Exhibit 10.1

 

 

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LLC INTEREST PURCHASE AGREEMENT

 

by and among

 

ALFA CORPORATION

 

and

 

JOHN CHARLES RUSSELL,

 

CAROL LYNN RUSSELL,

 

THE TRUSTS IDENTIFIED ON EXHIBIT A HERETO,

 

THE COMMUNITY FOUNDATION OF MIDDLE TENNESSEE, INC.

 

and

 

THE VISION INSURANCE GROUP, LLC

 

Dated as of August 30, 2004

 

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TABLE OF CONTENTS

 

ARTICLE 1

   DEFINITIONS    5

    SECTION 1.1

       CERTAIN DEFINITIONS    5

    SECTION 1.2

       INDEX OF CERTAIN DEFINED TERMS    10

ARTICLE 2

   PURCHASE AND SALE OF INTERESTS    12

    SECTION 2.1

       PURCHASE AND SALE OF INTERESTS    12

    SECTION 2.2

       PURCHASE PRICE    12

    SECTION 2.3

       EARNOUT PAYMENTS    13

    SECTION 2.4

       ACCOUNTS RECEIVABLE    15

    SECTION 2.5

       CLOSING DATE AND POST-CLOSING NET EQUITY SETTLEMENT    17

    SECTION 2.6

       PLACE AND DATE OF CLOSING; CLOSING DELIVERIES    19

    SECTION 2.7

       WIRE TRANSFERS; WITHHOLDING TAXES    20

ARTICLE 3

   REPRESENTATIONS AND WARRANTIES OF SELLERS AND VISION    20

    SECTION 3.1

       ORGANIZATION, STANDING AND POWER    20

    SECTION 3.2

       AUTHORITY    21

    SECTION 3.3

       GOVERNMENTAL AUTHORIZATION    21

    SECTION 3.4

       NON-CONTRAVENTION    21

    SECTION 3.5

       OWNERSHIP OF INTERESTS    22

    SECTION 3.6

       CAPITALIZATION OF TEXAS MGA    22

    SECTION 3.7

       FINANCIAL STATEMENTS; ABSENCE OF UNDISCLOSED LIABILITIES    22

    SECTION 3.8

       ABSENCE OF CERTAIN CHANGES    23

    SECTION 3.9

       MATERIAL CONTRACTS    24

    SECTION 3.10

       LITIGATION    25

    SECTION 3.11

       COMPLIANCE WITH LAWS; INSURANCE MATTERS    25

    SECTION 3.12

       ENVIRONMENTAL COMPLIANCE    27

    SECTION 3.13

       PERSONAL PROPERTY    27

    SECTION 3.14

       REAL PROPERTY    27

    SECTION 3.15

       INTELLECTUAL PROPERTY    28

    SECTION 3.16

       EMPLOYEE BENEFIT PLANS; ERISA    29

    SECTION 3.17

       LABOR AND EMPLOYMENT MATTERS    31

    SECTION 3.18

       TAX MATTERS    32

    SECTION 3.19

       OPERATIONS INSURANCE    33

    SECTION 3.20

       BROKER, FINANCIAL ADVISER    34

    SECTION 3.21

       DISCLOSURE    34

    SECTION 3.22

       FOUNDATION’S REPRESENTATIONS    34

ARTICLE 4

   REPRESENTATIONS AND WARRANTIES OF BUYER    35

    SECTION 4.1

       ORGANIZATION, STANDING AND POWER    35

    SECTION 4.2

       AUTHORITY    35

    SECTION 4.3

       GOVERNMENTAL AUTHORIZATION    35

    SECTION 4.4

       NON-CONTRAVENTION    35

    SECTION 4.5

       INVESTMENT INTENT    36

    SECTION 4.6

       SUFFICIENT FUNDS    36

    SECTION 4.7

       BUYER SHARES    36

    SECTION 4.8

       BUYER SEC FILINGS    36

ARTICLE 5

   COVENANTS    37

    SECTION 5.1

       CONDUCT OF BUSINESS    37

    SECTION 5.2

       EXCLUSIVITY    38

    SECTION 5.3

       COOPERATION    38     SECTION 5.4        POST-CLOSING ACCESS    39

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    SECTION 5.5

       FILING; OTHER ACTIONS; NOTIFICATIONS    39

    SECTION 5.6

       FURTHER ASSURANCES    40

    SECTION 5.7

       EXPENSES    40

    SECTION 5.8

       TAX MATTERS    40

    SECTION 5.9

       DISCLOSURE SUPPLEMENTS    42

    SECTION 5.10

       CERTAIN EMPLOYEE MATTERS    42

    SECTION 5.11

       PRESS RELEASES AND PUBLIC ANNOUNCEMENTS    44

    SECTION 5.12

       EARNOUT FRUSTRATION    44

    SECTION 5.13

       BUYER NONRECRUITMENT COVENANT    44

    SECTION 5.14

       JOHN RUSSELL NONRECRUITMENT, NONSOLICITATION AND NONCOMPETITION    45

    SECTION 5.15

       DORINCO REINSURANCE SETTLEMENT; PERSONAL GUARANTEES    46

ARTICLE 6

   CONDITIONS TO CLOSING    47

    SECTION 6.1

       CONDITIONS TO OBLIGATIONS OF SELLERS    47

    SECTION 6.2

       CONDITIONS TO OBLIGATIONS OF BUYER    48

ARTICLE 7

   TERMINATION    49

    SECTION 7.1

       TERMINATION BY MUTUAL CONSENT    49

    SECTION 7.2

       TERMINATION BY EITHER SELLERS OR BUYER    49

    SECTION 7.3

       TERMINATION BY SELLERS    49

    SECTION 7.4

       TERMINATION BY BUYER    50

    SECTION 7.5

       EFFECT OF TERMINATION AND ABANDONMENT    50

ARTICLE 8

   INDEMNIFICATION    50

    SECTION 8.1

       SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS    50

    SECTION 8.2

       OBLIGATION OF SELLERS TO INDEMNIFY    51

    SECTION 8.3

       OBLIGATION OF BUYER TO INDEMNIFY    52

    SECTION 8.4

       PROCEDURE FOR INDEMNIFICATION CLAIMS    53

    SECTION 8.5

       INSURANCE; SUBROGATION    54

    SECTION 8.6

       BUYER’S RIGHTS OF SETOFF    55

    SECTION 8.7

       SOLE REMEDY    55

ARTICLE 9

   MISCELLANEOUS    55

    SECTION 9.1

       ARBITRATION    55

    SECTION 9.2

       ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES    56

    SECTION 9.3

       AMENDMENTS    56

    SECTION 9.4

       WAIVERS    56

    SECTION 9.5

       ASSIGNMENT    57

    SECTION 9.6

       NOTICES    57

    SECTION 9.7

       GOVERNING LAW    59

    SECTION 9.8

       COUNTERPARTS    59

    SECTION 9.9

       CAPTIONS    59

    SECTION 9.10

       INTERPRETATIONS    59

    SECTION 9.11

       SEVERABILITY    59

    SECTION 9.12

       SELLERS REPRESENTATIVE    60

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EXHIBITS

 

Exhibit A    Vision’s Members Exhibit B    Revenue Earnout Payment Formula and
Terms Exhibit C    EBITDA Earnout Payment Formula and Terms Exhibit D    Monthly
Treaty Reports Exhibit E    Form of Subscription Agreement Exhibit F    Form of
John Russell Employment Agreement Exhibit G    Form of Thomas Russell Employment
Agreement Exhibit H    Form of David Tetzlaff Employment Agreement Exhibit I   
Form of Litigation Indemnification Agreement Exhibit J    Certain Dispositions
and Assignments Exhibit K    Bonus Agreements SELLERS DISCLOSURE MEMORANDUM
Section 3.1    Vision Qualifications to do Business Section 3.3    Governmental
Authorizations Section 3.4    Non-Contravention Section 3.5    Ownership of
Interests Section 3.7(a)    Vision Financial Statements Section 3.7(b)   
Undisclosed Liabilities Section 3.8    Changes Since December 31, 2003
Section 3.9    Material Contracts Section 3.10    Litigation Section 3.11   
Permits; Insurance Matters Section 3.13    Personal Property Section 3.14   
Real Property Section 3.15    Intellectual Property Section 3.16    Employee
Benefit Plans Section 3.17    Labor Matters Section 3.18    Tax Matters
Section 3.19    Operations Insurance Section 3.20    Broker, Financial Advisor
Section 5.10    Personal Leave Policy Section 5.15    Personal Guarantees
Section 6.2(j)    Consents Section 8.2    Certain Litigation

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LLC INTEREST PURCHASE AGREEMENT

 

THIS LLC INTEREST PURCHASE AGREEMENT (this “Agreement”), dated as of August 30,
2004, is entered into by and among ALFA CORPORATION, a Delaware corporation
(“Buyer”), JOHN CHARLES RUSSELL, an individual resident of the State of
Tennessee (“John Russell”), CAROL LYNN RUSSELL, an individual resident of the
State of Tennessee (“Carol Russell”), THE TRUSTS IDENTIFIED ON EXHIBIT A HERETO
(the “Seller Trusts”), THE COMMUNITY FOUNDATION OF MIDDLE TENNESSEE, INC., a
Tennessee not-for-profit corporation (the “Foundation”) (John Russell, Carol
Russell, the Seller Trusts and the Foundation are, collectively, “Sellers”), and
THE VISION INSURANCE GROUP, LLC, a Tennessee limited liability company
(“Vision”).

 

BACKGROUND

 

Sellers collectively own 100% of the limited liability company interests of
Vision (the “Interests”), with their respective membership percentages being set
forth on Exhibit A hereto. In addition, John Russell owns 100% of the issued and
outstanding capital stock of Vision MGA of Texas, Inc., a Texas corporation
(“Texas MGA”), which was formed solely for the purpose of performing Vision’s
business in Texas pursuant to regulatory requirements. The parties desire that
John Russell cause Texas MGA to be merged with and into Vision prior to the
Closing contemplated by this Agreement. The parties also desire that Sellers
sell to Buyer, and Buyer purchase from Sellers, the Interests at Closing in
accordance with the terms and conditions of this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, do hereby agree as follows:

 

ARTICLE 1

DEFINITIONS

 

Section 1.1 Certain Definitions. The following capitalized terms have the
respective meanings set forth below:

 

“Affiliate” means, with respect to a specified Person, any other Person
controlling, controlled by or under common control with the specified Person.

 

“American Safety Agreement” means that certain Program Management and
Underwriting Agreement for Personal Lines Private Passenger Automobile
Insurance, dated March 1, 2000, by and between American Safety Casualty
Insurance Company and Vision.

 

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“Annual Statement” means the form of annual statement for property and casualty
insurance companies prescribed by the National Association of Insurance
Commissioners, or such comparable form that the applicable insurance carrier is
required to use in lieu thereof by the insurance regulatory authority in the
state of such insurance carrier’s domicile.

 

“Average Buyer Share Price” means the average per share closing price of Buyer
Common Stock on the Nasdaq National Market for the ten Business Days ending on
the third Business Day preceding (and not counting) the Closing Date.

 

“AVIC” means Alfa Vision Insurance Corporation, an Alabama corporation and
wholly owned subsidiary of Buyer, which was formed for the purpose of engaging
in the Business with Vision after the Closing.

 

“AVIC Licenses” means certificates of authority for AVIC to engage in the
business of automobile insurance in the following states: Arkansas, Florida,
Indiana, Kentucky, Missouri, Ohio, Tennessee and Virginia; and qualification to
transact business as a reinsurer in the state of Texas.

 

“Business” means the business of marketing, underwriting and administering
insurance policies as conducted by Vision and Texas MGA, including the services
performed by Vision and Texas MGA on behalf of insurance carriers.

 

“Business Day” means any day other than a Saturday, a Sunday, a day on which
banking institutions in the State of Delaware are permitted or obligated by Law
to be closed, or a day on which the Nasdaq National Market is not open for
trading.

 

“Buyer Common Stock” means Buyer’s Common Stock, $1.00 par value per share.

 

“Buyer Material Adverse Effect” means any change, effect, matter, event,
occurrence or circumstance, individually or collectively, that has or would
reasonably be expected to have a material adverse effect on (i) the business,
assets or properties (including intangible assets or properties), liabilities,
results of operations or financial condition of Buyer and its Affiliates taken
as a whole or (ii) the ability of Buyer to perform its obligations under this
Agreement, other than such changes, effects, matters, events, occurrences or
circumstances generally affecting the United States economy.

 

“Closing” means the consummation of the transactions contemplated by this
Agreement.

 

“Closing Date” means the date on which the Closing actually occurs.

 

“Closing Date Employee” means each individual who is employed by Vision
immediately prior to the Closing, after any terminations required pursuant to
Section 5.10(a).

 

“Code” means the Internal Revenue Code of 1986, as amended. Any citation to a
provision of the Code includes a citation to any successor provision.

 

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“Contract” means any written or oral agreement, arrangement, commitment,
contract, indenture, instrument, lease or obligation of any kind or character to
which any Person is a party or that is binding on any Person or its assets or
business.

 

“Corporate Overhead” means any corporate overhead or expenses of Buyer,
including legal and accounting fees, allocated or charged to Vision, other than
charges for services that are actually used by Vision. By way of example, and
not by limitation, Corporate Overhead will not include reasonable charges to
Vision for services performed by employees of Alfa Mutual Insurance Company who
were employees of Vision prior to the Closing, or reasonable charges to Vision
for financial accounting and audit services to the extent that Vision receives
these services from or through Buyer rather than Vision purchasing them from
unaffiliated sources. The intent of the parties is that Corporate Overhead will
not include charges that Vision pays to Buyer or its other Affiliates for
services that Vision would have performed for itself or purchased from other
sources had Vision not been acquired by Buyer.

 

“Environmental Laws” means any federal, state or local laws, rules or
regulations, and any orders or decrees, relating to the regulation or protection
of the natural environment or to releases or threatened releases of Hazardous
Materials into the soil, land surface or subsurface strata, surface waters
(including navigable waters, ocean waters, streams, ponds, drainage basins, and
wetlands), ground waters, drinking water supply, stream sediments, ambient air
(including indoor air) and any other environmental medium or natural resource.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and all final and temporary regulations thereunder.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“GAAP” means United States generally accepted accounting principles as in effect
from time to time, consistently applied for all relevant time periods, applying
accrual basis accounting.

 

“Governmental Authority” means any federal, state, county, local, foreign or
other governmental or public agency, instrumentality, commission, authority,
board or body.

 

“Hazardous Materials” means any waste or other substance that is listed,
defined, designated or classified as, or otherwise determined to be, hazardous,
radioactive or toxic or a pollutant or a contaminant under or pursuant to any
Environmental Law, including any admixture or solution thereof, and specifically
including petroleum and all derivatives thereof or synthetic substitutes
therefor and asbestos or asbestos-containing materials.

 

“Interests” means 100% of the limited liability company membership interests of
Vision.

 

“Knowledge” means, with respect to Sellers, those facts that are known or should
reasonably have been known after due inquiry by each of the following
individuals: John Russell, Carol Russell, Thomas Russell, David Tetzlaff, Joel
Wit and Shannon Balmer.

 

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“Law” means any domestic or foreign federal, state or local statute, law,
ordinance, rule, administrative interpretation, regulation, order, judgment or
decree applicable to the parties hereto.

 

“Lien” means any claim, charge, conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, security interest or other security arrangement,
on or with respect to any asset or property.

 

“Litigation” means all suits, actions, causes of action (whether in law or at
equity), arbitrations, claims, complaints, administrative and similar
proceedings, and criminal prosecutions and investigations.

 

“Loss” means any loss, damage, liability, claim, cost or expense, including, but
not limited to, reasonable attorneys’ fees.

 

“MSC” means Mutual Service Casualty Insurance Company and its Affiliates,
including Modern Service Insurance Company.

 

“MSC Agreement” means that certain Automobile Insurance Service Agreement dated
October 13, 1999, by and between Vision and MSC, as amended on October 10, 2001.

 

“90-Day Treasury Rate” means the annual yield rate on the Closing Date of
actively traded U.S. Treasury securities having a remaining duration to maturity
of three months, as such rate is published under “Treasury Constant Maturities”
in Federal Reserve Statistical Release H.15(519).

 

“Order” means any administrative decision or award, decree, injunction,
judgment, order, quasi-judicial decision or award, ruling, or writ of any
Governmental Authority, or any binding determination pursuant to arbitration or
other similar alternative dispute resolution forum.

 

“Permits” means all licenses, permits, orders, approvals, registrations,
authorizations, qualifications and filings with and under all federal, state,
local or foreign Laws or Governmental Authorities.

 

“Permitted Liens” means (i) Liens for Taxes not yet due and payable, (ii) any
minor imperfection of title that does not materially interfere with the present
use or the continuation of such present use in the Business, (iii) materialmen’s
or similar liens or obligations arising in the ordinary course of business
securing accrued obligations not yet due and payable, (iv) purchase money Liens
arising in the ordinary course of business, and (v) Liens reflected in the
Vision Audited Statements.

 

“Person” means any individual, corporation, partnership, limited liability
company, firm, joint venture, association, joint-stock company, trust, estate,
unincorporated organization, governmental, judicial or regulatory body, business
unit, division or other entity.

 

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“SAP” means the statutory accounting practices prescribed or permitted by the
insurance regulatory authority in the state of domicile of the applicable
insurance carrier, consistently applied for all relevant time periods.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“SEC” means the United States Securities and Exchange Commission.

 

“Sellers Disclosure Memorandum” means the written information entitled “Sellers
Disclosure Memorandum” delivered to Buyer prior to the date of this Agreement
and referencing specific Sections of this Agreement. Any matter disclosed by
Sellers therein with respect to one Section shall be deemed disclosed with
respect to all other Sections, provided that the relevance to the Section from
which any such matter is omitted is apparent from the disclosure with respect to
the Section for which such matter is included.

 

“Sellers Material Adverse Effect” means any change, effect, matter, event,
occurrence or circumstance, individually or collectively, that has or would
reasonably be expected to have a material adverse effect on (i) the business,
assets or properties (including intangible assets or properties), liabilities,
results of operations or financial condition of Vision and Texas MGA taken as a
whole or (ii) the ability of Sellers to perform their obligations under this
Agreement, other than such changes, effects, matters, events, occurrences or
circumstances specifically referred to in Sellers Disclosure Memorandum or
generally affecting the United States economy.

 

“Sellers Representative” means John Russell. In the event of John Russell’s
death or a disability that prevents him from serving as Sellers Representative,
his estate or legal representative shall on a timely basis select one
individual, reasonably acceptable to Buyer, to serve as Sellers Representative.

 

“Tax” means any federal, state, county, local or foreign tax, charge, fee, levy,
impost, duty or other assessment, including income, gross receipts, premium,
employment, payroll, withholding, excise, sales, gains, transfer, recording,
license, real and personal property, use and occupation, capital stock,
franchise, registration, ad valorem, alternative or add-on minimum, estimated or
other tax, assessment or governmental charge of any kind whatsoever, imposed or
required to be withheld by and Governmental Authority, including any interest,
penalties and additions imposed thereon or with respect thereto, and including
liability for taxes of another person under Treas. Reg. Section 1.1502-6 or
similar provision of state, local or foreign law, as a transferee or successor,
by contract or otherwise.

 

“Tax Return” means any return, filing, questionnaire, information return or
other document required to be filed, including requests for extensions of time,
filings made with estimated tax payments, claims for refund and amended returns
that may be filed, for any period with any taxing authority (whether domestic or
foreign) in connection with any Tax (whether or not a payment is required to be
made with respect to such filing).

 

“Texas MGA” means Vision MGA of Texas, Inc., a Texas corporation.

 

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“Underwriting Loss” means the amount (computed in accordance with SAP)
includable on line 8 of the “Underwriting and Investment Exhibit Statement of
Income” in the Annual Statement of AVIC or its applicable Affiliate calculated
in a consistent manner, to the extent such amounts are directly related to the
insurance policies sold by Vision or an agent under contract with Vision, and to
the extent such amount is a negative number.

 

“Vision EBITDA” means, for each applicable time period, (i) Vision Fee Income,
less (ii) all of Vision’s expenses other than Corporate Overhead, and before
reductions for interest, income taxes, depreciation and amortization, computed
in accordance with GAAP, and plus or minus (iii) the net underwriting gain or
loss of AVIC or any of its Affiliates directly related to the insurance policies
sold by Vision or an agent under contract with Vision, computed in accordance
with SAP and includable within the amounts on line 8 of the “Underwriting and
Investment Exhibit Statement of Income” in AVIC’s or its applicable Affiliate’s
Annual Statement.

 

“Vision Fee Income” means, for each applicable time period, all net commissions
and fees due and payable to Vision in the ordinary course of its business of the
type that have generally been included in the Vision Audited Statements as
“Commission and fee income from managing general agent services, net of
estimated return commissions,” including, but not limited to, service fees,
renewal fees, installment fees, filing fees, reinstatement fees, NSF fees,
“convenience” fees, late fees, “theft prevention” fees, endorsement fees,
cancellation fees, policy fees, agent’s fee PIP, re-write fees, credit card
usage fees, and motorists protection plan income, all as computed in accordance
with GAAP.

 

“Vision Revenues” means the sum of (i) Vision Fee Income excluding all
commissions plus (ii) the direct premiums written by AVIC or any of its
Affiliates, or any other insurance carriers doing business with Vision, for the
applicable time period that are derived solely from insurance policies sold by
Vision or an agent under contract with Vision, computed in accordance with SAP
and includable within the amounts on line 34, column 1 of the “Underwriting and
Investment Exhibit, Part 1B – Premiums Written” in the applicable insurance
carrier’s Annual Statement.

 

Section 1.2 Index of Certain Defined Terms. The capitalized terms set forth
below are defined in the referenced sections:

 

Term

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Section

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Acquisition/Marketing Transaction    5.2 Actuarial Reports    3.11(e) Agreement
   1st Paragraph Alfa Companies    5.14(a) Allocation Schedule    2.2(d) Annual
Earnout Schedule    2.3(g)(i) Asserted Liability    8.4(a) Bonus Agreements   
5.10(d) Broker Agreement    5.7(b) Business Activities    5.14(c)

 

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Business Employees    3.17 Buyer    1st Paragraph Buyer Indemnitees    8.2(a)
Buyer SEC Documents    4.8 Buyer Shares    2.2(b)(ii) Carol Russell   
1st Paragraph Cash Portion    2.2(b)(i) Claims Notice    8.4(a) Closing Balance
Sheet    2.5(b)(i) Closing Interim Statements    2.5(a) Contest Notice    8.4(b)
David Tetzlaff Employment Agreement    2.6(b)(vi) Earnout Payments    2.3(b)
Earnout Period    2.3(a) EBITDA Earnout Payment    2.3(b) ERISA Affiliate   
3.16(b) Existing A/R LOC    2.4(a) Existing A/R    2.4(a) Final Net Members’
Equity    2.5(b)(v) Foundation    1st Paragraph Future Claims LOC    2.4(b)(ii)
Indemnified Party    8.4(a) Indemnifying Party    8.4(a) Initial Purchase Price
   2.2(a) Intellectual Property    3.15 Interim Net Members’ Equity    2.5(a)
Interim Statements    2.5(a) John Russell    1st Paragraph John Russell
Employment Agreement    2.6(b)(iv) June 30 Statements    3.7(a) Leased Real
Property    3.14(b) Litigation Indemnification Agreement    2.6(b)(vii) Material
Contracts    3.9(a) MSC and American Safety Claims    2.4(b)(iii)(1) MSC and
American Safety Reimbursements    2.4(b)(iii)(1) Monthly Treaty Reports   
2.4(b)(i) Owned Personal Property    3.13(b) Personal Guarantees    5.15(b)
Personal Property Leases    3.13(a) Pre-Closing Tax Returns    5.8(a) Real
Property Leases    3.14(b) Restricted Area    5.14(c) Revenue Earnout Payment   
2.3(b) Seller Indemnitees    8.3(a) Seller Indemnitors    8.2(a) Sellers   
1st Paragraph

 

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Seller Trusts

   1st Paragraph

Special Bonuses

   5.10(d)

Straddle Period Tax Returns

   5.8(b)(i)

Subscription Agreement

   2.6(b)(iii)

Termination Date

   7.2

Termination Fee

   7.5(a)

Texas Merger

   5.1(a)

Thomas Russell Employment Agreement

   2.6(b)(v)

Umpire

   9.1(a)

Vision

   1st Paragraph

Vision Audited Statements

   3.7(a)

Vision Benefit Plans

   3.16(b)

Vision ERISA Plan

   3.16(b)

Vision Financial Statements

   3.7(a)

 

ARTICLE 2

PURCHASE AND SALE OF INTERESTS

 

Section 2.1 Purchase and Sale of Interests. On the Closing Date, Sellers shall
sell to Buyer, and Buyer shall purchase from Sellers, the Interests, free and
clear of all Liens.

 

Section 2.2 Purchase Price.

 

(a) Amount. The aggregate consideration for the Interests shall be the sum of
(i) Twenty Million Dollars ($20,000,000), subject to adjustment as provided in
Section 2.5, payable at Closing (the “Initial Purchase Price”), plus (ii) the
amount of Earnout Payments, if any, that may be payable after Closing in
accordance with Section 2.3.

 

(b) Payment of Initial Purchase Price. Buyer shall pay the Initial Purchase
Price to Sellers on the Closing Date as follows:

 

(i) Cash. Fifteen Million Dollars ($15,000,000), subject to adjustment as
provided in Section 2.5, shall be paid in cash (the “Cash Portion”).

 

(ii) Stock. Five Million Dollars ($5,000,000) shall be paid by Buyer’s delivery
to Sellers of that aggregate number of shares of Buyer Common Stock equal to
$5,000,000 divided by the Average Buyer Share Price (the “Buyer Shares”).
Notwithstanding the foregoing, if the Average Buyer Share Price is less than
Thirteen Dollars ($13.00), Buyer may elect to pay Sellers all or any portion of
the $5,000,000 in cash at Closing in lieu of delivering that amount of Buyer
Shares.

 

(c) Allocation of Payments Among Sellers. The Initial Purchase Price, and any
Earnout Payments that may become due, shall be paid to Sellers in accordance
with the allocations set forth on Exhibit A.

 

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(d) Allocation of Purchase Price for Tax Purposes. All amounts constituting
consideration within the meaning of, and for the purposes of, Section 1060 of
the Code and the regulations thereunder shall be allocated among the assets of
Vision, including the assets acquired from Texas MGA, and any other rights
acquired by Buyer hereunder, as applicable, in the manner required by Section
1060 of the Code and the regulations thereunder and all other applicable Laws.
Within sixty calendar days after the Closing Date, Buyer shall provide Sellers
with the schedule allocating all such amounts as provided herein (the
“Allocation Schedule”). Buyer will revise the Allocation Schedule and deliver it
to Sellers to the extent necessary to reflect the Earnout Payments and any other
post-Closing payments made pursuant to or in connection with this Agreement.
Each of the parties hereto agrees to report consistently with the Allocation
Schedule for all Tax purposes, and not take any position inconsistent with the
Allocation Schedule for any Tax purposes.

 

Section 2.3 Earnout Payments.

 

(a) Earnout Period. The “Earnout Period” shall commence on the Closing Date and
end on December 31, 2009.

 

(b) Possible Earnout Payments. For each calendar year during the Earnout Period,
Sellers shall be eligible to receive an annual cash payment based on the amount
of Vision Revenue (each a “Revenue Earnout Payment”), and an annual cash payment
based on the amount of Vision EBITDA (each an “EBITDA Earnout Payment”), if such
payments are earned in accordance with this Section 2.3 (Revenue Earnout
Payments and EBITDA Earnout Payments are collectively “Earnout Payments”).

 

(c) Maximums. The aggregate maximum Revenue Earnout Payment that may be earned
for any single full calendar year is Seven Hundred Thousand Dollars ($700,000),
and the aggregate maximum EBITDA Earnout Payment that may be earned for any
single full calendar year is Two Million One Hundred Thousand Dollars
($2,100,000), subject to adjustment for calendar years 2005 and 2006 as
described in Exhibit C. The aggregate maximum amount of all potential Earnout
Payments that may be earned over the full Earnout Period is Fourteen Million
Dollars ($14,000,000).

 

(d) Revenue Earnout Payment. Each possible Revenue Earnout Payment shall be
computed in accordance with the formula and terms set forth on Exhibit B.

 

(e) EBITDA Earnout Payment. Each possible EBITDA Earnout Payment shall be
computed in accordance with the formula and terms set forth on Exhibit C.

 

(f) Consistent Methodologies. All amounts used in the computation of the
potential Earnout Payments shall be made using methodologies consistent with
those used in preparing the Vision Financial Statements for 2003; provided,
however, that if there is a material change in GAAP or SAP after Closing
required by Law or any applicable Governmental Authority, the parties will apply
such change to the computation and make appropriate counterbalancing adjustments
to the targets set forth on Exhibits B and C; and provided, further, that all

 

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uncollectible accounts receivable (to the extent not paid to Buyer pursuant to
Section 2.4) shall be written off Vision’s books in accordance with Buyer’s
policies generally regarding write-off of uncollectible accounts receivable.

 

(g) Annual Procedure.

 

(i) Not later than March 31 of each year beginning with March 31, 2006, Buyer
shall deliver to Sellers Representative a schedule showing the computation of
Vision Revenue, Vision EBITDA and any potential Earnout Payments (the “Annual
Earnout Schedule”). Sellers Representative shall have thirty calendar days from
the date of receipt of each Annual Earnout Schedule to notify Buyer in writing
of any objections to such schedule, setting forth in reasonable detail the
reasons for such objections. During such thirty calendar day period, Buyer shall
make available to Sellers Representative and his representatives, at Buyer’s
offices during normal business hours and at Sellers’ expense, all books and
records of Vision and AVIC and its Affiliates as Sellers Representative shall
reasonably request in order for Sellers Representative to perform his review of
the Annual Earnout Schedule; provided, however, that in the event that Sellers
Representative discovers an error(s) in the Annual Earnout Schedule, which would
lead to an underpayment in the Earnout Payments of at least ten percent (10%),
then such review shall be at Buyer’s expense.

 

(ii) In the event that Sellers Representative does not deliver a timely
objection notice to Buyer in accordance with this subsection (g), the Annual
Earnout Schedule as delivered by Buyer shall be deemed final and binding on all
parties on the 31st calendar day after Sellers Representative’s receipt of the
Annual Earnout Schedule.

 

(iii) In the event that Sellers Representative delivers a timely objection
notice to Buyer in accordance with this subsection (g), Buyer and Sellers
Representative shall attempt in good faith to resolve all disputes regarding the
Annual Earnout Schedule within thirty calendar days from the date Buyer receives
such objection notice from Sellers Representative.

 

(iv) If Buyer and Sellers Representative cannot reach agreement on all such
disputes within such thirty calendar day period (or such longer period as they
may mutually agree), then the issues remaining in dispute shall be submitted to
arbitration in accordance with Section 9.1.

 

(v) Within three Business Days after each Annual Earnout Schedule becomes final
and binding, if any Earnout Payment is due to Sellers, Buyer shall pay such
Earnout Payment to Sellers in cash; provided, however, that if any of the Trusts
identified on Exhibit A are terminated prior to the date upon which any Earnout
Payment is due, Buyer shall pay the portion of the Earnout Payment owed to such
Trust to Sellers Representative on behalf of such Trust. The parties shall treat
a portion of any Earnout Payment as imputed interest if and to the extent
required by Section 483 or Section 1274 of the Code.

 

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(h) Reversal of Roles in Process. For any portion of the Earnout Period during
which Sellers Representative serves as an officer of Vision, upon Buyer’s
request, Sellers Representative shall prepare the Earnout Schedule and deliver
it to Buyer, with the process in Section 2.3(g) being appropriately adjusted to
permit Buyer the right to object to such Earnout Schedule.

 

(i) Operations of Vision During Earnout Period. The parties acknowledge and
agree that they intend for Vision’s operations to continue after the Closing in
a manner generally consistent with such operations immediately preceding the
Closing. In the event that, during the Earnout Period, Vision is merged,
combined or consolidated with Buyer or an Affiliate of Buyer, Buyer shall
maintain separate books and records with respect to Vision for the determination
of the Earnout Payments. In the event that, during the Earnout Period, Buyer or
any of its Affiliates sells or otherwise transfers more than fifty percent of
Vision’s equity or all or substantially all of Vision’s assets to an
unaffiliated third party, then Buyer will either, as determined by Sellers
Representative in his or her sole discretion, (i) cause the purchaser or
transferee to assume Buyer’s obligations with respect to the Earnout Payments,
or (ii) if Sellers earned at least fifty percent (50%) of the maximum Earnout
Payment for any year prior to such transaction with an unaffiliated third party,
pay or cause the purchaser or transferee to pay the Sellers in cash at the
closing for such transaction an amount equal to seventy percent (70%) of the
present value of the maximum Earnout Payments still potentially available to
Sellers. If Sellers did not earn at least fifty percent (50%) of the maximum
Earnout Payment for any year prior to such transaction with an unaffiliated
third party, item (ii) will not be available.

 

Section 2.4 Accounts Receivable.

 

(a) Existing Accounts Receivable. At Closing, John Russell shall deliver to
Buyer an irrevocable letter of credit in a form mutually acceptable to John
Russell and Buyer (the “Existing A/R LOC”) for the aggregate outstanding amount
owed to Vision and Texas MGA as of December 31, 2004 pursuant to the MSC
Agreement and the American Safety Agreement (the “Existing A/R”). Such aggregate
amount shall be (i) the amount reflected on the trial balance report used to
prepare Vision’s November 30, 2004 financial statements, plus or minus (ii) an
amount for December 2004 that is the average monthly increase or decrease,
respectively, in the Existing A/R for the other eleven months of 2004. Vision
shall provide the proposed amount of the Existing A/R LOC to Buyer not later
than ten Business Days before Closing, and Buyer, Vision and John Russell shall
cooperate to reach agreement on the amount before Closing. Not later than
January 31, 2006, Buyer and Sellers Representative shall mutually determine
whether Vision has not then collected any portion of the Existing A/R, and
either John Russell shall pay to Buyer in cash any such uncollected amount
within three Business Days after the uncollected amount is determined or, if
John Russell does not make such payment, Buyer shall be entitled to draw such
amount under the Existing A/R LOC. The Existing A/R LOC shall remain in effect
for the benefit of Buyer until the process described in this subsection 2.4(a)
has been completed.

 

(b) Accounts Receivable for Future Claims Paid.

 

(i) Attached as Exhibit D are the monthly treaty year reports (the “Monthly
Treaty Reports”) that Vision and Texas MGA delivered to MSC and to American
Safety

 

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for the month ended July 2004. As reflected in these Monthly Treaty Reports, the
“Outstanding” amount represents the amount of estimated case loss reserves for
the Business under the MSC Agreement (excluding the portion of such amount
reimbursable by ACE INA Group as a reinsurer for insurance policies written on
or after July 1, 2001) and under the American Safety Agreement, which was an
aggregate of $1,368,889 at July 31, 2004 (comprised of $894,465 for MSC and
$474,424 for American Safety). Within fifteen calendar days after the end of
each month prior to the Closing, Vision shall deliver to Buyer Monthly Treaty
Reports for the month that will have just ended and, at the Closing, Sellers
Representative shall certify that the Monthly Treaty Reports for November 30,
2004, which will be the then most recently delivered such reports, have been
prepared in a manner consistent with Vision’s past methodology and in accordance
with the MSC Agreement and the American Safety Agreement, as applicable.

 

(ii) At Closing, John Russell shall deliver to Buyer an irrevocable letter of
credit in a form mutually acceptable to John Russell and Buyer (the “Future
Claims LOC”) in an amount equal to the aggregate “Outstanding” amount reflected
on the Monthly Treaty Reports for November 30, 2004 for the MSC Agreement
(excluding the portion of such amount reimbursable by ACE INA Group as a
reinsurer for insurance policies written on or after July 1, 2001) and for the
American Safety Agreement. The Future Claims LOC shall remain in effect for the
benefit of Buyer through the completion in 2008 of the annual procedure
described below, provided, however, that if John Russell desires that any Future
Claims LOC have a one-year term, Buyer shall be entitled to draw the full amount
under the Future Claims LOC if a replacement letter of credit with identical
terms is not delivered to Buyer prior to each one-year expiration.

 

(iii) Annual Procedure.

 

(1) For purposes of this Section 2.4, “MSC and American Safety Claims” means the
aggregate net amount of claims paid by Vision for the years 2005, 2006 and 2007
under the MSC Agreement (excluding the portion of such amount reimbursable by
ACE INA Group as a reinsurer for insurance policies written on and after July 1,
2001) and the American Safety Agreement, less subrogation and other recoveries
by Vision with respect to those claims, plus legal expenses paid by Vision with
respect to those claims. For purposes of this Section 2.4, “MSC and American
Safety Reimbursements” means the amount Vision receives from MSC and American
Safety for the years 2005, 2006 and 2007 as reimbursement of the MSC and
American Safety Claims.

 

(2) Not later than January 31 of each of 2006, 2007 and 2008, Buyer and Sellers
Representative shall mutually determine the amount of MSC and American Safety
Claims paid during the immediately preceding calendar year and the amount of MSC
and American Safety Reimbursements received during such period. In each of 2006
and 2007, the amount of the Future Claims LOC may be reduced by the amount of
the MSC and American Safety Reimbursements received in 2005 and 2006,
respectively. In 2008, once the amount of MSC and American Safety Claims and MSC
and American Safety Reimbursements for

 

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2007 have been determined, if the aggregate MSC and American Safety Claims (not
including any such claims relating to MSC and American Safety that are then less
than ninety days old, unless Buyer has a reasonable basis for believing that
such claims are uncollectible) exceeds the aggregate MSC and American Safety
Reimbursements, either John Russell shall pay to Buyer in cash the amount of
such excess within three Business Days or, if John Russell does not make such
payment, Buyer shall be entitled to draw such amount under the Future Claims
LOC.

 

(c) Adjustment to Purchase Price. Any payments made pursuant to this Section 2.4
shall be treated by Buyer and Sellers as an increase or reduction, as
applicable, to the Initial Purchase Price for Tax and all other purposes.

 

Section 2.5 Closing Date and Post-Closing Net Equity Settlement.

 

(a) Closing Date Adjustment. Within fifteen calendar days after the end of each
month prior to the Closing, Vision shall deliver to Buyer a balance sheet and
income statement of Vision as of and for the month that will have just ended
(the “Interim Statements”). At the Closing, Sellers Representative shall certify
that the then most recently delivered Interim Statements (the “Closing Interim
Statements”) have been prepared in a manner consistent with Vision’s past
methodology and with GAAP, and that they present fairly, in all material
respects, the financial condition of Vision as of its date and the results of
operations of Vision year-to-date, except that the Closing Interim Statements
will be unaudited and subject to normal year-end adjustments and lack footnotes
and other presentation items. Based on the Closing Interim Statements, the Cash
Portion of the Initial Purchase Price shall be adjusted as follows as
applicable: (i) the Cash Portion shall be increased by the amount by which
Vision’s total assets less its total liabilities as shown on the Closing Interim
Statements (“Interim Net Members’ Equity”) is more than $1,664,794, or (ii) the
Cash Portion shall be decreased by the amount by which Interim Net Members’
Equity is less than $1,664,794.

 

(b) Post-Closing Settlement.

 

(i) Not later than ninety calendar days after the Closing Date, Sellers
Representative shall cause Vision to prepare a balance sheet as of the Closing
Date (the “Closing Balance Sheet”). The Closing Balance Sheet: (1) will be
prepared in accordance with GAAP, (2) will be prepared consistent in all
material respects with the Vision Audited Statements, except to the extent that
such Vision Audited Statements were not prepared in accordance with GAAP, (3)
will include all accruals required by, and will otherwise be consistent with all
express terms and conditions of, this Agreement, regardless of whether such
accruals, terms or conditions are in accordance with GAAP or the Vision Audited
Statements, and (4) will be accompanied by the report of the independent
auditing firm Crowe Chizek & Company LLC, stating that the Closing Balance Sheet
fairly presents the financial position, assets and liabilities of Vision as of
the Closing Date and has been prepared in accordance with GAAP except as set
forth in this subsection (b). The parties acknowledge and agree that the use of
the Closing Interim Statements to make an adjustment, if any, to the Cash
Portion does not preclude Buyer from adjusting prior period financial
information of Vision in the Closing Balance Sheet.

 

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(ii) Buyer shall have sixty calendar days from the date of receipt of the
Closing Balance Sheet to notify Sellers Representative in writing of any
objections to the Closing Balance Sheet, setting forth in reasonable detail the
reasons for Buyer’s objections. During such sixty calendar day period, Buyer
shall have full and complete access to all books and records of Vision. Buyer
shall also have access to all accountants’ work papers as Buyer shall deem
appropriate in order for Buyer to perform its review of the Closing Balance
Sheet.

 

(iii) In the event that Buyer does not deliver a timely objection notice to
Sellers Representative in accordance with this subsection (b), the Closing
Balance Sheet as delivered by Sellers Representative shall be deemed final and
binding on all parties on the 31st calendar day after Buyer’s receipt of the
Closing Balance Sheet.

 

(iv) In the event that Buyer delivers a timely objection notice to Sellers
Representative in accordance with this subsection (b), Sellers Representative
and Buyer shall attempt in good faith to resolve all disputes regarding the
Closing Balance Sheet within thirty calendar days from the date Sellers
Representative receives such objection notice from Buyer. If Sellers
Representative and Buyer cannot reach agreement on all such disputes within such
thirty calendar day period (or such longer period as they may mutually agree),
then either party can submit the dispute to final and binding arbitration as
provided in Section 9.1

 

(v) Within five Business Days after the Closing Balance Sheet becomes final and
binding, the parties shall make such payment as is required by either of the
following as applicable: (1) Buyer shall pay to Sellers in cash the amount by
which Vision’s total assets less its total liabilities as shown on the Closing
Balance Sheet (“Final Net Members’ Equity”) is more than the amount of Interim
Net Member’s Equity; or (2) Sellers shall pay to Buyer in cash the amount by
which Vision’s Final Net Members’ Equity is less than the amount of Interim Net
Members’ Equity. Whichever payment is required by (1) or (2) of the preceding
sentence, such payment shall be accompanied by the payment of interest on such
amount at the 90-Day Treasury Rate for the number of days elapsed from (but not
counting) the Closing Date to and including the date of payment.

 

(c) Adjustment to Purchase Price. Any payments made pursuant to this Section 2.5
shall be treated by Buyer and Sellers as an increase or reduction, as
applicable, to the Initial Purchase Price for Tax and all other purposes.

 

(d) Reversal of Roles in Process. In the event that Sellers Representative does
not serve as an officer of Vision through at least the date that the Closing
Balance Sheet is delivered to Buyer, the process in this Section 2.5(b) shall be
adjusted as appropriate to provide for Buyer to prepare and deliver the Closing
Balance Sheet, with the Sellers Representative having rights to review and
object thereto.

 

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Section 2.6 Place and Date of Closing; Closing Deliveries.

 

(a) The Closing shall take place at the offices of Alston & Bird LLP, 1201 West
Peachtree Street, Atlanta, Georgia, at 9:00 a.m. eastern time on January 3,
2005. Subject to completion, the Closing shall be deemed effective as of 12:01
a.m. on January 1, 2005.

 

(b) At the Closing, Sellers shall deliver to Buyer the following:

 

(i) assignment of the Interests, free and clear of all Liens, executed by
Sellers;

 

(ii) the documents, evidence and instruments specified in Section 6.2, executed
by Sellers as contemplated thereby;

 

(iii) a subscription agreement for the Buyer Shares in substantially the form
attached hereto as Exhibit E (the “Subscription Agreement”), executed by all
Sellers who receive Buyer Shares;

 

(iv) an employment agreement in substantially the form of Exhibit F hereto
executed by John Russell (the “John Russell Employment Agreement”);

 

(v) an employment agreement in substantially the form of Exhibit G hereto
executed by Thomas Russell (the “Thomas Russell Employment Agreement”);

 

(vi) an employment agreement in substantially the form of Exhibit H hereto
executed by David Tetzlaff (the “David Tetzlaff Employment Agreement”);

 

(vii) an agreement in substantially the form of Exhibit I hereto executed by
John Russell (the “Litigation Indemnification Agreement”);

 

(viii) a certificate signed by each Seller certifying pursuant to Sections 897
and 1445 of the Code that none of the Sellers is a nonresident alien for U.S.
Tax purposes;

 

(ix) the Existing A/R LOC and the Future Claims LOC;

 

(x) a certificate signed by Sellers Representative regarding the November 30,
2004 Monthly Treaty Reports, per Section 2.4(b)(i); and

 

(xi) a certificate signed by Sellers Representative regarding the Closing
Interim Statements, per Section 2.5(a).

 

(c) At the Closing, Buyer shall deliver to Sellers the following:

 

(i) a cash payment equal to the amount of the Cash Portion, as adjusted pursuant
to Section 2.5;

 

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(ii) the Buyer Shares or cash in lieu thereof, pursuant to Section 2.2;

 

(iii) the documents and instruments specified in Section 6.1, executed by Buyer
as contemplated thereby;

 

(iv) the Subscription Agreement, executed by Buyer;

 

(v) the John Russell Employment Agreement, executed by Buyer or one of its
Affiliates;

 

(vi) the Thomas Russell Employment Agreement, executed by Buyer or one of its
Affiliates;

 

(vii) the David Tetzlaff Employment Agreement, executed by Buyer or one of its
Affiliates; and

 

(viii) the Litigation Indemnification Agreement, executed by Buyer.

 

Section 2.7 Wire Transfers; Withholding Taxes. Any payment of cash required
under this Agreement shall be paid to the recipient in immediately available
funds, United States Dollars, by means of a wire transfer, if the recipient
provides to the payer appropriate wire transfer instructions at least two
Business Days prior to the required date of payment, and otherwise by means of a
certified check.

 

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF SELLERS AND VISION

 

Vision and Sellers (other than the Foundation) hereby represent and warrant to
Buyer as set forth in Sections 3.1 through 3.21, and the Foundation hereby
represents and warrants to Buyer as set forth in Section 3.22:

 

Section 3.1 Organization, Standing and Power.

 

(a) Vision. Vision is a limited liability company duly organized, validly
existing and in good standing under the Laws of the State of Tennessee and has
full corporate power and authority to carry on its business as now conducted and
to own, lease and operate all of its assets. Section 3.1 of Sellers Disclosure
Memorandum lists all jurisdictions in which Vision is qualified to do business.
Except as set forth in Section 3.1 of Sellers Disclosure Memorandum, Vision is
duly qualified or licensed to do business as a foreign limited liability company
in good standing in each jurisdiction in which the ownership of its assets or
the conduct of its business requires such qualification or licensing, except for
such jurisdictions where the failure to be so qualified or licensed would not
have a Sellers Material Adverse Effect. Correct and complete copies of Vision’s
articles of organization and all amendments thereto (certified by the Tennessee
Secretary of State) and Vision’s operating agreement and all amendments thereto,
have been made available to Buyer. All limited liability company records of
Vision have been made available to Buyer for review, are correct and complete in
all material respects, and accurately reflect the ownership of Vision.

 

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(b) Texas MGA. Texas MGA is a corporation duly organized, validly existing and
in good standing under the Laws of the State of Texas and has full corporate
power and authority to carry on its business as now conducted and to own, lease
and operate all of its assets. Texas MGA is not qualified or licensed to do
business in any jurisdiction other than the State of Texas, and the ownership of
its assets and the conduct of its business do not require such qualification or
licensing in any other jurisdiction. Correct and complete copies of Texas MGA’s
articles of incorporation and all amendments thereto (certified by the Texas
Secretary of State) and bylaws and all amendments thereto, have been made
available to Buyer. All stock records of Texas MGA have been made available to
Buyer for review, are correct and complete in all material respects and
accurately reflect the stock ownership of Texas MGA.

 

Section 3.2 Authority. Sellers and Vision have all requisite power and authority
to execute and deliver, and to perform their obligations under, this Agreement
and to consummate the transactions contemplated hereby. This Agreement has been
duly executed and delivered by Sellers and Vision and, subject to the due
execution and delivery by Buyer, will be a valid and binding obligation of
Sellers and Vision, enforceable against Sellers and Vision in accordance with
its terms, except as (i) the enforceability hereof may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally, and (ii) the availability of equitable remedies may
be limited by equitable principles of general applicability. John Russell is,
and will be on the Closing Date, the trustee of each of the Seller Trusts, and
he, as such trustee, has all requisite power and authority under the applicable
trust documents to sell to Buyer hereunder all of the equity of Vision held in
such Seller Trusts.

 

Section 3.3 Governmental Authorization. Except as set forth in Section 3.3 of
Sellers Disclosure Memorandum, the execution, delivery and performance by
Sellers and Vision of this Agreement and the consummation of the transactions
contemplated hereby do not require Sellers or Vision to obtain any consent,
approval or action of, make any filing with, or give any notice to, any
Governmental Authority.

 

Section 3.4 Non-Contravention. Except as disclosed in Section 3.4 of Sellers
Disclosure Memorandum, the execution, delivery and performance by Sellers and
Vision of this Agreement and the consummation of the transactions contemplated
hereby will not (a) violate any provision of the articles of organization or
operating agreement of Vision; (b) violate any provision of the articles of
incorporation or bylaws of Texas MGA; (c) violate, conflict with, result in the
breach of or default under (or with notice, lapse of time, or both would result
in such a breach or default), result in any modification of the effect of,
provide the other contracting party the right to terminate or materially amend,
or require the other contracting party to consent to the assignment or
continuation of, any Material Contract to which either of Vision or Texas MGA is
a party; (d) violate any Order against or binding upon Sellers, Vision or Texas
MGA, except for such violations that would not have a Sellers Material Adverse
Effect; (e) violate any agreement with, or condition imposed by, any
Governmental Authority upon Sellers, Vision or Texas MGA, except for such
violations that would not have a Sellers Material Adverse Effect; (f) subject to
obtaining the governmental authorizations referred to in Section 3.3 hereof,
violate

 

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any Law, except for such violations that would not, individually or in the
aggregate, have a Sellers Material Adverse Effect; or (g) result in a breach or
violation of any of the terms or conditions of, constitute a default under, or
otherwise cause an impairment or a revocation of, any Permit of Vision or Texas
MGA, except for such breaches, violations, defaults, impairments or revocations
that would not have a Sellers Material Adverse Effect.

 

Section 3.5 Ownership of Interests. Except as disclosed in Section 3.5 of
Sellers Disclosure Memorandum, Sellers are the owners of 99% of the Interests,
as set forth on Exhibit A, free and clear of all Liens and any other limitation
or restriction (including any restriction on the right to vote, sell or
otherwise dispose of such Interests) and such Interests, together with the 1% of
Interests owned by the Foundation, constitute all of the limited liability
company interests of Vision. Sellers will transfer and deliver to Buyer at the
Closing good and marketable title to the Interests free and clear of all Liens
and any such other limitation or restriction. Vision does not own, directly or
indirectly, any equity or voting interest in, or otherwise control, any Person,
and does not have any agreement or commitment to acquire any such interest.

 

Section 3.6 Capitalization of Texas MGA. The authorized capital stock of Texas
MGA consists solely of 1,000 shares of common stock, par value $1.00 per share,
of which 1,000 shares are issued and outstanding, all of which shares are owned
by John Russell free and clear of all Liens and any other limitation or
restriction (including any restriction on the right to vote, sell or otherwise
dispose of such shares). All of the issued and outstanding shares of capital
stock of Texas MGA (a) are validly issued and fully paid and are non-assessable
under Law, (b) were issued pursuant to a valid exemption from registration under
all applicable securities Laws, and (c) were not issued in violation of any
preemptive rights of the current or past shareholders of Texas MGA. There are no
equity securities of Texas MGA outstanding other than the shares owned by John
Russell, and no outstanding Contracts, options, warrants or other rights
relating to the capital stock of Texas MGA. Texas MGA does not own, directly or
indirectly, any equity or voting interest in, or otherwise control, any Person,
and does not have any agreement or commitment to acquire any such interest.

 

Section 3.7 Financial Statements; Absence of Undisclosed Liabilities.

 

(a) Section 3.7(a) of Sellers Disclosure Memorandum contains complete and
correct copies of the audited consolidated balance sheets and statements of
income and cash flow from operations of Vision and Texas MGA as of and for the
fiscal years ended December 31, 2001, 2002 and 2003 (the “Vision Audited
Statements”) and the unaudited consolidated balance sheet and statement of
income and cash flow from operations of Vision and Texas MGA as of and for the
six-month period ended June 30, 2004 (the “June 30 Statements”; collectively,
the Vision Audited Statements and the June 30 Statements are the “Vision
Financial Statements”). The Vision Financial Statements (i) are in accordance
with the books and records of Vision and Texas MGA, (ii) have been prepared in
accordance with GAAP, except to the extent that the June 30 Statements are
unaudited, are subject to normal year-end adjustments and lack footnotes and
other presentation items, and (iii) present fairly the consolidated financial
position of Vision and Texas MGA as of the dates indicated and the results of
Vision’s and Texas MGA’s operations for the periods then ended.

 

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(b) Neither Vision nor Texas MGA has any debts, liabilities or obligations,
whether accrued, absolute or contingent, whether due or to become due, that
would have been required to be disclosed by Vision or Texas MGA by GAAP, other
than (i) as set forth in Section 3.7(b) of Sellers Disclosure Memorandum or (ii)
as reserved against or otherwise reflected in the Vision Financial Statements,
and all such debts, liabilities or obligations of Vision and Texas MGA shall be
reserved against or otherwise reflected in the Closing Balance Sheet.

 

Section 3.8 Absence of Certain Changes. Since December 31, 2003, (i) except as
disclosed in Section 3.8 of Sellers Disclosure Memorandum and (ii) except for
the transactions contemplated hereby, Sellers, Vision and Texas MGA have
conducted the Business in the ordinary course of business and there has not
been:

 

(a) any change in Vision’s limited liability company interests; any assignment
of any member’s governing rights; any grant of any option or right to purchase
limited liability company interests of Vision; any issuance of any security
convertible into such limited liability company interests; any grant of any
registration rights with respect to such limited liability company interests;
any purchase, redemption, retirement, or other acquisition by Vision of any of
its limited liability company interests;

 

(b) any amendment to the articles of organization or operating agreement of
Vision, nor any amendment to the articles of incorporation or bylaws of Texas
MGA;

 

(c) any Lien placed on, or any sale or transfer of any of Vision’s or Texas
MGA’s assets, except for sales or transfers of products and services made in the
ordinary course of business and except for Permitted Liens;

 

(d) any capital expenditure by Vision or Texas MGA except in the ordinary course
of business;

 

(e) any employment, deferred compensation, severance, retirement or other
similar agreement (or any amendment to any such existing agreement) offered to
or entered into with any Vision employee, any grant of any severance or
termination pay or retention or similar bonus to any Vision employee, or any
change in compensation or other benefits payable to any Vision employee other
than merit or tenure increases granted in the ordinary course of business;

 

(f) any labor dispute, other than routine individual grievances, or any activity
or proceeding by a labor union or representative thereof to organize any
employees, or any lockouts, strikes, slowdowns, work stoppages or any threats
thereof by or with respect to any Vision employees;

 

(g) any loans to any employee other than loans to employees in accordance with
the terms of Vision’s 401(k) plan; or

 

(h) any event, occurrence or condition of any character that has had, or which
might reasonably be expected to have, a Sellers Material Adverse Effect.

 

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Section 3.9 Material Contracts.

 

(a) Section 3.9 of Sellers Disclosure Memorandum contains a correct and complete
list of all of the following types of Contracts (other than the Personal
Property Leases and Real Property Leases) to which Vision or Texas MGA is a
party or by which any of their respective assets or properties are bound, or
pursuant to which Vision or Texas MGA has any rights, benefits, obligations or
liabilities:

 

(i) all Contracts having a duration of three months or more that are not
terminable without penalty upon sixty calendar days or less prior written notice
by any party;

 

(ii) all Contracts that require or could reasonably be expected to require any
party thereto to pay $25,000 or more in any twelve month period, or $50,000 or
more in the aggregate;

 

(iii) all loan agreements, indentures, letters of credit, mortgages, security
agreements, pledge agreements, deeds of trust, bonds, notes, purchase money
liens, liens securing rental payments under capital lease arrangements,
guarantees, instruments and other Contracts relating to the borrowing of money
or obtaining of or extension of credit;

 

(iv) all joint venture, partnership and similar Contracts involving a sharing of
profits or expenses;

 

(v) all broker, agency and sales promotion Contracts (other than standard form
producer agreements entered into in the ordinary course of business);

 

(vi) all Contracts that require or could require the payment of any severance,
retention or similar payments to employees on or after the date of this
Agreement;

 

(vii) all Contracts that contain any restrictive covenant or confidentiality
agreement (other than agreements relating solely to information about a
customer’s business or services provided to the customer by Vision or Texas MGA)
limiting the activities of Vision or Texas MGA;

 

(viii) all Contracts that constitute a lease or license of any Intellectual
Property from any third party (other than licenses for commercially available
software subject to “shrink wrap” or “click through” licenses, the license fees
for which have not exceeded and do not and will not exceed in the aggregate
$10,000 for any twelve (12) month period);

 

(ix) all stock purchase agreements, asset purchase agreements and other
acquisition or divestiture agreements, including any Contracts relating to the
acquisition, lease or disposition of any material assets or properties of Vision
or Texas MGA during the past three years.

 

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The Contracts listed in Section 3.9 of Sellers Disclosure Memorandum are
collectively the “Material Contracts.” A true and correct copy of each Material
Contract (or, if oral, a written description thereof) has been made available to
Buyer.

 

(b) Except as set forth in Section 3.9 of Sellers Disclosure Memorandum, each of
the Material Contracts was entered into by either Vision or Texas MGA in the
ordinary course of business, is in full force and effect and there exists no
breach or violation of or default under any of such Material Contracts by either
of Vision or Texas MGA or, to the Knowledge of Sellers, any other party to such
Material Contracts or any event which, with notice or the lapse of time, or
both, will create a breach or violation thereof or default thereunder by either
of Vision or Texas MGA or any other party to such Material Contracts.

 

(c) Except as set forth in Section 3.9 of Sellers Disclosure Memorandum, there
exists no actual or, to the Knowledge of Sellers, any threatened termination,
cancellation or limitation of, or any amendment, modification or change to, any
Material Contract which could reasonably be expected to have a Sellers Material
Adverse Effect.

 

(d) Neither Vision nor Texas MGA has granted any power of attorney affecting or
with respect to the Business that remains outstanding.

 

(e) The MSC Agreement and the American Safety Agreement are the only Contracts
pursuant to which Vision or Texas MGA is required to fund the payment of claims
on behalf of the insurance carrier and then seek reimbursement. All other
Contracts between Vision or Texas MGA and the insurance carriers involved in the
Business require Vision or Texas MGA to pay a claim only if the insurance
carrier has funded the payment in advance.

 

Section 3.10 Litigation. Section 3.10 of Sellers Disclosure Memorandum lists all
Litigation pending or, to the Knowledge of Sellers, threatened against Vision or
Texas MGA or any of their respective assets or properties, or against Sellers
with respect to Vision or Texas MGA. Section 3.10 of Sellers Disclosure
Memorandum also lists all Orders outstanding against Vision or Texas MGA. Except
as disclosed in Section 3.10 of Sellers Disclosure Memorandum, there is no
Litigation pending or, to the Knowledge of Sellers, threatened against Sellers,
Vision or Texas MGA or any of their properties or assets that, if adversely
determined, could reasonably be expected to result in a Sellers Material Adverse
Effect; nor is there any Order outstanding against Vision or Texas MGA that
could reasonably be expected to result in a Sellers Material Adverse Effect.

 

Section 3.11 Compliance with Laws; Insurance Matters.

 

(a) Except as set forth in Section 3.11 of Sellers Disclosure Memorandum,
Vision, Texas MGA and the Business are in compliance in all material respects
with all Laws, including all Laws applicable to the operations of a managing
general agent, and none of Sellers Representative, Vision or Texas MGA has
received any written notice alleging any material violation of any Law.

 

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(b) Section 3.11 of Sellers Disclosure Memorandum sets forth a complete list of
all material Permits held by Vision and Texas MGA, and all such Permits are
valid and in full force and effect. Except as listed in Section 3.11 of Sellers
Disclosure Memorandum, each of Vision and Texas MGA has all material Permits
necessary to conduct its Business in the manner it is presently being conducted.
Except as listed in Section 3.11 of Sellers Disclosure Memorandum, neither
Vision nor Texas MGA has engaged in any activity that is reasonably likely to
cause revocation or suspension of any of its Permits and no action or proceeding
looking to or contemplating the revocation or suspension of any such Permit is
pending or, to Sellers’ Knowledge, threatened.

 

(c) Except as set forth in Section 3.11 of Sellers Disclosure Memorandum, all
forms of insurance policies (including applications) that have been or are
marketed by Vision or Texas MGA are (and at all relevant times were) in all
material respects approved by the applicable Governmental Authorities or have
been filed with, and not objected to by, or are not required to be filed with,
such Governmental Authorities. Sellers have made available to Buyer correct and
complete copies of all insurance policies that have been or are marketed by
Vision or Texas MGA.

 

(d) Except as set forth in Section 3.11 of Sellers Disclosure Memorandum, all
insurance premium rates, commission rates and other types of fees related to the
Business that are required to be filed with any Governmental Authorities have
been so filed and approved, or otherwise are (and at all relevant times were)
filed and not objected to within the period provided for rejection, and the
premiums, commissions and other fees charged in connection with the Business
conform in all material respects thereto.

 

(e) Sellers have provided to Buyer accurate and complete copies of the actuarial
reports dated as of March 31, 2004 prepared by Vision for the third-party
insurance carriers engaged in the Business with Vision and Texas MGA (the
“Actuarial Reports”). The Actuarial Reports (i) accurately reflect the books and
records of Vision and Texas MGA, (ii) have been prepared using generally
accepted actuarial standards and in accordance with all applicable SAP, (iii)
have been prepared using actuarial assumptions that are consistent with the
terms and conditions of the underlying insurance policies, and (iv) have been
delivered to and accepted without objection by the applicable insurance
carriers.

 

(f) Section 3.11 of Sellers Disclosure Memorandum sets forth a correct and
complete list of all consumer complaints received by Governmental Authorities
regarding Vision, Texas MGA or any of the insurance carriers for whom Vision or
Texas MGA market policies, during the period 2001 through June 2004, to the
extent such complaints were communicated to Vision, Texas MGA or Sellers by the
Governmental Authorities or insurers, along with a description of the resolution
of each such complaint. No such complaint, individually or together with other
such complaints, is reasonably likely to result in a Sellers Material Adverse
Effect.

 

(g) All reports provided by Vision or Texas MGA to third parties with which
Vision or Texas MGA does business, including reports regarding collections and
remittances of cash, were accurate and complete in all material respects when
provided to such third parties, and such reports accurately state the amounts of
Vision’s and Texas MGA’s obligations to such third parties for remittances of
cash owed thereto.

 

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Section 3.12 Environmental Compliance. Except as would not have a Sellers
Material Adverse Effect: (a) Vision and Texas MGA are in compliance with all
applicable Environmental Laws; (b) Vision and Texas MGA have all material
Permits required under any applicable Environmental Laws and are in compliance
with their respective requirements; and (c) there are no pending or, to Sellers’
Knowledge, threatened claims under Environmental Laws against Vision or Texas
MGA.

 

Section 3.13 Personal Property.

 

(a) Section 3.13 of Sellers Disclosure Memorandum contains a true and correct
list of each lease pursuant to which each of Vision and Texas MGA leases
tangible personal property with an aggregate value in excess of $10,000 (the
“Personal Property Leases”). True and correct copies of each lease listed on
Section 3.13 of Sellers Disclosure Memorandum and any amendments, extensions,
and renewals thereof are attached thereto. Each of the Personal Property Leases
described in Section 3.13 of Sellers Disclosure Memorandum is in full force and
effect, and there exists no breach or violation of or default under any of the
Personal Property Leases by either Vision or Texas MGA or, to the Knowledge of
Sellers, any other party to the Personal Property Leases, or any event which,
with notice or lapse of time or both, will create a breach or violation thereof
or default thereunder by either Vision or Texas MGA or any other party to the
Personal Property Leases, the consequences of which, severally or in the
aggregate, would have a Sellers Material Adverse Effect. No rights of Vision or
Texas MGA under such leases have been assigned or otherwise transferred as
security for any obligation of Vision or Texas MGA. The consummation of the
transactions contemplated by this Agreement will not create or constitute a
default or event of default under any such lease or require the consent of any
other party to any such lease in order to avoid a default or event of default.

 

(b) Section 3.13 of Sellers Disclosure Memorandum contains a complete and
correct list of each item of tangible personal property with a value in excess
of $2,500 that is owned by either Vision and Texas MGA (collectively, the “Owned
Personal Property”). Either Vision or Texas MGA has good, valid and marketable
title to each item of Owned Personal Property, free and clear of all Liens other
than Permitted Liens.

 

(c) Except as disclosed in Section 3.13 of Sellers Disclosure Memorandum, the
Owned Personal Property and the personal property subject to the Personal
Property Leases constitute all of the tangible personal property required to
conduct the Business with the exception of any item of tangible personal
property having a value of $2,500 or less.

 

Section 3.14 Real Property.

 

(a) Neither Vision nor Texas MGA owns any real property.

 

(b) Section 3.14 of Sellers Disclosure Memorandum contains a true and correct
list of each lease (the “Real Property Leases”) pursuant to which each of Vision
and Texas MGA leases

 

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any real property (the “Leased Real Property”) and a summary description of all
structures and other improvements located on each such parcel of Leased Real
Property. Each of the Real Property Leases listed in Section 3.14 of Sellers
Disclosure Memorandum is in full force and effect and there is no existing
default or event of default, real or claimed, or event which with notice or
lapse of time or both would constitute a default thereunder by Vision or Texas
MGA or, to the Knowledge of Sellers, any other party to such Real Property
Leases. Except for Permitted Liens, the interests of Vision and Texas MGA in the
Real Property Leases are free and clear of any Liens or rights of any third
parties. The consummation of the transactions contemplated by this Agreement
will not create or constitute a default or event of default under any Real
Property Lease or require the consent of any other party to any Real Property
Lease in order to avoid a default or event of default.

 

(c) There is no default or breach by Vision or Texas MGA nor, to the Knowledge
of Sellers, any other party thereto, under any covenants, conditions,
restrictions or easements which may affect the Leased Real Property or any
portion or portions thereof which are to be performed or complied with by the
owner of the Leased Real Property, and no condition or circumstance exists
which, with the giving of notice or the passage of time, or both, would
constitute a default or breach by Vision or Texas MGA nor, to the Knowledge of
Sellers, any other party thereto, under any such covenants, conditions,
restrictions, rights-of-way or easements.

 

Section 3.15 Intellectual Property.

 

(a) Section 3.15 of Sellers Disclosure Memorandum sets forth a complete and
accurate list of all patents, trademarks, trade names, service marks, domain
names, copyrights and computer software used in the Business. Except as set
forth in Section 3.15 of Sellers Disclosure Memorandum, Vision or Texas MGA owns
or has the uncontested right to use all Intellectual Property necessary for the
conduct of the Business as presently conducted. For purposes of this Agreement,
the term “Intellectual Property” shall mean, collectively, patents, designs,
inventions, trademarks, trade names, domain names, service marks, copyrights,
computer software, manufacturing processes and confidential or proprietary
information.

 

(b) No claim is pending, or to the Knowledge of Sellers threatened, and neither
Sellers, Vision nor Texas MGA has received any written notice that the conduct
of the Business (including without limitation, the use of any Intellectual
Property) infringes upon, misappropriates or conflicts with any rights in
Intellectual Property claimed by any third party. No claim is pending, or to the
Knowledge of Sellers threatened, alleging that any Intellectual Property owned
or licensed by or to Vision or Texas MGA or which Vision or Texas MGA otherwise
has the right to use is invalid or unenforceable by Vision or Texas MGA.

 

(c) Except as set forth in Section 3.15 of Sellers Disclosure Memorandum, no
royalties or fees are payable by Vision or Texas MGA to anyone for use of the
Intellectual Property (other than licenses for commercially available software
subject to “shrink wrap” or “click through” licenses, the license fees for which
have not exceeded and do not and will not exceed $5,000 for any twelve (12)
month period). Correct and complete copies of all agreements pursuant to which
Vision or Texas MGA licenses any Intellectual Property have been delivered to
Buyer (other than licenses for commercially available software subject to
“shrink wrap” or

 

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“click through” licenses, the license fees for which have not exceeded and do
not and will not exceed $5,000 for any twelve (12) month period). Except as set
forth in Section 3.15 of Sellers Disclosure Memorandum, all such agreements are
in full force and effect, and, to the Knowledge of Sellers, there are no
existing defaults or events of default, real or claimed, or events which with or
without notice or lapse of time, or both, would constitute defaults under such
agreements that would give the non-defaulting party a right to terminate such
agreement or a right to receive any payment pursuant to such agreement.

 

Section 3.16 Employee Benefit Plans; ERISA.

 

(a) Texas MGA has never maintained, sponsored or contributed to any type of
employee benefit or welfare plan.

 

(b) Section 3.16 of Sellers Disclosure Memorandum sets forth a correct and
complete list of all pension, retirement, profit sharing, deferred compensation,
severance pay, vacation, bonus or other incentive plan, all other written
employee programs, arrangements or agreements, all medical, vision, dental or
other health plans, all life insurance plans, and all other employee benefit
plans or fringe benefit plans, including “employee benefit plans” as that term
is defined in Section 3(3) of ERISA, adopted, maintained by, sponsored in whole
or in part by, or contributed to at any time by Vision or any entity that is
considered one employer with Vision under Section 4001 of ERISA or Code Section
414 (“ERISA Affiliate”) for the benefit of employees, retirees, dependents,
spouses, directors, independent contractors or other beneficiaries and under
which employees, retirees, dependents, spouses, directors, independent
contractors or other beneficiaries are eligible to participate (collectively,
the “Vision Benefit Plans”). Section 3.16 of Sellers Disclosure Memorandum
includes a description of the benefits offered under any unwritten Vision
Benefit Plan. Any of the Vision Benefit Plans that is an “employee pension
benefit plan,” as that term is defined in Section 3(2) of ERISA, or an “employee
welfare benefit plan,” as that term is defined in Section 3(1) of ERISA, is
referred to herein as a “Vision ERISA Plan.” Neither Vision nor any of its ERISA
Affiliates have ever maintained a “defined benefit plan,” as defined in Code
Section 414(j). Vision has made available to Buyer copies of all Vision Benefit
Plans.

 

(c) For each Vision Benefit Plan, Sellers have delivered or made available to
Buyer true, correct and complete copies of all (i) trust agreements or other
funding arrangements for such Vision Benefit Plan (including insurance
contracts), and all amendments thereto; (ii) determination letters (including
determination letters for each prior version of such Vision Benefit Plan and
each plan that has been merged into such Vision Benefit Plan), rulings, opinion
letters, information letters, or advisory opinions issued by the Internal
Revenue Service, the Department of Labor, or the Pension Benefit Guaranty
Corporation; (iii) annual reports or returns, audited or unaudited financial
statements, actuarial valuations and reports, and summary annual reports
prepared for any Vision Benefit Plan; (iv) summary plan descriptions and any
material modifications thereto; (v) copies of any filings with the Internal
Revenue Service; (vi) all personnel, payroll and employment manuals and
policies; (vii) all collective bargaining agreements; (viii) all Contracts with
third-party administrators, actuaries, investment managers, consultants and
other independent contractors that relate to Vision Benefit Plans; (ix) IRS
Forms 5500 filed in each of the most recent three plan years for Vision Benefit
Plans, including all schedules thereto and opinions of independent accountants;
and (x) complete and accurate written summaries of any Vision Benefit Plan that
is oral.

 

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(d) Except as disclosed in Section 3.16 of Sellers Disclosure Memorandum, all
the Vision Benefit Plans and the related trusts subject to ERISA comply in all
material respects with, and have been administered in substantial compliance
with, (i) the provisions of ERISA, (ii) all provisions of the Code relating to
qualification and tax exemption under Code Sections 401(a) and 501(a), and (iii)
all other Laws, and neither Sellers nor Vision has received any written notice
from any Governmental Authority questioning or challenging such compliance, nor
are there any pending investigations or notices of pending investigation by a
Governmental Authority.

 

(e) All Vision Benefit Plans are in compliance with the applicable terms of
ERISA, the Code, all applicable federal and state securities Laws, and any other
applicable Laws, the breach or violation of which are reasonably likely to have,
individually or in the aggregate, a Sellers’ Material Adverse Effect. Each
Vision ERISA Plan (and all prior versions of such Vision ERISA Plan) that is
intended to be qualified under Code Section 401(a) has received a favorable
determination letter from the Internal Revenue Service, and neither Sellers nor
Vision are aware of any circumstances likely to result in revocation of any such
favorable determination letter.

 

(f) Except as disclosed in Section 3.16 of Sellers Disclosure Memorandum, all
Vision Benefit Plan documents, and annual reports or returns, audited or
unaudited financial statements, actuarial valuations, summary annual reports,
and summary plan descriptions issued with respect to the Vision Benefit Plans
are correct and complete and have been timely filed with the Internal Revenue
Service, the Department of Labor, or distributed to participants of a Vision
Benefit Plan (as required by Law) and there have been no changes in the
information set forth therein.

 

(g) No “party in interest” (as defined in Section 3(14) of ERISA) or
“disqualified person” (as defined in Section 4975(e)(2) of the Code) with
respect to any Vision Benefit Plan has engaged in any nonexempt “prohibited
transaction” (described in Section 4975(c) of the Code or Section 406 of ERISA).

 

(h) Except as disclosed in Section 3.16 of Sellers Disclosure Memorandum or as
required under Section 601 et. seq. of ERISA or Code Section 4980B, Vision has
never maintained a Vision Benefit Plan providing welfare benefits (as defined in
ERISA Section 3(1)) to employees after retirement or other separation from
service.

 

(i) Except as set forth in Section 3.16 of Sellers Disclosure Memorandum, there
are no restrictions on the rights of Vision to amend or terminate any Vision
Benefit Plan without incurring any liability thereunder. No Tax under Code
Sections 4980B or 5000 has been incurred with respect to any Vision Benefit Plan
and no circumstances exist that could give rise to such Taxes.

 

(j) Except as disclosed in Section 3.16 of Sellers Disclosure Memorandum,
neither the execution and delivery of this Agreement nor the consummation of the
transactions

 

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contemplated hereby will (i) result in any payment (including severance,
unemployment compensation, golden parachute, or otherwise) becoming due to any
member, officer, employee or agent of Vision under any Vision Benefit Plan or
otherwise, (ii) increase any benefits otherwise payable under any Vision Benefit
Plan, or (iii) result in any acceleration of the time of payment or vesting of
any such benefit. Except as disclosed in Section 3.16 of Sellers Disclosure
Memorandum, no payment that is owed or may become due to any member, officer,
employee or agent of Vision will be non-deductible or subject to Tax under Code
Section 280G or 4999; nor will Vision be required to “gross up” or otherwise
compensate such individuals because of the imposition of any excise Tax upon
payment to such individual. No event has occurred or circumstances exist that
could result in a material increase in premium costs of any Vision Benefit Plans
that are insured, or a material increase in any benefit costs of any Vision
Benefit Plans that are self-insured.

 

(k) Vision and Sellers have performed all of their respective obligations under
the Vision Benefit Plans and have made appropriate entries in Vision’s financial
records and statements for all such obligations that have accrued but that are
not yet due. The actuarial present values of all accrued deferred compensation
entitlements (including entitlements under any executive compensation,
supplemental retirement or employment agreement) of employees and former
employees of Vision and their respective beneficiaries have been fully reflected
on the Vision Financial Statements to the extent required by and in accordance
with GAAP. Vision and Sellers have made all required contributions and payments
which are due and payable under each Vision Benefit Plan for all periods through
and including the Closing Date.

 

(l) Other than routine claims for benefits, no claim against or legal proceeding
involving any Vision Benefit Plan is pending or, to the Knowledge of Sellers,
threatened.

 

(m) Except as disclosed in Section 3.16 of Sellers Disclosure Memorandum, all
Vision Benefit Plans that permit participants to direct the investment of plan
assets comply with the requirements of ERISA Section 404(c) and accompanying
regulations.

 

(n) Except as disclosed in Section 3.16 of Sellers Disclosure Memorandum, all
individuals participating in (or eligible to participate in) any Vision Benefit
Plan maintained (or contributed to) by Vision are common-law employees.

 

(o) Neither Vision nor any of its ERISA Affiliates have at anytime established,
maintained or contributed to, or otherwise participated in, or had an obligation
to maintain, contribute to, or otherwise participate in, any multiemployer plan
as defined in ERISA Sections 4001(a)(3) and 3(37)(A).

 

Section 3.17 Labor and Employment Matters. Section 3.17 of Sellers Disclosure
Memorandum contains a correct and complete list of all employees of Vision as of
July 31, 2004 (the “Business Employees”), specifying for each person his or her
job title. Except as disclosed in Section 3.17 of Sellers Disclosure Memorandum,
the employment of all Business Employees is terminable at will by Vision without
any penalty to or severance obligation becoming owed by Vision. Except as set
forth in Section 3.17 of Sellers Disclosure Memorandum, (i) Vision is not a
party to any union agreement or collective bargaining agreement or work rules or
practices

 

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agreed to with any labor organization or employee association applicable to the
Business Employees and no attempt to organize any of such employees has been
made or is pending, (ii) since January 1, 2001, there has been no labor strike,
dispute, slowdown, stoppage or lockout against or affecting Vision, and (iii) no
unfair labor practice charge or complaint against Vision is pending before the
National Labor Relations Board or any similar Governmental Authority with
respect to any of the Business Employees, and neither Vision nor Sellers is
aware of any circumstance that could support such a charge or complaint.

 

Section 3.18 Tax Matters. Except as set forth in Section 3.18 of Sellers
Disclosure Memorandum:

 

(a) All Tax Returns required to be filed by or with respect to each of Vision
and Texas MGA have been timely filed with the appropriate Taxing authorities;
all federal, state, local, foreign and other Taxes that are shown to be due on
such Tax Returns have been timely paid or adequately reserved for on the books
and records of Vision or Texas MGA, as applicable; and all such Tax Returns are
complete and accurate in all material respects.

 

(b) Prior to the date hereof, Sellers have provided to Buyer copies of the
portions of all federal Tax Returns, and copies of all state Tax Returns,
applicable to either of Vision or Texas MGA for the taxable periods ending in
2001, 2002 and 2003. No claim has ever been made by an authority in a
jurisdiction where Vision or Texas MGA does not file a Tax Return that such
company may be subject to Taxes by that jurisdiction.

 

(c) There are no outstanding agreements extending or waiving the statutory
period of limitation applicable to any claim for, or the period for the
collection or assessment of, Taxes due for any taxable period with respect to
any Tax for which Vision or Texas MGA may be subject or liable.

 

(d) None of Sellers, Vision or Texas MGA has received any notice of assessment
or proposed assessment in connection with any Taxes of or relating to Vision or
Texas MGA. No audit, assessment, collection or other proceeding by any
Governmental Authority is pending or, to the Knowledge of Sellers, threatened
with respect to (i) any Taxes due from or with respect to Vision or Texas MGA or
(ii) any Tax Return of or with respect to Vision or Texas MGA.

 

(e) There are no Liens for Taxes upon the assets or properties of Vision or
Texas MGA, except for Permitted Liens.

 

(f) Neither Vision nor Texas MGA is a party to any agreement relating to the
sharing or allocation of Taxes or indemnification agreement with respect to
Taxes or similar contract or arrangement.

 

(g) Neither Vision nor Texas MGA has been a member of an affiliated group filing
a consolidated federal income Tax Return (other than Vision and Texas MGA filing
a consolidated return together), or has any liability for Taxes of any Person
under Treas. Reg. § 1.1502-6 or § 1.1502-78 (or similar provision of state,
local or foreign law) as a transferee or successor, by contract or otherwise.

 

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(h) Vision has not filed an election under Treasury Regulation Section
301.7701-3 to be classified other than as provided in Treasury Regulation
Section 301.7701-3(b). At all times, Vision has been classified as a partnership
for all Tax purposes, and no Taxing authority has taken a position inconsistent
with such classification.

 

(i) Each of Vision and Texas MGA has complied with all applicable Laws relating
to the withholding of Taxes and the payment thereof to appropriate authorities,
including Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee or independent contractor, and Taxes
required to be withheld and paid pursuant to Sections 1441 and 1442 of the Code
or similar provision under foreign Law. Each of Vision and Texas MGA is in
compliance with, and its records contain all information and documents
(including properly completed IRS Forms W-9) necessary to comply with, all
applicable information reporting and Tax withholding requirements under federal,
state, and local Tax Laws, and such records identify with specificity all
accounts subject to backup withholding under Section 3406 of the Code.

 

(j) Neither of Vision or Texas MGA has made any payments, is obligated to make
any payments, or is a party to any agreement that could obligate it to make any
payments, that could be disallowed as a deduction under Section 280G or 162(m)
of the Code.

 

(k) Each of Texas MGA and Vision has paid fully and timely, or adequately
reserved on the financial statements of Vision, any Taxes that became due upon
the merger of Texas MGA with and into Vision.

 

(l) None of the Seller Trusts has created or will create any Tax liability for
Vision, including any payroll or other compensation related Taxes.

 

Section 3.19 Operations Insurance. Section 3.19 of Sellers Disclosure Memorandum
lists all liability, property and casualty, flood, workers’ compensation,
employers’ liability, directors and officers’ liability, surety bonds, key man
life insurance and other similar insurance Contracts that insure the business,
properties, operations or affairs of Vision or Texas MGA or affect or relate to
the ownership, use or operations of any of the assets or properties of Vision or
Texas MGA. Each such insurance Contract is in full force and effect, all
premiums due thereon have been paid, and, to the Knowledge of Sellers, no such
insurance Contract is the subject of a notice of cancellation or non-renewal by
the issuing insurer. Sellers have made available to Buyer complete and correct
copies of all such insurance Contracts together with all riders and amendments
thereto. Section 3.19 of Sellers Disclosure Memorandum sets forth a correct and
complete list of all claims filed under any of such insurance Contracts (or
predecessors thereto) by Sellers, Vision or MGA within the past three years.
Except as set forth in Section 3.19 of Sellers Disclosure Memorandum, to the
Knowledge of Sellers, the insurance companies issuing such policies are solvent
and not operating under the protection of any receivership, liquidation,
rehabilitation, conservatorship or other bankruptcy, insolvency or similar
proceeding. Sellers, Vision and Texas MGA have complied in all material respects
with the terms and provisions of such policies.

 

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Section 3.20 Broker, Financial Adviser.. Except as set forth in Section 3.19 of
the Sellers Disclosure Memorandum, neither Vision nor Texas MGA has any
liability or obligation to pay any fees, commissions or similar payments to any
broker, finder or financial adviser with respect to the transactions
contemplated by this Agreement.

 

Section 3.21 Disclosure. This Agreement, and each certificate or other
instrument or document required to be furnished by or on behalf of Sellers,
Vision or Texas MGA to Buyer or any of its agents or representatives pursuant
hereto, taken as a whole, do not contain any untrue statement of a material fact
or omit to state a material fact required to be stated herein or therein or
necessary to make the statements contained herein or therein in light of the
circumstances under which they were made, not misleading.

 

Section 3.22 Foundation’s Representations.

 

(a) The Foundation is a not-for-profit corporation duly organized, validly
existing and in good standing under the Laws of the State of Tennessee and has
full corporate power and authority to carry on its business as now conducted.
The Foundation has received a determination letter, and such letter is still in
force, from the Internal Revenue Service stating that the Foundation qualifies
as a charitable organization under Section 501(c)(3) of the Code.

 

(b) The Foundation has all requisite power and authority to execute and deliver,
and to perform its obligations under, this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Foundation and, subject to the due execution and delivery by
the other Sellers and by Buyer, will be a valid and binding obligation of the
Foundation, enforceable against the Foundation in accordance with its terms,
except as (i) the enforceability hereof may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally, and (ii) the availability of equitable remedies may
be limited by equitable principles of general applicability.

 

(c) The execution, delivery and performance by the Foundation of this Agreement
and the consummation of the transactions contemplated hereby do not require the
Foundation to obtain any consent, approval or action of, make any filing with,
or give any notice to, any Governmental Authority.

 

(d) The execution, delivery and performance by the Foundation of this Agreement
and the consummation of the transactions contemplated hereby will not (a)
violate any provision of the articles of organization or bylaws of the
Foundation; (b) violate any Order against or binding upon the Foundation; (c)
violate, in any material respect, any agreement with, or condition imposed by,
any Governmental Authority upon Foundation; or (d) violate any Law in any
material respect.

 

(e) The Foundation is the owner of 1% of the Interests, as set forth on Exhibit
A, free and clear of all Liens and any other limitation or restriction
(including any restriction on the right to vote, sell or otherwise dispose of
such Interests). The Foundation will transfer and deliver to Buyer at the
Closing good and marketable title to such 1% of the Interests free and clear of
all Liens and any such other limitation or restriction.

 

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ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer hereby represents and warrants to Sellers as follows:

 

Section 4.1 Organization, Standing and Power. Buyer is a corporation duly
organized, validly existing and in good standing under the Laws of the State of
Delaware and has full corporate power and authority to carry on its business as
now conducted and to own, lease and operate all of its assets. Buyer is duly
qualified to do business as a foreign corporation in good standing in each
jurisdiction in which the ownership of its assets or the conduct of its Business
requires such qualification, except for such jurisdictions where the failure to
be so qualified would not have a Buyer Material Adverse Effect.

 

Section 4.2 Authority. Buyer has all requisite power and authority to execute
and deliver, and to perform its obligations under, this Agreement and to
consummate the transactions contemplated hereby, and the performance by Buyer of
its obligations under this Agreement have been duly authorized by all necessary
corporate action on the part of Buyer. This Agreement has been duly executed and
delivered by Buyer, and subject to the due execution and delivery by Sellers and
Vision will, upon due execution and delivery, be a valid and binding obligation
of Buyer, enforceable against Buyer in accordance with its terms, except as (i)
the enforceability hereof may be limited by bankruptcy, insolvency, moratorium
or other similar Laws affecting the enforcement of creditors’ rights generally,
and (ii) the availability of equitable remedies may be limited by equitable
principles of general applicability.

 

Section 4.3 Governmental Authorization. Other than obtaining the AVIC Licenses,
the consummation of the transactions contemplated hereby do not require Buyer to
obtain any consent, approval or action of, make any filing with, or give any
notice to, any Governmental Authority.

 

Section 4.4 Non-Contravention. The execution, delivery and performance by Buyer
of this Agreement and the consummation of the transactions contemplated hereby
will not (a) violate any provision of the certificate of incorporation or bylaws
of Buyer; (b) violate, conflict with, result in the breach of or default under
(or with notice, lapse of time, or both would result in such a breach or
default), result in any modification of the effect of, provide the other
contracting party the right to terminate or materially amend, or require the
other contracting party to consent to the assignment or continuation of, any
material Contract to which Buyer is a party; (c) violate any Order against or
binding upon Buyer, except for such violations that would not have a Buyer
Material Adverse Effect; (d) violate any agreement with, or condition imposed
by, any Governmental Authority upon Buyer, except for such violations that would
not have a Buyer Material Adverse Effect; (e) subject to obtaining the
governmental authorizations referred to in Section 4.3 hereof, violate any Law,
except for such violations that would not have a Buyer Material Adverse Effect;
or (f) result in a breach or violation of any of the terms or conditions of,
constitute a default under, or otherwise cause an impairment or a revocation of,
any Permit related to Buyer’s business, except for such breaches, violations,
defaults, impairments or revocations that would not have a Buyer Material
Adverse Effect.

 

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Section 4.5 Investment Intent. Buyer is purchasing the Interests solely for
investment, with no present intention to resell or distribute the Interests
within the Securities Act. Buyer hereby acknowledges that the Interests have not
been registered pursuant to the Securities Act and may not be transferred in the
absence of such registration or an exemption therefrom under such Securities
Act.

 

Section 4.6 Sufficient Funds. Buyer has or will have at Closing sufficient funds
available to pay the Cash Portion, and to pay all its fees and expenses related
to the transactions contemplated hereby.

 

Section 4.7 Buyer Shares. The issuance of the Buyer Shares pursuant to this
Agreement has been duly authorized by all necessary corporate action on the part
of Buyer. When issued and delivered pursuant to this Agreement, the Buyer Shares
shall be duly authorized, validly issued, fully paid, non-assessable and not
subject to preemptive rights.

 

Section 4.8 Buyer SEC Filings. Buyer has filed all reports, schedules, forms,
statements and other documents required to be filed by it with the SEC since
January 1, 2003 (the “Buyer SEC Documents”). As of their respective dates, the
Buyer SEC Documents complied in all material respects with the requirements of
the Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to such Buyer SEC
Documents, and none of the Buyer SEC Documents when filed contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Except to the
extent that information contained in any Buyer SEC Document has been revised or
superseded by a later filed Buyer SEC Document, none of the Buyer SEC Documents
contains any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of Buyer included in the Buyer SEC
Documents comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with GAAP (except, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present in all material respects the consolidated
financial position of Buyer and its consolidated subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). Except as set forth in the Buyer SEC Documents, and
except for liabilities and obligations incurred in the ordinary course of
business consistent with past practice since the date of the most recent
consolidated balance sheet included in the Buyer SEC Documents, neither Buyer
nor any of its subsidiaries has any material liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise) required by GAAP to
be recognized or disclosed on a consolidated balance sheet of Buyer and its
consolidated subsidiaries or in the notes thereto.

 

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ARTICLE 5

COVENANTS

 

Section 5.1 Conduct of Business.

 

(a) Texas Merger. Prior to the Closing, Sellers and Vision shall cause Texas MGA
to be merged with and into Vision (the “Texas Merger”), and shall cause Vision
to have as of the Closing Date all qualifications, licenses and third-party
Contracts required for Vision to conduct the Business in the State of Texas.
Vision shall provide Buyer with copies of all documents necessary to effect, or
otherwise relating to, the Merger prior to their execution or filing, as
applicable. Vision shall be responsible for ensuring that the Merger complies
with all Laws, Permits and Material Contracts of Vision and Texas MGA.

 

(b) Maintain Ordinary Course of Business. Prior to the Closing, except as
necessary to effect the transactions contemplated by this Agreement, Sellers
shall cause Vision and Texas MGA to (i) in all material respects, operate the
Business as presently operated and only in the ordinary course of business, (ii)
use commercially reasonable efforts to preserve the value of the Business, and
(iii) use commercially reasonable efforts to preserve their relationships with
and the goodwill of their customers, suppliers, employees and other Persons
having business dealings with either of Vision or Texas MGA

 

(c) Specific Restrictions. Without limiting the generality of Section 5.1(b),
except as necessary to effect the transactions contemplated by this Agreement,
or except with the prior approval of Buyer (which shall not be unreasonably
withheld, conditioned or delayed), Sellers will not, and will cause Vision and
Texas MGA not to:

 

(i) enter into any contract that would constitute a Material Contract, other
than in the ordinary course of business;

 

(ii) dispose of or acquire any asset used or to be used in the Business, other
than acquisitions or dispositions in the ordinary course of business; provided,
however, that Buyer acknowledges that Vision will make those certain
dispositions of assets and assignments of Contracts to Vision officers, which
are detailed in Exhibit J, subsequent to the execution of the Agreement;

 

(iii) enter into, adopt or (except as may be required by Law or the terms of any
such arrangement) modify or terminate any bonus, profit sharing, severance,
termination, LLC interest or stock purchase agreement, pension, retirement,
deferred compensation, employment, severance or other employee benefit
agreement, trust, plan, fund or other arrangement for the benefit or welfare of
any employee, or amend any such arrangement as it relates to employees (except
for changes in compensation payable to any employee that is a merit or tenure
increase granted in the ordinary course of business);

 

(iv) materially change any of its underwriting, pricing, actuarial, commission
or investment practices or policies except as contemplated by the terms of this
Agreement or except as required by the terms of one of the Material Contracts,
or make, or agree to

 

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make, any material change in any of its financial, Tax or accounting practices
or policies, or in any assumption underlying such a practice or policy, in
either case including any basis for establishing reserves, or any depreciation
or amortization policies or rates, in each case other than as required by a
change in GAAP, SAP or applicable Law;

 

(v) (A) issue, sell, pledge, redeem, transfer, dispose of or encumber any of the
Interests or any shares of capital stock of Texas MGA, (B) amend its certificate
of incorporation, articles of organization, operating agreement or bylaws, (C)
incur or modify any material indebtedness or other material liability, (D) make
or authorize or commit for any capital expenditures other than in amounts not
exceeding $30,000 for an individual expenditure or $100,000 in the aggregate, or
(E) make any acquisition of, or investment in, assets or stock of any other
Person (other than in the ordinary course of business);

 

(vi) increase the salary or other compensation of any Business Employee;

 

(vii) hire any new employees or terminate any Business Employee, other than in
the ordinary course of business;

 

(viii) take any action or omit to take any action, which action or omission
would result in a material breach of any of Sellers’ representations and
warranties set forth in this Agreement; or

 

(ix) agree in writing or otherwise to take any of the actions described above in
this Section 5.1(c).

 

Section 5.2 Exclusivity. Neither Sellers nor Vision will (and Sellers shall
cause Texas MGA not to), directly or indirectly, solicit, initiate or encourage
the submission of any proposals for or enter into or continue any discussions
with respect to, (i) the acquisition by any Person of any of the membership
interests or assets of Vision or capital stock or assets of Texas MGA (including
any acquisition structured as a merger, consolidation, or share exchange), or
(ii) any transaction pursuant to which Vision or Texas MGA would enter into any
marketing relationship with an insurance carrier other than an Affiliate of
Buyer (any “Acquisition/Marketing Transaction”), or furnish or permit to be
furnished any non-public information concerning Vision or Texas MGA or the
Business to any Person (other than Buyer and its representatives), other than
information furnished in the ordinary course of business. Sellers shall promptly
notify Buyer of any inquiry or proposal received by Sellers, Vision or Texas MGA
or any representative thereof with respect to any such Acquisition/Marketing
Transaction. Sellers, Vision and Texas MGA and their representatives shall
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any Person other than Buyer in respect of any
Acquisition/Marketing Transaction.

 

Section 5.3 Cooperation. Prior to the Closing Date, Sellers shall, and shall
cause Vision to, cooperate with Buyer, upon Buyer’s reasonable request (without
causing undue disruption of the conduct of the Business), to develop plans for
the integration of the Business with that of Buyer and its Affiliates and to
allow Buyer to make continued review of the books,

 

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records, assets, liabilities, business and operations of Vision and Texas MGA.
Without limiting the generality of the foregoing, Sellers shall, and shall cause
Vision and Texas MGA to, cooperate with Buyer to audit and implement changes as
reasonably requested by Buyer in connection with Vision’s and Texas MGA’s
internal accounting, billing and cash management systems. In addition, Sellers
shall provide Buyer or its representatives with reasonable access to the
Business Employees to facilitate the transition of such employees from Vision
Benefits Plans to such benefit plans as may be made available to them following
the Closing Date, or for other reasonable purposes as the parties may mutually
agree.

 

Section 5.4 Post-Closing Access.

 

(a) By Sellers. Following the Closing, Sellers shall allow Buyer and its
representatives, upon reasonable prior notice, during regular business hours and
at Buyer’s expense, the right to examine and make copies of any Sellers books
and records for any reasonable business purpose concerning the conduct of the
Business prior to the Closing Date.

 

(b) By Buyer. At the Closing, Sellers shall leave in the possession of Vision
all original books and records of Vision and Texas MGA, and Sellers shall only
be allowed to retain copies of such books and records as they may reasonably
need for Tax and other reasonable business purposes. Following the Closing Date,
Buyer shall allow Sellers and their representatives, upon reasonable prior
notice, during regular business hours and at Sellers’ expense, the right to
examine and make copies of such books and records of Vision or Texas MGA for any
reasonable business purpose. Access to such books and records may not
unreasonably interfere with Buyer’s or any successor company’s business
operations.

 

Section 5.5 Filings; Other Actions; Notifications.

 

(a) Generally. Prior to the Closing, Sellers and Buyer shall cooperate with each
other and use (and shall cause their respective Affiliates to use) all
commercially reasonable efforts to do or cause to be done all things necessary,
proper or advisable on its part under applicable Laws and this Agreement to
consummate and make effective the transactions contemplated by this Agreement as
soon as practicable, including, without limitation, preparing and filing as
promptly as practicable all documentation to effect all necessary notices,
reports and other filings. Sellers and Buyer each shall keep the other apprised
of the status of matters relating to completion of the transactions contemplated
hereby, including promptly furnishing the other with copies of notices or other
communications received by Sellers, Vision or Buyer, as the case may be, or any
of their Affiliates, from any third party or Governmental Authority with respect
to the transactions contemplated by this Agreement. Sellers and Buyer each shall
give prompt notice to the other of any change that is reasonably likely to
result in a Sellers Material Adverse Effect or Buyer Material Adverse Effect,
respectively.

 

(b) AVIC Licenses. Prior to the Closing, Buyer will cause AVIC to use all
commercially reasonable efforts to obtain as expeditiously as possible the AVIC
Licenses. Nothing in this Agreement shall be construed to require Buyer or any
of its Affiliates, in connection with the receipt of any such AVIC License, to
agree or commit to (i) sell, hold separate, discontinue or limit, before or
after the Closing Date, any assets, businesses or interest

 

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in any assets or businesses of Buyer or any of its Affiliates (including for
this purpose Vision), or (ii) any conditions relating to, or changes or
restrictions in, the operations of the business of Buyer or its Affiliates, in
each case if the action required would, in Buyer’s reasonable judgment,
adversely impact the economic or business benefits to Buyer of the transactions
contemplated by this Agreement.

 

(c) Policy Forms and Rates. Prior to the Closing, at Buyer’s request, Vision
shall use all commercially reasonable efforts to prepare and assist Buyer in
filing all insurance policy form and rate filings that may be necessary in order
for AVIC or another insurance company affiliated with Buyer to issue insurance
policies marketed by Vision as part of the Business.

 

Section 5.6 Further Assurances. On and after the Closing Date, Sellers (as
reasonably requested from time to time by Buyer) and Buyer (as reasonably
requested from time to time by Sellers) shall take all reasonably appropriate
action and execute any additional documents, instruments or conveyances of any
kind (not containing additional representations and warranties) which may be
reasonably necessary to carry out any of the provisions of this Agreement.

 

Section 5.7 Expenses.

 

(a) Except as otherwise specifically provided in this Agreement, the parties to
this Agreement shall bear their respective expenses incurred in connection with
the preparation, execution and performance of this Agreement and the
transactions contemplated hereby, including, without limitation, all fees and
expenses of agents, representatives, counsel, investment bankers, actuaries and
accountants. All such expenses of Sellers and Vision shall be paid by Vision and
shall either be paid prior to the Closing or accrued as a liability on the
Closing Balance Sheet.

 

(b) Prior to the Closing, John Russell and Vision will use commercially
reasonable efforts to have Vision assign to John Russell, and John Russell
assume, all of Vision’s obligations under that certain Broker Agreement dated
May 3, 2004 between Vision and Kemper and Bowron LLC (the “Broker Agreement”),
pursuant to a form of assignment and assumption agreement reasonably acceptable
to Buyer. In the event that such assignment and assumption is not effected prior
to Closing, John Russell agrees that after Closing he shall reimburse Vision
immediately for any and all amounts that Vision is required to pay or other
costs incurred by Vision pursuant to such Broker Agreement.

 

Section 5.8 Tax Matters.

 

(a) Tax Periods Ending Before the Closing Date.

 

(i) Sellers shall prepare or cause to be prepared and file or cause to be filed
all Tax Returns for Vision and Texas MGA for all periods ending prior to the
Closing Date which are to be filed on or after the Closing Date, including a
final federal income Tax Return (“Pre-Closing Tax Returns”). The Pre-Closing Tax
Returns shall be prepared by Sellers in a manner that is, to the extent
permitted by Law, consistent with the last Tax

 

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Return filed by Sellers prior to the date of this Agreement in each relevant
jurisdiction with respect to Vision and Texas MGA. A copy of the Pre-Closing Tax
Returns shall be submitted to the Buyer at least thirty calendar days prior to
their due date, including extensions, and all reasonable changes requested by
Buyer shall be made to the Tax Returns. Sellers agree to make an election under
Section 754 of the Code on the final federal income Tax Return for Vision, if
the Buyer so requests.

 

(ii) Sellers shall timely pay all Taxes of Vision and Texas MGA with respect to
such periods ending prior to the Closing Date.

 

(b) Tax Periods Beginning Before and Ending On or After the Closing Date.

 

(i) Buyer shall prepare or cause to be prepared and file or cause to be filed
any Tax Returns of Vision for Tax periods which begin before the Closing Date
and end on or after the Closing Date (“Straddle Period Tax Returns”). Buyer
shall provide Sellers a copy of such Tax Returns within twenty days prior to
their due date for Sellers’ review and comment.

 

(ii) Sellers shall pay to Buyer within seven calendar days after the date on
which Buyer provides Seller with copies of the Tax Returns described in Section
5.8(b)(i) an amount equal to the portion of such Taxes allocable to the portion
of such Taxable period ending on the Closing Date (based on the method described
in Section 5.8(b)(iii)).

 

(iii) For purposes of this Agreement, in the case of any Taxes that are imposed
on a periodic basis and are payable for a Taxable period that includes (but does
not end on) the Closing Date, the portion of such Tax which relates to the
portion of such Taxable period ending on the Closing Date shall (x) in the case
of any Taxes other than Taxes based upon or related to income or receipts, be
deemed to be the amount of such Tax for the entire Taxable period multiplied by
a fraction the numerator of which is the number of calendar days in the Taxable
period ending on the Closing Date and the denominator of which is the number of
calendar days in the entire Taxable period, and (y) in the case of any Tax based
upon or related to income or receipts be deemed equal to the amount which would
be payable if the relevant Taxable period ended on the Closing Date. Any credits
relating to a Taxable period that begins before and ends after the Closing Date
shall be taken into account as though the relevant Taxable period ended on the
Closing Date. All determinations necessary to give effect to the foregoing
allocations shall be made in a manner consistent with prior practice of Visions.

 

(c) Cooperation on Tax Matters. Buyer and Sellers shall cooperate fully, as and
to the extent reasonably requested by the other party, in connection with the
filing of Tax Returns pursuant to this Section and any audit, litigation or
other proceeding with respect to Taxes. Such cooperation shall include the
retention and (upon the other party’s request) the provision of records and
information which are reasonably relevant to any such audit, litigation or other
proceeding and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder. Vision shall (i) retain all books and records with respect to Tax
matters pertinent to Vision and Texas MGA relating to any

 

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Taxable period beginning before the Closing Date until the expiration of the
statute of limitations (and, to the extent notified by Buyer or Sellers, any
extensions thereof) of the respective Taxable periods, and to abide by all
record retention agreements entered into with any taxing authority, and (ii) to
give the other party reasonable written notice prior to transferring, destroying
or discarding any such books and records and, if the other party so requests,
Vision or Sellers, as the case may be, shall allow the other party to take
possession of such books and records. Buyer and Sellers further agree, upon
request, to use their commercially reasonable efforts to obtain any certificate
or other document from any Governmental Authority or any other Person as may be
necessary to mitigate, reduce or eliminate any Tax that could be imposed
(including, but not limited to, with respect to the transactions contemplated by
this Agreement). Following the Closing Date, Buyer shall allow Sellers and their
representatives, upon reasonable prior notice, during regular business hours and
at Seller’s expense, the right to examine and make copies of such books and
records of Vision or Texas MGA.

 

(d) Certain Taxes. All transfer, documentary, sales, use, stamp, registration
and other such Taxes and fees (including any penalties and interest) incurred in
connection with this Agreement shall be borne by Sellers. Vision will file all
necessary Tax Returns and other documentation with respect to all such transfer,
documentary, sales, use, stamp, registration and other Taxes and fees, and, if
required by any Law, Sellers will, and will cause their Affiliates to, join in
the execution of any such Tax Returns and other documentation. The parties will
cooperate to the extent reasonably necessary to prepare such filings or returns
as may be required.

 

Section 5.9 Disclosure Supplements. From time to time prior to the Closing,
Sellers shall promptly supplement or amend the Sellers Disclosure Memorandum to
reflect any matter that, if existing, occurring or known on the date hereof,
should have been so disclosed or that is necessary to correct any information in
such Sellers Disclosure Memorandum that was or has been rendered inaccurate
since the date hereof; provided, however, that for purposes of determining the
rights and obligations of the parties under this Agreement, any such
supplemental or amended disclosure shall not be deemed to have been disclosed as
of the date hereof, or to cure any breach or inaccuracy of Seller’s
representations and warranties, unless so agreed to in writing by Buyer; and
provided, further, that such supplemental or amended disclosures by Sellers
shall not entitle Buyer to refuse to consummate the transactions contemplated
hereby unless such supplemental or amended disclosures, individually or in the
aggregate, disclose a failure of Sellers to satisfy any of the conditions to
Closing specified in Section 6.2 hereof.

 

Section 5.10 Certain Employee Matters.

 

(a) Employment Application Process; Notices to Employees. Prior to the Closing,
and at the request of Buyer, Vision shall require all of its employees to
participate in Buyer’s employment application process, including drug testing,
credit reporting and other applicable background screens. Buyer shall be
responsible for administering such process, and Buyer shall be responsible for
ensuring that such process complies with all Laws. If Buyer determines that any
of Vision’s employees do not satisfy Buyer’s normal and customary employment
criteria, Vision shall terminate such employees prior to the Closing Date if
Buyer so requests, and such

 

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individuals shall not be Closing Date Employees. The costs of such termination,
including any severance payments, shall be paid by Vision prior to the Closing
or accrued on the Closing Balance Sheet. Vision and Buyer shall cooperate and
mutually approve any notices or other announcements provided to Vision’s
employees regarding the transactions contemplated hereby or any compensation or
benefits to be provided to such employees after the Closing.

 

(b) Credit for Prior Service. Subject to applicable Laws, Buyer shall make
available to the Closing Date Employees, either on the Closing Date or as soon
thereafter as practicable, employee benefit plans generally provided to the
other similarly situated employees of Buyer and its Affiliates. To the extent
that any employee benefit plan, program or policy of Buyer is made available to
the Closing Date Employees after the Closing Date, Buyer shall, or shall cause
its applicable Affiliate to, grant the Closing Date Employees credit for service
with Vision prior to the Closing Date for purposes of eligibility and vesting
(but not for benefit accrual) to the extent that service of Buyer’s or its
applicable Affiliate’s employees is recognized for any such purpose.

 

(c) Personal Leave Accrual. After the Closing Date, subject to applicable Laws,
Buyer shall credit each Closing Date Employee with all unused personal leave
accumulated with Vision before the Closing Date in accordance with Vision’s
personal leave policy set forth in Section 5.10 of Sellers Disclosure
Memorandum, and the Closing Balance Sheet shall include an accrual for the cost
of such vacation. In addition, any unused sick leave will be credited to the
Buyer’s short-term disability plan.

 

(d) Employee Bonuses.

 

(i) Special Agreements. John Russell and Vision have entered into Agreements and
Releases with certain current and former Vision employees as set forth and
attached as Exhibit K (the “Bonus Agreements”), pursuant to which such
individuals will be entitled to certain bonus payments in connection with the
Closing (“Special Bonuses”). With respect to each such Bonus Agreement that
gives Vision the discretion to elect a form of payment to the current or former
employee, John Russell and Vision agree that Vision shall elect a form of
payment that does not entitle the current or former employee to any portion of
any Earnout Payment. The Bonus Agreements shall not be assigned, amended or
modified in any way prior to the Closing, and Vision shall not enter into any
Bonus Agreement not listed on Exhibit K on the date of this Agreement. None of
Sellers nor Vision has made any commitment to any current or former employee of
Vision that could permit such employee to share in any Earnout Payment.

 

(ii) Costs. As between Vision and John Russell, John Russell shall personally be
responsible for all costs of the Special Bonuses and all costs under the Bonus
Agreements, including all Taxes owed by Vision in connection therewith and other
costs to Vision. Prior to the Closing, John Russell shall make a capital
contribution to Vision of sufficient cash to cover all such costs of the Special
Bonuses and other amounts owed in connection with the Bonus Agreements, or
allocate a sufficient amount of the Cash Portion or the Initial Purchase Price
to make such Special Bonuses and other payments, or otherwise make appropriate
provision to reimburse Vision as may be agreed by Buyer.

 

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With respect to any other bonuses of any other type due to employees of Vision,
prior to the Closing, Vision shall pay all cash or other bonuses to which Vision
employees are entitled, or such obligations will be accrued on the Closing
Balance Sheet.

 

(e) Treatment of Certain Vision Benefit Plans. Prior to the Closing Date, Vision
will take all actions reasonably necessary or appropriate to fulfill all of its
obligations to contribute to and administer the Vision Benefit Plans in
accordance with their terms, including making all employer contributions to the
accounts of all Vision employees through the day immediately preceding the
Closing Date. In addition, at the request of Buyer, Vision will take all steps
reasonably necessary to terminate (i) effective on the Business Day immediately
preceding the Closing Date, each Vision Benefit Plan that is a plan subject to
ERISA, and (ii) effective prior to the Closing Date, any other Vision Benefit
Plan that may be requested by Buyer, in each case with Vision providing any
required notices, adopting any required amendments and adopting appropriate
board of directors resolutions. In addition, prior to the Closing Date, Vision
shall take any and all further actions necessary to retain the tax-qualified
status of each Vision Benefit Plan that is a tax-qualified plan, including: (i)
the preparation, execution and submission of such plans to the Internal Revenue
Service under the Employee Plan Compliance Resolution System set forth in
Revenue Procedure 2003-44; (ii) the preparation and execution of any amendment
deemed necessary in connection with such submission; (iii) the retention of
service providers to assist in the preparation of such submission; and (iv) the
preparation and distribution of the appropriate employee communications related
to the submission. Vision shall provide Buyer with copies of all documents
produced in accordance with the preceding sentence prior to their execution or
distribution, as applicable. Any costs to Vision of terminating Vision Benefit
Plans shall be paid by Vision prior to the Closing or accrued on the Closing
Balance Sheet.

 

Section 5.11 Press Releases and Public Announcements. With Sellers and Vision
being one party for this purpose, and Buyer being one party, each party shall
submit any proposed press release, media alert, public announcement or other
similar notice related to this Agreement or any transaction contemplated hereby,
to the other party for its approval (which approval shall not be unreasonably
withheld, conditioned or delayed) not less than three Business Days prior to
sending any such release, alert, announcement or notice. Without such approval
of the other party, no disclosure of this Agreement or the transactions
contemplated hereby shall be made except to the extent required by applicable
Law or Order, or by applicable rules or regulations of a national or foreign
stock exchange or the Automated Quotation System maintained by the National
Association of Securities Dealers, Inc.

 

Section 5.12 Earnout Frustration. Buyer shall not, and shall cause Vision not
to, take any action the primary purpose of which is to frustrate (i) the ability
of Vision to meet the EBITDA or Revenue targets necessary to earn the Earnout
Payments or (ii) the payment of the Earnout Payments if earned. Sellers
acknowledge and agree that Buyer or Vision may take actions with the primary
purpose of changing Vision’s Business for economic, regulatory or other rational
business reasons that might have an unintended effect on the Earnout Payments,
and that such actions will not violate this Section 5.12.

 

Section 5.13 Buyer Nonrecruitment Covenant. Buyer hereby specifically
acknowledges and agrees that at no time prior to the Closing Date or, in the
event the

 

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transactions contemplated by this Agreement are not consummated, that for a
period of one year after the termination of this Agreement, will Buyer or any of
its Affiliates employ or seek to employ any individual who, at the time of the
execution of this Agreement, currently works or worked during the past three
months for Vision, except with the written consent of Vision; provided, however,
that the foregoing shall not prevent Buyer or its Affiliates from employing an
individual who contacts Buyer or its Affiliates on his or her own initiative
without any direct or indirect solicitation by or encouragement from Buyer or
its Affiliates (other than general solicitations in publications or on websites,
or use of search firms, in each case not targeted specifically at such
individual).

 

Section 5.14 John Russell Nonrecruitment, Nonsolicitation and Noncompetition
Covenants.

 

(a) Nonrecruitment of Employees. In consideration of the Initial Purchase Price
and possible Earnout Payments to be paid to John Russell as a Seller hereunder,
John Russell hereby agrees that, during the five years immediately following the
Closing Date, he shall not, directly or indirectly, solicit or recruit for
employment or encourage to leave employment with Buyer or any of its Affiliates
(including Vision for purposes of this Section 5.14) (collectively, the “Alfa
Companies”), on his own behalf or on behalf of any other person or entity other
than an Alfa Company, any person employed by an Alfa Company or any person who
was employed by an Alfa Company within the twelve months immediately preceding
such solicitation or recruitment. In addition, John Russell agrees to exercise
commercially reasonable efforts to prevent any of the activities listed in this
Section 5.14(a) from occurring. Notwithstanding the foregoing, the prohibitions
of this Section 5.14 shall not prohibit John Russell, or any entity with respect
to which John Russell is an employee, director, or investor, from employing an
individual who contacts John Russell or such entity on his or her own initiative
without any direct or indirect solicitation by or encouragement from John
Russell or such entity (other than general solicitations in publications or on
websites, or the use of search firms, so long as such general solicitations or
search firm activities are not targeted specifically at an Alfa Company
employee).

 

(b) Nonsolicitation of Policyholders and Agents. In consideration of the Initial
Purchase Price and possible Earnout Payments to be paid to John Russell as a
Seller hereunder, John Russell hereby agrees that, during the five years
immediately following the Closing Date, he shall not, directly or indirectly, on
behalf of himself or of anyone other than an Alfa Company, (i) solicit or
attempt to solicit any person covered by a non-standard automobile policy issued
by any Alfa Company for the purpose of selling such person a non-standard
automobile insurance policy issued by any insurance company other than an Alfa
Company; or (ii) solicit or attempt to solicit any person who is, or has been
during the twelve months prior to such act of solicitation, an agent appointed
by any Alfa Company to sell non-standard automobile insurance for the purpose of
appointing such person to sell non-standard automobile insurance for any
insurance company other than an Alfa Company. In addition, John Russell agrees
to exercise commercially reasonable efforts to prevent any of the activities
listed in this Section 5.14(b) from occurring.

 

(c) Noncompetition. In consideration of the Initial Purchase Price and possible
Earnout Payments to be paid to John Russell as a Seller hereunder, John Russell
hereby agrees

 

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that, during the five years immediately following the Closing Date, he shall
not, without the prior written consent of Buyer, engage or participate in the
Business Activities within the Restricted Area, as a business executive or
equity owner, of any business or enterprise that directly competes with the Alfa
Companies. For purposes of this Section 5.14(c), the “Business Activities” shall
be the business of marketing, underwriting and administering non-standard
automobile insurance policies. For purposes of this Section 5.14(c), the
“Restricted Area” shall be the States of Alabama, Arkansas, Florida, Georgia,
Indiana, Kentucky, Mississippi, Missouri, Ohio, Tennessee, Texas and Virginia.
Nothing in this Section 5.14(c) shall prohibit John Russell from acquiring or
holding, for investment purposes only, less than five percent (5%) of the
outstanding publicly traded securities of any corporation which may compete
directly or indirectly with the Alfa Companies.

 

(d) Certain Limits. In the event that, during the five years following the
Closing Date, Buyer or one of its Affiliates terminates the employment of John
Russell without “Cause” (as that term is defined in the John Russell Employment
Agreement), and thereafter John Russell elects, in his sole discretion, to
forego his eligibility to receive future potential Earnout Payments, then the
covenants in Sections 5.14(a), (b) and (c) shall not apply for the period of
time that John Russell foregoes such eligibility to receive potential Earnout
Payments; provided, however, that in no event shall the covenants in Sections
5.14(a), (b) and (c) apply for less than three years after the Closing Date.

 

(e) Enforceability of Covenants. John Russell acknowledges that the Alfa
Companies have a present and future expectation of business within the
geographic areas served by them and from their present and proposed customers.
John Russell further acknowledges the reasonableness of the term, geographic
area and scope of the covenants set forth in this Section 5.14, and agrees that
he will not, in any action, suit or other proceeding, deny the reasonableness
of, or assert the unreasonableness of, the premises, consideration or scope of
the covenants set forth herein. John Russell further acknowledges that complying
with the provisions contained in this Section 5.14 will not preclude him from
engaging in a lawful profession, trade or business, or from becoming gainfully
employed. John Russell and Buyer agree that John Russell’s obligations under the
covenants in this Section 5.14 are separate and distinct under this Agreement,
and the failure or alleged failure of any Alfa Company to perform its
obligations under any provision of this Agreement, the John Russell Employment
Agreement or any other agreement among the parties, shall not constitute a
defense to the enforceability of the covenants in this Section 5.14. John
Russell agrees that any breach of any of the covenants in this Section 5.14 will
result in irreparable damage and injury to the Alfa Companies and that Buyer
will be entitled to injunctive relief in any court of competent jurisdiction
without the necessity of posting any bond. John Russell also agrees that he
shall be responsible for all damages incurred by the Alfa Companies due to any
breach of the restrictive covenants contained in this Agreement and that Buyer
shall be entitled to have John Russell pay all costs and attorneys’ fees
incurred by Buyer in enforcing the restrictive covenants in this Section 5.14.

 

Section 5.15 Dorinco Reinsurance Settlement; Personal Guarantees.

 

(a) Dorinco Reinsurance Settlement. Prior to Closing, Sellers and Vision shall
use commercially reasonable efforts to enter into a written agreement with
Dorinco Reinsurance

 

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Company, in form and substance reasonably satisfactory to Sellers Representative
and Buyer and approved by Buyer prior to its execution, which shall supersede
any and all oral Contracts between Vision and Dorinco Reinsurance Company. At
Closing, either (i) John Russell shall personally pay to Dorinco Reinsurance
Company any and all amounts owed thereto by Vision; or (ii) the Closing Interim
Statements and the Closing Balance Sheet shall include an accrued liability for
the full amount owed to Dorinco Reinsurance Company by Vision, in which event
Vision will make the payment to Dorinco Reinsurance Company. In addition, John
Russell shall indemnify Buyer for any other Loss arising in connection with the
business relationship between Vision and Dorinco Reinsurance Company.

 

(b) Personal Guarantees. John Russell is currently obligated under the four
personal guarantees listed in Section 5.15 of the Sellers Disclosure Memorandum
(the “Personal Guarantees”). At Closing, or as soon as practicable thereafter,
Buyer shall, or shall cause Vision to, take all actions necessary to cancel the
Personal Guarantees or otherwise remove John Russell from any liability
thereunder, provided that Section 5.15(a) has been complied with.

 

ARTICLE 6

CONDITIONS TO CLOSING

 

Section 6.1 Conditions to Obligations of Sellers. The obligations of Sellers to
consummate the transactions contemplated hereby are subject to the fulfillment
prior to or at Closing of the following conditions, any one or more of which may
be waived by Sellers:

 

(a) Representations and Warranties. The representations and warranties of Buyer
set forth in this Agreement shall be true and correct in all material respects
(or in all respects in the case of any representation or warranty containing any
materiality qualification) at and as of the Closing Date, as though made at and
as of such date except for changes permitted by this Agreement and except to the
extent that any representation or warranty is made as of a specified date, in
which case such representation or warranty shall be true in all material
respects (or in all respects in the case of any such representation or warranty
containing any materiality qualification) as of such date.

 

(b) Covenants. Buyer shall have performed and complied with all of its covenants
hereunder in all material respects through the Closing.

 

(c) Bringdown Certificate. Buyer shall have delivered to Sellers a certificate
to the effect that each of the conditions specified above in Sections 6.1(a) and
(b) is satisfied in all respects.

 

(d) No Injunction. There shall not be any injunction, judgment, Order, decree or
ruling in effect that prohibits or enjoins, or any Litigation pending that seeks
to prohibit or enjoin or that seeks material monetary damages with respect to,
the consummation of the transactions contemplated by this Agreement.

 

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(e) Certified Resolutions. Buyer shall have delivered to Sellers a certified
copy of the resolutions duly adopted by Buyer’s board of directors approving the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby.

 

(f) Good Standing Certificate. Buyer shall have delivered to Sellers a
certificate of good standing for Buyer issued within fifteen calendar days prior
to the Closing Date by the Delaware Secretary of State.

 

(g) No Buyer Material Adverse Effect. There shall not have occurred any Buyer
Material Adverse Effect, and Sellers shall have received from Buyer a
certificate dated as of the Closing Date signed by Buyer to such effect.

 

(h) Other Deliveries. Sellers shall have received all other documents,
instruments and payments listed in Section 2.6(c).

 

Section 6.2 Conditions to Obligations of Buyer. The obligations of Buyer to
consummate the transactions contemplated hereby are subject to the fulfillment
prior to or at Closing of the following conditions, any one or more of which may
be waived by Buyer:

 

(a) Representations and Warranties. The representations and warranties of
Sellers and Vision set forth in this Agreement shall be true and correct in all
material respects (or in all respects in the case of any representation or
warranty containing any materiality qualification) at and as of the Closing Date
as though made at and as of such date except for changes permitted by this
Agreement and except to the extent that any representation or warranty is made
as of a specified date, in which case such representation or warranty shall be
true in all material respects (or in all respects in the case of any such
representation or warranty containing any materiality qualification) as of such
date.

 

(b) Covenants. Sellers and Vision shall have performed and complied with all of
their covenants hereunder in all material respects through the Closing.

 

(c) Bringdown Certificate. Sellers shall have delivered to Buyer a certificate
to the effect that each of the conditions specified above in Sections 6.2(a) and
(b) is satisfied in all respects.

 

(d) No Injunction. There shall not be any injunction, judgment, Order, decree or
ruling in effect that prohibits or enjoins, or any Litigation pending that seeks
to prohibit or enjoin or that seeks material monetary damages with respect to,
the consummation of the transactions contemplated by this Agreement.

 

(e) Certified Resolutions. Sellers shall have delivered to Buyer a certified
copy of the resolutions duly adopted by Vision’s members, or other limited
liability company action, approving the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby.

 

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(f) Good Standing Certificates. Sellers shall have delivered to Buyer a
certificate of good standing for Vision issued within fifteen calendar days
prior to the Closing Date by the Secretary of State or other applicable
Governmental Authority of each jurisdiction listed in Section 3.1 of Sellers
Disclosure Memorandum.

 

(g) MGA Licenses. Sellers shall have delivered to Buyer evidence reasonably
satisfactory to Buyer that all of Vision’s managing general agent licenses
listed in Section 3.11 of Sellers Disclosure Memorandum are in full force and
effect as of the Closing Date.

 

(h) No Sellers Material Adverse Effect. There shall not have occurred any
Sellers Material Adverse Effect, and Buyer shall have received a certificate
dated as of the Closing Date signed by Sellers to such effect.

 

(i) Texas Merger. Seller shall have delivered to Buyer a copy of certificates of
merger issued by the Secretaries of State of Texas and Tennessee confirming that
the Texas Merger was effective prior to the Closing Date.

 

(j) Third-Party Consents. Sellers shall have delivered to Buyer evidence
reasonably satisfactory to Buyer that the approvals and consents listed in
Section 6.2(j) of Sellers Disclosure Memorandum have been received or deemed
received in each case without any conditions, restrictions or limitations.

 

(k) Other Deliveries. Buyer shall have received all other documents, instruments
and payments listed in Section 2.6(b).

 

ARTICLE 7

TERMINATION

 

Section 7.1 Termination by Mutual Consent. This Agreement may be terminated and
the transactions contemplated hereby may be abandoned at any time prior to the
Closing Date by mutual written consent of Sellers and Buyer.

 

Section 7.2 Termination by Either Sellers or Buyer. This Agreement may be
terminated and the transactions contemplated hereby may be abandoned by either
Sellers or Buyer, upon five Business Days’ notice to the other party, if the
Closing does not occur on January 3, 2005 (the “Termination Date”). The right to
terminate this Agreement pursuant to this Section 7.2 shall not be available to
any party that has breached in any material respect its obligations under this
Agreement in any manner that shall have proximately contributed to the
occurrence of the failure of the transactions contemplated by this Agreement to
be consummated.

 

Section 7.3 Termination by Sellers. This Agreement may be terminated and the
transactions contemplated hereby abandoned at any time prior to the Closing Date
by Sellers if there has been a material breach by Buyer of any representation,
warranty, covenant or agreement contained in this Agreement that, individually
or together with all such breaches, would prevent any of the conditions set
forth in Article 6 from being satisfied (other than by waiver) prior to the
Termination Date and that is not curable or, if curable, is not cured within
twenty calendar days after written notice of such breach is given by Sellers to
Buyer.

 

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Section 7.4 Termination by Buyer. This Agreement may be terminated and the
transactions contemplated hereby abandoned at any time prior to the Closing Date
by Buyer if there has been a material breach by Sellers of any representation,
warranty, covenant or agreement contained in this Agreement that, individually
or together with all such breaches, would prevent any of the conditions set
forth in Article 6 from being satisfied (other than by waiver) prior to the
Termination Date and that is not curable or, if curable, is not cured within
twenty calendar days after written notice of such breach is given by Buyer to
Sellers.

 

Section 7.5 Effect of Termination and Abandonment.

 

(a) Certain Termination Fee. In the event that (i) all the conditions to Buyer’s
obligation to close that are set forth in Section 6.2 have been satisfied or
waived on or before January 3, 2005, (ii) the transactions contemplated by this
Agreement are not consummated by close of business on January 3, 2005, and (iii)
Sellers have not breached in any material respect their obligations under this
Agreement in any manner that shall have proximately contributed to the
occurrence of the failure of the transactions contemplated by this Agreement to
be consummated, then Buyer shall pay to Sellers a termination fee of Two Million
Dollars ($2,000,000) in cash not later than January 7, 2005 (the “Termination
Fee”). Any such Termination Fee paid by Buyer shall be paid to the Sellers
Representative on behalf of the Sellers.

 

(b) In the event of termination of this Agreement and the abandonment of the
transactions pursuant to this Article 7, this Agreement shall become void and of
no effect with no liability on the part of any party hereto (or of any of its
representatives); provided, however, except as otherwise provided herein, no
such termination shall relieve any party hereto of any liability or damages
resulting from any breach of this Agreement; and provided, further, that if
Buyer pays the Termination Fee contemplated by Section 7.5(a), such Termination
Fee shall be the only amount to which Sellers are entitled under the
circumstances described in Section 7.5(a), regardless of any reason for Buyer’s
refusal or failure to consummate the transactions, and Sellers hereby
acknowledge and agree that they shall not seek nor be entitled to any other
remedy of any type.

 

ARTICLE 8

INDEMNIFICATION

 

Section 8.1 Survival of Representations, Warranties and Covenants. All
representations and warranties, and all pre-closing covenants and agreements,
made or undertaken by the parties in this Agreement shall survive the Closing
through close of business on the third anniversary of the Closing Date;
provided, however, that the representations and warranties contained in Sections
3.16 and 3.18 shall terminate at close of business on the later of the third
anniversary of the Closing Date or the 60th calendar day following the
expiration of the applicable statute of limitations with respect to the matters
contained therein; provided, further,

 

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that the representations and warranties contained in Sections 3.5, 3.6 and
3.11(g) shall survive the Closing indefinitely; and provided, further that the
representations and warranties in Section 3.10 shall survive the Closing through
close of business on the second anniversary of the Closing Date.

 

Section 8.2 Obligation of Sellers to Indemnify.

 

(a) Obligation to Indemnify. John Russell and Carol Russell (together, “Seller
Indemnitors”), jointly and severally, covenant and agree to defend, indemnify
and hold harmless Buyer, its Affiliates (including, for this purpose, Vision
after the Closing), and their respective officers, directors and employees
(collectively, the “Buyer Indemnitees”) from and against, and pay or reimburse
the Buyer Indemnitees for, any and all Losses asserted against, imposed upon or
incurred by Buyer Indemnitees resulting from, arising out of, based upon or
otherwise in respect of any of the following:

 

(i) any breach of or inaccuracy in any representation or warranty of Sellers or
Vision contained in this Agreement (such breach or inaccuracy being determined
without regard to (1) any materiality qualification contained in or otherwise
applicable to such representation or warranty or (2) whether disclosed to Buyer
in any supplementation pursuant to Section 5.9);

 

(ii) any failure of Sellers or Vision to perform any pre-Closing covenant or
agreement hereunder, or any failure of Sellers to perform any post-Closing
covenant or agreement hereunder, unless waived in writing by Buyer;

 

(iii) any Taxes of the Sellers, Vision or Texas MGA related to taxable periods
ending (or the portion of a taxable period ending) prior to the Closing Date;

 

(iv) any Loss with respect to the Bonus Agreements or the Special Bonuses,
including any claim to a Special Bonus made by a Person who did not receive such
a payment;

 

(v) any Loss resulting from discrepancies between the amounts that Vision
collected on behalf of, and the amounts Vision remitted to, the insurance
carriers with which Vision or Texas MGA does business, in Vision’s or Texas
MGA’s capacity as fiduciary for such carriers;

 

(vi) any Loss with respect to the Litigation matters described in Section 8.2 of
Sellers Disclosure Memorandum;

 

(vii) the indemnity provided for in Section 5.15(a); or

 

(viii) the reasonable costs to Buyer of enforcing this indemnity against Seller
Indemnitors.

 

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(b) Deductible. Seller Indemnitors shall not be required to indemnify the Buyer
Indemnitees with respect to any claim for indemnification pursuant to Section
8.2(a)(i) unless and until (i) the amount of any such individual claim (or
series of related claims) exceeds Twenty-Five Thousand Dollars ($25,000), at
which time Seller Indemnitors shall be liable for only the amount by which such
claim (or series of related claims) exceeds Twenty-Five Thousand Dollars
($25,000), or (ii) the aggregate amount of all such claims (including those
under $25,000 per claim) exceeds One Hundred Thousand Dollars ($100,000), at
which time Seller Indemnitors shall be liable for only the amount by which such
claim exceeds Fifty Thousand Dollars ($50,000). Notwithstanding the foregoing
sentence, indemnification claims relating to Sections 3.1 (“Organization,
Standing and Power”), 3.2 (“Authority”), 3.5 (“Ownership of Interests”), 3.6
(“Capitalization of Texas MGA”), 3.11(g) (“Compliance With Laws; Insurance
Matters”), 3.16 (“Employee Benefits Plans; ERISA”), and 3.18 (“Tax Matters”),
and indemnification claims pursuant to Sections 8.2(a)(ii), (iii), (iv), (v),
(vi), (vii) and (viii) shall not be subject to any deductible.

 

(c) Cap. The Buyer Indemnitees shall not be entitled to recover from the Seller
Indemnitors under the provisions of Section 8.2(a) an aggregate amount in excess
of 0.75 multiplied by the Initial Purchase Price plus any Earnout Payments that
are paid.

 

Section 8.3 Obligation of Buyer to Indemnify.

 

(a) Obligation to Indemnify. Buyer covenants and agrees to defend, indemnify and
hold harmless Sellers and their Affiliates (for this purpose, not including
Vision after the Closing), and their respective officers, directors and
employees (collectively, the “Seller Indemnitees”) from and against, and pay or
reimburse the Seller Indemnitees for, any and all Losses asserted against,
imposed upon or incurred by Seller Indemnitees resulting from, arising out of,
based upon or otherwise in respect of any of the following:

 

(i) any breach of or inaccuracy in any representation or warranty of Buyer
contained in this Agreement;

 

(ii) any failure of Buyer to perform any pre-Closing or post-Closing covenant or
agreement hereunder, unless waived in writing by Sellers;

 

(iii) any wrongful termination of an employee by Vision pursuant to Buyer’s
instructions under Section 5.10(a); or

 

(iv) the reasonable costs to Sellers of enforcing this indemnity against Buyer.

 

(b) Deductible. Buyer shall not be required to indemnify the Seller Indemnitees
with respect to any claim for indemnification pursuant to Section 8.3(a)(i)
unless and until (i) the amount of any such individual claim (or series of
related claims) exceeds Twenty-Five Thousand Dollars ($25,000), at which time
Buyer shall be liable for only the amount by which such claim (or series of
related claims) exceeds Twenty-Five Thousand Dollars ($25,000), or (ii) the
aggregate amount of all such claims (including those under $25,000 per claim)
exceeds One Hundred Thousand Dollars ($100,000), at which time Buyer shall be
liable for only the amount

 

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by which such claims exceed Fifty Thousand Dollars ($50,000). Notwithstanding
the foregoing sentence, indemnification claims relating to Sections 4.1
(“Organization, Standing and Power”), 4.2 (“Authority”) and 4.6 (“Sufficient
Funds”), and indemnification claims pursuant to Sections 8.3(a)(ii), (iii) and
(iv), shall not be subject to any deductible.

 

(c) Cap. The Seller Indemnitees shall not be entitled to recover from Buyer
under the provisions of Section 8.3(a) an aggregate amount in excess of 0.75
multiplied by the Initial Purchase Price plus any Earnout Payments that are
paid.

 

Section 8.4 Procedure for Indemnification Claims.

 

(a) Notice of Loss or Asserted Liability. Promptly after (i) becoming aware of
circumstances that have resulted in a Loss for which a party entitled to
indemnification pursuant to Section 8.2 or Section 8.3 intends to seek
indemnification (the “Indemnified Party”) or (ii) receipt by the Indemnified
Party of written notice of any demand, claim or circumstances which, with the
lapse of time, the giving of notice or both, would give rise to a claim or the
commencement of any litigation that may result in a Loss (an “Asserted
Liability”), the Indemnified Party shall give notice thereof (the “Claims
Notice”) to the party obligated to provide indemnification (the “Indemnifying
Party”). The Claims Notice shall describe the Loss or the Asserted Liability in
reasonable detail, and shall indicate the amount (estimated, if necessary) of
the Loss or Asserted Liability that has been or may be suffered by the
Indemnified Party. If a Claims Notice is not provided promptly as required by
this Section 8.4, the Indemnified Party nonetheless shall be entitled to
indemnification by the Indemnifying Party except to the extent that the
Indemnifying Party is prejudiced or suffer losses by such late receipt of the
Claims Notice.

 

(b) Opportunity to Defend or Contest Asserted Liability. The Indemnifying Party
may elect to assume the defense of or contest, at its own expense, any Asserted
Liability. If the Indemnifying Party elects to defend or contest such Asserted
Liability, it shall within thirty calendar days (or sooner, if the nature of the
Asserted Liability so requires) notify the Indemnified Party of its intent to do
so by sending a notice to the Indemnified Party (the “Contest Notice”), and the
Indemnified Party shall cooperate, at the expense of the Indemnifying Party, in
the defense or contest of such Asserted Liability. Counsel for the Indemnifying
Party who shall conduct the defense or contest of the Asserted Liability shall
be reasonably satisfactory to the Indemnified Party. If the Indemnifying Party
elects not to defend or contest the Asserted Liability, fails to notify the
Indemnified Party of its election as herein provided, or contests its obligation
to indemnify under this Agreement, the Indemnified Party (upon further notice to
the Indemnifying Party) shall have the right to pay, defend or contest such
Asserted Liability on behalf of and for the account and risk of the Indemnifying
Party. In any event, each of the Indemnified Party and the Indemnifying Party
may participate, at such party’s own expense, in the defense or contest of such
Asserted Liability.

 

(c) Cooperation With Respect to Asserted Liabilities. Seller Indemnitors and
Buyer shall cooperate fully with the other as to all Asserted Liabilities, shall
make available to each other as reasonably requested all information, records
and documents relating to all Asserted Liabilities and shall preserve all such
information, records and documents until the termination

 

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of any Asserted Liability. Seller Indemnitors and Buyer also shall make
available to the other, as reasonably requested, its personnel, agents, and
other representatives who are responsible for preparing or maintaining
information, records or other documents, or who may have particular knowledge
with respect to any Asserted Liability.

 

(d) Settlement of Asserted Liabilities. If the Indemnifying Party assumes the
defense of an Asserted Liability, (i) no compromise or settlement thereof may be
effected by the Indemnifying Party without the Indemnified Party’s consent
unless (1) there is no finding or admission of any violation of Law on the part
of Indemnified Party and no effect on any other claim that may be made against
the Indemnified Party, (2) the sole relief provided is monetary damages that are
paid in full by the Indemnifying Party, and (3) the compromise or settlement
includes, as an unconditional term thereof, the giving by the claimant or the
plaintiff to the Indemnified Party of a release, in form and substance
reasonably satisfactory to the Indemnified Party, from all liability in respect
of such Asserted Liability, and (ii) the Indemnified Party shall have no
liability with respect to any compromise or settlement thereof effected without
its consent.

 

(e) Losses Not Involving Asserted Liabilities. Upon receipt of a Claims Notice
relating to a Loss that does not involve an Asserted Liability, the Indemnifying
Party shall provide a written response to the Indemnified Party within thirty
calendar days stating the Indemnifying Party’s position with respect to its
obligations under this Article 8. The Indemnifying Party and the Indemnified
Party shall then attempt in good faith to resolve all disputes regarding such
Loss within thirty calendar days from the date the Indemnified Party receives
such written response from the Indemnifying Party and, if the parties cannot
reach agreement on all such disputes within such thirty calendar day period (or
such longer period as they may mutually agree), then either party shall be
entitled to request arbitration of the matter pursuant to Section 9.1.

 

(f) Payment. Upon determination of the amount of a Loss or Asserted Liability
that is binding on both the Indemnifying Party and the Indemnified Party, the
Indemnifying Party shall pay the amount of such Loss or Asserted Liability by
wire transfer of immediately available funds within five Business Days of the
date such amount is determined.

 

Section 8.5 Insurance; Subrogation.

 

(a) Insurance. Any indemnity payment made by an Indemnifying Party pursuant to
this Article 8 shall be reduced by an amount equal to (i) any third party
insurance proceeds realized by and paid to the Indemnified Party minus (ii) any
related costs and expenses, including the aggregate cost of pursuing any related
insurance claims. The Indemnified Party shall use all commercially reasonable
efforts to make insurance claims relating to any claim for which it is seeking
indemnification pursuant to this Article 8; provided, that (1) the Indemnified
Party shall not be obligated to make such an insurance claim if the Indemnified
Party in its reasonable judgment believes that the cost of pursuing such an
insurance claim together with any correspondent increase in insurance premiums
or other chargebacks to the Indemnified Party would exceed the value of the
claim for which the Indemnified Party is seeking indemnification pursuant to
this Article 8, and (2) no Indemnified Party shall be required to keep or
maintain any particular level of insurance.

 

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(b) Subrogation. Upon the Indemnifying Party’s payment in full of an
indemnification claim under this Article 8, such Indemnifying Party shall be
subrogated to all rights of the Indemnified Party with respect to the Loss to
which such indemnification relates; provided, however, that the Indemnifying
Party shall only be subrogated to the extent of any amount paid by it pursuant
to this Article 8 in connection with such Loss.

 

Section 8.6 Buyer’s Rights of Setoff. To the extent that Seller Indemnitors owe
any amount to the Buyer Indemnitees under this Article 8, and such amount is not
paid in accordance with Section 8.4(f), Buyer shall have the right to setoff
such amount at Buyer’s election: (a) against any Earnout Payment due to Sellers
pursuant to Section 2.3 hereof; (b) the Existing A/R LOC and the Future Claims
LOC; or (c) during the twelve months immediately following the Closing Date,
against any Buyer Shares that are delivered to Sellers at Closing by canceling
such Buyer Shares on Buyer’s stock records (applying the per share price of
Buyer Common Stock in effect on the last date that payment was due to Buyer
under Section 8.4(f)), in which event Sellers shall return to Buyer the original
stock certificate and Buyer shall issue a new certificate for any remaining
Buyer Shares not canceled pursuant to the setoff.

 

Section 8.7 Sole Remedy. The indemnity provided for in this Article 8 shall be
the sole and exclusive remedy of the parties hereto after the Closing, provided
that nothing herein shall limit in any way any such party’s remedies in respect
of fraud by the other party in connection herewith or the transactions
contemplated hereby or the rights of such party to such equitable remedies as
may be available in respect of fraud.

 

ARTICLE 9

MISCELLANEOUS

 

Section 9.1 Arbitration.

 

(a) The parties shall negotiate in good faith to resolve any dispute arising
under this Agreement. Any such dispute that remains outstanding after thirty
calendar days (which shall be the same thirty days required under Sections 2.3
and 2.5 if the dispute has arisen with respect to either such Section) shall be
submitted for decision to a single arbitrator (the “Umpire”) who is an
independent accountant, actuary or lawyer and who has not, and whose firm has
not, provided material services to either party within the three years
immediately preceding the date of the notice requesting arbitration. Notice
requesting arbitration, as well as all other notices required or permitted under
this Section 9.1, must be in writing and sent in accordance with Section 9.6.
For purposes of this Section 9.1, Buyer shall be considered one party, and
Sellers (represented by Sellers Representative) shall be considered one party.
This Section 9.1 shall not apply to Buyer’s right to seek injunctive relief
under Section 5.14.

 

(b) The parties shall undertake in good faith to agree on the Umpire. If the
parties cannot so agree within thirty calendar days after either party has given
the notice of arbitration as provided above, either party may request the
American Arbitration Association in Atlanta, Georgia to designate an Umpire with
the qualifications set forth above, who shall preside over the arbitration.

 

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(c) The arbitration shall be conducted expeditiously and confidentially in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, as such rules shall be in effect on the date of delivery of the
notice requesting arbitration, except to the extent such rules are inconsistent
with the express provisions of this Section 9.1.

 

(d) Within thirty calendar days after notice of appointment of the Umpire, the
Umpire shall commence the arbitration, and the Umpire and the parties hereto
shall use commercially reasonable efforts to conclude the arbitration hearings
with such thirty calendar day period. The Umpire shall be relieved of all
judicial formality and shall not be bound by the strict rules of procedure and
evidence, provided, however, that each party shall be entitled to reasonable
discovery in preparing its evidence and arguments. The arbitration shall take
place in Atlanta, Georgia. Insofar as the Umpire looks to substantive Law, the
Law of Tennessee shall govern. The decision of the Umpire when rendered in
writing shall be final and binding. The Umpire is empowered to grant interim
relief as he or she may deem appropriate.

 

(e) The Umpire shall render his or her decision, which shall be in writing and
state the reasons therefor, within thirty calendar days following the
termination of hearings. Judgment upon the award may be entered in any court
having jurisdiction thereof. Each party shall jointly and equally bear with the
other party the cost of the Umpire. The remaining costs of the arbitration shall
be allocated by the Umpire. The Umpire may, at his or her discretion, award such
further costs and expenses as he or she considers appropriate, including but not
limited to interest and attorneys’ fees. The Umpire shall not award punitive
damages under any circumstances.

 

Section 9.2 Entire Agreement; No Third Party Beneficiaries. Except as otherwise
expressly provided herein, this Agreement (including Sellers Disclosure
Memorandum and the other documents and instruments referred to herein)
constitutes the entire agreement between the parties with respect to the
transactions contemplated hereby and supersedes all prior arrangements or
understandings with respect thereto, written or oral. Nothing in this Agreement,
expressed or implied, is intended to confer upon any Person, other than the
parties or their respective successors, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement.

 

Section 9.3 Amendments. This Agreement may be amended only by a subsequent
writing signed by all parties. No course of performance by any party hereto
shall be deemed to modify or amend this Agreement unless the same shall be
consented to in a writing signed by all parties.

 

Section 9.4 Waivers.

 

(a) Prior to or at the Closing, Buyer shall have the right to waive any default
in the performance of any term of this Agreement by Sellers, to waive or extend
the time for the compliance or fulfillment by Sellers of any and all of their
obligations under this Agreement, and

 

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to waive any or all of the conditions precedent to the obligations of Buyer
under this Agreement, except any condition which, if not satisfied, would result
in the violation of any Law. No such waiver shall be effective unless in writing
signed by a duly authorized officer of Buyer.

 

(b) Prior to or at the Closing, Sellers shall have the right to waive any
default in the performance of any term of this Agreement by Buyer, to waive or
extend the time for the compliance or fulfillment by Buyer of any and all of its
obligations under this Agreement, and to waive any or all of the conditions
precedent to the obligations of Sellers under this Agreement, except any
condition which, if not satisfied, would result in the violation of any Law. No
such waiver shall be effective unless in writing signed by Sellers.

 

(c) The failure of any party at any time or times to require performance of any
provision hereof shall in no manner affect the right of such party at a later
time to enforce the same or any other provision of this Agreement. No waiver of
any condition or of the breach of any term contained in this Agreement in one or
more instances shall be deemed to be or construed as a further or continuing
waiver of such condition or breach or a waiver of any other condition or of the
breach of any other term of this Agreement.

 

Section 9.5 Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any party hereto (whether by
operation of Law or otherwise), in whole or in part, without the prior written
consent of the other party; provided, however, that Buyer may assign its rights
and obligations under this Agreement, in whole or in part, to any wholly owned
subsidiary of Buyer without obtaining the prior written consent of Sellers, and
provided further that (i) Buyer gives Sellers notice of such assignment, (ii)
any such assignment shall not delay the Closing or materially increase the cost
to Sellers of consummating the transactions contemplated hereby, and (iii) any
such assignment shall not relieve Buyer of its obligations hereunder.
Notwithstanding the foregoing, a Seller may assign such Seller’s rights to the
Earnout Payments without the consent of Buyer if the assignee is an immediate
family member of such Seller, or a trust established for the benefit of an
immediate family member of Seller, if such Seller provides Buyer with written
notice of the assignment within a reasonable time after the assignment, and if
the assignee is bound by the terms of this Agreement, including Section 9.12
below. Subject to the preceding two sentences, this Agreement will be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and permitted assigns.

 

Section 9.6 Notices. All notices or other communications that are required or
permitted hereunder shall be in writing and shall be delivered by hand, by
commercial courier, or by certified mail, postage pre-paid, to the Persons at
the addresses set forth below (or at such other address as may be provided from
time to time hereunder). Any such notice shall be deemed given when delivered by
hand, when delivered by commercial courier, or three Business Days after mailing
when sent by certified mail.

 

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If to Vision to:

 

The Vision Insurance Group, LLC

210 Westwood Place, Suite 200

Brentwood, Tennessee 37024-1324

Attention: John C. Russell

Telephone:     (615) 312-2101

Facsimile:       (615) 661-6629

 

with a copy (which shall not constitute notice for purposes of this Agreement)
to:

 

Christopher C. Whitson, Esq.

Sherrard & Roe, PLC

424 Church Street, Suite 2000

Nashville, Tennessee 37219-3304

Telephone:     (615) 742-4200

Facsimile:       (615) 742-4539

 

If to Sellers to:

 

John C. Russell

5205 Shaw Court

Brentwood, Tennessee 37027

Telephone:     (615) 377-9954

Facsimile:       (615) 312-2151

 

with a copy (which shall not constitute notice for purposes of this Agreement)
to:

 

Christopher C. Whitson, Esq.

Sherrard & Roe, PLC

424 Church Street, Suite 2000

Nashville, Tennessee 37219-3304

Telephone:     (615) 742-4200

Facsimile:       (615) 742-4539

 

If to Buyer:

 

Alfa Corporation

2108 East South Boulevard

Montgomery, Alabama 36191-0001

Attention: Angela Cooner, Esq.

Telephone:     334-613-4508

Facsimile:       334-288-0905

 

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with a copy (which shall not constitute notice for purposes of this Agreement)
to:

 

Alston & Bird LLP

1201 West Peachtree Street

Atlanta, Georgia 30309-3424

Attention: Susan J. Wilson

Telephone:     (404) 881-7974

Facsimile:        (404) 881-4777

 

Section 9.7 Governing Law. Notwithstanding the place where this Agreement may be
executed by any of the parties, the parties expressly agree that this Agreement
shall in all respects be governed by, and construed in accordance with, the
internal Laws of the State of Tennessee, without regard for its conflicts of
laws principles.

 

Section 9.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

 

Section 9.9 Captions. The captions contained in this Agreement are for reference
purposes only and are not part of this Agreement. All references herein to
articles, sections and exhibits shall be deemed references to such parts of this
Agreement, unless the context shall otherwise require.

 

Section 9.10 Interpretations.

 

(a) For purposes of this Agreement, the words “hereof,” “herein,” “hereby” and
other words of similar import refer to this Agreement as a whole unless
otherwise indicated. Whenever the words “include,” “includes” or “including” are
used in this Agreement, they shall be deemed to be followed by the words
“without limitation.” Whenever the singular is used herein, the same shall
include the plural, and whenever the plural is used herein, the same shall
include the singular, where appropriate. All dollar references in this Agreement
are to the currency of the United States.

 

(b) No uncertainty or ambiguity herein shall be construed or resolved against
any party, whether under any rule of construction or otherwise. No party to this
Agreement shall be considered the draftsman. The parties acknowledge and agree
that this Agreement has been reviewed, negotiated and accepted by all parties
and their attorneys and shall be construed and interpreted according to the
ordinary meaning of the words used so as to fairly accomplish the purposes and
intentions of all parties hereto.

 

Section 9.11 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.

 

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Section 9.12 Sellers Representative. Sellers Representative shall represent the
interests of all Sellers hereunder and shall handle all issues pursuant to this
Agreement on behalf of all Sellers, including acting on behalf of all Sellers in
any disputes with Buyer, and no Seller shall have any right to bring an action
against Buyer unless such action is pursued through Sellers Representative.

 

[Signatures Begin on Next Page]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

 

ALFA CORPORATION

 

By:  

/s/ Jerry A. Newby

--------------------------------------------------------------------------------

Name:   Jerry A. Newby Title:   President and Chief Executive Officer

JOHN CHARLES RUSSELL

   

/s/ John Charles Russell

--------------------------------------------------------------------------------

CAROL LYNN RUSSELL

   

/s/ Carol Lynn Russell

--------------------------------------------------------------------------------

JOHN CHARLES RUSSELL, TRUSTEE OF THE JOHN CHARLES RUSSELL 2004 ANNUITY TRUST NO.
1    

/s/ John Charles Russell, Trustee

--------------------------------------------------------------------------------

JOHN CHARLES RUSSELL, TRUSTEE OF THE JOHN CHARLES RUSSELL 2004 ANNUITY TRUST NO.
2    

/s/ John Charles Russell, Trustee

--------------------------------------------------------------------------------

 

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JOHN CHARLES RUSSELL, TRUSTEE OF THE JOHN CHARLES RUSSELL 2004 ANNUITY TRUST NO.
3    

/s/ John Charles Russell, Trustee

--------------------------------------------------------------------------------

THE COMMUNITY FOUNDATION OF MIDDLE TENNESSEE, INC. By:  

/s/ Robin Satyshur

--------------------------------------------------------------------------------

Name:   Robin Satyshur Title:   Professional Svcs Liaison THE VISION INSURANCE
GROUP, LLC By:  

/s/ John Charles Russell

--------------------------------------------------------------------------------

    John Charles Russell     President

 

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