AGREEMENT BETWEEN ADVISERS
by and between
CCM Advisors, LLC
and
Institutional Portfolio Services, Ltd.
Dated November 20, 2002
TABLE OF CONTENTS
Page
AGREEMENT BETWEEN ADVISERS
This Agreement Between Advisers ("Agreement") is dated November 20, 2002 by
and between CCM Advisors, LLC, a Delaware limited liability company ("CCMA"),
and Institutional Portfolio Services, Ltd., an Illinois corporation ("IPS").
RECITALS
IPS is the investment adviser to the Kenilworth Fund, Inc. (the "Acquired
Fund").
CCMA is the administrator to the AHA Diversified Equity Fund (the
"Surviving Fund") and is the investment adviser to the Diversified Equity Master
Portfolio, a separate series of CCM Advisors Funds, into which the Surviving
Fund invests all of its assets in a Master Fund/Feeder Fund structure.
On the terms set forth in this Agreement, IPS and CCMA desire to take all
commercially reasonable actions necessary to facilitate the consummation of the
Agreement and Plan of Reorganization dated November 20, 2002 by and among the
Acquired Fund, AHA Investment Funds, Inc., on behalf of the Surviving Fund and,
solely for the purposes of paragraph 9.2 thereof, each of CCMA and IPS (the
"Reorganization Agreement") pursuant to which the assets and liabilities of the
Acquired Fund shall be acquired and assumed by the A share class of the
Surviving Fund.
The parties, intending to be legally bound, agree as follows:
1. ACTIONS; CLOSING
1.1 Actions by IPS
IPS will take all actions within its control necessary to facilitate the
consummation of the Reorganization Agreement pursuant to which the assets and
liabilities of the Acquired Fund shall be acquired and assumed by the A share
class of the Surviving Fund, including but not limited to recommending to the
board of directors of the Acquired Fund that they approve the Reorganization
Agreement.
1.2 Consideration
The consideration for the actions of IPS will be as follows:
(a) On the date of Closing, CCMA will pay IPS 0.25% of the net assets of
the Acquired Fund on the date of Closing (the "Consideration"). CCMA shall
deliver the Consideration by wire transfer on the date of Closing. IPS shall
deliver specific account information and wire instructions in writing to CCMA at
least three (3) business days prior to the Closing Date.
(b) Thereafter, on each annual anniversary of the Closing Date up to and
including December 30, 2009, CCMA will pay IPS 0.25% of the average daily net
assets of the A share class of the Surviving Fund that are attributable to
shareholders of the A share class of the Surviving Fund that were shareholders
of the Acquired Fund on the date of Closing (excluding any assets contributed by
such shareholders to the Surviving Fund after the date of Closing). Such
payments shall be referred to herein as "Contingent Consideration." The
calculation of average daily net assets will be made by US Bancorp Fund
Services.
1.3 Closing
The Closing Date shall be on December 30, 2002, or on such other date as
the parties may agree. The Closing shall be held at 9:00 a.m. at Surviving
Fund's offices, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000, or at
such other time and/or place as the parties may agree.
2. REPRESENTATIONS AND WARRANTIES OF IPS
IPS represents and warrants to CCMA as follows:
2.1 Organization And Good Standing
(a) IPS is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, with full
corporate power and authority to conduct its business as it is now being
conducted and to own or use the properties and assets that it purports to own or
use.
(b) IPS is registered as an investment adviser under the Investment
Advisers Act of 1940 and has made all filings that it is required to make under
applicable federal and state laws in order to provide investment advisory
services to the Acquired Fund.
2.2 Enforceability; Authority; No Conflict
(a) This Agreement constitutes the legal, valid and binding obligation of
IPS, enforceable against IPS in accordance with its terms. IPS has the absolute
and unrestricted right, power and authority to execute and deliver this
Agreement and to perform its obligations under this Agreement, and such action
has been duly authorized by all necessary action by IPS' shareholders and board
of directors.
(b) Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the transactions contemplated herein will,
directly or indirectly (with or without notice or lapse of time):
(i) Breach (A) any provision of any of the Articles of Incorporation
or bylaws of IPS or (B) any currently effective resolution adopted by the
board of directors or the shareholders of IPS;
(ii) Violate or breach any law, regulation, injunction, order,
judgment or decree to which IPS is subject; or
(iii) Breach any provision of, cause a default under or result in
acceleration of payment under, cancellation, termination or modification of
any contract to which IPS is a party or to which any of its assets are
subject;
(c) Other than as referred to in paragraph (a) above, IPS is not required
to give any notice to or obtain any consent from any person in connection with
the execution and delivery of this Agreement or the consummation of any
transaction contemplated herein.
2.3 Proceedings
No litigation or administrative proceeding or investigation of or before
any court or governmental body is presently pending or, to the knowledge of IPS,
threatened against IPS or the Acquired Fund, or any of IPS's or the Acquired
Fund's properties or assets, which may affect IPS's ability to consummate the
transactions contemplated hereby.
2.4 Representations and Warranties of IPS
IPS represents and warrants to CCMA, on behalf of itself and the Acquired
Fund, that each of the representations and warranties made by the Acquired Fund
in the Reorganization Agreement is true and correct.
2.5 Brokers
There are no brokers or finders entitled to receive any payments in
connection with the transactions provided for herein.
2.6 Actions as Investment Adviser
IPS has acted as investment adviser to the Acquired Fund and has served as
administrator to the Acquired Fund in a manner that is in material compliance
with all applicable laws and has overseen the actions of the portfolio manager
to the Acquired Fund to ensure that the investments of the Acquired Fund are in
material compliance with the investment restrictions of the Acquired Fund. IPS
has received no written complaint or other notice of default from any
shareholder of the Acquired Fund which is currently unresolved.
3. REPRESENTATIONS AND WARRANTIES OF CCMA
CCMA represents and warrants to IPS as follows:
3.1 Organization And Good Standing
(a) CCMA is a limited liability company duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization, with
full power and authority to conduct its business as it is now being conducted
and to own or use the properties and assets that it purports to own or use.
(b) CCMA is registered as an investment adviser under the Investment
Advisers Act of 1940 and has made all filings that it is required to make under
applicable federal and state laws in order to provide investment advisory
services to the Surviving Fund.
3.2 Enforceability; Authority; No Conflict
(a) This Agreement constitutes the legal, valid and binding obligation of
CCMA, enforceable against CCMA in accordance with its terms. CCMA has the
absolute and unrestricted right, power and authority to execute and deliver this
Agreement and to perform its obligations under this Agreement, and such action
has been duly authorized by all necessary action by CCMA's members and managers.
(b) Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the transactions contemplated herein will,
directly or indirectly (with or without notice or lapse of time):
(i) Breach (A) any provision of any of the Certificate of Organization
or Limited Liability Company Agreement of CCMA or (B) any currently
effective resolution adopted by the managers or the members of CCMA;
(ii) Violate or breach any law, regulation, injunction, order,
judgment or decree to which CCMA is subject; or
(iii) Breach any provision of, cause a default under, or result in
acceleration of payment under, cancellation, termination or modification of
any contract to which CCMA is a party or to which any of its assets are
subject;
(c) Except as set forth on Schedule 3.2 and as referred to in paragraph (a)
above, CCMA is not required to give any notice to or obtain any consent from any
person in connection with the execution and delivery of this Agreement or the
consummation of any transaction contemplated herein.
3.3 Proceedings
No litigation or administrative proceeding or investigation of or before
any court or governmental body is presently pending or threatened against CCMA
or any of its properties or assets which may affect its ability to consummate
the transactions contemplated hereby.
3.4 Brokers
There are no brokers or finders entitled to receive any payments in
connection with the transactions provided for herein.
3.5 Actions as Investment Adviser and Administrator
CCMA has acted as investment adviser to the Diversified Equity Master
Portfolio in which the Surviving Fund invests its assets and has served as
administrator to the Surviving Fund in a manner that is in material compliance
with all applicable laws and has overseen the actions of Cambiar Investors, Inc.
and Xxxxxxx Associates Investment Management, LLC to ensure that the investments
of the Surviving Fund are in material compliance with the investment
restrictions of the Surviving Fund.
4. COVENANTS PRIOR TO CLOSING
4.1 IPS Services to Acquired Fund
Between the date of this Agreement and the Closing Date, IPS shall:
(a) continue to act as investment adviser and administrator to the Acquired
Fund in accordance with applicable laws and in a manner consistent with industry
norms and past practices.
(b) use its reasonable best efforts to cause the conditions set forth in
Section 5 hereto to be satisfied.
4.2 Notification
(a) Between the date of this Agreement and the Closing, IPS shall promptly
notify CCMA in writing if it becomes aware of any fact or condition that causes
or constitutes a breach of any of IPS' representations and warranties made as of
the date of this Agreement.
(b) Between the date of this Agreement and the Closing, CCMA shall promptly
notify IPS in writing if it becomes aware of any fact or condition that causes
or constitutes a breach of any of CCMA's representations and warranties made as
of the date of this Agreement.
4.3 No Negotiation
Between the date of this Agreement and the Closing, IPS shall not, and
shall cause its officers, directors, affiliates, agents and representatives not
to, directly or indirectly, solicit, initiate, encourage or entertain any
inquiries or proposals from, discuss or negotiate with, provide any nonpublic
information to or consider the merits of any inquiries, offers or proposals from
any person (other than CCMA) relating to any business combination transaction
involving IPS or the Acquired Fund or its business. IPS shall notify CCMA of any
such inquiry or proposal promptly and shall provide the details of any offers or
discussions received, including information as to the identity of the party
making such proposal and the specific terms and/or details of the offer or
discussion and its response.
4.4 Access and Due Diligence
Prior to the Closing Date, and upon reasonable advance notice received from
CCMA, IPS shall afford CCMA and its representatives full and free access, during
regular business hours, to IPS' (with respect to Acquired Fund) and Acquired
Fund's personnel, contracts, books and records and other documents and data,
such rights of access to be exercised in a manner that does not unreasonably
interfere with the operations of IPS or Acquired Fund and furnish CCMA and its
representatives with such additional financial, operating and other relevant
data and information as CCMA or its representatives may reasonably request.
4.5 CCMA's Services to Surviving Fund
Between the date of this Agreement and the Closing Date, CCMA shall:
(a) Continue to act as investment adviser to the Diversified Equity Master
Portfolio and administrator to the Surviving Fund in accordance with applicable
laws and in a manner consistent with industry norms and past practices.
(b) Use its reasonable best efforts to cause the conditions set forth in
Section 6 hereto to be satisfied.
5. CONDITIONS PRECEDENT TO CCMA'S OBLIGATION TO CLOSE
CCMA's obligation close the transaction contemplated herein is subject to
the satisfaction, at or prior to the Closing, of each of the following
conditions (any of which may be waived by CCMA, in whole or in part):
5.1 Accuracy of Representations
All of IPS' representations and warranties in this Agreement shall have
been accurate as of the date of this Agreement, and shall be accurate as of the
time of the Closing as if then made.
5.2 IPS' Performance
All of the covenants and obligations that IPS is required to perform or to
comply with pursuant to this Agreement at or prior to the Closing shall have
been duly performed and complied with.
5.3 Consents
All consents of other parties and all other consents, orders and permits of
federal, state and local regulatory authorities deemed necessary by CCMA to
permit consummation of the transactions contemplated hereby shall have been
obtained.
5.4 No Proceedings
No action, suit or other proceeding shall be pending before any court or
governmental agency in which it is sought to restrain or prohibit, or obtain
damages or other relief in connection with, this Agreement or the transactions
contemplated hereby.
5.5 Completion of Due Diligence
CCMA shall have completed its due diligence investigation to its
satisfaction and shall have provided written notice of same to IPS.
5.6 Other Conditions Precedent Satisfied
All conditions set forth in Sections 7 and 8 of the Reorganization
Agreement shall have been satisfied or waived.
5.7 No Material Adverse Change
No material adverse change in the assets or properties, liabilities,
business prospects, condition (financial or otherwise) or results of operations
of the Acquired Fund shall have occurred, other than changes occurring in the
ordinary course of business, provided that a decline in the aggregate net asset
value of the Acquired Fund shall not constitute a material adverse change unless
such aggregate net asset value on the business day immediately prior to the
Closing Date is less than $4.0 million.
5.8 Noncompete/Nonsolicitation Agreements
CCMA shall have received fully executed Noncompete/Nonsolicitation
Agreements in substantially the forms set forth herein as Exhibit A from each of
the following: Mr. B. Xxxxxxxxxx Xxx, Xxx. Xxxxxx X. Xxx, Xx. Xxxxxxx Xxx and
Xx. Xxxxxx Xxx.
5.9 Agreement Regarding Cisco Stock
CCMA shall have received a copy of a fully executed Agreement between IPS
and Surviving Fund in substantially the form set forth herein as Exhibit B.
5.10 Consent of Antares Capital Corporation
CCMA shall have received the consent of Antares Capital Corporation to the
transactions contemplated by this Agreement.
6. CONDITIONS PRECEDENT TO IPS' OBLIGATION TO CLOSE
IPS' obligation to close the transaction contemplated herein is subject to
the satisfaction, at or prior to the Closing, of each of the following
conditions (any of which may be waived by IPS in whole or in part):
6.1 Accuracy of Representations
All of CCMA's representations and warranties in this Agreement shall have
been accurate as of the date of this Agreement, and shall be accurate as of the
time of the Closing as if then made.
6.2 IPS' Performance
All of the covenants and obligations that CCMA is required to perform or to
comply with pursuant to this Agreement at or prior to the Closing shall have
been duly performed and complied with.
6.3 Consents
All consents of other parties and all other consents, orders and permits of
federal, state and local regulatory authorities deemed necessary by IPS to
permit consummation of the transactions contemplated hereby shall have been
obtained.
6.4 No Proceedings
No action, suit or other proceeding shall be pending before any court or
governmental agency in which it is sought to restrain or prohibit, or obtain
damages or other relief in connection with, this Agreement or the transactions
contemplated hereby.
7. TERMINATION
7.1 Termination Events
Subject to Section 10.3, this Agreement may be terminated as follows:
(a) by CCMA if a material breach of Sections 2.2(c) and 4.1 of this
Agreement has been committed by IPS and such breach has not been cured or waived
by CCMA within a period of 15 days after notice of such breach is given to IPS
by CCMA;
(b) by CCMA upon any breach of Section 8.3;
(c) by CCMA if a material breach of any provision of this Agreement not
described in Sections 7.1(a) and (b) of this Agreement has been committed by IPS
and such breach has not been waived by CCMA.
(d) by IPS if a material breach of any provision of this Agreement has been
committed by CCMA and such breach has not been waived by IPS;
(e) by CCMA if any condition in Section 5 has not been satisfied as of the
date specified for Closing or if satisfaction of such a condition by such date
is or becomes impossible (other than through the failure of CCMA to comply with
its obligations under this Agreement), and CCMA has not waived such condition on
or before such date;
(f) by IPS if any condition in Section 6 has not been satisfied as of the
date specified for Closing or if satisfaction of such a condition by such date
is or becomes impossible (other than through the failure of IPS to comply with
its obligations under this Agreement), and IPS has not waived such condition on
or before such date; and
(g) by mutual consent of CCMA and IPS.
7.2 Effect of Termination
Each party's right of termination under Section 7.1 is in addition to any
other rights it may have under this Agreement or otherwise, and the exercise of
such right of termination will not be an election of remedies.
8. ADDITIONAL COVENANTS
8.1 Right of Set-Off
CCMA shall have the right to set off the amount of any indemnifiable claim
under Section 9 hereunder and any indemnifiable claim under the Reorganization
Agreement against the amount of Contingent Consideration due hereunder with
prior written notice to IPS.
8.2 Fund Expense Ratio and Sales Load
(a) For each of the next three years, CCMA will use reasonable efforts to
maintain the total annual operating expenses of the A share class of the
Surviving Fund at or below 1.35% of net assets of the A share class of the
Surviving Fund, including reimbursing the Surviving Fund to the extent that
total operating expenses exceed 1.50%.
(b) CCMA will use reasonable efforts to cause the Surviving Fund to waive
all sales loads which would otherwise be applicable to purchases of Class A
shares of the Surviving Fund by Acquired Fund shareholders and members of their
immediate families, as long as an open account in the Class A shares of the
Surviving Fund is maintained by such Acquired Fund shareholder. For purposes of
this paragraph 8.2(b), a "member of the immediate family" of a person means any
parent, spouse of a parent, child, spouse of a child, spouse, brother or sister
of that person, and includes step and adoptive relationships.
8.3 Noncompetition, Nonsolicitation And Nondisparagement
(a) Noncompetition. For a period of three (3) years after the Closing Date,
without CCMA's written consent (which shall not be unreasonably withheld), IPS
shall not, anywhere in the United States, directly or indirectly, own, manage,
finance, control, or advise any person engaged in or about to become engaged in
the business of (nor shall IPS engage directly in the business of) (i) acting as
portfolio manager to registered investment companies or (ii) sponsoring or
advising a registered investment company similar to those advised by CCMA on the
Closing Date (collectively, a "Competing Business"), provided, however, that IPS
may purchase or otherwise acquire up to (but not more than) five percent (5%) of
any class of the securities of a Competing Business (but may not otherwise
participate in the activities of such Competing Business) if such securities are
listed on any national or regional securities exchange or have been registered
under Section 12(g) of the Exchange Act.
(b) Nonsolicitation. For a period of seven (7) years after the Closing
Date, neither IPS nor any employee of IPS not named in Section 5.8 shall,
directly or indirectly:
(i) solicit the business or funds of (1) any fund that CCMA provides
investment advisory, administration or other services on the date of
Closing or within one year of the date of Closing (a "CCMA Fund"), (2) any
person who, to their knowledge, is a shareholder of any of the CCMA Funds,
or (3) any person who was a shareholder of the Acquired Fund on the date of
Closing;
(ii) knowingly cause, induce or attempt to cause or induce any CCMA
fund shareholder, CCMA Fund, supplier, licensee, licensor, employee,
consultant or other business relation of CCMA to cease doing business with
CCMA, to deal with any Competing Business or in any way interfere with its
relationship with CCMA;
(iii) knowingly cause, induce or attempt to cause or induce any
Acquired Fund shareholder, advisee, supplier, licensee, licensor, employee,
consultant or other business relation of IPS or the Acquired Fund on the
Closing Date or within the year preceding the Closing Date to cease doing
business with CCMA, to deal with any Competing Business, or in any way
interfere with its relationship with CCMA; or
(iv) hire, retain or attempt to hire or retain any employee, director,
officer or trustee of CCMA or any CCMA Fund or in any way interfere with
the relationship between CCMA or any CCMA Fund and any of its employees,
directors, officers, trustees or independent contractors.
(c) Nondisparagement. Prior to and after the Closing Date, IPS will not
disparage CCMA, any CCMA Fund, or Fund managed or advised by CCMA, any of CCMA's
managers, members, officers, employees or agents or the Surviving Fund or its
directors and officers.
(d) Modification of Covenant. If a final judgment of a court or tribunal of
competent jurisdiction determines that any term or provision contained in
Section 8.3(a) through (c) is invalid or unenforceable, then the parties agree
that the court or tribunal will have the power to reduce the scope, duration or
geographic area of the term or provision, to delete specific words or phrases or
to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision. This Section 8.3
will be enforceable as so modified after the expiration of the time within which
the judgment may be appealed. This Section 8.3 is reasonable and necessary to
protect and preserve CCMA's legitimate business interests and the value of the
assets of the Acquired Fund and to prevent any unfair advantage conferred on
IPS.
8.4 Confidentiality
(a) As used in this Section 8.4, the term "Confidential Information"
includes all confidential and proprietary information of a party (which includes
but is not limited to historical and current financial statements, financial
projections and budgets, tax returns and accountants' materials, historical,
current and projected performance, business plans, strategic plans, marketing
and advertising plans, publications, client and customer lists and files,
contracts and the names and backgrounds of key personnel).
(b) CCMA acknowledges the confidential and proprietary nature of the
Confidential Information of IPS and IPS acknowledges the confidential and
proprietary nature of the Confidential Information of CCMA, the Acquired Fund
and the Surviving Fund. Each party agrees that such Confidential Information (i)
shall be kept confidential by the receiving party; (ii) shall not be used for
any reason or purpose other than to evaluate and consummate the transactions
contemplated herein; and (iii) without limiting the foregoing, shall not be
disclosed by the receiving party to any person, except with the prior written
consent of an authorized representative of CCMA with respect to Confidential
Information of CCMA, the Acquired Fund or the Surviving Fund or an authorized
representative of IPS with respect to Confidential Information of IPS or, prior
to the Closing, of both CCMA and IPS with respect to the Acquired Fund.
Confidential Information does not include information that (a) was, is or
becomes generally available to the public other than as a result of a breach of
this Section 8.4 or (b) was, is or becomes available to the receiving party on a
nonconfidential basis from a third party not bound by any confidentiality
provisions restricting disclosure.
8.5 Further Assurances
The parties shall cooperate reasonably with each other and with their
respective representatives in connection with any steps required to be taken as
part of their respective obligations under this Agreement, and shall (a) furnish
upon request to each other such further information; (b) execute and deliver to
each other such other documents; and (c) do such other acts and things, all as
the other party may reasonably request for the purpose of carrying out the
intent of this Agreement and the transactions contemplated herein.
8.6 Post-Closing Discussions with IPS
Following the Closing for a period of 3 years, a representative of CCMA or
the Surviving Fund will provide IPS with a quarterly update on the status of the
A share class of the Surviving Fund, and, to the extent allowed by applicable
law, on the status of the shareholders of the A share class of the Surviving
Fund who were shareholders of the Acquired Fund on the date of Closing. The
content of such discussions will be determined in the sole discretion of CCMA.
8.7 Section 15(f) of the Investment Company Act of 1940
While the parties believe, and have represented to the Securities and
Exchange Commission, that this transaction is not subject to Section 15(f) of
the Investment Company Act of 1940, CCMA will not take any action inconsistent
with Section 15(f) in connection with the provision of its services to the
Surviving Fund.
9. INDEMNIFICATION; REMEDIES
9.1 Survival
All representations, warranties, covenants and obligations in this
Agreement and any other certificate or document delivered pursuant to this
Agreement shall survive the Closing. The right to indemnification, reimbursement
or other remedy based upon such representations, warranties, covenants and
obligations shall not be affected by any investigation conducted with respect
to, or any knowledge acquired (or capable of being acquired) at any time,
whether before or after the execution and delivery of this Agreement or the
Closing Date, with respect to the accuracy or inaccuracy of or compliance with
any such representation, warranty, covenant or obligation. The waiver of any
condition based upon the accuracy of any representation or warranty, or on the
performance of or compliance with any covenant or obligation, will not affect
the right to indemnification, reimbursement or other remedy based upon such
representations, warranties, covenants and obligations.
9.2 Indemnification And Reimbursement By IPS
IPS will indemnify and hold harmless CCMA, the Surviving Fund and their
representatives and affiliates (collectively, the "CCMA Indemnified Persons"),
and will reimburse the CCMA Indemnified Persons for any loss, liability, claim,
damage, expense (including costs of investigation and defense and reasonable
attorneys' fees and expenses) or diminution of value, whether or not involving a
Third-Party Claim (collectively, "Damages"), arising from or in connection with:
(a) any breach of any representation or warranty made by IPS in this
Agreement or any other certificate, document, writing or instrument delivered by
IPS pursuant to this Agreement;
(b) notwithstanding subparagraph (e), below, any breach of any
representation, warranty, covenant or obligation made by the Acquired Fund in
the Reorganization Agreement or in any other certificate, document, writing or
instrument delivered by the Acquired Fund pursuant to the Reorganization
Agreement;
(c) any breach of any covenant or obligation of IPS in this Agreement or in
any other certificate, document, writing or instrument delivered by IPS pursuant
to this Agreement;
(d) any Damages arising out of the actions of IPS as the investment adviser
of the Acquired Fund prior to the Closing Date;
(e) any Damages arising from the operation of the Acquired Fund prior to
the Closing Date, other than the liabilities assumed pursuant to the
Reorganization Agreement;
(f) any Damages arising from any liability retained by the Acquired Fund
after the Closing Date;
(g) notwithstanding subparagraph (e), above, any Damages arising from or
related to the Acquired Fund's ownership of or actions with respect to the
shares of Cisco Systems Inc; and
(h) notwithstanding subparagraph (e), above, any Damages arising out of
actions or omissions by or on behalf of the Acquired Fund in accounting for
transactions with reference to Section 1091 of the Internal Revenue Code.
(i) The aggregate Damages for which CCMA shall be indemnified pursuant to
this Section 9.2 shall be limited to the aggregate Contingent Consideration,
provided that Damages arising under any subsection of this Section 9.2 shall not
be subject to this subsection (i) if they arise from or are related to any
action, arbitration, audit, claim, hearing, investigation, litigation or suit
commenced, conducted, or brought by any federal, state, local, municipal,
foreign or other body exercising governmental authority.
9.3 Indemnification And Reimbursement By CCMA
CCMA will indemnify and hold harmless IPS, and its representatives and
affiliates (collectively, the "IPS Indemnified Persons"), and will reimburse the
IPS Indemnified Persons for any loss, liability, claim, damage, expense
(including costs of investigation and defense and reasonable attorneys' fees and
expenses) or diminution of value, whether or not involving a Third-Party Claim
(collectively, "Damages"), arising from or in connection with:
(a) any breach of any representation or warranty made by CCMA in this
Agreement or any other certificate, document, writing or instrument delivered by
CCMA pursuant to this Agreement; and
(b) any breach of any covenant or obligation of CCMA in this Agreement or
in any other certificate, document, writing or instrument delivered by CCMA
pursuant to this Agreement.
9.4 Third-Party Claims
(a) Promptly after receipt by a person entitled to indemnity under Sections
9.2 or 9.3 (an "Indemnified Person") of notice of the assertion of a Third-Party
Claim against it, such Indemnified Person shall give notice to the person
obligated to indemnify under such Section (an "Indemnifying Person") of the
assertion of such Third-Party Claim, provided that the failure to notify the
Indemnifying Person will not relieve the Indemnifying Person of any liability
that it may have to any Indemnified Person, except to the extent that the
Indemnifying Person demonstrates that the defense of such Third-Party Claim is
prejudiced by the Indemnified Person's failure to give such notice.
(b) If an Indemnified Person gives notice to the Indemnifying Person
pursuant to Section 9.4(a) of the assertion of a Third-Party Claim, the
Indemnifying Person shall be entitled to participate in the defense of such
Third-Party Claim and, to the extent that it wishes (unless (i) the Indemnifying
Person is also a person against whom the Third-Party Claim is made and the
Indemnified Person determines in good faith that joint representation would be
inappropriate or (ii) the Indemnifying Person fails to provide reasonable
assurance to the Indemnified Person of its financial capacity to defend such
Third-Party Claim and provide indemnification with respect to such Third-Party
Claim), to assume the defense of such Third-Party Claim with counsel
satisfactory to the Indemnified Person. After notice from the Indemnifying
Person to the Indemnified Person of its election to assume the defense of such
Third-Party Claim, the Indemnifying Person shall not, so long as it diligently
conducts such defense, be liable to the Indemnified Person under this Section 9
for any fees of other counsel or any other expenses with respect to the defense
of such Third-Party Claim, in each case subsequently incurred by the Indemnified
Person in connection with the defense of such Third-Party Claim, other than
reasonable costs of investigation. If the Indemnifying Person assumes the
defense of a Third-Party Claim, (i) such assumption will conclusively establish
for purposes of this Agreement that the claims made in that Third-Party Claim
are within the scope of and subject to indemnification, and (ii) no compromise
or settlement of such Third-Party Claims may be effected by the Indemnifying
Person without the Indemnified Person's written consent unless (A) there is no
finding or admission of any violation of any law or any violation of the rights
of any Person; (B) the sole relief provided is monetary damages that are paid in
full by the Indemnifying Person; and (C) the Indemnified Person shall have no
liability with respect to any compromise or settlement of such Third-Party
Claims effected without its consent. If notice is given to an Indemnifying
Person of the assertion of any Third-Party Claim and the Indemnifying Person
does not, within ten (10) days after the Indemnified Person's notice is given,
give notice to the Indemnified Person of its election to assume the defense of
such Third-Party Claim, the Indemnifying Person will be bound by any
determination made in such Third-Party Claim or any compromise or settlement
effected by the Indemnified Person.
(c) Notwithstanding the foregoing, if an Indemnified Person determines in
good faith that there is a reasonable probability that a Third-Party Claim may
adversely affect it or its affiliates other than as a result of monetary damages
for which it would be entitled to indemnification under this Agreement, the
Indemnified Person may, by notice to the Indemnifying Person, assume the
exclusive right to defend, compromise or settle such Third-Party Claim, but the
Indemnifying Person will not be bound by any determination of any Third-Party
Claim so defended for the purposes of this Agreement or any compromise or
settlement effected without its written consent (which may not be unreasonably
withheld).
(d) With respect to any Third-Party Claim subject to indemnification under
this Section 9: (i) both the Indemnified Person and the Indemnifying Person, as
the case may be, shall keep the other person fully informed of the status of
such Third-Party Claim and any related proceedings at all stages thereof where
such person is not represented by its own counsel, and (ii) the parties agree
(each at its own expense) to render to each other such assistance as they may
reasonably require of each other and to cooperate in good faith with each other
in order to ensure the proper and adequate defense of any Third-Party Claim.
9.5 Other Claims
A claim for indemnification for any matter not involving a Third-Party
Claim may be asserted by notice to the party from whom indemnification is sought
and shall be paid promptly after such notice.
10. GENERAL PROVISIONS
10.1 Expenses
Except as otherwise described in this Section 10.1, each party to this
Agreement will bear its respective fees and expenses incurred in connection with
the preparation, negotiation, execution and performance of this Agreement,
including all fees and expense of its representatives. CCMA will pay the
expenses related to drafting and filing the proxy statement to be used at the
meeting of the shareholders of the Acquired Fund.
10.2 Public Announcements
Any public announcement, press release or similar publicity with respect to
this Agreement or the transactions contemplated herein will be issued by a party
only with the prior written consent of the other party.
10.3 Notices
All notices, consents, waivers and other communications required or
permitted by this Agreement shall be in writing and shall be deemed given to a
party when (a) delivered to the appropriate address by hand or by nationally
recognized overnight courier service (costs prepaid); (b) sent by facsimile or
e-mail with confirmation of transmission by the transmitting equipment; or (c)
received or rejected by the addressee, if sent by certified mail, return receipt
requested, in each case to the following addresses, facsimile numbers or e-mail
addresses and marked to the attention of the person (by name or title)
designated below (or to such other address, facsimile number, e-mail address or
person as a party may designate by notice to the other parties):
IPS:
-----------------------------------------------
Attention:
-----------------------------------------
Fax no.:
-------------------------------------------
E-mail address:
------------------------------------
CCMA:
----------------------------------------------
Attention:
-----------------------------------------
Fax no.:
-------------------------------------------
E-mail address:
------------------------------------
with a mandatory copy to:
--------------------------
Attention:
-----------------------------------------
Fax no.:
-------------------------------------------
E-mail address:
------------------------------------
10.4 Jurisdiction; Service Of Process
Any proceeding arising out of or relating to this Agreement or the
transactions contemplated herein may be brought in the courts of the State of
Illinois, County of Xxxx or, if it has or can acquire jurisdiction, in the
United States District Court for the Northern District of Illinois, and each of
the parties irrevocably submits to the exclusive jurisdiction of each such court
in any such proceeding, waives any objection it may now or hereafter have to
venue or to convenience of forum, agrees that all claims in respect of the
proceeding shall be heard and determined only in any such court and agrees not
to bring any proceeding arising out of or relating to this Agreement or any
transaction contemplated herein in any other court.
10.5 Waiver; Remedies Cumulative
The rights and remedies of the parties to this Agreement are cumulative and
not alternative. Neither any failure nor any delay by any party in exercising
any right, power or privilege under this Agreement or any of the documents
referred to in this Agreement will operate as a waiver of such right, power or
privilege, and no single or partial exercise of any such right, power or
privilege will preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege.
10.6 Entire Agreement And Modification
This Agreement supersedes all prior agreements, whether written or oral,
between the parties with respect to its subject matter (including the letter of
intent) and constitutes (along with the other documents delivered pursuant to
this Agreement and the Reorganization Agreement) a complete and exclusive
statement of the terms of the agreement between the parties with respect to its
subject matter. This Agreement may not be amended, supplemented, or otherwise
modified except by a written agreement signed by both parties.
10.7 Assignments
No party may assign any of its rights or delegate any of its obligations
under this Agreement without the prior written consent of the other parties.
Subject to the preceding sentence, this Agreement will apply to, be binding in
all respects upon and inure to the benefit of the successors and permitted
assigns of the parties.
10.8 Severability
If any provision of this Agreement is held invalid or unenforceable by any
court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
10.9 Construction
The headings of Articles and Sections in this Agreement are provided for
convenience only and will not affect its construction or interpretation. All
references to "Articles," "Sections" and "Parts" refer to the corresponding
Articles, Sections and Parts of this Agreement. All references to a "person" or
"persons" herein includes both individuals and entities.
10.10 Governing Law
This Agreement will be governed by and construed under the laws of the
State of Illinois without regard to conflicts-of-laws principles that would
require the application of any other law.
10.11 Execution Of Agreement
This Agreement may be executed in one or more counterparts, each of which
will be deemed to be an original copy of this Agreement and all of which, when
taken together, will be deemed to constitute one and the same agreement. The
exchange of copies of this Agreement and of signature pages by facsimile
transmission shall constitute effective execution and delivery of this Agreement
as to the parties and may be used in lieu of the original Agreement for all
purposes. Signatures of the parties transmitted by facsimile shall be deemed to
be their original signatures for all purposes.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
CCM ADVISORS, LLC
By:___________________
Its:____________________
INSTITUTIONAL PORTFOLIO SERVICES, LTD.
By:___________________
Its:____________________
Exhibit A
[Form of Individual Noncompete for Mr. B. Xxxxxxxxxx Xxx and Xxx. Xxxxxx X. Xxx]
[Form of Individual Noncompete for Xx. Xxxxxxx Xxx and Xx. Xxxxxx Xxx]
Exhibit B
[Form of Agreement regarding Cisco Stock]
