Exhibit 2.10
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is entered into as of
the 1st day of January, 1999 by and between Goran Capital Inc., a Canadian
corporation ("Goran"), Xxxxxx International Group, Inc., a Florida corporation
("SIGFL"), and Florida International Underwriters, Inc., a Florida corporation
("FIU"), with respect to the following:
WHEREAS, FIU AND SIGFL are insurance agencies engaged in the business
of writing policies of insurance;
WHEREAS, all of the issued and outstanding stock of SIGFL is owned by
Goran; and
WHEREAS, SIGFL desires to sell and FIU desires to purchase certain
assets of SIGFL, subject to the terms of this Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Sale of Assets. SIGFL hereby sells, transfers, conveys,
assigns and delivers to FIU and FIU hereby purchases the book
of business of SIGFL with respect to the excess and surplus
lines property and casualty insurance business currently
written through Pafco General Insurance Company, an Indiana
insurance company ("Pafco"), including access to all
proprietary information such as agents lists, agreements in
force and all other intangible assets of SIGFL relating
thereto (the "Book of Business").
2. Book of Business Purchase Price. The Purchase Price for the
Book of Business shall be equal to one hundred percent (100%)
of the net retained commission income received by FIU on the
Book of Business for the period from January 1, 1999 through
December 31, 1999 (the "Purchase Price"). For purposes of this
Section 2, net retained commission income shall be equal to
gross commission income received by FIU from the renewal of
the Book of Business into facilities represented by FIU less
commissions paid to producing agents or brokers with respect
to the Book of Business. The Purchase Price shall be
calculated at the end of each calendar quarter of 1999 and
shall be paid as follows:
2.1 Prior to April 30, 1999, FIU shall pay to SIGFL
one-third (1/3) of the Purchase Price attributable to
the quarter ending March 31, 1999. The remaining
two-thirds (2/3) of such portion of the Purchase
Price shall be paid by FIU to SIGFL , in two equal
installments, the first of which shall be due and
payable prior to April 30, 2000 and the second of
which shall be due and payable prior to April 30,
2001.
2.2 Prior to July 30, 1999, FIU shall pay to SIGFL
one-third (1/3) of the Purchase Price attributable to
the quarter ending June 30, 1999. The remaining
two-thirds (2/3) of such portion of the Purchase
Price shall be paid by FIU to SIGFL, in two equal
installments, the first of which shall be due and
payable prior to July 30, 2000 and the second of
which shall be due and payable prior to July 30,
2001.
2.3 Prior to October 30, 1999, FIU shall pay to SIGFL
one-third (1/3) of the Purchase Price attributable to
the quarter ending September 30, 1999. The remaining
two-thirds (2/3) of such portion of the Purchase
Price shall be paid by FIU to SIGFL, in two equal
installments, the first of which shall be due and
payable prior to October 30, 2000 and the second of
which shall be due and payable prior to October 30,
2001.
2.4 Prior to January 30, 2000, FIU shall pay to SIGFL
one-third (1/3) of the Purchase Price attributable to
the quarter ending December 31, 1999. The remaining
two-thirds (2/3) of such portion of the Purchase
Price shall be paid by FIU to SIGFL, in two equal
installments, the first of which shall be due and
payable prior to January 30, 2001 and the second of
which shall be due and payable prior to January 30,
2002.
2.5 Upon execution of this Agreement, FIU shall pay to
SIGFL the sum of Fifteen Thousand Dollars ($15,000)
which shall be allocated to that portion of the
Purchase Price due and payable with respect to the
quarter ending March 31, 1999.
3. Auxiliary Purchase Price. FIU shall have access to the closed
files of SIGFL (the "Old Business"). FIU shall pay to SIGFL
the sum of twenty-five percent (25%) of the net retained
commission income generated by FIU during the period from
January 1, 1999 through December 31, 1999 (the "Auxiliary
Purchase Price"). For purposes of this Section 3, net retained
commission income shall be equal to gross commission income
received by FIU from the renewal of the Old Business into
facilities represented by FIU less commissions paid to
producing agents or brokers with respect to the Old Business.
The Auxiliary Purchase Price shall be calculated at the end of
each calendar quarter during 1999 and the portion of the
Auxiliary Purchase Price attributable to each such calendar
quarter shall be paid within thirty (30) days of the end of
such quarter.
4. Pafco Renewals Purchase Price. FIU shall pay to SIGFL the sum
of fifty percent (50%) of the net retained commission income
generated by FIU during the period from January 1, 1999
through June 30, 1999 pursuant to the UMA (as defined herein)
(the "Pafco Renewals Purchase Price"). For purposes of this
Section 4, net retained commission income shall be equal to
gross commission income received by
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FIU from the business written pursuant to the UMA less
commissions paid to producing agents or brokers with respect
thereto. The Pafco Renewals Purchase Price shall be calculated
at the end of each of the first two calendar quarters during
1999 and the portion of the Pafco Renewals Purchase Price
attributable to each such calendar quarter shall be paid
within thirty (30) days of the end of such quarter.
5. Underwriting Management Agreement. Contemporaneously with this
Agreement FIU and Pafco shall enter into that certain
Underwriting Management Agreement (the "UMA") in the form of
Exhibit "A" attached hereto.
6. Representations and Warranties. Goran and SIGFL represent and
warrant to FIU as follows:
6.1 Organization, Standing and Qualification of Goran.
Goran is a Canadian corporation, duly organized,
validly existing and in good standing under the laws
of Canada. Goran has all requisite corporate power
and authority and is entitled to carry on its
business as now being conducted and to own, lease and
operate its assets and business as now conducted.
6.2 Organization, Standing and Qualification of SIGFL.
SIGFL is a Florida corporation, duly organized,
validly existing and in good standing under the laws
of the State of Florida. SIGFL has all requisite
corporate power and authority and is entitled to
carry on its business as now being conducted and to
own, lease and operate its assets and business as now
conducted.
6.3 Execution, Delivery and Performance of Agreement;
Authority of Goran. The execution, delivery and
performance of this Agreement by Goran and the
related agreements referred to herein will not
conflict with any provision of Goran's Certification
of Incorporation or any mortgage, lease, license,
agreement, law, rule or regulation or any order,
judgment or decree to which it is a party or by which
it may be bound. Goran has the full power and
authority to enter into this Agreement and to carry
out the transactions contemplated hereby, and this
Agreement constitutes a valid and binding obligation
of Goran and is enforceable in accordance with its
terms.
6.4 Execution, Delivery and Performance of Agreement;
Authority of SIGFL. The execution, delivery and
performance of this Agreement by SIGFL and the
related agreements referred to herein will not
conflict with any provision of SIGFL's Certificate of
Incorporation or any mortgage, lease, license,
agreement, law, rule or regulation or any order,
judgment or decree to which it is a party or by which
it may be bound. SIGFL has the full power and
authority to enter into this Agreement and to carry
out the transactions
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contemplated hereby, and this Agreement constitutes a
valid and binding obligation of SIGFL and is
enforceable in accordance with its terms.
6.5 Consent of Sole Shareholder. Goran is the owner of
all of the issued and outstanding stock of SIGFL and
has given all requisite approval and consent to the
transactions contemplated by this Agreement.
6.6 Title to Assets. SIGFL has good and marketable title
to the Book of Business, which is not subject to any
liens, pledges, security interests or other
restrictions.
7. Representations and Warranties of FIU. FIU represents and
warrants to Goran and SIGFL as follows:
7.1 Organization, Standing and Qualification of FIU. FIU
is a Florida corporation, duly organized, validly
existing and in good standing under the laws of the
state of Florida. FIU has all requisite corporate
power and authority and is entitled to carry on its
business as now being conducted and to own, lease and
operate its assets and business as now conducted.
7.2 Execution, Delivery and Performance of Agreement;
Authority of FIU. The execution, delivery and
performance of this Agreement by FIU and the related
agreements referred to herein will not conflict with
any provision of FIU's Certification of Incorporation
or any mortgage, lease, license, agreement, law, rule
or regulation or any order, judgment or decree to
which it is a party or by which it may be bound. FIU
has the full power and authority to enter into this
Agreement and to carry out the transactions
contemplated hereby, and this Agreement constitutes a
valid and binding obligation of FIU and is
enforceable in accordance with its terms.
8. Closing. The effective date of the closing of the transactions
contemplated by this Agreement shall be January 1, 1999
(the "Closing").
9. Covenant Not to Compete.
9.1 Goran and SIGFL acknowledge and agree that the purchase of
the Book of Business by FIU is a valuable and reasonable
consideration for FIU's entering into this Agreement. For
a period of two (2) years from the date of this Agreement,
neither Goran nor SIGFL shall directly or indirectly
engage in, have any interests in, or otherwise form any
relationship with any business, firm, person, partnership,
corporation (whether as an employee, officer, director,
agent, security holder, creditor, consultant, joint
venturer, partner, associate or otherwise), or in any
other entity for the purpose of providing
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property and casualty insurance products comparable to
those contained in the Book of Business (the "Business")
unless required by state law. This covenant shall prohibit
Goran and SIGFL from engaging in the Business, either
directly or indirectly, within the State of Florida. It is
expressly understood and agreed by and between the parties
that the geographic scope for such restriction to be
imposed against Goran and SIGFL is fair and reasonable.
9.2 Goran and SIGFL agree that in the event of a determination
of a material violation of any of the foregoing provisions
of Section 9.1 of this Agreement by a court of competent
jurisdiction:
9.2.1 If any of the Purchase Price, Auxiliary Purchase
Price or Pafco Renewals Purchase Price remain
unpaid to SIGFL, FIU shall be entitled to a
set-off of the Purchase Price, Auxiliary Purchase
Price or Pafco Renewals Purchase Price due and
owing to SIGFL for damages to FIU in such amount
as determined by a court of competent
jurisdiction;
9.2.2 The determination of a court of competent
jurisdiction of damages to FIU as a result of
Goran's or SIGFL's breach of this Agreement shall
not, in any event, or in any way prohibit FIU
from obtaining injunctive relief to prevent
further violation of this Agreement by Goran or
SIGFL.
10. Indemnification of Goran and SIGFL. FIU hereby indemnifies and
agrees to hold Goran and SIGFL harmless from, against and in
respect of and shall on demand reimburse such party for any and
all loss, liability or damage suffered or incurred by Goran or
SIGFL by reason of any untrue representation, breach of warranty
or nonfulfillment of any covenants by FIU contained herein or in
any document, instrument or agreement delivered to Goran or SIGFL
pursuant hereto or in connection herewith. Furthermore, FIU agrees
to indemnify and defend Goran and SIGFL and their individual
shareholders, directors and officers, from and against any claim,
suit, demand and for any damages, losses, costs, attorney's fees
and expenses incurred, as a result of any errors, omissions,
misrepresentations or actions taken by FIU subsequent to the
effective date of this Agreement with regard to the Book of
Business. It is the intention of the parties that Goran and SIGFL
and their individual shareholders, directors and officers shall
only be responsible for any losses, claims, demands, costs and
expenses arising out of SIGFL's operation of the Book of Business.
11. Indemnification of FIU. Goran and SIGFL hereby indemnify and agree
to hold FIU harmless from, against and in respect of and shall on
demand reimburse FIU for any
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and all loss, liability or damage suffered or incurred by FIU by
reason of any untrue representation, breach of warranty or
nonfulfillment of any covenants by Goran or SIGFL contained herein
or in any document, instrument or agreement delivered to FIU
pursuant hereto or in connection herewith. Furthermore, Goran and
SIGFL agree to indemnify and defend FIU and its individual
shareholders, directors and officers, from and against any claim,
suit, demand and for any damages, losses, costs, attorney's fees
and expenses incurred, as a result of any errors, omissions,
misrepresentations or actions taken by SIGFL prior to the
effective date of this Agreement with regard to the Book of
Business. It is the intention of the parties that FIU and its
individual shareholders, directors and officers shall only be
responsible for any losses, claims, demands, costs and expenses
arising out of its operation of the Book of Business.
12. Costs of Transaction. Except as otherwise provided herein, each of
the parties hereto shall be responsible for their respective costs
and fees in connection with this Agreement or any other agreement
contemplated herein and the transactions contemplated hereby.
13. Notices. Any notice, demand, consent, approval, request, or other
communication or document to be provided hereunder to a party
hereto shall be (a) in writing, and (b) deemed to have been
provided (i) forty-eight (48) hours after being sent as certified
or registered mail in the United States mail, postage prepaid,
return receipt requested, to the address of the party set forth as
follows or to any other address in the United States of America as
the party may designate from time to time by notice to the other
party, or (ii) upon being given by hand or other actual delivery
to the party:
If to Goran: Goran Capital Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Executive Vice President
If to SIGFL: Xxxxxx International Group, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, President
If to FIU: Florida International Underwriters, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000 Xxxx
Xxxx Xxxxx, XX 00000-0000
Attention: Colin W. A. Fellows
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14. Entirety. This Agreement represents the complete understanding
between the parties with respect to the transactions contemplated
herein.
15. Amendment. This Agreement may be amended by and only by an
instrument executed and delivered by each party.
16. Waiver. No party shall be deemed to have waived any right which it
holds hereunder unless the waiver is made expressly and in writing
(and, without limiting the generality of the foregoing, no delay
or omission by any party in exercising any such right shall be
deemed a waiver of is future exercise). No waiver shall be deemed
a waiver as to any other instance or any other right.
17. Choice of Law. All questions concerning the construction,
validity, and interpretation of this Agreement and the performance
of the obligations imposed hereby shall be governed by the
internal law, not the law of conflicts, of the State of Indiana.
18. Successors. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective heirs,
personal representatives, successors, and assigns hereunder.
19. Severability. No determination by any court, governmental body or
otherwise that any provision of this Agreement or any amendment
hereof is invalid or unenforceable in any instance shall affect
the validity or enforceability of (a) any other provision thereof,
or (b) that provision in any circumstance not controlled by the
determination. Each such provision shall be valid and enforceable
to the fullest extent allowed by and shall be construed wherever
possible as being consistent with, applicable law.
20. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but
all of which together will constitute one and the same instrument.
20. Further Assurances. The parties shall cooperate with each other
and shall execute and deliver, or cause to be delivered, all other
instruments and shall take all other actions, as either party
hereto may reasonably request from time to time in order to
effectuate the provisions hereof.
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IN WITNESS WHEREOF, each party hereto has executed this Agreement as of the
day and year first above written.
GORAN CAPITAL INC.
By:
Title:
XXXXXX INTERNATIONAL GROUP, INC.
By:
Title:
FLORIDA INTERNATIONAL UNDERWRITERS, INC.
By:
Title:
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