ASSET PURCHASE AGREEMENT
AGREEMENT (the "Agreement") made this 1st day of December, 1997,
by and between MEDICAL PROFESSIONAL LIABILITY AGENCY, LTD., a New York
corporation with offices at Xxx Xxxxx Xxxxx, Xxxxxxx Xxxxx, Xxx Xxxx 00000
("Seller"), FPIC INSURANCE AGENCY, INC., a Florida corporation with offices at
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxx 00000 ("Buyer") and,
solely for purposes of Sections 5.1, 5.2, 5.3 and 5.4 hereof, FRONTIER INSURANCE
COMPANY, d/b/a FRONTIER INSURANCE COMPANY OF NEW YORK, a New York corporation
with offices at 000 Xxxx Xxxxxx Xxxxx Xxxx, Xxxx Xxxx, Xxx Xxxx 00000 ("Frontier
Insurance").
R E C I T A L
WHEREAS, Buyer is desirous of purchasing and Seller is desirous
of selling certain of Seller's assets comprising substantially all of Seller's
Florida medical malpractice book of business, excluding coverage for dentists,
psychiatrists and chiropractors (the "Acquired Medical Malpractice Book of
Business"), upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, Buyer and Seller hereby agree as follows:
ARTICLE I
ASSETS BEING SOLD
1.1 Assets Being Sold. Seller hereby sells, conveys, transfers,
assigns and delivers to Buyer and Buyer hereby purchases from Seller the
following assets comprising substantially all of Seller's Florida medical
malpractice book of business, excluding, however, coverage for dentists,
psychiatrists and chiropractors (collectively, the "Acquired Assets"):
(a) all of Seller's rights to and interest in the
expirations and renewals with respect to the insurance policies issued and
insured by Frontier Insurance covering acts of medical malpractice by Florida
physicians in effect as at December 1, 1997 listed on Schedule 1.1(a) hereto
(the "Renewal Rights"), which Renewal Rights expressly exclude medical
malpractice for dentists, psychiatrists and chiropractors and insurance policies
issued and insured by Seller and/or Frontier Insurance under national programs
or social service programs; and
(b) all informational files relating to the Renewal
Rights.
1.2 Assets Excluded from Sale. Only the Acquired Assets as
described in Section 1.1 are being sold and purchased pursuant to this
Agreement.
1.3 Consideration. In full consideration for the Acquired Assets,
Buyer is delivering to Seller on the date hereof One Hundred Eleven Thousand Six
Hundred Sixty-Three (111,663) shares of Common Stock, par value $0.10 per share,
of FPIC Insurance Group, Inc. ("FPIC"), the parent corporation of Buyer (the
"FPIC Shares").
1.4 Adjustment to Consideration. The consideration paid for the
Acquired Assets is subject to the following cash adjustment:
(a) In the event the total direct written premiums and
assumed premiums received by Buyer as a result of renewals from the Renewal
Rights for the twelve-month period December 1, 1997 through November 30, 1998
(the "Post-Closing Renewals")
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exceed $8,000,000, Buyer shall pay Seller forty percent (40%) of the difference
between the Post-Closing Renewals and $8,000,000.
(b) In the event the Post-Closing Renewals are less than
$8,000,000, Seller shall pay Buyer forty percent (40%) of the difference between
$8,000,000 and the Post-Closing Renewals.
The Post-Closing Renewals shall be calculated by Buyer and
certified as true and correct by Buyer's Senior Vice President and Chief
Financial Officer and independent public auditors (the "Certified Calculation").
In the event payment is due from Buyer to Seller, Buyer shall deliver the
Certified Calculation, together with the required payment by certified or
official bank check payable to the order of Seller, by February 15, 1999, or
such later date as shall be mutually agreed upon by Buyer and Seller. In the
event payment is due from Seller to Buyer, Seller shall deliver payment by
certified or official bank check payable to the order of Buyer, within fifteen
(15) business days following Seller's receipt from Buyer of the Certified
Calculation. Seller acknowledges and agrees that the Post-Closing Renewals shall
be at Florida Physicians Insurance Company, Inc.'s ("Florida Physician's")
rates, on Florida Physician's policy forms and subject to Florida Physician's
underwriting standards consistent with Florida Physician's past practices.
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ARTICLE II
REPRESENTATIONS AND
WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer that:
2.1 Organization. Each of Seller and Frontier Insurance is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New York with full power and authority to own its properties and
carry on its business as now conducted.
2.2 Authority. The execution and delivery of this Agreement by
each of Seller and Frontier Insurance and the consummation of the transactions
contemplated hereby by Seller and Frontier Insurance have been authorized and
approved by all requisite corporate action of Seller and Frontier Insurance and
this Agreement and all instruments being delivered by Seller and Frontier
Insurance hereunder represent legal, valid and binding obligations of Seller and
Frontier Insurance enforceable against Seller and Frontier Insurance in
accordance with their respective terms.
2.3 No Consent. No consent, order, license, approval or
authorization of, or exemption by, or registration or declaration or filing
with, any governmental authority, bureau or agency, and no consent or approval
of any other person, corporation, partnership, trust, incorporated or
unincorporated association, joint venture, joint stock company, government (or
any agency or political subdivision thereof) or other entity of any kind
("Person"), is required to be obtained or made by Seller or any of Seller's
affiliates in connection with the performance by Seller or Frontier Insurance of
this Agreement or the consummation of the transactions contemplated to be
performed by Seller or Frontier Insurance hereunder.
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2.4 Title to Acquired Assets. Seller has good and marketable
title to the Acquired Assets, free and clear of any adverse claims, mortgages,
liens or other burdens or encumbrances, except the related obligations of Seller
with respect to the contracts being assigned, and the instruments of transfer
being executed and delivered by Seller concurrently with this Agreement are
valid and binding obligations of Seller and are sufficient to transfer to Buyer
all right, title and interest of Seller in and to the Acquired Assets.
2.5 No Breach. The consummation of the transactions contemplated
by this Agreement do not (i) contravene any provision of the Certificate of
Incorporation or By-Laws of Seller; (ii) violate, conflict with or result in the
breach or termination of, or constitute an amendment to, or otherwise give any
Person the right to terminate, or constitute (or with notice or lapse of time or
both would constitute) a default (by way of substitution, novation or otherwise)
under the terms of, any contract, mortgage, lease, bond, indenture, agreement,
franchise or other instrument or obligation relating to the Acquired Assets to
which Seller is a party or by which Seller or any of the Acquired Assets are
bound or affected; (iii) result in the creation of any lien, mortgage, claim,
charge, security interest, encumbrance, restriction or limitation (collectively,
"Liens") upon any of the Acquired Assets pursuant to the terms of any contract,
mortgage, lease, bond, indenture, agreement, franchise or other instrument or
obligation; (iv) violate any judgment, order, injunction, decree or award of any
court, arbitrator, administrative agency or governmental or regulatory body
against, or binding upon, Seller or any of the Acquired Assets; (v) constitute a
violation by Seller of any statute, law, rule or regulation of any jurisdiction
as such statute, law, rule or regulation relates to the Renewal Rights or to any
of the Acquired Assets; or (vi) violate any Permit (as defined in Section 2.7).
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2.6 Compliance with Laws. Neither Seller nor Frontier Insurance
is in violation of any applicable law, rule or regulation, the violation of
which could materially and adversely affect the Acquired Assets.
2.7 Permits. Seller has duly obtained and holds in full force and
effect all consents, authorizations, permits, licenses, orders or approvals of,
and has made all declarations and filings with, all federal, state or local
governmental or regulatory bodies that are material or necessary with respect to
the Acquired Medical Malpractice Book of Business (collectively, the "Permits");
all the Permits were duly obtained and are in full force and effect; no
violations are or have been recorded in respect of any such Permit and no
proceeding is pending or, to the knowledge of Seller, threatened to revoke, deny
or limit any such Permit.
2.8 Actions and Proceedings. There are no claims, actions, suits,
arbitrations, proceedings, investigations or inquiries, whether at law or in
equity and whether or not before any court, private body or group, governmental
department, commission, board, agency or instrumentality (collectively,
"Actions"), pending or, to the knowledge of Seller, threatened against,
involving or affecting the Acquired Assets, whether or not fully or partially
covered by insurance, or which would give rise to any right of indemnification
by any Person with respect to the Acquired Assets, other than any claim, action
or suit related to any policy for which Frontier Insurance is the insurer or
reinsurer; and there are no outstanding orders, writs, injunctions, awards,
sentences or decrees of any court, private body or group, governmental
department, commission, board, agency or instrumentality against, involving or
affecting the Acquired Assets. None of the Actions specified in the preceding
sentence, individually or in the aggregate, will have a material adverse effect
with respect to the Acquired Assets, and there are
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no circumstances, nor any events which have occurred which Seller believes will
result in an Action against or affecting the Acquired Assets.
2.9 No Brokers. Seller has not employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated hereby for which Buyer may be
responsible.
2.10 Policies of Insurance. Seller has no reason to believe that
the policies underlying the Renewal Rights will be terminated before their
stated expiration dates, except in the ordinary course, or will not be renewed
in the ordinary course upon their expiration.
2.11 Examination of Documents, Investment Purposes and Legending
of the Shares. Seller has examined the Annual Report on Form 10-K of FPIC for
the fiscal year ended December 31, 1996, FPIC's Quarterly Reports on Form 10-Q
for the quarters ended March 31, 1997 and June 30, 1997, including the financial
statements contained therein, FPIC's Proxy Statement for its 1997 Annual Meeting
of Shareholders and FPIC's 1997 Annual Report to Shareholders, and is acquiring
the FPIC Shares for Seller's own account for investment within the contemplation
of the Securities Act of 1933, as amended (the "Securities Act") and not with a
view to the transfer or resale thereof; Seller has been advised by Seller's
counsel of the legal implications and effect of the foregoing under the
Securities Act and of the circumstances under which the FPIC Shares to be
received by Seller may be disposed of under the Securities Act, including the
possible limited sale thereof pursuant to Rule 144 under the Securities Act; and
Seller consents to the legending of the certificates for the FPIC Shares to be
received with a legend in substantially the following form:
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THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT") AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT FOR
THESE SHARES OR AN OPINION OF THE CORPORATION'S COUNSEL THAT
REGISTRATION IS NOT REQUIRED.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller that:
3.1 Organization. Buyer is a corporation duly organized, validly
existing and its status is active under the laws of the State of Florida with
full power and authority to own, lease and operate its properties and to carry
on its business as now conducted.
3.2 Authority. The execution and delivery of this Agreement by
Buyer and the consummation of the transactions contemplated hereby by Buyer have
been authorized and approved by all requisite corporate action and this
Agreement and all instruments being delivered by Buyer hereunder represent the
legal, valid and binding agreements of Buyer enforceable against it in
accordance with their respective terms.
3.3 No Breach. The authorization, execution, delivery and
performance of this Agreement by Buyer do not violate any provision of its
articles of incorporation or by-laws or any agreement to which it is a party.
3.4 The FPIC Shares. The FPIC Shares delivered hereby have been
duly authorized and are validly issued, fully paid and non-assessable. The FPIC
Shares are authorized for listing on The Nasdaq Stock Market. No consent,
approval or filing with any
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Person (as defined in Section 2.3) is required in connection with the issuance
of the FPIC Shares, and the issuance of the FPIC Shares does not trigger
preemptive rights with respect to any Person.
3.5 Documents Delivered. Buyer has delivered to Seller FPIC's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996 (the
"1996 Form 10-K"), FPIC's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997 and June 30, 1997, FPIC's Proxy Statement for its 1997 Annual
Meeting of Shareholders and FPIC's 1996 Annual Report to Shareholders
(collectively, the "SEC Documents"). The SEC Documents were true and complete in
all material respects as at their respective dates, did not contain any untrue
statement of a material fact nor omit to state any material fact required to be
stated therein or necessary to make the statements contained therein, in light
of the circumstances under which they were made, not misleading, and since the
filing of the 1996 Form 10-K, there has not been any material adverse change in
FPIC's financial condition, results of operations or liabilities.
3.6 No Brokers. Buyer has not employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated hereby for which Seller may be
responsible.
ARTICLE IV
DELIVERIES
4.1 Deliveries to Buyer. On the date hereof, Seller is delivering
to Buyer:
(a) A xxxx of sale conveying, assigning and
transferring to Buyer the Renewal Rights, executed by Seller.
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(b) The opinion of Xxxxxxx Xxxxxx & Green, P.C.,
special counsel to Seller, or Xxxxxx Xxxxxx, Esq.,
counsel to Seller, as to the matters set forth in
Sections 2.1, 2.2, 2.3, 2.4, 2.5, 2.6, 2.7 and 2.8.
4.2 Deliveries to Seller. On the date hereof, Buyer is delivering
to Seller the following:
(a) A stock certificate or certificates evidencing the
FPIC Shares registered in the Frontier Insurance
Group, Inc.
(b) The opinion of LeBouef, Lamb, Xxxxxx & XxxXxx,
L.L.P., counsel to Buyer, as to the matters set
forth in Sections 3.1, 3.2, 3.3 and 3.4.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Reinsurance Election with Respect to Seller's National
programs.
(a) On or before December 31, 1997, Buyer may notify
Seller of the election of FPIC or another affiliate of Buyer (a "Participating
Affiliate") to participate in any one or more of Frontier Insurance's national
medical malpractice insurance programs listed on Schedule 5.1 hereto (the
"National Programs") on either of the following bases:
(i) With respect to any or all of the National Programs, a
Participating Affiliate may elect to enter into a reinsurance
agreement with Frontier Insurance in a form to be mutually agreed
to by the parties hereto (a "Reinsurance Agreement"), pursuant to
which Frontier Insurance will
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cede to the Participating Affiliate for a period of three years
from the date of election all or any portion of the Florida
component of the respective National Programs; or
(ii) With respect to any or all of the National Programs,
a Participating Affiliate may elect to enter into a Reinsurance
Agreement with Frontier Insurance pursuant to which Frontier
Insurance will cede to the Participating Affiliate for a period
of three years from the date of election, with respect to each
National Program selected by the Participating Affiliate, that
portion of the National Program which bears the same proportion
to the National Program that the Florida component of the
National Program then bears to the National Program. As an
illustration, if the Florida component of a National Program
constitutes 10% of the entire program at the time of a
Participating Affiliate's election, the Participating Affiliate
may elect to reinsure 10% of the entire program.
(b) For a period of three years from the date of this
Agreement, in the event Seller, Frontier Insurance or any of their respective
affiliates initiates any other national program or programs involving medical
healthcare professional liability, Seller shall give notice thereof to Buyer,
and Buyer shall have 30 days from the receipt of such notice to notify Seller of
the election of a Participating Affiliate to participate in such program or
programs on the same bases provided in paragraph (a) above, and Seller and
Frontier Insurance shall, or shall cause their affiliates to, permit the
Participating Affiliate to so participate.
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5.2 Encouragement of Independent Agents Owning Renewal Rights.
Seller and Frontier Insurance hereby agree to use their reasonable efforts and
to cooperate with Buyer to encourage those independent Florida insurance agents
who own the rights and interests in expirations and renewals on insurance
policies written by Frontier Insurance relating to Seller's Florida medical
malpractice book of business (excluding medical malpractice for dentists,
psychiatrists and chiropractors and insurance issued and insured under national
programs or social service programs) to renew such insurance through Buyer, FPIC
or a Participating Affiliate as insurer. The reasonable efforts and cooperation
of Seller and Frontier Insurance shall include, without limitation, the
preparation and mailing of letters to the relevant policyholders and insurance
agents in a form mutually agreeable to Buyer and Seller.
5.3 Florida Endorsements. Seller and Frontier Insurance hereby
agree to use their best efforts to cause each of the Florida Society of Internal
Medicine and the Florida Dermatological Society to endorse the medical
malpractice insurance programs of Buyer.
5.4 Non-Competition. (a) As a material inducement for Buyer to
enter into this Agreement, Seller and Frontier Insurance agree, until November
30, 2000, not to act as insurer or agent, and to cause their affiliates not to
insure or to act as agent with respect to, any medical professional liability
insurance policies in the State of Florida, excluding, however, medical
professional liability for dentists, psychiatrists and chiropractors and
insurance issued and insured under national programs or social service programs
of Seller, Frontier Insurance or their affiliates and except as permitted in
Section 5.4(b). The activities prohibited by this Section 5.4(a) are hereinafter
referred to as the "Competitive Activities."
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(b) Through November 30, 2000, none of Seller, Frontier
Insurance or their respective affiliates shall establish a start-up entity or
enterprise that engages in Competitive Activities. In the event any of Seller,
Frontier Insurance or any of their respective affiliates acquires an insurance
company prior to November 30, 2000 that engages in Competitive Activities, then
Seller, Frontier Insurance or the respective affiliate, as the case may be,
shall offer Buyer the right, for a period of 30 days following notification
thereof to Buyer, to purchase the rights to and interests in the expirations and
renewals with respect to the insurance policies with renewal dates prior to
November 30, 2000 owned by such insurance company covering such Competitive
Activities on the same terms and conditions that Seller is selling to Buyer the
Renewal Rights pursuant to this Agreement. In the event Buyer accepts the offer
to purchase such expirations and renewals, Seller, Frontier Insurance and/or the
acquired insurance company shall agree to a provision similar to Section 5.2
hereof with respect to expirations and renewals not owned by the acquired
insurance company for insurance with renewal dates prior to November 30, 2000
and Buyer otherwise shall be entitled to expand upon the class of business
covered by such insurance in the State of Florida through November 30, 2000 to
the exclusion of Seller, Frontier Insurance, their respective affiliates and the
acquired insurance company. In the event Buyer declines to accept Seller's offer
to purchase such expirations and renewals and such expirations and renewals
relate to a class of insurance not written by Buyer or its affiliates as of the
date of this Agreement, then Seller, Frontier Insurance, their respective
affiliates and/or the acquired insurance company shall be permitted to renew
such insurance and expand upon the class of business covered by such insurance
in the State of Florida. In the event Buyer declines to accept Seller's offer to
purchase such expirations and renewals and such
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expirations and renewals relate to a class of insurance written by Buyer or its
affiliates as of the date of this Agreement, then Seller, Frontier Insurance,
their respective affiliates and/or the acquired insurance company shall allow
the related insurance to expire in accordance with their terms and shall neither
renew such insurance nor expand upon the class of business covered by such
insurance in the State of Florida. Notwithstanding anything to the contrary
provided in this Section 5.4(b), in no event shall Seller, Frontier Insurance,
their respective affiliates or the acquired insurance company, prior to November
30, 2000, insure or act as agent with respect to any physicians or policies to
which the Renewal Rights pertain.
(c) Notwithstanding the provisions contained in this
Section 5.4, Seller and Frontier Insurance shall be entitled to act as insurer
with respect to policies underlying the Renewal Rights in effect prior to
December 1, 1997 and until their respective expirations.
5.5 Registration Rights.
(a) Definitions. For purposes of this Section 5.5, the
following terms shall have the respective meanings as herein set forth:
"Piggyback Shares" means (i) the shares of Registrable Securities
requested by Seller under Section 5.5(b) to be included in a registration
statement plus (ii) the shares of Common Stock proposed to be included in a
registration statement, if any, by other shareholders of FPIC.
"Registrable Securities" means the FPIC Shares. Registrable
Securities shall cease to be Registrable Securities upon the earliest to occur
of the following: (i) a registration statement with respect to such shares shall
have become effective under the Securities Act of 1933, as amended (the
"Securities Act") and the shares have been sold thereunder, (ii) the
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holding period requirements of rule 144(d) (or any successor provision) under
the Securities Act with respect to such shares shall have been satisfied by
Seller or its designee (to the extent the shares are issued to a designee),
(iii) such shares shall have been otherwise transferred, new certificates for
such shares shall have been delivered by FPIC not bearing a legend restricting
further transfer by virtue of the Securities Act and subsequent disposition of
such shares shall not require registration or qualification under the Securities
Act or any similar state law then in force, or (iv) such shares shall have
ceased to be outstanding. Notwithstanding any other provision of this Agreement,
Seller's rights under this Section 5.5 shall cease at such time as there are no
Registrable Securities.
(b) Notice and Registration Rights. If FPIC at any time
determines to register any of its Common Stock on Form X-0, Xxxx X-0 or Form S-1
for sale for cash for its own account (other than an offering solely of Common
Stock under Rule 415 under the Securities Act or any successor to Rule 415 under
the Securities Act or any successor to Rule 415), or is registering shares of
its Common Stock on Forms X-0, X-0 or S-1 for sale by shareholders of FPIC,
Buyer will give written notice by registered mail to Seller of FPIC's intention
to so register, at least 15 days prior to the anticipated filing date. Upon the
written request of Seller made within 10 days after the mailing of any such
notice (which request shall specify the number of Registrable Securities
intended to be sold) Buyer will cause all Registrable Securities, for which
registration has been requested, to be included in the registration statement
proposed to be filed by FPIC; provided, however, that if such registration shall
be in connection with an underwritten public offering and if the managing
underwriter shall advise FPIC that in the opinion of such managing underwriter
the inclusion of all Piggyback Shares in the proposed
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underwriting would materially interfere with the successful marketing of the
shares of Common Stock proposed to be sold by FPIC, then the number of Piggyback
Shares to be included therein shall be reduced pro rata (subject to any
presently existing rights of others) among the respective holders thereof as
advised by such managing underwriter in order to prevent such interference.
(c) Rights to Terminate Registration. Notwithstanding
anything to the contrary in this Section 5.5, FPIC shall have the right to
discontinue any registration under this Section 5.5 at any time prior to the
effective date of such registration.
(d) Implementation of Registration Rights. In the event
the distribution of Common Stock of FPIC covered by a Registration Statement
pursuant to this Section 5.5 is to be underwritten, each of FPIC and Seller
shall enter into an underwriting agreement containing customary provisions in
connection therewith with the managing underwriters approved by FPIC in its sole
discretion, and FPIC and Seller shall complete and/or execute all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents as may be reasonable or necessary in connection with such
underwriting agreement.
(e) Registration Expenses.
(i) All expenses incident to the performance of or
compliance with this Section 5.5 by Buyer or FPIC, including, without
limitation, all registration and filing fees, fees and expenses of compliance
with securities or Blue Sky laws, printing expenses, messenger and delivery
expenses, fees and disbursements of counsel and independent public accountants
for Buyer or FPIC (including the expense of any audit and/or "comfort" letter)
and other persons retained by Buyer or FPIC, and fees and disbursements of
underwriters (excluding
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underwriting commissions and discounts related to Seller's Registrable
Securities), shall be borne by Buyer or FPIC.
(ii) All expenses incident to Seller's performance
under this Section 5.5, including without limitation, all fees and disbursements
of counsel for Seller and all independent public accountants and other persons
retained by Seller, all underwriting commissions and discounts related to any
Seller's Registrable Securities included in any such underwritten public
offering and brokerage commissions, if any, shall be borne by Seller.
5.6 Schedule of Florida Medical Malpractice Claims. On or before
December 5, 1997, Buyer shall deliver to Seller a schedule setting forth by
report year a history of claims and premium payments relating to all Florida
medical malpractice insurance policies issued or insured by Seller or Frontier
Insurance during the past three years.
ARTICLE VI
SURVIVAL
6.1 Survival. All representations and warranties made in this
Agreement shall survive for a period of two years after the date hereof, except,
however, that (i) claims based on fraud or willful misrepresentation may be
asserted at any time within one year after the party learns of such fraud or
willful misrepresentation and (ii) any representation or warranty in respect of
which indemnity may be sought under Article 7 that would otherwise terminate two
years after the date hereof shall survive the second anniversary of the date
hereof if notice, given in good faith, of the specific inaccuracy or breach
thereof giving rise to such indemnity shall have been given to the party against
whom such indemnity may be sought prior to the second
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anniversary of the date hereof. In addition, the agreements contained in Section
1.4 and Article V shall survive the date hereof without limitation.
ARTICLE VII
INDEMNIFICATION
7.1 Indemnification.
(a) Seller hereby agrees to indemnify, defend and hold
harmless Buyer, FPIC and their officers, directors, employees and agents from
and against all losses, fines, civil penalties, judgments, claims, damages or
expenses (including reasonable attorneys' fees) of every kind imposed upon,
incurred or paid by any of them by reason of the breach by Seller of (i) any
representation and warranty made by Seller in this Agreement, or (ii) any
agreement of Seller set forth in Section 1.4 or of Seller or Frontier Insurance
set forth in Article V hereof.
(b) Buyer hereby agrees to indemnify, defend and hold
harmless Seller, Frontier Insurance and their officers, directors, employees and
agents from and against all losses, fines, civil penalties, judgments, claims,
damages or expenses (including reasonable attorneys' fees) of every kind imposed
upon, incurred or paid by any of them by reason of (i) the breach by Buyer of
any representation and warranty made by it in this Agreement, (ii) any claims
made against Seller or Frontier Insurance relating to the Renewal Rights other
than for matters in existence prior to December 1, 1997 or for losses under the
policies underlying the Renewal Rights or arising out of the conduct of the
Florida medical malpractice book of business being acquired by Buyer on and
after December 1, 1997, or (iii) the breach by Buyer of the agreement of Buyer
set forth in Section 1.4 hereof or Article V hereof.
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(c) Each party hereto shall promptly notify the other
party in writing of any claim made on such party by any third party in respect
of a liability, obligation or other matter which is the subject of the foregoing
indemnity agreement, and the party obligated hereunder to indemnify the party
giving such notice shall have the right to compromise or defend any such claim
through counsel of its choosing; provided, however, that any such compromise or
defense of a claim by a party shall require the consent of the other party,
which consent shall not be unreasonably withheld.
(d) Claims for indemnification under this Article VII must
be asserted prior to the second anniversary of the date hereof except as
otherwise provided in clauses (i) and (ii) of Section 6.1 and in the last
sentence of Section 6.1.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.1 Amendment and Modification. This Agreement may be amended,
modified and supplemented only by a writing signed by Buyer and Seller.
8.2 Waiver of Compliance. Any failure of Buyer or Seller to
comply with any obligation, covenant, agreement or condition herein contained
may be expressly waived, in writing only, by (i) Buyer in the case of any
failure of Seller or (ii) Seller, in the case of any failure of Buyer. Such
waiver shall be effective only in the specific instance and for the specific
purpose for which made or given.
8.3 Expenses. Each party will pay its own expenses incurred in
connection with this Agreement or any transaction contemplated by this
Agreement. The foregoing shall
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not be construed as limiting any other rights which any party may have as a
result of misrepresentation of or breach by any other party.
8.4 Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered by hand or when mailed by
certified or registered mail (return receipt requested), postage prepaid, as
follows:
A. If to Seller:
Medical Professional Liability Agency, Ltd.
Xxx Xxxxx Xxxxx
Xxxxxxx Xxxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx, President
with a copy to:
Frontier Insurance Company
000 Xxxx Xxxxxx Xxxxx Xxxx
Xxxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxx, President
or to such other person or place as Seller shall designate by notice in the
manner provided in this Section 8.4;
B. If to Buyer:
FPIC Insurance Agency, Inc.
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xx. Xxxxxxx X. Xxxxxxx
President and Chief Executive Officer
or to such other person as Buyer shall designate by notice in the manner
provided in this Section 8.4.
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8.5 Assignment. This Agreement shall be binding upon and inure to
the benefit of Buyer and Seller and their respective successors and assigns, but
neither this Agreement nor any of the rights, interests and obligations
hereunder shall be assigned by Buyer or Seller without the prior written consent
of the other party.
8.6 Third Parties. This Agreement is not intended to and shall
not be construed to give any person other than the parties hereto (and their
affiliates as provided herein) any interest or rights (including, without
limitation, any third party beneficiary rights) with respect to or in connection
with any agreement or provision contained herein or contemplated hereby.
8.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida, without regard to
principles of conflicts of laws; provided, however, that the transfer of title
to the Acquired Assets from Seller to Buyer shall be governed by and construed
in accordance with the laws of the State of New York.
8.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
8.9 Headings. The headings of the sections, schedules and
articles of this Agreement are inserted for the sake of convenience only and
shall not constitute a part hereof.
8.10 Entire Agreement. This Agreement, including the schedules,
contains the entire understanding of the parties in respect of the subject
matter contained herein and therein and there are no other terms or conditions,
representations or warranties, written or oral, express or implied, except as
set forth herein.
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8.11 Consent to Jurisdiction; Service of Process.
(a) Buyer and Seller hereby irrevocably submit to the
jurisdiction of the courts of the State of New York or the State of Florida over
any dispute arising out of this Agreement and each irrevocably agrees that all
claims in respect of such dispute or proceeding shall be heard and determined in
such courts. Buyer and Seller hereby irrevocably waive, to the fullest extent
permitted by applicable law, any objection which they may have to the laying of
venue of any such dispute brought in such court or any defense of inconvenient
forum for the maintenance of such dispute.
(b) Each of the parties hereto hereby consents to process
being served by any party to this Agreement in any suit, action or proceeding of
the nature specified in subsection (a) above by delivering it in the manner
specified by the provisions of Section 8.4 of this Agreement.
8.12 Further Assurances. Seller and Buyer agree to take such
additional actions and to execute and deliver such additional documents,
instruments or certificates as Buyer or Seller may reasonably request from time
to time in order to effect the transactions contemplated by this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly as of the day and year first above written.
MEDICAL PROFESSIONAL LIABILITY
AGENCY, LTD.
By: /s/ Xxxxxx X. Xxxxx
____________________________________
Xxxxxx X. Xxxxx, President
FPIC INSURANCE AGENCY, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
____________________________________
Name: Xxxxxxx X. Xxxxxxx
Title: President and
Chief Executive Officer
FOR PURPOSES OF SECTIONS 5.1, 5.2,
5.3 AND 5.4 ONLY:
FRONTIER INSURANCE COMPANY
d/b/a FRONTIER INSURANCE
COMPANY OF NEW YORK
By: /s/ Xxxxxx X. Xxxxx
____________________________________
Xxxxxx X. Xxxxx, Vice President
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