---------------------
EXHIBIT 2.3
ASSET PURCHASE AGREEMENT
BY AND AMONG
THE FRONTIER AGENCY, INC.
▇▇▇▇▇▇▇▇-▇▇▇▇▇ INSURANCE AND
REAL ESTATE AGENCY, INC.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. AND
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
DATED
APRIL 30, 1999
---------------------
ASSET PURCHASE AGREEMENT
BY AND AMONG
THE FRONTIER AGENCY, INC.
▇▇▇▇▇▇▇▇-▇▇▇▇▇ INSURANCE AND REAL ESTATE AGENCY, INC.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
AND
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
APRIL 30, 1999
TABLE OF CONTENTS
Page
1. Definitions..............................................................................................1
2. Basic Transaction........................................................................................5
(a) Purchase and Sale of Assets...............................................................5
(b) Assumption of Liabilities.................................................................5
(c) Payment of the Purchase Price.............................................................5
(d) The Closing...............................................................................5
(e) Deliveries at Closing.....................................................................5
(f) Allocation................................................................................6
(g) Effective Date............................................................................6
(h) Proration.................................................................................6
(i) Taxes and Expenses........................................................................6
3. Representations and Warranties of the Seller and Shareholders............................................6
(a) Organization of the Seller................................................................7
(b) Authorization of Transaction..............................................................7
(c) Noncontravention..........................................................................7
(d) Brokers' Fees.............................................................................7
(e) Title to Assets...........................................................................7
(f) Financial Statements......................................................................8
(g) Undisclosed Liabilities...................................................................8
(h) Legal Compliance..........................................................................8
(i) Tax Matters...............................................................................8
(j) Real Property.............................................................................8
(k) Tangible Assets...........................................................................9
(l) Litigation................................................................................9
(m) LABOR.....................................................................................9
(n) Environmental Compliance.................................................................10
(o) OSHA Compliance..........................................................................11
(p) Employee Benefit Plans...................................................................11
(q) Intellectual Property....................................................................12
(r) Disclosure...............................................................................12
4. Representations and Warranties of the Buyer.............................................................12
(a) Organization of the Buyer................................................................12
(b) Authorization of Transaction.............................................................12
(c) Noncontravention.........................................................................12
(d) Brokers' Fees............................................................................13
5. Deliveries at Closing...................................................................................13
(a) Documents to be Delivered by Buyer.......................................................13
(b) Documents to be Delivered by Seller......................................................13
i
6. Remedies for Breaches of this Agreement.................................................................14
(a) Survival of Representation and Warranties................................................14
(b) Indemnification Provisions...............................................................14
7. Conditions to Obligation to Close.......................................................................14
(a) Conditions to the Obligation to Buyer....................................................14
(b) Conditions to the Obligation of the Seller...............................................16
8. Miscellaneous...........................................................................................16
(a) No Third-Party Beneficiaries.............................................................16
(b) Entire Agreement.........................................................................16
(c) Succession and Assignment................................................................16
(d) Counterparts.............................................................................16
(e) Headings.................................................................................17
(f) NOTICES..................................................................................17
(g) Governing Law and Jurisdiction...........................................................17
(h) Amendments and Waivers...................................................................18
(i) Severability.............................................................................18
(j) Expenses.................................................................................18
(k) Construction.............................................................................18
(l) Incorporation of Exhibits and Schedules..................................................18
SCHEDULE 1(a)Real Property..........................................................................Schedule 1(a)-1
SCHEDULE 1(c)Inventory..............................................................................Schedule 1(c)-1
SCHEDULE 1(d)Contracts and Agreements ..............................................................Schedule 1(d)-1
SCHEDULE 1(e)Excluded Assets .......................................................................Schedule 1(e)-1
EXHIBIT 2(f)Purchase Price Allocation Agreement......................................................Exhibit 2(f)-1
EXHIBIT 5(a)(ii)Form Of Employment Agreement For ▇▇▇▇ ▇▇▇▇▇......................................Exhibit 5(a)(ii)-1
EXHIBIT 5(a)(ii)Form Of Employment Agreement For ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇............................Exhibit 5(a)(ii)-1
EXHIBIT 5(a)(iv)Assignment Agreement.............................................................Exhibit 5(a)(iv)-1
EXHIBIT 5(b)(i)▇▇▇▇ of Sale and Assignment........................................................Exhibit 5(b)(i)-1
EXHIBIT 5(b)(ii)General Warranty Deed............................................................Exhibit 5(b)(ii)-1
ii
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is entered into on April 30, 1999 (this
"Agreement"), by and among THE FRONTIER AGENCY, INC., an Alabama corporation
(the "BUYER"), on the one hand, and ▇▇▇▇▇▇▇▇-▇▇▇▇▇ INSURANCE AND REAL ESTATE
AGENCY, INC., an Alabama corporation (the "SELLER"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. and
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, residents of the State of Alabama (collectively the
"SHAREHOLDERS"), on the other hand. The Buyer, the Seller, and the Shareholders
are referred to collectively herein as the "PARTIES."
W I T N E S S E T H:
WHEREAS, the Seller owns and operates an insurance agency business (the
"Insurance Business") located at ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ (the "Real Estate") and desires to sell the Real Estate and certain of the
assets of the Insurance Business;
WHEREAS, the Shareholders own, in the aggregate, one hundred percent
(100%) of the issued and outstanding stock of the Seller; and
WHEREAS, the Buyer desires to purchase the Real Estate and certain of
the assets of the Insurance Business on the terms and subject to the conditions
hereinafter stated;
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and promises herein contained, and for the other
good and valuable consideration, the parties hereto agree as follows:
1. DEFINITIONS.
"ACQUIRED ASSETS" means all of the Seller's right, title, and interest
in and to the following assets of the Seller owned as of the Closing Date:
1. any and all real property, leaseholds and subleaseholds
therein, improvements, fixtures, and fittings thereon, and
easements, rights-of-way, and other appurtenances and
hereditaments thereto (such as appurtenant rights in and to
public streets), including the assets described on SCHEDULE
1(a) attached hereto (the "Real Property");
2. fixtures and similar property and capital assets owned by
Seller and attached to any real property described in
paragraph 1(a) above;
3. current and usable inventory of supplies, drugs, janitorial
and office supplies and other disposables and consumables on
hand at or under order by Seller on the Closing Date (as
defined in the Agreement), including, but not limited to, the
inventory listed and identified in SCHEDULE 1(c), which are
used in connection with the Insurance Business;
4. seller's rights, benefits and interests under all the
contracts and agreements, written or oral, relating to the
Insurance Business, including, without limitation, those
listed and identified on SCHEDULE 1(d);
5. prepaid expenses of Seller;
1
6. books, records, ledgers, documents, correspondence,
advertising and promotional materials, files, and other
writings used in connection with the operations of the
Insurance Business;
7. data processing programs, software programs, computer
print-outs, information contained in data bases and hardware,
and related items used in the conduct of the Insurance
Business, including accounting, invoices, auditing, and data
processing bases and programs;
8. intangible assets, goodwill, going concern value, corporate
and assumed names (although Seller shall be allowed to use the
name "▇▇▇▇▇▇▇▇-▇▇▇▇▇ Real Estate and Appraisals, Inc.) and
trade names, service marks and service names, and applications
therefor, and all intellectual property (and goodwill
associated therewith), and licenses and sublicenses granted
and obtained with respect thereto, and rights thereunder, used
in connection with the operation of the Insurance Business;
9. franchises, approvals, permits, licenses, orders,
registrations, certificates, variances, and similar rights
obtained from governments and governmental agencies;
10. rights, claims and causes of action held by Seller which have
accrued as a result of the operation of the Insurance
Business; and
11. all of the other assets, real, personal or mixed, tangible or
intangible, used by Seller in connection with the operations
of the Insurance Business, including, without limitation, any
furniture, office equipment, file cabinets, phone systems,or
other similar personal property items not permanently affixed
to the realty.
The term "Acquired Assets" shall not include any specific item included within
the definition of Excluded Assets below.
"ADVERSE CONSEQUENCES" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including court costs and attorneys' fees and expenses.
"ASSUMED LIABILITIES" means only the following listed Liabilities:
None
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"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.
"BUYER" has the meaning set forth in the preface above.
2
"CLOSING" has the meaning set forth in Section 2(d) below.
"CLOSING DATE" has the meaning set forth in Section 2(d) below.
"CODE" means the Internal Revenue Code of 1986, as amended.
"DISCLOSURE SCHEDULE" has the meaning set forth in Section 3 below.
"ENVIRONMENTAL LAWS" means all federal, state, and local laws, rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder and other governmental requirements relating to pollution,
control of chemicals, storage and handling of petroleum products, management of
waste, discharges of materials into the environment, health, safety, natural
resources, and the environment, including laws relating to emissions,
discharges, releases, or threatened releases of pollutants, contaminants, or
chemical, industrial, hazardous, or toxic materials or wastes into ambient air,
surface water, ground water, or lands or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants, or chemical, industrial, hazardous, or
toxic materials or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCLUDED ASSETS" means
(a) Any and all claims by Seller with respect to transactions
prior to the date of this Agreement, including, without limitation, tax refunds.
(b) All assets, real, personal or mixed, tangible or intangible,
used by Seller in connection with the operations of the Real Estate Business,
including, without limitation, furniture, office equipment, file cabinets, phone
systems, automobiles, and other items listed in SCHEDULE 1(E).
(c) All vehicles (and debt and insurance associated therewith); and
(d) bank accounts, ▇▇▇▇▇ cash box, and the escrow account.
"FINANCIAL STATEMENTS" has the meaning set forth in Section 3(f) below.
"HAZARDOUS MATERIALS" has the meaning set forth in Section 3(n) below.
"KNOWLEDGE" means actual or imputed knowledge after reasonable
investigation.
"LIABILITY" means any liability, whether known or unknown, asserted or
unasserted, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, and due or to become due, of any nature whatsoever, including any
liability for Taxes.
"LIEN" means any (a) mechanics, materialmen or similar lien relating to
repairs or improvements to real or personal property, (b) lien for Taxes, (c)
lien securing rental payments under any lease agreement, or (d) other lien
arising in the Ordinary Course of Business and not incurred in connection with
the borrowing of money.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice.
3
"PARTIES" has the meaning set forth in the preface above.
"PERSON" means an individual, a partnership, a limited liability
company, a corporation, 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(a) below.
"REAL ESTATE BUSINESS" means real estate sales and appraisal business
conducted by Seller.
"REAL PROPERTY" has the meaning set forth in the definition of Acquired
Assets above.
"SECURITY INTEREST" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, including all security interests arising
under Article 9 of the Uniform Commercial Code, but excluding (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, (c) liens securing rental payments under capital lease arrangements
that are not financing leases, and (d) other liens arising in the Ordinary
Course of Business and not incurred in connection with the borrowing of money.
"SELLER" has the meaning set forth in the preface above.
"SHAREHOLDERS" has the meaning set forth in the preface above.
"SURVEY" has the meaning set forth in Section 7(a)(v) below.
"TAX" 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 Sec. 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,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.
"TAX RETURN" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"TITLE POLICY", "TITLE COMPANY," and "TITLE BINDER" have the meanings
set forth in Section 7(a)(v) below.
2. BASIC TRANSACTION.
a. PURCHASE AND SALE OF ASSETS. On and subject to the terms and
conditions of this Agreement, at the Closing, the Buyer agrees
to purchase from the Seller, and the Seller agrees to sell,
transfer, convey, and deliver to the Buyer, all of the
Acquired Assets for a price equal to the Purchase Price, to be
paid as set forth in Section 2(c). The "PURCHASE PRICE" will
be (1) One Hundred Thirty- Six Thousand Seven Hundred Dollars
($136,700) for the Real Estate, less a mortgage debt on the
Real Estate, which the Buyer will pay from the proceeds of the
Purchase Price, plus (2) the Buyer's promise to employ
Shareholders on the terms and conditions set forth in the Form
of Employment Agreement, as attached hereto as Exhibit
4
5(a)(ii).
b. ASSUMPTION OF LIABILITIES. The Buyer will not assume or have
any responsibility or Liability either expressly or impliedly,
with respect to any obligation or Liability of the Seller of
any kind or nature.
c. PAYMENT OF THE PURCHASE PRICE. The Buyer shall pay or satisfy
the Purchase Price to the Seller by delivering an official
bank check at the Closing.
d. THE CLOSING. The closing of the transactions contemplated by
this Agreement (the "CLOSING") shall take place at the offices
of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, commencing at 2:00 p.m. local time on April 30, 1999;
provided, however, that the Closing Date shall be no later
than May 31, 1999. Time is of the essence for this Agreement.
e. DELIVERIES AT CLOSING. At the Closing, (i) the Buyer will
deliver to the Seller the various certificates, instruments,
and documents referred to in Section 5(a) below; (ii) the
Seller will deliver to the Buyer the various certificates,
instruments, and documents referred to in Section 5(b) below.
f. ALLOCATION. The Parties agree to allocate the Purchase Price
(and all other capitalizable costs) among the Acquired Assets
for all purposes (including financial accounting and tax
purposes) in accordance with the Purchase Price Allocation
Agreement attached hereto as EXHIBIT 2(F).
g. EFFECTIVE DATE. The Parties agree that if the transactions
contemplated by this Agreement close in accordance with the
terms of this Agreement, the effective time and date of this
Agreement shall be, for all purposes, 12:01 a.m. on the day
after the Closing Date (the "Effective Date").
h. PRORATION. The following prorations among the parties shall be
made as of the Closing, with the Seller liable to the extent
such items relate to any time period up to the Effective Date
and the Buyer liable to the extent such items relate to
periods on and after the Effective Date. To the extent
possible, the net amount of all such prorations will be
settled and paid at the Closing.
1. Any ad valorem taxes, including, without limitation, personal
property taxes and assessments, and other taxes, if any, on or
with respect to the Acquired Assets.
2. Rents, additional rents, Taxes and other items payable by the
Seller under any lease, license, permit, contract or any other
agreement or arrangement to be assigned to or assumed by the
Buyer.
3. The amount of rents, taxes, and charges for sewer, water,
fuel, telephone, electricity, and other utilities; provided,
that if practicable, a meter reading shall be taken on the
Effective Date and the respective obligations of the parties
determined in accordance with such readings.
5
If the actual expense of any of the above items for the billing period
in which the Effective Date falls is not known at the Closing, the proration
shall be made based on the expense incurred in the previous billing cycle, for
expenses billed less often than quarterly, and on the average expense incurred
in the preceding three (3) billing periods, for expenses billed quarterly or
more often.
i. TAXES AND EXPENSES. The Buyer shall be responsible
for any business, occupation, withholding or similar
tax or taxes of any kind (excluding income, employee,
or property taxes) related to the Seller's business
for any period prior to the Effective Date. All
applicable sales, use and tangible taxes, documentary
stamp taxes, filing and recording costs and other
transfer taxes, costs and fees relating to the
transfer of title to the Acquired Assets, and the
consummation of the transactions described herein,
shall be paid by the Buyer.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER AND SHAREHOLDERS.
The Seller and the Shareholders, jointly and severally,
represent and warrant to the Buyer that the statements
contained in this Section 3 are correct and complete as of the
date of this Agreement and will be correct and complete as of
the Effective Date, except as set forth in the disclosure
schedule accompanying this Agreement and initialed by the
Parties (the "DISCLOSURE SCHEDULE"). The Disclosure Schedule
will be arranged in paragraphs corresponding to the lettered
and numbered paragraphs contained in this Section 3.
a. ORGANIZATION OF THE SELLER. The Seller is a
corporation duly organized, validly existing, and in
good standing under the laws of the State of Alabama
and has the corporate power and licenses to own its
properties and carry on its business as now
conducted. The Seller is duly qualified to carry on
its business as a foreign corporation in each
jurisdiction where the nature of its business or the
location of its asset makes such qualification
necessary.
b. AUTHORIZATION OF TRANSACTION. The Seller has full
power and authority (including full corporate power
and authority) to execute and deliver this Agreement
and to perform its obligations hereunder. Without
limiting the generality of the foregoing, the board
of directors of the Seller and the Shareholders have
duly authorized the execution, delivery, and
performance of this Agreement by the Seller. This
Agreement constitutes the valid and legally binding
obligation of the Seller and the Shareholders,
enforceable in accordance with its terms and
conditions.
c. NONCONTRAVENTION. Neither the execution and the
delivery of this Agreement, nor the consummation of
the transactions contemplated hereby will (i) violate
any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge,
or other restriction of any government, governmental
agency, or court to which the Seller is subject or
any provision of the charter or bylaws of the 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 or consent under any agreement, contract,
lease, license, instrument, or other arrangement to
which the Seller is a party or by which it is bound
or to which any of its assets is subject or result in
the imposition of any Security Interest upon any of
its assets. The Seller does
6
not need to give any notice to, make any filing with,
or obtain any authorization, consent, or approval of
any government or governmental agency in order for
the Parties to consummate the transactions
contemplated by this Agreement.
d. BROKERS' FEES. The Seller has not engaged and 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 nor will any Acquired Assets become subject
to any Lien, charge or encumbrance of any nature in
favor of any broker, finder, or other agent with
respect to the transactions contemplated hereby.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ are
both licensed real estate agents acting in their
individual capacities.
e. TITLE TO ASSETS. Except as set forth in Section 3(e)
of the Disclosure Schedule, the Seller has good,
insurable, marketable, and indefeasible fee simple
title and record to, or a valid leasehold interest
in, the Acquired Assets, free and clear of any
Security Interest or Lien or any restriction on
transfer.
f. FINANCIAL STATEMENTS. The financial statements
(collectively the "FINANCIAL STATEMENTS") which have
been made available to the Buyer for inspection have
been prepared on a consistent basis throughout the
periods covered thereby, present fairly the financial
condition of the Seller as of such dates and the
results of operations of the Seller for such periods,
are correct and complete, and are consistent with the
books and records of the Seller (which books and
records are correct and complete).
g. UNDISCLOSED LIABILITIES. The Seller does not have any
Liability, and there is no Basis for any present or
future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand
against it giving rise to any Liability, except for
(i) Liabilities described and set forth on Section
2(g) of the Disclosure Schedule, (ii) Liabilities set
forth on the December 31, 1998, balance sheet
contained in the Financial Statements and (iii)
Liabilities which have arisen after the date of the
Financial Statements in the Ordinary Course of
Business (none of which results from, arises out of,
relates to, is in the nature of, or was caused by any
breach of contract, breach of warranty, tort,
infringement, or violation of law) and do not exceed,
in the aggregate, $10,000.
h. LEGAL COMPLIANCE. The Seller and its predecessors and
Affiliates have complied with all applicable laws
(including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and
charges thereunder) of federal, state, local, and
foreign governments (and all agencies thereof), and
no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand, or notice has been
filed or commenced against any of them alleging any
failure so to comply.
7
i. TAX MATTERS.
4. The Seller has filed all Tax Returns that it was
required to file. All such Tax Returns were correct
and complete in all respects. All Taxes owed by the
Seller (whether or not shown on any Tax Return) have
been paid. The Seller is not currently the
beneficiary of any extension of time within which to
file any Tax Return. No claim has ever been made by
an authority in a jurisdiction where the Seller does
not file Tax Returns that it is or may be subject to
taxation by that jurisdiction. There are no Liens on
any of the assets of the Seller that arose in
connection with any failure (or alleged failure) to
pay any Tax.
5. The Seller has withheld and paid all Taxes required
to have been withheld and paid in connection with
salaries, wages or other amounts paid or owing to any
employee, independent contractor, creditor,
stockholder, or other third party.
6. The Seller has not waived any statute of limitations
in respect of Taxes or agreed to any extension of
time with respect to a Tax assessment or deficiency.
j. REAL PROPERTY. SCHEDULE 1(a) lists and describes
briefly all Real Property owned by the Seller. There
is no Real Property leased or subleased by the
Seller. With respect to all Real Property owned
listed on SCHEDULE 1(a):
7. There are no adverse or other parties in possession
of the Real Property or of any part thereof except
Seller. No party has been granted any license, lease
or other right relating to the use or possession of
the Real Property, that has not been disclosed to
Buyer.
8. All improvements on the Real Property (the
"Improvements") are, to the best of Seller's
knowledge, structurally sound, are in good repair or
condition, except for damage to the storage room due
to a burglary, normal wear and tear excepted, and are
free of any material defects. The Improvements, all
heating, electrical, plumbing and drainage at, or
servicing, the Real Property and all facilities and
equipment relating thereto are, to the best of
Seller's knowledge, and as of the Closing will be, in
good condition and working order and adequate in
quantity and quality for the normal operation of the
Real Property (based on its past usage). No part of
the Real Property has been destroyed or damaged by
fire or other casualty. There are no unsatisfied
requests for repairs, restorations or alterations
with regard to the Real Property from any person,
entity or authority, including but not limited to any
lender, insurance provider or governmental authority.
9. No work has been performed or is in progress on the
Real Property, and no materials will have been
delivered to the Real Property that might provide the
basis for a mechanic's, materialman's or other lien
against the Real Property or any portion thereof, or
amounts due for such work and material shall have
paid or discharged to Buyer's satisfaction as of
Closing.
10. There are no known defects, damage, or any dangerous,
improper, or unsatisfactory conditions existing in or
with respect to the Real Property.
8
k. TANGIBLE ASSETS. The Seller owns or leases all land,
buildings, machinery, equipment, and other tangible
assets necessary for the conduct of the Insurance
Businesses as presently conducted. Each Acquired
Asset is free from defects (patent and latent), has
been maintained in accordance with normal industry
practice, is in good operating condition and repair
(subject to normal wear and tear), and is suitable
for the purposes for which it presently is used.
l. LITIGATION. Section 3(l) of the Disclosure Schedule
sets forth each instance in which the Seller (i) is
subject to any outstanding injunction, judgment,
order, decree, ruling, or charge or (ii) is a party
or is threatened to be made a party to any action,
suit, proceeding, hearing, or investigation of, in,
or before any court or quasi-judicial or
administrative agency of any federal, state, local,
or foreign jurisdiction or before any arbitrator.
None of the actions, suits, proceedings, hearings,
and investigations set forth in Section 3(l) of the
Disclosure Schedule could result in any material
adverse change in the operations, results of
operations, or future prospects the business assets
to be operated by the Buyer after the Closing.
m. LABOR. Except as set forth in 3(m) of the Disclosure
Schedule, the Seller is in compliance in all material
respects with all applicable laws respecting
employment and employment practices, terms and
conditions of employment and wages and hours, and is
not engaged in any unfair labor practice; the Seller
is not a party to any collective bargaining or labor
agreement or arrangement; no application for
certification as a collective bargaining unit with
respect to the Seller is pending or anticipated;
there is no unfair labor practice complaint pending
or, to the best knowledge of the Seller, threatened
against the Seller before the National Labor
Relations Board; there are no strikes, work
stoppages, grievance proceedings or other
controversies pending, or, to the knowledge of the
Seller, threatened or reasonably anticipated between
the Seller and any union or any current or former
employees of the Seller, or involving any material
suppliers.
n. ENVIRONMENTAL COMPLIANCE.
i. Except as set forth in Section 3(n) of the
Disclosure Schedule, Seller is in material
compliance with all applicable Environmental
Laws, the Seller has not authorized or conducted
nor has Knowledge of the generation,
transportation, storage, presence, use,
treatment, disposal, release, or other handling
of any hazardous substance, hazardous waste,
hazardous material, hazardous constituent, toxic
substance, pollutant, contaminant, asbestos,
radon, polychlorinated biphenyls ("PCBs"),
petroleum product or waste (including crude oil
or any fraction thereof), natural gas, liquefied
gas, synthetic gas or other material defined,
regulated controlled or potentially subject to
any remediation requirement under any
Environmental Law (collectively "THE HAZARDOUS
MATERIALS"), on, in, under or affecting the
9
Acquired Assets or any Real Property.
11 The Seller has, and is in compliance with, all
licenses, permits, registrations, and government
authorizations necessary to operate under all
applicable Environmental Laws. Section 3(n) of the
Disclosure Schedule lists all such licenses, permits,
registrations and government authorizations required
by any Environment Law.
12 Except as disclosed in Section 3(n) of the Disclosure
Schedule, the Seller has not received any written or
oral notice from any governmental agency or entity or
any other Person and there is no pending or
threatened claim, litigation or any administrative
agency proceeding that: (a) alleges a violation of
any Environmental Law(s) by the Seller or, with
respect to the Acquired Assets or Real Property, (b)
alleges that the Seller is a liable party or
potentially responsible party under the Comprehensive
Environmental Response, Compensation and Liability
Ac, 42 U.S.C. ss. 9601, et seq., or any state
superfund law, (c) has resulted or could result in
the attachment of an environmental lien on any of the
Acquired Assets or Real Property, or (d) alleges that
the Seller is liable for any contamination of the
environment, contamination of the Real Property,
damage to natural resources, property damage, or
personal injury based on its activities or the
activities of any predecessor or third parties
involving Hazardous Materials, whether arising under
the Environmental Laws, common law principles, or
other legal standards.
13. Due to the age of the buildings being purchased by
the Buyer, the parties acknowledge that there is a
high probability of lead based paint being present on
the walls, and Seller's representations made herein
are subject to Buyer accepting the property with that
condition known and releasing Seller from any and all
liability or exposure problem or damage that the
Buyer or its employees may incur as a result of the
presence of any lead based paint.
o. OSHA COMPLIANCE.
i. Except as set forth in Section 3(o) of the
Disclosure Schedule, Seller is currently in
material compliance with all applicable federal,
state, and local laws, rules, regulations,
codes, plans, injunctions, judgments, orders
decrees, rulings, and charges thereunder and
other governmental requirements relating to
occupational health and safety applicable to the
business of the Seller, including but not
limited to the Occupational Safety and Health
Act of 1970, as amended, and the rules and
regulations promulgated thereunder
(collectively, the "OSHA LAWS").
14. The Seller has, and is in compliance with, all
licenses, permits, registrations, and government
authorizations necessary to operate the business
currently conducted by Seller under all applicable
OSHA Laws. Section 3(o) of the Disclosure Schedule
lists all such licenses, permits, registrations and
authorizations required to be maintained by Seller by
applicable OSHA laws.
15. Except as disclosed in Section 3(o) of the Disclosure
Schedule, the Seller
10
has not received any written or oral notice from any
governmental agency or entity or any other Person and
there is no pending or threatened claim, litigation
or any administrative agency proceeding that alleges
a violation of any OSHA Law(s) by the Seller or, with
respect to the Acquired Assets or business of the
Seller.
p. EMPLOYEE BENEFIT PLANS. The Seller does not
maintain any bonus, deferred compensation,
pension, retirement, stock option, stock
appreciation, restricted stock, profit sharing,
severance, medical or life insurance, employee
stock ownership or stock purchase plans or other
"employee pension benefit plan", as defined in
Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or
other "employee welfare benefit plan", as
defined in Section 3(1) of ERISA (collectively
the "Seller Plans"). The Seller is not required
to contribute to, and during the five-year
period ending on the Effective Date will not
have been required to contribute to, any
"multi-employer plan" as such term is defined in
Section 4001(a)(3) of ERISA covering the Seller
employees, and the Seller will not be subject to
any withdrawal liability (whether partial or
complete) within the contemplation of Section
4001 et seq. of ERISA as a result of the
transactions contemplated by this Agreement. The
Seller has never contributed to, withdrawn from,
or had any employee covered by a multi-employer
plan. The Seller has complied in all material
respects with the requirements of the
Consolidated Omnibus Budget Reconciliation Act,
as it relates to employee benefits provided to
the Seller's employees. Each welfare plan
(including any such welfare plan covering former
employees of the Seller) may be amended or
terminated without restriction by Buyer on or at
any time after the Effective Date.
q. INTELLECTUAL PROPERTY. Section 3(q) of the
Disclosure Schedule lists all letters patent,
patent applications, service marks, trade names,
trademarks, trademark registrations and
applications, copyrights and copyright
applications and registrations both domestic and
foreign, presently owned, possessed or used by
the Seller in connection with its business (all
of the foregoing, together with all inventions,
technology, processes, designs, know-how, and
formula material to the conduct of the Seller's
business are hereinafter collectively referred
to as the "Intellectual Property"). Except as
disclosed in Section 3(q) of the Disclosure
Schedule, the Seller owns the entire right,
title and interest in and to the Intellectual
Property; all registrations, applications for
registration and assignments of registrations of
any Intellectual Property has been properly
registered in the name of the Seller; the Seller
is not obligated or under any liability to make
any payment, by way of royalties, fees, or
otherwise, to any owner or licensee of, or other
claimant to, the Intellectual Property; the
Seller has the right to bring action for the
infringement of such Intellectual Property; and
no officer or director of the Seller has any
knowledge, or has received any notice to the
effect, that any product the Seller manufactures
or sells or that any service the Seller renders,
or that the marketing or use by the Seller or
another of any such product or service, may or
is claimed to infringe any Intellectual Property
or legally protectable right of another.
11
r. DISCLOSURE. The representations and warranties
contained in this Section 3 do not contain any
untrue statement of a fact or omit to state any
fact necessary in order to make the statements
and information contained in this Section 3 not
misleading.
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The
Buyer represents and warrants to the Seller and
Shareholders that the statements contained in
this Section 4 are correct and complete as of
the date of this Agreement and will be correct
and complete as of the Closing Date.
a. ORGANIZATION OF THE BUYER. The Buyer is a
corporation duly organized, validly existing,
and in good standing under the laws of the State
of Alabama.
b. AUTHORIZATION OF TRANSACTION. The Buyer has full
power and authority (including full corporate
power and authority) to execute and deliver this
Agreement and to perform its obligations
hereunder. This Agreement constitutes the valid
and legally binding obligation of the Buyer,
enforceable in accordance with its terms and
conditions, subject to applicable bankruptcy,
moratorium, insolvency and other laws affecting
the rights of creditors and general equity
principles.
c. NONCONTRAVENTION. Neither the execution and the
delivery of this Agreement, nor the consummation
of the transactions contemplated hereby will (i)
violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any
government, governmental agency, or court to
which the Buyer is subject or any provision of
its charter or bylaws 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 agreement, contract, lease, license,
instrument, or other arrangement to which the
Buyer is a party or by which it is bound or to
which any of its assets is subject. The Buyer is
not required to give any notice to, make any
filing with, or obtain any authorization,
consent, or approval of any government or
governmental agency in order for to consummate
the transactions contemplated by this Agreement.
d. BROKERS' FEES. The Buyer has no Liability or
obligation to pay any fee or commission to any
broker, finder or agent with respect to the
transactions contemplated by this Agreement for
which the Seller could become liable or
obligated.
4. DELIVERIES AT CLOSING
a. DOCUMENTS TO BE DELIVERED BY BUYER. At the
Closing, Buyer shall deliver the following
instruments and documents to Seller or other
appropriate party:
16. a cashier's check in the amount set forth in Section
2(a) payable to the Seller;
12
17. the Form of Employment Agreement of each of the
Shareholders, as attached hereto as EXHIBIT 5(a)(ii);
18. the Purchase Price Allocation Agreement in
substantially the form attached hereto as EXHIBIT
2(f);
19. the Assignment Agreement in substantially the form
attached hereto as EXHIBIT 5(a)(iv); and
20. such other documents as Seller may reasonably request
to effect the transactions contemplated by this
Agreement.
b. DOCUMENTS TO BE DELIVERED BY SELLER. At the
Closing, the Seller shall deliver the following
instruments and documents to the Buyer:
21. a ▇▇▇▇ of Sale and Assignment in substantially the
form attached hereto as EXHIBIT 5(b)(i);
22. a general warranty deed regarding the Real Property
in the form attached as EXHIBIT 5(b)(ii) and a
certificate complying with Section 1445(b)(2) of the
Internal Revenue Code of 1986;
23. the Title Policy regarding the Real Property to be
issued pursuant to the Title Binder or an amended
Title Binder initiated by the Title Company, which
deletes all requirements and all exceptions and which
is down-dated to the Closing Date at the expense of
the Buyer;
24. a withdrawal, amendment, and/or termination of the
Seller's corporate name and any fictitious name
registration therefor (although Seller shall be
allowed to use the name "▇▇▇▇▇▇▇▇-▇▇▇▇▇ Real Estate
and Appraisals, Inc.");
25. the Purchase Price Allocation Agreement in
substantially the form attached hereto as EXHIBIT
2(f);
26. a Certificate of Good Standing for the Seller from
the Alabama Department of Revenue dated not more than
ten (10) days prior to the Closing;
27. resolutions of the Seller's board of directors and
shareholders, in a form satisfactory to the Buyer's
counsel, authorizing the execution and performance of
the Agreement and all other actions to be taken by
the Seller hereunder;
28. all consents and estoppel certificates necessary
regarding the transaction contemplated hereby;
29. the Form of Employment Agreement of each of the
Shareholders, as attached hereto as EXHIBIT 5(a)(ii);
and
30. such other documents as the Buyer may reasonably
request to effect the transactions contemplated by
this Agreement.
13
5. REMEDIES FOR BREACHES OF THIS AGREEMENT.
a. SURVIVAL OF REPRESENTATION AND WARRANTIES. All
of the representations and warranties of the
Parties contained in this Agreement shall
survive the Closing hereunder (even if the
damaged Party knew or had reason to know of any
misrepresentation or breach of warranty at the
time of Closing) and continue in full force and
effect forever thereafter (subject to any
applicable statutes of limitations).
b. INDEMNIFICATION PROVISIONS. The parties shall
have any and all statutory, equitable, or common
law remedy for a breach of a representation,
warranty, or covenant. Additionally, if the
Buyer is due any indemnification from the Seller
or Shareholders pursuant to the terms of this
Agreement, the Parties acknowledge and agree
that the Buyer shall be entitled to offset the
amount of such amounts from any payments due to
the Seller under the Employment Agreements.
6. CONDITIONS TO OBLIGATION TO CLOSE.
a. CONDITIONS TO THE OBLIGATION TO BUYER. The
obligation of the Buyer to consummate the
transactions to be performed by it in connection
with the Closing is subject to satisfaction of
the following conditions:
31. The representations and warranties set forth in
Section 3 above shall be true and correct in all
material respects at and as of the Effective Date;
32. The Seller shall have performed and complied with all
of its covenants hereunder in all material respects
through the Effective Date;
33. There shall not be any injunction, judgment, order,
decree, ruling or charge in effect preventing
consummation of any of the transactions contemplated
by this Agreement;
34. Prior to the Effective Date, there shall not have
been any material adverse change in the Acquired
Assets of the Seller; the business or condition,
financial or otherwise, of the Seller; the results of
operations or prospects of the Seller as a result of
any event or occurrence or including, but not limited
to, any legislative or regulatory change, revocation
of any license or right to do business, fire,
explosion, accident, casualty, labor trouble, flood,
drought, riot, storm, condemnation, act of God or
other public force or otherwise;
35. Within thirty (30) days following the execution of
this Agreement, the Seller shall have obtained a
commitment to issue an ALTA owners title insurance
policy with respect to the Real Property (the "Title
Binder") through a nationally recognized title
company (the "Title Company"). If the Title Binder
discloses any defect in title, then Buyer shall give
Seller written notice thereof within ten (10) days
following the receipt by Buyer of the Title Binder,
whichever shall last occur. Seller shall then have
ten (10) days in which to remove such defect(s) or to
provide assurances to Buyer that such defect(s) will
be removed prior to or at the Closing, and, if Seller
does not do so, this Agreement shall, at the option
of Buyer, terminate.
14
36. The Buyer shall have received all authorizations,
consents and approvals of governments and government
agencies;
37. All actions to be taken by the Seller in connection
with consummation of the transactions contemplated
hereby and all certificates, instruments and other
documents required to effect the transactions
contemplated hereby will be satisfactory in form and
substance to the Buyer; and
38. Buyer shall have received (at Buyer's sole cost and
expense) a Phase I Environmental Assessment
indicating that the Property poses no potential for
liability under any applicable environmental law.
The Buyer may waive in writing any condition specified in this Section
7(a).
b. CONDITIONS TO THE OBLIGATION OF THE SELLER. The
obligation of the Seller to consummate the
transactions to be performed by it in connection
with the Closing is subject to satisfaction of
the following conditions:
39. The representations and warranties set forth in
Section 4 above shall be true and correct in all
material respects at and as of the Effective Date;
40. The Buyer shall have performed and complied with all
of its covenants hereunder in all material respects
through the Effective Date;
41. There shall not be any injunction, judgment, order,
decree, ruling or charge in effect preventing
consummation of any of the transactions contemplated
by this Agreement; and
42. All actions to be taken by the Buyer in connection
with consummation of the transactions contemplated
hereby and all certificates, instruments and other
documents required to effect the transactions
contemplated hereby will be reasonably satisfactory
in form and substance to the Seller.
The Seller may waive any condition specified in this Section 7(b) if it
executes a writing so stating at or prior to the Closing.
7. MISCELLANEOUS.
a. 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.
b. 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.
c. SUCCESSION AND ASSIGNMENT. This Agreement shall
be binding upon
15
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, that the Buyer may (i)
assign any or all of its rights and interests
hereunder to one or more of its Affiliates and
(ii) designate one or more of its Affiliates to
perform its obligations hereunder (in any or all
of which cases the Buyer nonetheless shall
remain responsible for the performance of all of
its obligations hereunder).
d. COUNTERPARTS. 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.
e. 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.
f. 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 it is sent by personal hand
delivery, overnight delivery by nationally
recognized carriers, or confirmed facsimile or
other electronic transmission, and addressed to
the intended recipient as set forth below:
If to the Seller: If to the Buyer:
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Insurance and The Frontier Agency, Inc.
Real Estate Agency, Inc. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, President
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., President ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Internet: ▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
Copy to: Copy to:
▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇ Baker, Donelson, Bearman &
▇.▇. ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Internet: ▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
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.
g. GOVERNING LAW AND JURISDICTION. This Agreement shall
be
16
governed by and construed in accordance with the
domestic laws of the State of Alabama without giving
effect to any choice or conflict of law provision or
rule (whether of the State of Alabama or any other
jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of
Alabama. Each of the Parties hereby agrees to submit
to the personal jurisdiction of the state and federal
courts for the State of Alabama for any and all
proceedings, claims or controversies which arise as a
result of this Agreement.
h. AMENDMENTS AND WAIVERS. No amendment of any provision
of this Agreement shall be valid unless the same
shall be in writing and signed by the Buyer and the
Seller. The Seller may consent to any such amendment
at any time prior to the Closing with the prior
authorization of its board of directors. 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.
i. 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.
j. EXPENSES. The Parties will bear their own costs and
expenses (including legal fees and expenses) incurred
in connection with this Agreement and the
transactions contemplated hereby.
k. CONSTRUCTION. The Parties have participated jointly
in the negotiation and drafting of this Agreement. In
the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be
construed as if drafted jointly by the Parties and no
presumption or burden of proof shall arise favoring
or disfavoring any Party by virtue of the authorship
of any of the provisions of this Agreement. 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 word "including"
shall mean including without limitation. 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.
l. INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits
and Schedules identified in this Agreement are
incorporated herein by reference and made a part
hereof.
17
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
BUYER:
The Frontier Agency, Inc.
By:
----------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, President
SELLER:
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Insurance
and Real Estate Agency, Inc.
By:
----------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., President
SHAREHOLDERS:
----------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
----------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
18