STOCK PURCHASE AGREEMENT by and between NAPLES CAPITAL ADVISORS, INC. (“NCA”) JOHN M. SUDDETH, JR. AND MICHAEL H. MORRIS (“Sellers”) and TIB FINANCIAL CORP. (“Purchaser”) Dated as of December 12, 2007
Exhibit
10.1
by
and between
NAPLES
CAPITAL ADVISORS, INC.
(“NCA”)
XXXX
X. XXXXXXX, XX. AND XXXXXXX X. XXXXXX
(“Sellers”)
and
(“Purchaser”)
Dated
as of December 12, 2007
This
Stock Purchase Agreement
(“Agreement”) is made and entered into as of the 12th day of
December,
2007, by and between Naples Capital Advisors, Inc., a Florida corporation
(“NCA”), Xxxx X. Xxxxxxx, Xx. and Xxxxxxx X. Xxxxxx (collectively, the
“Sellers”), and TIB Financial Corp. (the “Purchaser”). NCA, the
Sellers and the Purchaser may be referred to in this Agreement individually
as a
“Party” and collectively as the “Parties.”
W
I T N E S S E T H :
WHEREAS,
the Sellers own all of the
outstanding capital stock of NCA, which is engaged in the business of providing
wealth management and related services as an investment advisor registered
under
the applicable provisions of federal and state securities laws (“Purchased
Business”); and
WHEREAS,
the Purchaser desires to
purchase from the Sellers all of the outstanding shares of NCA, and the Sellers
desire to sell to the Purchaser, such shares, all for the consideration and
subject to the terms and conditions hereinafter set forth.
NOW,
THEREFORE, in consideration of the
mutual promises and covenants set forth herein, and in reliance upon the
representations, warranties, conditions and covenants contained herein and
intending to be legally bound hereby, the parties hereby agree as
follows:
ARTICLE
I
SALE
AND PURCHASE OF STOCK
1.1 Sale
and Purchase of Shares.
Subject
to the terms and conditions of
this Agreement, at the Closing (as defined in Section 1.4 below), the Sellers
shall sell to the Purchaser, and the Purchaser shall purchase from the Sellers,
free and clear of any and all liens, pledges, charges, security interests,
mortgages, claims, options, imperfections of title, tenancies or other rights,
interests or encumbrances of any kind or nature (“Encumbrances”), all of the
shares of capital stock of NCA owned by the Sellers (collectively, the
“Shares”), which such Shares constitute all of the shares of capital stock of
NCA issued and outstanding. In purchasing such Shares, the Purchaser
will acquire through NCA all of the assets and property of every kind and
description (real, personal, and mixed, tangible and intangible) of NCA,
including, without limitation, the followings assets, property and business
of
NCA (the “Assets”):
(a) The
Purchased Business as a going concern;
(b) All
good will of the Purchased Business;
(c) All
fixed assets;
(d) All
cash and equipment including without limitation all supplies and other
inventories used or useable in connection with the Purchased Business, fixtures,
furniture, inventory, supplies, equipment, prepaid expenses, deposits, accounts
receivable, notes receivable, securities, sales data, and customer
lists;
(e) All
claims and rights to and under all contracts, licenses, equipment leases,
instruments, commitments, agreements and other legally binding arrangements
of
every type and description, relating to the Purchased Business and to which
NCA
is a party or by which any of the Assets is bound, including, without
limitation, all contract rights, prepayments and deposits on contracts to be
performed after the Closing, all as set forth on Section 1.1 (e) hereto
(singularly, “Contract” and collectively “Contracts”);
(f) All
computer hardware and software, computer electronic data processing materials,
owned by NCA and relating to the Purchased Business;
(g) All
trade secrets, know-how, processes, procedures, research records, market
surveys, licenses, proprietary or technical information, data, plans,
specifications and the like used or useable in connection with the Purchased
Business;
(h) Copyrights,
rights to renew copyrights, and copyright renewals, and trademarks, trade names,
assumed names, service marks, and the good will associated therewith,
registrations and applications for any and all of the foregoing, licenses with
respect to any and all of the foregoing, and all imprints, logos, colophons,
and
all other such like property associated or identified solely and exclusively
with NCA and the Purchased Business (“Identification Property
Rights”);
(i) All
right, title, and interest of NCA in and to the name “Naples Capital Advisors,
Inc.” and any variation thereof, and any other name or term associated
exclusively with the products of the Purchased Business;
(j) All
trade secrets, inventions, know-how, formulae, processes, procedures, research
records, records of inventions, test information, market surveys, marketing
know-how, licenses, royalties, discoveries, improvements, proprietary or
technical information, data, plans, specifications, drawings and the like
relating to the Purchased Business;
(k) All
books and records relating to the Purchased Business and the Assets, including
without limitations lists of customers of the Purchased Business, records with
respect to financial, marketing, equipment, business development plans,
advertising matter, catalogs, correspondence, mailing lists, sales materials
and
records, purchasing materials and records, personnel records, research and
development files, records and data, media materials, customer orders and other
records used in or required to continue the Purchased Business after the Closing
substantially in the manner presently conducted by NCA (provided,
however, that NCA shall be entitled to receive at its expense copies of
such portions thereof as NCA may reasonably request);
(l) All
permits, licenses, franchises, approvals, registrations, orders and
authorizations by federal, state or local governmental regulatory authorities
or
bodies (singularly, “Permit” and collectively “Permits”) necessary for the
operation of the Purchased Business;
(m) All
rights and warranties from suppliers, vendors or others for the benefit of
the
Purchased Business or its customers;
(n) The
leasehold interest or portions of the leasehold interest in the real properties
listed on Schedule 1.1 (n) hereto; and
(o) NCA’s
corporate minute books and other corporate books and records, tax returns and
financial books and records.
1.2 No
Excluded Assets. Notwithstanding anything to the
contrary contained herein, there are no assets, properties, and rights of NCA
which are excluded in connection with the sale of Shares.
1.3 Purchase
Price. In consideration of and in full payment for the
Shares and subject to the provisions of this Agreement, Purchaser shall pay
to
the Sellers at the Closing an aggregate of $1,333,000 by wire transfer in
immediately available funds, payable to the Sellers pro-rata in proportion
to
their respective ownership of NCA at the Closing. In addition, the
Sellers shall be entitled to receive the amounts set forth in Section 1.8 of
this Agreement subject to the terms set forth in such Section. The
amounts payable in Section 1.8 plus the amounts payable to the Sellers at the
Closing pursuant to this Section 1.3 are collectively referred to as the
“Purchase Price.”
1.4 Closing;
Closing Date. The closing of the transactions
contemplated by this Agreement (the “Closing”) shall take place at the offices
of the Purchaser, at 10:00 a.m. local time, on the Closing Date, or at such
other location and time as the Parties shall agree upon. For purposes
of this Agreement, the “Closing Date” shall mean the later of January 2, 2008 or
the 10th
business day after each of the conditions of this Agreement are fulfilled or
waived, a waiver of each of the conditions of this Agreement, or as soon as
reasonably practicable thereafter. All transactions contemplated by
this Agreement shall, except as otherwise specified herein, be deemed to be
effective as of 12:01 a.m., Eastern Standard Time on the Closing
Date.
1.5 Obligations
and Liabilities Not Assumed. As set forth below, it is
the intention of the parties that NCA will not have any obligations other than
the accounts payable set forth on the Closing Balance Sheet, as defined
below.
1.6 Closing
Financial Documents. At the Closing, the Sellers will
deliver to the Purchaser a balance sheet as of the close of business on the
day
before the Closing Date (the “Closing Balance Sheet”), which shall be prepared
by the Sellers in accordance with generally accepted accounting principles
applied on a consistent basis (“GAAP”). Such Closing Balance Sheet
shall set forth all assets, obligations and liabilities of any nature whatsoever
of NCA as of the date of such Closing Balance Sheet.
1.7 Section
338(h)(10) Election, Installment Sale.
(a) NCA
and each Seller shall join with Purchaser in making an election under Section
338(h)(10) of the Internal Revenue Code of 1986, as amended (the “Code”) (and
any corresponding election under state and local tax law) with respect to the
purchase and sale of the Shares hereunder (collectively, the “Section 338(h)(10)
Election”). Sellers shall include any income, gain, loss, deduction
or other tax items resulting from the Section 338(h)(10) Election on their
tax
returns to the extent required by law.
(b) Purchaser,
NCA and the Sellers agree that the purchase price and liabilities of NCA will
be
allocated to the assets of NCA for purposes of the Section 338(h)(10) Election
and for all other purposes (including any tax or financial accounting purpose)
in a manner consistent with Schedule1.7(b) hereto. Purchaser, NCA and
each Seller shall file all tax returns in a manner consistent with such
allocation.
(c) Purchaser
shall prepare and file all forms and documents required in connection with
the
Section 338(h)(10) Election, including Internal Revenue Service Form 8023 (or
successor form), any required schedules thereto, and any comparable forms and
schedules that may be required under state law. Purchaser shall
deliver a copy of the completed Form 8023 to each Seller.
(d) Purchaser,
NCA and each Seller shall be bound by the Section 338(h)(10) Election and the
allocation set forth in Schedule 1.7(b) for all tax purposes, shall file all
tax
returns in a manner consistent therewith and shall take no position contrary
thereto unless required to do so by applicable tax laws.
(e) It
is the intention of the Sellers to report gain from the sale of NCA’s assets
that is deemed to occur as a result of the Section 338(h)(10) election using
the
installment method set forth in Section 453 of the Code. Purchaser
shall take no position inconsistent with the use by Sellers of the installment
method for any purpose, unless required to do so by applicable tax
laws.
1.8 Earn-Out.
(a) Following
each of the three annual anniversaries of NCA (or a subsidiary of the Purchaser)
receiving a trust department license under Florida Statutes Section 660.26,
each
Seller shall have the right to receive his pro-rata portion of $148,000 provided
that NCA achieves the Milestones (as defined below) during the prior twelve
month period. If NCA does not achieve at least $441,600 of total
revenue during the applicable twelve-month period, the Earn-Out for such period
shall be forfeited and the Sellers shall have no right to receive such Earn-Out
for such period. If NCA does not achieve the Milestones for any
applicable twelve-month period, but does achieve at least $441,600 of total
revenue during such period, the Earn-Out for such period shall be adjusted
downwards by the percentage that equals the excess of $552,000 of total revenue
over total actual revenue for such twelve-month perod, divided by
$552,000. All calculations of total revenue shall be on an accrual
basis and in accordance with GAAP.
For
purposes of this Agreement,
“Milestones” shall mean the achievement by NCA of the following total revenue
goals of NCA for the applicable twelve-month period:
|
Applicable
12-Month Period
|
Total
Revenue
|
Earn-Out
|
||||||
|
First
Annual Anniversary
|
$ |
552,000
|
$ |
148,000
|
||||
|
Second
Annual Anniversary
|
$ |
552,000
|
$ |
148,000
|
||||
|
Third
Annual Anniversary
|
$ |
552,000
|
$ |
148,000
|
||||
(b) No
later than forty-five days following the end of each applicable twelve-month
period, Purchaser shall prepare and deliver to each Seller its calculation
of
the Earn-Out attributable to the financial performance of NCA for the
immediately preceding period. Within 30 days following Purchaser’s notification
to the Sellers of its calculation of the applicable Earn-Out the Sellers shall
deliver to Purchaser a notice of objection (an “Objection Notice”) or a notice
of acceptance (an “Acceptance Notice”) signed by each of the Sellers with
respect to the calculation of the Earn-Out. Purchaser shall provide the Sellers
and their accountants and other representatives, upon reasonable advance notice,
access to the books and records of the Company relating to the calculation
of
the Earn-Out as may be reasonably requested by the Sellers. Purchaser’s
calculation of the Earn-Out shall be final and binding on the parties if an
Acceptance Notice is delivered to Purchaser or if no Objection Notice is
delivered to Purchaser within such 30 day period. Any Objection Notice shall
specify the items disputed, shall describe the reasons for the objection
thereof, shall state the amount in dispute and shall state Sellers’ calculation
of the Earn-Out. If an Objection Notice is given, the Sellers and Purchaser
shall consult with each other with respect to the objection. If the parties
are
unable to reach agreement within 15 days after an Objection Notice has been
given, any unresolved disputed items shall be promptly referred to an accounting
firm mutually agreed to by the parties that has not previously performed work
for either the Sellers or Purchaser (the “Unrelated Accounting Firm”). The
Unrelated Accounting Firm shall be directed to render a written report on the
unresolved disputed issues as promptly as practicable (but in no event later
than 45 days following submission of the matter to the Unrelated Accounting
Firm) and to resolve only those issues of dispute set forth in the Objection
Notice. The resolution of the dispute by the Unrelated Accounting Firm shall
be
final and binding on the parties. The fees and expenses of the Unrelated
Accounting Firm shall be borne equally between the Sellers and Purchaser;
provided, however, that if the Earn-Out calculated by one of the parties (the
“Differing Party”) pursuant to this subsection differs from the final
determination of the Unrelated Accounting Firm by more than twenty percent
to
the detriment of such Differing Party, then such Differing Party shall be
responsible for the payment of all of the fees and expenses of the Unrelated
Accounting Firm.
(c) If
the Sellers deliver to Purchaser the Acceptance Notice referred to in Section
1.8(b) or fail to deliver an Objection Notice within the 30 day period required
by Section 1.8(b) with respect to any Earn-Out, Purchaser shall pay to the
Sellers any amounts which Purchaser’s calculation shall indicate to be owed to
the Sellers within five business days after the delivery of such Acceptance
Notice or the expiration of such 30 day period, as the case may be.
Alternatively, if the Sellers deliver to Purchaser the Objection Notice referred
to in Section 1.8(b), within five business days after such delivery, Purchaser
shall pay the undisputed portion, if any, of the amount owed and, within five
business days after the resolution of any dispute by the parties or the
Unrelated Accounting Firm relating to the Objection Notice, Purchaser shall
pay
the remainder owed, if any.
(d) Upon
the closing of a Change of Control, the Seller shall be entitled to receive
at
such closing an amount equal to the balance of all Earned-Out amounts as if
NCA
had achieved all Milestones for such twelve-month period during which the Change
of Control occurs as well as any subsequent twelve-month period during the
three
annual anniversary periods referred to in Section 1.8(a). For
purposes of this Agreement, a Change of Control shall mean a merger in which
the
Purchaser is not the surviving entity, the acquisition of the Purchaser by
means
of a merger, consolidation or purchase of 80% or more of its outstanding shares,
or the acquisition by any individual or group of beneficial ownership of more
than 50% of the outstanding shares of Purchaser common stock. The
term “group” and the concept of beneficial ownership shall have such meanings
ascribed thereto as set forth in the Securities Exchange Act of 1934, as amended
(the “1934 Act”), and the regulations and rules thereunder.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF SELLERS
The
Sellers hereby jointly and
severally, represent and warrant to Purchaser as follows:
2.1 Ownership.
(a) The
authorized capital stock of NCA consists of 200 shares of common stock, par
value $.01 per share. The only outstanding shares of capital stock of
NCA are the Shares, all of which are validly issued, fully paid and
non-assessable, and owned by the Sellers. No other person holds any
option, warrant or other right of any nature to subscribe for, purchase or
otherwise acquire any shares of the capital stock or other securities of NCA
or
any securities convertible into or exchangeable for shares of capital stock
or
other securities of NCA, or any agreement or contract granting or reserving
any
such right.
(b) The
Sellers are the sole record and beneficial owners of and have the full right,
power and authority to vote, sell, transfer and deliver the Shares to Purchaser
pursuant to this Agreement, and no other person holds any option, warrant or
other right of any nature to subscribe for, purchase or otherwise acquire any
of
the Shares or any securities convertible into or exchangeable for any of the
Shares. The certificates representing the Shares are valid and
genuine and the delivery of such certificates will transfer to Purchaser legal
and valid title to the Shares free and clear of all Encumbrances.
2.2 Authority;
Binding Effect. The Sellers have the requisite power,
authority and competency to execute and deliver this Agreement and all Ancillary
Documents, and to consummate the transactions contemplated hereby and thereby,
and no other action or proceeding on the part of any person is necessary to
authorize such execution, delivery and performance and the consummation of
the
transactions contemplated hereby and thereby. This Agreement is, and
on the Closing Date each of the Ancillary Documents will be, the valid and
binding obligation of the Sellers, enforceable against Sellers in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting creditors' rights
generally or by general principles of equity.
2.3 No
Conflict or Violation. The execution, delivery and
performance by Sellers of this Agreement and each of the Ancillary Documents,
does not, and the consummation by Sellers of the transactions contemplated
hereby or thereby will not, with or without the giving of notice or the lapse
of
time or both:
(a) violate
in any material respect any provision of any law;
(b) conflict
with or result in a violation or breach of, or constitute or result in a default
under, any of the terms, conditions or provisions of (i) Order of any agency
or
court to which either Sellers or NCA is subject or by which either of them
or
any of their respective assets or businesses is bound, or (ii) any Permit held
by NCA or by which NCA or its assets or business is bound;
(c) require
any Consent of or filing with or giving of notice to any agency or any other
person not a party to this Agreement, other than to (i) existing clients of
NCA,
(ii) the State of Florida Office of Financial Regulation, and (iii) the
Securities and Exchange Commission; or
(d) violate,
or be in conflict with or constitute a default under, or permit the termination
of any provision of or result in the acceleration of (or give the right to
accelerate) the maturity or performance of any obligation of Sellers or NCA
or
result in the creation or imposition of any Encumbrance upon any of their
respective assets, properties or business under any Contract to which either
of
them is a party or by which any of their respective assets, property or
businesses is bound.
2.4 Litigation. There
is no litigation pending or threatened, by or before any agency or court against
Sellers or by which any Seller is or may be bound or to which the assets,
properties or business of Sellers are or may be subject; nor to the best
knowledge of Sellers is there any basis for any such litigation.
2.5 Untrue
Statements and Omissions. No representation or warranty
contained in Article II of this Agreement and no schedule, document, agreement
or instrument delivered by Sellers or NCA contains any untrue statement of
a
material fact or omits to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
2.6 Organization,
Standing and Authority.
(a) NCA
is a corporation duly organized and existing, and its status is active, under
the laws of the State of Florida and has all requisite corporate power and
authority to own, lease and operate its assets and property and to carry on
the
Purchased Business and operations related thereto as heretofore
conducted. NCA is duly qualified or otherwise authorized as a foreign
corporation to transact business and is in good standing in each jurisdiction
set forth in Schedule 2.6, which are the only jurisdictions in which such
qualification or authorization is required by law in connection with its
business, except those jurisdictions in which the failure of NCA to be so
qualified or authorized would not constitute a Material Adverse
Change. Except as set forth in Schedule 2.6, NCA does not file or is
required to file any tax or similar returns in any other jurisdiction based
upon
the ownership or use of property therein or the derivation of income
therefrom. NCA has heretofore delivered to Purchaser the articles of
incorporation and bylaws of NCA, as amended to date, certified by the Secretary
of NCA as in effect on the date hereof and which are true, complete and correct,
and NCA is not in violation of any of the provisions thereof.
(b) NCA
is a registered investment advisor under the Investment Advisors Act of 1940
and
the Florida Securities and Investor Protection Act (collectively, the “Advisor
Acts”), and has in effect all federal, state and local authorizations, Permits
and approvals necessary for it to carry on its business as it is now
conducted.
2.7 Subsidiaries
and Other Interests. NCA has no direct or indirect
Subsidiaries, or owns directly or indirectly any shares of stock or other equity
interests in or of any person. For purposes of this Agreement,
“Subsidiary” means any corporation, limited liability company or other entity of
which NCA owns securities, units or other membership or ownership interests
having a majority of the ordinary voting power, directly or through one or
more
Subsidiaries, to elect the board of directors or managers.
2.8 Assets. The
Assets include all tangible and intangible property regularly used by NCA in
the
operation of its business.
2.9 Ownership
of Assets.
(a) NCA
has good, valid and marketable title to all of the Assets or, in the case of
leased properties included in the Assets, valid leasehold rights as lessee,
free
and clear of all Encumbrances, and the Assets at the Closing will be free and
clear of any and all Encumbrances.
(b) All
equipment and tangible assets included in the Assets (other than inventories)
are useable in or useful to NCA in the ordinary course of its business and
are
in operating condition and in a state of reasonable maintenance and repair
to
the extent necessary for the operation of the Purchased Business as of the
date
hereof.
(c) The
inventory reflected in the Assets are in good condition, useable in or useful
to
the Purchased Business in the ordinary course and are not damaged, obsolete
or
in excess of reasonable requirements.
(d) The
accounts receivable reflected in the Closing Balance Sheet are the result of
bona fide sales and will be collectible in amounts not less than the aggregate
amounts set forth in the Closing Balance Sheet.
2.10 Authority;
Binding Effect. NCA has the requisite corporate power
and authority to execute and deliver this Agreement and any other agreements,
instruments and documents to be executed and delivered by it pursuant to this
Agreement (“Ancillary Documents”), and to consummate the transactions
contemplated hereby and thereby. Such execution, delivery and
performance by NCA has been duly authorized by all requisite corporate action
on
the part of the Board of Directors and, to the extent necessary, the
shareholders, of NCA, and no other action or proceeding on the part of any
Person is necessary to authorize such execution, delivery and performance and
the consummation of the transactions contemplated hereby and
thereby. This Agreement is, and on the Closing Date the Ancillary
Documents to which NCA is to be a party will be, a valid and binding obligation
of NCA, enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting creditors’ rights generally or by general principles of
equity.
2.11 No
Conflict or Violation. Neither the execution, delivery
and performance by NCA of this Agreement and each of the Ancillary Documents
to
which it is a party, nor the consummation by NCA of the transactions
contemplated hereby or thereby, will, with or without the giving of notice
or
the lapse of time or both:
(a) violate
in any material respect any applicable law;
(b) conflict
with or result in a breach of or constitute or result in a default under any
of
the terms, conditions or provisions of (i) the articles of incorporation or
bylaws of NCA, or (ii) any judgment, order, injunction or decree of any domestic
or foreign court, governmental authority or self-regulatory authority (an
“Order”), to which it is subject or by which NCA or its assets, property or
business is bound;
(c) require
any Permit or any consent, approval, notice, action, authorization or waiver
of
or filing with or giving of notice to any domestic or foreign governmental
or
regulatory authority or any other Person not a party to this Agreement
(“Consent”); or
(d) violate,
or be in conflict with or constitute a default under, or permit the termination
of any provision of or result in the acceleration of (or give the right to
accelerate) the maturity or performance of any obligation of NCA or result
in
the creation or imposition of any Encumbrance upon any of its assets, properties
or business under, any Contract to which it is a party or by which its assets,
property or businesses is bound or any Permit held by NCA or by which it or
any
of its assets, properties or businesses is bound.
2.12 Tax
Matters. NCA has filed and has had since its inception,
in effect a valid election as an S corporation pursuant to the applicable
provisions of the Code. NCA has duly filed with the appropriate
federal, state, and local governmental agencies all tax returns and reports
required to be filed by NCA and has paid in full all taxes shown to be due
on
such tax returns and reports. There are no tax liens, whether imposed
by any federal, state or local taxing authority, outstanding against any of
the
Assets or the Purchased Business.
2.13 Contracts. Schedule
2.13 sets forth all Contracts to be included in the Assets. NCA has
delivered or made available to Purchaser true and complete copies of each such
Contract which is in writing and, in the case of any such Contracts not reduced
to writing, has provided to Purchaser a written summary of the material terms
thereof. Except as otherwise specified on Schedule 2.13 (i) each such
Contract listed on Schedule 2.13 is the valid, binding and enforceable
obligation of NCA; (ii) NCA is not in default under any such Contract and (iii)
no event which, with the giving of notice or the lapse of time or both, has
occurred which would become a default under any such Contract. Except
as set forth on Schedule 2.13 the consummation of the transactions contemplated
by this Agreement will not require the Consent of any Person pursuant to any
such Contract, in connection with the sale of the Shares to Purchaser or
otherwise, or give rise to the right to terminate any such Contract; and NCA
has
not received any notice from any other party to any such Contract of the
termination or threatened termination thereof or that any such Consent is
required, nor does NCA have any knowledge of any event which would allow any
such other party to terminate any such Contract or cause any such Consent to
be
required.
2.14 Litigation.
(a) There
is no claim, action, suit, proceeding, arbitration, investigation, hearing
(each
and all of the foregoing being herein referred to as “Litigation”), pending, or
to the knowledge of NCA threatened, by or before any court or governmental
or administrative authority or private arbitration tribunal: (i)
against NCA; (ii) by which NCA is or may be bound or to which the Assets or
the
Purchased Business are or may be subject; or (iii) to restrain or prevent the
carrying out of the transactions contemplated by this Agreement or which might
affect the right of Purchaser to own, operate or control the Assets and the
Purchased Business on or after the Closing Date nor to the knowledge of NCA
is
there any basis for any Litigation.
(b) Neither
NCA nor any of its properties or assets is subject to or bound by any Order,
or
to the knowledge of NCA is the subject of any investigation by any federal,
state, foreign or other governmental or regulatory body, nor has NCA received
any notice of claim that it is in violation of any Order. Neither NCA
nor any of its respective officers, directors, employees or, to the knowledge
of
NCA, any of NCA’s agents, is permanently or temporarily enjoined or barred by
any Order from engaging in or continuing any conduct or practice incident to
the
Purchased Business.
2.15 Identification
Property Rights. Schedule 2.15 sets forth a list of all
Identification Property Rights of NCA included in the Assets, which constitute
all Identification Property Rights necessary for the operation of the Purchased
Business. Except as otherwise specified on Schedule
2.15:
(a) NCA
owns or uses the trademarks, trade names and service marks listed on Schedule
2.15, each of which is in use by NCA and, no other Person owns any interest
in
such trademarks, trade names and service marks;
(b) No
royalty, license, consent fee or consideration is payable by NCA in connection
with the ownership or use of any such Identification Property
Rights;
(c) All
such Identification Property Rights of NCA are free and clear of any
Encumbrances and are fully assignable to Purchaser under the terms of this
Agreement without notice to, or the Consent of, any other Person;
and
(d) To
the knowledge of NCA, no other person is using such trademarks, trade names
and
service marks.
2.16 Books
and Records. The books and records of NCA are accurate
and complete in all material respects and accurately reflect the basis for
the
financial position and results of operations of NCA contained in the Financial
Statements referred to in Section 2.21 hereof.
2.17 Compliance
With Laws. NCA has complied in all material respects
with, and is not in default in any material respect under, applicable laws
including, but not limited to, the Advisor Acts. NCA has not received
notice of any violation or alleged violation of any applicable law relating
to
the Purchased Business nor is NCA aware of any basis for any such claimed
violation.
2.18 Assignment. No
Consent of any Person is needed which has not been obtained in order to permit
the valid sale, transfer and assignment by Sellers to Purchaser of the
Shares.
2.19 Financial
Statements; No Material Adverse Change. Attached as
Schedule 2.19 are the unaudited balance sheet of NCA dated as of October 31,
2007 and the related unaudited income statement for the period ended October
31,
2007 (the “Financial Statements”). The Financial Statements were
prepared in accordance with GAAP, are in accordance with the books and records
of NCA, and fairly present the separate financial position and results of
operations of NCA at the respective dates and for the period
indicated. Since the date of the October 31, 2007 Financial
Statements, there has occurred, and as of the Closing Date there shall have
occurred, no Material Adverse Change with respect to the Assets. For
purposes of this Agreement, “Material Adverse Change” means any circumstances or
events which, either singly or in the aggregate, has had or could reasonable
be
anticipated to have a material and adverse effect on NCA, the
Purchased Business or its prospects or properties. At the Closing,
NCA shall have no obligations, liabilities, or accounts or amounts payable
except as included in the accounts payable amount set forth in the Closing
Balance Sheet.
2.20 Liability. Except
for losses, claims, damages and expenses adequately covered by NCA’s insurance
or included in the accounts payable amount on the Financial Statements, there
are not any liabilities of NCA, fixed or contingent, asserted and arising out
of
or based upon incidents occurring on or before the Closing with respect to
any
service rendered by NCA, on or before the Closing.
2.21 Real
Property; Leases.
(a) NCA
does not own, or have legal or equitable title in, any real
property.
(b) Except
as specified in Schedule 2.21, NCA does not have any leasehold interest in,
or
any right, option or other interest in, any real property.
(c) With
respect to the leases referred to in Schedule 2.21, no default or event of
a
default on the part of NCA as lessee, and no default or event of default on
the
part of the lessor, under the provisions of any said leases, and no event which
with the giving of notice or passage of time, or both, would constitute such
default or event of default on the part of NCA, or on the part of any such
lessor, has occurred and is continuing unremedied or unwaived.
(d) The
buildings and improvements used by NCA, and the operations and maintenance
thereof as now operated and maintained, do not (i) contravene any zoning or
building law or ordinance or other administrative regulation or (ii) violate
any
provision of federal, state or local law, the effect of which materially
interferes with or prevents the continuing use of such properties for the
purposes for which they are now being used, or would materially affect the
value
thereof. All of the buildings, structures and building related
equipment of NCA used in the Purchased Business and included in the Assets
are
in operating condition and in a state of reasonable maintenance and repair
to
the extent necessary for the operation of the Purchased Business.
(e) There
exists no pending or threatened condemnation, eminent domain or similar
proceeding with respect to, or which could affect, any real property leased
by
NCA.
2.22 Employees. NCA
does not have any oral or written contracts of employment with any employee
of
NCA which are not terminable at will and NCA is not a party to or subject to
any
collective bargaining agreements and has not been a party to or subject to
any
collective bargaining agreements with any labor unions. A true and
correct statement of the names, employment status (part time or full as
determined by NCA), and rates of compensation (including salaries, wages and
commissions and including bonuses and deferred compensation, and any amounts
required to be paid or expected to be payable in the remainder of NCA’s current
fiscal year for such fiscal year or any other fiscal year of NCA to each such
person, and not paid as of the Closing) of all employees of NCA is set forth
on
Schedule 2.22. NCA has complied in all respects with all applicable
federal, state, and local laws, ordinances, rules and regulations and
requirements relating to the employment of labor, including but not limited
to
the provisions thereof relative to wages, hours, collective bargaining, payment
of Social Security, unemployment and withholding taxes, and equal employment
opportunity. NCA is not liable for any arrears of wages or any taxes
or penalties for failure to comply with any of the foregoing. NCA has
not entered into, and is not obligated to enter into, any agreement relating
to
the payment of vacation pay or severance pay to any employee and NCA does not
have any obligation to any employees to provide them with pay for vacation
time,
except for vacation pay payable in the ordinary course of
business. NCA has not received notice from any employee of NCA that
any such employee is terminating his or her employment with
NCA. Schedule 2.22 describes the severance policy and practices of
NCA covering employees of NCA.
2.23 Employee
Benefit Plans. Schedule 2.23 contains a list of all
employee benefit plans, arrangements and agreements currently maintained or
contributed to by NCA for the benefit of employees of NCA (the
“Plans”). No Plan is subject to the provisions of Title IV of the
Employee Retirement Income Security Act of 1974, as amended
(“ERISA”). Any of the Plans that is subject to ERISA is in compliance
with ERISA in all material respects; neither NCA nor any Plan has engaged in
a
transaction in connection with any Plan that could result in the imposition
of a
material civil penalty under Section 409 or 502(i) of ERISA or a material tax
under Section 4975 or 4976 of the Internal Revenue Code of 1986, as amended
(the
“Code”). No Plan (other than one which is an employee pension benefit
plan within the meaning of Section 3(2)(A) of ERISA) provides benefits
(including without limitation, death, health or medical benefits) (whether
or
not insured) with respect to current or former employees of NCA beyond their
retirement or other termination of service with NCA, other than (a) coverage
mandated by applicable law, (b) deferred compensation benefits which have been
accrued as liabilities on the books of NCA or (c) benefits the full cost of
which is borne by the current or former employees (or
their beneficiaries). NCA has performed or caused to be
performed all material obligations required to be performed under or with
respect to such Plan (including the making when due of all contributions)
required by law or otherwise and has timely compiled with the material terms
of
each Plan and with all material requirements of all laws, rules and regulations
(including, but not limited to, ERISA and the Code) which are applicable to
each
plan. There are no actions, suits or claims pending (other than
routine claims for benefits) or threatened against any Plan, nor does any basis
therefor exist.
2.24 Customers’
Agreements. Attached as Schedule 2.24 is a true and
complete copy of the following:
(a) Customers’
agreements for NCA’s services; and
(b) Any
outstanding proposal by NCA for the provision of NCA’s services to a third
party.
2.25 Customer
List. Sellers represent that all names and addresses of
NCA customers related to its business will on the Closing Date be transferred
to
the exclusive possession of Purchaser, and that NCA has not transferred such
names and addresses to its officers, directors, shareholders or any other
Person.
2.26 Sales
and Use Taxes. The sale by Seller of the Shares will
not result in the imposition of or liability for any sales, use or other taxes
on NCA or the Purchaser and, if such taxes are imposed or liability therefor
incurred or asserted, Sellers will indemnify and hold Purchaser harmless
therefrom; except to the extent that any such tax is imposed solely as a result
of the Section 338(h)(10) Election, in which case the Purchaser shall indemnify
and hold the Sellers harmless from such taxes.
2.27 Trade
Secrets. Sellers (i) shall cooperate with Purchaser in
disclosing and delivering to Purchaser all customer lists, analyses, reports
and
recommendations prepared for customers or potential customers, price lists,
computer programs, processes, methods, ideas, inventions or devices and
specifications relating to the business of NCA and other information of a secret
or confidential nature and all records, engineering plans and specifications,
formulas, know-how, technical data, manufacturing processes, secrets, new
product development, research data, and other information used in the business
of NCA, (ii) shall cooperate with Purchaser in connection therewith after the
Closing Date in such manner as may reasonably be required by Purchaser, and
(iii) shall not divulge, publish or otherwise reveal to any other person, firm
or corporation, or use for its own benefit, for any reason whatsoever, any
of
the foregoing without first obtaining the prior written consent of
Purchaser.
2.28 Sellers’
Assistance. Sellers will provide assistance to the
Purchaser in connection with the operation of NCA’s business for a period of 90
business days following the Closing (without any cost to NCA or the Purchaser)
and, thereafter, will cooperate with Purchaser, at the request of Purchaser
and
upon reasonable payment to the Sellers, in furnishing information, evidence,
testimony and other assistance in connection with any actions, proceedings,
arrangements or disputes involving NCA whether based upon contracts,
arrangements, or acts of NCA which were in effect or occurred on or prior to
the
Closing Date or otherwise.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
Purchaser
hereby represents and
warrants to Sellers as follows:
3.1 Authority;
Binding Effect. Purchaser has the requisite power and
authority to execute and deliver this Agreement and any Ancillary Documents
to
be executed and delivered by it pursuant to this Agreement, and to consummate
the transactions contemplated hereby and thereby. This Agreement and
the Ancillary Documents to which Purchaser is to be a party on the Closing
Date
will be, valid and binding obligations of Purchaser, enforceable against it
in
accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, moratorium or other similar laws affecting
creditors’ rights generally or by general principles of equity.
3.2 No
Conflict or Violation. Neither the execution, delivery
and performance by Purchaser of this Agreement and each of the Ancillary
Documents to which it is a party, nor the consummation by Purchaser of the
transactions contemplated hereby or thereby, will, with or without the giving
of
notice or the lapse of time or both:
(a) violate
in any material respect any applicable law; or
(b) require
any Permit or Consent.
3.3 Untrue
Statements and Omissions. No representation or warranty
contained in Article III of this Agreement or in any schedule, document,
agreement or instrument of Purchaser contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
3.4 Organization,
Standing and Power. The Purchaser is a duly registered
bank holding company under the Bank Holding Company Act of 1956, as amended,
and
is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Florida, and has the corporate power and authority
to
carry on its business as now conducted and to own, lease and operate its assets
and to incur its liabilities. The Purchaser is duly
qualified or licensed to transact business as a foreign corporation in good
standing in the states of the United States and foreign jurisdictions where
the
character of its assets or the nature or conduct of its business requires it
to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually
or
in the aggregate, a Material Adverse Effect on the Purchaser.
3.5 Availability
of Purchase Price. The Purchaser has, and at the
Closing and at the time of the payment of any Earn-Out will have, sufficient
cash to satisfy the Purchaser’s obligations under this Agreement.
ARTICLE
IV
POST-CLOSING
COVENANTS
4.1 Post-Closing
Covenants.
(a) General. In
case at any time after the Closing any further action is legally necessary
or
reasonably desirable (as determined by Purchaser) to carry out the purposes
of
this Agreement, each of the Sellers will take such further action (including
the
execution and delivery of such further instruments and documents) as Purchaser
reasonably may request. The Sellers acknowledge and agree that from
and after the Closing, NCA will be entitled to possession of all documents,
books, records, agreements, and financial data of any sort relating to NCA,
which shall be maintained at the main office of NCA; provided, however,
that the Sellers shall be entitled to reasonable access to and to make copies
of
such books and records at their sole cost and expense and NCA will maintain
all
of the same for a period of at least two (2) years after Closing. The
Sellers further agree to convey all rights to any
Identification Property Rights reasonably related to the business of
NCA to NCA.
(b) Transition. For
a period of three (3) years following Closing, the Sellers will not take any
action (or cause any such action to be taken by another Person) that primarily
has the effect of discouraging any vendor, lessor, licensor, customer,
independent contractor or consultant, subcontractor, supplier, business partner
or other business associate of NCA from maintaining the same business relations
with NCA after the Closing as it maintained with NCA prior to the
Closing. For a period of three (3) years following Closing, the
Sellers will refer all customer inquiries relating to the Purchased Business
to
NCA.
(c) Confidentiality. Except
as otherwise required in the performance of their employment duties to NCA
during the term of this Agreement and thereafter, the Sellers will treat and
hold in confidence and not disclose all Confidential Information and refrain
from using any of the Confidential Information except in connection with this
Agreement or otherwise for the benefit of NCA for a period of three (3) years
from the date of this Agreement, and deliver promptly to NCA or destroy, at
the
written request and option of NCA, all tangible embodiments (and all copies)
of
the Confidential Information which are in their possession except as otherwise
permitted herein. In the event that any Seller is requested or
required (by oral question or written request for information or documents
in
any legal proceeding, interrogatory, subpoena, civil investigative demand,
or
similar legal proceeding) to disclose any Confidential Information, such Sellers
will notify NCA promptly of the request or requirement. For purposes
of this Agreement, the term “Confidential Information” means (i) the terms and
provisions of this Agreement and (ii) all information which is the subject
of
reasonable efforts by NCA to maintain its non-public character or to otherwise
prevent such information from being publicly disclosed, and trade secrets of
NCA
including, without limitation, any of same comprising the identity, lists or
descriptions of any of NCA’s customers, referral sources or organizations;
financial statements, cost reports or other financial information; contract
proposals or bidding information; business plans and training and operations
methods and manuals; personnel records; fee structure; and management
systems, policies or procedures, including related forms and
manuals. Confidential Information shall not include any information
(a) which is disclosed pursuant to subpoena or other legal process, (b) which
is
subsequently disclosed to any third party not in breach of a confidentiality
agreement, or (c) which becomes publicly known or disclosed in any other way
through no fault of the Sellers.
(d) Covenant
Not to Compete; Non-Solicitation Agreement. For and in
consideration of the aggregate consideration paid to the Sellers hereunder
each
of the Sellers covenants and agrees as follows:
(i) For
a period of three (3) years from and after the Closing Date, each Seller agrees
that he will not, directly or indirectly without the prior written consent
of
NCA, (i) own, manage, control, render services for, or in any manner engage,
or
become associated with, any business that provides services, or engages in
business, similar to that provided or conducted by NCA prior to the Closing
Date, in the Counties of Collier, Lee, Sarasota or Monroe, in the State of
Florida, (ii) service or solicit any business competing with NCA’s business from
any customer of NCA, (iii) induce, request or advise any customer, client,
supplier, licensee or other business relation of NCA to withdraw,
curtail or cancel such customer’s business with NCA, or in any way interfere
with the relationship between any such customer, client, supplier, licensee,
or
business relation and NCA, or (iv) solicit or attempt to solicit, or hire away
any person employed by NCA or any person who as an independent contractor
performed services on behalf of NCA prior to the Closing Date, or in any way
unlawfully interfere with the relationship between NCA and any employee or
independent contractor thereof; provided, however, that no owner of
less than five percent (5%) of the outstanding stock of any publicly traded
corporation shall be deemed to engage solely by reason thereof in any of its
businesses.
(e) Tax
Returns. The Sellers shall cause NCA to file with the appropriate
governmental authorities all Tax Returns required to be filed by it for any
taxable period ending prior to the Closing Date and NCA shall remit any Taxes
due in respect of such Tax Returns. In addition, the Sellers shall cause to
be
prepared a short period tax return for NCA covering the period January 1, 2007
through the Closing Date. The cost of preparation of such short
period tax return shall be paid for by Seller, without impact to the purchase
price payable to the Sellers pursuant to Section 1.3 of this
Agreement. The Sellers shall provide drafts of the completed tax
returns for NCA to Purchaser for its review a reasonable time prior to the
filing of such tax returns, and shall permit Purchaser to comment on such tax
returns, and shall make such revisions as are reasonably requested by Purchaser
prior to filing (so long as same are reasonably agreed to by Sellers’ accountant
and are in accordance with all applicable laws).
(f) Transfer
Taxes. The Sellers shall be responsible for all stock transfer or
gains taxes imposed on the Sellers incurred in connection with this
Agreement. The Purchaser shall be responsible to pay to the Sellers
an amount equal to the income taxes imposed on the Sellers as a result of the
sale of Shares with the Section 338(h)(10) Election in effect less the amount
of
income taxes the Sellers would have paid if the Section 338(h)(10) Election
had
not been made. Any disagreement between the Sellers and the Purchaser
as to the amount of any additional income taxes contemplated by the preceding
sentence shall be resolved by the Sellers and the Purchaser within a period
of
30 days following the delivery by the Sellers to the Purchaser of the
calculation of such additional income taxes, accompanied by information and
documentation in support of such calculation. If the parties are
unable to reach agreement within such 30-day period, any unresolved items shall
be promptly referred to the Unrelated Accounting Firm which shall have 45 days
thereafter to finalize the calculation of the additional income taxes, which
calculation shall be final and binding on the parties. The fees and
expenses of the Unrelated Accounting Firm shall be borne equally by the Sellers
and the Purchaser; provided, however, that if the amount calculated by
one of the parties (the “Different Party”) pursuant to this subsection differs
from the final calculation by more than 20% to the detriment of such Different
Party, then such Different Party shall be responsible for the payment of all
the
fees and expenses of the Unrelated Accounting Firm.
(g) Litigation
Support. In the event and for so long as any Party is actively
contesting or defending against any claim, suit, action or charge, complaint,
or
demand in connection with (i) any transaction contemplated under this Agreement
or (ii) any fact, circumstance, status, condition, activity, practice,
occurrence, event, action, failure to act, or transaction on or prior to the
Closing Date involving NCA, each of the Sellers will cooperate and make
reasonably available themselves or their personnel, as applicable, and provide
such reasonable testimony and access to their books and records as shall be
necessary in connection with the contest or defense.
(h) Employment
and Compliance Agreements. Following the Closing, the Sellers
shall use their best efforts to assist NCA in obtaining duly executed and
delivered employment agreements from each of the employees of NCA designated
by
Purchaser, covering matters including without limitation non-solicitation and
confidentiality.
ARTICLE
V
CONDITIONS
TO CONSUMMATION OF THE PURCHASE OF SHARES
Consummation
of the Closing is conditioned upon:
5.1 Regulatory
Approvals. Procurement by Purchaser of all
requisite approvals and consents of regulatory authorities, for the consummation
of the sale of Shares and the expiration of applicable statutory waiting periods
relating thereto, provided, however, that no such approval or consent shall
have
imposed any condition or requirement which would so materially and adversely
impact the economic or business benefits to Purchaser of the transactions
contemplated by this Agreement that, had such condition or required been known,
such party would not, in its judgment, have entered into this
Agreement.
5.2 Third
Party Consents. All consents or approvals of all
persons (other than regulatory authorities) required for the consummation of
the
sale of Shares shall have been obtained and shall be in full force and effect,
unless the failure to obtain any such consent or approval is not reasonably
likely to have, individually or in the aggregate, a material adverse effect
on NCA.
5.3 No
Prohibition. There not being in effect any law,
order, decree or injunction of any court or agency of competent jurisdiction
that restrains, enjoins or otherwise prohibits or makes illegal consummation
of
the sale of Shares or which could be reasonably expected to result in a material
diminution of the benefits of the transaction to Purchaser, and there shall
not
be pending or threatened on the date of Closing any action or proceeding which
could reasonably be expected to result in the enactment or issuance of any
such
law, order, decree or injunction.
5.4 Litigation. No
action, suit, or proceeding shall be pending or threatened before any court
or
administrative agency of any federal, state, local or foreign jurisdiction
wherein an unfavorable judgment, order, decree, stipulation, injunction or
charge could (a) prevent consummation of any of the transactions contemplated
by
the Agreement, (b) cause any of the transactions contemplated by this Agreement
to be rescinded following consummation, or (c) affect adversely the right after
the date of Closing of Purchaser to own, operate, or control substantially
all
of the assets and operations of NCA.
5.5 Representations,
Warranties and Covenants. (i) Each of the
representations and warranties contained herein of any party being true and
correct as of the date of this Agreement and upon the date of Closing with
the
same effect as though all such representations and warranties had been made
on
the date of Closing, except for any such representations and warranties made
as
of a specified date, which shall be true and correct as of such date, (ii)
each
and all of the agreements and covenants contained herein of any party to be
performed and complied with pursuant to this Agreement and the other agreements
contemplated hereby prior to the date of Closing shall have been duly performed
and complied with in all material respects, and (iii) each of Sellers and
Purchaser shall have received a certificate signed by it and dated the date
of
the Closing, to such effect.
5.6 Employment
Agreements. In addition, the obligation of
Purchaser to consummate the sale of Shares is subject to the execution by each
of the Sellers, concurrently with the Closing, of an employment agreement with
Purchaser in the form of that attached to this Agreement as Exhibit
5.6(b).
ARTICLE
VI
THE
CLOSING
The
Closing; Closing
Date. The Closing shall constitute the acts which take
place on the Closing Date by which the transactions contemplated by this
Agreement are consummated.
On
the Closing Date, at the Closing,
the parties shall exchange documents as follows:
6.1 Sellers
shall deliver to Purchaser:
(a) The
certificates for the Shares, duly endorsed for transfer, or accompanied by
duly
executed assignments separate from the certificate or other documentation
reasonably requested by Purchaser to transfer the Shares in the stock records
of
NCA, transferring to the Purchaser full and exclusive ownership of the
Shares
(b) Such
further instruments of assignment, conveyance or transfer or other documents
as
Purchaser or its counsel may reasonably request to assure the full and effective
assignment and transfer to it of the Shares and ownership and control of the
assets owned by NCA and all the right, title and interest therein and to assure
the effective carrying out of the transactions contemplated hereby
(collectively, the “Ancillary Documents”).
6.2 Purchaser
shall deliver each Seller:
(a) The
Seller’s pro-rata portion of the cash portion of the Purchase Price payable at
the Closing.
(b) Such
further instruments or other documents as NCA or its counsel may reasonably
request to assure the effective carrying out of the transactions contemplated
hereby.
6.3 The
Purchaser and the Seller shall agree upon the computation of the Closing Balance
Sheet.
6.4 NCA
and each of the Sellers shall enter into the Employment Agreement in the form
of
that attached to this Agreement as Exhibit 5.6(b).
6.5 All
closing documents shall be in form and substance reasonably satisfactory to
counsel for the respective parties.
ARTICLE
VII
SURVIVAL
OF REPRESENTATIONS, WARRANTIES
AND
AGREEMENTS; EXPENSES AND INDEMNIFICATION
7.1 Survival. All
representations, warranties, covenants and agreements of Sellers and Purchaser
contained in this Agreement and the Ancillary Documents shall survive the
Closing and the consummation of the transactions contemplated by this
Agreement.
7.2 Expenses.
(a) Whether
or not the transactions contemplated by this Agreement are consummated, each
party hereto shall pay all of such party’s own fees and expenses incident to the
negotiation, preparation and execution of this Agreement, including the fees
and
expenses of such party’s own legal counsel, accountants and other
advisors.
(b) Sellers
shall pay all sales or other transfer, stamp or similar taxes incurred in
connection with the sale, transfer and assignment of the Shares to
Purchaser.
7.3 Indemnification
of Purchaser. From and after the Closing Date, Sellers
shall jointly and severally, indemnify and hold Purchaser and NCA and its
post-Closing directors, officers, employees, agents and affiliates (each a
“Purchaser Protected Party”) harmless from and against any and all damages,
losses, deficiencies, liabilities, obligations, commitments, costs or expenses
of any kind or nature (including legal and other expenses reasonably incurred
in
investigating and defending against the same) (“Reimbursable Amounts”) incurred
by any Purchaser Protected Party resulting directly or indirectly
from:
(a) any
untrue statement contained in any of the representations or warranties made
by
Sellers in this Agreement or in any Ancillary Documents;
(b) any
failure by Sellers to comply with the covenants or agreements of NCA contained
in this Agreement or in any Ancillary Documents;
(c) any
and all claims against NCA or the Purchaser for any amounts in excess of the
liabilities set forth on the Closing Balance Sheet and any liability or expense
of NCA arising before the Closing Date to the extent not included in the
liabilities set forth in the Closing Balance Sheet;
(d) any
and all claims arising from the conduct by NCA of its business and/or its
ownership or operation of the Assets prior to the Closing Date; or
(e) any
and all claims arising from the employment by NCA of any employees of NCA prior
to the Closing Date, and any claims relating to severance or to termination
of
such employees.
7.4 Indemnification
of Sellers. From and after the Closing Date, Purchaser
shall indemnify and hold Sellers (each a “Sellers Protected Party”) harmless
from and against any and all Reimbursable Amounts incurred by any Sellers
Protected Party resulting directly or indirectly from:
(a) any
untrue statement contained in any of the representations and warranties made
by
Purchaser in this Agreement or in any Ancillary Documents;
(b) any
failure by Purchaser to comply with the covenants or agreements of Purchaser
contained in this Agreement or in any of the Ancillary Documents;
(c) any
and all claims arising from the conduct by NCA of its business and/or its
ownership or operations of the Assets after the Closing Date.
7.5 Indemnification
for Third Party Claims. The following procedures shall
be applicable with respect to indemnification for third party claims arising
in
connection with any provision of this Agreement:
(a) Promptly
after receipt by the party seeking indemnification hereunder (an “Indemnitee”)
of written notice of the assertion or the commencement of any claim, liability
or obligation by a third party, whether by legal process or otherwise (a
“Claim”), with respect to any matter referred to in Section 7.3 or Section 7.4
hereof, as the case may be, the Indemnitee shall give written notice thereof
(the “Notice”) to the persons from whom indemnification is sought pursuant
hereto (an “Indemnitor”) and shall thereafter keep the Indemnitor reasonably
informed with respect thereto, provided that failure of the Indemnitee to give
the Indemnitor prompt notice as provided herein shall not relieve the Indemnitor
of its obligations hereunder unless such failure alone and not in conjunction
with other factors results in (i) a default judgment, (ii) the expiration of
the
time to answer a complaint, or (iii) the inability of the Indemnitor to
adequately defend against such Claim. In case any such Claim is
brought against any Indemnitee, the Indemnitor shall be entitled to assume
the
defense thereof, by written notice of its intention to the Indemnitee within
thirty (30) days after receipt of Notice, with counsel reasonably satisfactory
to the Indemnitee at the Indemnitor’s own expense. Notwithstanding
the assumption by the Indemnitor of the defense of any Claim as provided in
this
Section 7.5(a), the Indemnitee shall be permitted to join in the defense of
such
claim and to employ counsel at its own expense.
(b) If
the Indemnitor shall fail to notify the Indemnitee of its desire to assume
the
defense of any such Claim within the prescribed period of time, or shall notify
the Indemnitee that it will not assume the defense of any such Claim,
then the Indemnitee shall assume the defense of any such Claim, in which event
it may do so in such manner as it may deem appropriate. The
Indemnitor shall be permitted to join in the defense of such Claim and to employ
counsel at its own expense.
(c) No
Indemnitee shall make any settlement of any Claim which would give rise to
liability on the part of an Indemnitor hereunder without the written consent
of
the Indemnitor, which consent shall not be unreasonably withheld. If
a firm written offer is made to settle a Claim and the Indemnitor desires to
accept such settlement offer, but the Indemnitee elects not to consent thereto,
then the Indemnitee may continue to contest or defend such Claim; provided,
however, that the total maximum liability of the Indemnitor to indemnify or
otherwise reimburse the Indemnitee in accordance with this Agreement with
respect to such Claim shall be limited to and shall not exceed the amount of
the
settlement offer rejected by the Indemnitee, plus reasonable out-of-pocket
costs
and expenses (including attorneys’ fees) to the date of notice that the
Indemnitor desires to accept such settlement offer.
(d) Amounts
payable by an Indemnitor to an Indemnitee under Section 7.3 or Section 7.4
hereof, as the case may be, shall be payable by the Indemnitor as incurred
by
the Indemnitee.
7.6 Setoff
Rights. Purchaser shall have the right to setoff
against any unpaid portion of the of the purchase price to be paid pursuant
to
Sections 1.3 and 1.8, any amounts paid by Purchaser or NCA as the result of
Sellers’ failure to fulfill its indemnification obligations under Section 7.3
and 7.5, within 15 days after the delivery by Purchaser to Sellers of a notice
setting forth the amounts being set off, the parties understanding that to
the
extent that the amount of such setoff exceeds any payment to be made by
Purchaser to Sellers pursuant to Sections 1.3 and 1.8, such excess shall
continue to remain an obligation of the Sellers to be paid to the Purchaser
in
accordance with the provisions of this Article VII.
ARTICLE
VIII
MISCELLANEOUS
8.1 Publicity. Except
as may otherwise be required by law, no publicity, release or announcement
concerning this Agreement or the transactions contemplated hereby shall be
made
without advance written approval thereof by the parties hereto.
8.2 Notices. Any
notice or other communication required or permitted hereunder shall be in
writing and shall be delivered personally, telegraphed, telexed, sent by
facsimile transmission (provided acknowledgment or receipt thereof is delivered
to the sender) or sent by certified, registered or express mail, postage
prepaid. Any such notice shall be deemed given when so delivered
personally, telegraphed, telexed or sent by facsimile transmission or, if
mailed, three days after the date of deposit in the United States mails as
follows:
If
to Sellers, to:
Xxxx
X. Xxxxxxx, Xx.
Xxxxxxx
X. Xxxxxx
000
0XX Xxxxxx
Xxxxx
Xxxxxx,
Xxxxxxx 00000
with
a
copy to:
Xxxxx
X.
Xxxx, Esquire
The
Korn
Law Firm, P.L.
0000
Xxxxxxx Xxxxx X., Xxxxx 000
Xxxxxx,
Xxxxxxx 00000
If
to Purchaser, to:
000
0xx Xxxxxx
Xxxxx,
Xxxxx 000
Xxxxxx,
Xxxxxxx
00000-0000
Attention: Xxxxxx
X.
Xxxx
Chief
Executive Officer
with
a
copy to:
Xxxx
X.
Xxxxxxx, Esquire
Xxxxx
Xxxxxxxxx, PA
000
Xxxxx
Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxx 00000
or
such
other address as any of the above shall have specified by notice
hereunder.
8.3 Amendment;
Extension; and Waiver.
(a) This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.
(b) At
any time on or prior to the Closing Date, any party hereto may (i) extend the
time for the performance of any of the obligations or other acts of the other
parties hereto, (ii) waive any inaccuracies in the representations and
warranties of the other parties hereto contained herein or in any document
delivered pursuant hereto, and (iii) waive compliance by the other parties
hereto with any of the agreements or conditions contained herein or in any
Ancillary Document. Any agreement on the part of a party hereto in
any such extension or waiver shall be valid if set forth in any instrument
in
writing signed on behalf of such party. No action taken pursuant to
this Agreement, including any investigation by or on behalf of any party hereto,
shall be deemed to constitute a waiver by the party taking such action of
compliance with any agreement or condition contained herein or in any Ancillary
Document. The waiver by any party hereto of any condition or of a
breach of any other provision of this Agreement or any Ancillary Document shall
not operate or be construed as a waiver of any other condition or any other
provision or subsequent breach. The waiver by any party of any of the
conditions precedent to its obligations under this Agreement shall not preclude
it from seeking redress for breach of this Agreement other than with respect
to
the condition so waived. All rights and remedies of any party to this
Agreement shall be cumulative and concurrent and may be exercised singularly,
successively or concurrently, at the sole discretion of such party and may
be
exercised as often as occasion therefor may exist.
8.4 Governing
Law; Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida, without giving
effect to the principles of conflicts of laws thereof. The sole and
exclusive venue for any action arising out of this Agreement shall be a state
or
federal court situated in Xxxxxxx County, Florida, and the parties agree that
the jurisdiction of such court may be secured over a party by means of certified
mail, return receipt requested or by personal service.
8.5 Binding
Effect; Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, permitted assigns and legal representatives. Neither this
Agreement, nor any right hereunder, may be assigned by any party hereto without
the prior written consent of the other party hereto.
8.6 Severability. This
Agreement is intended to be performed in accordance with, and only to the extent
permitted by, all applicable laws. If any provision of this Agreement
or the application thereto to any Person or circumstances shall, for any reason
and to any extent, be valid or unenforceable, the remainder of this Agreement
and the application of such provision to other persons or circumstances shall
not be effected thereby, but rather shall be enforced to the greatest extent
permitted by law.
8.7 No
Third Party Beneficiaries. Nothing in this Agreement is
intended or shall be construed to give any Person other than the parties hereto
and, in the event of the inability of any party hereto fully to exercise such
rights, the respective shareholders of each such party, any legal or equitable
right, remedy or claim under or in respect of this Agreement or the Ancillary
Documents or any provision contained herein.
8.8 Counterparts. This
Agreement may be executed by the parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute one and the same
instrument. Each counterpart may consist of a number of copies hereof
each signed by less than all, but together signed by all of the parties
hereto.
8.9 Exhibits
and Schedules. The Exhibits and the Schedules to this
Agreement are a part of this Agreement as if fully set forth
herein.
8.10 Headings. The
headings in this Agreement are for reference only, and shall not affect the
interpretation of this Agreement.
8.11 Actions
by Affiliates. To the extent that this Agreement
requires action to be taken by affiliates of any party hereto, the applicable
party shall cause such action to be taken.
8.12 Prevailing
Party. In connection with any action arising out of
this Agreement or the transactions contemplated hereby, the substantially
prevailing party in any such action shall be entitled to receive from the other
party all costs and expenses (including reasonable attorneys’ fees) incurred by
the substantially prevailing party in connection therewith, in addition to
any
other award made by the court in which such action is brought.
8.13 Rules
of Construction.
(a) In
this Agreement, unless the context otherwise requires, words in the singular
number or in the plural number shall each include the singular number, and
words
of the masculine gender shall include the feminine and the neuter, and, when
the
sense so indicates, words of the neuter gender may refer to any
gender.
(b) The
term “Person” shall mean an individual, corporation, a partnership, an
association, a trust or any other entity or organization, including a
governmental or political subdivision or any agency or instrumentality
thereof.
(c) All
references herein to dollar amounts are in United States dollars and all
references herein to generally accepted accounting principles are to those
in
effect in the United States as of the date hereof.
(d) The
terms “herein”, “hereunder” and similar terms refer to this Agreement generally
and not to any one Article or Section.
(e) Any
representations and warranties set forth herein containing the phrase “to the
knowledge” shall mean, include and refer to such knowledge as may be possessed
by the respective directors and officers (either singly or collectively) of
the
party to whom such phrase relates.
(f) All
provisions in this Agreement requiring any party hereto to use its best efforts,
to cooperate with the other parties hereto, and to take such action as may
be
reasonably necessary to achieve a particular result shall not be construed
to
require such party to expend or agree to expend any funds, or to agree to any
increase in amounts otherwise payable by such party pursuant to any contractual
obligations or applicable law, except as otherwise specified in this
Agreement.
IN
WITNESS WHEREOF, this Agreement has
been signed by an officer of each of the parties on the date first above
written.
|
SELLERS
|
NAPLES
CAPITAL ADVISORS, INC.
|
|||
|
By:
|
/s/ | |||
| Xxxxxxx X. Xxxxxx | ||||
| /s/ | Title: Chief Executive Officer | |||
| Xxxx X. Xxxxxxx, Xx., Individually | ||||
| /s/ | PURCHASER: | |||
|
Xxxxxxx
X. Xxxxxx, Individually
|
|
|||
|
By:
|
/s/ | |||
| Xxxxxxx X. Xxxxxxxx | ||||
| Title: Chief Financial Officer |
