EXHIBIT 10.1
AGREEMENT
This agreement ("Agreement") is made as of the 2nd day of January, 2003 between
Wachovia Securities Financial Network, Inc., a Florida corporation ("FiNet") and
Summit Holding Group, Inc, a Florida corporation ("Summit").
WHEREAS, Summit desires to purchase FiNet's retail brokerage business that is
carried on in FiNet's Boca Raton office (the "Business");
WHEREAS, Summit desires that FiNet transfer to Summit the customer accounts of
FiNet at the Boca Raton, Florida office (the "Office") located at 000 X. Xxxxxxx
Xxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000 and the other assets and obligations
related to the Business, and Summit desires to acquire those accounts, assets
and obligations; and
WHEREAS, FiNet desires to assign to Summit, and Summit desires to accept the
assignment of, the contracts of certain independent registered representatives
under contract with FiNet at the Office ("Transferred Representatives"); Summit
also desires to employ the Office's support staff employees ("Transferred
Staff"). (Such Transferred Representatives and Transferred Staff may be, where
appropriate, collectively referred to as the "Transferred Persons.")
WHEREAS, Summit intends to reorganize such that Summit becomes the sole
shareholder of Summit Brokerage Services, Inc..
NOW, THEREFORE, in consideration of the promises and of the respective
representations, warranties, covenants and agreements hereinafter set forth, the
parties hereto agree as follows:
ARTICLE I
PURCHASE, SALE AND ASSIGNMENT
Section 1.01. Assets Being Acquired.
A. Upon the terms and subject to the conditions set forth in this
Agreement, FiNet agrees to sell, transfer, assign, convey and deliver
to Summit, and Summit agrees to purchase and accept, at the Closing (as
hereinafter defined), all right, title and interest of FiNet in, to and
under the following assets of the Business and no others (the
"Assets"):
(i) all of FiNet's customer accounts serviced at or from the
Office as of the Closing Date (the accounts being transferred
hereunder shall be referred to herein as the "Accounts");
(ii) copies of documents contained in the Office relating to the
Accounts;
(iii) all of the furniture, office equipment and supplies, and
computer hardware and software in the Office that is currently
owned by FiNet; and
(iv) the lease of the real estate for the Office, together with any
leasehold improvements thereon, and all other rights,
subleases, licenses, permits, deposits and profits appurtenant
to or related to such lease (the "Real
Estate Lease") A copy of the current Real Estate Lease is attached
hereto as Schedule 1.01.A.(iv).
B. For the avoidance of doubt, the following assets and properties of
FiNet shall be excluded from and shall not constitute Assets:
(i) cash, certificates of deposit, bank deposits and other cash
equivalents of FiNet held for or used in connection with the
business conducted in the Office;
(ii) insurance policies relating to the operation of the Office;
(iii) all assets owned or held by any benefit plan of FiNet for the
Transferred Persons; and
(iv) all refunds or credits of taxes due to or from FiNet.
Section 1.02. Liabilities Assumed. In connection with the sale, transfer,
conveyance, assignment and delivery of the Assets pursuant to this Agreement, on
the terms and subject to the conditions set forth in this Agreement, at the
Closing, Summit assumes none of FiNet's obligations arising in connection with
the operation of the Business, including but not limited to any obligations or
liabilities to FiNet employees, clients, or other third party, arising from
FiNet, its agents or the Transferred Persons' actions, inaction or occurrences
prior to the Closing. Summit shall be responsible for the operation of the
Business from and after the Closing and shall be responsible for all
liabilities, obligations or undertakings arising from or relating to the conduct
of the Business only after the Closing (including those acts or omissions
relating to customer account agreements that arise only after the date of the
Closing). However, Summit agrees to cooperate with, and assist FiNet in
collecting any obligations or liabilities owed to FiNet from the Transferred
Persons relating to such Transferred Persons' actions, inactions or occurrences
prior to Closing.
Section 1.03. Transfer of Accounts.
A. The Accounts shall be delivered to Summit pursuant to an agreement
entitled Letter of Understanding, regarding the conversion of customer
business, (the "Conversion"). Summit and FiNet agree to finalize the
Letter of Understanding as soon as practicable after entering this
Agreement.
B. After execution of this Agreement, FiNet and Summit shall provide
written notice in a mutually agreed upon format to FiNet's customers
whose accounts were serviced at or from the Office as of the Closing
Date informing such customers of the proposed transfer of their
Accounts to Summit, and thereafter FiNet will promptly notify Summit as
to any customers who object to such transfer. FiNet and Summit agree to
adhere to the instructions of any such objecting customer regarding the
disposition of its Account.
C. Except as limited by Section 1.03(B), Summit shall accept all customer
Accounts, including any debits in such Accounts.
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D. On the Closing Date, or as soon thereafter as reasonably practicable,
FiNet shall provide Summit with copies of account documents kept in the
Office (copies of account documents to be made by FiNet from the
premises of the Office).
X. XxXxx agrees that it will not impose any fee or charge on any customer
in connection with the transfer of the Accounts to Summit.
Section 1.04. Transferred Persons.
A. Following the execution of this Agreement, Summit and FiNet shall
coordinate the recruitment of all the Transferred Persons listed in
Schedule 1.04.A. Summit agrees to accept the assignment of contracts
("Transferred Contracts") for all the Transferred Representatives.
Summit further agrees to offer employment to all Transferred Staff at
substantially the same terms, conditions, and salary as such employees
currently have with FiNet (such employment offer by Summit shall be at
a cash compensation level that is at least ninety percent of each
Transferred Staff's respective salary, include an offer of medical,
dental, and vision insurance, and a work location within thirty miles
of the Office). With the consent of the Transferred Persons, Summit
shall have complete access to and a copy of FiNet's personnel and other
records relating to the Transferred Persons to the extent permitted by
law. FiNet will use its best efforts to obtain the consent of the
Transferred Persons to this information.
B. All salary, accrued but unpaid benefits, and other compensation,
including bonuses, awards, prizes and other incentive with regard to
the Transferred Persons shall be paid in full by FiNet up to the
Closing, and Summit shall have no liability in respect thereof. FiNet
shall maintain any liability that may exist for paid time off payable
to Transferred Persons in respect of paid time off accrued but not
taken for the period prior to the Closing Date. FiNet shall notify
Summit of any carry-forward paid time off for each Transferred Person.
C. Summit's right to hire employees or independent contractors working for
FiNet under contracts shall be limited to the Transferred Persons of
FiNet, and FiNet does not hereby waive any rights with respect to
employees or independent contractors other than the Transferred
Persons. Summit shall assume all registration and licensing expenses
pertaining to each Transferred Person upon employment by, or the
assignment of the Transferred Contract to, Summit of each Transferred
Person. However, FiNet has paid for, and Summit shall not be liable
for, the annual registration and licensing expenses for the year 2003.
In addition, FiNet shall assume any and all registration and licensing
expenses incurred in order to affect the transfer of such registrations
and licenses, pertaining to the Transferred Persons, to Summit.
D. For a period of at least one year after the Closing, Summit will offer,
and provide to those Transferred Persons who accept employment with, or
agree to the assignment of their respective Transferred Contracts to,
Summit a level of compensation that is, in the aggregate, no less
favorable than the level of compensation currently provided to such
Transferred Persons. Effective as of the Closing, the Transferred
Persons shall be
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entitled to participate in the benefit plans of Summit on substantially
the same terms and conditions applied to employees of Summit and its
subsidiaries. For the purpose of determining eligibility to participate
in such benefit plans and the vesting of benefits under such benefit
plans (but not for the accrual of benefits under such benefit plans),
Summit shall give effect to years of service with FiNet as if such
service had been with Summit or its subsidiaries. No Transferred
Employee who elects coverage under a Purchaser Welfare Benefit Plan
shall be excluded from coverage under such plan (for such employee or
any other covered person) on the basis of a pre-existing condition that
was not also excluded under the FiNet's welfare benefit plans.
E. Upon the Closing, the participation of the Transferred Persons in
FiNet's benefit plans shall cease in accordance with the terms of such
plans. With respect to the Transferred Persons, FiNet shall be
responsible for any welfare benefits or claims, which by reason of
events which take place on or prior to the Closing, become payable
under the terms of any welfare benefit plan. With respect to
Transferred Persons, Summit shall be responsible for any welfare
benefits or claims which become payable by reason of events that take
place after the Closing.
F. Summit shall provide coverage for the Transferred Persons under
Summit's severance plan, policies and practices for Summit's similarly
situated employees and for a period of 12 months following the Closing,
any Transferred Person who is terminated by Summit and is entitled to
severance under the Summit's severance plan shall receive from Summit
the greater of the severance pay benefits under either Summit's
severance plan or under the FiNet's current severance plan, which
benefits shall be paid in a lump sum or by salary continuation as
determined by Summit on a case-by-case basis.
Section 1.05. Purchase Price.
A. Beginning at the Closing, Summit shall pay FiNet, on a Transferred
Representative by Transferred Representative basis, the amounts that
correspond to each Transferred Representative's outstanding forgivable
loan balance owed to FiNet as set forth in Schedule 1.05.A attached
hereto. The monthly payments ("Monthly Payments") by Summit to FiNet
shall begin January 1, 2003 and continue for a total of forty-eight
months. For the period from January 1, 2003 through the Closing Date,
FiNet will pay to Summit the net fee contribution of the Business, less
clearing fees, money market rebates and interest retained by FiNet.
B. Should a Transferred Representative leave Summit before January 1,
2005, the Monthly Payment pertaining to that Transferred
Representative, as set forth in Schedule 1.05.A, shall terminate. Any
remaining balance owed by Summit to FiNet associated with a Transferred
Representative who leaves Summit within two years after Closing shall
be determined ("Loss"). FiNet, in its sole discretion, shall take
whatever collection efforts it deems necessary to protect its and
Summit's interests in collecting the amounts due from the Transferred
Representative. Upon the actual collection of such amount recovered
from Transferred Representative, Summit shall pay to FiNet in equal
amounts over the
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remaining term of the Monthly Payments, 50% of the sum of the Loss plus
any fees or costs in collecting amounts from Transferred Representative
reduced by actual amounts collected from Transferred Representative. If
the actual collection occurs after the Monthly Payments have been made,
then the 50% due from Summit shall be due immediately. FiNet represents
that no decision to not pursue less than $10,000 from a Transferred
Representative shall be challenged.
C. Should a Transferred Representative leave Summit on or after January 1,
2005, the Monthly Payments pertaining to that Transferred
Representative, as set forth in Schedule 1.05.A, shall continue in
accordance with Section 1.05.A.
D. Should a Transferred Representative leave before the Closing Date, the
Monthly Payment pertaining to that Transferred Representative, as set
forth in Schedule 1.05A, shall be frozen and any remaining balance owed
by Summit to FiNet shall be calculated. FiNet, in its sole discretion,
shall take whatever collection efforts it deems necessary to protect
its and Summit's interests in collecting the amount due from the
Transferred Representative. Upon the actual collection of such amount
recovered from Transferred Representative, Summit shall pay to FiNet,
beginning the forty-ninth (49th) month after Closing, in twelve (12)
equal amounts, 50% of the sum of the Loss plus any fees or costs in
collecting amounts from Transferred Representative reduced by actual
amounts collected.
Section 1.06. Closing; Closing Deliveries.
A. The Sale and the Purchase of the Assets and the assumption of the
Assumed Liabilities contemplated by this Agreement (the "Closing")
shall take place at the Office or by correspondence as soon as possible
after the latest of the following events to occur:
(i) the receipt by FiNet (and to the extent necessary, Summit) of
any required regulatory approvals and consents necessary to
transfer the Assets and
(ii) the date upon which transfers of the Accounts from FiNet to
Summit can first take place.
The Closing shall be conditional on all of such events having been duly
completed in accordance with their terms. All such events shall be
deemed to have occurred simultaneously with each of the other events at
the time when all such events shall have taken place (the day on which
the Closing takes place being the "Closing Date").
A. At or before the Closing, FiNet and Summit shall take or cause to be
taken all actions, steps and corporate proceedings necessary or
desirable to validly and effectively approve or authorize the
completion of the transactions herein provided for and each shall use
their best efforts to ensure that the conditions precedent to the
obligations of the parties to complete the transactions are fulfilled
as soon as possible after the date hereof with a view to the Closing
Date occurring as soon as possible.
B. At the Closing, FiNet shall deliver or cause to be delivered to Summit:
(i) possession of the Assets
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(ii) such certificates, documents, instruments of assignment or
conveyance and consents as necessary to vest in Summit all of
FiNet's title to the Assets or for the consummation of the
transactions contemplated hereby.
C. At the Closing, Summit shall deliver to FiNet:
(i) such certificates, documents, instruments of assignment as
required to be delivered by Summit pursuant hereto or
reasonably requested by FiNet as necessary for the
consummation of the transactions contemplated hereby.
Section 1.07. Power of Attorney.
A. Effective upon the Closing Date, Summit shall have the right to receive
and open all mail, packages and other communications addressed to FiNet
and relating to the Business and FiNet agrees to deliver promptly to
Summit any such mail, packages or other communications received
directly or indirectly by FiNet. Also, effective upon the Closing Date,
Summit shall have the right and authority to collect, for its own
account, all receivables and other items constituting a part of the
Assets and further with respect to the Accounts to hypothecate customer
securities, to endorse and transfer stock certificates registered in
the name of FiNet and with respect to the Assets, to endorse with the
name of FiNet any checks or drafts received on account of any such
receivables or other items relating to the Business. FiNet shall
promptly transfer or deliver to Summit any cash or other property
received directly or indirectly by FiNet in respect of receivables and
other items, including any amounts payable as interest relating to the
Assets.
Section 1.08. Further Assurance; Cooperation
A. Following the Closing, upon request of one party, the other party shall
do, execute, acknowledge and deliver such further acts, assignments,
assurances, conveyances, transfers and other instruments and papers as
may be required
(i) to sell, assign, transfer, convey and deliver to and vest in
Summit and protect its right title, and interest in all the
Accounts, and other Assets of the Business sold, assigned,
transferred, conveyed and delivered to Summit pursuant to this
Agreement;
(ii) to effect the assumption by Summit of the Assumed Liabilities;
and
(iii) as otherwise may be appropriate to carry out the transactions
contemplated in this Agreement.
B. Following the Closing, Summit and FiNet will cooperate with each other
and with regulatory authorities as required to resolve any disputes
relating to the Accounts or to the Transferred Persons or to any other
Assets or Assumed Liabilities transferred pursuant to this Agreement
and in this regard Summit will make available to FiNet and FiNet will
make available to Summit any documents or records in the possession of
the other party which are relevant to the dispute.
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C. Upon signing this agreement and at all times thereafter, Summit and
FiNet shall keep all terms, conditions and matters related to this
agreement confidential, except as required by rules or regulations.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF FiNet
FiNet hereby makes the following representations and warranties as of
the Closing Date:
Section 2.01. Organization: Authority: Due Execution.
X. XxXxx is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation,
Florida, and has all necessary power and authority to enter into this
Agreement and the other agreements required to be delivered hereunder
(the "Ancillary Agreements"), to carry out its obligations hereunder
and thereunder and to consummate the transactions contemplated hereby
and thereby.
B. The execution and delivery of this Agreement and the Ancillary
Agreements by FiNet and the consummation by FiNet of the transactions
contemplated hereby and thereby have been duly authorized by all
requisite action on the part of FiNet. This Agreement has been, and
upon their execution, the Ancillary Agreements will be, duly executed
and delivered by FiNet and, assuming due authorization, execution and
delivery by Summit, this Agreement constitutes, and, upon their
execution, the Ancillary Agreements will constitute, legal, valid and
binding obligations of FiNet enforceable against FiNet in accordance
with their terms.
Section 2.02. No Conflict; Consent.
A. Assuming that all consents, approvals, authorizations, filings and
notifications and other actions described in Section 2.02(b) have been
obtained, the execution, delivery and performance of this Agreement and
the Ancillary Agreements by FiNet does not and will not (i) violate,
conflict with or result in the breach of any constituent corporate
documents of FiNet; (ii) violate any statute, ordinance, law, rule or
regulation applicable to FiNet or the Assets except for those
violations which would not adversely affect the ability of FiNet to
perform its obligations as contemplated hereby; or (iii) result in the
creation of any lien, security interest, charge or encumbrance on any
of the Assets pursuant to any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other
instrument to which FiNet is bound.
B. Except for the filings, approvals, authorizations, consents and other
orders or actions under applicable laws or under agreements to which
FiNet is subject relating to the Business, the Assets and the
Transferred Persons, the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby
by FiNet do not and will not require any consent, approval,
authorization or other order of, action by, filing with or notification
to, any governmental authority.
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Section 2.03. Litigation. Other than those listed on Schedule 2.03, there are no
pending or, to the knowledge of FiNet, threatened actions, suits, proceedings,
complaints or investigations conducted by any governmental agency or
self-regulatory organization or any third party against the Transferred Persons
or related to any of the Assets or the Business before any governmental
authority, any court or arbitral panel, which could reasonably have an adverse
effect on the Business or the Assets or, if adversely determined, result in the
issuance of an order restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by the
Agreement. None of the Transferred Persons has been permanently or temporarily
enjoined or prohibited by any judgment, order or decree of any court,
governmental authority or self-regulatory organization from engaging in or
continuing any conduct or practice in connection with the Office or the
Accounts.
Section 2.04. Registration. All registrations, permits, licenses, authorizations
and approvals issued by any governmental authority or self-regulatory
organization (collectively, "Registrations") relating to the Transferred Persons
are valid and in full force and effect and FiNet has no knowledge, and has not
received notice, that any governmental authority or self regulatory organization
has taken, or has any valid basis for taking, any steps to cancel, suspend or
revoke any Registration that is material to the Business, the Assets or any
Transferred Employee. FiNet has all licenses, permits, and Registrations
required for the provision of brokerage services and as otherwise necessary to
conduct the Business and the employment of the Transferred Persons as presently
maintained and employed, and none of the Transferred Persons has violated in any
material respect any rule of a governmental authority or self-regulatory
organization.
Section 2.05. Title to Assets. Except for the Real Estate Lease, FiNet has good
and marketable title to, or valid rights to use, all the Assets purported to be
owned or used by FiNet. All of such owned Assets are owned free and clear of all
liens, encumbrances or security interests.
Section 2.06. Customer Accounts. The Accounts include all customer accounts
serviced as of the Closing Date by the Transferred Persons. The Accounts are
being conducted in compliance in all material respects with the margin
requirements of FiNet, which are equal to or greater than the margin
requirements of the New York Stock Exchange and the Board of Governors of the
Federal Reserve System, and with all other applicable laws.
Section 2.11. Custody of Securities. As of the close of business on the Closing
Date, all securities in the Accounts will be held by FiNet or its clearing firm
or shall be delivered in the normal course of business within the required time
period specified in Rule 15c3-3 promulgated under the Securities Exchange Act of
1934, and are held in compliance with such rule. All securities to be
transferred to Summit with respect to the Accounts will be transferred free and
clear of all liens except insofar as they secure margin indebtedness or loans
incurred by FiNet to finance margin indebtedness.
Section 2.12. Taxes. All sales taxes, assessments and other charges levied and
payable on or before the Closing Date pursuant to applicable laws in respect of
the Business prior to the
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Closing Date and for which Summit or the Business could be liable, have been
paid or will have been paid prior to the Closing Date.
Section 2.13. Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission or connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of FiNet for which Summit shall be liable.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SUMMIT
Summit hereby makes the following representations and warranties:
Section 3.01. Organization: Authority: Due Execution.
A. Summit is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida and has all necessary
power and authority to enter into this Agreement and the Ancillary
Agreements, to carry out its obligations hereunder and thereunder and
to consummate the transactions contemplated hereby and thereby.
B. The execution and delivery of this Agreement and the Ancillary
Agreements by Summit and the consummation of the transactions
contemplated hereby have been duly authorized by all requisite action
on the part of Summit. This Agreement has been, and upon their
execution the Ancillary Agreements will be, duly executed and delivered
by Summit, and, assuming due authorization, execution and delivery by
FiNet, this Agreement constitutes, and upon their execution, the
Ancillary Agreements will constitute, legal, valid and binding
obligations of Summit enforceable in accordance with their terms.
Section 3.02. No Conflicts; Consents.
A. Assuming that all consents, approval, authorizations, filings and
notifications and other actions described in Section 2.02(b) have been
obtained, the execution, delivery and performance of this Agreement and
the Ancillary Agreements by Summit does not and will not (i) violate,
conflict with or result in the breach of any constituent corporate
documents of Summit; or (ii) violate any statute, ordinance, law, rules
or regulation applicable to Summit except for those violations which
would not adversely affect the ability of Summit to perform its
obligations as contemplated hereby.
B. Except for the filings, approvals, authorizations, consents or other
orders or actions under applicable laws relating to the Business, the
Assets and the Transferred Persons, the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by Summit do not and will not require any consent,
approval, authorization or other order of, action by, filing with or
notification to, any governmental authority.
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Section 3.03. Litigation. There are no legal proceedings against Summit pending
before any governmental authority or, to the knowledge of Summit, threatened,
which could, if adversely determined, result in the issuance of an order
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement.
Section 3.04. Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Summit for which FiNet shall be liable.
ARTICLE IV
COVENANTS AND ADDITIONAL AGREEMENTS
Section 4.01. Conduct of Business. From and after the date of this Agreement and
until the transfer of the Accounts and the contracts of the Transferred Persons
by Summit, FiNet will:
(i) conduct the Business and its administration of the Accounts
only in the ordinary course consistent with past practice;
(ii) use its best efforts to preserve intact the reputation of the
Business;
(iii) use its best efforts to keep available the services of the
Transferred Persons;
(iv) use its best efforts to preserve for Summit the goodwill of
clients, customers and others having business relations with
FiNet at the Office;
(v) promptly notify Summit in writing of any material adverse
change in the Business, prospects, assets, operations or
financial condition of the Office; and
(vi) obtain or make at the earliest practicable date and in any
event before the Closing all other consents, governmental
authorizations, approvals, estoppel certificates and filings
required to be obtained by it or which may be reasonably
necessary to the consummation of the transactions contemplated
by this Agreement or which are reasonably requested by the
other party.
Section 4.02. Access to Information. From the date hereof, FiNet shall furnish,
and cause its officers and employees to furnish to Summit and its authorized
representatives such due diligence information regarding the Business, the
Office, the Assets and Transferred Persons as Summit shall from time to time
reasonably request.
Section 4.03. Notification of Certain Matters. FiNet and Summit agree to give
prompt notice to each other of (i) the occurrence, or failure to occur, of any
event which occurrence or failure to occur would be likely to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Closing and (ii) any material failure on its part to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
Section 4.03 shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
Section 4.04. Claims Cooperation.
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A. In order to facilitate the resolution of any claims made by or against
or incurred by FiNet after the Closing with respect to liabilities
which were incurred or actions which occurred prior to the Closing,
upon reasonable notice, Summit shall after the Closing (i) furnish to
the officers, employees and authorized agents and representatives of
FiNet such information regarding the Business and the Assets for the
period prior to the Closing as FiNet may from time to time reasonably
request and (ii) make available to FiNet the employees of Summit whose
assistance, testimony or presence is necessary to assist FiNet in
evaluating any such claims and in defending such claims, including the
presence of such persons as witnesses in hearings or trials for such
purposes; provided, however that the foregoing shall not unreasonably
interfere with the businesses or operations of Summit or any of its
respective affiliates and provided, further, that Summit shall not be
obligated to disclose any information held under a legally binding
obligation of confidentiality or which is protected by any privilege.
FiNet's requests for cooperation should be made in writing and should
specify the account and party(ies) involved. FiNet shall attach to its
request a copy of any relevant request for documentation that it has
from a regulatory or investigative body, or other third party. FiNet
shall reimburse Summit for reasonable out-of-pocket expenses incurred
by any officers, employees or authorized agents for lodging, travel,
and meals in providing such cooperation to FiNet.
B. In order to facilitate the resolution of any claims made by or against
or incurred by Summit after the Closing, upon reasonable notice, FiNet
shall after the Closing (i) furnish to the officers, employees and
authorized agents and representatives of Summit such information
regarding the Business and the Assets for the period prior to the
Closing as Summit may from time to time reasonably request and (ii)
make available to Summit the employees of FiNet whose assistance,
testimony or presence is necessary to assist Summit in evaluating any
such claims and in defending such claims, including the presence of
such persons as witnesses in hearings or trials for such purposes;
provided, however that the foregoing shall not unreasonably interfere
with the businesses or operations of FiNet or any of its respective
affiliates and provided, further, that FiNet shall not be obligated to
disclose any information held under a legally binding obligation of
confidentiality or which is protected by any privilege. Summit's
requests for cooperation should be made in writing and should specify
the account and party(ies) involved. Summit shall attach to its request
a copy of any relevant request for documentation that it has from a
regulatory or investigative body, or other third party. Summit shall
reimburse FiNet for reasonable out-of-pocket expenses incurred by any
officers, employees or authorized agents for lodging, travel, and meals
in providing such cooperation to Summit.
Section 4.04. Phone Expenses. FiNet shall reimburse Summit for all direct and
actual costs and expenses associated with FiNet's use of the Office phone system
after Closing. Summit shall provide FiNet with a monthly invoice that details
such direct and actual costs and expenses. Summit shall also maintain the phone
system, and add additional lines upon FiNet's request.
Section 4.05. Accounting Cooperation. FiNet, and its agents and employees, shall
cooperate, and shall cause its accountants to cooperate, with Summit's
accountants in connection with any
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audit work relating to periods prior to the Closing Date, as required by
applicable federal and state securities laws, and other reasonable requirements.
Such cooperation shall include, without limitation, providing such assurances,
comfort letters and access to work papers as may reasonably be requested by
Summit and its accountants.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PARTIES
Section 5.01. Conditions Precedent to Obligations of Summit. The obligations of
Summit hereunder are subject to the fulfillment, at or before the Closing, of
each of the following conditions (all or any of which may be waived by Summit in
its sole discretion):
A. Performance by FiNet. All the terms, covenants, agreements and
conditions of this Agreement to be complied with and performed by
FiNet, on or before the Closing shall have been complied with and
performed in all material respects.
B. Representations and Warranties. The representations and warranties made
by FiNet in this Agreement shall be true and correct in all material
respects at the date of this Agreement and at all times thereafter to
the Closing Date, with the same force and effect as though all such
representations and warranties had been made all as of such time.
Section 5.02. Conditions Precedent to Obligations of FiNet. The obligations of
FiNet hereunder are subject to the fulfillment, at or before the Closing, of
each of the following conditions (all or any of which may be waived by FiNet in
its sole discretion):
A. Performance by Summit. All the terms, covenants agreements and
conditions of this Agreement to be complied with and performed by
Summit, on or before the Closing shall have been complied with and
performed in all material respects.
B. Representations and Warranties. The representations and warranties made
by Summit in this Agreement shall be true and correct in all material
respects at the date of this Agreement and at all times thereafter to
the Closing Date, with the same force and effect as though all such
representations and warranties had been made all as of such time.
ARTICLE VI
INDEMNIFICATION
Section 6.01. Indemnification by FiNet. Subject to the other provisions of this
Article VI and the other terms of this Agreement, FiNet agrees to indemnify and
hold harmless Summit, its employees, officers, directors, agent and affiliates
from and against:
(i) any and all claims, damages, liabilities, liens, losses or
other obligations whatsoever, together with costs and
expenses, including fees and disbursements of counsel and
expenses of investigation (collectively,
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"Losses"), arising out of or relating to any material
misrepresentation or omission or the breach of any warranty,
covenant or agreement of FiNet contained in this Agreement or
in any agreement, certificate or other instrument delivered by
FiNet pursuant to this Agreement;
(ii) any Losses arising out of or relating to acts or omissions of
FiNet or its agents or employees in connection with the
Business or the Office prior to the Closing;
(iii) any Losses arising out of or relating to acts or omissions of
FiNet or its agents or employees in connection with the
Accounts prior to the Closing; and
(iv) any Losses arising out of or relating to acts or omissions of
FiNet or its agents or employees in connection with the
Transferred Persons prior to the Closing.
Section 6.02. Indemnification by Summit. Subject to the other provisions of this
Article VI and the other terms of this Agreement Summit agrees to indemnify and
hold harmless FiNet, its employees, officers, directors, agents and affiliates
from and against:
(i) any and all Losses arising out of or relating to any material
misrepresentation or omission or the breach of any warranty,
covenant or agreement of Summit contained in this Agreement or
in any agreement, certificate or other instrument delivered by
FiNet pursuant to this Agreement;
(ii) any Losses arising out of or relating to acts or omissions of
or occurrences in connection with the Business or the Office
after the Closing,
(iii) any Losses arising out of or relating to acts or omissions of
or occurrences in connection with the Accounts after the
Closing; and
(iv) any Losses arising out of or relating to acts or omissions of
or occurrences subsequent to the Closing in connection with
the Transferred Persons who accept employment with Summit.
Section 6.03. Notice; Control of Action. Each indemnified party agrees to give
the indemnifying party prompt written notice of any action, claim, demand,
discovery of fact, proceeding or suit (collectively, "Actions") for which such
indemnified party intends to assert a right to indemnification under this
Agreement setting forth in reasonable detail the identity, nature and amount of
the Losses (to the extent such Losses are known at the time such notice is
given) related to the Action, the indemnified party's failure to provide the
detail required in the preceding sentence shall not constitute either a breach
of this Agreement by the indemnified party or, any basis for the indemnifying
party to assert that the indemnified party did not comply with the terms of this
Section 6.03 sufficient to cause the indemnified party to have waived its rights
for indemnification, unless the indemnifying party demonstrates that its ability
to defend against any Action with respect thereto has been materially adversely
affected. The indemnifying party shall have the right to employ its own legal
counsel in any such Action. The indemnifying party shall control the Action and
shall obtain the written consent of the indemnified party, which shall not be
unreasonably withheld, prior to ceasing to defend, settling or otherwise
disposing of any such Action.
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Section 6.05 Dispute of Liability to Indemnify. If the party receiving notice of
a claim of indemnification disputes its obligation to indemnify, then FiNet and
Summit will proceed in good faith to negotiate a resolution of such dispute, and
if not resolved through the negotiations by management of FiNet and Summit
within 30 days after the delivery of the notice of such claims, such dispute
shall be resolved fully and finally by arbitration before the National
Association of Securities Dealers or the New York Stock Exchange.
Section 6.05. Reimbursement of Costs. Upon the parties' agreement to the
obligation to Indemnify, or after resolution of any dispute referred to in
Section 6.04, the costs and expenses, including fees and disbursements of
counsel and expenses of investigation, incurred by any indemnified party in
connection with any Action shall be reimbursed on a quarterly basis by the
indemnifying party without prejudice to the indemnifying party's right to
contest the indemnified party's right to indemnification, and subject to refund
in the event the indemnified party is shown not to have been entitled to
indemnification. In the case of continuing acts that result in Losses for which
both parties bear responsibility, Summit and FiNet shall share control of the
Action.
ARTICLE VII
GENERAL PROVISIONS
Section 7.01. Expenses. Except as otherwise specified in this Agreement, all
costs and expenses, including, without limitation, fees and disbursements of
counsel, the parties' respective advisors and accountants, incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses, whether or not the Closing
shall have occurred.
Section 7.02. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery in
person, by courier service, by cable, by telecopy, by telegram, by telex, or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given, in accordance with this Section
7.02).
(a) if to FiNet:
Wachovia Securities Financial Network, Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, General Counsel
(b) if to Summit:
Summit Holding Group, Inc.
000 Xxxxx Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx, Chairman & CEO
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Section 7.03. Heading. The descriptive headings contained in this Agreement are
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 7.04. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.
Section 7.05. Entire Agreement. This Agreement, the Schedules and the Ancillary
Agreements constitute the entire agreement of the parties hereto with respect to
the subject matter hereof and supersede all prior agreements and undertakings,
both written and oral, between FiNet and Summit with respect to the subject
matter hereof.
Section 7.06. Assignment; Successors and Assigns. This Agreement may not be
assigned by operation of law or otherwise without the express prior written
consent of FiNet, if assignment is sought by Summit; or of Summit if assignment
is sought by FiNet. Provided, however, that either party may assign its rights
hereunder to one or more of its direct wholly owned subsidiaries, or affiliated
companies, without prior consent; provided further however, that no such
assignment shall relieve the assignor of its obligations hereunder. This
Agreement shall be binding upon and inure to the benefit of the successors and
permitted assigns of the parties hereto.
Section 7.07. No Third Party Beneficiaries. This Agreement is for the sole
benefit of the parties hereto and their permitted assigns and nothing herein,
express or implied, is intended to or shall confer upon any other person or
entity, including, without limitation, any employee or former employee of FiNet
or Summit, any legal or equitable right, benefit or remedy of any nature
whatsoever, including, without limitation, any rights of employment for any
specified period, under or by reason of this Agreement.
Section 7.08. Amendment; Waiver.
A. This Agreement may not be amended or modified except by an instrument
in writing signed by, or on behalf of, FiNet and Summit.
B. Any party to this Agreement may (i) extend the time for the performance
of any of the obligations or other acts of the other party, (ii) waive
any inaccuracies in any document delivered by the other parties
pursuant hereto or (iii) waive compliance with any of the agreements or
conditions of the other parties contained therein. Any such extension
or waiver shall be valid only if set forth in an instrument in writing
signed by the party to be
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bound thereby. Any waiver of any term or condition shall not be
construed as a waiver of any subsequent breach or subsequent waiver of
the same term or condition, or a waiver of any other term or condition,
of this Agreement. The failure of any party to assert any of its rights
hereunder shall not constitute a waiver of any of such rights.
Section 7.10. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Florida. All controversies or
disputes which may arise between the parties concerning the construction,
performance, or breach of this Agreement or any other agreement between the
parties, whether entered into prior to, on, or subsequent to the date of this
Agreement, including any controversy concerning whether an issue is arbitrable,
shall be determined by filing a written claim with the National Association of
Securities Dealers, Inc. in accordance with its arbitration procedures.
Section 7.11. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
IN WITNESS WHEREOF FiNet and Summit have caused this Agreement to be executed as
of the date first written above by their respective officers thereunto duly
authorized.
SUMMIT HOLDING GROUP, INC.
/s/ Xxxxxxxx X. Xxxxx
------------------------------------------
Xxxxxxxx X. Xxxxx
Chairman and Chief Executive Officer
WACHOVIA SECURITIES FINANCIAL NETWORK, INC.
/s/ Xxxxx X. Xxxxxxx
------------------------------------------
Xxxxx X. Xxxxxxx
Chief Operating Officer
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