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EXHIBIT 2.2
FIRST AMENDMENT
TO
DISTRIBUTION AGREEMENT
This First Amendment to Distribution Agreement (this "Amendment") is
made and entered into on October __, 1996, by and among AMERISAFE, Inc., a
Texas corporation (formerly Gulf Universal Holdings, Inc.) (the "Company"),
Xxxxxxx X. Xxxxxx ("Xxxxxx"), Xxxxxx X. Xxxxxx ("Temple"), M.T. & Co., Inc., a
Louisiana corporation ("MTInc."), Southern Underwriters, Inc., a Louisiana
corporation ("SUI"), and Xxxxxx, Temple and Trent Financial Services, a
Louisiana corporation ("MTTFS").
RECITALS
A. The Company, Xxxxxx and Temple are parties to a Distribution
Agreement dated July 20, 1996 (the "Original Agreement").
B. The parties to the Original Agreement desire to (i) amend the
Original Agreement as set forth in this Amendment to, among other things,
adjust the distribution of the SUI and MTTFS capital stock and (ii) add MTInc.,
SUI and MTTFS as parties thereto.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants herein contained, and intending to be legally bound hereby, the
parties agree as follows:
1. Sections 1(a) and 1(b) of the Original Agreement are hereby
amended in their entirety to read as follows:
(a) Distribution to Temple. The Company hereby agrees
to distribute to Temple on the Distribution Date (as defined below in
Section 3) (i) 1,000 shares of Common Stock, no par value, of MTInc.
(the "MTInc. Shares"), representing all of the outstanding capital stock
of MTInc., (ii) 510 shares of Common Stock, par value $1.00 per share,
of SUI (the "Temple SUI Shares"), (iii) 51 shares of Common Stock, no
par value, of MTTFS (the "Temple MTTFS Shares"), and (iv) a promissory
note in the amount of $8,000,000 (the "Temple Note"). The Company also
hereby agrees to make, prior to such distribution, a capital
contribution to MTInc. by delivering a promissory note in the amount of
$5,971,872 (the "MTInc. Note"). Temple hereby agrees to accept the
MTInc. Shares, the Temple SUI Shares, the Temple MTTFS Shares and the
Temple Note. MTInc. hereby agrees to accept the MTInc. Note.
(b) Distribution to Xxxxxx. The Company hereby agrees
to distribute to Xxxxxx on the Distribution Date (i) 490 shares of
Common Stock, par value $1.00 per share, of SUI (the "Xxxxxx XXX
Shares") and (ii) 49 shares of Common Stock, no par value, of MTTFS (the
"Xxxxxx MTTFS Shares"). Xxxxxx hereby agrees to accept the Xxxxxx XXX
Shares and the Xxxxxx MTTFS Shares.
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2. A new Section 1(d) is added as follows:
(d) Reorganization of MorTem Corporations. Temple
acknowledges that prior to the Distribution Date, the MorTem
Corporations will be reorganized pursuant to the Plan of Reorganization
adopted by the Board of Directors of the Company on October __, 1996
(the "Plan of Reorganization") as follows: (i) M&T Aviation, Inc.,
Xxxxxx, Temple & Trent of Arkansas and Gulf Audit Services, Inc. will be
merged with and into MTInc., with MTInc. as the surviving corporation,
(ii) Xxxxxx, Temple & Company, Xxxxxx, Temple & Trent of Shreveport and
Systems Operations, Inc. (d/b/a Engineered Mechanical Systems) will
become wholly owned subsidiaries of MTInc., (iii) the assets and
liabilities of CHM, Inc. ("CHM"), other than any shares of Class B
Common Stock of the Company held by CHM, will be transferred to MTInc.,
(iv) the assets of Mor-Tem Systems, Inc. ("MOR-TEM"), other than the (a)
MTInc. Shares, (b) the shares of capital stock of SUI, MTTFS, Xxxxxxxxx
& Xxxxxx, Inc. and Xxxxxx Xxxxxx Risk Management, Inc. and (c) the
shares of Series A Preferred Stock of the Company held by MOR-TEM will
be transferred to MTInc. and (v) MTInc. will indemnify MOR-TEM and
assume the liabilities of MOR-TEM.
3. Section 3 of the Original Agreement is hereby amended in its
entirety to read as follows:
3. Distribution Date. For purposes of this Agreement,
"Distribution Date" means the date upon which the Company distributes
the Shares described in Sections 1(a) and 1(b) above to Xxxxxx and
Temple, which date shall be two business days prior to the date
requested by the Company for the acceleration of the effectiveness of
its Registration Statement on Form S-1 (File No. 333-10099) with respect
to the Company's registered public offering of the Company's Class A
Common Stock (the "Offering") or such earlier date as may be agreed upon
by the parties; provided that if the Distribution Date has not occurred
prior to October 31, 1996, the obligations of the parties hereto will
terminate.
4. New paragraphs (iii) and (iv) are added to subsection (a) of
Section 4 as follows:
(iii) As of the Distribution Date, he has not
transferred, agreed to transfer, or negotiated with any person
regarding a transfer of, any of his shares of the Company held as
of July 1, 1996.
(iv) Except as provided in this Agreement, he
currently has no plans or intentions to transfer any of his stock
in the Company, MTInc., SUI, or MTTFS on or after the
Distribution Date.
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5. A new subsection (c) is added to Section 4 as follows:
(c) Each of MTInc., SUI and MTTFS hereby represents and
warrants that:
(i) It is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Louisiana and has all requisite corporate authority to execute
and deliver this Agreement and to perform all of the transactions
contemplated by this Agreement to be performed by it; and
(ii) The execution and delivery by it of this
Agreement, and the consummation of the transactions contemplated
by this Agreement to be performed by it, have been duly
authorized by all necessary corporate action on the part of such
corporation, and this Agreement will, when executed and delivered
by the parties and subject to Section 3, constitute its valid and
binding obligation, enforceable against it in accordance with its
terms.
6. Section 5 is hereby amended to extend the representations and
warranties of the Company contained in such section to MTInc., SUI and MTTFS as
well as Xxxxxx and Temple.
7. Section 7 is hereby amended in its entirety, to read as follows:
7. Tax Characterization. It is the express intention of the
parties that the distributions of stock contemplated by this Agreement
qualify for tax-free treatment under section 355 of the Internal Revenue
Code of 1986, as amended (the "Code"). In this regard, the parties
hereto covenant as follows:
(a) Each of Xxxxxx and Temple hereby covenants that:
(i) For the period commencing on the
Distribution Date and ending at the end of the second taxable
year ending after the Distribution Date (the "Post-Distribution
Period"), he will not transfer any of his Company, MTInc., SUI or
MTTFS stock to any other person, other than a transfer by Xxxxxx
of Company stock solely in exchange for stock, pursuant to a
transaction qualifying as a tax-free reorganization described in
section 368(a)(1) of the Code (a "Qualifying Transaction"). For
all purposes of this Agreement, a transaction shall be deemed to
be a Qualifying Transaction only if: (i) the IRS issues a ruling
letter so holding, or (ii) tax counsel to the Company renders an
opinion reasonably satisfactory in form and substance to the
Company and to both Xxxxxx and Temple that the transaction is a
Qualifying Transaction. Any stock received in such a transfer
pursuant to a Qualifying Transaction shall become subject to this
covenant.
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(ii) Following the Post-Distribution Period he
will not transfer stock of the Company, MTInc., SUI, or MTTFS to
any person pursuant to any agreements, arrangements or
negotiations entered into before the Distribution Date.
(iii) During the Post-Distribution Period Xxxxxx
will cause the Company, through its operating subsidiary, Temple
will cause MTInc., and Xxxxxx and Temple will cause SUI and
MTTFS, to continue the active conduct of their respective
businesses which they conduct on the Distribution Date, and not
to liquidate or to sell or otherwise dispose of any material part
of their assets (including stock of subsidiaries) other than in
the ordinary course of business or pursuant to a Qualifying
Transaction, if such sale or disposition would cause the
respective corporation not to continue to employ a substantial
portion of the assets held by it on the Distribution Date in the
conduct of businesses conducted by it on such date.
(iv) Temple will cause MTInc. to use the MTInc.
Note, or the proceeds thereof, solely in the ordinary conduct of
its existing business and/or to retire existing indebtedness. In
no event will he cause MTInc. to use such funds to invest in
assets of any business or activity other than MTInc.'s existing
lines of business.
(b) The Company, MTInc., SUI and MTTFS each covenants
that during the Post-Distribution Period it will not discontinue the
active conduct of the active business which it conducts on the
Distribution Date, liquidate, or sell or otherwise dispose of any
material part of its assets (including stock of subsidiaries) other than
in the ordinary course of business or pursuant to a Qualifying
Transaction, if such sale or disposition would cause the respective
corporation not to continue to employ a substantial portion of the
assets held by it on the Distribution Date in the conduct of businesses
conducted by it on such date.
(c) MTInc. covenants that it will use the MTInc. Note,
and proceeds thereof, solely in the ordinary conduct of its existing
business and/or to retire existing indebtedness. In no event will it
use such funds to invest in assets of any business or activity other
than its existing lines of business.
8. A new Section 11 is added as follows:
11. Pledge to Banc One.
(a) Xxxxxx Pledge. Xxxxxx hereby agrees to pledge the
Xxxxxx XXX Shares and the Xxxxxx MTTFS Shares to Banc One as security
for the loan agreement between Banc One and the Company (the "Loan
Agreement"), and further agrees to execute and deliver all such
agreements, instruments and documents, and to take any further action,
as may be requested by Banc One to evidence such pledge.
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(b) Temple Pledge. Temple hereby acknowledges that the
Temple Note will be payable only out of the net proceeds of the Offering
and will be subject to the prior repayment of all amounts owed to Banc
One in connection with the Loan Agreement. Temple hereby agrees to
pledge the Temple Note and the proceeds therefrom, the MorTem Shares,
the Temple SUI Shares and the Temple MTTFS Shares to Banc One as
security for the Loan Agreement, and further agrees to execute and
deliver all such agreements, instruments and documents, and to take any
further action, as may be requested by Banc One to evidence such pledge.
(c) MTInc. Pledge. MTInc. acknowledges that the MTInc.
Note will be payable only out of the net proceeds of the Offering and
shall be subject to the prior repayment of all amounts owed to Banc One
in connection with the Loan Agreement. MTInc. hereby agrees to pledge
the MTInc. Note and the proceeds therefrom to Banc One as security for
the Loan Agreement, and further agrees to execute and deliver all such
agreements, instruments or documents, and to take any further action, as
may be requested by Banc One to evidence such pledge.
9. A new Section 12 is added as follows:
12. Indemnity.
(a) MTInc., SUI and MTTFS. If, as a result of any
event within the control of MTInc., SUI or MTTFS occurring in the
24-month period commencing on the Distribution Date and involving either
the stock or assets (or any combination thereof) of MTInc., SUI or MTTFS
(including, but not limited to, a merger, consolidation, liquidation,
stock issuance, or sale or other disposition of assets by or involving
MTInc., SUI or MTTFS) any taxes are imposed on the Company or any of its
subsidiaries with respect to any action taken pursuant to the Plan of
Reorganization (or any amendment thereof), then the respective
corporation shall pay those taxes (and related interest and penalties,
if any) and shall indemnify and hold harmless the Company and its
subsidiaries from and against all such taxes, interest, and penalties,
including but not limited to any such taxes paid at any time by Company
or any subsidiary. The respective corporation shall make such payment
and indemnification no later than 15 days after written notice from the
Company or one of its subsidiaries of a final determination with respect
to such taxes, which notice shall be accompanied by a computation of the
amounts due.
(b) Xxxxxx. Xxxxxx agrees to indemnify the Company and
its subsidiaries and hold them harmless against and with respect to any
damages, claims, losses, taxes (including interest, penalties and
additions thereto), and costs and expenses arising from, in connection
with or with respect to (i) any misrepresentation or breach of warranty
by Xxxxxx under this Agreement, or (ii) any failure by Xxxxxx to fulfill
any agreement or covenant under this Agreement.
(c) Temple. Temple agrees to indemnify the Company and
its subsidiaries and hold them harmless against and with respect to any
damages, claims,
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losses, taxes (including interest, penalties and additions thereto), and
costs and expenses arising from, in connection with or with respect to
(i) any misrepresentation or breach of warranty by Temple under this
Agreement, or (ii) any failure by Xxxxxxxx to fulfill any agreement or
covenant under this Agreement.
(d) Xxxxxx and Temple. Xxxxxx and Temple jointly and
severally agree to indemnify and hold harmless the Company against any
liability for tax, penalties, interest or other amounts which may be
asserted against the Company or any of its subsidiaries as a result of
alleged federal or state income tax deficiencies of MTInc. or any
corporation (other than Xxxxxxxxx & Xxxxxx, Inc.) which was at any time
a subsidiary of MTInc. with respect to any year in which such
corporation was not a member of the affiliated group (within the meaning
of section 1504 of the Internal Revenue Code of 1986) of which the
Company was the common parent, including without limitation deficiencies
attributable to the disallowance of compensation deductions for amounts
paid to Xxxxxx and/or Temple.
10. Schedule 1 to the Original Agreement is amended to delete Xxxxxx
Xxxxxx & Co. of Texas from the list of MorTem Corporations.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
AMERISAFE, INC.
By:
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Xxxx X. Xxxxxxxx, President
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XXXXXXX X. XXXXXX
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XXXXXX X. XXXXXX
M.T. & CO., INC.
By:
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Xxxxxx X. Xxxxxx, President
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SOUTHERN UNDERWRITERS, INC.
By:
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Xxxxxx X. Xxxxxx, President
XXXXXX, TEMPLE & TRENT
FINANCIAL SERVICES, INC.
By:
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Xxxxx X. Xxxxx,
Vice President
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