Asset Purchase Agreement
Execution
Copy
THIS
ASSET PURCHASE AGREEMENT, dated as of this 27th day of
March, 2009, is by and among NII BSA LLC, a Delaware limited liability company
(“Buyer”), XXXXX XXXXX
AGENCY, INC., a New York corporation (“BSA”), DCAP ACCURATE, INC., a
Delaware corporation (“DA”) (BSA and DA are
collectively “Seller”)
and DCAP GROUP, INC., a Delaware corporation (the “Shareholder”, and collectively
with the Seller, the “Seller
Group”).
Preliminary
Statement:
Seller is
engaged in the Business (as this capitalized term and other capitalized terms
used herein are defined in Exhibit A)
in New York. Seller owns the Purchased Assets, which Seller uses in
the operation of the Business. Buyer desires to purchase from Seller,
and Seller desires to sell to Buyer, the Purchased Assets, all upon the terms
and conditions hereinafter set forth. The Shareholder owns 100% of
the issued and outstanding capital stock of Seller. The Shareholder
is entering into this Agreement to provide certain non-competition,
indemnification and other assurances to Buyer as a material inducement for Buyer
to enter into this Agreement.
Agreement:
In
consideration of the premises and of the respective mutual agreements,
covenants, representations and warranties contained herein, the parties hereto
agree as follows:
1. DEFINITIONS.
1.1. Certain Defined
Terms. As
used in this Agreement, except as otherwise set forth herein, each capitalized
term shall have the meaning ascribed to such term in Exhibit A.
1.2. Construction,
etc. Unless
otherwise expressly provided, for purposes of this Agreement, the following
rules of interpretation shall apply: (i) whenever the context
requires, the singular includes the plural and the plural includes the singular;
(ii) “or” is not exclusive; (iii) a reference to any Person includes such
Person’s successors and assigns but, if applicable, only if succession or any
assignment to such successors and assigns is not prohibited by this Agreement;
(iv) the words “include,” “includes” and “including” and any other words or
phrases of inclusion shall not limit the generality of any enumerations or
descriptions preceding such terms, and references to “included” matters will be
regarded as non-exclusive, non-characterizing illustrations; (v) a reference to
any gender includes each other gender; (vi) references to any document,
instrument or agreement (A) shall be deemed to include all exhibits, schedules,
addenda, riders and other attachments thereto, (B) shall include all documents,
instruments or agreements issued or executed in replacement thereof, and (C)
shall mean such document, instrument or agreement as amended, modified or
supplemented from time to time and in effect from time to time in accordance
with the terms thereof; (vii) the words “hereof,” “herein” and “hereunder” and
words of similar import when used in any document shall refer to such document
as a whole and not to any particular provision of such document; (viii) the
section headings contained in this Agreement are for the reference purposes only
and shall not affect the meaning or interpretation of any of the provisions of
this Agreement; (ix) all accounting terms used herein shall be interpreted and
all accounting determinations hereunder shall be made in accordance with
generally accepted accounting principles for financial reporting in the United
States, consistently applied; (x) any reference to any statutory provision
includes each successor provision and all applicable laws as to that provision;
(xi) “will” has the same meaning as “shall” and, thus, connotes an obligation
and an imperative and not a futurity; (xii) “copy” or “copies” means that the
copy or copies of the material to which it relates are true, correct and
complete; and (xiii) an entity will have knowledge of a particular fact or
matter if any of its current directors, officers, managers or similar Persons
have knowledge of such fact or other matter, including, in the case of each
member of the Seller Group, Xxxxx X. Xxxxxxxxx, Xxxxx Xxxxxxxxx and Xxxxxx
Xxxxxxx, and in the case of Buyer, Xxxxxxxxx and Xxxx Xxxxxx).
1.2.1. This
Agreement is a result of negotiations among, and has been reviewed by Seller,
Buyer, Shareholder and their respective counsel. Accordingly, this
Agreement shall be deemed to be the product of all parties hereto, and no
ambiguity shall be construed in favor of or against any party hereto.
2. PURCHASE AND SALE OF THE
PURCHASED ASSETS.
2.1. Purchase and
Sale. Upon the terms and
conditions of this Agreement, Buyer hereby agrees to purchase and acquire, and
Seller hereby agrees to sell, convey, assign, transfer and deliver to Buyer,
free and clear of all Liens, the Purchased Assets.
2.2. Assumption of
Liabilities. As part of the
consideration for the Purchased Assets, Buyer shall assume as of the Closing
Date and shall pay and discharge or cause to be paid and discharged in
accordance with their terms only (A) those
Liabilities accruing in respect of periods from and after the Closing Date under
the Contracts specifically identified in Schedule
2.2 as to be assumed by the Buyer (collectively, the “Assumed Contracts”), but in
each case excluding (i) any Liability that relates to a period or portion of a
period prior to the Closing Date, and (ii) any Liability based on a breach or
alleged breach of any such Contract on or before the Closing Date, (B) Unearned
Commissions as provided in Section
6.16, and (C) the AMS Obligation as provided in Section
2.4.2.4 (collectively, the “Assumed
Liabilities”).
2.3. Excluded
Liabilities. Except
for the assumption of the Assumed Liabilities, Buyer will not acquire or assume
and will have no responsibility for paying, performing or discharging any of
Seller’s Liabilities. No such assumption shall be implied or
construed by operation of Law or otherwise. All Liabilities other
than the Assumed Liabilities shall remain the sole responsibility of and shall
be retained, paid, performed and discharged solely by Seller. Without
limiting the generality of the foregoing, the excluded
Liabilities include, among other things, each of the following: (i)
any liabilities or obligations relating to any consultant, broker, producer,
sub-producer employee or former employee of Seller, including any claim by any
such Person or any other Person (including brokers with whom Seller has
split-commission arrangements or other arrangements) for salary, wages,
commissions, vacation or holiday pay, severance pay, sick pay, workers
compensation, medical benefits, retirement benefits, any other employee benefits
or other benefits of any kind whatsoever, and including any liability or
obligation under the New York State Worker Adjustment Retraining Notification
Act (“NY WARN”) or any
corresponding or similar federal or state legislation, or pursuant to other
applicable Law, Proceedings or Orders; (ii) any liability or obligation of
Seller in respect of any Tax or similar payment obligation to any Tax Authority;
(iii) any liability or obligation of Seller in respect of any Contract, whether
arising or accruing before or after the Closing Date, including any Leases and
any carrier contracts assigned and transferred to Buyer in accordance with this
Agreement (except as provided in Section
2.2 with respect to the Assumed Contracts); (iv) all of Seller’s accounts
payable and all indebtedness of Seller for borrowed money or otherwise, whether
for periods preceding or following the Closing Date (except to the extent they
are included in the Assumed Contracts for periods on or after the Closing Date
and for the AMS Obligation); (v) any liabilities or obligations to Seller’s
customers, clients or accounts, including liabilities relating to customer or
client deposits held by Seller in fiduciary accounts in its name; (vi) any
liability to any shareholder or Affiliate of Seller or the Shareholder; (vii)
any liability arising out of any Proceeding, including any commenced, brought,
conducted or heard by or before, or otherwise involving, any Governmental or
Regulatory Authority and including any relating to the acts or omissions of
Seller or its employees and agents or the operation of the Business; (viii) any
liabilities or obligations with respect to Prior Claims; and (ix) any
liabilities based on, arising out of or in connection with the execution,
delivery or performance by Seller of this Agreement, including all liabilities
of Seller for federal, state, county, local or other income, sales, use or other
Taxes or assessments of any kind, including any based upon, or related to, the
sale of the Purchased Assets, the dissolution of Seller or any action related to
any of the foregoing.
2.4. Purchase Price;
Allocation. The
purchase price (the “Purchase
Price”) shall be as follows:
2.4.1. The
Purchase Price for all of the Purchased Assets, other than the Closed Store Book
of Business, shall be Two Million Three Hundred Thirty Six Thousand Nine Hundred
Fifty Two Dollars ($2,336,952), payable as follows:
2.4.1.1. One
Million Eight Hundred Eighty Six Thousand Four Hundred Nine Dollars ($1,886,409)
(collectively, the “Cash
Payment”), subject to reduction as provided in Schedule
8.1.4, will be paid to Seller at the Closing by wire transfer (with the
reduction amount, if any, being paid to the Escrow Agent as provided for in
Schedule
8.1.4).
2.4.1.2. Subject
to offset as provided herein, the balance of the Purchase Price in the amount of
Four Hundred Fifty Thousand Five Hundred Forty Three Dollars ($450,543) shall be
paid by Buyer to Shareholder pursuant to a promissory note substantially in the
form attached hereto as Exhibit B
(the “Promissory
Note”). Seller consents to Buyer’s payment of the Promissory
Note to the Shareholder and not to Seller. The Promissory Note shall
be dated as of the Closing Date and will provide for the principal balance to be
paid in two equal installments of principal of Two Hundred Twenty Five Thousand
Two Hundred Seventy One and 50/100 Dollars ($225,271.50), the first being due on
March 31, 2010 and the second being due on September 30, 2010 (the “Maturity Date”), together with
applicable interest payments accruing from the Closing Date at the
rate of five and 25/100 percent (5.25%) per annum. All accrued and
unpaid interest on the unpaid principal under the Promissory Note to the date of
the first such installment shall be due and payable with such first installment,
and all accrued and unpaid interest on the unpaid principal remaining after the
payment of the first installment, from the date of the first installment to the
Maturity Date, shall be due and payable with such second installment on the
Maturity Date.
2.4.2. The
Purchase Price for the Closed Store Book of Business shall be an amount equal to
sixty percent (60%) (“Seller’s
Share”) of the Net Commissions Derived from the Closed Stores during the
period that begins on the Closing Date and ends on September 30, 2010 (such
period being the “Payment
Period”).
2.4.2.1. The term
“Net Commissions Derived from
the Closed Stores” means all new and renewed agency billed and direct
billed commissions actually collected by the Buyer during the Payment Period
from the sale, placement or renewal of insurance products to or for any Person
who was a client, customer or account of the Closed Store Book of Business as of
the Closing Date (each a “Closed Store Account”) (as
determined pursuant to the provisions of Section
2.4.2.4) net of adjustments for unearned or return commissions and other
policy audit charges actually deducted therefrom; provided, that Net
Commissions Derived from the Closed Stores shall not include (a) any service
fees, public adjuster fees, profit sharing payments, overrides, contingent or
bonus commissions or income, interest income, or any other miscellaneous income,
compensation or revenue of any kind, character or description derived, earned or
realized from any source, or any commissions attributable to non-owned business,
(b) commissions paid to any third party producing agent or agency or to any
third party broker, (c) commissions with respect to the sale, placement or
renewal of insurance products to or for any Person who was not a Closed Store
Account (including any Person referred to Buyer by a Closed Store Account), or
(d) commissions with respect to new insurance products (such as homeowner’s
insurance placed for a Closed Store Account who did not have a homeowner’s
insurance policy prior to the Closing Date) sold to or placed for any Closed
Store Account. As an illustration of the foregoing, if a Closed Store
Account has an insurance policy with respect to an automobile and obtains a
policy through Buyer with respect to another automobile, or if an insurance
policy for a Closed Store Account is switched through Buyer from one insurance
carrier to another, commissions received with respect thereto shall constitute
Net Commissions Derived from the Closed Stores.
2.4.2.2. Subject
to offset as provided herein, the Purchase Price for the Closed Store Book of
Business shall be paid to Seller as follows: the Seller’s Share of
the Net Commissions Derived from the Closed Stores collected by the
Buyer during each calendar quarter of the Payment Period shall be
remitted to BSA or DA, as the case may be, within 20 days after the end of each
such calendar quarter, and each such quarterly remittance shall be accompanied
by documentation, including carrier commission statements, evidencing the Net
Commissions Derived from the Closed Stores actually collected by the Buyer
during the applicable quarter from any insurance carriers during such quarter
(or, if the 20th day is
not a business day, then no later than the next business day), and information
as to all Closed Store Accounts who switched insurance carriers during such
prior quarter, including the name of, and subcode utilized for the particular
Closed Store Account by, the new carrier.
2.4.2.3. The Buyer
shall use commercially reasonable efforts to retain each Closed Store Account
for the duration of the Payment Period, and for these purposes “commercially
reasonable efforts” means only the same efforts that the Buyer and any Affiliate
of the Buyer uses in the ordinary course of its insurance agency business to
retain its own insurance agency clients, customers or accounts. Each
Closed Store Account will be assigned to the Buyer’s master producer code, but
the Buyer will establish and maintain throughout the Payment Period a subcode
under the Buyer’s master code which denotes that the activity associated with
the subcode relates only to a Closed Store Account. The subcode
established for a particular Closed Store Account will not be changed during the
Payment Period, except to reflect any Closed Store Accounts who switch insurance
carriers, as provided in Section
2.4.2.2.
2.4.2.4. At the
Closing, Seller will provide to Buyer Schedule 2.4.2.4
which will list, as of a date no more than five (5) business days prior
to the Closing, each client, customer and account of the Closed Stores that has
an active policy as of the date the schedule is provided. The
schedule will be deemed a list of the Closed Store Accounts for purposes of this
Agreement, subject to adjustment in case any such Person no longer had an active
policy as of the Closing Date. In addition, at the Closing, the
Seller will deliver to Buyer a computer disc which will contain all data, as of
a date no more than five (5) business days prior to the Closing, relating to the
Current Book of Business and the Closed Store Book of Business on the Seller’s
AMS 360 client management computer system (the “AMS 360
System”). Buyer agrees that (i) no representation or warranty
is made as to the convertibility of the data contained on the disc from the AMS
360 System (the “Disc”)
to any system utilized by Buyer and (ii) it shall be responsible for the payment
of the amount due for the production of the Disc (the “AMS Obligation”).
2.4.2.5. The term “Closed Stores” mean only
those locations of Seller identified as such on Schedule
2.4.2.5. Any locations of Seller that are not Closed Stores
shall be deemed “Open
Stores” and are listed as such on Schedule
2.4.2.5.
2.4.2.6. Seller
shall have the right, upon reasonable notice, to inspect Buyer’s books and
records in connection with the matters provided for in this Section
2.4.2, but, except for the purposes set forth in Section
6.6.2, Seller’s right to inspect shall not continue after such time as
the Purchase Price for the Closed Store Book of Business has been paid in
full.
2.4.3. Subject
to Section
7.5, the Promissory Note, and any payment of the Purchase Price for the
Closed Store Book of Business due under Section
2.4.2., shall be subject to reduction by Buyer to offset any unsatisfied
obligations of the Seller Group arising under this
Agreement. Satisfaction of any Seller Group obligations from the
amounts due under the Promissory Note or under Section
2.4.2. shall not operate to waive the obligations of the Seller Group
contained in this Agreement for amounts owed by Seller to Buyer in excess of the
amounts offset under this Section
2.4.3, subject to the provisions of Section
7.7.
2.4.4. The
Purchase Price (including the Purchase Price for the Closed Store Book of
Business) shall be allocated as set forth in Schedule
2.4.4. Buyer, on the one hand, and the Seller Group, on the
other hand, have arrived at this allocation as set forth in Schedule
2.4.4 by arm’s-length negotiation and none of them will take a position
(and each of them will cause their respective Affiliates not to take a position)
on any Tax Return or before any Governmental or Regulatory Authority charged
with the collection of any Tax or in any Proceeding that is in any manner
inconsistent with the terms of Schedule
2.4.4 or this Section
2.4.4 without the prior written consent of the other parties to this
Agreement.
2.5. Excluded
Assets. The
Purchased Assets shall not include any of Seller’s right, title or interest in
or to the following (collectively, “Excluded Assets”), all of
which are excluded from the sale and purchase contemplated hereunder and shall
remain the property of Seller after the Closing:
2.5.1. all cash,
cash equivalents, bank deposits or similar cash items of Seller, including
without limitation all customer deposit fiduciary accounts in Seller’s
name;
2.5.2. all
Contracts other than the Assumed Contracts;
2.5.3. all
minute books, stock Records and corporate seals;
2.5.4. all
prepaid expenses and security deposits (other than the Lease and Utility
Security Deposits and prepaid telephone directory advertising expenses
transferred to Buyer);
2.5.5. all
claims for refund of Taxes and other governmental charges of whatever
nature;
2.5.6. all
rights of Seller under this Agreement and the documents and instruments entered
into by Seller in connection with this Agreement;
2.5.7. all
non-transferable Permits;
2.5.8. all
rights with regard to the editorial content and page layouts comprising Seller’s
internet websites;
2.5.9. all
rights with respect to the personal property set forth on Schedule
2.5.9;
2.5.10. all
rights with respect to amounts payable by Nonconsenting Carriers; provided, that all
rights with respect to amounts payable by any Nonconsenting Carrier shall not be
deemed Excluded Assets, but shall instead be deemed Purchased Assets, from and
after the date such Nonconsenting Carrier appoints Buyer to sell any of its
products and such carrier is no longer a Nonconsenting Carrier pursuant to the
provisions of Schedule
8.1.4;
2.5.11. except as
provided in Section
2.4.2.5, all rights with respect to the following licenses: (a) AMS 360;
(b) Metafile; (c) Silver Plume; and (d) BSAMS;
2.5.12. all
insurance policies covering Seller as the insured and all rights thereunder;
2.5.13. all
Pre-Closing Overrides;
2.5.14. except as
provided in Section
6.21, all rights with respect to Seller’s computer
servers;
2.5.15. all
rights with respect to claims against Xxxx Xxxxxx; and
2.5.16. all
rights with respect to the clients, customers and accounts of the Current Book
of Business who reside in the Commonwealth of Pennsylvania and who are
identified on Schedule
2.5.16.
2.6. Guaranty. Buyer’s
obligation to (a) pay the Promissory Note, the Purchase Price for the Closed
Store Book of Business, the Pre-Closing Overrides and an amount equal to sixty
percent (60%) of the Post-Closing Overrides and (b) indemnify, defend and hold
harmless Seller and Shareholder as provided for herein will be guaranteed by
Xxxxxxx Xxxxxxxxx (“Xxxxxxxxx”)
pursuant to a guaranty substantially in the form attached hereto as Exhibit
C (the “Guaranty”).
2.7. Adjustment
to Purchase Price. At the Closing, an adjustment shall be made
to the Purchase Price and the Cash Payment to give effect to any amounts paid by
Seller with respect to the real property Leases set forth on Schedule
5.10 that relate to the period on or after the Closing
Date.
3. CLOSING DATE; CLOSING
DELIVERIES; TERMINATION.
3.1. Closing. Subject
to the satisfaction of the conditions set forth in Sections
8.1 and 8.2 hereof
(or the waiver thereof by the party entitled to waive that condition), the
closing of the purchase and sale of the Purchased Assets (the “Closing”) shall take place at
such place as Buyer and Seller may mutually agree upon at 10:00 a.m. (Eastern
Standard Time) on a date to be specified by the mutual consent of Buyer and
Seller, which date shall be no later than five (5) business days after
satisfaction or waiver of the conditions set forth in Section 8
hereof (other than conditions that by their nature are to be satisfied at the
Closing, but subject to the satisfaction or waiver of such conditions), unless
another time or date, or both, are agreed to in writing by Buyer and
Seller. The date on which the Closing shall be held is referred to in
this Agreement as the “Closing
Date”. The Closing will be effective as of 12:01 a.m. local
time on the Closing Date. The Business will operate for the benefit
of Buyer on the Closing Date.
3.2. Seller Group Deliveries at
Closing. Subject
to the terms and conditions of this Agreement, on the Closing Date the members
of the Seller Group, as appropriate, shall execute (as applicable) and/or
deliver to Buyer:
3.2.1. a Xxxx of
Sale in form and substance reasonably satisfactory to counsel for Buyer and the
Seller Group (the “Xxxx of
Sale”);
3.2.2. an
assignment and assumption agreement with respect to the Assumed Contracts, in
form and substance reasonably satisfactory to Buyer and Seller, and separate assignment
and assumption agreements for each of the real estate Leases listed on Schedule
5.10;
3.2.3. any and
all other third party consents required in order to transfer the Purchased
Assets to Buyer, including consents to the assignment of the Assumed Contracts
and estoppel certificates from all landlords with respect to each of the real
estate Leases listed on Schedule
5.10 in form and substance reasonably satisfactory to Buyer, Seller and
Lender and a Landlord’s Agreement substantially in the form attached hereto as
Exhibit
G from each such landlord; provided, however,
that:
3.2.3.1. Notwithstanding
the foregoing provisions of Section
3.2.3 to the
contrary, Seller will
not be obligated to deliver a consent with respect to any of the advertising
contracts, copying machine contracts, bottled water contracts, waste removal
contracts or alarm contracts set forth on Schedule
2.2.
3.2.3.2. Anything
in this Agreement to the contrary notwithstanding, (a) in the event an
assignment to the Buyer of any real estate Leases or other Assumed
Contracts or any
claim, right or benefit arising thereunder or resulting therefrom which, without
the consent of the lessor, licensor or other similar parties thereto, would
result in the Buyer not receiving all of the rights of the Seller thereunder,
and/or (b) if any such consent has not been obtained by the Closing Date and the
parties have nevertheless elected to proceed with the Closing, such Lease or
other Assumed Contract shall be deemed not to have been assigned to the
Buyer. However, the obligations thereof shall nevertheless be deemed
to have been assumed by the Buyer and constitute Assumed Liabilities and if
requested by the Buyer, after the Closing, the parties who were unable to obtain
any such consent will use reasonable commercial efforts to obtain such consent
(subject to Section
6.8); provided that, if the consent is not obtained and is required to
effectively assign any such Assumed Contract to the Buyer, the parties will
cooperate with each other in any reasonable arrangement to provide the Buyer
with the full claims, rights and benefits thereunder; the foregoing shall not be
construed as a limitation on the conditions to the obligation of the Buyer to
consummate the transactions contemplated hereby, including the requirement that
the consents, estoppels and Landlord’s Agreements be delivered at Closing as
provided for in Section 3.2.3
(subject to Section
3.2.3.1), it
being understood and agreed that the Buyer shall have no obligation to
consummate the transactions contemplated hereby if any such instruments are not
so delivered or if any other such conditions are not fulfilled or
satisfied;
3.2.4. a true,
correct and complete list of the Current Book of Business as of a date not more
than five (5) business days prior to the Closing Date, and Schedule
2.4.2.4 which will be a true, correct and complete list of the Closed
Store Accounts as of a date not more than five (5) business days prior to the
Closing Date;
3.2.5. a
certificate of an officer of Seller, in form and substance reasonably
satisfactory to counsel for Buyer and the Seller Group, certifying as to (i) the
incumbency and signatures of the officers of Seller that have or will execute
any of the Transaction Documents on behalf of Seller, (ii) the resolutions of
the board of directors of each Person comprising the Seller and the Shareholder
authorizing the execution, delivery and performance of the Transaction
Documents, and (iii) Seller’s certificate of incorporation and
bylaws;
3.2.6. to the
extent applicable, evidence reasonably acceptable to Buyer’s counsel of the
release of any and all Liens on the Purchased Assets;
3.2.7. evidence
reasonably acceptable to Buyer that as to those employees of Seller being
offered employment with Buyer, Seller has, effective as of the Closing Date,
terminated all such employees from the Business and has satisfied all
obligations of Seller with respect to such terminated employees (including, the
payment of salary, bonuses and all other remuneration for all periods through
the Closing Date, subject to Section
6.2), as required by applicable Laws (including the NY WARN), contract or
otherwise;
3.2.8. an
assignment of the telephone number(s), facsimile number(s) and domain names used
in connection with the Business, as may be required;
3.2.9. a
certificate of good standing for Seller from the jurisdiction of its
organization and from each other jurisdiction in which Seller is authorized or
qualified to do business, each dated not later than thirty (30) days prior to
the Closing Date;
3.2.10. a
certificate of the Shareholder to the effect set forth in Sections
8.1.1 and 8.1.2;
3.2.11. articles
of amendment, effective on the Closing Date, evidencing the change of name of
each Person comprising the Seller, as required by Section
6.14;
3.2.12. all other
certificates, instruments and documents that are expressly required pursuant to
this Agreement to be delivered by the Seller Group to Buyer at the
Closing;
3.2.13. such
other bills of sale, endorsements, assignments and such other instruments of
transfer and conveyance, in form and substance reasonably satisfactory to
Buyer’s counsel, as shall be effective to vest in Buyer as of the Closing Date,
good and marketable title, free and clear of any Liens, to all of the Purchased
Assets, and otherwise pursuant to Section
9.9 (Further Assurances);
3.2.14. a final
profit and loss statement and consolidated and reconciled final balance sheet
dated as of the date of closing; provided that Seller may deliver the same to
Buyer not later than May 15, 2009 if the same are not delivered at
Closing;
3.2.15. the
Offset Escrow Agreement; and
3.2.16. a Standby
Creditor’s Agreement substantially in the form attached hereto as Exhibit
F (the “Standby
Creditor’s Agreement”).
3.3. Buyer Deliveries at
Closing. Subject
to the terms and conditions of this Agreement, on the Closing Date Buyer shall
execute (as applicable) and/or deliver, or cause to be delivered, to
Seller:
3.3.1. the Cash
Payment;
3.3.2. the
Promissory Note;
3.3.3. the
Guaranty;
3.3.4. a
certificate of Buyer to the effect set forth in Sections
8.2.1 and 8.2.2;
3.3.5. countersigned
copies of the assignment and assumption agreements for the Assumed Contracts and
real estate Leases referred to in Section
3.2.2;
3.3.6. all other
certificates, instruments and documents that are expressly required pursuant to
this Agreement to be delivered by Buyer to Seller at the Closing;
and
3.3.7. the
Offset Escrow Agreement.
3.4. Termination of
Agreement. Seller
or Buyer may terminate this Agreement at any time prior to the Closing Date by
giving written notice to the other under the following
circumstances:
3.4.1. by mutual
consent of Seller and Buyer;
3.4.2. if the
Closing shall not have occurred by the close of business on or before the
thirtieth (30th) day after the execution and delivery of this Agreement (or, if
the 30th day is
not a business day, the next business day) or such later date as Buyer and
Seller may agree to in writing (the “Termination Date”); provided, however, that if the
Closing shall not have occurred on or before the Termination Date due to a
material breach of any representations, warranties, covenants or agreements
contained in this Agreement by Buyer or Seller, then the breaching party may not
terminate this Agreement pursuant to this Section
3.4.2;
3.4.3. if either
Buyer or Seller is prohibited by an Order from consummating the transactions
contemplated by this Agreement, and such Order has become final and
non-appealable;
3.4.4. by Buyer
if, following the date of this Agreement any one or more customers representing,
in the aggregate, at least ten percent (10%) of the net revenue derived from the
Current Book of Business as of the date hereof terminates its or their business
relationship with Seller, cancels its or their policies brokered by Seller or
provides notice to Seller of its or their intent to terminate its or their
business relationship with Seller or let its or their policies brokered by
Seller expire without renewal;
3.4.5. by Buyer,
if any of the conditions to the obligations of Buyer set forth in Section
8.1 shall have become incapable of fulfillment other than as a result of
a breach by Buyer of any covenant or agreement contained in this Agreement, and
such condition has not been waived by Buyer in writing;
3.4.6. by
Seller, if any condition to the obligations of Seller set forth in Section
8.2 shall have become incapable of fulfillment other than as a result of
a breach by Seller of any covenant or agreement contained in this Agreement, and
such condition has not been waived by Seller in writing;
3.4.7. by Buyer,
if there shall be a breach by any member of the Seller Group of any
representation or warranty made by such member, or any covenant or agreement
contained in this Agreement, in either case which would result in a failure of a
condition set forth in Section
8.1 and which breach cannot be cured or has not been cured by the earlier
of (i) ten (10) business days after the giving of written notice by Buyer to
Seller of such breach or (ii) the Termination Date; or
3.4.8. by
Seller, if there shall be a breach by Buyer of any representation or warranty
made by Buyer, or any covenant or agreement contained in this Agreement, in
either case which would result in a failure of a condition set forth in Section
8.2 and which breach cannot be cured or has not been cured by the earlier
of (i) ten (10) business days after the giving of written notice by Seller to
Buyer of such breach or (ii) the Termination Date.
3.5. Effect of
Termination.
3.5.1. Subject
to Section
3.5.2 below, if this Agreement is terminated by Buyer or Seller as
permitted by Section
3.4, then each of the parties
shall be relieved of their duties and obligations arising under this Agreement
after the date of such termination and such termination shall be without
liability to Buyer or Seller. In no event shall Buyer
have or incur liability to the Seller Group, or Seller Group have or incur
liability to Buyer, for incidental, consequential, punitive, indirect or special
damages.
3.5.2. Nothing
in this Section
3.5 shall relieve any or all members of the Seller Group or Buyer of any
liability for a breach of this Agreement prior to the date of
termination. The damages recoverable by Buyer upon a breach by any
member of the Seller Group shall include all attorneys’ fees, and the fees of
other professional advisors, reasonably incurred by Buyer in connection with the
transactions contemplated hereby. The damages recoverable by Seller
Group upon a breach by Buyer shall include all attorneys’ fees, and the fees of
other professional advisors, reasonably incurred by Seller Group in connection
with the transactions contemplated hereby.
4. BUYER REPRESENTATIONS AND
WARRANTIES. Buyer
represents and warrants to Seller as follows, knowing and intending that Seller
will rely thereon in entering into and performing this Agreement:
4.1. Organization and
Authority. Buyer
is a limited liability company duly formed, validly existing and in good
standing under the laws of the State of Delaware. Buyer has the
requisite power and authority to enter into this Agreement and to perform its
obligations under this Agreement. The signing, delivery and
performance of this Agreement by Buyer have been duly authorized by Buyer, and
no further action is required on Buyer’s part in order to authorize this
Agreement or the transaction contemplated by this Agreement. Buyer
has all requisite power, authority and legal capacity to execute and deliver
each Transaction Document to which it is a party, to perform its obligations
under each such Transaction Document, and to consummate the transactions
contemplated by each such Transaction Document. This Agreement is the
legal, valid and binding obligation of Buyer duly enforceable against Buyer in
accordance with its terms.
4.2. No Conflict or
Violation. Neither
the signing and delivery of this Agreement and the other Transaction Documents
by Buyer nor the performance by Buyer of the transaction contemplated by this
Agreement will result in: (i) a violation or conflict with Buyer’s
formation or governing documents; (ii) a violation of any Laws or any Order to
which Buyer is subject; or (iii) a breach or default under any mortgage,
indenture, deed of trust or other Contract to which Buyer is a party or is
otherwise subject.
4.3. No Broker’s or Finder’s
Fees. No
broker, finder, financial advisor or other person acting in a similar capacity
has acted directly or indirectly for Buyer in connection with this Agreement or
the transaction contemplated by this Agreement.
4.4. Consents and
Approvals. The
signing, delivery and performance by Buyer of this Agreement and the other
Transaction Documents does not require consent, approval or authorization from,
or any declaration, filing, registration or notice with or to, any Governmental
or Regulatory Authority or any other Person.
4.5. Appointed
Carriers. Schedule
4.5 contains a true, complete and correct list of each insurance carrier
for which Buyer or any Affiliate thereof (including N.I.I. Brokerage, L.L.C.
(“N.I.I.”)) has been appointed as an agent. Except as disclosed in
Schedule
4.5, (a) all of the agency agreements to which Buyer or any Affiliate
thereof is a party are valid, binding and in full force and effect, (b) no
notice of termination has been received by Buyer or any Affiliate thereof with
respect to any agency agreement and, to the knowledge of Buyer, no insurance
company has threatened to cancel or terminate any agency agreement with Buyer or
any Affiliate thereof, and (c) to the knowledge of Buyer, there are no existing
defaults, or events which with or without the passage of time or the giving of
notice, or both, would constitute material defaults by Buyer or any Affiliate
thereof or by any other party to any such agency agreements.
5. SELLER GROUP REPRESENTATIONS
AND WARRANTIES. Each
member of the Seller Group, jointly and severally, represents and warrants to
Buyer as follows, knowing and intending that Buyer will rely thereon in entering
into and performing this Agreement:
5.1. Organization and Authority;
Capitalization.
5.1.1. BSA is a
corporation duly organized, validly existing and in good standing under the Laws
of the State of New York. DA is a corporation duly organized, validly
existing and in good standing under the Laws of the State of
Delaware. Seller has the requisite power and authority to own the
Purchased Assets and to carry on the Business as presently
conducted. Seller is duly qualified, licensed and authorized to do
business and is in good standing as a foreign corporation in each jurisdiction
where the nature of the Business or the character or location of the Purchased
Assets makes such qualification or licensing necessary. Copies of (i)
BSA’s Certificate of Incorporation and all amendments, certified by the New York
Department of State as being true and accurate, (ii) DA’s Certificate of
Incorporation and all amendments, certified by the Delaware Department of State
as being true and accurate, and (iii) Bylaws, as amended, certified by Seller’s
respective corporate secretary as being true, accurate and complete, are being
delivered to Buyer together with this Agreement. The sole shareholder
of Seller is Shareholder. No Person has any right or option to
acquire shares of Seller’s stock from Seller or Shareholder.
5.1.2. The
signing, delivery and performance of this Agreement by Seller have been duly
authorized by Seller’s board of directors and by Shareholder, as Seller’s only
shareholder, and no further action is required on the part of Seller in order to
authorize this Agreement or the transaction contemplated by this
Agreement. Each member of the Seller Group has all requisite power,
authority and legal capacity to execute and deliver each Transaction Document to
which it is a party, to perform its obligations under each such Transaction
Document, and to consummate the transactions contemplated by each such
Transaction Document. This Agreement is the legal, valid and binding
obligation of each member of the Seller Group, duly enforceable against each of
them in accordance with its terms.
5.2. Operation of the
Business. The
Business is conducted only by Seller and not through any Affiliate or other
Person. No Affiliate or other Person, including but not limited to
any employee, broker or producer, owns or has any right or interest in the
Business or any of the Purchased Assets, or any right to receive fees on account
of the Business or the revenues derived therefrom. The Business and
all of the Purchased Assets are owned or held exclusively by Seller and not by
any other Person. Seller does not conduct any business or activity
other than the Business. Seller does not own, directly or indirectly,
any equity, securities or other interests in any Person and, insofar as the
Business is concerned, is not a member of and does not otherwise participate in
any partnership, joint venture, strategic alliance or other collaborative or
cooperative arrangement, whether written or oral, or whether by practice or
custom or course of dealing. Seller has no subsidiaries and no
Affiliates except the Shareholder.
5.3. No Conflict or
Violation. Neither
the signing and delivery of this Agreement and the other Transaction Documents
by the Seller Group nor the performance by the Seller Group of the transaction
contemplated by this Agreement and the other Transaction Documents will result
in: (i) a violation or conflict with Seller’s certificates of incorporation or
bylaws; (ii) a violation of any Laws or any Order to which Seller, the Business
or any of the Purchased Assets are subject; (iii) the imposition of any Lien
against the Purchased Assets; (iv) the loss, revocation or nonrenewal of any
material Permit; or (v) a breach or default under any Contract to which any
member of the Seller Group is a party or by which any member of the Seller Group
is bound.
5.4. Ordinary Course; Absence of
Certain Events. Since
December 1, 2007, except for the closure of the Closed Stores, the Business has
been operated only in the ordinary course and, except as set forth on Schedule
5.4, there has been no: (i) entry into, termination of or receipt of
notice of termination of or indication by any Agency or Producer of any intent
to terminate any Agency Agreement or Producer Agreement to which Seller is a
party; (ii) damage to or destruction or loss of any Purchased Asset; (iii)
indication by any customer of Seller of an intention to discontinue or change
the terms of its relationship with Seller or to cancel or not renew any policy
constituting a part of the Current Book of Business or the Closed Store Book of
Business (except for any discontinuance, change, cancellation or non-renewal
which would not, either individually or together with other such
discontinuances, changes, cancellations or non-renewals, have a material adverse
effect on the Business); or (iv) other material adverse change in the
Business.
5.5. Consent and
Approvals. Except
as set forth on Schedule
5.5, the execution, delivery and performance of this Agreement by Seller
(including, without limitation, the assignment of the Assumed Contracts, the
Current Book of Business and the Closed Store Book of Business to Buyer) does
not and will not require any consent, approval, appointment or authorization
from, or any declaration, filing, registration or notice with or to, any
Governmental or Regulatory Authority or any other Person.
5.6. Absence of
Litigation. There
are, and during the past three years, there have been, no Proceedings pending
or, to the knowledge of any member of the Seller Group, any claims or
investigations made or Proceedings threatened against or involving Seller, the
Business or the Purchased Assets except for Proceedings which have been settled
for an aggregate out-of-pocket amount from Seller to the claimants of not in
excess of $30,000. There are no outstanding Orders related to the
Business against any member of the Seller Group or, to the knowledge of any
member of the Seller Group, any producers or employees involved on behalf of
Seller in the Business. No voluntary or involuntary petition in
bankruptcy, receivership, insolvency or reorganization with respect to Seller,
or petition to appoint a receiver or trustee of Seller’s property, has been
filed for or against Seller, nor shall Seller file such a petition prior to the
Closing Date or for one hundred (100) days thereafter, and if such a petition is
filed by any third party, it shall be promptly discharged by
Seller. Seller has not made any assignment for the benefit of
creditors or admitted in writing its inability to pay its debts as they come
due.
5.7. Compliance with Laws;
Permits.
5.7.1. Seller
(and each other member of the Seller Group insofar as it relates to the Business
or the Purchased Assets) has been in the past and is now in compliance in all
material respects with all Laws applicable to Seller and the
Business. No member of the Seller Group has received written notice
of a violation or alleged violation of any Laws related to the Business which
has not been rectified or which remains outstanding and, to the knowledge of
each member of the Seller Group, no such outstanding violation exists or
material violation has occurred.
5.7.2. Seller
has all Permits necessary for the conduct and operation of the Business as
presently conducted. Schedule
5.7.2 lists all such Permits. To the extent the Business is
required to be operated or conducted by individuals who are duly licensed or
hold applicable Permits, all such individuals have the required Permits, all of
which are listed on Schedule
5.7.2. The Permits are in full force and
effect. Except as set forth on Schedule
5.7.2, Seller has been, and is now, conducting the Business in material
compliance with the Permits and, to the knowledge of the Seller Group, no
Proceedings are pending or threatened to limit, not renew or revoke, or to
impose or require any extraordinary action with respect to, any
Permit. Seller has timely filed all material reports, registrations,
statements, renewal applications and other submissions that are required
pursuant to any Permit to be filed with any Governmental or Regulatory Authority
having jurisdiction over the Business.
5.8. Intellectual
Property. Schedule
5.8 lists all registered or unregistered trademarks, service marks,
tradenames, business names, alternate names, patents and patent applications,
registered copyrights, logos and Internet domain names and address registrations
owned or used under license by each Person comprising the Seller or from which
the Business otherwise benefits (collectively, “Intellectual
Property”). Seller has the right to use the Intellectual
Property, and except as set forth on Schedule 5.8
or to the extent it is an Excluded Asset, Buyer will have the right to
use the Intellectual Property on and after the Closing Date. There
are no Proceedings pending or, to the knowledge of the Seller Group, threatened,
asserting that Seller’s use of the Intellectual Property infringes the rights of
any Person. No member of the Seller Group has knowledge of any
infringement upon any Intellectual Property by any Person.
5.9. Title to Purchased
Assets. Seller
has and will deliver to Buyer good title to all of the Purchased Assets, free
and clear of all Liens. Except as set forth on Schedule
5.9, each asset that is necessary for the realization of all the revenue
generated by the Business or is otherwise owned, used or held for use in
connection with the Business as now conducted constitutes a Purchased
Asset. No Person other than Seller owns, holds or, to the knowledge
of the Seller Group, claims any beneficial interest, ownership, option to
purchase or right of first refusal or Lien of any kind in or to the Purchased
Assets, and none of the Purchased Assets is subject to any purchase money lien,
title retention agreement or other financing arrangement. Seller has
not leased or licensed any of the Purchased Assets for use by any other
Person.
5.10. Real Estate;
Environmental. Seller
does not own any real property. Schedule
5.10 contains a complete listing of the locations of Seller’s offices and
all real property Leases to which Seller is a party. No office
locations are occupied by Seller under Lease or other right of use or occupancy
except as set forth in Schedule
5.10. All Leases listed in Schedule
5.10 are in full force and effect. Seller has not subleased or
licensed any of the office locations listed on Schedule
5.10 or assigned any of Seller’s rights under any real property Leases to
any other Person, and no Person except Seller has the right to occupy or use the
office locations listed on Schedule
5.10. No security deposit paid by Seller under any of the
Leases listed in Schedule
5.10 has been applied, refunded or otherwise disbursed by the applicable
landlord. Seller has received no written notice that Seller is in
default under any of the Leases listed in Schedule
5.10. There are no material existing defaults on the part of
Seller or, to Seller’s knowledge, any other party under any of the real property
Leases, and no events have occurred or conditions arisen which, with the passage
of time or the giving of notice or both, would constitute a material default
under any such Leases. Schedule
5.10 accurately sets forth the actual commencement date, the scheduled
expiration date, a description of any renewal options (none of which have been
exercised by Seller), the current monthly base rent paid by Seller, the current
security deposit posted by Seller and held by the landlord and, to the extent
reasonably ascertainable by Seller, the current annual or monthly (as
applicable) payments for real estate taxes, insurance premiums, and common area
maintenance or other operating expenses due and payable under each of the real
property Leases. True and complete copies of the real property Leases
listed in Schedule
5.10, including any amendments, have been delivered to
Buyer. Seller and the Business are in compliance in all material
respects with all Environmental Laws. Except for routine quantities
of office supplies and cleaning supplies held for use in the ordinary course of
the Business in compliance with Laws, the operations of the Business do not
include or involve and have never included or involved any use, storage or
disposal of Hazardous Materials.
5.11. Book of
Business. The
list of the Current Book of Business and the Closed Store Book of Business to be
delivered to Buyer at the Closing will be true, correct and complete, and such
list will contain all current customers of Seller as of a date not more than
five (5) business days prior to the Closing Date. Seller has not
directly or indirectly provided any third party (other than AMS) with Seller’s
customer account list Client Information, or any other information comprising or
concerning the Current Book of Business or the Closed Store Book of Business,
and to the knowledge of the Seller Group no third party has had or currently has
access to any such information other than the insurance carriers with whom
business is placed for the customers of Seller. No member of the
Seller Group has received written notice of any kind (whether on a commission
statement or otherwise) that any customer account comprising a portion of the
Current Book of Business or the Closed Store Book of Business has canceled or
non-renewed or intends to cancel or non-renew other than due to the failure to
pay premiums when due in the ordinary course of business, and all such
non-renewals or cancellations resulting from the failure to pay premiums when
due, in the aggregate, represent less than ten percent (10%) of the total
Current Book of Business (measured in terms of Gross Commission) and less than
ten percent (10%) of the Seller 2008 Commission Amount. None of the
customer accounts constituting part of the Current Book of Business or the
Closed Store Book of Business represents business that has been brokered by
Seller on behalf of a third party.
5.12. Gross Commissions; Agency
Agreements; Producer Agreements.
5.12.1. Seller’s
Gross Commissions earned from the Open Stores for the annual period beginning on
December 1, 2007 and ending on November 30, 2008 were not less than $2,225,669;
and Seller’s Gross Commissions earned during such period from the Closed Stores
was not less than $443,368. All of Seller’s Gross Commissions from
both the Open Stores and the Closed Stores during said period constitute all of
Seller’s Gross Commissions earned during said period and all such Commissions
derive from bona fide transactions in the ordinary course of the
Business. Schedule
5.12.1 lists and describes all agreements or other arrangements whereby
Seller shares, splits or otherwise divides commissions with any third party
agency, broker, producer or other Person. Except as set forth on
Schedule
5.12.1, there were no reductions or payouts in respect of either (a) the
Seller 2008 Commission Amount, or (b) the amount set forth above in this Section
5.12.1 with respect to the Closed Stores and no reductions or payouts are
reasonably anticipated from future Gross Commissions of the
Business.
5.12.2. Schedule
5.12.2 contains a true, complete and correct list of each Agency
Agreement and sets forth a true and correct list of the revenue received by
Seller from each of its appointed carriers and assigned risk carriers during the
twelve (12) month periods ended December 31, 2007 and December 31,
2008. Seller has delivered to Buyer a true, complete and correct copy
of each such Agency Agreement. Except as disclosed in Schedule
5.12.2, (a) all of the Agency Agreements are valid, binding and in full
force and effect, (b) no notice of termination has been received by Seller with
respect to any Agency Agreement or any of Seller’s business thereunder, and to
the knowledge of the Seller Group, no insurance company has threatened to cancel
or terminate or modify any Agency Agreement or any of Seller’s business
thereunder, (c) to the knowledge of Seller, there are no existing defaults, or
events which with or without the passage of time or the giving of notice, or
both, would constitute material defaults by Seller or by any other party to any
such Agency Agreements, and (d) it is the intent of Seller to so transfer and
assign all such business to Buyer as a part of the Purchased
Assets.
5.12.3. Seller is
not a party to, and neither Seller nor the Business is bound by, any Producer
Agreement.
5.13. Contracts. Schedule
5.13 sets forth a complete and correct list of all Contracts, whether
written or oral, related to the Business or to which Seller is a party or by or
to which the Seller or its assets or properties are bound or
subject. All of the Contracts set forth on Schedule
5.13 are in full force and effect and Seller has paid in full all amounts
due to date thereunder and has satisfied in full all of its other material
liabilities and obligations to date. Seller is not in default under
any Assumed Contract (true, correct and complete copies of which have been
provided to Buyer) nor is any other party to any Assumed Contract in default,
and there does not exist any condition which, with the giving of notice or the
lapse of time or both, would constitute a material default under any Assumed
Contract.
5.14. Personnel. Schedule
5.14 sets forth (i) the name, date of hire, position and the total
compensation (including base salary, commissions and other forms of
compensation) of each current employee, consultant and agent of the Business
(including the Executive Employee) in calendar years 2007 and 2008, and (ii) all
commitments or agreements by Seller to increase the compensation or modify the
conditions or terms of employment or engagement of any such employee, consultant
or agent whether or not in the ordinary course of business whether or not
consistent with past practice. Seller has provided Buyer with true,
correct and complete copies of all written agreements with its employees,
consultants and agents (including the Executive Employee) relating to the
employment of such Persons or their ability to compete with Seller or the
Business, and all such agreements are listed on Schedule
5.14.
5.15. Brokers; Powers of
Attorney.
5.15.1. No member
of the Seller Group has employed or engaged any broker, financial advisor,
finder or similar intermediary and no member of the Seller Group has incurred or
will incur any broker’s, finder’s or similar fees, commissions or expenses in
connection with sale of the Purchased Assets contemplated by this
Agreement.
5.15.2. The
Seller Group has not granted any power of attorney to any Person (other than to
Buyer) for any purpose whatsoever with respect to the Business or the Purchased
Assets, which power of attorney is currently in force.
5.16. Tax
Matters. Except
as set forth on Schedule
5.16:
5.16.1. All
federal, state and local income and franchise and all other Tax Returns required
to be filed by or with respect to Seller or the Purchased Assets have been
timely filed with the appropriate Tax Authorities in all jurisdictions in which
such Tax Returns are required to be filed (taking into account any extension of
time to file granted or to be obtained on behalf of Seller) and such Tax Returns
are true, correct and complete in all material respects. All Taxes
due and payable by or with respect to Seller or the Purchased Assets, whether or
not shown on such Tax Returns, have been timely paid in full. Seller
has established appropriate accruals and reserves for Taxes with respect to
current periods which are not yet due and payable.
5.16.2. All Taxes
required to be withheld by Seller (including, without limitation, withholding
Taxes for employees) have been withheld and have been (or will be) duly and
timely paid to the proper Tax Authority.
5.16.3. No
written agreement or other document extending, or having the effect of
extending, the period of assessment or collection of any Taxes of Seller is
still in effect with any Tax Authority.
5.16.4. No
deficiencies with respect to Taxes of Seller have been asserted in writing by
any Tax Authority that have not been fully paid.
5.16.5. There are
no audits or investigations by any Tax Authority of Seller in progress with
respect to any Tax and no written notice has been received that a Tax Authority
intends to commence any such audit or investigation.
5.16.6. No claim
has been made in writing within the past five (5) years by a Tax Authority in a
jurisdiction where Seller does not file Tax Returns that it is or may be subject
in that jurisdiction to a Tax.
5.16.7. Seller is
not a party to any Tax allocation, indemnity or sharing agreement or arrangement
with respect to a Tax that could apply to the Purchased Assets after the Closing
Date.
5.16.8. Seller
does not pay and is not required to pay any State sales tax, Seller has not
reported the payment of sales tax on any Tax Return filed by Seller, and Seller
has no State sales tax liability.
5.17. Tangible Personal
Property. Schedule
5.17 sets forth a true and complete list of all material Tangible
Personal Property owned or leased by Seller. Except as set forth on
Schedule
5.17, the Tangible Personal Property owned by Seller is in good working
order, ordinary wear and tear excepted, and sufficient for the conduct of the
Business in the ordinary course.
5.18. Inventories. Except
for routine office supplies, Seller has no inventories.
5.19. Insurance. Schedule
5.19 contains a true, correct and complete list, and Seller has made
available to Buyer true and complete copies, of all insurance policies, binders
or self-insurance authorizations related to the Business or the Purchased Assets
where Seller is the named insured. Except for policy deductibles,
Seller does not self-insure any type of liability claims, whether general
liability or otherwise. Seller will provide to Buyer, promptly upon
request, a copy of any policy or binder or claims information referred to in
Schedule
5.19. Except as set forth in Schedule
5.19, Seller has not received notice of cancellation or non-renewal, or
of any material premium increase or other material change in coverage terms, of
any insurance policy related to the Business or the Purchased Assets where it is
the named insured, and all such policies are in full force and
effect. Neither the Business nor the Purchased Assets are insured
under any policy where Seller is not the named insured.
5.20. Employee Benefit
Plans.
5.20.1. Schedule
5.20 lists every employee benefit, health, hospitalization, welfare,
disability, “cafeteria”, severance, bonus, incentive compensation, life
insurance, pension, profit-sharing, savings, 401(k), deferred compensation,
vacation benefit, sick pay and personal time plan or benefit, and any other
fringe benefit or similar plan, arrangement or practice, whether or not written,
covering employees or former employees of the Business or their spouses or
dependents which is currently maintained, sponsored or contributed to by Seller
(collectively, “Employee
Plans”). None of the Employee Plans is a multiemployer plan
within the meaning of Section 3(37) of ERISA, and none of the Seller or any
ERISA Affiliate has ever contributed to, maintained or sponsored any
multiemployer plan.
5.20.2. Each
Employee Plan (including any related trust, insurance contract or other funding
vehicle), including the operation and maintenance of each such Plan and
contributions if any made thereto by Seller complies with all applicable Laws in
all material respects, including ERISA and the Code. There are no
Proceedings involving Seller or otherwise related to the Business with respect
to any of the Employee Plans (other than routine claims for benefits in the
ordinary course, none of which are, individually or in the aggregate, material)
pending or, to the knowledge of Seller, threatened.
5.21. Full
Disclosure. No
representation or warranty by any member of the Seller Group in this Agreement
or in any of the Schedules or Exhibits attached hereto contains any untrue
statement of a material fact or omits to state any fact necessary to make any
statement herein or therein not materially misleading.
6. CERTAIN COVENANTS OF THE
PARTIES.
6.1. Standstill
Agreement. Pending
the Closing and for so long as this Agreement remains in effect, neither Seller
nor Shareholder shall directly or indirectly solicit, continue or initiate any
negotiations or proposals, or enter into any binding or non-binding agreements
or understandings with any Person (other than Buyer), relating to any asset
sale, asset transfer, acquisition, sale or exchange of stock or other equity
interests, merger, reorganization or other business combination involving
Seller, the Business or the Purchased Assets.
6.2. Employees. On
the Closing Date, Seller shall terminate the employment of all of its employees
listed on Schedule
6.2 (the “Transferred
Employees”), such that they will no longer be employed by
Seller. Buyer shall offer employment, effective as of the Closing
Date, to all Transferred Employees. Nothing herein shall require
Buyer to continue the employment of any Transferred Employee for a fixed or
definite period, it being understood that all such employment shall be
“at-will”. Seller shall accrue vacation, personal and sick days for
its employees for all periods prior to the Closing whether or not consistent
with Seller’s past practice. Seller shall pay to all of its
employees, on or before the date on which
such employees would have been paid in the ordinary course for services rendered
through the Closing Date, and agrees to indemnify and hold Buyer harmless from
and against, all accrued and unpaid salary, bonuses, commissions, employee
benefits, vacation, sick pay and other benefits or entitlements of Seller’s
employees as of the Closing Date, whether pursuant to applicable Laws, contract
or otherwise.
6.3. Publicity. No
publicity release or announcement concerning this Agreement or the transactions
contemplated hereby will be made without written advance approval thereof by
Buyer and Seller. Buyer and Seller will cooperate in issuing any
press release or other public announcement concerning this Agreement or the
transactions contemplated hereby. Buyer and Seller shall furnish to
the other drafts of all press releases or announcements prior to their
release. Nothing herein shall be deemed to restrict Shareholder from
taking whatever action is necessary to timely comply with its disclosure
obligations under applicable securities Law, the Nasdaq rules, or other
Governmental or Regulatory Authority.
6.4. Segregation of
Assets. After
the date hereof, each of Seller, on the one hand, and Buyer, on the other hand,
agree to keep their respective assets and properties segregated from the assets
and properties of the other, and if for any reason, any asset or property
(including any commissions or other accounts receivable) of Seller, on the one
hand, or Buyer, on the other hand (for the purposes of this Section
6.4, the “Rightful
Owner”) is received by or delivered to the other party (the “Recipient”), the Recipient of
such asset or property shall hold such asset or property in trust for the
Rightful Owner and, as soon practicable after such receipt or delivery (but in
any event within three (3) business days if the funds have cleared the
Recipient’s account, or, if later, within one (1) business day after clearance
of such funds) transfer and deliver the same to the Rightful Owner in the same
form received by or delivered to the Recipient and, to the extent required, with
such endorsements as may be necessary to effect such transfer.
6.5. Restrictive
Covenants.
6.5.1. Confidentiality. No member of the
Seller Group, and no officer, director, employee or agent (including Xxxxx X.
Xxxxxxxxx, Xxxxx Xxxxxxxxx or Xxxxxx Xxxxxxx) of any member of the Seller Group,
will, directly or indirectly (including through any Affiliate), for itself or
themselves or for any other Person, from the date hereof until the end of time
or the earlier termination of this Agreement (in the event no Closing occurs),
disclose, divulge, furnish or make accessible to any Person (other than Buyer or
its Affiliates or authorized representatives) or in any way use in the conduct
of any business or activity, any of the Proprietary Information of
Buyer or any of its Affiliates. “Proprietary Information”
means confidential or proprietary information, as such terms are most broadly
defined under applicable Law and includes any information related to the Current
Book of Business, the Closed Store Book of Business, or other Client
Information, the Buyer’s or the Seller’s trade secrets, technical data, models,
passwords, access to computer files, financial information and records, computer
software programs, agreements and/or Assumed Contracts between the Seller and
its clients, contracts between the Buyer and its clients, client contacts,
Assumed Contracts between the Seller and insurance companies, contracts between
Buyer and insurance companies, creative policies and ideas, advertising
campaigns, marketing plans and budgets, and financial and business projections
of the Seller or Buyer, and information about or received from clients and other
companies with which the Seller or Buyer does business. The foregoing
shall be deemed Proprietary Information whether or not any such information is
marked “confidential”. The term Proprietary Information does
not include information which (i) is or becomes generally available to the
public other than by breach of this provision or (ii) the Seller or Shareholder
learns from a third party who is either not under an obligation of confidence to
the Buyer or not a client of the Buyer. Notwithstanding
anything to the contrary set forth in this Section
6.5.1, nothing in this Section
6.5.1 will prohibit the limited disclosure of information (i)
that is required to be disclosed in connection with any court action or any
Proceeding before any Governmental or Regulatory Authority, (ii) in connection
with the enforcement of any of the respective rights of the members of the
Seller Group under this Agreement, (iii) in connection with the defense by the
members of the Seller Group of any claim asserted against any such members by
Buyer or (iv) to attorneys, accountants or financial advisors of the Seller
Group on a “need-to-know” basis only, but only to the extent disclosure is
reasonably required for the foregoing enumerated purposes.. Anything
in this Section
6.5.1 to the contrary notwithstanding, no disclosure of Proprietary
Information for the limited purposes set forth in subsection (i) above shall be
made until Seller has delivered written notice to Buyer of its or any other
member of the Seller Group’s intention to disclose such Proprietary Information
so that Buyer, at its cost, may contest the need for such disclosure, and each
member of the Seller Group will provide reasonable cooperation (and will use
reasonable efforts to cause its representatives to cooperate) in connection with
any such Proceeding, and in any such event of disclosure of Proprietary
Information, all reasonable steps will be taken to ensure that such disclosure
either is made subject to a court’s order of protection reasonably limiting the
disclosure, or to other reasonable limitations agreed on by the parties
hereto.
6.5.2. Solicitation
of Business. During the
Restricted Period, no member of the Seller Group, and no officer, director,
employee or agent (including Xxxxx X. Xxxxxxxxx, Xxxxx Xxxxxxxxx or Xxxxxx
Xxxxxxx) of any member of the Seller Group, shall, directly or indirectly
(including through any Affiliate), for himself, herself, itself or for any other
Person solicit, service or accept insurance related business (excluding
insurance underwriting and insurance premium financing) from any client,
customer or account that is part of the Current Book of Business or the Closed
Store Book of Business as of the Closing Date or was a customer of Seller at any
time during the twelve
(12) month period
preceding the execution of this Agreement. In addition, during the
Restricted Period no member of the Seller Group shall directly or indirectly
take or cause any action that would reasonably be expected to adversely affect
Buyer’s ability to retain any of the Current Book of Business or the Closed
Store Book of Business.
6.5.3. Solicitation
of Employees. During the
Restricted Period, no member of the Seller Group, and no officer, director,
employee or agent (including Xxxxx X. Xxxxxxxxx, Xxxxx Xxxxxxxxx or Xxxxxx
Xxxxxxx) of any member of the Seller Group, shall, directly or indirectly
(including through any Affiliate), for itself or for any other Person, solicit,
hire, employ, attempt to hire or employ or enter into any employment,
principal-agent or similar arrangement with any Transferred Employee, nor shall
any member of the Seller Group directly or indirectly (including through any
Affiliate) provide to any Person the names of any Transferred Employees for any
such purpose.
6.5.4. Non-Compete. During the
Restricted Period and within the Restricted Area, no member of the Seller Group,
and no officer, director, employee or agent (including Xxxxx X. Xxxxxxxxx, Xxxxx
Xxxxxxxxx or Xxxxxx Xxxxxxx) of any member of the Seller Group, shall directly
or indirectly (including through any Affiliate) own, manage, operate, join,
control, finance or participate in the ownership, management, operation, control
or financing of, or be connected to as an officer, director, employee,
principal, agent, manager, representative, consultant, investor, owner, partner,
joint venture or otherwise, or permit its or his name to be used by or in
connection with, any business or enterprise but only with regard to, and only to
the extent that such business or enterprise is engaged in, the insurance agency
or brokerage business. The foregoing shall not be construed to
restrict any member of the Seller Group, or any officer, director, employee or
agent (including Xxxxx X. Xxxxxxxxx, Xxxxx Xxxxxxxxx or Xxxxxx Xxxxxxx) of any
member of the Seller Group from engaging in the business of insurance
underwriting or insurance premium financing; provided that in the
conduct of such insurance underwriting or insurance premium financing businesses
no Person who is subject to the covenants of this Section shall directly or
indirectly contact the insureds except through insurance agencies or insurance
brokerage firms that are not Affiliates of any member of the Seller
Group. Notwithstanding anything in this Agreement to the contrary, no
member of the Seller Group shall directly or indirectly (including through any
Affiliate) use or permit any other Person to use any of the trade names set
forth on Schedule
6.5.4 (other
than “DCAP” if included therein) for any purpose after the date of this
Agreement.
6.5.5. Materiality;
Adequate Consideration. Buyer, Seller and
Shareholder agree that the covenants set forth in this Section
6.5 are a material and substantial part of the transaction contemplated
by this Agreement. Seller and Shareholder further agree, acknowledge
and intend that the covenants set forth in this Section
6.5 shall be fully enforceable against them, jointly and severally,
irrespective of the amount of the Purchase Price being allocated to such
covenants. EACH OF SELLER AND SHAREHOLDER AGREE THAT IT HAS RECEIVED
ADEQUATE CONSIDERATION FOR THE COVENANTS PROVIDED FOR IN THIS SECTION
6.5 AND THAT SUCH COVENANTS ARE REASONABLE AND NECESSARY TO PROTECT THE
INTERESTS OF BUYER AND ITS AFFILIATES AND TO INDUCE BUYER TO ENTER INTO THIS
AGREEMENT.
6.5.6. Remedies.
6.5.6.1. Each
member of the Seller Group acknowledges that any breach of this Section
6.5 will cause irreparable harm to Buyer for which damages at law would
not provide reasonable or adequate compensation. As a result, Buyer
shall be entitled to have the provisions of this Section
6.5 specifically enforced by preliminary and permanent injunctive relief
without the necessity of proving actual damages as well as to an equitable
accounting of all earnings, profits, and other benefits arising out of any
violation of this Section
6.5, including estimated future earnings. Any right to obtain
an injunction, restraining order or other equitable relief hereunder will not be
deemed a waiver of any other right or remedy Buyer may have under this Agreement
or otherwise at law or in equity. Except as specifically set forth in
Section
6.5.9, nothing in this Section
6.5 shall be construed as prohibiting Buyer from pursuing any other
remedy or remedies existing in its favor. The Restricted Period shall
not expire, and shall be tolled, during any period in which any member of the
Seller Group (or any officer, director, employee or agent [including Xxxxx X.
Xxxxxxxxx, Xxxxx Xxxxxxxxx or Xxxxxx Xxxxxxx] of any member of the Seller Group)
is in violation of any of the covenants set forth in this Section
6.5; and all restrictions shall automatically be extended by the period
of violation of any such restrictions and covenants. Each of the
covenants and agreements contained in this Section
6.5 is separate, distinct and severable not only from each other covenant
but also from the other and remaining provisions of this Agreement or any other
written or oral agreement between the Buyer and any member of the Seller Group
(or any officer, director, employee or agent [including Xxxxx X. Xxxxxxxxx,
Xxxxx Xxxxxxxxx or Xxxxxx Xxxxxxx] of any member of the Seller Group) and shall
be construed as agreements independent of any other agreement between the Buyer
and any member of the Seller Group.
6.5.6.2. Notwithstanding
the provisions of Section
6.5.6.1 to the contrary, the covenants contained in this Section
6.5 shall terminate and be of no further force or effect if
(i) an Event of Default (as defined in the Promissory Note) shall occur and
continue beyond all applicable grace, notice and cure periods or (ii) Buyer
shall default in its obligation to pay to Seller (a) any portion of the Purchase
Price for the Closed Store Book of Business pursuant to Section
2.4.2 or (b) any portion of the Overrides pursuant to Section
6.1.8, and such default shall continue unremedied for a period of ten
(10) days after notice of default is given by Seller to Buyer; provided,
however, that the foregoing provisions of this Section
6.5.6.2 shall be inapplicable with respect to any setoff claimed in good
faith by Buyer against (i) the Promissory Note, (ii) any portion of the Purchase
Price for the Closed Store Book of Business pursuant to Section
2.4.2, or (iii) any portion of any Post-Closing Overrides pursuant to
Section
6.1.8.2, provided that the setoff amount is deposited into escrow
pursuant to the terms of this Agreement and the Promissory Note.
6.5.7. Non-Disparagement. After the
Closing, (i) neither Seller nor Shareholder, nor any officer, director, employee
or agent (including Xxxxx X. Xxxxxxxxx, Xxxxx Xxxxxxxxx or Xxxxxx Xxxxxxx) of
any member of the Seller Group shall, directly or indirectly, disparage Buyer or
any of its members, managers, officers, employees or agents or the Business, and
(ii) neither Buyer nor any member, manager, officer, employee or agent
(including Xxxx Xxxxxxxxx or Xxxx Xxxxxx) shall, directly or indirectly,
disparage Seller or Shareholder or any of their respective officers, directors,
employees or agents or the business of Seller or Shareholder.
6.5.8. Successor
Rights. The covenants
contained in this Section
6.5 shall inure to the benefit of any successor in interest to Buyer by
way of merger, consolidation, sale or other succession.
6.5.9. Liquidated
Damages. If any member of
the Seller Group directly or indirectly breaches any of its undertakings in this
Section
6.5 and as a result any account comprising a part of the Current Book of
Business or the Closed Store Book of Business transferred to Buyer curtails or
takes any of its business away from Buyer or places any insurance business or
other insurance-related business with anyone other than Buyer, Buyer shall have
the right, at its sole option, to recover liquidated damages from the Seller
Group. For each diverted account, Buyer’s liquidated damages shall be
an amount equal to two hundred percent (200%) of the gross annualized
commissions and other revenues realized by Buyer and/or Seller, as the case may
be, in respect of the diverted account during the twelve (12) months preceding
the diversion date. The Seller Group acknowledges that (i) it would
be difficult to calculate Buyer’s damages for business diverted as a result of
violation of the undertakings in this Section
6.5, (ii) an industry rule of thumb for valuing insurance agencies is
200% of revenues, with major accounts potentially being worth much more to an
insurance agency than 200% of their annual revenue and, therefore, (iii)
liquidated damages as provided for in this Section
6.5.9 represent a fair, reasonable and appropriate approximation of
Buyer’s damages, and should not be considered punitive or a
penalty. The Seller Group must pay liquidated damages as calculated
in this Section
6.5.9 within ten (10) business days after receipt of Buyer’s written
demand. After that, any unpaid liquidated damages shall accrue
interest at a fluctuating annual rate equal to three hundred (300) basis points
over the prime rate of leading money center banks reported in The Wall Street
Journal, as such prime rate may change from time to time. Buyer shall
have the right to off-set any unpaid liquidated damages and interest against any
amounts payable to Seller by Buyer, provided that any amount so offset is paid
to the Escrow Agent to be held pursuant to the terms of the Offset Escrow
Agreement. Buyer shall have no obligation to require the Seller Group
to pay the liquidated damages described above and may instead exercise any or
all of its remedies set forth in Section
6.5.6; provided, however, that if
Buyer elects to require the Seller Group to pay liquidated damages in accordance
with this Section
6.5.9, upon payment in full by the Seller Group to Buyer of the amounts
due pursuant to this Section
6.5.9, Buyer shall cease pursuit of and be deemed to waive all other
remedies available to Buyer only with respect to the specific breach giving rise
to the payment of such liquidated damages and with respect to the particular
account.
6.5.10. Key
Employees. Each of Xxxxx X. Xxxxxxxxx, Xxxxx Xxxxxxxxx and
Xxxxxx Xxxxxxx (collectively, the “Key
Employees”) agree to be bound by the restrictions set forth in Section
6.5; provided,
however,
that the parties agree that, in the event of any violation by any of the Key
Employees of such restrictions, Buyer’s sole remedy and relief against them
shall be injunctive and other equitable relief and under no circumstances shall
any of the Key Employees be liable for any monetary or other damages at law or
otherwise. The foregoing shall not be construed as a limitation on
the obligations of the Seller Group pursuant to Section
6.5 in the event of a violation of the restrictions set forth therein by
any of the Key Employees.
6.6. Access to
Information.
6.6.1. Seller
agrees that, prior to the Closing Date, Buyer and/or its lenders, legal and
financial representatives shall be entitled to make such investigation of the
properties, businesses and operations of the Business and such examination of
the books and Records of the Business and the Purchased Assets as they
reasonably request and to make extracts and copies of such books and Records,
and, prior to and after the Closing Date, the Seller Group shall use
commercially reasonable efforts to furnish Buyer and its representatives with
such financial, business and operating data of Seller as may be required or
reasonably requested by Buyer. Any information about Seller obtained
by Buyer pursuant to this Section
6.6 or any other provision of this Agreement which is proprietary,
confidential or not generally known to the public or within the industry and
which is unrelated to the Business or the Purchased Assets shall be treated as
confidential and shall not be disclosed to any other Person or used or exploited
by Buyer for so long as such information otherwise remains confidential,
proprietary or not generally known to the public or to the industry; provided, however, that nothing
in this Section
6.6 shall prohibit the limited disclosure of information (i) that is
required to be disclosed in connection with any Proceeding before any
Governmental or Regulatory Authority, (ii) in connection with the defense by
Buyer of any claim asserted against it by any member of the Seller Group, or
(iii) to attorneys, accountants or financial advisors of Buyer on a
“need-to-know” basis only. Anything in this Section
6.6 to the contrary notwithstanding, no disclosure of information for the
limited purposes set forth in subsection (i) above shall be made until Buyer has
delivered written notice to Seller of its intention to disclose such information
so that Seller, at its cost, may contest the need for such disclosure, and Buyer
will provide reasonable cooperation (and will use reasonable efforts to cause
its representatives to cooperate) in connection with any such Proceeding, and in
any such event of disclosure of information, all reasonable steps will be taken
to ensure that such disclosure either is made subject to a court’s order of
protection reasonably limiting the disclosure, or to other reasonable
limitations agreed on by the parties hereto. Nothing herein shall be
deemed to limit the obligations of Buyer pursuant to the letter agreement dated
February 27, 2008 between Shareholder and N.I.I. (the “Confidentiality Agreement”),
which agreement Buyer hereby adopts, and agrees to be bound by, as if a
signatory thereto. The Confidentiality Agreement shall be deemed
terminated effective upon the Closing and, to the extent any of the provisions
of the Confidentiality Agreement are inconsistent with the provisions of this
Agreement, the provisions hereof shall prevail. Without limiting the
generality of the foregoing, Seller agrees that the provisions of the
Confidentiality Agreement shall not limit the representations, warranties and
covenants provided for in this Agreement and acknowledges that, prior to the
Closing, Buyer may communicate with certain Business Associates (as defined in
the Confidentiality Agreement), including Seller’s employees and insurance
carriers, for the purpose of entering into business relationships with them that
will take effect upon the Closing.
6.6.2. On and
after the Closing Date, Buyer agrees that, upon reasonable notice, Seller shall
be entitled to review and make copies of all data and Records comprising a
portion of the Purchased Assets, but only to the extent such data and Records
relate to the period prior to the Closing Date and only to the extent (i)
requested or required by, or needed in connection with a filing with, or report
to, a Governmental or Regulatory Agency, (ii) related to a Proceeding, a Prior
Claim, or the defense by Seller or Shareholder of any claim asserted against it
by Buyer, (iii) required, or requested by the accountants for Seller and/or
Shareholder, in connection with the preparation of financial statements or with
respect to tax matters or (iv) otherwise required by Seller or Shareholder to
fulfill any obligation to any Person.
6.7. Conduct of the Business
Pending the Closing.
6.7.1. Prior to
the Closing, except (i) as required by applicable Law, (ii) as otherwise
contemplated by this Agreement or (iii) with the prior written consent of Buyer,
Seller shall:
6.7.1.1. conduct
the Business only in the ordinary course consistent with past practice and in
compliance with applicable Law; and
6.7.1.2. use
commercially reasonable efforts to (A) preserve the present business operations,
organization and goodwill of the Business, (B) preserve the present
relationships with customers, clients and accounts of the Business, (C) maintain
and keep in full force and effect all Permits necessary for the operation of the
Business, and (D) maintain all existing insurance policies with respect to the
Business and the Purchased Assets through the Closing Date.
6.7.2. Except
(i) as required by applicable Law, (ii) as otherwise contemplated by this
Agreement or (iii) with the prior written consent of Buyer, Seller shall not
directly or indirectly:
6.7.2.1. subject
any of the Purchased Assets to any Lien;
6.7.2.2. acquire
any material properties or assets that would constitute Purchased Assets or
sell, assign, license, transfer, convey, lease or otherwise dispose of any of
the Purchased Assets outside of the ordinary course of Business;
6.7.2.3. terminate
or cause to be terminated, or agree to any material amendment or modification
to, any of the Agency Agreements or Producer Agreements;
6.7.2.4. enter
into any Contract affecting any of the Purchased Assets outside of the ordinary
course of Business;
6.7.2.5. curtail
any existing marketing or advertising programs;
6.7.2.6. take any
action that would be reasonably expected to be likely to have a material
detrimental effect on the goodwill of the Business or the existing relationships
with clients, customers, accounts, employees or other Persons having dealings
with the Business;
6.7.2.7. do or
omit to do anything which will result or which would reasonably be expected to
result in a material breach of any representation, warranty, covenant or
obligation of Seller contained in this Agreement;
6.7.2.8. engage in
any stock or asset purchase, merger, business combination or other acquisition
transaction or otherwise acquire the operating assets or going business of any
other Person; or curtail, transfer, sell or otherwise dispose of any segment of
the Business to any Person, or enter into any Contract to do any of the
foregoing; or
6.7.2.9. enter
into any agreement or commitment to do anything prohibited by this Section
6.7.
6.8. Consents. Seller
shall, at its expense, use its best efforts, and Buyer shall cooperate with
Seller, to diligently pursue and obtain all written consents and approvals
required to consummate the transaction contemplated by this Agreement,
including, the consents and approvals referred to on Schedule
5.5 hereof (subject to Section
3.2.3.1); provided, however, that Seller
shall not be obligated to pay any consideration therefor to any third party from
whom consent or approval is requested or to initiate any Proceedings to obtain
any such consent or approval. At Seller’s reasonable request, Buyer
shall cooperate with Seller in connection with Seller’s requests for consent or
approval, including furnishing evidence of Buyer’s financial capacity and
ability to perform, and attending meetings or otherwise participating in
communications with Persons from whom such consent or approval is being
requested.
6.9. Permits. If
any Permits must be reissued in Buyer’s name rather than being transferred by
Seller, Buyer will initiate the necessary applications and Seller will cooperate
with Buyer in effectuating the reissuance of such Permits in Buyer’s name,
including confirming to any Governmental or Regulatory Authority Seller’s
readiness to surrender the Permits in Seller’s name upon their reissuance to
Buyer. Until each such Permit shall have been transferred to Buyer or
reissued in Buyer’s name, Seller shall use its best efforts and cooperate with
Buyer and take such steps, at Buyer’s request and expense, as may be necessary
to secure to Buyer the operational benefits and practical use of such Permit,
including maintaining the Permit in effect in Seller’s name, complying with any
conditions or requirements applicable under the Permit, and exercising or
enforcing for Buyer’s benefit the rights of the named holder under the
Permit.
6.10. Best
Efforts. Each
of Buyer and Seller shall use its best efforts to (i) take all actions and do
all things necessary or appropriate to consummate the transactions contemplated
by this Agreement and (ii) cause the fulfillment at the earliest practicable
date of all of the conditions to their respective obligations to consummate the
transactions contemplated by this Agreement.
6.11. Bulk
Sales. Seller
shall comply with any and all requirements and provisions of any “bulk-transfer”
or similar Laws in each applicable jurisdiction that may apply with respect to
the sale of any or all of the Purchased Assets to Buyer.
6.12. Notice of Certain
Events. Prior
to Closing, Seller will with reasonable promptness (but in any event within five
(5) business days of Seller learning of the circumstances or event) notify Buyer
of any circumstance or event involving, or action by, Seller or otherwise, (i)
which, if known at the date of this Agreement, would have been required to be
disclosed in or pursuant to this Agreement, (ii) the existence, occurrence or
taking of which would result in any of the representations and warranties of the
Seller Group contained in this Agreement not being true, accurate and complete
in any material respect immediately thereafter or on the Closing Date, (iii)
which otherwise has or can reasonably be expected to have a material adverse
effect on the Business or the Purchased Assets.
6.13. Update
Schedules. Prior
to Closing, Seller shall with reasonable promptness (but in any event within
five (5) business days of Seller learning of the changed or new information)
disclose to Buyer in writing any information set forth in the Schedules hereto
which no longer obtains and any information of the nature of that set forth in
such Schedules which arises after the date of this Agreement and which would
have been required to be included in the Schedules if such information had
obtained on or prior to the date of this Agreement; provided, however, that no
amendment or supplement by Seller pursuant to this Section
6.13 shall be deemed to amend or supplement the Schedules hereto or to
prevent or cure any misrepresentation or breach of warranty which existed prior
to such amendment or supplement.
6.14. Seller’s Change of
Name. Effective
as of the Closing Date, Seller will adopt and file articles of amendment to
change Seller’s corporate name to delete all references to the terms “Accurate”
and “Xxxxx Xxxxx” or any variants or derivatives of such terms, and Seller, the
Shareholder and their Affiliates shall cease to use the names “Accurate
Insurance” and “Xxxxx Xxxxx Insurance Agency” (and all variants thereof), and
all other trade names or service names (and any variants or derivatives of such
names) ever used by Seller prior to the Closing (other than
“DCAP”). Seller will also transfer to Buyer, effective as of the
Closing Date, Seller’s registrations for all Internet domain names used in the
Business. Notwithstanding the foregoing, Seller will retain all
rights in the editorial content and page layouts comprising Seller’s Internet
websites. From and after the Closing Date, subject to the terms of
this Section
6.14, Buyer will, as between Buyer, Seller, the Shareholder and their
Affiliates, have the sole and exclusive right to use and exploit the trade names
“Accurate Insurance”, “Xxxxx Xxxxx Insurance Agency” and any variants or
derivatives of such trade names.
6.15. Errors and Omissions
Insurance. Within
thirty (30) days after the Closing, Seller shall at its expense obtain a tail
errors and omissions liability insurance policy with respect to matters
occurring prior to the Closing, effective as of the Closing Date and providing
continuous coverage for no less than three (3) years from and after the Closing
Date (the “Tail E&O
Policy”). The Tail E&O Policy must provide at least the
same coverage, and contain terms and conditions which are no less advantageous
to Seller, as the errors and omissions liability insurance policy most recently
maintained by Seller prior to the Closing. Seller shall provide Buyer
with a true and complete copy of the Tail E&O Policy, together with proof of
payment of the applicable premium, on or before the expiration of the 30-day
period referenced above.
6.16. Return
Commissions. Buyer
shall be responsible for and shall indemnify and hold Seller harmless from all
losses, claims, damages, costs and expenses in connection with any and all
unearned or return commissions and other policy audit charges arising from
policy cancellations relating to (a) the Current Book of Business transferred to
Buyer for all policy years which commence prior to the Closing and (b) the
Closed Store Book of Business to the extent that such unearned or return
commissions and other policy audit charges are offsets pursuant to the
provisions of Section
2.4.2.1 or otherwise appear on statements of insurers that are received
on or after the Closing Date (collectively, “Unearned
Commissions”).
6.17. Receipt of Commissions
Post-Closing. All
commissions received by Seller or Buyer on or after the Closing Date with
respect to policies or policy renewals with an effective date before, on or
after the Closing Date shall constitute the property of Buyer. Except
as set forth in Section
6.18, all
contingency, bonus and profit sharing payments paid on or after the Closing Date
shall constitute the property of Buyer, regardless of the period to which such
payments relate.
6.18. Override
Amounts.
6.18.1. All
override amounts received by Seller or Buyer on or after the Closing Date from
Progressive Insurance Company or its Affiliates (“Progressive”) that relate to
the period prior to the Closing Date (“Pre-Closing Overrides”) shall
constitute the property of Seller. In the event that the Closing Date
is not the first day of a calendar month, any override amounts for the month in
which the Closing falls shall be considered Pre-Closing Overrides on a pro rata
basis, i.e., based upon the number of calendar days in the month that fall prior
to the Closing Date as compared to the total number of days in the
month. Any Pre-Closing Overrides received by Buyer shall be paid to
Seller promptly.
6.18.2. All
override amounts received by Seller or Buyer on or after the Closing Date from
Progressive that relate to the period on and after the Closing Date and through
September 30, 2010 (the “Post-Closing Overrides” and
together with the Pre-Closing Overrides, the “Overrides”) shall constitute
the property of Buyer; provided, however, that subject to offset as provided
herein, Buyer shall pay to Seller an amount equal to sixty percent (60%) of the
Post-Closing Overrides. Such amounts will be paid to Seller within 20
days after the end of each calendar quarter (or, if the 20th day is not a
business day, then no later than the next business day).
6.18.3. Each
remittance made pursuant to this Section
6.18 shall be accompanied by Progressive statements evidencing the amount
of the Overrides paid for each month.
6.19. Client
Deposits. Seller
and Buyer acknowledge and agree that Buyer is not purchasing or assuming any
customer or client deposits held by Seller in fiduciary accounts (“Client
Deposits”). Following the Closing, it shall be Seller’s
responsibility to pay and remit all premium and other amounts held or received
by Seller in fiduciary accounts as and when due to the applicable insurance
carriers or third party wholesalers and brokers, and Seller and Shareholder
shall indemnify, defend and hold Buyer harmless from and against any and all
Adverse Consequences which may be asserted against, imposed on or incurred by
Buyer as a result of or in connection with Seller’s failure to timely pay and
remit all Client Deposits. If Seller shall receive any Client
Deposits after the Closing, it shall immediately notify Buyer in writing of the
name of the client and the amount received.
6.20. Client Notification;
Transition of Business.
6.20.1. Effective
upon the Closing, Buyer may prepare and forward to the clients of the Business,
or to such portion of the clients as Buyer may elect, and/or to such insurance
carriers as Buyer may deem appropriate, a notice from Buyer informing the
clients of the transition of the Business and directing them to remit all future
payments to Buyer at the address specified by Buyer. If requested by
Buyer, Seller shall join in any such notice. Buyer shall be
responsible for the costs of preparing and mailing the notice.
6.20.2. From and
after the Closing, Seller and Shareholder agree to reasonably cooperate with
Buyer in connection with Seller’s transition of the Business to
Buyer.
6.21. Computers, Client Management
Systems and Files. Buyer
acknowledges that certain computers and monitors used by Seller and described on
Schedule
6.21 (the “Computers”) are leased by
BSA. Following the Closing, Buyer shall have the right to use the
Computers where currently located, without charge, during the lease term for the
Computers which expires on May 31, 2011 (the “Lease Expiration
Date”). Seller shall, at Seller’s cost and expense, pay and
perform all Seller’s obligations under all Leases covering the Computers through
the Lease Expiration Date. On or about the Lease Expiration
Date, Seller
agrees to purchase the Computers and thereupon sell the Computers to Buyer for a
purchase price of $1. In addition, (a) at the Closing, Seller shall
convey to Buyer all of its right, title and interest to its physical files
relating to the Current Book of Business and the Closed Store Book of Business,
which files Buyer shall remove from Seller’s premises promptly following the
Closing, and (b) following the Closing, Buyer shall have the right to use,
without charge, Seller’s computer servers and client management systems relating
to the Current Book of Business and the Closed Store Book of
Business.
6.22. Premium
Financing. Following the Closing and through January 31, 2018,
Buyer will refer each of its customers who desire premium financing to Payments
Inc. and its successors and assigns (“Payments Inc.”), and only to
Payments Inc. Buyer acknowledges and agrees that it shall not be
entitled to any compensation for such referrals or otherwise in connection with
any premium financing provided; and Seller acknowledges that Buyer may charge
any such customers fees and service charges in connection with such premium
financing, and Seller agrees that Seller shall not be entitled to any portion of
any such fees and charges.
7. INDEMNIFICATION.
7.1. Indemnification by
Buyer. Buyer
shall indemnify, defend and hold Seller and Shareholder and each of Seller’s and
Shareholder’s officers, directors, employees, representatives and Affiliates
harmless from and against, and shall reimburse Seller and Shareholder on demand
on account of, any and all Adverse Consequences which may be asserted against,
imposed on or incurred by any of them as a result of or arising out of or in any
manner relating or attributable to (a) any misrepresentation or breach by Buyer
of any representation or warranty made by Buyer in this Agreement or any
document delivered by Buyer pursuant to this Agreement, (b) any breach or
non-fulfillment by Buyer of any of its covenants or obligations contained in
this Agreement or any document delivered by Buyer pursuant to this Agreement,
(c) Buyer’s operation of the Business, ownership of the Purchased Assets and use
of the Computers after the Closing Date, or (d) the Assumed
Liabilities.
7.2. Indemnification by the
Seller Group. Each
of Seller and Shareholder, jointly and severally, shall indemnify, defend and
hold Buyer and each of its officers, directors, members, managers, employees,
representatives, Affiliates, successors and assigns harmless from and against,
and shall reimburse Buyer on demand on account of, any and all Adverse
Consequences which may be asserted against, imposed on or incurred by any of
them as a result of or arising out of or in any manner relating or attributable
to (a) any misrepresentation or breach by any member of the Seller Group of any
representation or warranty made by Seller or Shareholder in this Agreement or
any document delivered by Seller or Shareholder pursuant to this Agreement, (b)
any breach or non-fulfillment by Seller or Shareholder of any of their
respective covenants or obligations contained in this Agreement or any document
delivered by Seller or Shareholder pursuant to this Agreement, (c) Prior Claims
or any other Liabilities of Seller or the Business (other than Assumed
Liabilities), including any failure of Seller to pay, perform, discharge or
satisfy any Prior Claims or any such other Liabilities (other than Assumed
Liabilities), (d) any noncompliance with any bulk sales Laws in connection with
the sale and transfer of the Purchased Assets to Buyer, or (e) Seller’s
operation of the Business or ownership of the Purchased Assets prior to the
Closing Date.
7.3. Indemnification Procedure
for Third-Party Claims. Any
Persons entitled to indemnification under this Agreement (the “Indemnified Parties”)
receiving notice of a claim from a third party will promptly give notice of the
claim to the party under this Agreement required to provide indemnification (the
“Indemnifying Party”);
provided, however, that the
failure to give notice will not relieve or otherwise affect the Indemnifying
Party’s obligations under this Section 7
with respect to such claim, except to the extent that the failure to give notice
demonstrably prejudices or otherwise impairs the Indemnifying Party’s ability to
defend against or contest the claim.
7.3.1. The
Indemnifying Party will be entitled at its own cost and expense to contest and
defend any third-party claim; provided, however, that the
Indemnifying Party will not be entitled to contest and defend any claim that
seeks relief that, if successful, would be reasonably likely to have a material adverse
effect on the business of the Indemnified Party (a “Material Claim”) (it being
understood that a claim that only seeks monetary relief shall not be considered
a Material Claim); provided, further, that the
Indemnifying Party will notify the Indemnified Parties within a reasonable
period of time, not to exceed twenty (20) days after receipt of notice of the
third-party claim, that the Indemnifying Party intends to so
contest. The contest will be conducted by counsel selected by the
Indemnifying Party and reasonably acceptable to the Indemnified Parties, but any
of the Indemnified Parties will have the right to participate in the Proceedings
and to be represented by attorneys of their own choice, at their own cost and
expense. The Indemnifying Party will otherwise be responsible for the
costs and expenses of the defense, including payment of any judgment, award or
settlement amount for which the Indemnifying Party is liable under this Section
7.
7.3.2. If the
Indemnifying Party does not elect within the 20-day period to contest any
third-party claim which is not a Material Claim, or if the third-party claim is
a Material Claim, the Indemnified Parties will be entitled to defend or
otherwise deal with the claim. The Indemnifying Party will have the
right to participate in the Proceedings and to be represented by attorneys of
its own choice, at its own cost and expense. At any time after taking
over defense or contest of a third party claim, the Indemnified Parties may
elect to pay or compromise the third-party claim with the prior written consent
of the Indemnifying Party (not to be unreasonably withheld), and the
Indemnifying Party will be bound by such action and will indemnify the
Indemnified Parties with respect to such action in accordance with this Section
7.
7.3.3. The
Indemnified Parties will provide reasonable assistance to the Indemnifying Party
in its defense or contest of third-party claims, including document production,
responses to discovery and making the present or former employees, contractors
and agents of the Business available for depositions and trial
testimony. The party conducting the defense or contest of a
third-party claim which is subject to indemnification will keep the other party
to this Agreement reasonably informed as to the status of the defense or
contest.
7.3.4. Notwithstanding
anything to the contrary contained in this Section 7,
the Indemnifying Party will not have the right to settle or compromise any
third-party claim without the Indemnified Party’s consent if the Indemnified
Party reasonably concludes that the settlement or compromise could materially
and adversely affect the Indemnified Party, or, in the case of Buyer, materially
impair Buyer’s ability to continue to conduct the Business consistent with the
manner in which the Business was conducted by Seller; provided, however, that the
Indemnifying Party will have the right to settle or compromise any third-party
claim without the Indemnified Party’s consent if the settlement or compromise
includes as an unconditional term the giving by all claimants or plaintiffs to
the Indemnified Party of a release from all liability in respect of the claim
and if no injunctive or other equitable relief would be imposed against the
Indemnified Party pursuant to or as a result of such settlement.
7.4. Survival. All
covenants and obligations on the part of Seller and Buyer in this Agreement, or
in any document delivered pursuant to this Agreement at Closing or otherwise,
will survive the Closing. Notwithstanding any investigation by or on
behalf of Buyer or Seller, all representations and warranties of Buyer, Seller
and Shareholder in this Agreement, or in any documents delivered pursuant to
this Agreement at Closing or otherwise, will survive the Closing for a period of
two (2) years, provided, however, that (i) the
representations and warranties in Section
5.16 with respect to Taxes shall survive until ninety (90) days after the
expiration of the applicable statute of limitations; and (ii) the
representations and warranties in Section
5.9 with respect to Seller’s title to the Purchased Assets shall survive
indefinitely. Notwithstanding anything to the contrary contained in
this Agreement, any representation or warranty on the part of Seller and Buyer
in this Agreement will survive indefinitely to the extent a claim with respect
thereto has been submitted in writing prior to the applicable survival
expiration date.
7.5. Right of
Set-Off. Subject
to the provisions of Section
7.3 hereof, Buyer shall have the right (but shall not be obligated) to
set-off against the Promissory Note, or to set-off against the Purchase Price
for the Closed Store Book of Business pursuant to Section
2.4.2, or any portion of the Post-Closing Overrides payable to Seller
pursuant to Section
6.18.2, any Adverse Consequences with respect to which Buyer is entitled
to indemnification under Section
7.2 but has not been indemnified in full by Seller or Shareholder.; provided,
however, that any amount so set-off (other than any amount set off with respect
to a claim by any third party) (“Direct Claim”) shall be paid
to the Escrow Agent, to be held pursuant to the provisions of the Offset Escrow
Agreement. Amounts held in escrow pursuant to the Offset Escrow
Agreement shall be disbursed by the Escrow Agent only as set forth
therein. The principal amount of the Promissory Note, or any payment due
Seller pursuant to either Section
2.4.2 or Section
6.18.2 shall not be deemed to constitute a limit or cap on the amount of
any indemnification required to be provided pursuant to this Agreement, or
preclude any Indemnified Party from recovering the full amount of all Adverse
Consequences, subject to the provisions hereof.
7.6. Purchase Price
Adjustment. All
indemnification payments made pursuant to this Agreement shall be treated as
adjustments to the Purchase Price.
7.7. Limitations. Notwithstanding
anything herein to the contrary, as to matters which are subject to
indemnification pursuant to this Section 7,
(a) Seller and Shareholder shall not be liable unless and until the
aggregate Adverse Consequences to the Indemnified Parties resulting from such
otherwise indemnifiable matters shall exceed a cumulative aggregate of thirty
thousand dollars ($30,000) (the “Indemnification Threshold”)
(with Seller and Shareholder being responsible for all Adverse Consequences that
exceed the Indemnification Threshold), and (b) the aggregate amount of any
payments that shall be payable by Seller and Shareholder as a result of any
claims for indemnification made hereunder shall be limited to the Purchase
Price.
7.8. Other Rights and
Remedies. Notwithstanding
anything in this Agreement to the contrary, in no event shall any
Indemnified Party directly or indirectly bring any claim with respect
to any matter for which there is a basis for indemnity under this Agreement
except pursuant and subject to the terms, conditions and limitations (including
time periods) contained in this Section 7
whether for breach of contract, or based on any other theory of recovery
whatsoever.
7.9. Tax
Benefit. The
amount of any Adverse Consequences suffered by any Indemnified Party shall be
reduced by the amount, if any, of the present value of any federal, state or
local income tax benefit (net of reasonable expenses incurred in obtaining such
benefit) such Indemnified Party shall have enjoyed, and if such a benefit is
enjoyed by an Indemnified Party after it receives payment or other credit under
this Agreement with respect to any Adverse Consequences (an “Indemnity Payment”), then a
refund equal in aggregate amount to the benefit, net of reasonable expenses and
tax or other costs incurred in obtaining such benefit, shall be made promptly to
the party making such Indemnity Payment.
7.10. Insurance; Time Value of
Money. In
the event that an Indemnified Party recovers any insurance proceeds from any
policies which are then in force which cover any Adverse Consequences, the
amount which the Indemnified Party shall be entitled to recover from the
Indemnifying Party for such Adverse Consequences shall be reduced by the amount
of insurance proceeds actually recovered. The amount of any Adverse
Consequences that are future Adverse Consequences shall be reduced to their
present value as of the date of payment therefor, using reasonable and
appropriate assumptions.
8. CONDITIONS TO
CLOSING.
8.1. Conditions Precedent to
Obligations of Buyer. The
obligation of Buyer to consummate the transactions contemplated by this
Agreement is subject to the fulfillment, on or prior to the Closing Date, of
each of the following conditions (any or all of which may be waived in writing
by Buyer in whole or in part to the extent permitted by applicable
Law):
8.1.1. the
representations and warranties of the Seller Group set forth in this Agreement
shall continue to be true and correct in all material respects, on and as of the
Closing Date, except (i) for those representations and warranties already
qualified by the word “material”, in which case they shall continue to be true
and correct on and as of the Closing Date in all respects, and (ii) to the
extent such representations and warranties relate to an earlier date (in which
case such representations and warranties shall be true and correct in all
material respects on and as of such earlier date);
8.1.2. Seller
shall have performed and complied with in all material respects all covenants
and obligations contained in this Agreement and required to be performed or
complied with on Seller’s part at or prior to the Closing;
8.1.3. there
shall have occurred between the date hereof and the Closing Date no facts or
circumstances that give rise to a material adverse effect on the Business,
assets, properties, results of operations or financial condition of Seller or
the Purchased Assets (taken as a whole), or a material adverse effect on the
ability of Seller to consummate the transactions contemplated by this
Agreement;
8.1.4. the
insurance carrier under such each Agency Agreement to which Seller is a party as
set forth on Schedule
5.12.2 shall have consented to the appointment of Buyer to sell such
carrier’s products; provided, however,
that the receipt of such consent to appointment by any particular insurance
carriers shall not be a condition hereunder to the extent that the aggregate
Gross Commissions paid during the twelve months ended November 30, 2008 by all
such insurance carriers whose consent to appointment is not obtained did not
exceed ten percent (10%) of the Seller 2008 Commission Amount, provided that there
shall be a reduction in the Purchase Price as provided for on Schedule
8.1.4 to account for the failure to obtain such consents to appointment;
provided further, however,
that if any such consent to the assignment of any Producer Agreement has not
been obtained, the wholesaler or other Person under such Producer Agreement
shall have consented to the appointment of Buyer to sell such wholesaler’s or
other Person’s products;
8.1.5. subject
to Section
3.2.3.1, any required consent to the assignment of the Assumed Contracts
(including that of Progressive to the assignment of the Progressive Agreement to
Buyer), and any other consent set forth on Schedule
5.5 shall have been obtained in writing (subject to Section
8.1.4);
8.1.6. Seller
shall have delivered, or caused to be delivered, to Buyer all items set forth in
Section
3.2 (subject to Sections 3.2.3.1
and 8.1.4);
8.1.7. no Order
by a Governmental or Regulatory Authority shall be in effect which restrains,
enjoins or otherwise prohibits the consummation of the transactions contemplated
hereby, and no Proceeding shall be pending or threatened which seeks to enjoin
or which challenges the validity of this Agreement or the consummation of the
transactions contemplated hereby;
8.1.8. Shareholder
shall have loaned to Xxxxxxxxx the sum One Hundred Thousand Dollars ($100,000)
(the “Loan”). The
Loan shall be evidenced by a promissory note substantially in the form attached
hereto as Exhibit
E (the “Xxxxxxxxx
Promissory Note”). The Xxxxxxxxx Promissory Note shall be
dated as of the Closing Date and will provide for the principal balance to be
paid in two equal installments of principal of Fifty Thousand Dollars ($50,000.00),
the first being due on March 31, 2010 and the second being due on September
30, 2010 (the “Xxxxxxxxx
Maturity Date”), together with applicable interest payments
accruing from the Closing Date at the rate of five and 25/100 percent (5.25%)
per annum. All accrued and unpaid interest on the unpaid principal
under the Xxxxxxxxx Promissory Note to the date of the first such installment
shall be due and payable with such first installment, and all accrued and unpaid
interest on the unpaid principal remaining after the payment of the first
installment, from the date of the first installment to the Xxxxxxxxx Maturity
Date, shall be due and payable with such second installment on the Xxxxxxxxx
Maturity Date; and
8.2. Conditions Precedent to
Obligations of Seller. The
obligation of Seller to consummate the transactions contemplated by this
Agreement is subject to the fulfillment, on or prior to the Closing Date, of
each of the following conditions (any or all of which may be waived in writing
by Seller in whole or in part to the extent permitted by applicable
Law):
8.2.1. the
representations and warranties of Buyer set forth in this Agreement shall
continue to be true and correct in all material respects, on and as of the
Closing Date, except (i) for those representations and warranties already
qualified by the word “material”, in which case they shall continue to be true
and correct on and as of the Closing Date in all respects, and (ii) to the
extent such representations and warranties relate to an earlier date (in which
case such representations and warranties shall be true and correct in all
material respects on and as of such earlier date);
8.2.2. Buyer
shall have performed and complied with in all material respects all covenants
and obligations contained in this Agreement and required to be performed or
complied with on Buyer’s part at or prior to the Closing;
8.2.3. Buyer
shall have delivered, or caused to be delivered, to Seller the items set forth
in Section
3.3;
8.2.4. no Order
by a Governmental or Regulatory Authority shall be in effect which restrains,
enjoins or otherwise prohibits the consummation of the transactions contemplated
hereby, and no Proceeding shall be pending or threatened which seeks to enjoin
or which challenges the validity of this Agreement or the consummation of the
transactions contemplated hereby; and
8.2.5. Progressive
shall have consented to be assignment of the Progressive Agreement to
Buyer.
8.3. Frustration of Closing
Conditions. Neither
Seller nor Buyer may rely on the failure of any condition set forth in Section
8.1 or 8.2, as
the case may be, if such failure was caused by such party’s failure to comply
with any provision of this Agreement.
9. MISCELLANEOUS.
9.1. Notices. Notices
given pursuant to this Agreement must be in writing. They will be
deemed to have been duly given: (i) upon delivery or refusal to accept delivery,
if hand-delivered; (ii) three (3) business days after being sent by certified
United States mail, return receipt requested; or (iii) one (1) business day
after being deposited for next-day delivery with Federal Express or other
national overnight courier service. In each case, notice will be
marked “Personal and Confidential” and will be addressed as
follows:
|
If to
Seller:
DCAP
Group, Inc.
0000
Xxxxxxxx
Xxxxxxx,
XX 00000
Attn: Xxxxx
Xxxxxxxxx
Fax:
(000) 000-0000
|
With a
copy to:
Xxxx
Xxxxxxx, Esq.
Certilman
Balin Xxxxx & Xxxxx, LLP
00
Xxxxxxx Xxxxxx
Xxxx
Xxxxxx, XX 00000
Fax:
(000) 000-0000
|
|
If to
Buyer:
N.I.I.
Brokerage, L.L.C.
00
Xxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx,
XX 00000
Attn:
Xxxx Xxxxxxxxx
Fax:
(000) 000-0000
|
With a
copy to:
Xxxxxxx
X. Xxxxx, Esq.
Kagan
Lubic Xxxxxx Xxxxx Gold & Colbert, LLP
000
Xxxxxxx Xxx., 00xx Xxxxx
Xxx
Xxxx, XX 00000
Fax:
(000)
000-0000
|
Any party
may change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other parties notice
in the manner herein set forth.
9.2. Entire
Agreement. This
Agreement together with the attached Exhibits and Schedules, the Confidentiality
Agreement and, following the Closing, the Transaction Documents, constitutes the
entire agreement and understanding between the parties hereto and supersede all
prior agreements, understandings, negotiations and discussions, both written and
oral, between and among the parties hereto with respect to the subject matter
hereof. This Agreement may not be amended, modified or supplemented
except in a writing signed by all of the parties hereto.
9.3. Benefits; Binding
Effect. This
Agreement shall be for the benefit of and binding upon the parties hereto, their
respective heirs, executors, legal representatives, successors and permitted
assigns. No party to this Agreement may assign or delegate any of its
rights, duties or obligations under this Agreement to any Person without prior
written consent of the other parties hereto; provided that Buyer
shall have a right to assign and delegate its rights and obligations to any one
or more of its Affiliates, without any such consent. Any attempted
assignment or delegation in violation of the foregoing sentence shall be void
and of no effect. Notwithstanding the foregoing, if Buyer assigns its
rights and obligations hereunder, it shall guarantee the payment of the
Promissory Note and the obligations of its assignee under this Agreement and the
other Transaction Documents.
9.4. Waiver. Buyer,
by an instrument duly executed by its authorized representative in writing, may
extend the time for or waive the performance of any of the obligations of Seller
or waive compliance by Seller with any of the covenants or conditions contained
herein. Seller, by an instrument in writing, may extend the time for
or waive the performance of any of the obligations of Buyer or waive compliance
by Buyer with any of the covenants or conditions contained herein. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any of the other provisions hereof (whether or not
similar), nor shall any such waiver constitute a continuing waiver unless
otherwise expressly so provided.
9.5. No Third Party
Beneficiary. Nothing
expressed or implied in this Agreement is intended, or shall be construed, to
confer upon or give any Person other than the parties hereto and their
respective successors and permitted assigns any rights or benefits under or by
reason of this Agreement.
9.6. Severability. It
is the desire and intent of the parties hereto that the provisions of this
Agreement be enforced to the fullest extent permissible under the Laws and
public policies applied in each jurisdiction in which enforcement is
sought. Accordingly, if any particular provision of this Agreement
(including the Restricted Period or the Restricted Area) shall be adjudicated by
a court of competent jurisdiction to be invalid, prohibited or unenforceable for
any reason, such provision, as to such jurisdiction, shall be ineffective,
without invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of this Agreement or affecting the validity or
enforceability of such provision in any other
jurisdiction. Notwithstanding the foregoing, if such provision could
be more narrowly drawn so as not to be invalid, prohibited or unenforceable in
such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn,
without invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other
jurisdiction.
9.7. Expenses. Whether
or not the transactions contemplated by this Agreement shall be consummated, all
legal, accounting and other costs and expenses incurred in connection with this
Agreement and any of the transactions contemplated hereby on behalf of Buyer
shall be borne and paid by Buyer and all such costs and expenses incurred on
behalf of the Seller Group shall be borne and paid by the Seller Group, and no
party shall be obligated for any cost or expense incurred by any other party
unless this Agreement expressly so provides. Notwithstanding the
foregoing, in the event of any litigation based upon or arising out of this
Agreement, the court having jurisdiction shall be authorized to award the
prevailing party reimbursement of all reasonable costs and expenses incurred by
the prevailing party in connection with such litigation, including reasonable
attorneys’ fees and post-judgment collection and enforcement
proceedings.
9.8. Counterparts. This
Agreement may be executed in any number of counterparts and by the several
parties hereto in separate counterparts, all of which taken together shall be
deemed to be one and the same instrument.
9.9. Further
Assurances. Seller,
Shareholder and Buyer agree, upon request and for no additional consideration,
to sign, acknowledge and deliver any documents and to do anything else which the
other may reasonably request in order to perfect or confirm the transfer of the
Purchased Assets and the Business to Buyer, or otherwise carry out more
completely the purpose and intent of this Agreement consistent with its
terms.
9.10. Remedies
Cumulative. Except
as otherwise expressly provided herein, no remedy made available by any of the
provisions of this Agreement is intended to be exclusive of any other remedy,
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing under Contract, at Law
or in equity.
9.11. Governing Law;
Jurisdiction.
9.11.1. THIS
AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS
OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR
CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER
JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE
OF NEW YORK TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE
INTERNAL LAW OF THE STATE OF NEW YORK WILL CONTROL THE INTERPRETATION AND
CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION’S CHOICE OF LAW
OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF ANOTHER JURISDICTION WOULD
ORDINARILY APPLY.
9.11.2. Any
Proceeding arising out of or relating to this Agreement or any of the
transactions contemplated by this Agreement shall be brought exclusively in the
courts of the State of New York located in New York County, and each of the
parties irrevocably submits to the exclusive jurisdiction of such courts in any
such Proceeding, and waives any objection it or he may now or hereafter have to
venue or to convenience of forum.
9.12. Waiver of Right to Trial by
Jury. Each
party to this Agreement waives any right to trial by jury in any action, matter
or Proceeding regarding this Agreement or any provision hereof.
9.13. Consented
Assignment. Anything
contained herein to the contrary notwithstanding, this Agreement shall not
constitute an agreement to assign any claim, right, Contract or Permit if an
attempted assignment thereof without the consent of another party thereto would
constitute a breach thereof or in any way affect the rights of Seller
thereunder, unless such consent is obtained. If such consent is not
obtained, or if an attempted assignment would be ineffective or would affect
Seller’s rights thereunder so that Buyer would not in fact receive all such
rights, Seller shall cooperate in any reasonable arrangement designed to provide
for Buyer the benefit under any such claims, rights, Contracts or Permits,
including without limitation enforcement, at the expense of Buyer, of any and
all rights of Seller against the other party or parties thereto arising out of
the breach, termination or cancellation by such other party or
otherwise.
9.14. Payment of Sales, Use or
Similar Taxes. Seller
shall be responsible for (and shall indemnify and hold Buyer harmless against)
one hundred percent (100%) of any sales Taxes incident to the sale and transfer
of the Purchased Assets and for all other applicable sales, use, stamp,
documentary, filing, recording, transfer or similar fees or Taxes or
governmental charges (including UCC-3 filing fees, if any) in connection with
the sale of the Purchased Assets contemplated by this Agreement; provided,
however, that if any such Taxes are those imposed upon a buyer pursuant to
applicable law, then Buyer shall be responsible for (and shall indemnify and
hold Seller harmless against) one hundred percent (100%) of such
Taxes. Seller shall file all necessary documents (including all Tax
Returns) with respect to all such amounts in a timely manner.
[remainder of page intentionally left
blank]
IN
WITNESS WHEREOF, the parties have duly executed this Asset Purchase Agreement as
of the date first above written.
BUYER:
NII BSA
LLC
By: /s/
Name:
Xxxxxxx Xxxxxxxxx
Title: Manager
SELLER:
DCAP
ACCURATE, INC.
By: /s/
Name:
Xxxxx X. Xxxxxxxxx
Title: President
XXXXX
XXXXX AGENCY, INC.
By: /s/
Name:
Xxxxx X. Xxxxxxxxx
Title: President
SHAREHOLDER:
DCAP
GROUP, INC.
By: /s/
Name:
Xxxxx X. Xxxxxxxxx
Title: President
As to
Section 6.5.10
only: As
to Sections 2.6 and 6.10 only:
/s/ /s/
Xxxxx X. Xxxxxxxxx Xxxxxxx Xxxxxxxxx
Xxxxx X. Xxxxxxxxx Xxxxxxx Xxxxxxxxx
/s/
Xxxxx
Xxxxxxxxx
/s/
Xxxxxx
Xxxxxxx
Schedules and
Exhibits
|
Schedule
2.2
|
Assumed
Contracts
|
|
Schedule
2.4.2.4
|
Closed
Store Client List
|
|
Schedule
2.4.2.5
|
Closed
Stores
|
|
Schedule
2.4.4
|
Purchase
Price Allocation
|
|
Schedule
2.5.9
|
Excluded
Personal Property
|
|
Schedule
2.5.16
|
Pennsylvania
Customers
|
|
Schedule
4.5
|
Appointed
Carriers
|
|
Schedule
5.4
|
Absence
of Certain Events
|
|
Schedule
5.5
|
Consents
and Approvals
|
|
Schedule
5.7.2
|
Permits
|
|
Schedule
5.8
|
Intellectual
Property
|
|
Schedule
5.9
|
Material
Assets to be Excluded from Sale
|
|
Schedule
5.10
|
Real
Property Leases
|
|
Schedule
5.12.1
|
Split
Commissions; Other Payouts
|
|
Schedule
5.12.2
|
Agency
Agreements and Revenues
|
|
Schedule
5.13
|
Contracts
|
|
Schedule
5.14
|
Personnel
|
|
Schedule
5.16
|
Tax
Matters
|
|
Schedule
5.17
|
Tangible
Personal Property
|
|
Schedule
5.19
|
Insurance
|
|
Schedule
5.20
|
Employee
Benefit Plans
|
|
Schedule
6.2
|
Transferred
Employees
|
|
Schedule
6.5.4
|
Excluded
Trade Names
|
|
Schedule
6.21
|
Computers
|
|
Schedule
8.1.4
|
Preliminary
Purchase Price Reduction
|
|
Schedule
A
|
Telephone
Numbers, Facsimile Numbers, E-mail Addresses and Domain
Names
|
|
Exhibit
A
|
Definitions
|
|
Exhibit
B
|
Promissory
Note
|
|
Exhibit
C
|
Guaranty
|
|
Exhibit
D
|
Offset
Escrow Agreement
|
|
Exhibit
E
|
Xxxxxxxxx
Promissory Note
|
|
Exhibit
F
|
Standby
Creditor’s Agreement
|
|
Exhibit
G
|
Landlord’s
Agreement
|
EXHIBIT
A
DEFINITIONS
“Adverse Consequences” means
all claims, charges, penalties, fines, amounts paid in settlement, liabilities,
obligations, losses, damages, deficiencies, fees, costs and expenses, including
all reasonable attorneys’ fees and court costs and the reasonable costs incurred
by any Person to enforce another Person’s indemnification obligations under this
Agreement, but excluding incidental, exemplary, indirect, punitive and special
damages.
“Affiliate” means, with respect
to a particular Person, any other Person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, such particular Person.
“Agency Agreements” means all
agency agreements, carrier contracts and other similar arrangements with
insurance companies to which Seller is a party and under which Seller derives
any Gross Commissions.
“Agreement” means this Asset
Purchase Agreement, as the same may be amended, supplemented or otherwise
modified from time to time.
“Business” means the insurance
agency business of Seller.
“Buyer” has the meaning set
forth in the preamble to this Agreement.
“Client Information” means all
list(s) or Records of clients or customers or accounts, together with all files,
computer records and client, customer and account records (whether in written
format, digital format or any other media) used or held by, for or in connection
with the Business or Seller.
The terms
“client” or “customer” or “account” for the definition of “Client Information”,
mean as to any Person at any time, any other Person listed or otherwise
identified on or in the books or records of such Person (whether in written
format, digital format or any other media) at such time as a client, customer,
account or other Person from whom such Person directly or indirectly (i) derived
or received any revenue or other income, (ii) may prospectively derive or
receive any revenue or other income or (iii) derived or received revenue or
other income during the twenty-four (24) month period prior to such
time.
“Closed Store Book of
Business” means, as of a particular date or for a particular period, the
Seller’s then insurance agency and brokerage business and the renewals and
expirations thereof together with all written or otherwise recorded
documentation, data or information relating solely to the Closed Stores,
including (a) the list of insurance companies with which Seller did business
through any Closed Store and Records pertaining thereto, and (b) the list of
customer accounts of the Business conducted through any Closed Store, sometimes
referred to as daily reports or dailies, which contain, with respect to each
such account the name and address of the insured, the type of insurance, the
insurance carrier, the expiration date of each policy, and all other types of
information customarily used by Seller. Closed Store Book of Business
does not include any accounts that have cancelled or non-renewed as of the
particular date as of which the Closed Store Book of Business is
measured.
“Contract” means any agreement,
contract, Lease, consensual obligation, promise or undertaking (whether written
or oral and whether express or implied) that is legally binding.
“Current Book of Business”
means, as of a particular date or for a particular period, all of Seller’s then
insurance agency and brokerage business and the renewals and expirations
thereof, together with all written or otherwise recorded documentation, data or
information relating to the Open Stores, including, but not limited to, (a) the
list of insurance companies with which Seller does business and records
pertaining thereto, and (b) the list of customer accounts, of the Business
conducted through the Open Stores, sometimes referred to as daily reports or
dailies, which contain, with respect to each such account, the name and address
of the insured, the type of insurance, the insurance carrier, the expiration
date of each policy and all other types of information customarily used by
Seller. Current Book of Business does not include any accounts that
have canceled or non-renewed as of the particular date as of which the Current
Book of Business is measured.
“Environmental Laws” means all
Laws governing the use, storage, shipment, handling, disposal, discharge,
release, cleanup, reporting, warning, workplace disclosure or monitoring of
Hazardous Materials, or otherwise relating to environmental pollution or
environmental protection.
“ERISA” means the Employee
Retirement Income Security Act of 1974, as amended.
“Escrow Agent” means Certilman
Balin Xxxxx & Xxxxx, LLP.
“Executive Employee” means Xxxxx
Xxxxxxxxx.
“Governmental or Regulatory
Authority” means any court, tribunal, arbitrator, authority, agency,
commission, official or other instrumentality of the United States, any foreign
country or any domestic or foreign state, province, county, city or other
political subdivision.
“Gross Commissions” means, in
respect of any period, all new and renewed agency billed and direct billed
commissions earned during such period on account of the Current Book of Business
or the Closed Store Book of Business, as the case may be, during such period
from the sale of insurance products and service fees paid on the then Current
Book of Business or the Closed Store Book of Business, as the case may be;
provided, that Gross Commissions shall not include any (1) contingent or bonus
income, interest income or any other miscellaneous income or any commissions
attributable to non-owned business or business written prior to the commencement
of such period (to the extent earned in such prior period), or (2) commissions
paid to any third party producing agent or agency or to any third party
broker.
“Hazardous Materials” means all
substances, in whatever form or concentration, which are classified as
hazardous, toxic or dangerous or as pollutants or contaminants under any
Environmental Laws. “Hazardous Materials” specifically include
gasoline, oil, diesel fuel and other petroleum products, their fractions and
their constituent and residual compounds and by-products, and radon, asbestos
and asbestos-containing materials, urea formaldehyde and PCB’s.
“Law” means any law, statute,
rule, regulation, ordinance or other pronouncement having the effect of law, in
each case, of any Governmental or Regulatory Authority.
“Lease” means any real property
lease, personal property lease or any other lease or rental agreement, license,
right to use or installment and conditional sale agreement to which Seller is a
party and any other Contract pertaining to the leasing or use of any Tangible
Personal Property or real property.
“Lease and Utility Security
Deposits” means all security deposits paid by Seller under utility
accounts and real estate Leases which are transferred to
Buyer at Closing.
“Lender” means the lender
identified in the Standby Creditor’s Agreement.
“Liabilities” means,
collectively, any and all of Seller’s liabilities or obligations (as such terms
may be most broadly interpreted under applicable Law) of any kind (whether
express, implied, contingent, non- contingent or otherwise), whether or not
relating to the Purchased Assets, the Business or otherwise and whether incurred
or accrued prior to or after the Closing Date.
“Liens” means any mortgage,
pledge, assessment, security interest, lease, lien, right of possession in favor
of any third party, claim, levy, charge, equitable interest, option, right of
way, easement, encroachment, right of first option, right of first refusal or
similar restriction or other encumbrance of any kind, or any conditional sale
agreement, factor’s lien agreement or any other right of any third party of any
kind.
“Offset Escrow Agreement” means
the offset escrow agreement substantially in the form attached hereto as Exhibit
D.
“Orders” means any writ,
judgment, decree, injunction, or similar order of any Governmental or Regulatory
Authority (in each such case whether preliminary, final or
otherwise).
“Permits” means all licenses,
permits, certificates, orders, approvals, registrations, certifications and
authorizations with all Governmental and Regulatory Authorities required in
connection with the ownership and use of the Purchased Assets as presently owned
and used or the operation of the Business as presently conducted.
“Person” means any natural
person, corporation, unincorporated organization, partnership (general, limited
or otherwise), limited liability company, association, joint-stock company,
joint venture, trust, governmental body or agency or other entity having legal
status of any kind.
“Prior Claims” means all claims
or causes of action related to the Business (including general liability claims,
claims for personal injury and property damage, claims arising out of motor
vehicle accidents, property damage or economic injury, contract claims and
claims arising out of violations or alleged violations of Laws) which: (i) are
asserted at any time before the Closing; or (ii) arise out of events or
occurrences that take place or circumstances or conditions that are existing at
any time before the Closing, including environmental conditions antedating the
Closing which under applicable Environmental Laws require or will require
remediation, disclosure or other response action; or (iii) involve an alleged
injury, damage or violation that occurred or was existing before the Closing;
and, in the case of clauses (ii) and (iii), without regard to whether such
claims have been asserted, or are known to Seller, as of the Closing
Date.
“Proceedings” means all
litigation, complaints, actions, suits, proceedings, hearings, investigations,
grievances, arbitrations or other legal, administrative or governmental
proceedings or enforcement actions.
“Producer Agreements” means all
producer, subproducer, wholesaler, brokerage and agency marketing agreements and
other similar arrangements with third party brokers or agencies to which Seller
is a party and under which Seller places any business.
“Purchased Assets” means
Seller’s entire right, title and interest in, to and under (i) the Current Book
of Business and the Closed Store Book of Business as of the Closing Date, (ii)
all Client Information, (iii) all Intellectual Property and other intangible
rights and property of the Business, including, (a) the goodwill and going
concern value of the Business, (b) the exclusive use of all trade names and
service names of Seller, including all of the trade names listed on Schedule
6.5.4, and all derivatives thereof, and (c) all telephone number(s),
facsimile number(s), e-mail addresses and domain name registrations used in
connection with the Business, each of which is identified on Schedule A
attached hereto, (iv) all Assumed Contracts, (v) the Tangible Personal Property
owned by Seller, including those items listed on Schedule
5.17, (vi) all Lease and Utility Security Deposits, (vii) all rights of
Seller under non-disclosure or confidentiality, non-compete, or non-solicitation
agreements with employees and agents of Seller or with third parties to the
extent relating to the Business or the Purchased Assets (or any portion
thereof), (viii) all data and Records related to the operation of Seller not
otherwise described in the definitions of Current Book of Business or the Closed
Store Book of Business and Client Information, including referral sources,
research and development reports and Records, personnel Records, production
reports and Records, service and warranty Records, equipment logs, operating
guides and manuals, financial and accounting Records, creative materials,
advertising materials, promotional materials, studies, correspondence and other
similar documents and Records to the extent related to the Business, (ix) the
Permits (to the extent transferable under applicable law), (x) all accounts,
commissions and fees receivable, (xi) the Seller’s Proprietary Information, and
(xii) all rights (including renewal rights), warranties, guaranties, privileges,
claims, causes of action, and goodwill associated with any of the assets
described in the immediately preceding clauses (i) through (x) inclusive, but
does not include the Excluded Assets or any Liabilities other than the Assumed
Liabilities.
“Records” means all information
that is inscribed on a tangible medium or that is stored in an electronic or
other medium and is retrievable in perceivable form.
“Restricted Area” means any
geographic area within twenty-five (25) miles of the location (as of the Closing
Date) of any office of Seller in any direction.
“Restricted Period” means a
period of three (3) years beginning on the Closing Date.
“Seller” has the meaning set
forth in the preamble to this Agreement.
“Seller Group” has the meaning
set forth in the preamble to this Agreement.
“Seller 2008 Commission Amount”
means an amount equal to Two Million Two Hundred Twenty Five Thousand Six
Hundred Sixty Nine Dollars ($2,225,669), representing the amount of Gross
Commissions earned by Seller during the one year period ended November 30, 2008
and attributable solely to the Open Stores.
“Shareholder” has the meaning
set forth in the preamble to this Agreement.
“Tangible Personal Property”
means all machinery, equipment, tools, furniture, office equipment, computer
hardware, supplies, materials, vehicles and other items of tangible personal
property of every kind used or held for use in the Business, together with any
express or implied warranty by the manufacturers or sellers of any item or
component part thereof and all maintenance records and other documents relating
thereto.
“Tax Authority” means any state
or local government, or agency, instrumentality or employee thereof, charged
with the administration of any law or regulation relating to Taxes.
“Tax Return” means all returns,
declarations, reports, estimates, information returns and statements required to
be filed in respect of any Taxes.
“Taxes” means (i) all federal,
state, local or foreign taxes, charges, or other assessments, including all net
income, gross receipts, capital, sales, use, motor fuel, ad valorem, value
added, transfer, franchise, profits, inventory, capital stock, license,
withholding, payroll, employment, social security, unemployment, excise,
severance, stamp, occupation, property and estimated taxes and (ii) all
interest, penalties, fines, additions to tax or additional amounts imposed by
any Tax Authority in connection with any item described in clause
(i).
“Transaction Documents” means
this Agreement, the Xxxx of Sale, the Promissory Note, the Guaranty, the Offset
Escrow Agreement, the Standby Creditor’s Agreement and the other instruments and
documents required to be (or actually) delivered at the Closing Date in
connection with the transactions contemplated under this Agreement, including
the Lender’s Loan (as defined in the Standby Creditor’s Agreement).
The
following terms, when used in this Agreement, shall have the meanings defined
for such terms in the section or schedule set forth adjacent to such
terms:
|
AMS
Obligation
|
2.4.2.4
|
|
Applicable
Period
|
Schedule
8.1.4
|
|
Assumed
Contracts
|
2.2
|
|
Assumed
Liabilities
|
2.2
|
|
Xxxx
of Sale
|
3.2.1
|
|
Cash
Payment
|
2.4.1.1
|
|
Client
Deposits
|
6.19
|
|
Closed
Stores
|
2.4.2.5
|
|
Closed
Store Account
|
2.4.2.1
|
|
Closing
|
3.1
|
|
Closing
Date
|
3.1
|
|
Computers
|
6.21
|
|
Confidentiality
Agreement
|
6.6.1
|
|
Current
Book of Business Customers
|
Schedule
8.1.4
|
|
Direct
Claim
|
7.5
|
|
Disc
|
2.4.2.4
|
|
Employee
Plans
|
5.20.1
|
|
Excluded
Assets
|
2.4
|
|
Excluded
Liabilities
|
2.3
|
|
Xxxxxxxxx
|
2.6
|
|
Xxxxxxxxx
Maturity Date
|
8.1.8
|
|
Xxxxxxxxx
Promissory Note
|
8.1.8
|
|
Guaranty
|
2.6
|
|
Indemnification
Threshold
|
7.7
|
|
Indemnified
Parties
|
7.3
|
|
Indemnifying
Party
|
7.3
|
|
Indemnity
Payment
|
7.9
|
|
Intellectual
Property
|
5.8
|
|
Key
Employees
|
6.5.10
|
|
Lease
Expiration Date
|
6.20
|
|
Loan
|
8.1.8
|
|
Material
Claim
|
7.3.1
|
|
Maturity
Date
|
2.4.1.2
|
|
Net
Commissions Derived from the Closed Stores
|
2.4.2.1
|
|
N.I.I.
|
4.5
|
|
Nonconsenting
Carriers
|
Schedule
8.1.4
|
|
NY
WARN
|
2.3
|
|
Open
Stores
|
2.4.2.5
|
|
Overrides
|
6.18.2
|
|
Payment
Period
|
2.4.2
|
|
Payments
Inc.
|
6.22
|
|
Post-Closing
Overrides
|
6.18.2
|
|
Pre-Closing
Overrides
|
6.18.1
|
|
Preliminary
Purchase Price Reduction
|
Schedule
8.1.4
|
|
Progressive
|
6.18.1
|
|
Progressive
Agreement
|
Schedule
2.2
|
|
Promissory
Note
|
2.4.1.2
|
|
Proprietary
Information
|
6.5.1
|
|
Purchase
Price
|
2.4
|
|
Recipient
|
6.4
|
|
Rightful
Owner
|
6.4
|
|
Seller’s
Shares
|
2.4.2
|
|
Standby
Creditor’s Agreement
|
3.2.16
|
|
Tail
E&O Policy
|
6.15
|
|
Termination
Date
|
3.4.2
|
|
Third
Party Determination
|
Schedule
8.1.4
|
|
Transferred
Employees
|
6.2
|
|
Unearned
Commissions
|
6.16
|
