Exhibit 10.10
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ASSET PURCHASE AGREEMENT
between
INSPIRE INSURANCE SOLUTIONS, INC., debtor and debtor-in-possession,
and
ARROWHEAD GENERAL INSURANCE AGENCY, INC.
Dated as of May 14, 2002
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of May 14,
2002 (the "Signing Date"), is made by and between Arrowhead General Insurance
Agency, Inc., a Minnesota corporation ("Purchaser"), and INSpire Insurance
Solutions, Inc., a Texas corporation, debtor and debtor-in-possession,
("Seller"). Seller and Purchaser are sometimes collective referred to as the
"Parties," and individually referred to as "Party." This Asset Purchase
Agreement, together with the Exhibits referenced herein and attached hereto, are
collectively referred to as this "Agreement."
RECITALS
A. Seller provides certain policy processing, servicing and
administration services to Purchaser pursuant to a Policy Administration
Services Agreement, dated as of December 1, 1998, by and between Seller and
Purchaser (the "Policy Administration Agreement").
B. Purchaser and Seller desire to terminate the Policy Administration
Agreement and to concurrently enter into various new agreements, including this
Agreement, which will collectively help establish a new business relationship
between the Parties.
C. On February 15, 2002, INSpire filed a voluntary petition for relief
under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code") in
the United States Bankruptcy Court for the Northern District of Texas, Fort
Worth Division (the "Bankruptcy Court"), under Case No. 02-41228-DML (the
"Bankruptcy Case").
D. Purchaser and Seller further desire that this Agreement, as well as
the other agreements referenced in it, shall only be effective and binding on
them if (1) all of such agreements are approved by a final order of the
Bankruptcy Court acceptable in form and substance to Customer, and (2)
INSpire's rejection of the Policy Administration Agreement, the Claims
Administration Agreement, and the Claims Management Agreement is approved by a
final order of the Bankruptcy Court acceptable in form and substance to
Customer.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the promises and the mutual
agreements, covenants, representations and warranties set forth in this
Agreement and for other good, valid and binding consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties, intending to be
legally bound, hereby agree as follows:
ARTICLE I
IDENTIFICATION OF ASSETS AND EQUIPMENT
Section 1.1 Sale of Purchased Assets. Subject to the terms and
conditions of and in reliance upon the representations and warranties contained
in this Agreement, at the Closing (described below), Seller will (or Seller will
cause its Affiliates to) sell, transfer and deliver to Purchaser, and Purchaser
will purchase and receive from Seller, all of the assets which are described and
listed in the appraisal of capital assets which is attached hereto as Schedule 1
(the "Purchased Assets"), free and clear of any and all liens, claims,
obligations or other encumbrances.
Section 1.2 Transfer and Assignment of Computer Software Programs and
Systems. Other than the software and systems that are the subject of the
Software License Agreement between Seller and Purchaser and subject to the terms
and conditions of and in reliance upon the representations and warranties
contained in this Agreement, at the Closing, Seller will (or Seller will cause
its Affiliates to) sell, assign, transfer and deliver to Purchaser, and
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Purchaser will purchase and receive from Seller, all third party software
licenses applicable to the computer software programs located on any and all of
the Purchased Assets, free and clear of any and all liens, claims, obligations
or other encumbrances.
ARTICLE II
PURCHASE PRICE AND RELATED ITEMS
Section 2.1 Purchase Price. The total consideration for the Purchased
Assets is the sum of $230,655 (the "Closing Cash Payment").
ARTICLE III
CLOSING
Section 3.1 Closing. The consummation of the transactions contemplated
by this Agreement (the "Closing") will take place at the offices of Seller
located at 0000 Xxxx Xxxxxxxxx, Xxx Xxxxx, Xxxxxxxxxx, on the later of the
Signing Date or the date when this Agreement is approved by final order of the
Bankruptcy Court as provided for herein (the "Effective Date"). The Closing may
be postponed to such other date as the parties may mutually agree in writing,
but no later than five days after the Effective Date. The date on which the
Closing actually occurs is hereinafter referred to as the "Closing Date."
Section 3.2 Deliveries by Seller. At the Closing, Seller will deliver,
or cause to be delivered, to Purchaser the following:
(a) a xxxx of sale for the Purchased Assets in form and
substance reasonably acceptable to the Parties;
(b) such other instruments of conveyance, assignment and
transfer as will be necessary to vest in Purchaser good and valid title to the
Purchased Assets, free and clear of all liens, claims, obligations and
encumbrances;
(c) a receipt for the payment of the Closing Cash Payment; and
(d) a final order by the Bankruptcy Court, issued no later
than 45 days after the Signing Date approving (1) this Agreement, the Sublease,
the Software License Agreement, the Professional Services Agreement, the
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Comprehensive Preferred Escrow Agreement, the Claims Administration Agreement,
and the Policy Processing and Administration Agreement, without amendment or
modification, unless such amendment or modification is approved in writing by
the Parties, and (2) INSpire's rejection of the Policy Administration
Agreement, the Claims Administration Services Agreement and the Claims
Management Agreement.
Section 3.3 Deliveries by Purchaser. At the Closing, Purchaser will
deliver to Seller immediately available funds by wire transfer to Seller in an
amount of the Closing Cash Payment.
Section 3.4 Simultaneous Deliveries. The delivery of any documents,
which are required to be delivered at the Closing pursuant to this Agreement,
will be deemed to occur simultaneously. No delivery will be effective until each
Party has received or waived receipt of all the documents that this Agreement
entitles such Party to receive.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser that the statements
made in this Article IV are true, correct and complete:
Section 4.1 Corporate Status; Qualification. Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Texas. There is a pending Bankruptcy Chapter 11 proceeding for the
reorganization of Purchaser, which will therefore require that this Agreement be
approved by the Bankruptcy Court. Seller is duly qualified and in good standing
as a foreign entity under the laws of each jurisdiction where qualification is
required, except where the lack of such qualification would not have a material
adverse effect on the transaction contemplated hereby.
Section 4.2 Corporate Power and Authority. Seller has the corporate
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
Except for the consent of the Bankruptcy Court, Seller has taken all corporate
action necessary to authorize its execution and delivery of this Agreement, the
performance of its obligations hereunder and the consummation of the
transactions contemplated hereby.
Section 4.3 Enforceability. This Agreement has been duly executed and
delivered by Seller and constitutes a legal, valid and binding obligation of
Seller enforceable against it in accordance with the terms of this Agreement,
except as the same may be limited by the Bankruptcy Case, applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and general equitable principles regardless of
whether such enforceability is considered in a proceeding at law or in equity.
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ARTICLE V
REPRESENTATION AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller that the statements made
in this Article V are true, correct and complete.
Section 5.1 Corporate Status Qualification. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Minnesota. There is no pending or threatened proceeding for the
dissolution, liquidation, insolvency or rehabilitation of Purchaser. Purchaser
is duly qualified and in good standing as a foreign entity under the laws of
each jurisdiction where qualification is required, except where the lack of such
qualification would not have a material adverse effect on the transaction
contemplated hereby.
Section 5.2 Corporate Power and Authority. Purchaser has the corporate
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
Purchaser has taken all corporate action necessary to authorize its execution
and delivery of this Agreement, the performance of its obligations hereunder and
the consummation of the transactions contemplated hereby.
Section 5.3 Enforceability. This Agreement has been duly executed and
delivered by Customer and constitutes a legal, valid and binding obligation of
Purchaser enforceable against it in accordance with the terms of this Agreement,
except as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and general equitable principles regardless of
whether such enforceability is considered in a proceeding at law or in equity.
ARTICLE VI
REMEDIES AND LIMITATION OF LIABILITY
Section 6.1 Indemnification of the Parties. Each Party (the
"Indemnitor") will indemnify, defend, and hold harmless the other Party (the
"Indemnitee") from and against any arbitration award, claim, cost, damage,
demand, expense, fine, liability, lawsuit, obligation, payment or penalty of any
kind or nature whatsoever, including any reasonable attorneys' fees and expenses
(a "Claim") incurred by the Indemnitee that arises out of or directly relates to
the Indemnitor's performance or breach of this Agreement. Upon an Indemnitee's
request, the Indemnitor will indemnify the Indemnitee's directors, employees,
officers, agents, attorneys, representatives and shareholders to the same extent
as such Indemnitee. No such person, however, will be a third party beneficiary
of the indemnification provision set forth in this Agreement. To the extent that
a Indemnitee requests the Indemnitor to indemnify such Party's representatives,
the Indemnitee will cause its representatives to comply with the indemnification
provisions and abide by the indemnification limitations set forth in this
Agreement.
Section 6.2 Limitation Acknowledgement. Each Party expressly
acknowledges that the limitations set forth in this Article VI represent the
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express agreement of the Parties with respect to the allocation of risks between
the Parties and each party fully understands and irrevocably accepts such
limitations.
Section 6.3 Notice of Claim. Any award of damages or indemnification
pursuant to this Agreement is conditioned upon the Indemnitor having received
full and prompt notice in writing of the Claim and the Indemnitee allowing the
Indemnitor to fully direct the defense or settlement of such Claim; provided,
however, that the failure to receive prompt notice relieves the Indemnitor of
its obligations under this Article only if the Indemnitor is materially
prejudiced by the failure to receive such notice. The Indemnitor will not be
responsible for any settlement or compromise made without its consent.
ARTICLE VII
MISCELLANEOUS
Section 7. 1 Amendment. No amendment of this Agreement will be
effective unless in writing signed by the Parties.
Section 7.2 Counterparts. This Agreement may be executed in any number
of counterparts, each of which will be deemed to be an original agreement, but
all of which will constitute one and the same agreement.
Section 7.3 Entire Agreement. This Agreement constitutes the entire
agreement and understanding between the Parties and supersedes all prior
agreements and understandings, both written and oral, with respect to the
subject matter of this Agreement.
Section 7.4 Expenses. Each Party will bear its own expenses with
respect to the negotiation and preparation of this Agreement.
Section 7.5 No Assignment. No Party may assign its benefits or delegate
its duties under this Agreement without the prior consent of the other Party.
Section 7.6 No Third Party Beneficiaries. This Agreement is solely for
the benefit of the Parties and no other Person will have any right, interest, or
claim under this Agreement.
Section 7.7 Notices. All claims, consents, designations, notices,
waivers, and other communications in connection with this Agreement will be in
writing. Such claims, consents, designations, notices, waivers, and other
communications will be considered received (a) on the day of actual transmittal
when transmitted by facsimile with written confirmation of such transmittal, (b)
on the next business day following actual transmittal when transmitted by a
nationally recognized overnight courier, or (c) on the third business day
following actual transmittal when transmitted by certified mail, postage
prepaid, return receipt requested; in each case when transmitted to a Party at
its address set forth below (or to such other address to which such Party has
notified the other Parties in accordance with this Section to send such claims,
consents, designations, notices, waivers, and other communications):
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Seller: Attn: Chief Executive Officer
INSpire Insurance Solutions, Inc.
000 Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000
Phone: 000-000-0000
Fax: 000-000-0000
With copy to: Xxxxxx X. Xxxxxx
Jenkens & Xxxxxxxxx
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Phone: 000-000-0000
Fax: 000-000-0000
Purchaser: Attn: Chief Executive Officer
Arrowhead General Insurance Agency, Inc.
000 X. Xxxxxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Phone: 000-000-0000
Fax: 000-000-0000
Section 7.8 Public Announcement. The Parties will agree on the terms of
any public communications concerning this Agreement.
Section 7.9 Representation by Legal Counsel. Each Party is a
sophisticated entity that was advised by experienced legal counsel and other
advisors in the negotiation and preparation of this Agreement.
Section 7.10 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction will not invalidate the
remaining provisions of this Agreement or affect the validity or enforceability
of such provision in any other jurisdiction. In addition, any such prohibited or
unenforceable provision will be given effect to the extent possible in the
jurisdiction where such provision is prohibited or unenforceable.
Section 7.11 Successors. This Agreement will be binding upon and will
inure to the benefit of each Party and its heirs, legal representatives,
permitted assigns, and successors, provided that this Section will not permit
the assignment or other transfer of this Agreement, whether by operation of law
or otherwise, if such assignment of other transfer is not otherwise permitted
under this Agreement.
Section 7.12 Time of the Essence. Time is of the essence in the
performance of this Agreement and all dates and periods specified in this
Agreement.
Section 7.13 Waiver. No provision of this Agreement will be considered
waived unless such waiver is in writing and signed by the Party that benefits
from the enforcement of such provision. No waiver of any provision in this
Agreement, however, will be deemed a waiver of a subsequent breach of such
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provision or a waiver of a similar provision. In addition, a waiver of any
breach or a failure to enforce any term or condition of this Agreement will not
in any way affect, limit, or waive a Party's rights under this Agreement at any
time to enforce strict compliance thereafter with every term and condition of
this Agreement.
Section 7.14 Force Majeure. The Parties will not be liable or deemed
to be in default for any delay or failure in performance under this Agreement or
interruption of Services resulting, directly or indirectly, from acts of God,
civil or military authority, labor disputes, shortages of suitable materials,
labor or transportation or any similar cause beyond the reasonable control of
the Parties.
Section 7.15 Attorneys' Fees. In the event of any action, arbitration,
claim, proceeding or suit between the Parties seeking enforcement of any of the
terms and conditions of this Agreement, the prevailing party in such action,
arbitration, claim, proceeding or suit will be awarded its reasonable costs and
expenses, including its court costs and reasonable attorneys' fees.
Section 7.16 Relationship of the Parties. The Parties are independent
contractors of one another, and there should be no instance in which they should
be construed as partners or joint venturers.
Section 7.17 Drafting. Neither this Agreement nor any provision
contained in this Agreement will be interpreted in favor of or against either
Party because such Party or its legal counsel drafted this Agreement or such
provision. No prior draft of this Agreement or any provision contained in this
Agreement will be used when interpreting this Agreement or its provisions.
Section 7.18 Headings. Article and section headings are used in this
Agreement only as a matter of convenience and will not have any effect upon the
construction or interpretation of this Agreement.
ARTICLE VIII
BANKRUPTCY COURT APPROVAL
Section 8.1 Condition of Bankruptcy Court Approval. This Agreement is
expressly conditioned upon Seller and its affiliates obtaining a final order
from the Bankruptcy Court in the Bankruptcy Case approving (a) this Agreement,
as well as the Policy Processing and Administration Agreement, the Sublease, the
Claim Administration Agreement, the Software License Agreement, the Professional
Services Agreement and the Comprehensive Preferred Escrow Agreement concurrently
entered into between Seller and/or its affiliates and Purchaser and/or its
affiliates, all without amendment or modification, unless such amendment or
modification is approved in writing by all of the Parties, within forty-five
(45) days after the date this Agreement is entered into; and (b) the termination
of the Policy Administration Agreement, the Claims Administration Agreement, and
the Claims Management Agreement. The final order of the Bankruptcy Court shall
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be in a form and substance acceptable to Customer. This Agreement shall be
implemented by the Parties on a date mutually agreed to by the Parties, but no
later than five days after the Effective Date. If the final order from the
Bankruptcy Court is not obtained within the time specified, this Agreement and
all of its terms and provisions are and shall be null and void and of no force
or effect whatsoever.
[SIGNATURE PAGE TO FOLLOW]
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed and delivered by a duly authorized officer as of the Signing Date.
Seller: INSPIRE INSURANCE SOLUTIONS, INC., debtor
and debtor-in-possession
By:
----------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President & CEO
Purchaser: ARROWHEAD GENERAL INSURANCE AGENCY, INC.
By:
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Name: Xxxxxx Xxxxxxx
Title: President & CEO
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Schedule 1 - List of Capital Assets to be sold by Seller and Purchased by
Purchaser
Asset Appraisal to be attached.
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