Exhibit 2.9
1911 Corp. Draft 7-6-98
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into this 7th day of July, 1998, by
and among 1911 CORP., a Delaware corporation ("Seller"), and IGF Holdings, Inc.,
an Indiana corporation ("Purchaser").
ARTICLE I
Definitions
The following terms, when used in this Agreement, shall have the
meanings described in this Section:
1.1 Balance Sheet shall have the meaning given in Section 3.6.
1.2. Code shall mean the Internal Revenue Code of 1986 and regulations,
revenue rulings and court decisions adopted or decided thereunder.
1.3. Closing and Closing Date shall have the meanings given in Section
2.3.
1.4. Company shall mean North American Crop Underwriters, Inc., a
Minnesota corporation.
1.5. Employee Benefit Arrangement shall mean each employee benefit
(including, but not limited to, fringe benefits as defined in Section 132 of the
Code, and whether or not in writing) that is not salary, a Plan, or an
employment or severance agreement.
1.6. Encumbrance shall mean any pledge, security interest, mortgage,
community property interest, lien, automatic or other stay in a bankruptcy or
insolvency proceeding, legal or equitable claim, trust agreement, constructive
or resulting trust, voting trust or agreement, restricted stock agreement, right
of first refusal, or option, including any restriction on use, voting, transfer,
receipt of income, or exercise of any other attribute of ownership, except such
restrictions as may be contained in the Articles of Incorporation or the By-Laws
of Company and restrictions on subsequent transfer contained in federal and
state securities laws and state insurance laws.
1.6. ERISA shall mean the Employee Retirement Income Security Act
of 1974.
1.7. Governmental Authority means any government or political
subdivision, board, commission or other instrumentality thereof, whether
federal, state, local or foreign.
1.8. Indemnified Party shall have the meaning given in Section 9.3.
1.9. Indemnifying Party shall have the meaning given in Section 9.4.
1.10. Interim Balance Sheet shall have the meaning given in Section
3.6.
1.11. Legal Requirement shall mean any constitution, law, ordinance,
established principle of common law, regulation, administrative ruling, or
applicable court decision of any Governmental Authority.
1.12. Licenses and Permits shall mean any license, permit, order,
approval, registration, authorization or qualification under any federal, state
or local law or with any Governmental Authority or under any industry or
non-governmental self-regulatory organization that is necessary for the conduct
of the business of the Company or any Subsidiary or the ownership of the
properties of either.
1.13. Plan shall mean a plan as defined in Section 3(3) of ERISA.
1.14. Permitted Encumbrance shall mean Encumbrances described in
Schedule 3.2 with respect to the Shares and in Schedule 3.4 with respect to
Company's assets.
1.15. Purchase Price shall have the meaning given in Section 2.2.
1.16. Securities Act shall mean the federal Securities Act of 1933 and
rules, regulations and applicable administrative rulings and court decisions
issued thereunder.
1.17. Shares shall mean 600 shares of the Common Stock without par
value of the Company, of which 200 shares are individually owned by each person
who is a Seller.
ARTICLE II
2.1. Purchase of the Shares. On the terms and conditions set forth
herein, Seller shall sell, transfer, convey and assign the Shares to Purchaser
and Purchaser shall purchase the Shares from Seller:
2.2. The Purchase Price.
2.2.1. Aggregate Purchase Price. The purchase price payable by
Purchaser to Seller for the Shares pursuant to this Agreement shall be the sum
of Four Million Dollars ($4,000,000.00) (the "Purchase Price").
2.2.2. Method of Payment. Three Million Dollars of the Purchase Price
shall be paid in cash at the Closing (as defined in Section 2.3) by wire
transfer in available funds by Purchaser upon the instructions of Seller, with
the remaining One Million Dollars ($1,000,000) payable by Purchaser
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1911 Corp. Draft 7-6-98
to Seller no earlier than three (3) years from the date hereof, with such
obligation of Purchaser to Seller being unsecured and without interest.
2.3. The Closing. The signing of this Agreement and the Closing of the
purchase and sale under this Agreement (the "Closing") shall take place on July
7, 1998 (provided all of the conditions to Closing set forth in Sections 5 and 6
have been satisfied or waived) (the "Closing Date"), or on such later date as
soon thereafter as possible upon which such conditions have been satisfied or
waived. The Closing shall occur at the place mutually agreed by the parties
hereto.
2.4. Conveyance of the Shares. Conveyance of the Shares to Purchaser
shall be effected by delivery by Seller to Purchaser of the certificates
therefore with stock powers attached thereto duly endorsed in blank. Title to
the Shares shall be conveyed from Seller to Purchaser free and clear of all
Encumbrances.
ARTICLE III
Representations and Warranties of Seller
Seller hereby warrants and represents:
3.1. Organization and Good Standing. Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Minnesota. Company has no Subsidiaries. Company has full corporate power and
authority to conduct its business as it is now being conducted. Company is duly
qualified to do business as a foreign corporation in the jurisdictions listed in
Schedule 3.1, and is in good standing in each such jurisdiction, and such
jurisdictions constitute each jurisdiction in which Company is required to be so
qualified as a result of the nature of its business or the ownership or use of
property.
3.2. Capitalization of Company. The authorized capital stock of Company
consists of 100,000 shares of Common Stock without par value, of which 1,000
shares are issued and outstanding, and are held as shown in Schedule 3.2. The
Shares have been duly authorized and validly issued by Company and are fully
paid and non-assessable. The Shares are free and clear of any Encumbrance (other
than any Encumbrance caused to exist by Purchaser), except for Permitted
Encumbrances shown in Schedule 3.2. Company has not authorized or granted any
call, option, warrant, subscription, conversion right or other right to capital
stock of the Company. None of the Shares was issued in violation of the
Securities Act or any other Legal Requirement. Company has no ownership interest
or right or obligation to acquire any ownership interest in any other
corporation, trust, partnership, joint venture or other legal entity.
3.3. Enforceability. Seller has full power and authority to execute and
to deliver this Agreement, and to carry out the transaction contemplated herein.
This Agreement is the valid and binding obligation of the Seller, and
enforceable against Seller in accordance with its terms, except
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as such enforceability may be limited by laws affecting the rights and remedies
of creditors and applicable principles of equity. The execution, delivery and
performance of this Agreement by the Seller will not, with or without the giving
of notice or passage of time or both, (i) conflict with, result in a default,
right to accelerate or loss of rights under, or result in the creation of any
lien, charge or encumbrance pursuant to any provision of any mortgage, deed of
trust, lease, license agreement or other agreement to which Seller or Company is
a party or by which it is bound or affected, (ii) conflict with or result in a
default under any provision of the Articles of Incorporation or By-Laws of
Seller or Company, or any effective resolution of the Directors or Stockholders
of Seller or Company, (iii) conflict with or provide grounds for modification,
suspension or revocation of any license, permit or other governmental
authorization held by Seller or Company at the Closing, or (iv) conflict with or
result in a violation of any Legal Requirement.
3.4. Company's Assets. Company owns all of the assets included in the
Balance Sheet and the Interim Balance Sheet, except for acquisitions,
dispositions or retirements in the ordinary course of business and any other
dispositions described in Schedule 3.4. Except as stated in Schedule 3.4,
Company has good and marketable title to its assets, and none of the assets of
Company are subject to any Encumbrance.
3.5. Accounts Receivable. The accounts receivable of Company reflected
on the Balance Sheet and the Interim Balance sheet or otherwise on the books of
Company represent valid obligations arising from sales actually made or services
actually performed in the ordinary course of business. Unless paid prior to the
Closing Date, such accounts receivable will be as of the Closing Date current
and collectible net of the respective reserves shown on the Interim Balance
Sheet or the accounting records of Company as of the Closing Date (which
reserves are adequate and calculated in accordance with past practice).
3.6. Financial Statements. Seller has delivered to Purchaser (a) the
unaudited balance sheet of Company and the related statements of income,
statements of operations and retained earnings, and statement of cash flows for
the year ended December 31, 1997 (the "Balance Sheet"), (b) the unaudited
balance sheet, income statement and related financial statements of Company for
year to date and the month ended May 31, 1998 (the "Interim Balance Sheet"). The
Balance Sheet and the Interim Balance Sheet accurately present the financial
condition and results of operations and cash flows of Company as at the
respective dates thereof or for the periods referred to therein, all in
accordance with United States generally accepted accounting principles, applied
on a basis consistent with the basis on which the Balance Sheet was prepared,
and applied on a basis that is consistent from period to period as shown
therein. Seller expressly warrants to Purchaser that the Company's net worth as
of December 31, 1997, was not less than $1,141,641. Except as set forth in
Schedule 3.6, Company has no liabilities as of the dates of the Balance Sheet
and the Interim Balance Sheet that are not reflected therein, including, without
limitation, contingent liabilities required to be disclosed under United States
generally accepted accounting principles.
3.7. No Material Adverse Change. Since the dates of the Balance Sheet
and the Interim Balance Sheet, there has been no material adverse change in the
business, operations, properties, assets or condition of Company.
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1911 Corp. Draft 7-6-98
3.8. Litigation. There is no litigation, investigation, arbitration or
other proceeding of any court or other Governmental Authority pending or, to the
best of Company's knowledge, threatened against or relating to Company, except
as listed in Schedule 3.8 to this Agreement by date of filing, names of parties,
court or agency and docket number. Company is not a party to or bound by any
order, judgments, injunctions, decrees or settlement agreements under which it
may have continuing obligations as of the date hereof and which may restrict or
affect the current business operations of Company or Company's capacity to
authorize and issue the Shares. Seller does not know or have reasonable grounds
to know of any basis for any such litigation, investigation, arbitration or
other proceeding. The right or ability of Company to consummate the transaction
contemplated herein has not been challenged by any Governmental Authority or any
other person.
3.9. Books and Records. The books of account, stock record books,
minute books, and other records of Company are complete and correct and have
been maintained in accordance with good business practice.
3.10. Contracts. Each and every executory contract under which Company
has any continuing right to performance or any obligation to perform (except for
agreements (i) with employees and (ii) Plans, which are discussed elsewhere in
this Agreement) is listed in Schedule 3.10. True and correct copies of the
contracts listed in Schedule 3.10 have been provided to Purchaser. There are no
defaults under said contracts.
3.11. Intellectual Property.
3.11.1. Trademarks and Service Marks. Company currently uses the
trademarks or service marks listed in Schedule 3.11.1. Except as provided in
Schedule 3.8, Company has received no notice from any person that such
trademarks and service marks may infringe upon trademarks and service marks of
any other entity.
3.11.2. Know-How, Methods of Operation and Customer Lists. Company has
the unrestricted right to use its know-how, methods of operation, and customer
lists free and clear of any claims of third persons to compensation for the use
thereof (except for claims for compensation under agreements disclosed by
Company in Schedule 3.10).
3.11.3. Software Programs. All software programs that are currently
used by Company as part of its management information systems are listed in
Schedule 3.11.3. Seller knows of no claim of conflicting ownership rights,
breaches of license agreements or past or future license expirations that would
materially interfere with Company's continued use of the software programs
listed in Schedule 3.11.3 for the purposes for which such programs are currently
being used, whether such programs are owned by or licensed to Company.
3.12. Compliance with Legal Requirements. Company is in compliance with
Legal Requirements applicable to Company and its business. To the best knowledge
of Seller, Company has not committed any breach of any Legal Requirement that
may, as of the Closing Date, result in
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any penalty, fine, suspension or loss of any License or Permit listed in
Schedule 3.13, or other adverse or remedial action that would interfere with the
conduct of the business of Company or result in the incurring of costs or
expenses over and above those customarily incurred in the ordinary course of
business.
3.13. Licenses and Permits. Schedule 3.13 lists each License and Permit
of Company as of the Closing Date. Schedule 3.13 specifies for each state or
province in which Company is licensed as an insurance agent, third party
administrator or other regulated provider of similar products or services, the
specific products or services for which Company is licensed in such state, and
the date of expiration of such license, if any. Each License and Permit is
currently effective and is not the subject of any proceedings by which such
License or Permit might be suspended, restricted or revoked. Company is not a
party to any such proceeding. The Licenses and Permits listed in Schedule 3.13
constitute all of the licenses and permits that are necessary for the conduct of
the business of Company as such business is currently conducted. With respect to
each License and Permit listed in Schedule 3.13, such schedule states any
approval or notice filing that is a legal precondition to the closing of the
transactions contemplated by this Agreement, and the applicable statutory or
regulatory reference describing such notice filing or approval.
3.14. Taxes and Tax Returns. Company has filed with the appropriate
governmental authorities all federal, state and local tax returns required to be
filed by Company or appropriate extensions have been obtained therefor. All of
the foregoing have been correct and complete. All federal, state and local
income, sales, use, occupation, property, excise, employment, employee
withholding and other taxes which have become due (including interest and
penalties) have been fully paid (except for taxes, if any, listed in Schedule
3.14 that are being contested in good faith and as to which adequate reserves
have been provided in the Balance Sheet and the Interim Balance Sheet). None of
the federal income tax returns of Company for any year not closed by applicable
statutes of limitations have been audited. All deficiencies proposed as a result
of such audits have been paid, reserved against, settled, or are being contested
in good faith as described in Schedule 3.14. Except as stated in Schedule 3.14,
Company has not granted any waiver of any statute of limitations related to any
federal, state or local tax. Seller shall file or cause to be filed on behalf of
the Company a United States federal income tax return for the Company for the
period ended on the Closing Date, which return shall be subject to prior review
by Purchaser, and Seller shall be responsible for payment of any adjustments to
the tax on such return that are required by the Internal Revenue Service, or to
contest such adjustments only in good faith and at Seller's sole expense, and
Seller shall also receive any refunds with respect to such return.
3.15. Employees. Company is not a party to any employment or severance
agreement with any of its employees or directors except as stated in Schedule
3.15 (except for personnel policies applicable to all employees generally, true
and complete copies of which have previously been made available to Purchaser).
Such Schedule 3.15 contains a complete and accurate list of the following
information for each employee of Company, including each employee on leave of
absence: name, position title, current rate of compensation payable, vacation
accrued, and participation status in any Plan.
3.16. Employee Benefits. Neither Company nor any entity acquired by
Company (whether currently owned by Company or not) has contributed to a
multiemployer plan as defined in Section
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1911 Corp. Draft 7-6-98
3(37) of ERISA, nor have they ever sponsored or participated in any plan subject
to Title IV of ERISA. Company does not sponsor or contribute to any Plan that
reimburses or funds health or other insurance benefits to retired employees, or
otherwise has any obligation to reimburse or fund health or other insurance
benefits for retired employees. Except as stated in Schedule 3.16, Company has
not terminated any Plan. Each Plan to which Company contributes or of which
Company is a sponsor is listed in Schedule 3.16. True and correct copies of each
Plan listed in Schedule 3.16, have been made available to Purchaser. Each Plan
that is intended to be qualified under Section 401 of the Code is so qualified,
and no event has occurred that would reasonably be expected to cause any such
Plan to fail to meet any requirements for qualification. True and correct copies
of any Internal Revenue Service determination letter, Forms 5500, financial
statements, and consultant reports with respect to each Plan for the most recent
three plan years have been made available to Purchaser. Except as stated in
Schedule 3.16, Company or the administrator of each Plan has administered each
Plan in accordance with the provisions thereof and reasonable interpretations
thereof. Each Employee Benefit Arrangement of Company is listed in Schedule
3.16. True and correct copies of each Employee Benefit Arrangement have been
made available to Purchaser.
3.17. Labor Relations. None of the employees of Company is a member of
a labor union or subject to a collective bargaining agreement or actively
seeking formation of a labor union.
Company is not a party to any labor dispute or grievance.
3.18. Insurance. Schedule 3.18 lists all insurance policies of Company
by type of insurance, name of insurer, expiration date, deductibles and policy
limits. Except as stated in Schedule 3.18, all of such insurance is written on
an occurrence and not on a claims made basis. The retroactive date for any such
insurance that is written on a claims made basis is stated in Schedule 3.18.
True and complete copies of Company's current professional liability, officers
and directors, and errors and omissions insurance policies, including the
declarations pages thereof, have been provided to Purchaser. With respect to any
insurance policy listed as a claims made policy on Schedule 3.18, Company has
delivered to the insurer a notice of any claim or potential claim of which
Company is aware as of the date hereof that may reasonably be expected to be
covered by such policy, and such notice is in accordance with the notice
provisions of such policy.
3.19. Real Estate. Company has no ownership interest in any real
property except for an office building and land located at Highway 210 West,
Henning, Minnesota, and an office building and land located at 801 Inman Street,
Henning, Minnesota. The Inman Street building was constructed in approximately
1988 and the Highway 210 building was constructed in approximately 1978. Neither
Seller nor Company has notice or knowledge of the presence of any hazardous
materials, including but not limited to asbestos, petroleum derivatives or
pesticides, in quantities or concentrations sufficient to require any remedial
action under any federal, state or local law, regulation or court proceeding
effective as of the Closing Date. Company has not disposed of any substances
from the site of such office building or any other site occupied by Company in
such a manner that Company is subject to current or future payment of clean up
or remediation costs under
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the federal CERCLA statute or any similar state or local law effective as of the
Closing Date with respect to any site at which such substances may have been
disposed.
3.20. Brokers or Finders. Neither Company nor Seller has incurred any
obligation or liability, contingent or otherwise, for brokerage or finders' fees
or agents' commissions or other similar payment in connection with this
Agreement and the transactions contemplated thereby.
3.21. Absence of Certain Changes and Events. Since the dates of the
Balance Sheet and the Interim Balance Sheet, Company has conducted its business
in the ordinary course, and has not (without limitation):
(a) Increased the rate of compensation to any employee;
(b) Adopted or modified any Plan or Employee Benefit Arrangement;
(c) Granted or modified any employment contract, severance agreement, or
other benefit not constituting a Plan or Employee Benefit Arrangement;
(d) Made any distribution with respect to its stock;
(e) Suffered any loss or damage to any asset or assets, whether or not
covered by insurance, that materially and adversely affects the
business, financial condition or prospects of Company, taken as a
whole;
(f) Sold, leased or otherwise disposed of any asset of Company that is
material to the operation of Company;
(g) Merged with or acquired capital stock in any corporation;
(h) Made any loan or advance under any loan to or guaranteed any obligation
of any person;
(i) Made any material change in the accounting methods employed by Company;
or
(j) Entered into any agreement to do any of the foregoing.
3.22. Disclosure. No representation or warranty by or on behalf of
Seller contained in this Agreement and no certificate, schedule, or other
document furnished or to be furnished to Purchaser pursuant hereto contains or
will contain any untrue statement of a material fact or omits or will omit to
state any material facts which are necessary in order to make the statements
contained herein or therein, in light of the circumstances under which they were
made, not misleading.
3.23. Survival of Representations and Warranties. The representations
and warranties of Seller in this Section of this Agreement shall be true and
correct as of the Closing. The representations and warranties of Seller shall
survive the Closing for a period of two years, except that the representations
and warranties in Section 3.14 shall survive the Closing separately as to each
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1911 Corp. Draft 7-6-98
tax obligation until the thirtieth day following the expiration of the statute
of limitations applicable to such tax obligation, including any voluntary
extensions thereof.
ARTICLE IV
Representations and Warranties of Purchaser
Purchaser hereby warrants and represents to Seller that:
4.1. Status of Purchaser. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Indiana.
Purchaser has full corporate power and authority to conduct its business as it
is now being conducted. Purchaser is duly qualified to do business as a foreign
corporation in each jurisdiction in which Purchaser is required to be so
qualified as a result of the nature of its business or the ownership or use of
property.
4.2. Enforceability. Purchaser has full power and authority to execute
and to deliver this Agreement and all related documents, and to carry out the
transaction contemplated herein. Purchaser has taken all necessary corporate
action to authorize its execution and performance of this Agreement. This
Agreement is the valid and binding obligation of Purchaser, and enforceable
against Purchaser in accordance with its terms, except as such enforceability
may be limited by laws affecting the rights and remedies of creditors and
applicable principles of equity. The execution, delivery and performance of this
Agreement by the Purchaser will not, with or without the giving of notice or
passage of time or both, (i) conflict with, result in a default, right to
accelerate or loss of rights under, or result in the creation of any lien,
charge or encumbrance pursuant to any provision of any mortgage, deed of trust,
lease, license agreement or other agreement to which Purchaser is a party or by
which it is bound or affected, (ii) conflict with or result in a default under
any provision of the Certificate of Incorporation or By-Laws of Purchaser, or
any effective resolution of the Directors or Stockholders of Purchaser, or (iii)
conflict with or result in a violation of any Legal Requirement.
4.3. Certain Proceedings. There is no pending action against Purchaser
in any court or administrative agency that challenges or may have the effect of
preventing or delaying or making unlawful the consummation of the transactions
contemplated by this Agreement. To Purchaser's knowledge, no such proceeding has
been threatened.
4.4. Brokers or Finders. Purchaser has incurred no obligation or
liability, contingent or otherwise, for brokerage or finders' fees or agents'
commissions or other similar payment in connection with this Agreement and the
transactions contemplated thereby.
4.5 Disclosure. No representation or warranty by or on behalf of
Purchaser contained in this Agreement and no statement contained in any
certificate, list, exhibit, or other instrument furnished or to be furnished to
Seller pursuant hereto contains or will contain any untrue statement of a
material fact or omits or will omit to state any material facts which are
necessary in order to
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make the statements contained herein or therein, in light of the circumstances
under which they were made, not misleading.
4.6. Survival of Representations and Warranties. The representations
and warranties of Purchaser in this Section of this Agreement shall be true and
correct as of the date of execution of this Agreement, and as of the Closing.
The representations and warranties of Purchaser shall survive the Closing for a
period of two years.
ARTICLE V
Purchaser's Conditions to Closing
All obligations of Purchaser under this Agreement are subject to
fulfillment, prior to or at Closing, of each of the following conditions, any
one or all or which may be waived in writing by Purchaser:
5.1. Seller's Representations and Warranties True at Closing. Seller's
representations and warranties contained in this Agreement or in any certificate
or document delivered in connection with this Agreement or the transactions
contemplated herein shall be true in all material respects at and as of the date
of Closing as though such representations and warranties were then made.
5.2. Seller's Performance. Seller shall have performed all of its
material obligations under this Agreement that are to be performed prior to or
at Closing to the extent the same have not been waived by Purchaser in
accordance with the terms hereof.
5.3. Delivery of Documents. Seller shall have delivered to Purchaser
the agreements, certificates, consents and other documents required to be
delivered by Seller to Purchaser in accordance with Article VII of this
Agreement.
5.4. Seller's Closing Certificate. Purchaser shall have received a
certificate of Seller dated as of the Closing Date confirming that all
conditions set forth in this Article V to be satisfied by Seller have been
satisfied.
In the event any of the foregoing conditions is not satisfied by
Seller, or waived by Purchaser prior to Closing, Purchaser shall have the right
to terminate this Agreement in accordance with the provisions of Section 10.
ARTICLE VI
Seller's Conditions to Closing
All obligations of Seller under this Agreement are subject to the
fulfillment, prior to or at Closing, of each of the following conditions, any
one or all of which may be waived by Seller in writing:
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1911 Corp. Draft 7-6-98
6.1. Purchaser's Representations and Warranties True at Closing.
Purchaser's representations and warranties contained in this Agreement or in any
certificate or document delivered in connection with this Agreement or the
transactions contemplated herein shall be true in all material respects at and
as of the date of Closing.
6.2. Purchaser's Performance. Purchaser shall have performed its
obligations under this Agreement that are to be performed prior to or at Closing
to the extent the same have not been waived by Seller in accordance with the
terms hereof.
6.3. Delivery of Documents. Purchaser shall have delivered to Seller
the agreements, certificates, consents and other documents to be delivered by
Purchaser to Seller in accordance with Article VIII of this Agreement.
6.4. Purchaser's Closing Certificate. Seller shall have received a
certificate of Purchaser dated as of the Closing Date confirming that all
conditions set forth in this Article VI to be satisfied by Purchaser have been
satisfied.
In the event any of the foregoing conditions is not satisfied by
Purchaser, or waived by Seller prior to Closing, Seller shall have the right to
terminate this Agreement in accordance with the provisions of Section 10.
ARTICLE VII
Seller's Obligations at Closing
7.1 Deliveries by Seller at Closing. On the Closing Date, Seller
agrees that it will deliver to Purchaser:
(a) The Shares, with stock powers attached thereto duly endorsed in
blank.
(b) Seller's certificates and such certificates from public officials
relating to organization and good standing of the Company, which
Purchaser may reasonably request to verify any of the Seller's
representations and warranties herein.
(c) Copies of the duly adopted Articles of Organization and By-Laws of
Company, certified as true and complete by the Secretary of
Company.
(d) Employment Agreements between Company and Raymond C. Murdock,
Harry Pieterick, and Lonnie Anderson.
(e) Release of stock pledge of Shares held by Lonnie Anderson and
Release of those certain Security Agreements pertaining to amounts
owed by the Company to William M. Bengson and Ernest E. Read for
the purchase of their Company Shares in 1996.
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(f) Key man life insurance policy on the life of Raymond C. Murdock.
(g) Estoppel letters from each person who is a Seller.
(h) Termination of Stockholders Agreement dated September 19, 1996.
(i) Any other document reasonably requested by Purchaser to confirm the
accuracy of the representations and warranties by Seller herein and
the compliance by Seller with the provisions of this Agreement.
7.2. Post-Closing. After the Closing of this Agreement, Seller agrees
that at Purchaser's sole cost and expense, it will take such actions and
properly execute and deliver to Purchaser such further instruments of
assignment, conveyance and transfer as, in the reasonable opinion of counsel for
Purchaser and Seller, may be reasonably necessary to assure, complete and
evidence the full and effective transfer and conveyance of the Shares. Purchaser
shall not, however, be responsible for reimbursing Seller for the cost of
Seller's performance of any actions required or contemplated by this Agreement
to be performed by Seller.
ARTICLE VIII
Purchaser's Obligations at Closing
8.1. Purchaser's Obligations at Closing. On the Closing Date, Purchaser
agrees that it will deliver to Seller:
(a) Payment of the Purchase Price.
(b) Secretary's certificates and such certificates from public
officials relating to the legal existence, corporate good
standing, charter documents, and state tax clearance, which
Seller may reasonably request to verify any of Purchaser's
representations and warranties herein.
(c) Certified resolutions of the Boards of Directors of Purchaser,
authorizing the transactions contemplated hereby, certified by
the Secretary of Purchaser.
(d) Certificates of the Secretary of Purchaser as to incumbency and
related matters.
(e) Copies of the duly adopted Articles of Organization and By-Laws of
Purchaser, certified as true and complete by the Secretary of such
corporation.
(fg) Any other document reasonably requested by Seller to confirm the
accuracy of the representations and warranties by Purchaser herein
and the compliance by Purchaser with the provisions of this
Agreement.
8.2. Post-Closing.
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1911 Corp. Draft 7-6-98
8.2.1. After the Closing of this Agreement, Purchaser agrees that it
will take such actions and properly execute and deliver such further instruments
as Seller may reasonably request to assure, complete and evidence the
transaction provided for in this Agreement.
ARTICLE IX
Indemnification
9.1. Seller's Indemnification. Each person constituting a Seller,
jointly and severally, shall indemnify and hold Purchaser harmless from and
against:
(a) Except as otherwise expressly provided in this Agreement, any
and all damage, loss, or liability resulting from any
misrepresentation of a material fact, breach of warranty or
nonfulfillment of any agreement on the part of Seller under this
Agreement or from any misrepresentation in any certificate
furnished or to be furnished to Purchaser hereunder; and
(b) Any and all actions, suits, proceedings, demands, assessments,
judgments, reasonable costs, and other reasonable expenses,
including, but not limited to, reasonable attorney's fees,
incident to any of the foregoing.
9.2. Purchaser's Indemnification. Purchaser shall indemnify and hold
Seller harmless from and against:
(a) Except as otherwise expressly provided in this Agreement, any and
all damage, loss or liability resulting from any
misrepresentation of a material fact, breach of warranty or
nonfulfillment of any agreement on the part of Purchaser under
this Agreement or from any misrepresentation in any certificate
furnished or to be furnished to Seller hereunder; and
(b) Any and all actions, suits, proceedings, demands, assessments,
judgments, reasonable costs and other reasonable expenses,
including, but not limited to, reasonable attorney's fees,
incident to any of the foregoing.
9.3. Conditions of Indemnification. The respective obligations and
liabilities of Seller and Purchaser (the "Indemnifying Party") to the other
(herein sometimes called the "Indemnified Party") under Sections 9.1 and 9.2
hereof with respect to claims resulting from the assertion of liability by third
parties shall be subject to the following terms and conditions:
(a) Within 20 days after receipt of notice (referred to herein as
"notice") of commencement of any action or the assertion in
writing, formal or informal, of any claim, audit or inquiry by
a person (referred to herein as a "claim"), the Indemnified
Party shall give the Indemnifying Party written notice thereof
together with a copy
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of the document asserting such claim, and the Indemnifying Party
shall have the right to respond to such claim and to undertake
the defense thereof by a representative of its own choosing and
to enter into a settlement or compromise thereof or consent to a
judgment with respect thereto; provided, however, the
Indemnifying Party shall not, without the prior written consent
of the Indemnified Party, settle or compromise any claim or
consent to the entry of judgment (i) that does not include as an
unconditional term thereof the giving by the claimant or the
plaintiff to the Indemnified Party a release from all
liability in respect of such claim, or (ii) that contemplates
any payment or performance by the Indemnified Party.
(b) In the event that the Indemnifying Party, by the 20th day after
receipt of notice of a claim (or, if earlier, by the tenth day
preceding the day on which a responsive pleading must be served
in order to prevent judgment by default in favor of the person
asserting such claim), (i) does not elect to defend against
such claim, and (ii) if an election to defend is made, does not
provide reasonable assurances to the Indemnified Party of the
Indemnifying Party's (or its insurer's) ability to pay defense
costs and indemnity costs likely to be incurred with respect to
the claim, the Indemnified Party will, upon notice to the
Indemnifying Party, have the right to respond to such claim and
to undertake to defense, compromise or settlement of such claim
on behalf of and for the account and risk of loss of the
Indemnifying Party, subject to the right of the Indemnifying
Party to assume the defense of such claim upon satisfying
conditions (i) and (ii) above at any time prior to the
settlement, compromise or final determination thereof (if such
assumption be permitted by any court or other tribunal having
jurisdiction thereof), provided that the Indemnifying Party
shall be given at least 15 days' prior written notice of the
effectiveness of any such proposed settlement or compromise;
(c) In connection with any such indemnification, the Indemnified
Party shall cooperate in all reasonable requests of the
Indemnifying Party.
9.4. Indemnification Limits. Neither Seller on the one hand nor
Purchaser on the other hand shall have any obligation to indemnify the other
party for any breach of any misrepresentation, breach of warranty or
nonfulfillment of any agreement on the part of Seller or Purchaser under this
Agreement or from any misrepresentation in any certificate furnished or to be
furnished hereunder unless the aggregate amount of such indemnifiable claims
previously paid by Seller to Purchaser, on the one hand, or by Purchaser to
Seller, on the other hand, shall exceed $100,000.00, and thereafter Seller, on
the one hand, and Purchaser, on the other hand, shall be responsible only for
the excess of such aggregate amount over $100,000.00, provided, however, that in
no event shall the aggregate of all indemnifiable claims paid by Seller to
Purchaser or by Purchaser to Seller hereunder exceed $1,000,000, adjusted for
inflation by the percentage increase in the U.S. Department of Labor consumer
price index, all urban wage earners, from the Closing Date though the date on
which payment is made by Seller.
9.5. No Rescission. It is agreed by Purchaser and Seller in
consideration of their mutual agreements in this Article IX that neither of them
shall be entitled to rescission of this Agreement as a remedy, unless the other
party fails to perform its material obligations under this Article, and
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1911 Corp. Draft 7-6-98
rescission would otherwise be available to the party not in breach under
principles of applicable law.
ARTICLE X
Termination of Agreement
10.1. Termination of Agreement. This Agreement may be terminated and
the transaction contemplated herein abandoned at any time prior to Closing:
(a) By mutual agreement of the parties;
(b) By Seller, if any of the conditions set forth in Article VI
shall have become incapable of fulfillment prior to the Closing
Date or such earlier date as may be specifically provided for
the performance thereof (as the same may be extended) through
no fault of Seller and the same shall not have been waived by
Seller;
(c) By Purchaser, if any of the conditions set forth in Article V
shall have become incapable of fulfillment prior to the Closing
Date or such earlier date as may be specifically provided for
the performance thereof (as the same may be extended) through
no fault of Purchaser and the same shall not have been waived
by Purchaser; or
(d) By either Seller or Purchaser in the event of a material breach
by the other party of its obligations hereunder.
10.2. Notice of Breach Required. Neither party to this Agreement may
claim termination or pursue any other remedy referred to in Section 10.1 on
account of a breach of a condition, covenant or warranty by the other, without
first giving such other party written notice of such breach and not less than
twenty (20) days within which to cure such breach; provided, however, that no
such cure right shall exist in the event of a breach by Purchaser of its
obligation to pay the purchase price due at Closing pursuant to Section 2.2
hereof. The Closing Date shall be postponed, if necessary, to afford such
opportunity to cure.
10.3. Termination by Purchaser for Breach. In the event of the
termination of this Agreement by Purchaser under Sections 10.1(c) or (d) due to
a material breach by Seller of its obligations hereunder, Purchaser shall have
the right either to (i) terminate this Agreement and to sue for any damages
suffered as a result thereof or (ii) seek specific performance of Seller's
obligations hereunder (the costs of which shall be borne by Seller if Purchaser
establishes that Seller has committed a material breach of its obligations
hereunder).
10.4. Termination by Seller for Breach. In the event of the
termination of this Agreement by Seller under Sections 10.1(b) or (d) due to a
material breach by Purchaser of its obligations
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hereunder, Seller shall have the right either to (i) terminate this Agreement
and sue for any damages suffered as a result thereof or (ii) seek specific
performance of the Purchaser's obligations hereunder (the costs of which shall
be borne by Purchaser if Seller establishes that Purchaser has committed a
material breach of its obligations hereunder).
ARTICLE XI
Miscellaneous Provisions
11.1. Notices. Any notice, request or other communication to be given
by any party hereunder shall be in writing and shall be sent by registered or
certified mail, postage prepaid, by overnight courier guaranteeing overnight
delivery or by facsimile transmission (if confirmed verbally or in writing by
mail as aforesaid), to the following address:
To Seller: Joseph Cole
1911 Corp.
CNA Plaza - 36 South
Chicago, Illinois 60685
Telephone No.: 312-822-2052
Fax Number: 312-755-7196
With a copy to: Michael T. Gengler, Esq.
Vice President, Associate General Counsel
CNA Financial Corporation
CNA Plaza-42 South
333 South Wabash
Chicago, Illinois 60685-0001
Telephone No.: 312-922-7189
Fax Number: 312-755-7376
To Purchaser: Dennis Daggett
President
IGF Holding Company
6000 Grand Avenue
Des Moines, Iowa 50312
Telephone No.: 515-633-1000
Fax Number: 515-633-1010
With a copy to: David L. Bates, Esq.
Vice President, General Counsel and Secretary
Symons International Group, Inc.
4720 Kingsway Drive
Indianapolis, Indiana 46205
Telephone No.: 317-259-6384
Fax Number: 317-259-6395
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1911 Corp. Draft 7-6-98
Notice shall be deemed given three (3) business days after deposit in the mail,
on the next day if sent by overnight courier and on receipt if sent by facsimile
(and confirmed verbally or by mail as aforesaid).
11.2. Arbitration. Any dispute arising between the parties to this
Agreement with respect to performance or interpretation of this Agreement shall
be submitted to arbitration in accordance with the Commercial Arbitration Rules
of the American Arbitration Association before a single arbitrator. The
arbitrator shall give effect to any applicable statutes of limitations. The
essential determinations of the arbitrator's award shall be based upon written
findings of fact and conclusions of law, and judgment upon the award of the
arbitrator may be entered in any court having jurisdiction thereof. The award
shall be subject to judicial review as to any harmful errors of law.
11.3. Sole Agreement. This Agreement may not be amended or modified in
any respect whatsoever except by instrument in writing signed by the parties
hereto. This Agreement, and the exhibits hereto and documents and agreements
delivered pursuant hereto, constitute the entire agreement between the parties
hereto with respect to the sale of the Shares and supersede all prior
negotiations, discussions, writings and agreements between them with respect to
the subject matter hereof.
11.4. Successors. The terms of this Agreement shall be binding upon and
inure to the benefit of and be enforceable by and against the heirs and
successors of the parties hereto.
11.5. Captions. The captions of this Agreement are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
11.6. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Illinois applicable to contracts
entered into therein, without consideration of principles of choice of law or
conflicts of laws.
11.7. Severability. Should any one or more of the provisions of this
Agreement be determined to be invalid, unlawful or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions hereof
shall not in any way be affected or impaired thereby.
11.8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
11.9. Third Party Beneficiary. The provisions of this Agreement are not
intended to confer any benefits upon any person or entity not a party to this
Agreement, provided, however, that IGF Insurance Company shall be entitled to
rely upon the agreement of Seller in Section 2.5.
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IN WITNESS WHEREOF, the parties hereby execute this Agreement as of the
day and year first set forth above.
PURCHASER: IGF HOLDINGS, INC.
By:________________________________________
Name:
Title:
SELLER: 1911 CORP.
By:________________________________________
Name:
Title:
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1911 Corp. Draft 7-6-98
SCHEDULE INDEX
Schedule 3.1 Qualifications as Foreign Corporation
Schedule 3.2 Holders of Company's Stock
Schedule 3.4 Dispositions and Permitted Encumbrances
Schedule 3.6. Exceptions to Balance Sheet
Schedule 3.8 Litigation
Schedule 3.10 Executory Contracts
Schedule 3.11.1 Trademarks and Service Marks
Schedule 3.11.3 Software Programs
Schedule 3.13 Licenses and Permits
Schedule 3.14 Taxes and Tax Returns
Schedule 3.15 Employees
Schedule 3.16 Plans and Employee Benefit Arrangements
Schedule 3.18 Insurance
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