AGREEMENT AND PLAN OF MERGER
EXHIBIT 10.4
AGREEMENT AND
PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of July 16, 2001 (the "Agreement Date"), is made and entered into by and among XXXXX & Xxxxx, Inc., a Florida corporation ("Xxxxx & Xxxxx"), CV MERGER CO., an Oklahoma corporation and wholly-owned subsidiary of Xxxxx & Xxxxx, the principal business address of which is 000 Xxxxx Xxxxxxxxx Xxxxxx, Xxxxxxx Xxxxx, Xxxxxxx 00000 ("Merger Sub"; Merger Sub and Xxxxx & Xxxxx are sometimes hereinafter referred to collectively as the "Buyers"); COMPVANTAGE INSURANCE AGENCY, L.L.C., an Oklahoma limited liability company, the principal business address of which is 000 Xxxxx Xxxxx Xxxxxx, Xxxxx, Xxxxxxxx 00000 ("CompVantage"); AGENCY OF INDIAN PROGRAMS INSURANCE, L.L.C., an Oklahoma limited liability company, the principal business address of which is 000 Xxxxx Xxxxx Xxxxxx, Xxxxx, Xxxxxxxx 00000 ("Indian Programs" and together with CompVantage, each a "Target" and collectively, the "Targets"); and XXXXXXX X. XXXXX, a resident of the State of Oklahoma ("Xxxxx"), XXXX X. XXXXXXX, a resident of the State of Oklahoma ("Xxxxxxx"), and XXXXXX X. XXXXXXX, a resident of the State of Oklahoma ("Xxxxxxx" and collectively with Xxxxx and Xxxxxxx, each a "Member" and collectively, the "Members") (the Targets and the Members are sometimes hereinafter referred to collectively as the "Sellers").
Background
The Members own all of the outstanding membership interests of CompVantage and Indian Programs. The Targets are engaged primarily in the insurance agency business (including the administration of insurance programs) in the State of Oklahoma. The Boards of Directors of Xxxxx & Xxxxx and Merger Sub and the managing members of the Targets have determined that it is advisable and in the best interests of the companies and their respective stockholders and Members that the Targets merge with and into Merger Sub pursuant to this Agreement with Merger Sub being the surviving corporation (the "Merger"). Xxxxx & Xxxxx, Merger Sub and the Sellers desire to make certain representations, warranties, covenants and agreements in connection with the Merger and also prescribe certain conditions to the Merger. In addition, pursuant to an Agreement and Plan of Merger of this date (the "AIP Merger Agreement") among Xxxxx & Xxxxx, Xxxxx & Xxxxx of Oklahoma, Inc., an Oklahoma corporation and wholly-owned subsidiary of Xxxxx & Xxxxx, Agency of Insurance Professionals, Inc. ("AIP"), an Oklahoma corporation and affiliate of the Targets, and each of the Members (who are the sole shareholders of AIP), AIP will merge with and into Xxxxx & Xxxxx of Oklahoma.
THEREFORE, in consideration of the respective representations, warranties, covenants and agreements set forth herein, the parties agree as follow:
Article 1
The Merger
Section 1.1 The Merger. At the Effective Time (as defined in Section 1.2 hereof), upon the terms and subject to the conditions set forth in this Agreement, each Target shall be merged with and into Merger Sub in accordance with Section 2054 of the Oklahoma Limited Liability Company Act (the "OLLCA"). As a result of the Merger, the separate existence of each Target shall cease and Merger Sub shall continue as the surviving corporation of the Merger (the "Surviving Corporation").
Section 1.2 Consummation of Merger. As promptly as practicable after the satisfaction or, if permissible, waiver in writing of the conditions set forth in Article 7 hereof (including, without limitation, each Target's and Merger Sub's delivery of the Tax Clearance Letters (as defined in Section 6.10), as required under Section 7.1(d) hereof), the parties hereto shall cause the Merger to be consummated by Merger Sub filing a Certificate of Merger, substantially in the form of Exhibit 1.2 (the "Certificate of Merger"), in such form as required by, and executed in accordance with, the relevant provisions of the OLLCA (the time of such filing being herein referred to as the "Effective Time" and the date of such filing being herein referred to as the "Merger Date").
Section 1.3 Effect of the Merger. At the Effective Time, the effect of the Merger shall be as provided in the applicable provisions of the OLLCA. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, except as otherwise provided herein, the identity, all of the property (whether real, personal or mixed), rights, privileges, powers, immunities, franchises, debts, liabilities and duties of each Target shall be merged with, fully vest in and become the rights, privileges, powers, immunities, franchises, debts, liabilities and duties of the Surviving Corporation and the separate existence of each Target shall cease.
Section 1.4 Certificate of Incorporation; Bylaws. At the Effective Time, the Certificate of Incorporation and the Bylaws of the Surviving Corporation shall be the Certificate of Incorporation and Bylaws of Merger Sub as in effect immediately prior to the Effective Time, in each case until duly amended in accordance with applicable law.
Section 1.5 Directors and Officers.
(a) At the Effective Time, the directors of the Surviving Corporation shall be the directors of Merger Sub immediately prior to the Effective Time, to hold office in accordance with the Certificate of Incorporation and Bylaws of the Surviving Corporation, until their successors are duly elected or appointed and qualified.
(b) At the Effective Time, the officers of the Surviving Corporation shall be the officers of Merger Sub immediately prior to the Effective Time, in each case until their respective successors are duly elected or appointed and qualified.
Section 1.6 Name of Surviving Corporation. As of the Effective Time, the name of the Surviving Corporation shall be CV Merger Co., an Oklahoma corporation. The Buyers shall notify the Oklahoma Department of Insurance of any changes in the corporate name or officers of Target promptly after the Merger Date.
Section 1.7 Merger Consideration. Subject to the satisfaction of the terms and conditions of this Agreement, and by virtue of the Merger and without any action on the part of the Members, all of the membership interests in the respective Targets (the "Target Interests") will be converted into the right to receive, and the Members shall receive, based upon their respective interests in Target as set forth on Section 1.8(a)(ii) hereto, a total of 18,020 shares of the common stock of Xxxxx & Xxxxx (collectively, the "Xxxxx & Xxxxx Shares"), which is equal to:
(a) Seven Hundred Fifty Thousand and No/100 Dollars ($750,000.00), which is the sum of (i) Seven Hundred Forty-Eight Thousand Five Hundred and No/100 Dollars ($748,500.00), the dollar value of the Merger Consideration attributable to CompVantage, plus (ii) One Thousand Fifteen Hundred and No/100 Dollars ($1,500.00), the dollar value of the Merger Consideration attributable to Indian Programs, divided by
(b) $41.62 (the "Average Price"), which is the average closing price for a share of common stock of Xxxxx & Xxxxx, as reported on the New York Stock Exchange, in the twenty (20) day period ending at the close of business on the third (3rd) business day in advance of the Closing Date (as defined in Section 2.1 hereof).
Section 1.8 Delivery of Xxxxx & Xxxxx Shares. (a) The Xxxxx & Xxxxx Shares shall be issued as Merger Consideration to the Members as follows:
(i) a total of 1,802 shares, representing ten percent (10%) of the Xxxxx & Xxxxx Shares (the "Pledged Shares"), shall be pledged to Buyers as partial security for the indemnification obligations of the Members under Article 8 hereof. These Pledged Shares, subject to any reduction in number as may be necessary to satisfy the Members' indemnification obligations, shall be delivered to the Members one (1) year after the Closing Date, in accordance with the terms of the Pledge Agreement attached hereto as Exhibit 2.2(a)(iii); and
(ii) a total of 16,218 shares, representing the remainder of the Xxxxx & Xxxxx Shares, shall be delivered to the Members at the Closing (as defined in Section 2.1 hereof). Of this amount, 5,406 shares will be delivered to each of the Members at Closing. Of the total number of Xxxxx & Xxxxx Shares to be issued to the Members as Merger Consideration, (A) 6,007 shares will be issued to Xxxxx and Xxxxxxx, respectively, and (B) 6,006 shares will be issued to Xxxxxxx, which amounts each represent thirty-three and one-third percent (33 1/3%) of the total number of Xxxxx & Xxxxx Shares to be issued hereunder.
(b) The parties agree that the dollar value of each Xxxxx & Xxxxx Share shall be the Average Price for all purposes in determining (i) the number of Xxxxx & Xxxxx Shares to be issued under Sections 1.7 and 1.8(a)(ii) hereof, (ii) the number of Xxxxx & Xxxxx Shares to be pledged under this Section 1.8(a)(i), or (iii) the number of Pledged Shares Buyers may withhold to satisfy an indemnifiable claim, notwithstanding the actual market value of such shares (in each case with respect to clauses (i), (ii) or (iii), as adjusted for any stock splits or stock dividends).
(c) No certificate representing fractional Xxxxx & Xxxxx Shares will be issued in the Merger and such fractional share interests will not entitle the owner thereof to vote or to any rights of a shareholder of Xxxxx & Xxxxx. In lieu of any such fractional shares, the Members will each be entitled to receive from Xxxxx & Xxxxx (after aggregating all fractional shares of Xxxxx & Xxxxx Shares issuable to such Seller) Xxxxx & Xxxxx Shares rounded upward or downward to the nearest whole share with a factor of one-half (1/2) or greater rounded up to the nearest whole share.
Section 1.9 Effect on Target Interests. From and after the Merger Date, the Target Interests shall be canceled and terminated, shall represent solely the right to receive the Merger Consideration in respect of the Target Interests, and shall have no other rights. No interest shall accrue or be payable on any Merger Consideration.
Section 1.10 Xxxxx & Xxxxx Shares. All Xxxxx & Xxxxx Shares received by the Members pursuant to this Agreement shall, except for restrictions on resale, pledge, or transfer described in Section 6.6 hereof or in the Registration Rights Addendum described in Section 1.12 hereof, have the same rights as all of the other shares of outstanding Xxxxx & Xxxxx common stock by reason of the provisions of the Certificate of Incorporation of Xxxxx & Xxxxx or as otherwise provided by the Florida Business Corporation Act. All voting rights of such Xxxxx & Xxxxx Shares received by the Members shall be fully exercisable by the Members and the Members shall not be deprived nor restricted in exercising those rights.
Section 1.11 Accounting Treatment. The parties agree, as more fully described in Section 6.6 of this Agreement, to treat this transaction for accounting purposes as a pooling-of-interests transaction and to take all actions necessary to characterize the transaction as such.
Section 1.12 Registration of Xxxxx & Xxxxx Shares. The Members shall have the rights and obligations set forth in the Registration Rights Addendum attached hereto with respect to the registration of the Xxxxx & Xxxxx Shares for sale and other matters addressed therein.
Article 2
Closing, Items to be Delivered,
Further Assurances, and Effective Date
Section 2.1 Closing. The consummation of the Merger under this Agreement (the "Closing") will take place at 9:00 a.m., local time, on the date on which all of the closing conditions set forth in Article 7 of this Agreement are satisfied including, without limitation, the filing of those documents or instruments necessary to effect the Merger pursuant to applicable state law (the "Closing Date"), at Buyer's offices of 000 X. Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx 00000, unless another date or place is agreed to in writing by the parties hereto.
Section 2.2 Closing Obligations. At the Closing:
(a) The Members will deliver to Buyer:
(i) certificates, if any, representing the Target Interests to Buyers, which certificates have been marked "CANCELED" by the appropriate Target;
(ii) a release in the form of Exhibit 2.2(a)(ii), executed by each of the Members (the "Release");
(iii) a pledge agreement in the form of Exhibit 2.2(a)(iii), executed by each of the Members (the "Pledge Agreement"), along with executed stock powers for the Pledged Shares, with signatures guaranteed by a commercial bank or by a member firm of the New York Stock Exchange;
(iv) written opinion of counsel dated as of the Closing Date in substantially the form of Exhibit 2.2(a)(iv) with only such changes therein as shall be in form and substance reasonably satisfactory to Buyers (the "Opinion of Members' Counsel");
(v) employment agreements, each substantially in the form of Exhibit 2.2(a)(v) to the AIP Merger Agreement, executed by Evans, Hawkins, and Xxxxxxx, respectively (collectively, the "Member Employment Agreements");
(vi) Buyers' standard employment agreement, executed by each Target employee that Buyer intends to retain;
(vii) the Certificate of Merger, duly executed by Targets, to be filed with the Secretary of State of the State of Oklahoma;
(viii) written consent for this Merger transaction, in form and substance reasonably acceptable to the Buyers, obtained from those parties identified on Schedule 3.5;
(ix) The Sellers shall have delivered managing member resolutions, duly adopted in accordance with the OLLCA, and such other instruments as Buyers may deem necessary or desirable, in their sole discretion, to evidence that each Target has terminated, and neither Target shall have any liability whatsoever (including, without limitation, the making of any payment in connection with such termination) with respect to: (A) any Member's employment agreement, or any agreement with either Target regarding outstanding subscriptions, options, warrants, rights, securities (including, without limitation, those convertible or exchangeable into the capital stock or other ownership or equity interests of either Target), contracts, agreements, commitments, understandings or other arrangements (whether oral or written) under which either Target is bound or obligated to issue any additional shares of capital stock or rights to purchase shares of capital stock; (B) all of its Employee Benefits Plans (except Targets' Employee Welfare Benefit Plans, as defined in Section 3.20(b) hereof), with such termination effective prior to the Closing Date, and all of its Employee Welfare Benefit Plans effective no later than August 1, 2001, along with a form notice to Targets' employees, satisfactory to Buyers, regarding the termination of Targets' Employee Welfare Benefit Plans, which notice shall be delivered to each Target's employees promptly after Closing; (C) any life insurance policies on the lives of any of the executives and other officers of Targets, together with any agreements to provide any of such policies at the expense of Targets; and (D) any and all leases of employee vehicles and any agreements with employees related to the provision of Targets' vehicles, or for the payment of a periodic vehicle allowance, by Targets (the "Target Resolutions"); and
(x) resolutions of the Members, duly adopted and executed in accordance with the relevant provisions of the OLLCA, approving the Merger and the other transactions contemplated herein, the Agreement, and the Ancillary Documents (the "Member Resolutions"); and
(b) Buyers shall deliver to the Members:
(i) certificates representing the number of Xxxxx & Xxxxx Shares to be issued to the Members at the Closing pursuant to Section 1.8(a)(ii) hereof;
(ii) written opinion of counsel dated as of the Closing Date in substantially the form of Exhibit 2.2(b)(ii) with only such changes therein as shall be in form and substance reasonably satisfactory to Sellers (the "Opinion of Buyers' Counsel");
(iii) the Member Employment Agreements, executed by Xxxxx & Xxxxx; and
(iv) the Certificate of Merger, duly executed by Merger Sub, to be filed with the Secretary of State of the State of Oklahoma.
Section 2.4 Mutual Performance. At or prior to the Closing, the parties hereto shall also deliver to each other the agreements, certificates, and other documents and instruments referred to in Articles 6 and 7 hereof.
Section 2.5 Third Party Consents. To the extent that the Merger may not be consummated hereunder without the consent of another person which has not been obtained, this Agreement shall not constitute an agreement to consummate such Merger if an attempted transfer would constitute a breach thereof or be unlawful, and the Members, at their expense, shall use their best efforts to obtain any such required consent(s) as promptly as possible. If any such consent shall not be obtained or if any attempted transfer would be ineffective or would impair Buyers' rights so that Buyers would not in effect acquire the benefit of all such rights, the Members, to the maximum extent permitted by law, shall act after the Closing as Buyers' agent in order to obtain for it the benefits thereunder and shall cooperate, to the maximum extent permitted by law, with Buyers in any other reasonable arrangement designed to provide such benefits to Buyers.
Section 2.6 Further Assurances. From time to time after the Closing, at Buyers' request, the Members will execute, acknowledge and deliver to the Buyers such other instruments of conveyance and transfer and will take such other actions and execute and deliver such other documents, certifications and further assurances as the Buyers may reasonably request in order to vest more effectively the Merger. Each of the parties hereto will cooperate with the others and execute, acknowledge and deliver to the other parties such other instruments and documents and take such other actions as may be reasonably requested from time to time by such other party as necessary to carry out, evidence and confirm the intended purposes of this Agreement.
Section 2.7 Effective Date. The Effective Date of this Agreement and all related instruments executed at the Closing shall be the Merger Date.
Article 3
Representations and Warranties of the Sellers
The Sellers represent and warrant to the Buyers as follows:
Section 3.1 Organization. Each Target is a limited liability company organized and in good standing under the laws of Oklahoma and its status is active. Each Target has all requisite power and authority and all necessary governmental approvals to own, lease, and operate its properties and to carry on its business as now being conducted. Each Target is duly qualified to do business and is in good standing as a foreign limited liability company in each jurisdiction where the conduct of its insurance agency business requires it to be so qualified.
Section 3.2 Authority. The Members have the requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Members and constitutes their valid and binding obligation, enforceable against them in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, or similar laws from time to time in effect which offset creditors' rights generally, and general equitable principles.
Section 3.3 Capitalization. The Target Interests constitute all of the issued and outstanding membership interests of Targets. All of the Target Interests have been duly issued and are fully paid and nonassessable. All of the Target Interests are owned and held by the Members, free and clear of all liens, encumbrances or other third-party rights of any kind whatsoever. There are no outstanding agreements, options, rights or privileges, whether preemptive or contractual, to acquire membership interests or other securities of either Target.
Section 3.4 Corporate Records. The Members have delivered to Buyers correct and complete copies of the Articles of Organization and Operating Agreement of each Target, each as amended to date. None of the Targets or Members is in default under or in violation of any provision of either Target's Articles of Organization or Operating Agreement.
Section 3.5 Consents and Approvals; No Violations. Except as set forth in Schedule 3.5 to the AIP Merger Agreement, neither the execution, delivery or performance of this Agreement by the Members nor the consummation by them of the transactions contemplated hereby nor compliance by them with any of the provisions hereof will (a) conflict with or result in any breach of any provision of the Articles of Organization or Operating Agreement of either Target, (b) except with respect to the filing of the Certificate of Merger with the Secretary of State of Oklahoma, require any filing with, or permit, authorization, consent, or approval of, any court, arbitral tribunal, administrative agency or commission, or other governmental or regulatory authority or agency (each a "Governmental Entity"), except where the failure to obtain such permits, authorizations, consents, or approvals or to make such filings would not have a material adverse effect, (c) result in a violation or breach of, or constitute a default (or give rise to any right of termination, amendment, cancellation, or acceleration) under, any of the terms, conditions, or provisions of any note, bond, mortgage, lease, license, agreement, or other instrument or obligation to which any of the Members or either Target is a party or by which any of the Members or either Target or any of their respective properties or assets may be bound, or (d) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Members or either Target, or any of their respective properties or assets, except in the case of (c) or (d) above for violations, breaches or defaults that would not, individually or in the aggregate, have a material adverse effect on either Target or Buyers' ownership of the Target Interests.
Section 3.6 No Third Party Options. Except as set forth in Schedule 3.6 to the AIP Merger Agreement, there are no existing agreements, options, commitments, or rights with, of or to any person to acquire any of Targets' respective membership interests or any interest therein, assets, properties or rights, or any interests therein.
Section 3.7 Financial Statements. The Members have delivered to Buyers true and complete copies of (a) AIP and Targets' consolidated balance sheet as of February 28, 2001 and the related statement of income for the twelve (12) months then ended, and (b) AIP and Targets' consolidated `balance sheet at May 31, 2001 (the "Balance Sheet Date"), and the related statement of income for the three (3) months then ended. All of such financial statements were prepared internally by Targets and have not been externally reviewed or audited, but were prepared in accordance with Targets' standard accounting principles, consistently applied throughout the periods involved. Such balance sheets fairly present the financial position, assets and liabilities (whether accrued, absolute, contingent or otherwise) of Targets at the dates indicated and such statements of income fairly present the results of operations for the periods then ended. Targets' financial books and records are accurate and complete in all material respects.
Section 3.8 Absence of Certain Changes. Since the Balance Sheet Date, there have been no events or changes having a material adverse effect on the assets, liabilities, financial condition or operations of Targets or, to the Members' or either Target's Knowledge (as defined in Section 10.2 of this Agreement), on the future prospects of Targets. Since the Balance Sheet Date, neither Target has made any distributions or payments to the Members (other than normal compensation that may have been paid to the Members in their capacity as bona fide employees) and has not entered into any agreements other than in the ordinary course of business. Since the Balance Sheet Date, each Target has carried on business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and has not taken any unusual actions in contemplation of this transaction except to the extent that Buyers have given their prior specific consent.
Section 3.9 Assets. (a) Targets own and hold, free and clear of any lien, charge, pledge, security interest, restriction, encumbrance or third-party interests of any kind whatsoever (including insurance company payables), sole and exclusive right, title, and interests in and to the customer expiration records for those designated customers listed in Schedule 3.9(a) to the AIP Merger Agreement, together with the exclusive right to use such records and all customer accounts, copies of insurance policies and contracts in force, and all files, invoices and records pertaining to the customers, their contracts and insurance policies, and all related information. All customer accounts listed so designated in Schedule 3.9(a) to the AIP Merger Agreement represent current customers of Targets and none of such accounts has been cancelled or transferred as of the date hereof. Except as otherwise set forth in Schedule 3.9(a) to the AIP Merger Agreement, none of the accounts shown in Schedule 3.9(a) to the AIP Merger Agreement represents business that has been brokered through a third party.
(b) The names "CompVantage" and "Beacon Insurance Agencies" are the only trade names used by Targets within the past three (3) years. No party has filed a claim during the past three (3) years against either Target alleging that it has violated, infringed on or otherwise improperly used the intellectual property rights of such party, or, if so, the claim has been settled with no existing liability to either Target and, to the Knowledge of the Members or either Target, neither Target has violated or infringed any trademark, trade name, service xxxx, service name, patent, copyright or trade secret held by others.
(c) To the Members' or either Target's Knowledge, the computer software of Targets performs in accordance with the documentation and other written material used in connection therewith, is substantially free of defects in programming and operation. The Members have delivered to Buyers complete and correct copies of all user and technical documentation related to such software.
(d) Targets or AIP own or lease all tangible assets necessary for the conduct of its business. All equipment, inventory, furniture and other assets owned or leased by Targets or AIP in their businesses are in a state of good repair and maintenance, having regard for the purposes of which they are used, and the purposes for which such assets are used and for which they are held by Targets or AIP are not, to the Members' or either Target's Knowledge, in violation of any statute, regulation, covenant or restriction. Targets or AIP own or lease all office furniture, fixtures and equipment in their offices located in Pryor, Oklahoma.
(e) All notes and accounts receivables of each Target are reflected properly on its books and records, are valid receivables subject to no set-offs or counterclaims either asserted to date or of which the Members or either Target has Knowledge, are presently current and collectible, and will be collected in accordance with their terms at their recorded amounts. All of Targets' accounts payable, including accounts payable to insurance carriers, are current and reflected properly on its books and records, and will be paid in accordance with their terms at their recorded amounts.
Section 3.10 Undisclosed Liabilities. Neither Target has any liabilities, and there is no reasonable basis for any present or future charge, complaint, action, suit, proceeding, hearing, investigation, claim or demand against either Target giving rise to any liability, except (a) those liabilities reflected in the June 30, 2001 consolidated balance sheet of Targets and AIP`, and (b) liabilities which have arisen after June 30, 2001 in the ordinary course of business (none of which relates to any breach of contract, breach of warranty, tort, infringement, or violation of law, or arose from any charge, complaint, action, suit, proceeding, hearing, investigation, claim or demand). Except as set forth in Schedule 3.10 to the AIP Merger Agreement, neither Target has guaranteed the obligations of any third party, including, without limitation, guarantees relating to premium financing on behalf of its customers.
Section 3.11 Litigation and Claims. Except as disclosed in Schedule 3.11 to the AIP Merger Agreement, there is no suit, claim, action, proceeding or investigation pending or, to the Members' or either Target's Knowledge, threatened against either Target, and there is no reasonable basis for such a suit, claim, action, proceeding or investigation. Neither Target is subject to any outstanding order, writ, injunction or decree which, insofar as can be reasonably foreseen, individually or in the aggregate, in the future would have an adverse effect on either Target or would prevent the Members from consummating the transactions contemplated hereby. No voluntary or involuntary petition in bankruptcy, receivership, insolvency, or reorganization with respect to the Members or either Target has been filed by or, to the Knowledge of the Members or either Target, against the Members or either Target, nor will the Members or either Target file such a petition prior to the Closing Date or for one hundred (100) days thereafter, and if such petition is filed by others, the same will be promptly discharged. Each of the Members is solvent on the date hereof and will be solvent on the Closing Date. Neither the Members nor the Targets has, and at the Closing Date will not have, made any assignment for the benefit of creditors, or admitted in writing insolvency or that its property at fair valuation will not be sufficient to pay its debts, nor will the Members permit any judgment, execution, attachment, or levy against them or their properties to remain outstanding or unsatisfied for more than ten (10) days.
Section 3.12 Compliance with Applicable Law. Targets hold all permits, licenses, variances, exemptions, orders, and approvals of all Governmental Entities necessary for the lawful conduct of their businesses (collectively, the "Permits"). Each Target is in compliance with the terms of the Permits, except where the failure to comply would not have an adverse effect. Neither Target is conducting business in violation of any law, ordinance or regulation of any Governmental Entity (including, without limitation, the Xxxxx-Xxxxx Xxxxxx Financial Services Modernization Act of 1999 and any applicable federal or state regulations promulgated pursuant thereto), except for possible violations that individually or in the aggregate do not, and, insofar as reasonably can be foreseen, in the future will not, have an adverse effect on its business. As of the date of this Agreement, no investigation or review by any Governmental Entity with respect to either Target is pending or, to the Knowledge of the Members or either Target, threatened, nor has any Governmental Entity indicated an intention to conduct the same.
Section 3.13 Tax Returns and Audits. Each Target has timely filed all federal, state, local and foreign tax returns, including all amended returns, in each jurisdiction where such Target is required to do so or has paid or made provision for the payment of any penalty or interests arising from the late filing of any such return, has correctly reflected all taxes required to be shown thereon, and has fully paid or made adequate provision for the payment of all taxes that have been incurred or are due and payable pursuant to such returns or pursuant to any assessment with respect to taxes in such jurisdictions, whether or not in connection with such returns. Neither Target is currently subject to any audits with respect to any federal, state, local or foreign tax returns required to be filed and there are no unresolved audit issues with respect to prior years' tax returns. There are no circumstances or pending questions relating to potential tax liabilities nor claims asserted for taxes or assessments of either Target that, if adversely determined, could result in a tax liability for any period prior to, including, or beginning after the Closing Date or on such Target's practices in computing or reporting taxes. Neither Target has executed an extension or waiver of any statute of limitations on the assessment or collection of any tax due that is currently in effect. Neither Target is holding any unclaimed property that it is required to surrender to any state taxing authority including, without limitation, any uncashed checks or unclaimed wages, and Targets have timely filed all unclaimed property reports required to be filed with such state taxing authorities. Neither Target purges its records of uncashed checks periodically.
Section 3.14 Contracts. (a) Schedule 3.14 to the AIP Merger Agreement lists all material contracts, agreements and other written arrangements to which either Target is a party, including, without limitation, the following:
(i) any written arrangement (or group of written arrangements) for the furnishing or receipt of services that calls for performance over a period of more than one (1) year;
(ii) any written arrangement concerning a partnership or joint venture;
(iii) any written arrangement (or group of written arrangements) under which either Target has created, incurred or assumed or may create, incur or assume indebtedness (including capitalized lease obligations) involving more than $10,000.00 or under which it has imposed (or may impose) a security interest on any of its assets, tangible or intangible;
(iv) any employment agreement;
(v) any written arrangement concerning confidentiality or non-competition;
(vi) any written arrangement involving either Target and their present or former affiliates, managers or members;
(vii) any written arrangement under which the consequences of a default or termination could have a material adverse effect on the assets, liabilities, business, financial condition, operations or future prospects of either Target; or
(viii) any other written arrangement (or group of related arrangements) either involving more than $10,000.00 or not entered into in the ordinary course of business.
(b) Neither Target is a party to any verbal contract, agreement or other arrangement which, if reduced to written form, would be required to be listed in Schedule 3.14 to the AIP Merger Agreement. The Members have delivered to Buyers a correct and complete copy of each written arrangement, as amended to date, listed in Schedule 3.14 to the AIP Merger Agreement. Each such contract, agreement and written arrangement is valid and enforceable in accordance with its terms, and no party is in default under any provision thereof.
Section 3.15 Non-Solicitation Covenants. Neither Target is a party to any agreement that restricts its ability to compete in the insurance agency industry or solicit specific insurance accounts.
Section 3.16 Insurance Policies. Schedule 3.16 to the AIP Merger Agreement sets forth a complete and correct list of all insurance policies held by Targets with respect to their businesses, and true and complete copies of such policies have been delivered to Buyers. Targets have substantially complied with all the provisions of such policies and the policies are in full force and effect.
Section 3.17 Errors and Omissions; Employment Practices Liability. (a) Neither Target has incurred any liability or taken or failed to take any action that may reasonably be expected to result in (i) a liability for errors or omissions in the conduct of its insurance business or (ii) employment practices liability (EPL), except such liabilities as are fully covered by insurance. All errors and omissions (E&O) and EPL lawsuits and claims currently pending or threatened against either Target are set forth in Schedule 3.11 to the AIP Merger Agreement. Targets have E&O insurance coverage in force, with minimum liability limits of $2 million per occurrence and $6 million aggregate, with a deductible of $5,000.00, and the Sellers will provide to Buyer a certificate of insurance evidencing such coverage prior to or on the Closing Date. Targets have had the same or higher levels of E&O coverage continuously in effect for at least the past five (5) years.
(b) Targets have EPL insurance coverage in force, with minimum liability limits of $1 million per occurrence and $1 million aggregate, with a deductible of $5,000.00 per claim, and the Sellers will provide to Buyer a certificate of insurance evidencing such coverage prior to or on the Closing Date. Targets have had the same or higher levels of EPL coverage continuously in effect for at least the past three (3) years.
Section 3.18 Employee Dishonesty Coverage. Schedule 3.18 to the AIP Merger Agreement sets forth a complete and correct list of all employee dishonesty bonds or policies, including the respective limits thereof, held by Targets in the three (3) year period prior to the Closing Date, and true and complete copies of such bonds or policies have been delivered to Buyers. Targets have complied with all the provisions of such bonds or policies and Targets have an employee dishonesty bond or policy in full force and effect as of the Closing Date.
Section 3.19 Employees. Except as disclosed in Schedule 3.14 to the AIP Merger Agreement, all employees of Targets are employees at will, and neither Target is a party to any written contract of employment.
Section 3.20 Employee Benefit Plans. Schedule 3.20 to the AIP Merger Agreement lists each Employee Benefit Plan (as defined below) that Targets or any trade or business, whether or not incorporated, that together with Targets would be deemed a "single employer" within the meaning of Section 4001 of ERISA (as defined below) (a "Target ERISA Affiliate") maintains or to which either Target or any Target ERISA Affiliate contributes.
(a) Each such Employee Benefit Plan (and each related trust, insurance contract, or fund) complies in form and in operation in all respects with the applicable requirements of ERISA, the Code, and other applicable laws. No such Employee Benefit Plan is under audit by the Internal Revenue Service or the U.S. Department of Labor or comparable state agency.
(b) All required reports and descriptions (including Form 5500 Annual Reports, Summary Annual Reports, PBGC-1s, and summary plan descriptions) have been filed or distributed appropriately with respect to each such Employee Benefit Plan. The requirements of Part 6 of Subtitle B of Title I of ERISA and of Code Section 4980B have been met with respect to each such Employee Benefit Plan that is an "Employee Welfare Benefit Plan" as such term is defined in ERISA Section 3(1).
(c) All contributions (including all employer contributions and employee salary reduction contributions) that are due have been paid to each such Employee Benefit Plan that is an "Employee Pension Benefit Plan" as such term is defined in ERISA Section 3(2), and all contributions for any period ending on or before the Closing Date that are not yet due have been paid to each such Employee Pension Benefit Plan or accrued in accordance with the past custom and practice of Targets. All premiums or other payments for all periods ending on or before the Closing Date have been paid with respect to each such Employee Benefit Plan that is an Employee Welfare Benefit Plan.
(d) Each such Employee Benefit Plan that is an Employee Pension Benefit Plan meets the requirements of a "qualified plan" under Code Section 401(a) and has received, within the last two (2) years, a favorable determination letter from the Internal Revenue Service.
(e) The market value of assets under each such Employee Benefit Plan that is an Employee Pension Benefit Plan (other than any "Multiemployer Plan" as such term is defined in ERISA Section 3(37)) equals or exceeds the present value of all vested and nonvested liabilities thereunder determined in accordance with Pension Benefit Guaranty Corporation ("PBGC") methods, factors, and assumptions applicable to an Employee Pension Benefit Plan terminating on the date for determination.
(f) Targets have delivered to Buyers correct and complete copies of the plan documents and summary plan descriptions, the most recent Form 5500 Annual Report, and all related trust agreements, insurance contracts, and other funding agreements that implement each such Employee Benefit Plan.
(g) With respect to each Employee Benefit Plan that either Target or any Target ERISA Affiliate maintains or ever has maintained or to which it contributes, ever has contributed, or ever has been required to contribute:
(i) No such Employee Benefit Plan that is an Employee Pension Benefit Plan (other than any Multiemployer Plan) has been completely or partially terminated or been the subject of a "Reportable Event" (as such term is defined in ERISA Section 4043) as to which notices would be required to be filed with the PBGC. No proceeding by the PBGC to terminate any such Employee Pension Benefit Plan (other than any Multiemployer Plan) has been instituted or, to the Knowledge of the Members or either Target, threatened.
(ii) There have been no "Prohibited Transactions" as defined in ERISA Section 406 and Code Section 4975 with respect to any such Employee Benefit Plan. No "Fiduciary" as defined in ERISA Section 3(21) has any liability for breach of fiduciary duty or any other failure to act or comply in connection with the administration or investment of the assets of any such Employee Benefit Plan. No action, suit, proceeding, hearing, or investigation with respect to the administration or the investment of the assets of any such Employee Benefit Plan (other than routine claims for benefits) is pending or, to the Knowledge of the Members or either Target, threatened. None of the Members and the managers (and employees with responsibility for employee benefits matters) of either Target has any Knowledge of any basis for any such action, suit, proceeding, hearing, or investigation.
(iii) No Target has incurred, and none of the Targets, the Members and the managers (and employees with responsibility for employee benefits matters) of either Target has any reason to expect that either Target shall incur, any liability to the PBGC (other than PBGC premium payments) or otherwise under Title IV of ERISA (including any withdrawal liability) or under the Code with respect to any such Employee Benefit Plan that is an Employee Pension Benefit Plan.
(iv) Neither of the Targets nor any Target ERISA Affiliate contributes to, nor has ever been required to contribute to, any Multiemployer Plan or has any liability (including withdrawal liability) under any Multiemployer Plan.
(v) Neither of the Targets nor any Target ERISA Affiliate maintains or contributes, nor has ever maintained or contributed, or has ever been required to contribute to any Employee Welfare Benefit Plan providing medical, health, or life insurance or other welfare-type benefits for current or future retired or terminated employees, their spouses, or their dependents (other than in accordance with Code Section 4980B).
As used in this Agreement, the term "Employee Benefit Plan" means any (a) nonqualified deferred compensation or retirement plan or arrangement that is an Employee Pension Benefit Plan, (b) qualified defined contribution retirement plan or arrangement that is an Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or arrangement that is an Employee Pension Benefit Plan (including any Multiemployer Plan), or (d) Employee Welfare Benefit Plan or material fringe benefit plan or program.
Section 3.21 Intellectual Property.
(a) Each Target owns or has the right to use pursuant to license, sublicense, agreement, or permission all Intellectual Property (as defined below) necessary for the operation of the businesses of such Target as presently conducted and as presently proposed to be conducted. Each item of Intellectual Property owned or used by either Target immediately prior to the Closing hereunder shall be owned or available for use by Merger Sub on identical terms and conditions immediately subsequent to the Closing hereunder. Each Target has taken all necessary action to maintain and protect each item of Intellectual Property that it owns or uses.
(b) To either Target's or the Members' Knowledge, no Target has interfered with, infringed upon, misappropriated, or otherwise come into conflict with any Intellectual Property rights of third parties, and none of the Members and the managers (and employees with responsibility for Intellectual Property matters) of either Target has ever received any charge, complaint, claim, demand, or notice alleging any such interference, infringement, misappropriation, or violation (including any claim that such Target must license or refrain from using any Intellectual Property rights of any third party). To the Knowledge of the Members or either Target, no third party has interfered with, infringed upon, misappropriated, or otherwise come into conflict with any Intellectual Property rights of either Target.
(c) Neither Target has any patents issued in its name, or patent applications filed or pending. Schedule 3.21(c) to the AIP Merger Agreement identifies each license, agreement, or other permission that either Target has granted to any third party with respect to any of its Intellectual Property (together with any exceptions). Targets have delivered to Buyers correct and complete copies of all such registrations, applications, licenses, agreements, and permissions (as amended to date) and has made available to Buyers correct and complete copies of all other written documentation evidencing ownership and prosecution (if applicable) of each such item. Schedule 3.21(c) to the AIP Merger Agreement also identifies each trade name and registered or unregistered trademark or service xxxx used by either Target. With respect to each item of Intellectual Property required to be identified in Schedule 3.21(c) of the AIP Merger Agreement:
(i) Targets possess all right, title, and interest in and to the item, free and clear of any security interest, license, or other restriction;
(ii) the item is not subject to any outstanding injunction, judgment, order, decree, ruling, or charge;
(iii) no action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand is pending or is threatened that challenges the legality, validity, enforceability, use, or ownership of the item; and
(iv) neither Target has any outstanding agreements to indemnify any person or entity for or against any interference, infringement, misappropriation, or other conflict with respect to the item.
(d) Schedule 3.21(d) of the AIP Merger Agreement identifies each item of Intellectual Property that any third party owns and that either Target uses pursuant to license, sublicense, agreement, or permission. Targets have delivered to Buyers correct and complete copies of all such licenses, sublicenses, agreements, and permissions (as amended to date). To the Members' or either Target's Knowledge, with respect to each item of Intellectual Property required to be identified in Schedule 3.21(d) of the AIP Merger Agreement:
(i) the license, sublicense, agreement, or permission covering the item is legal, valid, binding, enforceable, and in full force and effect;
(ii) the license, sublicense, agreement, or permission shall continue to be legal, valid, binding, enforceable, and in full force and effect on identical terms following the consummation of the transactions contemplated hereby (including the assignments and assumptions referred to in Article 2 above);
(iii) no party to the license, sublicense, agreement, or permission is in breach or default, and no event has occurred that with notice or default or permit termination, modification, or acceleration thereunder;
(iv) no party to the license, sublicense, agreement, or permission has repudiated any provision thereof;
(v) with respect to each sublicense, the representations and warranties set forth in clauses (i) through (iv) above are true and correct with respect to the underlying license;
(vi) the underlying item of Intellectual Property is not subject to any outstanding injunction, judgment, order, decree, ruling, or charge;
(vii) no action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand is pending or, to the Knowledge of the Members or either Target, is threatened that challenges the legality, validity, or enforceability of the underlying item of Intellectual Property; and
(viii) neither Target has granted any sublicense or similar right with respect to the license, sublicense, agreement, or permission.
(e) To the Knowledge of the Members or either Target, neither Target shall interfere with, infringe upon, misappropriate, or otherwise come into conflict with, any Intellectual Property rights of third parties as a result of the continued operation of its businesses as presently conducted and as presently proposed to be conducted.
Section 3.22 Environment, Health, and Safety.
(a) Each Target has materially complied with all Environmental, Health, and Safety Laws, and has received no written notice that any action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand has been filed or commenced against it alleging any failure so to comply. Without limiting the generality of the preceding sentence, each of the Targets and their respective predecessors and affiliates has obtained and been in compliance with all of the terms and conditions of all permits, licenses, and other authorizations that are required under, and has materially complied with all other limitations, restrictions, conditions, standards, prohibitions, requirements, obligations, schedules, and timetables that are contained in, all Environmental, Health, and Safety Laws.
(b) Neither Target has any liability (and, to the Knowledge of either Target and the Members, none of the Targets and their respective predecessors and affiliates has handled or disposed of any substance, arranged for the disposal of any substance, exposed any employee or other individual to any substance or condition, or owned or operated any property or facility in any manner that could form the basis for any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand against either Target giving rise to any liability) for damage to any site, location, or body of water (surface or subsurface), for any illness of or personal injury to, any employee or other individual, or for any reason under any Environmental, Health, and Safety Law.
(c) All properties and equipment used in the businesses of the Targets and their predecessors and affiliates have been free of asbestos, polychlorinated biphenyls (PCBs), methylene chloride, trichloroethylene, 1,2-trans-dichloroethylene, dioxins, dibenzofurans, and Extremely Hazardous Substances.
(d) As used in this Agreement, the term:
(i) "Environmental, Health, and Safety Laws" means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Resource Conservation and Recovery Act of 1976, and the Occupational Safety and Health Act of 1970, each as amended, together with all other laws (including rules, regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder) of federal, state, local, and foreign governments (and all agencies thereof) concerning pollution or protection of the environment, public health and safety, or employee health and safety, including laws relating to emissions, discharges, releases, or threatened releases of pollutants, contaminants, or chemical, industrial, hazardous, or toxic materials or wastes into ambient air, surface water, ground water, or lands or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of pollutants, contaminants, or chemical, industrial, hazardous, or toxic materials or wastes;
(ii) "Extremely Hazardous Substance" has the meaning set forth in Section 302 of the Emergency Planning and Community Right-to-Know Act of 1986, as amended; and
(iii) "Hazardous Materials" means any "toxic substance" as defined in 15 U.S.C. Section 2601 et seq. on the date hereof, including materials designated on the date hereof as "hazardous substances" under 42 U.S.C. Section 9601 et seq. or other applicable laws, and toxic, radioactive, caustic, or otherwise hazardous substances, including petroleum and its derivatives, asbestos, PCBs, formaldehyde, chlordane and heptachlor.
Section 3.23 Pooling-of-Interests Accounting Matters. Except as set forth on Schedule 3.23(a) to the AIP Merger Agreement, (i) neither Target has been a subsidiary or division of another corporation or a part of an acquisition which was later rescinded; (ii) within the past two (2) years, there has not been any sale, spin-off or split-up of a significant amount of assets of either Target other than in the ordinary course of business; (iii) neither Target owns any shares of the capital stock of Xxxxx & Xxxxx; (iv) neither Target has acquired any of its membership interests during the past two (2) years; (v) as of the Effective Time, neither Target has any obligation (whether contingent or otherwise) to purchase, redeem or otherwise acquire any shares of its membership interests or any interest therein or to pay any dividend or make any distribution in respect thereof; (vi) neither the voting structure of either Target nor the relative ownership of membership interests among the Members has been altered or changed within the last two (2) years in contemplation of the Merger; and (vii) none of the membership interests of either Target were issued pursuant to awards, grants or bonuses.
(b) To the Knowledge of each of the Sellers, neither of the Targets nor any Member has taken or agreed to take any action that would prevent Xxxxx & Xxxxx from accounting for this transaction as a pooling of interests. Without limiting the generality of the foregoing, to the Knowledge of the Members or either Target, no "Affiliate" (as defined below) of either Target has, during a period of thirty (30) days prior to the date of this Agreement, sold, pledged, hypothecated, or otherwise transferred or encumbered any membership interest or any interest therein of either Target held by such Affiliate. For purposes of this Agreement, the term "Affiliate" means any manager or owner of ten percent (10%) or more of the voting membership interests of either Target.
(c) As of the Closing Date, no Member has entered into any agreement to sell, pledge, hypothecate, or otherwise transfer or encumber the Xxxxx & Xxxxx Shares.
Section 3.24 Securities Law Representations. (a) The Members were granted access to the business premises, offices, properties, and business, corporate and financial books and records of Buyers. The Members were permitted to examine the foregoing records, to question officers of Buyers, and to make such other investigations as they considered appropriate to determine or verify the business and financial condition of Buyers. Buyers furnished to the Members all information regarding its business and affairs that the Members requested, including, without limitation, (i) Buyer's Annual Report on Form 10-K for the year ended December 31, 2000, (ii) Amendment to Buyer's Annual Report on Form 10-K/A for the year ended December 31, 2000, (iii) Buyer's Annual Report to Members for the year ended December 31, 2000, (iv) the Proxy Statement for Buyer's 2001 Annual Meeting of Members, (v) Buyer's Report on Form 8-K filed on January 18, 2001, (vii) Amendment to Buyer's Report on Form 8-K/A filed on March 20, 2001, (viii) Second Amendment to Buyer's Report on Form 8-K/A filed on March 23, 2001, and (ix) Buyer's Quarterly Report on Form 10-Q for the three (3) months ended March 31, 2001.
(b) Each Member recognizes that the Xxxxx & Xxxxx Shares will, when issued, not be registered under the Securities Act of 1933, as amended (the "Securities Act") and will therefore, unless and until a registration statement with respect to the Xxxxx & Xxxxx Shares is declared effective by the Securities and Exchange Commission (the "SEC"), constitute "restricted securities" as defined pursuant to Rule 144(a)(3) under the Securities Act under which means, among other things, that the Members generally will not be able to sell the Xxxxx & Xxxxx Shares for a period of at least one (1) year following the Closing Date, and may not be sold, offered for sale, transferred, pledged, hypothecated or otherwise disposed of except in compliance with the Securities Act, as such, by way of illustration but without limitation, in compliance the safe harbor provisions of Rule 144; further, the legal consequences of the foregoing mean that the Member must bear the economic risk of the investment in the Xxxxx & Xxxxx Share for an indefinite period of time; further, if the Member desires to sell or transfer all or any part of the Xxxxx & Xxxxx Shares, Buyer may require the Member's counsel to provide a legal opinion that the transfer may be made without registration under the Securities Act; further, other restrictions discussed elsewhere herein may be applicable; further, the Member is subject to the restriction on transfer described herein and Buyer will issue stop transfer orders with Buyer's transfer agent to enforce such restrictions; further, the Xxxxx & Xxxxx Shares will bear a legend restricting transfer; and further, the following paragraph, or language substantially equivalent thereto, will be inserted in or stamped on the certificates evidencing the same:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND SUCH SHARES HAVE BEEN ACQUIRED FOR INVESTMENT. THIS STOCK MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT COVERING THE SAME UNDER THE SECURITIES ACT OF 1933 OR OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE SECURITIES LAWS.
(c) Because of their considerable knowledge and experience in financial and business matters, each of the Members is able to evaluate the merits, risks, and other factors bearing on the suitability of the Xxxxx & Xxxxx Shares as an investment. Each of the Members, individually or by virtue of a "purchaser representative" (as defined pursuant to Rule 501(h) under the Securities Act), qualifies as an "accredited investor" as defined under Rule 501(a) under the Securities Act.
(d) Each Member's annual income and net worth are such that he would not now be, and does not contemplate being, required to dispose of any investment in the Xxxxx & Xxxxx Shares, including the risk of losing all or any part of his investment and the inability to sell, transfer, pledge, or otherwise dispose of any of the Xxxxx & Xxxxx Shares for an indefinite period.
(e) Each Member's acquisition of the Xxxxx & Xxxxx Shares will be solely for his own account, as principal, for investment, and not with a view to, or for resale in connection with, any underwriting or distribution.
Section 3.25 No Misrepresentations. None of the representations and warranties of the Members set forth in this Agreement or in the attached Schedules, notwithstanding any investigation thereof by Buyers, contains any untrue statement of a material fact, or omits the statement of any material fact necessary to render the statements made not misleading.
Article 4
Representations and Warranties of Buyers
Each of the Buyers represents and warrants to the Members as follows:
Section 4.1 Organization. Each of the Buyers is a corporation organized under the laws of Florida and its status is active. Each Buyer has all requisite corporate power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as now being conducted. Each Buyer is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the property owned, leased, or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary, except where the failure to be so duly qualified or licensed and be in good standing would not in the aggregate have a material adverse effect.
Section 4.2 Authority. Each Buyer has the requisite corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby, have been duly authorized by all necessary corporate action on the part of each Buyer and no other corporate proceeding on the part of either Buyer is necessary to authorize this Agreement or to consummate the transactions so contemplated. This Agreement has been duly executed and delivered by each Buyer and constitutes its valid and binding obligation, enforceable against each Buyer in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization or similar laws from time to time in effect which offset creditors' rights generally and general equitable principles.
Section 4.3 Consents and Approvals; No Violations. Neither the execution, delivery or performance of this Agreement by Buyers nor the consummation by Buyers of the transactions contemplated hereby nor compliance by Buyers with any of the provisions hereof will (a) conflict with or result in any breach of any provision of the Certificate of Incorporation or Bylaws of either Buyer, (b) except with respect to the filing of the Certificate of Merger with the Secretary of State of Oklahoma, require any filing with, or permit authorization, consent, or approval of, any Governmental Entity, except where the failure to obtain such permits, authorizations, consents, or approvals or to make such filings would not have a material adverse effect, (c) result in a violation or breach of, or constitute a default (or give rise to any right of termination, amendment, cancellation, or acceleration) under, any of the terms, conditions or provisions of any note, bond, mortgage, lease, license, agreement, or other instrument or obligation to which either Buyer is a party or by which either Buyer or its properties or assets may be bound, or (d) violate any order, writ, injunction, decree, statute, rule or regulation applicable to either Buyer or any of its properties or assets, except in the case of (c) or (d) above for violations, breaches or defaults that would not, individually or in the aggregate, have a material adverse effect.
Section 4.4 SEC Reports and Financial Statements. Buyer has filed with the SEC, and has heretofore made available to the Sellers true and complete copies of all forms, reports, schedules, statements and other documents required to be filed by it since December 31, 2000 under the Securities Exchange Act of 1934 (the "Exchange Act") or the Securities Act (as such documents have been amended since the time of their filing, collectively, the "Buyer SEC Documents"). The Buyer SEC Documents, including without limitation any financial statements and schedules included therein, at the time filed, (a) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and (b) complied in all material respects with the applicable requirements of the Exchange Act and the Securities Act, as the case may be, and the applicable rules and regulations of the SEC thereunder. The financial statements of Buyer included in the Buyer SEC Documents comply as to form in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of the unaudited statements, as permitted by Form 10-Q of the SEC) and fairly present (subject, in the case of the unaudited statements, to normal, recurring audit adjustments) the consolidated financial position of Buyer and its consolidated subsidiaries as at the dates thereof and the consolidated results of their operations and cash flows for the periods then ended.
Section 4.5 Absence of Certain Changes. Except as disclosed in the Xxxxx & Xxxxx SEC Documents, since December 31, 2000, there have been no events, changes or events having, individually or in the aggregate, a material adverse effect on Buyers.
Section 4.6 No Undisclosed Liabilities. Except as and to the extent set forth in Buyer's Quarterly Report on Form 10-Q for the three (3)-month period ended March 31, 2001, as of March 31, 2001, Buyer had no liabilities or obligations, whether or not accrued, contingent or otherwise, that would be required by generally accepted accounting principles to be reflected on a consolidated balance sheet of Buyer and its subsidiaries. Since March 31, 2001, Buyer has not incurred any liabilities, whether or not accrued, contingent or otherwise, outside the ordinary course of business or that would have, individually or in the aggregate, a material adverse effect on Buyer.
Section 4.7 Litigation. Except as disclosed in the Xxxxx & Xxxxx SEC Documents filed prior to the date of this Agreement, there is no suit, claim, action, proceeding or investigation pending or, to the Knowledge of Xxxxx & Xxxxx, threatened against Xxxxx & Xxxxx or any of its subsidiaries before any Governmental Entity that, individually or in the aggregate, is reasonably likely to have a material adverse effect on Xxxxx & Xxxxx or would prevent Xxxxx & Xxxxx from consummating the transactions contemplated by this Agreement. Except as disclosed in the Xxxxx & Xxxxx SEC Documents, neither Xxxxx & Xxxxx nor any of its subsidiaries is subject to any outstanding order, writ, injunction or decree that, insofar as can be reasonably foreseen, individually or in the aggregate, in the future would have a material adverse effect on Xxxxx & Xxxxx or would prevent either Buyer from consummating the transactions contemplated hereby.
Section 4.8 Accounting Matters. (a) To the Knowledge of Buyers, neither Buyer nor any of their respective affiliates has through the date of this Agreement taken or agreed to take any action that (without giving effect to any action taken or agreed to be taken by either Target or any of its affiliates) would prevent the parties from accounting for the transaction to be effected by this Agreement as a pooling of interests.
(b) Without limiting the generality of Section 4.8(a), to the Knowledge of Buyers, no Affiliate of either Buyer has, during a period of thirty (30) days prior to the date of this Agreement, sold, pledged, hypothecated, or otherwise transferred or encumbered any Xxxxx & Xxxxx Shares held by such Affiliate.
Section 4.9 Errors and Omissions. Neither Buyer has incurred any material liability or taken or failed to take any action that may reasonably be expected to result in a material liability for errors or omissions in the conduct of its insurance business, except such liabilities as are fully covered by insurance and those disclosed in the Xxxxx & Xxxxx SEC Documents. Buyers have errors and omission (E&O) insurance coverage in force, with minimum liability limits of $75,000,000.00 per occurrence and $75,000,000.00 aggregate, with a deductible of $250,000.00.
Section 4.10 Securities Law Representations. Buyers were granted access to the business premises, offices, properties, and business, corporate and financial books and records of the Targets. Buyers were permitted to examine the foregoing records, to question Members and managers of the Targets, and to make such other investigations as it considered appropriate to determine or verify the business and financial condition of the Targets. The Members furnished to Buyers all information regarding the business and affairs of the Targets that Buyers requested.
Article 5
[INTENTIONALLY OMITTED]
Additional Agreements
Section 6.1 Access to Information. Upon reasonable notice, each Target shall, and the Members shall cause each Target to, afford to the officers, employees, accountants, counsel, and other authorized representatives of Buyers full access, during the period prior to the Closing Date, to all of the properties, books, contracts, commitments, records, and senior management of the Targets. Unless otherwise required by law, Buyers will hold any such information that is nonpublic in confidence, will not use such information in its business if the transaction does not close, and will return such information if the transaction does not close.
Section 6.2 Expenses. Whether or not the transaction is consummated, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses.
Section 6.3 Brokers or Finders. Each of the parties represents, as to itself, its subsidiaries and its affiliates, that no agent, broker, investment banker, financial advisor, or other firm or person is or will be entitled to any broker's or finder's fee or any other commission or similar fee in connection with any of the transactions contemplated by this Agreement, and each of the parties agrees to indemnify and hold the others harmless from and against any and all claims, liabilities, or obligations with respect to any fees, commissions, or expenses asserted by any person on the basis of any act or statement alleged to have been made by such party or its affiliate.
Section 6.4 Additional Agreements; Best Efforts. Subject to the terms and conditions of this Agreement, each of the parties agrees to use its best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper, or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement, including cooperating fully with the other parties.
Section 6.5 Non-Competition Covenants. Given the statewide nature of each Target's business, each of the Members agrees that he shall not, directly or indirectly, for a period of five (5) years beginning on the Closing Date (the "Restricted Period"), engage in, or be or become the owner of an equity interest in, or otherwise consult with, be employed by, or participate in the business of, any entity (other than Buyers) engaged in the insurance agency business within the State of Oklahoma, or within those counties within the States of Kansas, Missouri or Arkansas that adjoin those states' respective borders with the State of Oklahoma. Without limiting the foregoing, none of the Members shall, during the Restricted Period, (a) solicit, divert, accept business from, nor service, directly or indirectly, as insurance solicitor, insurance agent, insurance broker or otherwise, for his account or the account of any other agent, broker, or insurer, either as owner, shareholder, promoter, employee, consultant, manager or otherwise, any account that is part of the Purchased Book of Business or any insurance account then serviced by Buyer, or (b) hire or directly or indirectly solicit any employees of Buyer or its affiliates to work for any Member or any of their affiliates, or any company that competes with Buyer or its affiliates. The Members acknowledge that the confidentiality and non-solicitation covenants to be contained in any employment agreements they may enter into with Buyers will be in addition to, and will not supersede or be subordinate to, the non-competition covenants contained in this Section 6.5.
Section 6.6 Pooling-of-Interests Accounting Matters. Neither of the Targets nor any of the Members shall knowingly take any action, or knowingly fail to take any action, that would jeopardize the treatment of this transaction as a "pooling of interests" for accounting purposes. Without limiting the generality of the foregoing, each of the Members agrees that they would each be deemed "Affiliates" of the Targets (as such term is defined in Section 3.23(b) of this Agreement) and that, in order to preserve the pooling-of-interests treatment of this transaction, such Member shall not sell, pledge, hypothecate, or otherwise transfer or encumber any Xxxxx & Xxxxx Shares issued to such Member under this Agreement until the final results of at least thirty (30) days of post-Closing combined operations have been published by Xxxxx & Xxxxx, via the issuance of a quarterly earnings report or other means at Xxxxx & Brown's sole discretion.
Section 6.7 Remedy for Breach of Covenants. In the event of a breach of the provisions of Section 6.5 or 6.6, Buyers shall be entitled to injunctive relief as well as any other applicable remedies at law or in equity. Should a court of competent jurisdiction declare the covenants set forth in Section 6.5 or 6.6 unenforceable due to a unreasonable restriction, duration, geographical area or otherwise, the parties agree that such court shall be empowered and shall grant Buyers and their affiliates injunctive relief to the extent reasonably necessary to protect their respective interests. The Members each acknowledge that the covenants set forth in Sections 6.5 and 6.6 represent an important element of each Target's value and were a material inducement for Buyers to enter into this Agreement.
Section 6.8 Successor Rights. The covenants contained in Section 6.5 and 6.6 shall inure to the benefit of any successor in interests of either Buyer by way of merger, consolidation, sale or other succession.
Section 6.9 Errors and Omissions Extended Reporting ("Tail") Coverage; Employment Practices Liability and Employee Dishonesty Coverage. On or prior to the Closing Date, the Members shall cause the Targets to purchase, at Targets' expense, a tail coverage extension on Targets' errors and omissions (E&O) insurance policy. Such E&O tail coverage shall extend for a period of at least five (5) years from the Closing Date, shall have the same coverages and deductibles currently in effect, and shall otherwise be in form reasonably acceptable to Buyers. A Certificate of Insurance evidencing each such coverage shall be delivered to Buyers at or prior to Closing.
Section 6.10 Tax Clearance Letters. Prior to Closing, each Target and Merger Sub shall each request from the Oklahoma Tax Commission a letter stating that each Target's and Merger Sub's franchise tax has been paid for the current fiscal year, which letters, upon Closing, shall be included with the Certificate of Merger for filing with the Oklahoma Secretary of State (the "Tax Clearance Letters").
Section 6.11 Release. The Members each agree on the Closing Date to execute and deliver the Release.
Section 6.12 Pledge Agreement. The parties agree on the Closing Date to enter into the Pledge Agreement.
Section 6.13 Member Employment Agreements. Xxxxx & Xxxxx and each of the Members agree on the Closing Date to enter into the respective Member Employment Agreements.
Section 6.14 Schedules. The Members agree prior to the Closing Date to deliver Schedules in form and substance satisfactory to Buyers.
Section 6.15 Certificate of Merger. Merger Sub and the Targets each agree on the Closing Date to execute the Certificate of Merger, and Merger Sub agrees to file such duly executed Certificate of Merger promptly after the Closing.
Section 6.16 Confidentiality. The parties agree to maintain the existence of this transaction and the terms hereof in confidence, until the earliest of the following circumstances occurs: (a) the parties mutually agree to release such information to the public; (b) Buyers reasonably conclude that such disclosure is required by law; or (c) the Closing has occurred and ownership of the Target Interests has passed to Buyers.
Section 6.17 Preparation of Tax Return. The Members recognize that a year-to-date income tax return must be prepared and filed for each Target as a result of this transaction and that the Members are primarily responsible for preparing this return. The Members therefore agree to prepare this return promptly after the Closing, at their expense, and deliver it to the Targets to review and file. Buyers shall be solely responsible for any changes they make to the return prepared by the Members.
Section 6.18 Employee Benefits; Credit for Service with Targets. With respect to any Employee Benefit Plan (as defined in Section 3.20 hereof) maintained or sponsored by Buyers, any waiting period for eligibility or vesting under any such Employee Benefit Plan shall provide employees of either Target whom Buyers wish to retain with credit for such employees' prior service with such Target. In addition, such Target employees shall receive credit for prior service in determining vacation and sick days under Buyers' vacation and sick day policies as applicable.
Article 7
Conditions
Section 7.1 Conditions to Each Party's Obligation. The respective obligations of each party to effect the transactions contemplated by this Agreement shall be subject to the satisfaction prior to or on the Closing Date of the following conditions:
(a) Approvals. All authorizations, consents, orders, or approvals of, or declarations or filings with, or expirations of waiting periods imposed by, any Governmental Entity, the failure to obtain which would have a material adverse effect on either Target, shall have been filed, occurred, or been obtained.
(b) No Injunctions or Restraints. No temporary restraining order, preliminary or permanent injunction, or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the transaction shall be in effect.
(c) Tax Clearance Letters. The Targets and Merger Sub shall have each delivered a Tax Clearance Letter from the OTC as described in Section 6.10 hereof.
(d) AIP Merger Agreement. The transactions contemplated by the AIP Merger Agreement shall become effective simultaneously with the transactions contemplated by this Agreement.
Section 7.2 Conditions to Obligations of Buyers. The obligation of Buyers to effect the transactions contemplated by this Agreement is subject to the satisfaction of the following conditions, unless waived by Buyers:
(a) Representations and Warranties. The representations and warranties of the Members set forth in this Agreement shall be true and correct in all material respects as of the Closing Date.
(b) Performance of Obligations by the Members. The Members shall have performed all obligations required to be performed by them under this Agreement at or prior to the Closing Date.
(c) Employment Agreements. (A) Each Member shall have executed and delivered to Buyers a copy of his respective Member Employment Agreement, and (A) each employee of the Targets that Buyers intend to retain shall have executed and delivered to Buyers a copy of an employment agreement with Xxxxx & Xxxxx or Merger Sub, as the case may be, which employment agreements contain confidentiality and non-solicitation provisions.
(d) Due Diligence. Buyers shall be satisfied, in their sole discretion, with the results of their due diligence investigation of the Targets.
(e) Opinion of the Members' Counsel. The Members shall have delivered to Buyers a written opinion of counsel dated as of the Closing Date in substantially the form attached hereto as Exhibit 2.2(a)(iv) with only such changes therein as shall be in form and substance reasonably satisfactory to Buyers.
(f) Pledge Agreement. The Members shall have executed and delivered to Buyers the Pledge Agreement.
(g) Release. Each Member shall have executed and delivered to Buyers the Release.
(h) Schedules. The Members shall have delivered to Buyers those Schedules required under the AIP Merger Agreement to delivered by the Members to Buyers.
(i) Certificate of Merger. Each Target shall have executed and delivered to Buyers the Certificate of Merger.
(j) E&O, EPL and Employee Dishonesty Coverages. The Members shall have delivered or caused to be delivered to Buyers a Certificate of Insurance evidencing Targets' E&O tail coverage policy required under Section 6.9, and shall deliver evidence of Targets' EPL and employee dishonesty coverages as set forth in Sections 3.17(b) and 3.18, respectively.
(k) Adverse Changes. There shall have been no material adverse change to the business or financial condition of either Target since the Balance Sheet Date.
(l) Buyers' Board Approval. Buyers' Boards of Directors shall have approved the Merger, this Agreement and the transactions and other agreements, instruments and documents contemplated herein (including, without limitation, approval for credit to retained Target employees for prior service with either Target with respect to Buyers' Employee Benefit Plans, as set forth in Section 6.18 hereof), and Xxxxx & Brown's Board of Directors shall have approved the issuance of the Xxxxx & Xxxxx Shares to the Members.
(m) Approval of Members and Targets. Each Target and the Members shall have delivered to Buyers resolutions evidencing the Members' and such Target's manager's approval of the Merger, this Agreement and the transactions and other agreements, instruments and documents contemplated herein.
(n) Tangible Net Worth. Buyers shall be satisfied that the Targets and AIP have a consolidated tangible net worth as of the Closing Date, after appropriate reductions including, but not limited to, the cost of purchasing the E&O tail coverage policies required under Section 6.9 hereof and the corresponding section of the AIP Merger Agreement, all distributions to the Members, and the write-off of all accounts receivables of either Target or AIP aged over fifty-nine (59) days of the Closing Date (the "Aged Accounts Receivable"), of at least $200,000.00; provided, however, that Buyers hereby agree to assign all right, title and ownership to such written-off Aged Accounts Receivable to the Members.
(o) Target Resolutions and Member Resolutions. Sellers shall have delivered to Buyers the Target Resolutions and Member Resolutions.
(p) Company Vehicles and Boats. Buyers shall be satisfied in their sole discretion that all autos, other vehicles and boats owned or leased by either Target have been sold, distributed or assumed, as the case may be.
(q) Liquidation of Securities. Buyers shall be satisfied in their sole discretion that all investment securities beneficially owned or held by the Companies have been liquidated prior to Closing.
(r) Satisfaction of All Liens and Encumbrances. Buyers shall have received evidence satisfactory to them in their sole discretion that any and all liens, judgments, or other encumbrances against the Target Interests have been fully satisfied and released prior to Closing.
(s) Willingness of Insurance Carriers to Appoint Merger Sub. Buyers shall be satisfied in their discretion that each Target's insurance carriers, brokers, and managing general agents (MGAs) are willing to appoint Merger Sub on terms acceptable to Buyers.
(t) Accounting Treatment; Securities Exemption. Buyers shall be satisfied in their sole discretion that the Merger and related issuance of the Xxxxx & Xxxxx Shares shall qualify (i) for treatment for accounting purposes as a pooling-of-interests transaction and (ii) for an exemption from registration under federal and state securities laws.
Section 7.3 Conditions to Obligation of the Members. The obligations of the Members to effect the transactions contemplated by this Agreement are subject to the satisfaction of the following conditions, unless waived by the Members:
(a) Representations and Warranties. The representations and warranties of Buyers set forth in this Agreement shall be true and correct in all material respects as of the Closing Date.
(b) Performance of Obligations by Buyers. Buyers shall have performed in all material respects all obligations required to be performed by them under this Agreement at or prior to the Closing Date.
(c) Opinion of Buyer's Counsel. Buyer's Assistant General Counsel shall have delivered to the Members a written opinion dated as of the Closing Date in substantially the form attached hereto as Exhibit 2.2(b)(ii) with only such changes therein as shall be in form and substance reasonably satisfactory to the Members.
Article 8
Indemnification
Section 8.1 Survival of Representations, Warranties, Indemnities and Covenants. The representations, warranties and indemnities set forth in this Agreement and any right to bring an action at law, in equity, or otherwise for any misrepresentation or breach of warranty under this Agreement shall survive for a period of one (1) year from the Closing Date. All post-closing covenants set forth in Article 6 hereof shall survive the Closing for the period specified in this Agreement or, if not specified, for a period of one (1) year following the Closing Date.
Section 8.2 Indemnification Provisions for the Benefit of Buyers. Subject to Section 8.4 hereof, the Members, jointly and severally, agree to indemnify and hold Buyers and their respective officers, directors and affiliates harmless from and against any and all Adverse Consequences (as defined below) that any of such parties may suffer or incur resulting from, arising out of, relating to, or caused by (a) the material breach of any of the Members' representations, warranties, obligations or covenants contained herein, or (b) the operation of Targets' insurance agency businesses or ownership of the Target Interests by the Members on or prior to the Closing Date, including, without limitation, any claims or lawsuits based on conduct of either Target or the Members occurring before the Closing. For purposes of this Article 8, the phrase "Adverse Consequences" means all charges, complaints, actions, suits, proceedings, hearings, investigations, claims, demands, judgments, orders, decrees, stipulations, injunctions, damages, dues, penalties, fines, costs, amounts paid in settlement, liabilities (whether known or unknown, whether absolute or contingent, whether liquidated or unliquidated, and whether due or to become due), obligations, taxes, liens, losses, expenses, and fees, including all reasonable attorneys' fees and court costs, net of aggregate insurance proceeds actually received. For purposes of this Section 8.2, "Adverse Consequences" also specifically includes any Adverse Consequences attributable to any deductible(s) due and payable under Targets' policies described under Section 6.9 hereof.
Section 8.3 Indemnification Provisions for the Benefit of the Members. Subject to Section 8.4 hereof, Buyers agree, jointly and severally, to indemnify and hold the Members harmless from and against any and all Adverse Consequences the Members may suffer or incur resulting from, arising out of, relating to, or caused by (a) the material breach of any of Buyers' representations, warranties, obligations or covenants contained herein, or (b) the operation of the insurance agency businesses of Targets after the Closing Date, including, without limitation, any claims or lawsuits based on conduct of either Buyer occurring after the Closing.
Section 8.4 Maximum Indemnification Obligation; Materiality Threshold. (a) The maximum indemnification obligation of any party (the Buyers on the one hand, and the Sellers on the other hand, collectively referred to as one party for purposes of this Section 8.4) hereunder shall be limited to the aggregate value, as of the Closing Date, of the Merger Consideration (the "Maximum Liability Amount").
(b) No party shall be entitled to indemnification hereunder with respect to any claim or claims unless and until the amount of the indemnified claim or claims under this Agreement and the AIP Merger Agreement exceeds $25,000.00 in the aggregate. Once such party's claims exceed $25,000.00 in the aggregate, such party shall be entitled to be indemnified for the full amount of its claims, including the initial $25,000.00 thereof.
(c) Notwithstanding anything to the contrary in this Section 8.4, the Sellers' indemnification obligations under this Article 8 with respect to any and all Adverse Consequences that Buyer may suffer or incur resulting from, arising out of, relating to, or caused by Sellers' breach of their respective covenants set forth in Sections 6.5, 6.6 or 6.16 hereof or the corresponding sections of the LLCs Merger Agreement shall not be subject to the Maximum Liability Amount or the Maximum Threshold Amount.
Article 9
[INTENTIONALLY OMITTED]
Article 10
Miscellaneous
Section 10.1 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, telecopied (if confirmed), or mailed by registered or certified mail (return receipt requested) to the parties at the following addresses or at such other address for a party as shall be specified by like notice:
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(a) If to Buyers, to |
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Xxxxx & Xxxxx, Inc. |
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000 X. Xxxxxxx Xxxxxx, Xxxxx 0000 |
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Xxxxx, Xxxxxxx 00000 |
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Telecopy No.: (000) 000-0000 |
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Attn: Xxxxxx X. Xxxxxxx, Esq. |
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(b) if to the Members, to |
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Xxxxxxx X. Xxxxx |
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0000 Xxxxx Xxxxxxxx Xxxxxx |
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Xxxxx, Xxxxxxxx 00000 |
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Xxxx X. Xxxxxxx |
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00000 Xxxxxxxxxx Xxxxx |
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Xxxxxxxxx, Xxxxxxxx 00000 |
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Xxxxxx X. Xxxxxxx |
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00000 Xxxxxxx Xxxxx |
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Xxxxxxxxx, Xxxxxxxx 00000 |
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with a copy to |
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Riggs, Abney, Neal, Turpen, Orbison & Xxxxx, P.C. |
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000 Xxxx Xxxxx Xxxxxx |
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Xxxxx, Xxxxxxxx 00000 |
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Telecopy No.: (000) 000-0000 |
Section 10.2 Use of Term "Knowledge". With respect to the term "Knowledge" as used herein: (a) an individual will be deemed to have "Knowledge" of a particular fact or other matter if (i) such individual is actually aware of such fact or other matter, or (ii) a prudent individual reasonably could be expected to discover or otherwise become of such fact or other matter in the course of conducting a reasonably comprehensive investigation concerning the existence of such fact or matter; and (b) a corporation or other entity will be deemed to have "Knowledge" of a particular fact or other matter if any individual who is serving, within the twelve (12)-month period prior to the Closing Date, as a director or officer (or in a similar capacity) of such corporation or entity has, or at any time had, Knowledge of such fact or other matter.
Section 10.3 Counterparts. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.
Section 10.4 Entire Agreement. This Agreement (including the documents and instruments referred to herein) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof.
Section 10.5 Assignment. Except as contemplated in Section 6.8 hereof, neither this Agreement nor any of the rights, interests, or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties. This Agreement will be binding upon, inure to the benefit of, and be enforceable by the parties and their respective successors and permitted assigns.
Section 10.6 Amendment. This Agreement may not be amended except by an instrument in writing signed on behalf of all the parties hereto.
Section 10.7 Joint Efforts. This Agreement is the result of the joint efforts and negotiations of the parties hereto, with each party being represented, or having the opportunity to be represented, by legal counsel of its own choice, and no singular party is the author or drafter of the provisions hereof. Each of the parties assumes joint responsibility for the form and composition of this Agreement and each party agrees that this Agreement shall be interpreted as though each of the parties participated equally in the composition of this Agreement and each and every provision and part hereof. The parties agree that the rule of judicial interpretation to the effect that any ambiguity or uncertainty contained in an agreement is to be construed against the party that drafted the agreement shall not be applied in the event of any disagreement or dispute arising out of this Agreement.
Section 10.8 Headings. All paragraph headings herein are inserted for convenience of reference only and shall not modify or affect the construction or interpretation of any provision of this Agreement.
Section 10.9 Severability. If any provision or covenant, or any part thereof, of this Agreement should be held by any court to be illegal, invalid or unenforceable, either in whole or in part, such illegality, invalidity or unenforceability shall not affect the legality, validity or enforceability of the remaining provisions or covenants, or any part thereof, all of which shall remain in full force and effect.
Section 10.10 Attorneys' Fees. The prevailing party in any proceeding brought to enforce the provisions of this Agreement shall be entitled to an award of reasonable attorneys' fees and costs incurred at both the trial and appellate levels incurred in enforcing its rights hereunder.
Section 10.11 Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Florida without regard to conflicts of laws principles thereof, except as to the effectuation of the Merger, which shall be governed by and construed and enforced in accordance with the OLLCA.
* * * * * * * * * *
[Remainder of Page Intentionally Left Blank - Signature Page Follows]
IN WITNESS WHEREOF, the parties have signed or caused this Agreement to be signed by their respective officers thereunto duly authorized as of the date first written above.
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BUYERS: |
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XXXXX & XXXXX, INC. |
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By:/S/ C. XXX XXXXXXX |
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Name: C. Xxx Xxxxxxx |
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Title: Regional Executive Vice President |
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CV MERGER CO. |
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By: /S/ C. XXX XXXXXXX |
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Name: C. Xxx Xxxxxxx |
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Title: President |
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SELLERS: |
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COMPVANTAGE INSURANCE AGENCY, L.L.C. |
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By: /S/ XXXXXX X. XXXXXXX |
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Name: Xxxxxx X. Xxxxxxx |
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Title: Manager |
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AGENCY OF INDIAN PROGRAMS |
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INSURANCE, L.L.C. |
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By: /S/ XXXXXX X. XXXXXXX |
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Name: Xxxxxx X. Xxxxxxx |
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Title: Manager |
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/S/ XXXXXXX X. XXXXX |
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Xxxxxxx X. Xxxxx, individually |
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/S/ XXXX X. XXXXXXX |
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Xxxx X. Xxxxxxx, individually |
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/S/ XXXXXX X. XXXXXXX |
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Xxxxxx X. Xxxxxxx, individually |
SCHEDULES AND EXHIBITS
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Schedule 3.5: Consents and Approvals |
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Schedule 3.6: Third Party Options |
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Schedule 3.9(a): Book of Business |
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Schedule 3.10: Guarantees of Third Party Obligations |
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Schedule 3.11: Litigation and Claims |
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Schedule 3.14: Material Contracts |
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Schedule 3.16: Insurance Policies |
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Schedule 3.18: Employee Dishonesty Coverage |
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Schedule 3.20: Employee Benefit Plans |
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Schedule 3.21(c): Owned Intellectual Property |
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Schedule 3.21(d): Licensed Intellectual Property |
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Schedule 3.23(a): Pooling-of-Interests Accounting Matters |
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Exhibit 1.2: Certificate of Merger |
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Exhibit 2.2(a)(ii): Release |
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Exhibit 2.2(a)(iii): Pledge Agreement |
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Exhibit 2.2(a)(iv): Opinion of the Members' Counsel |
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Exhibit 2.2(a)(v): Member Employment Agreement |
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Exhibit 2.2(b)(ii): Opinion of Buyer's Counsel |
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