EXHIBIT 10.33
EXECUTION COPY
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") entered into on October
15, 2004, by and between NORTH POINTE INSURANCE COMPANY, a Michigan corporation
("Seller"), and THI HOLDINGS (DELAWARE), INC., a Delaware corporation ("Buyer").
The Buyer and Seller are referred to collectively herein as the "Parties".
Certain capitalized terms used herein are defined in Section l hereof.
RECITALS
WHEREAS, Seller is a Michigan corporation conducting a property and
casualty insurance company business in the State of Michigan; and
WHEREAS, Buyer, through its subsidiaries, operates a property and casualty
insurance company in the State of Michigan; and
WHEREAS, on the terms and subject to the conditions contained in this
Agreement, Buyer desires to pursue certain policy replacements of contracts of
non-standard automobile insurance currently underwritten by Seller, and Seller
desires to exit the business of underwriting and issuing contracts of
non-standard automobile insurance, to non-renew its existing non-standard
automobile insurance policies, and to assist Buyer in its pursuit of such
replacements of contracts of non-standard automobile insurance currently
underwritten by Seller in the State of Michigan.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained in this Agreement, intending to be legally bound, the
Parties represent, warrant, covenant and agree as follows:
SECTION 1. DEFINITIONS.
"Acquired Assets" means all of Seller's agent lists and Seller's right to
underwrite and offer policyholder replacement policies connected to Seller's
non-standard automobile business in the State of Michigan, and the other assets
described in EXHIBIT A hereto. Notwithstanding anything in this Agreement to the
contrary, both parties acknowledge that under the American Agency System, the
independent agents that market Seller's non-standard automobile insurance
products and have the right to solicit renewals of those policies. The Parties
acknowledge that Seller has not claimed that it is selling to Buyer any rights
to the renewals that are superior to those claimed by those agents.
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"Basis" means any past or present fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction that forms or could form the basis for any
specified consequence.
"Xxxx of Sale" has the meaning set forth in Section 10(a).
"Closing" has the meaning set forth in Section 2(e) below.
"Closing Date" has the meaning set forth in Section 2(e) below.
"Confidential Material" has the meaning set forth in Section 12(e) below.
"Damages" has the meaning set forth in Section 14(b)(i).
"Days" shall mean calendar days.
"Exhibit or Schedule" shall mean the exhibits and schedules delivered by
Seller to Buyer and attached to this Agreement.
"Indemnified Party" has the meaning set forth in Section 14(b)(iii) below.
"Indemnifying Party" has the meaning set forth in Section 14(b)(iii)
below.
"Knowledge" or words of similar import means actual knowledge after
reasonable investigation.
"Legal Requirement" means any federal, state, local, municipal, foreign,
international or other administrative order, constitution, law, ordinance,
principle of common law, regulation, statute or treaty.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"Material Adverse Effect" means any material adverse effect on the
business, financial condition, results of operations or properties as to any of
the Acquired Assets.
"Opt Out" means an agent's response to Seller's notification of the
transaction described in this Agreement, instructing the parties not to offer
Buyer's replacement policy to the agent's clients, a list of which Buyer will
provide to Seller by October 27, 2004.
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"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Party" or "Parties" has the meaning set forth in the preface above.
"Person" means an individual, a partnership, a corporation (including
limited liability companies), an association, a joint stock company, a trust, a
joint venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
"Purchase Price" has the meaning set forth in Section 2(c) below.
"Security Interest" means any mortgage, encumbrance, charge, claim,
equitable interest, lien, option, pledge, Security Interest, or right of first
refusal, including any restriction on use, voting, transfer, receipt of income,
or exercise of any other attribute of ownership, other than (a) mechanic's,
materialmen's, and similar liens, (b) liens for taxes not yet due and payable or
for taxes that the taxpayer is contesting in good faith through appropriate
proceedings, and (c) purchase money liens and liens securing rental payments
under capital lease arrangements.
"Tax" or "Taxes" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Section
59A), customs duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum tax or estimated tax, including any interest, penalty, or addition
thereto, whether disputed or not.
SECTION 2. BASIC TRANSACTION.
(a) Purchase and Sale of Assets. On and subject to the terms and
conditions of this Agreement, Buyer agrees to purchase from Seller, and Seller
agrees to sell, transfer, convey, and deliver to Buyer, all of the Acquired
Assets free and clear of all Security Interests at the Closing for the
consideration specified below.
(b) No Assumption of Seller's Liabilities. Buyer will not assume or have
any responsibility with respect to any obligation or Liability of Seller, and
shall not become a successor in interest of Seller that may result in Buyer
assuming any obligation or Liability of Seller. For the avoidance of doubt,
without limitation, Buyer shall not assume, directly or indirectly, any of the
Seller's liabilities and or obligations, whether direct, indirect, contingent or
otherwise, related to any insurance policies issued by Seller.
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(c) Purchase Price. The aggregate purchase price of the Acquired Assets
shall be Four Million Dollars ($4,000,000) ("Purchase Price"). Subject to the
terms and conditions of this Agreement, Buyer agrees to wire in immediately
available funds to Seller at Closing, the sum of Three Million Dollars
($3,000,000) ("Closing Payment"). Buyer will wire to Seller the sum of One
Million Dollars ($1,000,000) ("Second Payment") on the first business day
following 60 days after the Closing, upon Seller's doing the following
post-closing requirements during that 60 day period:
(i) Keeping to its ordinary course of business, underwrite and
service the in-force non-standard policies, including those
that are renewed on Seller's paper prior to Closing, the
policy terms of which expire after Closing.
(ii) Provide daily transaction detail supporting upcoming policy
renewals to be effective 40 days prior to expiration for
policies expiring on and after December 1, 2004, in a mutually
agreed upon format. Additionally, Seller will provide to Buyer
a listing of changes and copies of endorsements affecting
policies referenced above.
(iii) Within two (2) business days following Closing, Seller shall
send letters which have been mutually agreed upon by the
Parties to all of Seller's agents notifying them of this
transaction and specifying the last day for the agent to
submit any pending policies.
(iv) Issue non-renewal notices along with a cover letter mutually
agreed upon by the Parties to all insureds, agents and legally
interested third parties 33 days prior to expiration in a
mutually agreed upon format for policies expiring on and after
December 1, 2004. For any insured for whom the agent has not
provided a written intent to Opt Out and to whom Buyer wishes
to offer a replacement policy, Buyer will provide Seller with
a policy application, premium quote and any other document
that Buyer deems appropriate, for Seller to mail to the
insured shortly after the mailing of the non-renewal notice.
(v) Send its Vice President of Marketing or other members of its
marketing staff to visit the agents who produce in the
aggregate no less than 75% of Seller's current book of
non-standard auto business to inform such agents of this
transaction, and attempt to persuade those agents to move
their business to Buyer. Buyer's representative shall be
afforded an opportunity to participate in such agent visits.
(vi) After October 29, 2004, Seller shall cease accepting any
non-standard automobile applications from agents and shall
return any application to the agent from whom it was received.
Upon Seller performing all of these post-closing requirements during the
period 60 days following Closing, Buyer will pay Seller the Second Payment
within two (2) business days of the 60th day following Closing. For the
avoidance of doubt, however, Seller's obligation to
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continue to perform all of the above post-closing requirements, shall be ongoing
following the payment of the Second Payment, will not cease upon payment of the
Second Payment, and shall continue until all of Seller's non-standard automobile
policies shall legally non-renew.
Seller has provided necessary instructions for wire transfers of the
Closing Payment. Seller will provide to Buyer any change in wire transfer
instructions no less than three days prior to the Second Payment date.
(d) Closing. The closing of the transactions contemplated herein (the
"Closing") will take place on or before October 15, 2004 in Southfield, MI at
Seller's business offices, at which time and place, subject to the satisfaction
or waiver of each condition precedent, the assets and instruments of conveyance
will be delivered and all rights, title and interest will vest in the party
receiving them (the "Closing Date").
(e) Bonus Payments. In addition to the Purchase Price, subject to the
terms and conditions of this Agreement, Buyer shall pay Seller performance
bonuses for assisting Buyer in converting Seller's in-force policies (as
measured at Closing), such performance bonuses to be paid as bonus level
percentages are achieved and reported in Buyer's reports ("Bonus Payments"). A
policy is "renewed" when the first payment is received on Buyer's new or renewal
policies relating to Seller's previous in-force policy. Seller shall pay Buyer
$250,000 for assisting Buyer if Buyer converts 28% of the Sellers' in-force
policies (as measured from Closing) no later than nine months following the
Closing. Buyer shall pay Seller an additional $250,000 if the number of in-force
policies that are converted reaches 35% of the Sellers' in-force policies (as
measured from Closing) no later than nine months following the Closing. Bonus
Payments will be paid as earned and reported in Buyer's reports. Buyer will
provide Seller daily transaction detail supporting its replacements of Seller's
policies in a mutually agreed upon format.
The Parties will calculate the bonus level percentages as follows:
(i) Credit will be given for policies that cancel and renew with
Buyer through the same agent, and within 45 days of the date
of cancellation.
(ii) Policies written by agents who have been cancelled by any of
Buyer's affiliates in the 4 year period prior to closing will
not be included in the calculation of in-force policies at
Closing.
(iii) Policies written by agents to whom Buyer does not offer an
agent agreement will not be included in the calculation of
in-force policies at Closing.
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In order for Buyer to achieve its goal of transferring business and for
Seller to achieve its goal of receiving the Bonus Payments, the Parties also
agree Buyer will not file a rate change regarding Seller's insurance contracts
in excess of 2% overall for a period of four months following the Closing Date.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby
represents and warrants to the Buyer as follows:
(a) Organization. Seller is duly organized and validly existing as a
corporation and in good standing under the laws the State of Michigan, and has
all requisite power and authority to own, lease, and sell the assets, properties
and business contemplated in this Agreement.
(b) Authority. Seller has all requisite corporate power and authority to
execute and deliver this Agreement and to carry out its obligations hereunder.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Seller and this Agreement has been duly executed
and delivered by Seller and constitutes the valid and legally binding obligation
of Seller, enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, rehabilitation, or similar laws affecting the
enforcement of creditors' rights generally.
(c) Brokers' Fees. Seller has no liability or obligation to pay any fees
or commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which the Buyer or any of Buyer's affiliates
could become liable or obligated. Seller will indemnify Buyer for any
misrepresentation contained in this Section 3(c).
(d) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated thereby, will
(i) violate any statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency, or
court to which Seller is subject or any provision of the charter or bylaws of
Seller or (ii) conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any material
agreement, contract, lease, license or instrument to which Seller or any of its
material properties or assets are subject (or result in the imposition of any
Security Interest upon any of its assets), except where the violation, conflict,
breach, default, acceleration, termination, modification, cancellation, failure
to give notice or creation of a Security Interest would not materially impair
the ability of the Parties to consummate the transactions contemplated by this
Agreement.
(e) Title to Acquired Assets. Seller has good and marketable title to each
of the Acquired Assets, and except for liens to be paid and released at Closing,
all of which shall be
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satisfied by Seller at or prior to Closing, each of the Acquired Assets is free
and clear of all Security Interests, restrictions, liens and other encumbrances.
(f) Notices, Consents and Approvals. Other than as set forth in SCHEDULE
3(f) hereto, the execution and delivery by the Seller of this Agreement, the
performance by the Seller of Seller's obligations hereunder, and the
consummation by the Seller of the transactions contemplated hereby do not
require the Seller to obtain any consent, approval or action of, or make any
filing with or give any notice to, any governmental or regulatory body or other
third party.
(g) Undisclosed Liabilities. There is no Liability relating to the
transactions contemplated under this Agreement (and to the Knowledge of Seller
there is no Basis for any present or future charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand against Seller giving rise
to any such Liability) not retained by Seller that has not been disclosed by
Seller to Buyer or shall not be disclosed by Seller to Buyer prior to the
Closing Date.
(h) Legal Compliance. Seller is not in violation of any federal, state or
local law, ordinance, statute, rule, regulation, order, judgment, injunction,
award, decree or requirement of any governmental or regulatory body, court or
arbitrator, which violation individually or in the aggregate would have a
Material Adverse Effect on any of the Acquired Assets, and Seller has not
received any written notice that any such violation is being or may be alleged.
(i) Powers of Attorney. There are no outstanding powers of attorney
executed that would have any effect on the Acquired Assets or the transactions
contemplated herein.
(j) Litigation. To the Knowledge of the Seller, there are no actions,
suits, hearings, arbitration, proceedings (public or private) or governmental
investigations that have been brought by or against any governmental authority
or any other Person (collectively, "Proceedings") pending or threatened in
writing against or affecting the Seller or any of the Acquired Assets as to
which could result in a determination or resolution adverse and which, if so
adversely determined or resolved, would have a Material Adverse Effect; and (ii)
there are no existing or threatened in writing orders, judgments or decrees
(other than those of general application) of any governmental authority which
would have a Material Adverse Effect on any of the Acquired Assets.
(k) Tax Matters. Seller has, and as of the Closing Date will have, paid
and discharged all Taxes owed by Seller attributable to the Acquired Assets or
the operation of the Acquired Assets by Seller (or any affiliate) that are due
and payable, excepting such taxes,
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assessments and other levies which will not be due until or after the Closing
Date and Taxes that the taxpayer is contesting in good faith through appropriate
proceedings.
(l) Disclosure. To the best of Seller's Knowledge, this Agreement,
including the Schedules and any other Exhibits, does not contain any untrue
statement of a material fact or omit to state any fact necessary in order to
make the statements and information contained herein, in light of the
circumstances in which they are made, not misleading. There is no fact which has
not been disclosed to the Buyer in writing of which Seller is aware and which is
or could reasonably be anticipated to be material to Buyer's decision to
consummate the transactions contemplated by this Agreement on the terms and
conditions set forth herein.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby
represents and warrants to the Seller as follows:
(a) Organization. Buyer is duly organized and validly existing as a
limited liability company and in good standing under the laws the State of
Delaware.
(b) Authority. Buyer has all requisite corporate power and authority to
execute and deliver this Agreement and to carry out its obligations hereunder.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Buyer and this Agreement has been duly executed
and delivered by Buyer and constitutes the valid and legally binding obligation
of Buyer, enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, rehabilitation, or similar laws affecting the
enforcement of creditors' rights generally.
(c) Brokers' Fees. Buyer has no liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which the Seller or any of Seller's
affiliates could become liable or obligated. Buyer will indemnify Seller for any
misrepresentation contained in this Section 4(c).
(d) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated thereby, will
(i) violate any statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency, or
court to which Buyer is subject or any provision of the charter or bylaws of
Buyer or (ii) conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any material
agreement, contract, lease, license or instrument to which Buyer or any of its
material properties or assets are subject (or result in the imposition of any
Security Interest upon any of its assets), except where the violation, conflict,
breach,
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default, acceleration, termination, modification, cancellation, failure to give
notice or creation of a Security Interest would not materially impair the
ability of the Parties to consummate the transactions contemplated by this
Agreement.
(e) Notices, Consents and Approvals. Other than as is set forth in
SCHEDULE 4(e) hereto, the execution and delivery by the Buyer of this Agreement,
the performance by the Buyer of its obligations hereunder, and the consummation
by the Buyer of the transactions contemplated hereby do not require the Buyer to
obtain any consent, approval or action of, or make any filing with or give any
notice to, any person or any governmental or regulatory body, or other third
party.
(f) Financing. The Buyer has, and will have at Closing, available cash or
existing borrowing facilities that together are sufficient to enable it to
consummate the transaction contemplated by this Agreement.
(g) Due Diligence. Buyer has completed its legal, business, and financial
due diligence with the results being to the satisfaction of Buyer in its sole
discretion.
SECTION 5. SELLER COVENANTS. The Seller covenants and agrees as follows:
(a) General. The Seller will use Seller's best efforts to take all actions
and to do all things necessary, proper, or advisable in order to consummate and
make effective the transactions contemplated by this Agreement.
(b) Notices and Consents. Seller will give any notices to third parties,
and Seller will use Seller's best efforts to obtain any third party consents,
that Buyer may reasonably request in connection with the matters referred to in
SECTIONS 3(f) AND 4(e) above. Seller will give any notices to, make any filings
with, and use its best efforts to obtain any necessary authorizations, consents,
and approvals of governments and governmental agencies in connection with the
matters referred to herein. In addition, Seller shall assist Buyer in providing
notice of the transaction, in a form satisfactory to both parties, at Closing to
the agents who write Seller's Michigan non-standard automobile policies. Such
notice shall allow for the agent to notify the Buyer that Buyer should not send
any policy application to agent's clients (the "Opt Out").
(c) Preservation of Acquired Assets. Prior to the Closing, Seller will use
Seller's best efforts to keep the Acquired Assets substantially without material
negative change, including present physical facilities, working conditions, and
relationships with lessors, licensors, suppliers, customers and employees.
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(d) Full Access. Seller will permit representatives of Buyer to have
reasonable access during normal business hours to all premises, properties,
personnel, books, records (including tax records), contracts, and documents
pertaining to the Acquired Assets.
(e) Notice of Developments. Seller shall give prompt written notice to the
Buyer of any development causing a breach of any of its own representations and
warranties. No disclosure by the Parties pursuant to this Section 5(e), however,
shall be deemed to amend or supplement the Schedules or Exhibits or to prevent
or cure any misrepresentation, breach of warranty, or breach of covenant. Seller
shall give prompt written notice to Buyer upon learning of any Basis which is a
breach of Buyer's representations; provided however, Seller agrees that this
Section 5(e) shall in no way limit or waive the remedies available to Buyer
under this Agreement.
(f) Maintenance of Records. Seller will maintain and continue to keep the
books, accounts and records associated with the Acquired Assets in the usual
manner and consistent with prior practice.
(g) Other Consents. Seller will use Seller's best efforts to assist Buyer
in obtaining any approvals that may be necessary in connection with the sale of
the Acquired Assets.
(h) Continued Effectiveness of Representations and Warranties. From the
date hereof, through the Closing Date, Seller shall use Seller's best efforts so
that the representations and warranties contained in this Agreement hereof shall
continue to be true and accurate on and as of the Closing Date.
(i) Non-Compete. Seller shall not directly or indirectly compete with
Buyer's use of the Acquired Assets for a period of three (3) years following the
Closing Date in the geographic locations as further set forth in EXHIBIT B
hereto.
SECTION 6. BUYER COVENANTS. The Buyer covenants and agrees:
(a) General. The Buyer will use its best efforts to take all actions and
to do all things necessary, proper, or advisable in order to consummate and make
effective the transactions contemplated by this Agreement.
(b) Notice of Developments. The Buyer will give prompt written notice to
Seller of any development causing a breach of any of its own representations and
warranties in Section 4 above. No disclosure by the Parties pursuant to this
Section 6(b) however shall be deemed to prevent or cure any misrepresentation,
breach of warranty, or breach of covenant. Buyer shall give prompt notice to
Seller upon learning of any Basis that causes a breach of any of Seller's
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representations; provided however, the Buyer agrees that this Section 6(b) shall
in no way limit or waive the remedies available to Seller under this Agreement.
(c) Other Consents. Buyer will use Buyer's best efforts to assist Seller
in obtaining any approvals that may be necessary in connection with the sale of
the Acquired Assets.
(d) Continued Effectiveness of Representations and Warranties. From the
date hereof, through the Closing Date, Buyer shall use Buyer's best efforts so
that the representations and warranties contained in this Agreement hereof shall
continue to be true and accurate on and as of the Closing Date.
SECTION 7. CONDITIONS TO OBLIGATIONS OF SELLER. The obligations of Seller
to consummate this transaction are subject to and conditioned upon the
satisfaction, at or prior to the Closing Date, of each of the following
conditions precedent, any of which may be waived by the Seller at or prior
to the Closing Date:
(a) Accuracy of Representations and Warranties. The representations and
warranties made by Buyer herein shall be true and correct in all material
respects on the Closing Date and shall be confirmed in writing at the Closing by
Buyer.
(b) Performance by Buyer. All of the terms and conditions of this
Agreement to be complied with and performed by Buyer on or before the Closing
Date shall have been complied with and performed in all material respects,
including, without limitation, the delivery of each of the items to be delivered
under Section 11 hereof.
(c) Legal Challenge. No suit, action or other proceeding brought by any
federal or state government or agency shall be pending, and no claim by any such
authority shall have been asserted, before any court or governmental agency in
which it is or will be sought to restrain or prohibit the consummation of the
transactions contemplated hereby.
(d) Consents and Approvals. Seller shall have obtained all necessary
consents and approvals.
(e) Non-Performance. If any of the conditions contained in this Section 7
shall not be fulfilled or performed at or before the Closing Date to the
reasonable satisfaction of Seller, Seller may, by written notice to Buyer,
terminate all its obligations hereunder (except as otherwise provided herein)
and where the non-performance or non-fulfillment of a condition is as a result
of a breach of any covenant, representation or warranty on the part of Buyer
herein contained, may bring an action against Buyer for damages suffered by
Seller pursuant to Section 13 below,
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provided that any of the said condition may be waived in whole or in part by
Seller without prejudice to any claims it may have for breach of a covenant,
representation or warranty.
SECTION 8. CONDITIONS PRECEDENT TO CLOSING. The following conditions
precedent have been satisfied in full:
(a) Seller has provided Buyer with an audited statutory balance sheet for
the year ended December 31, 2003 and balance sheets for the period from January
1, 2004 to June 30, 2004.
(b) The Michigan Office of Financial and Insurance Services has advised
the Parties that it has not presented any objection to this transaction.
SECTION 9. CONDITIONS TO OBLIGATIONS OF BUYER. The obligations of Buyer to
consummate this transaction are subject to and conditioned upon the
satisfaction, at or prior to the Closing Date, or each of the following
conditions precedent, any of which may be waived by the Buyer at or prior
to the Closing Date:
(a) Accuracy of Representations and Warranties. The representations and
warranties, made by Seller herein and in the Exhibits or in any schedule shall
be true and correct in all material respects on the Closing Date and shall be
confirmed in writing at the Closing by Seller.
(b) Performance by Seller. All of the terms and conditions of this
Agreement to be complied with and performed by Seller on or before the Closing
Date shall have been complied with and performed in all material respects,
including, without limitation, the delivery of each of the items to be delivered
under Section 10 hereof.
(c) Approvals and Other Consents. Buyer shall have obtained all necessary
approvals and other consents.
(d) Legal Challenge. No suit, action or other proceeding shall be pending
before any court or governmental agency, and no claim shall have been asserted,
in which it is or will be sought to restrain or prohibit or to obtain damages or
other relief in connection with this Agreement or the consummation of the
transactions contemplated hereby.
(e) Non-Performance. If any of the conditions contained in this Section 9
shall not be fulfilled or performed at or before the Closing Date to the
reasonable satisfaction of Buyer, Buyer may, by written notice to Seller,
terminate all its obligations hereunder and where the non-performance or
non-fulfillment of a condition is as a result of a breach of any covenant,
representation or warranty on the part of Seller herein contained, may bring an
action against
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Seller for damages suffered by Buyer pursuant to Section 13 below, provided that
any of the said conditions may be waived in whole or in part by Buyer without
prejudice to any claims it may have for breach of covenant, representation or
warranty.
(f) Corporate Consents. Buyer shall have received by the Closing Date, all
necessary corporate authorizations as to the transactions contemplated under
this Agreement.
(g) In-force Policies. There shall be at Closing at least 16,000 in-force
policies.
SECTION 10. ACTIONS AT CLOSING BY SELLER. At the Closing, Seller shall
deliver to Buyer:
(a) A general assignment and Xxxx of Sale transferring the Acquired Assets
(the "Xxxx of Sale") in the form attached hereto as EXHIBIT C.
(b) A certificate of the Seller in the form attached hereto as EXHIBIT D,
(i) attesting that the Seller has caused a reasonable examination as to the
warranties and representations of Seller set forth herein, and (ii) attesting,
that as of the Closing Date each of the representations and warranties of Seller
contained herein is true.
(c) Certified copies of resolutions of Seller's board of directors,
respectively, authorizing the transactions contemplated by this Agreement.
(d) At Closing, Seller shall provide to Buyer a complete file for all
in-force policies that will include name, address, policy number, effective
date, expiration date, agent name, agent address, and agent number. Seller will
also provide claims information as described in EXHIBIT A herein.
(e) Such other documents as may be necessary or appropriate, in the
reasonable opinion of Buyer or its counsel, to evidence the authorization of,
and to effect the transactions contemplated by, this Agreement, including
placing the Acquired Assets in the physical possession of the Buyer where
appropriate.
SECTION 11. ACTIONS AT CLOSING BY BUYER. At or prior to the Closing, Buyer
shall:
(a) Wire transfer the Closing Payment as set forth in Section 2(c) in
immediately available funds to an account of Seller, as designated in writing by
Seller prior to the Closing Date.
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(b) Deliver a certificate of an officer of Buyer, in the form attached
hereto as EXHIBIT E, (A) attesting that he or she has caused a reasonable
examination to be made as to warranties and representations of Buyer set forth
herein, and (B) attesting that on and as of the Closing Date each of the
representations and warranties of Buyer contained herein is true.
(c) Certified copies of resolutions of Buyer's board of directors,
respectively, authorizing the transactions contemplated by this Agreement.
(d) Deliver to Seller a list of all agents licensed with Seller that are
not licensed with Buyer.
(e) Deliver such other documents as may be necessary or appropriate, in
the reasonable opinion of Seller or Seller's counsel, to evidence the
authorization of, and to effect the transactions contemplated by, this
Agreement.
SECTION 12. POST-CLOSING COVENANTS. The Parties agree as follows with
respect to the period following the Closing:
(a) In addition to the actions that Seller has agreed to take in the 60
days following Closing (as described in Section 2(c)), Seller shall cease to
write new non-standard automobile insurance policies, provide appropriate
non-renewal notices to its policyholders as required by law, and cease accepting
any non-standard automobile applications after October 29, 2004 and return those
applications unbound to the agents from whom they were received.
(b) Intentionally omitted.
(c) Seller shall use its best efforts to provide Buyer's access to
Seller's appointed agency force, including a letter of introduction, in a form
mutually agreeable to the Parties, describing the Buyer and the transaction.
(d) General. In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, each of the
Parties will take such further action (including the execution and delivery of
such further instruments and documents) as any other Party reasonably may
request, at the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under Section 14
below).
(e) Litigation Support. In the event and for so long as any Party actively
is contesting or defending against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand in connection with (i) any
transaction contemplated under this Agreement or (ii) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
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incident, action, failure to act, or transaction on or prior to the Closing Date
involving Seller, each of the Parties will cooperate with the contesting or
defending Party and its counsel in the contest or defense, make available its
personnel, and provide such testimony and access to its books and records as
shall be necessary in connection with the contest or defense, all at the sole
cost and expense of the contesting or defending Party (unless the contesting or
defending Party is entitled to indemnification therefor under Section 14 below).
(f) Confidentiality. The Parties will treat and hold as such all of the
Confidential Material, refrain from using any of the Confidential Material
except in connection with this Agreement, and deliver promptly to the other
Party or destroy, at the request and option of such Party, all tangible
embodiments (and all copies) of the Confidential Material which are in their
possession. In the event that a Party is requested or required (by oral question
or request for information or documents in any legal proceeding, interrogatory,
subpoena, civil investigative demand, or similar process) to disclose any
Confidential Material, that Party will notify the other Party promptly of the
request or requirement so that the other Party may seek an appropriate
protective order or waive compliance with the provisions of this Section 12(e).
If, in the absence of a protective order or the receipt of a waiver hereunder,
either such Party is, on the advice of counsel, compelled to disclose any
Confidential Material to any tribunal or else stand liable for contempt, such
Party may disclose the Confidential Material to the tribunal; provided, however,
that the disclosing Party shall use reasonable efforts to obtain, at the
reasonable request of the other Party, an order or other assurance that
confidential treatment will be accorded to such portion of the Confidential
Material required to be disclosed as such Party shall designate.
The term "Confidential Material" shall include all information, whether
written or oral, (whatever the form or storage medium) or gathered by
inspection, or acquired, directly or indirectly in connection with this
Agreement regardless of whether such information is specifically identified as
"confidential." Each Party recognizes and acknowledges the competitive value of
the Confidential Material and the damage that could result if the Confidential
Material were used or disclosed except as authorized by this Agreement.
The term "Confidential Material" shall not include information that (i)
was known to the Seller or its representatives or was in its or its
representatives' possession (except as may have been provided during
negotiations of this Agreement) prior to the date of this Agreement; or (ii) is
or becomes generally available to the public other than through an unauthorized
disclosure of the Seller or its representatives in violation of this Agreement;
or (iii) becomes available to the Seller or its representatives from a source
other than the Buyer or its representatives, provided that such source is not,
to the Seller's knowledge, prohibited from transmitting such Confidential
Material to the Seller by a contractual, legal or fiduciary obligation to the
Buyer or its representatives or (iv) is independently developed by the Seller or
any of its representatives without reference to the Confidential Material.
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(g) Tax Matters. Seller shall be responsible for any and all Taxes
attributable to the Acquired Assets or the operation of the Acquired Assets by
Seller for any period (or portion thereof) on or prior to the Closing Date.
Buyer shall be responsible for any and all Taxes attributable to the Acquired
Assets or the operation of the Acquired Assets by Buyer for any period (or
portion thereof) after the Closing Date.
SECTION 13. TERMINATION.
(a) Termination of Agreement. The Parties may terminate this Agreement as
provided below:
(i) The Parties may terminate this Agreement by mutual written
consent at any time prior to the Closing.
(ii) Buyer may terminate this Agreement by giving written notice to
Seller at any time prior to the Closing (a) in the event
Seller has breached any representation, warranty, or covenant
contained in this Agreement in any material respect, Buyer has
notified Seller of the breach, and the breach has continued
without cure after the notice of the breach or the breach has
gone unabated as of the Closing Date, or (b) if the Closing
shall not have occurred on or before October 30, 2004, by
reason of the failure of any condition precedent in Sections 8
or 9 hereof (unless the failure results primarily from Buyer
itself breaching any representation, warranty, or covenant
contained in this Agreement).
(iii) Seller may terminate this Agreement by giving written notice
to Buyer at anytime prior to the Closing (a) in the event
Buyer has breached any representation, warranty, or covenant
contained in this Agreement in any material respect, Seller
has notified Buyer of the breach, and the breach has continued
without cure after notice of the breach or has continued
unabated as of the Closing Date, or (b) if the Closing shall
not have occurred on or before, October 30, 2004 by reason of
the failure of any condition precedent under Section 7 hereof
(unless the failure results primarily from Seller itself
breaching any representation, warranty, or covenant contained
in the Agreement).
(iv) Buyer may terminate this Agreement if at Closing the number of
in-force policies is less than 16,000.
(v) Either Party may terminate this Agreement if there is any
objection expressed by the Michigan Office of Financial and
Insurance Services concerning this Agreement or the
transaction contemplated herein.
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(b) Effect of Termination. If any Party terminates this Agreement pursuant
to this Section 13, all rights and obligations of the Parties hereunder shall
terminate without any Liability of any Party to any other Party (other than as a
result of a willful breach of any covenant or agreement contained in this
Agreement); provided, however, that the confidentiality provisions contained in
Section 12(f) shall survive termination.
SECTION 14. INDEMNIFICATION.
(a) Survival of Representations and Warranties. Unless otherwise stated
herein, all of the representations and warranties, obligations, covenants, and
agreements of the Parties contained in this Agreement shall survive the Closing
for three (3) years. The representations and warranties, obligations, covenants
and agreements in Sections 3(a), (b), (d), (e) and (j) shall survive the Closing
without limitation. The representations and warranties, obligations, covenants
and agreements in Sections 4(a), (b) and (d) shall survive Closing without
limitation. If notice of indemnification is given in accordance with Section 14
hereof before the expiration of the applicable time referenced above, the
representation, warrant, covenant, or agreement applicable to such claim shall
survive until resolution of such claim and related matter. If notice of
indemnification is not timely given as described herein, then such surviving
obligations shall expire and be terminated as provided herein in this Agreement.
(b) Indemnification; Arbitration and Litigation.
(i) Seller's Indemnification. Subject to the limitations described
in Section 14(a) above, Seller shall be liable for and defend,
indemnify, and hold Buyer wholly harmless from and against any
and all liability, loss, cost and expense whatsoever
(including reasonable fees of legal counsel and related
disbursements) (together, "Damages") incurred by Buyer as a
result of or related to: (a) any breach of or any inaccuracy
in, any of the representations, warranties, covenants and
agreements of Seller contained in this Agreement, in any
certificate, Schedule or Exhibit delivered pursuant hereto, or
any agreement executed and delivered in connection with the
transactions contemplated under this Agreement; (b) any
demands, claims, actions or cause of actions of whatever kind
or character arising out of or in connection with an insurance
policy written by Seller; (c) Seller's negligent or wrongful
performance or non-performance of its obligations pursuant to
this Agreement or any other agreement provided for or
contemplated herein; and (d) any demands, claims, actions or
cause of actions against Buyer caused by Seller's act or
omission. Seller will not indemnify Buyer for any demands,
claims, actions or cause of actions against Buyer caused by
Buyer's act or omission.
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(ii) Buyer's Indemnification. Subject to the limitations described
in Section 14(a) above, Buyer shall be liable for and defend,
indemnify, and hold Seller wholly harmless from and against
any and all Damages incurred by Seller, as a result of, or
related to: (a) any breach of or any inaccuracy in any of the
representations, warranties, covenants and agreements of Buyer
contained in this Agreement or in any certificate, Schedule or
Exhibit delivered pursuant hereto or any agreement executed
and delivered in connection with the transaction contemplated
under this Agreement; (b) Buyer's negligent or wrongful
performance or non-performance of its obligations pursuant to
this Agreement or any other agreement provided for or
contemplated herein; (c) any demands, claims, actions, or
cause of actions of whatever kind or character arising out of
or in connection with an insurance policy written by Buyer or
its affiliates; and (d) any demands, claims, actions or cause
of actions against Seller caused by Buyer's act or omission.
Buyer will not indemnify Seller for any demands, claims,
actions or cause of actions against Seller caused by Seller's
act or omission.
(iii) Indemnified Party. If any suit, action, proceeding (including
any governmental or regulatory investigation), claim or demand
shall be brought or asserted against any Party in respect of
which indemnity may be sought pursuant to this Section 14,
such Party (the "Indemnified Party") shall promptly notify the
person against whom such indemnity may be sought (the
"Indemnifying Party") in writing, and the Indemnifying Party,
upon request of the Indemnified Party, shall retain counsel
reasonably satisfactory to the Indemnified Party to represent
the Indemnified Party and shall pay such fees and expenses of
such counsel related to such proceeding. In any such
proceeding, any Indemnified Party shall have the right to
retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party
unless (a) the Indemnifying Party and the Indemnified Party
shall have mutually agreed to the contrary, (b) the
Indemnifying Party has failed within a reasonable time to
retain counsel reasonably satisfactory to the Indemnified
Party, (c) the named parties in any such proceeding (including
any impleaded parties) include both the Indemnified Party and
the Indemnifying Party and representation of both Parties by
the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood
that the Indemnifying Party shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be
liable for the fees and expenses of more than one separate
firm (in addition to any local counsel) for the Indemnified
Party, and that all such fees and expenses shall be reimbursed
as they are incurred. Any such separate firm for the Buyer to
be indemnified by the Seller shall be designated in writing by
the Buyer and any such separate firm for the Seller to be
indemnified by the Buyer shall be designated in writing by the
Seller. The Indemnifying Party shall not be liable for any
settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a
final judgment in favor of the party asserting a claim, the
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Indemnifying Party agrees to indemnify any Indemnified Party
from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an Indemnified Party shall have
requested an Indemnifying Party to reimburse an Indemnified
Party for fees and expenses of counsel as contemplated by
Section 14(b), the Indemnifying Party agrees that it shall be
liable for any settlement of any proceeding effected without
its written consent if (x) such settlement is entered into
more than 30 days after receipt by such Indemnifying Party of
the aforesaid request and (y) such Indemnifying Party shall
not have reimbursed the Indemnified Party in accordance with
such request prior to the date of settlement. No Indemnifying
Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified
Party is or could have been a party and indemnity could have
been sought hereunder by such Indemnified Party, unless such
settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the
subject matter of such proceeding.
Except as otherwise provided in this Agreement, Seller and Buyer hereby
acknowledge and agree that the sole and exclusive remedy with respect to any
claims against the other party relating to this Agreement or transaction
contemplated herein shall be pursuant to the indemnification provisions
contained in Section 14 hereof.
(iv) Arbitration. Seller and Buyer shall endeavor to resolve any
and all disputes out of, or relating to, this Agreement by
binding arbitration in the State of Michigan pursuant to the
then current rules of the American Arbitration Association.
The Parties will attempt to agree upon a single arbitrator. In
the event that they cannot agree to a single arbitrator,
Seller and Buyer shall each appoint an arbitrator. The two
arbitrators shall in turn select a neutral arbitrator with no
interest in the dispute, but who is experienced in the type of
issue in dispute. The three arbitrators will hear the dispute
and a written determination signed by any two of the three
arbitrators will be final and binding on the Parties. The
arbitrators shall not be empowered to award damages in excess
of actual damages and they shall be expressly prohibited from
awarding punitive damages.
(v) Attorneys' Fees. If either party brings any action or
proceeding to interpret or enforce this Agreement, or for
damages for any alleged breach hereof, the prevailing party
shall be entitled to recover reasonable attorneys' fees and
costs.
SECTION 15. NOTICE OF DEFAULT AND RIGHT TO CURE. If a party defaults under
any of this Agreement's terms, the non-defaulting party will give to the
defaulting party a written notice of the default. The defaulting party has
thirty (30) days after receipt of this notice to cure the
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default. Only if the defaulting party fails to cure the default within
this time period, may the non-defaulting party exercise those remedies
granted under this Agreement or applicable law.
SECTION 16. MISCELLANEOUS.
(a) Press Releases and Public Announcements. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement without the prior written approval of the other Party; provided,
however, that any Party may make any public disclosure it believes in good faith
is required by applicable law (in which case the disclosing Party will use its
best efforts to advise the other Party prior to making the disclosure).
(b) No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns, except as disclosed herein in the Agreement.
(c) Entire Agreement. This Agreement (including the documents referred to
herein) constitutes the entire agreement between the Parties and supersedes any
prior understandings, agreements, or representations by or between the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof. This Agreement shall not supersede or affect the Confidentiality
Agreement, if any, which shall remain in full force and effect, but will
terminate at the Closing.
(d) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Party; provided, however, such approval will not be unreasonably
withheld.
(e) Counterparts and Facsimile Signatures. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original but all
of which together will constitute one and the same instrument. This Agreement
may be executed by facsimile signatures which shall be treated as an original
signature for all purposes.
(f) Headings. The Section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered
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or certified mail, return receipt requested, postage prepaid, and addressed to
the intended recipient as set forth below:
If to Buyer:
THI Holdings (Delaware), Inc.
0000 Xxxxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxx Xxxxxxxxxx
President
Fax Number: (000) 000-0000
Copy to:
Office of General Counsel
Nationwide Insurance
Xxx Xxxxxxxxxx Xxxxx 0-00-00
Xxxxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxxx
Assistant General Counsel
Fax Number: (000) 000-0000
If to Seller:
North Pointe Insurance Company
00000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: B. Xxxxxxx Xxxxxxx
President
Fax Number: (000) 000-0000
Copy to:
North Pointe Insurance Company
00000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
General Counsel
Fax Number: (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 Party notice in the manner herein set forth.
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(h) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Michigan without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Delaware or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Michigan.
(i) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by Buyer
and Seller. No waiver by any Party of any default, misrepresentation, or breach
of warranty or covenant hereunder, whether intentional or not, shall be deemed
to extend to any prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.
(j) Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) Expenses. The Seller and the Buyer will each bear its own costs and
expenses (including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby.
(l) Construction. Any reference to any federal, state, local, or foreign
statute or law shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. The Parties
intend that each representation, warranty, and covenant contained herein shall
have independent significance. If any Party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that there
exists another representation, warranty, or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which the
Party has not breached shall not detract from or mitigate the fact that the
Party is in breach of the first representation, warranty, or covenant.
(m) Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
(n) Full Cooperation. The Parties each agree to cooperate with each other
in connection with all actions reasonably required to implement the transactions
contemplated by this Agreement.
(o) Specific Performance. Each of the Parties acknowledges and agrees that
the other Party would be damaged irreparably in the event any of the provisions
of this Agreement and the Non-Compete/Non-solicitation Agreement attached hereto
are not performed in accordance with
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their specific terms or otherwise are breached. Accordingly, each of the Parties
agrees that the other Party shall be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Agreement and the
Non-Compete/Non-Solicitation Agreement and to enforce specifically such
agreements and the terms and provisions thereof respectively in any action
instituted in state or federal court, in addition to any other remedy to which
it may be entitled, at law or in equity.
(signature page follows immediately)
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.
NORTH POINTE INSURANCE COMPANY
a Michigan corporation
By: /s/ Xxxx X. Xxxxx
----------------------------------------------
Xxxx X. Xxxxx
Title: Chief Financial Officer and Treasurer
THI HOLDINGS (DELAWARE), INC.
a Delaware corporation
By: ____________________________________________
Xxxx Xxxxxxxxxx
Title: President
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EXHIBIT A
ACQUIRED ASSETS
The Acquired Assets shall consist of:
A. Seller's agent lists and its right to underwrite and offer policyholder
replacement policies connected to, and all information relating to
expirations of, Seller's non-standard automobile business in the State of
Michigan; and
B. The following data, policy files and/or policyholder related information:
Agent/Agency Towing
Name, full address and phone Loss payee
Policy Driver
Policy number Driver type
Effective date Driver name, age, date of
Expiration date birth, sex, marital status
Named insured, full address and phone number Drivers license number
Pay plan Sr 22 filing
Current term premium Driver infractions
BI limit Driver accidents
PD limit
UM coverage limit Claims
Mini tort coverage At fault accidents
PIP option / deductible
Vehicle
Vehicle number
VIN
Make
Model
Submodel
Symbol
Full garaging address
Vehicle use
Comp deductible
Coll type
Coll deductible
Additional equipment limit
Rental
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EXHIBIT B
NON-COMPETE / NON-SOLICITATION AGREEMENT
Non-Competition Non-Solicitation. Seller acknowledges that in order to
make the purchase under this Agreement a long-term success for Buyer, a covenant
not to solicit or compete with Buyer's use of the Acquired Assets and the
execution of the transactions contemplated in the Agreement constitute a
legitimate, protectable interest of the Buyer. Therefore, except as expressly
prior approved in writing by Buyer, Seller agrees that during the three (3) year
period following the Closing Date, Seller will not, directly or indirectly:
1. Engage in, control, advise, manage, serve as a director, officer, or
employee of, act as a consultant to, or exert any influence upon,
any business which conducts non-standard automobile insurance
activities in the Territory (as hereinafter defined) similar to
those conducted by Buyer;
2. Solicit, divert or attempt to solicit or divert any party who is,
was, or was solicited to become, a customer of Seller at any time
prior to the Closing Date;
3. Solicit for employment or encourage to leave their employment, any
person accepts employment with Buyer or its affiliates,
post-Closing, and who was, during the three (3) year period prior to
such employment, an officer or employee of Seller;
4. Make any statement to any third party, including the press or media,
likely to result in adverse publicity for the Buyer.
For the avoidance of doubt, compete or competition will include, but not
be limited to, providing any services, investment or property (including
intellectual property) to any other entity that during this three (3) year
period writes non-standard auto insurance in Michigan.
Competition will not include Seller's acts (i) pursuant to any reinsurance
agreement to which it is a party as to non-standard automobile insurance and
(ii) relating to any claim on any non-standard automobile policy it has written.
In addition, Seller shall agree during the term of the non-compete
provisions herein not to sell or convey any tangible property of Seller used to
conduct its non-standard insurance business in the State of Michigan.
Trade Secrets: Confidential Material.
From and after the Closing Date, Seller shall not directly or indirectly
disclose or use for its own benefit, or for the benefit of any other person
other than the Buyer, any secret or Confidential Material, customer lists, or
supplier information, of or pertaining to the Buyer or the Seller, their
respective businesses or financial affairs, or their products which are not a
matter of public knowledge. This provision shall survive indefinitely.
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Intellectual Property.
From and after the Closing Date, Seller shall not directly or indirectly
use in any manner any trade name, trademark, service xxxx or logo used by the
Buyer, including any word, phrase or logo that is similar in sound or
appearance. This provision shall survive indefinitely.
For purposes of this Non-compete / Non-Solicitation Agreement, the term
"directly or indirectly" shall include acts or omissions as a proprietor,
partner, joint venture, employer, salesman, agent, employee, officer, director,
lender or consultant of, or owner of a twenty percent (20%) interest in any
business that competes with the Buyer's non-standard automobile insurance
business. "Territory" shall mean the geographic area located within the State of
Michigan. "Similar" shall mean an insurance company whose book of business is
comprised of more than fifty percent (50%) non-standard private passenger
automobile insurance policies. This provision applies solely to non-standard
private passenger automobile insurance, and no other line of insurance.
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EXHIBIT C
FORM OF XXXX OF SALE
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XXXX OF SALE
This Xxxx of Sale (the "Xxxx of Sale") is dated October 15, 2004, from
NORTH POINTE INSURANCE COMPANY, a Michigan corporation ("Seller") to THI
HOLDINGS (DELAWARE), INC. ("Buyer"), a Delaware corporation. All capitalized
terms not defined herein shall have the meaning set forth in the Asset Purchase
Agreement between the Parties dated October 15, 2004.
WITNESSETH
WHEREAS, Seller has agreed to transfer, assign and convey to Buyer and
Buyer has agreed to purchase the Acquired Assets, free and clear of all liens,
claims encumbrances, and rights of others.
NOW, THEREFORE, in consideration of the premises, in satisfaction of its
obligations under the Agreement and for other good and valuable consideration,
the receipt, adequacy and sufficiency of which are hereby acknowledged:
Section 1. Seller has granted, bargained, conveyed, assigned transferred,
set over and delivered, and by these presents does hereby grant, exchange,
convey, assign, transfer, set over and deliver, to Buyer all of Seller's right,
title and interest in the Acquired Assets as described on EXHIBIT A attached
hereto and incorporated herein, including, Seller's goodwill in the Acquired
Assets, relating or pertaining to the non-standard automobile insurance company
business of Seller.
TO HAVE AND TO HOLD all and singular the said properties, assets and
business hereby conveyed, transferred or assigned or intended so to be, unto
Buyer, its successors and assigns, to and for its and their own use forever
together with all and singular the properties, assets, rights and appurtenances
thereto belonging or in any way incident or appertaining thereto.
Seller is not selling to Buyer any asset that is not specifically listed
or identified on EXHIBIT A.
Section 2. Seller represents and warrants that Seller has the right and
title to convey, transfer and assign the Acquired Assets and, subject to the
limitations set forth in the Agreement. Seller will defend that right and title
against the lawful claims and demands of all persons, and the Acquired Assets
are free from all liens, claims encumbrances or Security Interests.
Section 3. Nothing contained in this Xxxx of Sale shall be construed as an
attempt hereby to assign any contract, lease, interest in property, right of
way, easement, permit, license, claim, demand or right which is not assignable
or which an attempt to assign or transfer would in any way impair, or as an
attempt to transfer any property in case such transfer would be invalid for any
cause.
Section 4. Any Person may rely without further inquiry upon the powers and
rights herein granted to Buyer and upon any notarization, certification,
affidavit or jurist by any notary
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public of any state relating to the authorization, execution and delivery of
this Xxxx of Sale or to the authenticity of any copy, conformed or otherwise,
hereof.
Section 5. This instrument is executed by, and shall be binding upon,
Seller and Seller's successors and assigns, for the uses and purposes above set
forth and referred to and shall inure to the benefit of Buyer, its successors
and assigns.
Section 6. This Xxxx of Sale shall be effective for all purposes as of the
date first above written.
Section 7. This Xxxx of Sale shall be governed by and construed and
enforced in accordance with the laws of the State of Michigan, excluding the
choice of law rules thereof.
IN WITNESS WHEREOF, Seller and Buyer have caused this Xxxx of Sale, to be
duly executed on the day and year first above set forth.
NORTH POINTE INSURANCE COMPANY
a Michigan corporation
By: /s/ Xxxx X. Xxxxx
---------------------------------------------
Xxxx X. Xxxxx
Title: Chief Financial Officer and Treasurer
THI HOLDINGS (DELAWARE), INC.
a Delaware corporation
By:
-----------------------------------------------
Xxxx Xxxxxxxxxx
Title: President
30
EXECUTION COPY
EXHIBIT A
TO
XXXX OF SALE
The Acquired Assets shall consist of:
A. Seller's agent lists and its right to underwrite and offer policyholder
replacement policies connected to, and all information relating to
expirations of, Seller's non-standard automobile business in the State of
Michigan; and
B. The following data, policy files and/or policyholder related information:
Agent/Agency Submodel
Name, full address and phone Symbol
Full garaging address
Policy Vehicle use
Comp deductible
Policy number Coll type
Effective date Coll deductible
Expiration date Additional equipment limit
Named insured, full address and phone number Rental
Pay plan Towing
Current term premium Loss payee
BI limit
PD limit Driver
UM coverage limit
Mini tort coverage Driver type
PIP option / deductible Driver name, age, date of birth, sex, marital
status
Vehicle Drivers license number
Sr 22 filing
Vehicle number Driver infractions
VIN Driver accidents
Make
Model Claims
Cont'd At fault accidents
31
EXECUTION COPY
EXHIBIT D
SELLER'S CERTIFICATE
This Certificate is being delivered pursuant to Section 10(c) of the
Asset
Purchase Agreement (the "Agreement"), dated as of October 15, 2004, between
Buyer and Seller. Terms not defined herein shall have the meaning as set forth
in the Agreement.
The undersigned hereby certifies to Buyer as follows:
1. The undersigned has caused a reasonable examination as to the warranties
and representations of Seller as set forth in the Agreement;
2. On and as of the Closing Date, each of the representations and warranties
of Seller contained in the Agreement is true.
NORTH POINTE INSURANCE COMPANY
a Michigan corporation
By: Xxxx X. Xxxxx
-------------------------------------
Xxxx X. Xxxxx
Dated: October 15, 2004 Title: Chief Financial Officer and Treasurer
32
EXECUTION COPY
EXHIBIT E
BUYER'S CERTIFICATE
This Certificate is being delivered pursuant to Section 11(b) of the
Asset
Purchase Agreement (the "Agreement"), dated as of October 15, 2004, between
Buyer and Seller. Terms not defined herein shall have the meaning as set forth
in the Agreement.
The undersigned hereby certifies to Seller as follows:
1. The undersigned has caused a reasonable examination as to the warranties
and representations of Buyer as set forth in the Agreement;
2. On and as of the Closing Date, each of the representations and warranties
of Buyer contained in the Agreement is true.
THI HOLDINGS (DELAWARE), INC.
a Delaware corporation
By: -----------------------
Xxxx Xxxxxxxxxx
Dated: October 15, 2004 Title: President
33
Activity Report -- Send
Page : 001
Date & Time : 14-Oct-2004 05:25pm
Line 1 : 2483583041
Line 2 :
E-mail :
Machine ID : North Pointe Insurance
Scan count : 45815 (0000B2F7)
Print count : 82093 (000140AD)
Drum count : 6310 (000018A6)
Nbr. Job Date Time Duration Pgs To Dept. nbr Account Comm. code Status
---- --- ------ ------- -------- --- ----------- ------------------ ----------- ------
932 278 22-Sep 10:55am 01/05 003 13128324700 EC 502 OK
933 279 22-Sep 11:45am 00/20 001 12483735586 EC 602 OK
934 280 22-Sep 01:13pm 00/15 001 12486140388 EC 603 OK
935 284 23-Sep 10:54am 00/24 002 17344629721 EC 603 OK
936 285 23-Sep 12:05pm 02/03 006 15183732726 EC 602 OK
937 286 23-Sep 12:52pm 00/14 001 12486140388 EC 603 OK
938 287 23-Sep 04:06pm 00/38 002 18132826200 G3 501 OK
939 288 24-Sep 11:56am 01/25 006 14404610989 EC 603 OK
940 289 24-Sep 12:08pm 00/21 003 17346322339 EC 603 OK
941 291 24-Sep 03:29pm 01/34 001 12486464143 G3 201 OK
942 296 27-Sep 12:12pm 00/21 003 17346322339 EC 603 OK
943 300 28-Sep 07:22am 00/26 002 12489360049 EC 602 OK
944 301 28-Sep 08:47am 05/25 017 12486680841 EC 502 OK
945 302 28-Sep 12:13pm 00/21 003 17346322339 EC 603 OK
946 310 29-Sep 05:25pm 01/07 012 12486030521 EC 603 OK
947 311 30-Sep 10:06am 00/26 002 12483991601 EC 603 OK
948 313 30-Sep 10:47am 06/19 014 19148287888 EC 300 OK
949 314 30-Sep 10:59am 03/47 014 19528322325 EC 502 OK
950 316 01-Oct 02:19am 00/21 003 17346322339 EC 603 OK
951 317 01-Oct 01:04pm 00/20 003 17346322339 EC 603 OK
952 318 01-Oct 03:35pm 00/42 001 12052544304 G3 501 OK
953 319 04-Oct 09:08am 00/14 001 12486140388 EC 603 OK
954 321 04-Oct 12:16pm 00/20 003 17346322339 EC 603 OK
955 322 04-Oct 01:22pm 00/53 003 17344140090 EC 502 OK
956 325 05-Oct 07:32am 00/34 002 16305989520 EC 502 OK
957 326 05-Oct 09:44am 00/32 002 12487501111 EC 502 OK
958 328 05-Oct 11:14am 01/39 001 12483772495 EC 603 OK
959 330 05-Oct 12:20pm 00/21 003 17346322339 EC 603 OK
960 331 05-Oct 02:06pm 00/22 002 13132225636 EC 603 OK
961 333 06-Oct 08:34am 03/15 005 12485869518 EC 402 OK
962 335 06-Oct 10:03am 00/49 003 12486680841 EC 502 OK
963 337 06-Oct 10:44am 00/39 002 12486490030 EC 502 OK
964 338 06-Oct 12:20pm 00/20 003 17346322339 EC 603 OK
965 340 06-Oct 01:26pm 00/38 001 13135611197 EC 502 OK
966 342 07-Oct 07:39am 00/26 003 18106783510 EC 603 OK
967 343 07-Oct 12:03pm 00/47 003 15867722960 EC 602 OK
968 345 07-Oct 02:41pm 00/59 003 12484065111 G3 501 OK
969 347 07-Oct 04:05pm 00/34 002 15862282288 EC 502 OK
970 346 07-Oct 04:07pm 00/00 000 12319289024 50
971 348 07-Oct 04:18pm 00/22 002 12319284024 EC 603 OK
972 350 07-Oct 05:05pm 00/53 005 19045197856 EC 603 OK
973 354 08-Oct 05:01pm 01/02 000 1586772960 EC 000 XX X0
000 000 12-Oct 07:06am 00/35 002 18089491599 EC 502 OK
975 358 12-Oct 02:32pm 00/31 002 19528322325 EC 502 OK
976 359 12-Oct 03:58pm 00/42 003 12138979551 EC 602 OK
977 362 13-Oct 10:02am 03/07 001 17706596010 EC 402 OK
978 363 13-Oct 11:07am 04/53 016 19528322325 EC 502 OK
979 365 13-Oct 01:57pm 00/34 003 12127095513 EC 603 OK
980 367 14-Oct 03:16pm 01/06 000 1813282200 NG B0
981 368 14-Oct 05:14pm 07/03 034 14404610989 EC 603 OK
