and
have been maintained in accordance with sound business practices. At the Closing, all of those books and records will be in the possession of the Company.
|
|
(b)
|
To Seller’s Knowledge, the minute books of the Company Group from January 1, 1999 through the Closing Date contain, in all material
respects, accurate and complete records of all meetings, and actions taken by written consent of, the stockholders, the board of directors and any committees of the board of directors or board of managers, as applicable, of each member of
the Company Group, and no meeting, or action taken by written consent, of any such stockholders, board of directors, board of managers, or committee has been held for which minutes have not been prepared and are not contained in such
minute books.
|
Section 3.21 Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by the Transaction Documents based upon arrangements
made by or on behalf of Seller.
Section 3.22 Data Privacy. In connection with its collection, storage, transfer (including, without limitation,
any transfer across national borders) and/or use of any personally identifiable information from any individuals, including, without limitation, any customers, prospective customers, employees and/or other third parties (collectively “Personal Information”), each member of the Company Group is and has been in compliance with all applicable Laws in all relevant jurisdictions, the Company Group’s privacy policies and the requirements of any
contract or codes of conduct to which any member of the Company Group is a party, except to the extent such noncompliance would not have, and would not reasonably be expected to have, a Material Adverse Effect. Each member of the Company Group
has commercially reasonable physical, technical, organizational and administrative security measures and policies in place to protect all Personal Information collected by it or on its behalf from and against unauthorized access, use and/or
disclosure. Each member of the Company Group is and has been in compliance with all Laws relating to data loss, theft and breach of security notification obligations except to the extent such noncompliance would not have, and would not
reasonably be expected to have, a Material Adverse Effect.
Section 3.23 Regulatory.
|
(a)
|
Each member of the Company Group has timely filed (taking into account permitted
extensions timely obtained, if any) all material regulatory reports, schedules, statements, documents, filings, submissions, forms, registrations and other documents, together with any amendments required to be made with respect
thereto, that each was required to file with any Governmental Authority, including state health and insurance regulatory authorities (“Regulatory Filings”) and any applicable federal regulatory authorities. All such Regulatory Filings complied with applicable Law.
To the extent required by applicable law, all premium rates, rating plans, policy forms and terms established or used by the Company Group that are required to be filed with and/or approved by a governmental authority have been so filed
and/or approved, the premiums charged by the Company Group conform to the premiums so filed and/or approved, and comply with the laws applicable thereto, and no such premiums are subject to any investigation by any governmental authority.
|
|
(b)
|
The Company Group’s licenses are valid and in full force and effect, and no member
of the Company Group is in material default under any license or accreditation, none of the licenses or accreditations
will be terminated as a result of the transactions contemplated hereby and no member of the Company Group has received notice that the Company Group is in violation of any of the terms or conditions of any license or accreditation.
|
|
(c)
|
All insurance Contract benefits, growth and interest payable by the Company
Group to any other Person that is a party to or bound by any insurance, reinsurance, coinsurance, or other similar
Contract with the Company Group have been paid in accordance with the terms of the insurance, reinsurance, coinsurance and other Contracts under which they arose, except for such benefits, growth and interest for which the Company Group reasonably believes there is a reasonable basis to contest payment.
|
|
(d)
|
No outstanding insurance Contract issued, reinsured, or underwritten by any member of the Company Group entitles the holder thereof or any other Person to
receive dividends, distributions, or to share in the income of any member of the Company Group or to receive any other benefits based on the revenues or
earnings of any member of the Company Group or any other Person.
|
|
(e)
|
The underwriting standards utilized and ratings applied by the Company Group and,
as of the date of this Agreement, by any other Person that is a party to or bound by any reinsurance,
coinsurance, or other similar Contract with any member of the Company Group conform to industry accepted underwriting standards, and to the standards and ratings
required pursuant to the terms of the respective reinsurance, coinsurance, or other similar Contracts.
|
|
(f)
|
All of the Company Group’s liability under insurance Contracts issued, reinsured, or underwritten by the Company Group which is beyond the Company Group’s
normal retention is fully reinsured under valid reinsurance Contracts with reinsurers which (i) are solvent, and (ii) all amounts to which any member of the Company Group is entitled under reinsurance, coinsurance, or other similar Contracts (including without limitation amounts based on paid and unpaid losses) as of the date of this Agreement are fully collectible.
|
|
(g)
|
Each Producer, at the time such Producer wrote,
sold, or produced business for the Company Group, was duly licensed as an insurance agent (for the type of business written, sold, or produced by such Producer) in the particular jurisdiction in which such Producer wrote, sold, or produced
such business for the Company Group.
|
|
(h)
|
No such Producer violated (or with or without notice or lapse of time or both, would have violated) any term or provision of any Law or
any writ, judgment, decree, injunction, or similar order applicable to the writing, sale, or production of business for the Company Group.
|
|
(i)
|
As of the date hereof, there is no investigation, audit, examination or inquiry relating to any member of the Company Group or its respective business in progress or contemplated by any Governmental
Authority.
|
|
(j)
|
No claim or assessment is pending or, to Seller’s Knowledge, threatened against any member of the Company Group by action of any state insurance guaranty association in connection with that
association’s fund relating to insolvent insurers.
|
|
(n)
|
Other than as set forth on Schedule 3.23(n), there are no agreements between any
member of the Company Group and any Affiliate of the Company Group that are currently in force and effect, or which previously were in force and effect at any
time since January 1, 2018. All regulatory notices and approvals required for or in respect of such affiliated interest agreements have been given and/or obtained,
as applicable, in accordance with applicable legal requirements and no notice of objection, violation or disapproval has been received by any member of the Company Group relative to any such affiliated interest agreement.
|
|
(o)
|
All compensation, including wages, commissions, bonuses, fees and other
compensation, payable to all Producers, agents or representatives of the Company Group for services performed have been
paid in full and there are no outstanding agreements, understandings or commitments of any member of the Company Group with respect to any compensation,
commissions, bonuses or fees.
|
Section 3.24 Insurance Products; Reserves.
|
(a)
|
Except as disclosed in Schedule 3.24(a), (i) each of the insurance plan products of the Company Group, including the benefit design and structure, administration, bid submission and pricing and calculation of pricing thereof, comply, in all material respects, with all
applicable Laws and contractual requirements, the Company Group’s internal policies and the applicable insurance policies or plans under which they arose and (ii) all insurance claims paid or benefits
provided by the Company Group have been paid or provided, in all material respects, in accordance with the terms of the applicable insurance policies
or plans under which they arose.
|
|
(b)
|
All reserves and other similar amounts with respect to insurance as established or reflected
in the Financial Statements as of and for the period ended June 30, 2019 were computed in accordance with commonly accepted actuarial standards consistently applied, were fairly stated in
accordance with the benefits specified by the provisions of the related insurance Contracts and in the related reinsurance, coinsurance, and other similar Contracts of the Company Group and meet the requirements of the insurance Laws of the State of Louisiana and of the states in which such insurance Contracts
were issued or delivered and when considered in light of the assets held by the Company Group with respect to the reserves and
related actuarial items, including without limitation then current assumptions concerning investment earnings on the assets and considerations anticipated to be received and retained under the
insurance Contracts, mortality and morbidity experience, persistency and expenses, all such reserves and related actuarial items held in support of the insurance Contracts of the Company Group, were good, sufficient and adequate as of June 30, 2019 (under commonly accepted actuarial standards consistently applied and fairly stated in accordance
with sound actuarial principles), to cover, in all material respects, the amount of all reasonably anticipated matured and unmatured benefits, dividends, claims, expenses and other Liabilities of
the Company Group under all insurance Contracts under which the Company Group has or will have any liability (including, without limitation, any liability arising under or as a result of any reinsurance, coinsurance, or other similar Contract).
|
|
(c)
|
The Company Group owns assets that qualify as legal reserve assets under
applicable insurance Laws in an amount at least equal to all such statutory reserves and other similar amounts.
|
Section 3.25 Affiliate Transactions. Except as set forth in Schedule 3.09(a)(xiii) and (xiv) of the Disclosure
Schedules, no Company Group member is a party to any transaction (including any loan or other credit accommodation) with another Company Group member or one of its Affiliates (each an “Affiliate
Transaction”). All Affiliate Transactions over $10,000 (i) were made in the ordinary course of business, and (ii) were made on substantially the same terms as those prevailing at the time for comparable transactions with Persons who are
not related to or Affiliates of the Company Group, and each are set forth on Schedule 3.25.
Section 3.26 Unclaimed Property. No member of the Company Group is (or will be as of the Closing
Date) subject to levies or assessments for unclaimed property under applicable unclaimed property, escheat or similar Laws. None of the assets of the Company Group constitute unclaimed property under Law. Except as set forth in Schedule 3.26, there is no abandoned or unclaimed property reportable under any state or local unclaimed property, escheat or similar Law related to the Company Group. Without limiting the generality of the foregoing, the Company Group has established
and followed procedures to identify any unclaimed property and, to the extent required by applicable Law, remit such unclaimed property to the applicable Governmental Authority. The Company Group’s records are adequate to permit a Governmental
Authority or outside auditor to confirm the foregoing representations.
Section 3.27 Market Practices. Each member of the Company Group, as applicable, have, in all
material respects, marketed, sold and issued the insurance policies and plans written by, and other products of, the Company Group in compliance with all
applicable Laws in the respective jurisdictions in which such insurance policies and plans have been marketed, sold or issued. All advertising, promotional and sales materials and other marketing practices used by the Company Group or any agents and
representatives thereof, have, in all material respects, complied and are currently in compliance with all applicable Laws in jurisdictions in which the marketing and sales materials are disbursed, and neither the manner in which the Company
Group compensates any Person involved in the sale or servicing of insurance products that is not an insurance agent, nor,
to Seller’s Knowledge, the conduct of any such Person, renders such Person an insurance agent under any applicable
Laws, and the manner in which the Company Group compensates each Person involved in the sale or servicing of
insurance or specialized health care service plan products on behalf of the Company Group is in compliance, in all material respects, with all applicable Laws.
Section 3.28 Full Disclosure. No representation or warranty by Seller or the Company in the Transaction Documents and no statement contained in the
Disclosure Schedules to this Agreement or any certificate or other document furnished or to be furnished to Buyer pursuant to the Transaction Documents contains any untrue statement of a material fact, or omits to state a material fact necessary
to make the statements contained therein, in light of the circumstances in which they are made, not misleading. Notwithstanding the foregoing, nothing in this Section 3.28 shall limit the knowledge or materiality qualifiers set forth in the
above representations.
Buyer represents and warrants to Seller that the statements contained
in this ARTICLE IV are true and correct as of the date hereof.
Section 4.01 Organization and Authority of
Buyer. Buyer is a corporation duly organized, validly existing and in good standing under the Laws of the State of
Utah. Buyer has full corporate power and authority to enter into the Transaction Documents, to carry out its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution and delivery by Buyer of the Transaction Documents, the performance by Buyer
of its obligations hereunder and thereunder and the consummation by Buyer of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of Buyer. The Transaction Documents have
been duly executed and delivered by Buyer, and (assuming due authorization, execution and delivery by the other parties thereto) the Transaction Documents constitute a legal, valid and binding obligation of Buyer enforceable against Buyer in accordance with its terms.
Section 4.02 No Conflicts; Consents. The execution, delivery and performance by Buyer of the Transaction Documents, and the consummation of the transactions contemplated hereby and thereby, do not and will not conflict with or result in a violation or breach of, or default
under, any provision of the certificate of incorporation, by-laws or other organizational documents of Buyer. No consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental
Authority is required by or with respect to Buyer in connection with the execution and delivery of the Transaction
Documents and the consummation of the transactions contemplated hereby and thereby, except for consent of the Louisiana Insurance Department, and
filing of the required Form A.
Section 4.03 Investment Purpose. Buyer is acquiring the Shares solely for its own account for investment purposes and not with a view to, or for offer or sale in connection with, any distribution thereof. Buyer acknowledges that the Shares are not registered under the Securities Act of 1933, as amended, or any state securities Laws, and that the Shares may not be transferred or sold except pursuant to the registration provisions of the Securities Act of 1933, as amended or pursuant
to an applicable exemption therefrom and subject to state securities Laws and regulations, as applicable.
Section 4.04 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by the Transaction Documents based upon arrangements made by or on behalf of Buyer.
Section 4.05 Operations of the Company Group. Buyer shall
engage at least the minimum number of employees necessary to avoid creating any obligation under the WARN Act on the part of Seller, and Buyer shall continue to employ at least the minimum number of employees for the minimum duration necessary to
avoid creating any obligation under the WARN Act on the part of Seller. Except as caused by Seller’s breach of Section 5.01(m), Buyer shall bear any and all obligations and liability under the WARN Act resulting from employment losses relating to
the sale of the Company Group.
Section 4.06 No Current Obligation to Sell. As of the date hereof and the Closing Date, Buyer has no binding obligation, offer or commitment, whether oral or written, to sell
the Company or any member of the Company Group.
Section 4.07 Acknowledgment. Buyer has no actual knowledge of the inaccuracy or incompleteness of any representation or warranty made herein by Seller.
Section 5.01 Conduct of Business Prior to the Closing. From the date hereof until the Closing, except as otherwise provided in this Agreement or the Coinsurance Agreement or consented to in writing by Buyer, Seller shall, and shall cause the Company
Group to, (x) conduct the business of the Company Group in the ordinary course of business consistent with past practice (including
collecting receivables and paying payables as they become due and in compliance with all applicable Laws); and (y) use best efforts to maintain and preserve intact the
current organization, business and franchise of the Company Group and to preserve the rights, franchises, goodwill and relationships of its employees, customers, lenders, suppliers, regulators and
others having business relationships with the Company Group. Without limiting the foregoing, from the date hereof until the Closing Date, Seller shall:
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(a)
|
not adopt, modify or propose any material change in the
governance or other organizational documents of the Company Group;
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(b)
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cause the Company Group to preserve and maintain all of its material Permits;
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(c)
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cause the Company Group to pay its debts, Taxes and other obligations when due unless validly contested;
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(e)
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cause the Company Group to continue in full force and effect
without modification all Insurance Policies, except as required by applicable Law;
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(f)
|
cause the Company Group to take commercially reasonable
actions to defend and protect its properties and assets from infringement or usurpation;
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(g)
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cause the Company Group to perform all of its material
obligations under all Contracts relating to or affecting its properties, assets or business;
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(i)
|
cause the Company Group to not materially change the employment relationship with
any Key Employee;
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(k)
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cause the Company Group not to take or permit any action that would cause any of the changes, events or conditions described in Section 3.08 to occur;
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(l)
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cause the Company Group to take commercially reasonable actions to maintain in
full force and effect any Company IP Registration; and
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(m)
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not implement any facility closings or employee layoffs that could implicate the WARN Act.
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Section 5.02 Access to Information. From the date hereof until the Closing, Seller shall, and shall cause the Company Group to, (a) afford Buyer and its Representatives full access to and the right to inspect all of the Real Property, properties, assets, premises, books
and records, Contracts and other documents and data related to the Company Group at Buyer’s cost; (b) furnish Buyer
and its Representatives with such financial, operating and other data and information related to the Company Group as Buyer
or any of its Representatives may request; and (c) instruct the Representatives of Seller and the Company Group to cooperate with Buyer in its investigation of the Company Group. Buyer and its Representatives shall not, without the advance written consent of Seller conduct environmental due diligence of
the Company Group and the Real Property, including the collecting and analysis of samples of indoor or outdoor air, surface water, groundwater or surface or subsurface land on, at, in, under or from the Company Group and the Real Property. Notwithstanding anything herein to the contrary, any investigation pursuant to this Section
5.02 shall be conducted in such manner as not to unreasonably interfere with the conduct of the business of Seller or the Company Group. No investigation by Buyer or other information received by Buyer shall operate as a waiver or otherwise
affect any representation, warranty or agreement given or made by Seller in this Agreement. Buyer shall not contact any employee or representative of Seller other than those specifically designated by Seller.
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(ii)
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any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement;
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(iii)
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any notice or other communication from any Governmental
Authority in connection with the transactions contemplated by this Agreement; and
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Section 5.05 Resignations. Seller shall deliver to Buyer written resignations, effective as of the Closing Date, of the officers, managers, and directors of the Company Group.
Section 5.06 Confidentiality. From and after the Closing, Seller
shall, and shall cause its Affiliates to, hold, and shall use its best efforts to cause its or their respective Representatives to hold, in confidence any and all information, whether written or oral, concerning the Company
Group, except to the extent that Seller can show that such information (a) is generally available to and known by the
public through no fault of Seller, any of its Affiliates or their respective Representatives; or (b) is lawfully acquired by Seller, any of its Affiliates or their respective Representatives from and after the Closing from sources which are not prohibited from disclosing such information by a legal, contractual or fiduciary obligation. If Seller
or any of its Affiliates or their respective Representatives are compelled to disclose any information by judicial or
administrative process or by other requirements of Law, Seller shall promptly
notify Buyer in writing and shall disclose only that portion of such information which Seller is advised by its counsel in writing is legally required to be
disclosed, provided that Seller shall use commercially reasonable efforts to obtain an appropriate protective order or other reasonable assurance that confidential treatment will be accorded such information.
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(c)
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During the Restricted Period, in the Territory, Seller shall not, and shall not permit any of its Affiliates to, directly or
indirectly, hire, associate with, or solicit any Producer that has a then current business relationship with any member of the Company Group, or that has had a business relationship with any member of the Company Group in the preceding
twelve (12) month period, or encourage any such Producer to cease working or associating with the Company Group, except pursuant to a general solicitation which is not directed specifically to any such Producer.
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(b)
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Seller and Buyer shall use reasonable best efforts
to give all notices to, and obtain all consents from, all third parties that are described in Section 3.05 of the Disclosure Schedules.
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(c)
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Without limiting the generality of the parties' undertakings pursuant to subsections (a) and (b) above, each of the parties hereto shall use all reasonable best efforts to:
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|
(i)
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respond to any inquiries by any Governmental Authority regarding
antitrust or other matters with respect to the transactions contemplated by the Transaction Documents;
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(ii)
|
avoid the imposition of any order or the taking of any action
that would restrain, alter or enjoin the transactions contemplated by the Transaction Documents; and
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Section 5.09 Maintenance of Benefits.
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(a)
|
Prior to or on the Closing Date, as determined by Buyer in its sole discretion, Seller shall cause each Benefit Plan set forth on
Schedule 5.09(a) to be separated, divided, or spun off as necessary so that each member of the Company Group is either a sponsor of or participant in Benefit Plans applicable to only members of the Company Group. Buyer shall not have
responsibility or liability with respect to any Benefit Plan not expressly assumed at Closing or with respect to any asserted or unasserted claims under any Benefit Plan which exists at Closing except with respect to those claims related
to Persons, and their dependents, covered by the Benefit Plans expressly assumed by the Company Group at Closing.
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(b)
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At the written request of Buyer provided no later than fifteen (15) days prior to the Closing Date, each of member of the Company Group
shall, at least one (1) Business Day prior to the Closing Date, adopt written resolutions (or take other necessary and appropriate action) to terminate certain Benefit Plans of the Company Group member, or participation in and sponsorship
of such Benefit Plan, and to fully vest all participants under such Benefit Plan, such termination and vesting to be effective no later than the Business Day preceding the Closing Date. The Company Group shall provide Buyer with an
advance copy of such proposed resolutions (and any related documents) and a reasonable opportunity to comment thereon prior to adoption or execution.
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(c)
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Seller will comply with the provisions in Section 5.09(a) and 5.09(b) to Buyer’s satisfaction and provide Buyer all documentation
necessary to give effect to the provisions in Section 5.09(a) and 5.09(b) at least ten (10) days prior to the Closing Date.
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Section 5.10 Closing Conditions. From the date hereof until the Closing, each party hereto shall, and Seller shall cause the Company Group to, use
best efforts to take such actions as are necessary to expeditiously satisfy the closing conditions set forth in ARTICLE VII hereof.
Section 5.11 Public Announcements. Unless otherwise required by applicable Law (based upon the reasonable advice of counsel), no party shall make any public announcements in respect of the Transaction Documents or the
transactions contemplated hereby or otherwise communicate with any news media without the prior written consent of the other party (which consent shall not be unreasonably withheld or delayed),
and the parties shall cooperate as to the timing and contents of any such announcement.
Section 5.12 Further Assurances. Following the Closing, each of the
parties hereto shall, and shall cause their respective Affiliates to, execute and deliver such additional documents, instruments, conveyances and assurances
and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by the Transaction Documents (including, without
limitation, to effect the transfer of any Real Property to Buyer).
Section 5.13 Security Interests. No Seller or Affiliate of a Seller shall take any action affecting any member of the Company Group’s position as a lender or mortgagee
under any mortgage loan secured by the real (immovable) property of any Seller or any Affiliate of any Seller. For the avoidance of doubt, Seller shall maintain and preserve the Company Group’s interests under such mortgages, including the
priorities thereof, and shall take no action that would cause or allow any of such mortgages to be junior to or subordinate to another creditor.
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(c)
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All transfer, documentary, sales, use, stamp, registration, value added and other such Taxes and fees (including any penalties and interest) incurred in connection with the Transaction Documents (including any real property transfer Tax and any other similar Tax) shall be borne and paid by Seller when due. Seller
shall, at its own expense, timely file any Tax Return or other document with respect to such Taxes or fees (and Buyer shall cooperate with respect thereto as necessary).
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Section 6.02 Termination of Existing Tax
Sharing Agreements. Any and all existing Tax sharing agreements (whether written or not) binding upon the Company
Group shall be terminated as of the Closing Date. After such date none of the Company Group, Seller nor any of Seller's Affiliates and their respective Representatives shall have any
further rights or liabilities thereunder or under any payables or receivables arising thereunder.
Section 6.03 Tax Indemnification. Each Seller, severally (each for such Seller’s Pro Rata Share), and not jointly nor solidarily, shall indemnify the Company
Group, Buyer, and each Buyer Indemnitee and hold them harmless from and against (a) any Loss attributable to any breach of or inaccuracy in any representation or warranty made in Section 3.19; (b) any Loss attributable to any breach or violation of, or failure to fully perform, any covenant, agreement, undertaking or obligation in this ARTICLE VI; (c) all Pre-Closing Taxes of the Company Group or otherwise relating to the business of the Company
Group prior to Closing; (d) all Taxes of any member of an affiliated, consolidated, combined or unitary group of which the Company Group (or any predecessor of the Company Group) is
or was a member on or prior to the Closing Date by reason of a liability under Treasury Regulation Section
1.1502-6 or any comparable provisions of foreign, state or local Law; and (e) any
and all Taxes of any person imposed on the Company Group arising under the principles of transferee or successor liability or by contract, relating to an event or transaction occurring before the Closing Date. In each of the above cases, together with any out-of-pocket fees and expenses (including attorneys' and accountants' fees) incurred in connection therewith. Seller
shall reimburse Buyer for any Taxes and/or related expenses of the Company
Group that are the responsibility of Seller pursuant to this Section 6.03 within ten (10) Business Days after payment of or notice of demand and payment for, whichever is sooner, such Taxes and/or related expenses by Buyer or the Company Group. Notwithstanding subpart (c) above, no Seller shall be liable for any Pre-Closing Taxes of the Company
Group attributed to the first fifteen million dollars ($15,000,000.00) realized on the Bond Gains and 50% of that portion of the Bond Gains in excess of fifteen million dollars ($15,000,000.00) attributable to
the Company Group.
Section 6.04 Straddle Period. Unless otherwise required by law, in the case
of Taxes that are payable with respect to a taxable period that begins before and ends after the Closing Date (each such period, a “Straddle Period”), the portion of any such Taxes that are treated as Pre-Closing Taxes for purposes of this Agreement shall be:
Notwithstanding the foregoing, in the event the Bond Gains (as defined in the Coinsurance Agreement) exceed fifteen million dollars ($15,000,000.00), (i) the
Company and Seller shall share equally (50%/50%) the Company’s additional tax expense attributed to that portion of the Bond Gains in excess of fifteen million dollars ($15,000,000.00), (ii) Buyer shall give Seller an estimate of the expected
amount to be shared by the Company and Seller as soon as practicable, (iii) any amounts available in the Indemnification Escrow Fund shall be applied toward satisfaction of Seller’s share of said tax expense and shall be delivered to Buyer, (iv)
any remaining amount owed by Seller shall, upon demand, be paid to Buyer by Seller.
Section 6.05 Section 280G.
Prior to the Closing, the Company Group shall seek the necessary approval from Seller of any payments or
benefits, if any, under any Contract, plan, or agreement which, separately or in the aggregate, would be an “excess
parachute payment” under Section 280G of the Code as a result of the transactions contemplated by this Agreement; provided that any communications to Seller
regarding such approval (including the computations of parachute payments, the identification of the “disqualified individuals” who are potential recipients of
parachute payments, and the waivers of payments and/or benefits executed by the affected individuals) shall be delivered within ten (10) Business Days following
the date hereof to Buyer and Buyer shall have the right to review and approve (which approval shall not be
unreasonably conditioned, withheld or delayed) such communications before they are distributed to Seller. The Company shall deliver to Buyer prior to the Closing reasonable evidence either (i)(a) that the shareholder approval
was solicited in conformity with Section 280G of the Code and the regulations promulgated thereunder and the necessary shareholder approval was obtained with respect to any payments and/or benefits that were subject to the shareholder vote (the “280G Approval”), or (b) that the
280G Approval was not obtained and, as a consequence, that such “excess parachute payments,” shall not be made or provided, as authorized under the waivers of
those payments and/or benefits which were executed by all of the affected individuals or (ii) that computations of parachute payments have been complete, and
“disqualified individuals” who are potential recipients of parachute payments have been identified, if any, and that pursuant to such calculations, there are no “excess parachute payments” to be made to any “disqualified individual.”
Section 6.07 Contests. Buyer agrees to give written notice to Seller
of the receipt of any written notice by the Company Group, Buyer or any of Buyer's
Affiliates which involves the assertion of any claim, or the commencement of any Action, in respect of which an
indemnity may be sought by Buyer pursuant to this ARTICLE VI (a “Tax Claim”);
provided, that failure to comply with this provision shall not affect Buyer's right to
indemnification hereunder. Buyer shall control the contest or resolution
of any Tax Claim; provided, however, that Buyer shall
obtain the prior written consent of Seller before entering into any settlement of a claim or ceasing to defend such claim, which consent shall not be
unreasonably withheld, conditioned or delayed; and, provided further, that Seller shall be entitled to participate in the defense of such claim and to employ counsel of its choice for such purpose, the fees and expenses of which separate counsel shall be borne solely by Seller.
Section 6.08 Cooperation and Exchange of Information. Seller and Buyer
shall provide each other with such cooperation and information as either of them reasonably may request of the other in filing any Tax Return pursuant to this ARTICLE
VI or in connection with any audit or other proceeding in respect of Taxes of the Company Group. Such cooperation and information shall include providing copies of relevant Tax Returns or portions thereof, together with accompanying
schedules, related work papers and documents relating to rulings or other determinations by tax authorities.
Section 6.09 Tax Treatment of Indemnification Payments. Any indemnification
payments pursuant to this ARTICLE VI shall be treated as an adjustment to the Purchase Price by the parties for Tax purposes, unless otherwise required by Law.
Section 6.10 Payments to Buyer. Any amounts payable to Buyer pursuant to this ARTICLE VI shall be satisfied: (i) from
the Indemnification Escrow Fund; and (ii) to the extent such amounts exceed the amount available to Buyer in the
Indemnification Escrow Fund, from each Seller severally (each for such Seller’s Pro Rata Share), and not jointly nor solidarily.
Section 6.11 Survival. Notwithstanding anything in this Agreement to the contrary, the
provisions of Section 3.19 and this ARTICLE VI shall survive for the full period of all applicable statutes of limitations (giving effect to any waiver, mitigation or
extension thereof) plus sixty (60) days.
Section 6.12 Overlap. To the extent that any obligation or responsibility pursuant to ARTICLE
VIII may overlap with an obligation or responsibility pursuant to this ARTICLE VI, the provisions of this ARTICLE VI shall govern.
Section 7.01 Conditions to Obligations of All Parties. The obligations of each party to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of each of the following
conditions:
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(b)
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Buyer shall have received all consents, authorizations, orders and approvals from the Governmental Authorities referred to in Section 3.05 in form and substance reasonably satisfactory to Buyer and Seller,
and no such consent, authorization, order and approval shall have been revoked.
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Section 7.02 Conditions to Obligations of Buyer. The obligations of Buyer to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or Buyer's waiver, at or prior to the Closing, of each of the following conditions:
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(d)
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No Action shall have been commenced against Buyer, Seller or the Company Group, which would prevent the Closing. No injunction or restraining order shall have been issued by any Governmental Authority, and be in effect, which restrains or prohibits any transaction contemplated hereby.
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(e)
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The Company Group shall have fully satisfied (including with respect to rights of timely notification) or obtained enforceable waivers in respect of any preemptive or similar rights directly
or indirectly affecting any shares of capital stock or other equity interests of the Company Group.
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(h)
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Written confirmation from the Executrix, that other than the Estate Pledge Agreements, the Estate has no other rights to or liens on the Shares.
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(i)
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Completion of all curative title work as more particularly set forth on Schedule 7.02(i).
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(j)
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From the date of this Agreement, there shall not have occurred any Material
Adverse Effect, nor shall any event or events have occurred that, individually or in the aggregate, with or without the lapse of time, could reasonably be expected to result in a Material Adverse Effect.
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(k)
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The Company shall have delivered a legal opinion of Xxxxxxx
Xxxxxx Xxxxx & Xxxxx, LLC, counsel to the Company, in form and substance reasonably satisfactory to Buyer, as set forth on Exhibit D.
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(l)
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The Escrow Agreement and Coinsurance Agreement shall have been executed and
delivered by the parties thereto and true and complete copies thereof shall have been delivered to Buyer.
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(m)
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At least three (3) Business Days before Closing,
Seller shall have delivered to Buyer the Closing Indebtedness Certificate.
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(o)
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Seller shall have delivered to Buyer a certificate pursuant
to Treasury Regulations Section 1.1445-2(b) that Seller is not a foreign person within the meaning of Section 1445 of the Code.
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(t)
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Seller shall have delivered to Buyer such other documents or
instruments as Buyer reasonably requests and are reasonably necessary to consummate the transactions contemplated by this Agreement.
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(u)
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Seller shall have amended and restated the Human Resource Service Agreement, dated as of June 27, 2013, between the Company and
Rose-Neath, and related provider agreements, to the satisfaction of Buyer.
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(v)
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Buyer shall have received the necessary documentation as required in Section 5.09(c).
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(w)
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Buyer shall have received a waiver and release of the option to purchase in the A&M Xxxxxx Lease and necessary documentation as
required to extend the term of the A&M Xxxxxx Lease through April 30, 2022.
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(x)
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Buyer shall have received all necessary documentation as required to extend the term of that certain Lease, by and between the Company,
as lessor, and Care Management Group, LLC, as lessee, dated as of September 30, 2016, through September 30, 2022.
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(y)
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The Coinsurance Agreement shall be in full force and effect and the insurance business subject thereto shall not have been recaptured
by the Company; provided, that, Buyer shall have waived this condition should the recapture occur due to Buyer’s election to cause the recapture in accordance with the Coinsurance Agreement.
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Section 7.03 Conditions to Obligations of Seller. The obligations of Seller to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or Seller's waiver, at or prior to the Closing, of each of the following conditions:
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(c)
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No injunction or restraining order shall have been issued by
any Governmental Authority, and be in effect, which restrains or prohibits any material transaction contemplated hereby.
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(d)
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The Escrow Agreement and Coinsurance Agreement shall have
been executed and delivered by the parties thereto and true and complete copies thereof shall have been delivered to Seller.
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(f)
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Buyer shall have delivered to the Escrow Agent by wire transfer of immediately available
funds the Indemnification Escrow Amount.
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(g)
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The LDI shall have approved for payment the total amount owed by the Company to Rose-Neath pursuant to the Surplus Note.
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(h)
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The Company shall have paid the Surplus Note Payment.
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Section 8.01 Survival. Subject to the limitations and other provisions of this Agreement, the representations and warranties contained herein (other
than any representations or warranties contained in Section 3.19 which are subject to ARTICLE VI) shall survive
the Closing and shall remain in full force and effect until the date that is eighteen (18) months from the Closing Date; provided, that the representations and warranties in (a) Section 3.01, Section 3.02, Section 3.03, Section 3.04, Section 4.01 and Section 4.04 shall survive indefinitely and (b) Section 3.12(i), Section 3.12(j), Section 3.16,
Section 3.17, and 3.22 shall survive for the full period of all applicable statutes of limitations (giving effect to any waiver, mitigation or extension thereof) plus
sixty (60) days. All covenants and agreements of the parties contained herein (other than any covenants or agreements contained in ARTICLE VI which are subject to ARTICLE VI) shall survive the Closing eighteen (18) months or for the period
explicitly specified therein. Notwithstanding the foregoing, any claims asserted in good faith with reasonable specificity (to the extent known at such time) and in writing by notice from the non-breaching party to the breaching party prior to
the expiration date of the applicable survival period shall not thereafter be barred by the expiration of the relevant representation or warranty and such claims shall survive until finally resolved.
Section 8.02 Indemnification By Seller. Subject to the other terms and conditions of this ARTICLE VIII,
each Seller severally (each for such Seller’s Pro Rata Share), and not jointly nor solidarily, shall indemnify and defend each of Buyer and its Affiliates
(including the Company Group) and their respective Representatives (collectively,
the “Buyer Indemnitees”) against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses
incurred or sustained by, or imposed upon, the Buyer Indemnitees based upon,
arising out of, with respect to or by reason of:
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(c)
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any data or cyber privacy, security, or security breach notification incidents that resulted in the unauthorized access, collection,
use, processing, storage, sharing, distribution, transfer, disclosure, security, destruction or disposal of any personal, financial, sensitive or confidential information or data (whether in electronic or any other form or medium);
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(d)
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the failure to properly and timely record reinscriptions regarding any mortgages in favor of any member of the Company Group that
encumber real (immovable) property owned by any Seller or any Affiliate of any Seller, or any member of the Company Group;
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(e)
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any liabilities arising under the agreements set forth on Schedule 3.18(d); or
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(f)
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any liabilities arising from the Company’s acquisition of directors and officers liability insurance policy for the transactions
contemplated under this Agreement.
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Section 8.03 Indemnification By Buyer. Subject to the other terms and conditions of this ARTICLE VIII, Buyer shall indemnify and defend each Seller and its Affiliates and their respective Representatives (collectively, the “Seller
Indemnitees”) against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or
sustained by, or imposed upon, the Seller Indemnitees based upon, arising out of, with respect to or by reason of:
Section 8.04 Certain Limitations. The indemnification provided for in Section 8.02 and Section
8.03 shall be subject to the following limitations:
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(d)
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Notwithstanding the foregoing, (i) in no event shall indemnified Persons be entitled to indemnification for the aggregate amount of any
Losses under this Agreement (including under Article VI) in excess of the sum of the Purchase Price plus the amount of the Surplus Note Payment, unless due to fraud or intentional misrepresentation. Notwithstanding anything herein to the
contrary and (ii) no party will be liable in respect of any Consequential Losses.
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Section 8.05 Indemnification Procedures. The party making a claim under this ARTICLE VIII is referred to as the “Indemnified Party”, and the party against whom such claims are asserted under this ARTICLE VIII is
referred to as the “Indemnifying Party”.
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(b)
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Any Losses payable to a Buyer Indemnitee pursuant to this ARTICLE VIII shall be satisfied: (i) first from the Indemnification Escrow
Fund; and (ii) to the extent the amount of Losses exceeds the amounts available to the Buyer Indemnitee in the Indemnification Escrow Fund, from each Seller severally (each for such Seller’s Pro Rata Share), and not jointly nor
solidarily.
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Section 8.07 Tax Treatment of Indemnification Payments. All indemnification
payments made under this Article VIII shall be treated by the parties as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.
Section 8.08 Effect of Investigation. Except as to Buyer’s representation in Section 4.07, the representations, warranties and covenants of the Indemnifying Party, and
the Indemnified Party's right to indemnification with respect thereto, shall not be affected or deemed waived by reason of any investigation made by or on behalf of the Indemnified Party (including by any of its Representatives) or by reason of
the fact that the Indemnified Party or any of its Representatives knew or should have known that any such representation or warranty is, was or might be inaccurate or by reason of the Indemnified Party's waiver of any condition set forth in
ARTICLE VII.
Section 8.09 Exclusive Remedies. Subject to Section 5.07 and Section
10.11, the parties acknowledge and agree that their sole and exclusive remedy with respect to any and all claims (other than claims arising from fraud, criminal activity or willful misconduct on the part of a party hereto in connection with the transactions contemplated by the Transaction Documents) for any breach of any representation, warranty, covenant, agreement
or obligation set forth herein or otherwise relating to the subject matter of the Transaction Documents, shall be pursuant to the indemnification provisions set forth
in ARTICLE VI and this ARTICLE VIII. In furtherance of the foregoing, each party hereby waives, to the fullest
extent permitted under Law, any and all rights, claims and causes of action for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of the Transaction Documents it may have against the
other parties hereto, their Representatives, and their Affiliates and each of their respective Representatives arising
under or based upon any Law, except pursuant to the indemnification provisions set forth in ARTICLE VI and this ARTICLE
VIII. Nothing in this Section 8.09 shall limit any Person's right to seek and obtain any equitable relief to which any Person
shall be entitled or to seek any remedy on account of any party's fraudulent, criminal or intentional misconduct.
Section 8.10 Insurance Recoveries. Any amount of Losses for which indemnification is provided under this ARTICLE VIII shall be reduced by an amount equal to any related
recoveries actually received by Buyer Indemnitee or Seller Indemnitee, as applicable, under any insurance policy; provided that the amount of such reduction shall in all cases be offset by the amount of all premiums and deductibles related
thereto, plus costs incurred by such Buyer Indemnitee or Seller Indemnitee, as applicable, in connection with the recovery of such amount under such insurance policy.
Section 8.11 Tax Benefits. Notwithstanding anything contained herein to the contrary, the amount of any Losses incurred or suffered by Buyer shall be calculated net of any
Tax benefit that Buyer actually realizes in the year the Losses are incurred as a result of being able to currently deduct the Losses for Tax purposes.
Section 9.02 Effect of Termination. In the event of the termination of this Agreement in accordance with this Article, this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto except:
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(b)
|
that nothing herein shall relieve any party hereto from liability for any willful breach of any provision hereof.
|
Section 10.01 Expenses. Except as otherwise expressly provided herein, all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with the Transaction
Documents and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses, whether or not the Closing shall have occurred.
Section 10.02 Notices. All notices, requests, consents, claims, demands, waivers
and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of
receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or
e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal
business hours of the recipient or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid.
Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section
10.02):
|
If to Seller Representative:
|
Xxxxxx X. Reso, Jr.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Facsimile:000-000-0000
E-mail: xxxx@xxxxxxx.xxx
|
|
with a copy (which shall not constitute notice) to:
|
Xxxxxxx Xxxxxx Xxxxx & Xxxxx, LLC
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Facsimile:000-000-0000
E-mail: xxxx@xxxxxxx.xxx;
xxxxxxxxx@xxxxxxx.xxx
Attention:Xxxxxx X. Reso, Jr., Esq.
Xxxxxx X. Xxxxxxxx, Esq.
|
|
If to Buyer:
|
X.X Xxx 00000
Xxxx Xxxx Xxxx, Xxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxxxx
E-mail: Xxxx.Xxxxxxxx@xxxxxxxxxxxxxxxx.xxx
and
X.X Xxx 00000
Xxxx Xxxx Xxxx, Xxxx 00000-0000
Attn: Xxxxxxx X. Xxxx
E-mail: Xxxxxxx.Xxxx@xxxxxxxxxxxxxxxx.xxx
|
|
with a copy (which shall not constitute notice) to:
|
Baker, Donelson, Bearman, Xxxxxxxx & Xxxxxxxxx, PC 000 Xx. Xxxxxxx Xxxxxx, Xxxxx 0000 Xxx Xxxxxxx, XX 00000 Facsimile:000-000-0000
E-mail:xxxxxxxxx@xxxxxxxxxxxxx.xxx
Attention:Xxxx X. Xxxxxxxx, Esq.
|
Section 10.03 Interpretation. For purposes of this Agreement, (a) the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”; (b) the word “or” is not exclusive; and (c) the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Agreement as a whole. Unless the context otherwise requires, references herein: (x) to Articles, Sections, Disclosure
Schedules and Exhibits mean the Articles and Sections of, and Disclosure Schedules and Exhibits attached to, this Agreement; (y) to an agreement, instrument or other document means
such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and
(z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an
instrument or causing any instrument to be drafted. The Disclosure Schedules and Exhibits referred to herein
shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein.
Section 10.04 Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.
Section 10.05 Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render
unenforceable such term or provision in any other jurisdiction. Except as provided in Section 5.07(f), upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement
so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the greatest extent possible.
Section 10.06 Entire Agreement. The Transaction Documents constitute the sole and entire agreement of the parties to this Agreement with
respect to the subject matter contained herein and therein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In
the event of any inconsistency between the statements in the body of this Agreement, the Coinsurance Agreement and those in the Escrow Agreement, the
Exhibits and Disclosure Schedules (other than an exception expressly set forth as such in the Disclosure Schedules), the statements in the body of this Agreement will control.
Section 10.07 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed;
provided, however, that prior to the Closing Date, Buyer may, without the prior written consent of Seller, assign all or any portion of its rights under this Agreement to one or more of its direct or
indirect wholly-owned subsidiaries. No assignment shall relieve the assigning party of any of its obligations hereunder.
Section 10.08 No Third-party Beneficiaries. Except as provided in Section
6.03 and ARTICLE VIII, this Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
Section 10.09 Amendment and Modification;
Waiver. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth
in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default
not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure
to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall
operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege.
Section 10.11 Specific Performance. The parties agree that irreparable damage
would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific
performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity.
Section 10.12 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
Section 10.13 Shareholder Representative.
|
(a)
|
By the execution and delivery of this Agreement or any letter of transmittal, including
counterparts thereof, each of the Shareholders of the Company Group will irrevocably constitute and appoint the Shareholder
Representative as the true and lawful agent and attorney-in-fact of such Shareholder with full powers of substitution to act in the name, place and stead of such Shareholder
with respect to the performance on behalf of such Shareholder under the terms and provisions hereof and to do or refrain from doing all such further acts and things, and to execute all such documents, as the Shareholder Representative shall deem necessary or appropriate in connection with any transaction contemplated hereunder, including the power to: (i) act for such Shareholder with respect to the Indemnification Escrow Amount; (ii) amend, modify or waive any provision of the Transaction Documents in any
manner; (iii) employ, obtain and rely upon the advice of legal counsel, accountants and other professional advisors as the Shareholder Representative, in the sole discretion thereof, deems necessary
or advisable in the performance of the duties of the Shareholder Representative; (iv) act for such Shareholder with respect
to all Purchase Price matters referred to herein; (v) incur any expenses, liquidate and withhold assets received on behalf of such Shareholder prior to their distribution to such Shareholder to the extent of any amount that the Shareholder Representative deems necessary for
payment of or as a reserve against expenses, and pay such expenses or deposit the same in an interest-bearing bank account established for such purpose, with
all such expenses reimbursed to the Shareholder Representative out of amounts received out of the Indemnification Escrow Amount, or if no amounts are received, by reimbursement from the Shareholders in accordance with their pro rata percentage ownership; (vi) receive all notices, communications and
deliveries hereunder on behalf of such Shareholder; (vii) do or refrain from doing any further act or deed on behalf of such Shareholder that the Shareholder Representative deems necessary or appropriate, in the sole discretion of the Shareholder
Representative, relating to the subject matter hereof as fully and completely as such Shareholder could do if personally present
and acting and as though any reference to such Shareholder herein was a reference to the Shareholder Representative; or (viii)
direct, authorize or permit any third party paying agent, if applicable, to take any of the foregoing actions; provided, however, that the Shareholder Representative shall have no obligation to act, except as expressly provided herein.
|
|
(b)
|
The appointment of the Shareholder Representative shall be deemed coupled with an
interest and shall be irrevocable, and any other Person may conclusively and absolutely rely, without inquiry, upon any action of the Shareholder
Representative as the act of each Shareholder in all matters referred to herein.
|
|
(c)
|
In the event the Shareholder Representative resigns or ceases to function in such capacity for any reason whatsoever, then the successor Shareholder Representative shall be the Person appointed by the Shareholders holding a majority of the pro rata percentages held by all Shareholders.
|
|
(d)
|
The Reserve Amount shall be used by the Shareholder Representative to satisfy the obligations of the Shareholder Representative set forth herein and to otherwise permit the Shareholder
Representative to perform its obligations set forth herein. As soon as practicable after the date on which the final obligation of the Shareholder
Representative under this Agreement has been discharged, the Shareholder Representative shall pay the Escrow Agent any amounts remaining in the Reserve Amount to be paid by Escrow Agent in accordance with the Escrow Agreement.
|
|
(e)
|
In furtherance of its role, the Shareholder Representative shall be entitled to
incur such reasonable costs and expenses as the Shareholder Representative may deem appropriate under the circumstances, which expenses may include hiring
attorneys, accountants, appraisers and other professional advisors. Such expenses shall be reimbursed from the Reserve Amount from time to time upon demand by the Shareholder
Representative.
|
|
(f)
|
Nothing in the Transaction Documents is intended, and nothing in the Transaction Documents shall be interpreted as,
imposing upon the Shareholder Representative, solely in its capacity as the agent and attorney-in fact for the Shareholders, any personal liability, personal
economic obligation or personal guarantee in favor of any party to this Agreement or any third party. The Shareholder Representative shall have no liability to the Shareholders with respect to actions taken or omitted to be taken in its capacity as the Shareholder
Representative. The Shareholders hereby agree to defend, indemnify, and hold the Shareholder Representative harmless from and against any and all liability, damages, costs, and expenses, including attorneys’
fees and court costs, that the Shareholder Representative may incur as a result of this Agreement or in the course of performance of its services hereunder, other than for such liability as the Shareholder Representative may incur
because of his (or his representatives) gross negligence, fraud or intentional misconduct
|
Section 10.14 Escrowed Funds. Subject to such deductions from
the Escrow Amount as are required pursuant to this Agreement (including any amounts that Buyer reasonably believes will be subject to claims for indemnification pursuant to any claim that has not been finally resolved) and the Escrow Agreement,
within five (5) Business Days after the eighteen (18) month anniversary of the Closing Date, the Parties shall instruct the Escrow Agent to release from escrow and deliver to the Shareholders the remaining balance of the Escrow Amount, plus any
interest accumulated thereon, in accordance with each Shareholder’s Pro Rata Share.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed, in multiple
counterpart originals, as of the date first written above by their respective officers thereunto duly authorized.
|
BUYER:
SECURITY NATIONAL LIFE INSURANCE COMPAN
|
|
|
By: /s/ Xxxxx X. Xxxxx
Name:Xxxxx X. Xxxxx
Title:CEO and President
SHAREHOLDER REPRESENTATIVE:
|
|
|
By: /s/Xxxxxx X. Reso, Jr.
|
|
|
Name: Xxxxxx X. Reso, Jr.
Title: Shareholder Representative
|
|
|
SELLERS:
|
| /s/Xxxxxx X. Xxxxxx |
|
|
Xxxxxx X. Xxxxxx
|
|
|
|
|
|
/s/ Xxxxxxxx X. Xxxxxx
|
|
|
Xxxxxxxx X. Xxxxxx
|
|
|
|
|
|
/s/ Xxxx Xxxxxx
|
|
|
Xxxx Xxxxxx
|
|
|
|
|
|
/s/ Xxx Xxxxx Xxxxxx
|
|
|
Xxx Xxxxx Xxxxxx
|
|
|
|
/s/ Xxxxxx X. Xxxxx
|
|
Xxxxxx X. Xxxxx
|
|
|
SELLERS (CONT.):
|
|
/s/ Xxxxxxxxxxx X. Xxxxxx
|
|
|
|
Xxxxxxxxxxx X. Xxxxxx
|
|
|
Xxxxxxxx X. Xxxxxx Inter Vivos Trust
|
|
|
By: /s/ Xxxx X. Xxxxxxxxxx
|
|
Xxxx X. Xxxxxxxxxx, Trustee
|
|
|
|
By: /s/ Xxxxxx X. Xxxxxx
|
|
Xxxxxx X. Xxxxxx, Trustee
|
|
|
|
By: /s/ Xxxxxxxx X. Xxxxxx
|
|
Xxxxxxxx X. Xxxxxx, Trustee
|
|
|
|
THE XXXXXX LIMITED PARTNERSHIP:
|
|
By:Xxxxxxxx X. Xxxxxx Inter Vivos Trust, General Partner
|
|
|
/s/ Xxxx X. Xxxxxxxxxx
|
|
|
|
Xxxx X. Xxxxxxxxxx, Co-Trustee of the Xxxxxxxx X. Xxxxxx Inter Vivos Trust
|
| /s/Xxxxxx X. Xxxxxx | |
|
|
Xxxxxx X. Xxxxxx, Co-Trustee of the Xxxxxxxx X. Xxxxxx Inter Vivos Trust
|
| /s/ Xxxxxxxx X. Xxxxxx | |
|
|
Xxxxxxxx X. Xxxxxx, Co-Trustee of the Xxxxxxxx X. Xxxxxx Inter Vivos Trust
|
|
By:Xxxxxxxx X. Xxxxxx Management Trust, General Partner
|
|
| /s/ Xxxx X. Xxxxxxxxxx | |
|
|
Xxxx X. Xxxxxxxxxx, Co-Trustee of the Xxxxxxxx X. Xxxxxx Management Trust
|
|
|
Xxxxxx X. Xxxxxx, Co-Trustee of the Xxxxxxxx X. Xxxxxx Management Trust
|
| /s/ Xxxxxxxx X. Xxxxxx | |
|
|
Xxxxxxxx X. Xxxxxx, Co-Trustee of the Xxxxxxxx X. Xxxxxx Management Trust
|
|
|
COMPANY:
|
|
|
XXXXXXXXXX LIFE INSURANCE COMPANY
|
| By: /s/ Xxxxxxx X. Xxxxxxxx | |
|
|
Name: Xxxxxxx X. Xxxxxxxx |
|
|
|
|
|
Title: President and Chief Executive Officer
|
EXHIBIT A
SHAREHOLDER LIST
|
Shareholder
|
Number of Shares Owned
|
Pro Rata Share
|
||||||
|
Xxxxxx Xxxxxxx Xxxxxx
|
152,018.5
|
19.0018
|
%
|
|||||
|
Xxx Xxxxx Xxxxxx
|
344.5
|
0.0431
|
%
|
|||||
|
Xxxxxxxx Xxxxx Xxxxxx
|
152,018.5
|
19.0018
|
%
|
|||||
|
Xxxx Xxxxxxxxx Xxxxxx
|
152,018.5
|
19.0018
|
%
|
|||||
|
Trustees of the Xxxxxxxx X. Xxxxxx Inter Vivos Trust
|
33,250.0
|
4.1561
|
%
|
|||||
|
The Xxxxxx Limited Partnership
|
310,350.0
|
38.7928
|
%
|
|||||
|
Xxxxxx X. Xxxxx
|
10.0
|
0.0013
|
%
|
|||||
|
Xxxxxxxxxxx X. Xxxxxx
|
10.0
|
0.0013
|
%
|
|||||
|
Total
|
800,020.0
|
100.0000
|
%
|
|||||
EXHIBIT B
FORM OF ESCROW AGREEMENT
[ATTACHED]
EXHIBIT C
TERRITORIES
|
TEXAS
Xxxxxxxx
Xxxxxxx
Xxxxxxxx
Aransas
Xxxxxx
Xxxxxxxxx
Atascosa
Xxxxxx
Xxxxxx
Bandera
Bastrop
Baylor
Bee
Xxxx
Bexar
Xxxxxx
Xxxxxx
Bosque
Bowie
Brazoria
Brazos
Xxxxxxxx
Xxxxxxx
Xxxxxx
Xxxxx
Xxxxxxxx
Burnet
Xxxxxxxx
Xxxxxxx
Xxxxxxxx
Xxxxxxx
Camp
Xxxxxx
Xxxx
Xxxxxx
Xxxxxxxx
Cherokee
Childress
Xxxx
Xxxxxxx
Coke
Shelby
Xxxxxxx
Xxxxx
Xxxxxxxxx
Xxxxx
Xxxxxxxx
Sterling
Xxxxxxxxx
Xxxxxx
Xxxxxxx
Tarrant
Xxxxxx
Xxxxxxx
Xxxxx
Xxxxxxxxxxxx
Xxxxx
Xxx Xxxxx
Xxxxxx
Trinity
Xxxxx
Xxxxxx
Upton
Uvalde
Val Verde
Van Zandt
Xxxxxxxx
Xxxxxx
Xxxxxx
Xxxx
Washington
Xxxx
Xxxxxxx
Xxxxxxx
Wichita
Wilbarger
Willacy
Xxxxxxxxxx
Xxxxxx
Xxxxxxx
Xxxx
Xxxx
Xxxxxx
Xxxxx
Xxxxxx
Xxxxxx
Xxxxxx
Independence
Izard
Xxxxxxx
Xxxxxxxxx
Xxxxxxx
Xxxxxxxxx
Xxxxxxxx
Xxx
Lincoln
Little River
Xxxxx
Lonoke
Madison
Xxxxxx
Xxxxxx
Mississippi
Xxxxxx
Xxxxxxxxxx
Nevada
Xxxxxx
Ouachita
Xxxxx
Xxxxxxxx
Pike
Poinsett
Polk
Xxxx
Prairie
Xxxxxxx
Xxxxxxxx
St. Xxxxxxx
Saline
Xxxxx
Xxxxxx
Xxxxxxxxx
Xxxxxx
Xxxxx
Xxxxx
Union
Van Buren
Washington
White
Xxxxxxxx
Yell
|
Xxxxxxx
Xxxxxx
Xxxxxxxxxxxxx
Colorado
Comal
Comanche
Concho
Xxxxx
Xxxxxxx
Xxxxxx
Xxxxx
Xxxxxxxx
Xxxxxx
Xxxxxxxxx
Xxxxxx
Xxxxxx
Xxxxxx
Deaf Xxxxx
Delta
Xxxxxx
XxXxxx
Xxxxxxx
Dimmit
Xxxxxx
Xxxxx
Eastland
Xxxxx
Xxxxxxx
Xxxxx
El Paso
Erath
Falls
Xxxxxx
Xxxxxxx
Xxxxxx
Xxxxx
Xxxxx
Fort Bend
Xxxxxxxx
Xxxxxxxxx
Frio
Xxxxxx
LOUISIANA
Acadia
Xxxxx
Ascension
Assumption
Avoyelles
Xxxxxxxxxx
Bienville
Bossier
Caddo
Calcasieu
Xxxxxxxx
Xxxxxxx
Catahoula
Claiborne
Concordia
De Xxxx
East Baton Rouge
East Xxxxxxx
East Xxxxxxxxx
Xxxxxxxxxx
Xxxxxxxx
Xxxxx
Iberia
Iberville
Xxxxxxx
Xxxxxxxxx
Xxxxxxxxx Xxxxx
La Salle
Lafayette
Lafourche
Lincoln
Xxxxxxxxxx
Madison
Xxxxxxxxx
Natchitoches
Orleans
Ouachita
Plaquemines
Pointe Coupee
Rapides
Red River
Richland
Sabine
St. Xxxxxxx
|
Galveston
Xxxxx
Xxxxxxxxx
Xxxxxxxxx
Goliad
Xxxxxxxx
Xxxx
Xxxxxxx
Xxxxx
Xxxxxx
Xxxxxxxxx
Xxxx
Xxxx
Xxxxxxxx
Xxxxxxxx
Xxxxxxxx
Xxxxxx
Xxxxxx
Xxxxxxxx
Xxxxxxx
Xxxxxxx
Xxxx
Xxxxxxxx
Xxxxxxxxx
Xxxxxxx
Xxxx
Hockley
Hood
Xxxxxxx
Houston
Xxxxxx
Xxxxxxxx
Xxxx
Xxxxxxxxxx
Xxxxx
Xxxx
Xxxxxxx
Jasper
Xxxx Xxxxx
Jefferson
Xxx Xxxx
Xxx Xxxxx
St. Xxxxxxx
St. Xxxxxx
St. Xxxxx
St. Xxxx The Baptist
St. Xxxxxx
St. Xxxxxx
St. Xxxx
St. Tammany
Tangipahoa
Tensas
Terrebonne
Union
Vermilion
Xxxxxx
Xxxxxxxxxx
Webster
West Baton Rouge
West Xxxxxxx
Xxxx Xxxxxxxxx
Xxxx
MISSISSIPPI
Xxxxx
Xxxxxx
Amite
Attala
Xxxxxx
Xxxxxxx
Xxxxxxx
Xxxxxxx
Chickasaw
Choctaw
Claiborne
Xxxxxx
Xxxx
Coahoma
Copiah
Xxxxxxxxx
De Xxxx
Xxxxxxx
Xxxxxxxx
Xxxxxx
Xxxxxx
Grenada
|
Xxxxxxx
Xxxxx
Xxxxxx
Xxxxxxx
Xxxxxxx
Xxxxxx
Xxxx
Xxxx
Xxxxxx
Xxxx
Xxxxxx
Kleberg
Xxxx
Xxxxx
Xxxx
Lampasas
La Salle
Lavaca
Xxx
Xxxx
Liberty
Limestone
Xxxxxxxx
Live Oak
Llano
Loving
Lubbock
Xxxx
XxXxxxxxx
McLennan
XxXxxxxx
Xxxxxxx
Xxxxxx
Xxxxxx
Xxxxx
Matagorda
Maverick
Xxxxxx
Xxxxxx
Midland
Xxxxx
Xxxxx
Xxxxxxx
Xxxxxxxx
Xxxxx
Xxxxxx
Xxxxxxxxx
Issaquena
Itawamba
Jackson
Xxxxxx
Xxxxxxxxx
Xxxxxxxxx Xxxxx
Xxxxx
Xxxxxx
Lafayette
Xxxxx
Xxxxxxxxxx
Xxxxxxxx
Xxxxx
Xxx
Xxxxxxx
Lincoln
Lowndes
Madison
Xxxxxx
Xxxxxxxx
Xxxxxx
Xxxxxxxxxx
Neshoba
Xxxxxx
Noxubee
Oktibbeha
Panola
Pearl River
Xxxxx
Xxxx
Pontotoc
Xxxxxxxx
Xxxxxxx
Xxxxxx
Xxxxx
Xxxxxxx
Xxxxxxx
Xxxxx
Xxxxx
Sunflower
Tallahatchie
|
Xxxxxxxx
Xxxxxxxx
Xxxxxxxxxx
Xxxxx
Xxxxxx
Xxxxxx
Nacogdoches
Xxxxxxx
Xxxxxx
Xxxxx
Nueces
Ochiltree
Oldham
Orange
Palo Pinto
Panola
Xxxxxx
Xxxxxx
Pecos
Xxxx
Xxxxxx
Presidio
Rains
Xxxxxxx
Xxxxxx
Real
Red River
Xxxxxx
Xxxxxxx
Xxxxxxx
Xxxxxxxxx
Rockwall
Xxxxxxx
Xxxx
Xxxxxx
San Xxxxxxxxx
San Xxxxxxx
San Xxxxxxxx
San Xxxx
Xxxxxxxxxx
Xxxxxx
Xxxxxxxxxxx
Xxxx
Tippah
Tishomingo
Tunica
Union
Xxxxxxxx
Xxxxxx
Washington
Xxxxx
Xxxxxxx
Xxxxxxxxx
Xxxxxxx
Yalobusha
Yazoo
ARKANSAS
Arkansas
Xxxxxx
Xxxxxx
Xxxxxx
Xxxxx
Xxxxxxx
Xxxxxxx
Xxxxxxx
Chicot
Xxxxx
Xxxx
Cleburne
Cleveland
Columbia
Xxxxxx
Xxxxxxxxx
Xxxxxxxx
Xxxxxxxxxx
Cross
Xxxxxx
Xxxxx
Xxxx
Xxxxxxxx
Xxxxxxxx
Xxxxxx
Xxxxxxx
Xxxxx
Xxxxxx
Hempstead
Hot Spring
|
EXHIBIT D
FORM OF LEGAL OPINION
[ATTACHED]
EXHIBIT E
COINSURANCE AGREEMENT
[ATTACHED]
