Stock Purchase Agreement, dated as of January 27, 2021, by and among Massachusetts Mutual Life Insurance Company, Great American Financial Resources, Inc. and American Financial Group, Inc

 

Section 7.01          Conduct of Business Prior to the Closing.

 

(a)          Except as required by applicable Law or existing contracts or as otherwise contemplated by, or necessary to effectuate the transactions contemplated by this Agreement or the Transaction Agreements, except as reasonably necessary to protect the health and safety of personnel affected by, or as mandated or requested by a Governmental Authority related to, caused by or taken in response to, a Contagion Event, and except as otherwise set forth in Schedule 7.01(a), from the date of this Agreement through the Closing Date, unless Buyer otherwise consents in advance in writing (which consent shall not be unreasonably withheld, delayed or conditioned), AFG shall, and shall cause its Affiliates to, refrain from taking any of the following actions:

 

(i)          (A) institute or promise to institute any new Employee Benefit Plan for or covering any Business Employee, (B) increase or grant, or promise to increase or grant, awards or benefits under any Employee Benefit Plan or otherwise for any Business Employee, (C) increase or promise to increase the base salary, commissions, target bonus percentage or opportunity of any Business Employee, (D) accelerate the payment or vesting under any Employee Benefit Plan or otherwise for any Business Employee or (E) pay or agree to make any grant of any award or pay any benefit (including severance) or agree or promise to pay, conditionally or otherwise, any bonus, equity-based award, extra commission, pension, retirement, allowance, severance or vacation pay or other employee benefit for any Business Employee (clauses (A) through (E) individually or in the aggregate shall hereinafter be referred to as “Restricted Benefit Changes”), in each case, other than (w) as required by the terms of any Employee Benefit Plan as in effect on the date hereof and listed on Section 5.13(b) of the Seller Disclosure Schedule, (x) Restricted Benefit Changes under clause (A) or (B) above (other than grants of equity awards) that both (1) apply to substantially all similarly situated employees of Seller and its Affiliates and (2) do not disproportionately benefit Business Employees over such similarly situated employees of Seller and its Affiliates who are not Business Employees, (y) Restricted Benefit Changes consisting of increases in base salaries or base wages payable with respect to the 2021 calendar year and limited to the ordinary course consistent with past practice annual compensation planning process (inclusive of salary increases, promotion recognition and bonus opportunities) for Business Employees which do not exceed more than three and a half percent (3.5%) of the aggregate salary, target commission opportunity, and target bonus opportunity otherwise payable with respect to such Business Employees with respect to the 2021 calendar year, and (z) Restricted Benefit Changes consisting of grants of equity or equity-based awards under the AFG Long Term Incentive Plan with a grant date fair value for each Business Employee that does not exceed the grant date fair value of such Business Employee’s 2020 long-term incentive award under the AFG Long Term Incentive Plan (exclusive of any extraordinary or one-time equity awards);

 

(ii)         (A) terminate the employment of any Managerial Employee, other than for cause, (B) hire, promote, demote or materially alter the duties of any Managerial Employee or (C) hire or promote any Business Employee into a role with total annual compensation in excess of $150,000;

 

(iii)        (A) transfer or reallocate the employment or services of any Business Employee to a business of Seller or any of its Affiliates other than the Business such that such employee would then no longer be a Business Employee, (B) transfer or reallocate the employment or services of any employee of Seller and its Affiliates who is not a Business Employee to the Business such that such employee would then become a Business Employee or (C) solicit for employment, employ or hire any Business Employee whose employment has been terminated with Seller or any of its Affiliates during the period from the date hereof through the Closing Date;

 

(iv)         (A) transfer, issue, sell or dispose of any Capital Stock or other securities of any of the Acquired Companies or grant options, warrants, calls or other rights to purchase or otherwise acquire Capital Stock or other securities of any of the Acquired Companies or (B) permit or allow any shares of Capital Stock or other securities of any of the Acquired Companies to become subject to any Lien, other than a Permitted Lien;

(v)         cease providing any material services to the Acquired Companies that are provided to the Acquired Companies as of the date of this Agreement or change in any material respect the terms upon or manner in which such services are provided;

 

(vi)         fail to operate, maintain and repair the Business Premises in the ordinary course of business in any material respect; or

 

(vii)        enter into any legally binding commitment with respect to any of the foregoing.

 

(b)          Except as required by applicable Law or existing contracts or as otherwise contemplated by, or necessary to effectuate the transactions contemplated by this Agreement or the Transaction Agreements, except as reasonably necessary to protect the health and safety of personnel affected by, or as mandated or requested by a Governmental Authority related to, caused by or taken in response to, a Contagion Event, and except as otherwise set forth in Schedule 7.01(b) or as relates exclusively to the Excluded Assets or the Excluded Subsidiaries, from the date of this Agreement through the Closing Date, unless Buyer otherwise consents in advance in writing (which consent shall not be unreasonably withheld, delayed or conditioned), Seller shall cause (x) the Business and the Acquired Companies to be operated in the ordinary course of business, (y) to the extent consistent with clause (x), the Acquired Companies to use commercially reasonable efforts to preserve intact the Business, Permits and relationships with distributors and Governmental Authorities and (z) the Acquired Companies to refrain from taking any of the following actions (it being understood that no act or omission by any Acquired Company with respect to the matters specifically addressed by any provision of this clause (z) shall be deemed to be a breach of clause (x) or (y)):

 

(i)           declare, set aside, make or pay any dividend or other distribution in respect of the Capital Stock of GALIC other than (A) any Pre-Closing Dividend, (B) any transaction solely between or among the Acquired Companies and (C) cash dividends or distributions to Seller;

 

(ii)       voluntarily adopt a plan of complete or partial liquidation or rehabilitation or authorize or undertake a merger, dissolution, rehabilitation, consolidation, restructuring, recapitalization or other reorganization;

 

(iii)        effect any recapitalization, reclassification, stock split or combination or similar change in the capitalization of any of the Acquired Companies, or reincorporate or redomesticate any Acquired Company;

 

(iv)         amend the certificate of incorporation or by-laws (or other comparable organizational documents) of any of the Acquired Companies, or change any Insurance Company’s state of domicile;

 

(v)        make any material change in the underwriting, claims administration, investment, reserving, hedging, risk management or financial accounting guidelines, policies, practices or principles of the Acquired Companies, as applicable, in effect on the date hereof, other than any change required by GAAP or SAP, or in respect of underwriting, claims, administration, investment, hedging or risk management, in the ordinary course of business, or fail in any material respect to comply with such guidelines, policies, practices or principles;

(vi)       make any material change in policies, practices or principles applicable to the setting of non-guaranteed elements with respect to the Insurance Contracts;

 

(vii)      incur any Indebtedness to any Person (other than another Acquired Company) (other than current trade accounts payable incurred in respect of property or services purchased in the ordinary course of business that are, individually and in the aggregate, immaterial in amount) or assume, grant, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans or advances (other than, in each case, in respect of transactions relating to the Investment Assets in the ordinary course of business), for individual amounts not in excess of $10,000,000 or in the aggregate not in excess of $25,000,000;

 

(viii)       other than in the ordinary course of business, modify, amend (in any material respect), recapture or terminate (other than at its stated expiry date) any Material Contract or any Reinsurance Agreement or enter into any contract which would, if entered into prior to the date hereof, have been a Material Contract or Reinsurance Agreement; provided that the Acquired Companies shall not permit any procurement contract to terminate at expiry unless there is a replacement or no further need for the services covered by such expiring contract;

 

(ix)         other than with respect to the Investment Assets, (A) purchase, sell, lease, license, exchange or otherwise dispose of or acquire any property, assets or rights (x) in any individual transaction in excess of $1,000,000 or in the aggregate in excess of $5,000,000 or (y) if doing so would otherwise have a material adverse impact on the conduct of the Business, (B) permit any material property, assets or rights to become subject to any Lien other than Permitted Liens or (C) acquire any new investments that would subject any of the Acquired Companies to any Liability to fund any capital calls or capital commitments or similar obligations over a period of greater than one (1) year from the date of the applicable investment in excess of $10,000,000 in the aggregate;

 

(x)        acquire (by merger, consolidation, acquisition of stock or assets, bulk reinsurance or otherwise) any corporation, partnership, joint venture, association or other business organization or division thereof, or substantially all of the assets of any of the foregoing except for acquisitions of Investment Assets;

 

(xi)         settle any litigation or claim against any of the Acquired Companies (other than claims under Insurance Contracts within applicable policy limits), other than any such settlement that is solely a monetary settlement that requires payment by any of the Acquired Companies of less than $2,000,000 in excess of the amount reserved against in the Financial Statements prior to the date of this Agreement;

 

(xii)      modify the terms of, or default under, any Indebtedness or, other than in the ordinary course of business, cancel or compromise any material Indebtedness or waive any material rights without receiving a realizable benefit of similar or greater value;

(xiii)      enter into any new line of business, or, other than in the ordinary course of business, introduce any new products or services, or change in any material respect existing products or services, or change in any material respect the crediting rates or participation rates for such products or services;

 

(xiv)       abandon, modify, waive, surrender, withdraw or terminate any material Permit;

 

(xv)       undertake or commit to make any capital expenditures for which the aggregate consideration paid or payable in any individual transaction is in excess of $2,000,000 or in the aggregate in excess of $10,000,000;

 

(xvi)      cause or permit any of the Insurance Companies to seek approval from the applicable Department of Insurance for the use of any accounting practices in connection with the Statutory Statements that depart from the accounting practices prescribed or permitted by applicable insurance Laws of such respective domiciliary jurisdiction;

 

(xvii)     cause or permit any of the Insurance Companies to enter into any transaction involving Investment Assets, other than in accordance with the Investment Guidelines and in a manner consistent with past practices (as limited by the Investment Guidelines);

 

(xviii)     make any filing with any Governmental Authority relating to (A) the withdrawal or surrender of any Permit held by any of the Acquired Companies or (B) the withdrawal by any of the Acquired Companies from any lines or kinds of business relating to the Business;

 

(xix)       enter into or amend any material Intercompany Agreements or transactions;

 

(xx)       (A) make, revoke or amend any material Tax election of or with respect to any of the Acquired Companies, (B) file any material amended Tax Return or claim for income or premium Tax Refund of or with respect to any of the Acquired Companies, (C) enter into any closing agreement, or settlement or compromise of any Tax Liability or refund, that in each case would or would reasonably be expected to affect any Tax Liability of any of the Acquired Companies for any Post-Closing Date Taxable Period, (D) extend or waive the application of any statute of limitations regarding the assessment or collection of any Tax of or with respect to any of the Acquired Companies, or (E) make any material change in any method of Tax accounting of or with respect to any of the Acquired Companies or change any annual Tax accounting period of any of the Acquired Companies; or

 

(xxi)       enter into any legally binding commitment with respect to any of the foregoing.

Section 7.02          Access to Information.

 

(a)         From the date of this Agreement until the Closing Date, Seller shall, and shall cause its Affiliates to, give Buyer and its authorized Representatives, upon reasonable advance written notice and during regular business hours, reasonable access to the books, records, appropriate personnel and officers and other facilities and properties of the Acquired Companies; provided, that any such access shall be conducted at Buyer’s expense, in accordance with applicable Law (including any applicable Law relating to antitrust, competition, employment or privacy issues or arising out of or with respect to any Contagion Event), under the supervision of Seller’s or its Affiliates’ personnel and in such a manner as to maintain confidentiality and not to unreasonably interfere with the normal operations of Seller and its Affiliates (including the Acquired Companies).  In addition to the foregoing, within ten (10) Business Days following the end of each calendar month, Seller shall deliver to Buyer a report setting forth the holdings of the investment portfolio of the Acquired Companies as of the end of such calendar month and the performance of the investment portfolio during such calendar month, including an updated “watch list” with respect to impaired and potentially impaired Investment Assets.

 

(b)         Notwithstanding anything to the contrary contained in this Agreement or any other agreement between Buyer and Seller executed on or prior to the date hereof, Seller shall have no obligation to make available to Buyer or its Representatives, or to provide Buyer or its Representatives with access to or copies of (i) except as provided in Section 9.01(j), any personnel file, medical file or related records of any Business Employee, (ii) except as provided in Section 10.07, any Tax Return filed by Seller or any of its Affiliates (other than the Acquired Companies) or predecessors, or any related material or (iii) any other information if Seller determines, in its reasonable judgment, that making such information available would (A) jeopardize any attorney-client privilege, the work product immunity, any other legal privilege or immunity, or expose such party to Liability for disclosure of sensitive or personal information or (B) contravene any applicable Law, Governmental Order, any fiduciary duty or a contract or obligation of confidentiality owing to a non-Affiliated Person, it being understood that Seller shall (x) cooperate with any requests for, and use its commercially reasonable efforts to obtain, any waivers and (y) use its commercially reasonable efforts to make other arrangements (including redacting information or entering into joint defense agreements), in each case, that would enable any otherwise required disclosure to Buyer to occur without so jeopardizing any such privilege or immunity or contravening such applicable Law, Governmental Order, fiduciary duty or obligation of confidentiality.

 

Section 7.03          Reasonable Best Efforts; Regulatory Matters.

 

(a)          Upon the terms and subject to the conditions set forth in this Agreement, each of Buyer, AFG and Seller shall, and shall cause their respective Affiliates to, use their respective reasonable best efforts to consummate and make effective the transactions contemplated by this Agreement and the other Transaction Agreements as promptly as practicable, including, as applicable, (i) preparing and filing with any Governmental Authority as promptly as practicable all Governmental Approvals contemplated by this Agreement or the other Transaction Agreements, (ii) using their respective reasonable best efforts to obtain all consents, approvals, waivers, authorizations, notices and filings necessary, proper or advisable to consummate the transactions contemplated by this Agreement or the other Transaction Agreements and (iii) using their respective reasonable best efforts to secure the expiration or termination of any applicable waiting period under the HSR Act.  Buyer shall be solely responsible for the costs of making or obtaining any such consents, approvals, waivers, authorizations, notices and filings and none of Seller or any of its Affiliates shall be required to make any payment to any Governmental Authority in connection therewith unless such payment is advanced by Buyer.

 

(b)          Without limiting the foregoing, each of Buyer, AFG and Seller, and their respective Affiliates, shall use their respective reasonable best efforts to avoid each and every impediment under any applicable Law that may be asserted by, or Governmental Order that may be entered with, any Governmental Authority with respect to the Governmental Approvals necessary, proper or advisable to consummate the transactions contemplated by this Agreement and the other Transaction Agreements so as to enable the Closing to occur.

 

(c)          In furtherance of, and without limiting, the foregoing, (i) Buyer shall file one or more “Form A” Acquisition of Control Statement, together with all exhibits, affidavits and certificates thereto with the Insurance Regulator of the State of Ohio within fifteen (15) Business Days after the date hereof, (ii) each of Buyer and Seller shall file a notification and report form pursuant to the HSR Act with the Federal Trade Commission and the Antitrust Division of the United States Department of Justice with respect to the transactions contemplated hereby, within fifteen (15) Business Days after the date hereof, and request early termination of the waiting period under the HSR Act, (iii) Buyer shall file and make any pre-acquisition notifications on “Form E” or similar market share notifications, to be filed in each jurisdiction where required by applicable Law with all required applicants within fifteen (15) Business Days after the date hereof, (iv) Seller shall file or cause to be filed an application for approval of a change in ownership or control of GAAI under FINRA Rule 1017 with FINRA (the “FINRA CMA”) with a request for FINRA to review it on a “Fast Track” basis within fifteen (15) Business Days after the date hereof and (v) Seller shall file or cause to be filed written notification regarding the change in ownership or control of GAAI to any other self-regulatory organization of which it is a member and any notice or other filing with any applicable state securities authority at least (30) days prior to the Closing.

 

(d)        Buyer, AFG and Seller shall consult with each other with respect to the obtaining of all Governmental Approvals necessary, proper or advisable to consummate the transactions contemplated by this Agreement and the other Transaction Agreements and each party shall keep the other parties apprised on a reasonably prompt basis of the status of such matters relating to such consents, approvals and waivers.  Each party shall have the right to review in advance and shall be provided with a reasonable opportunity to comment on, in each case subject to applicable Law, any material filing to be made with, or written materials submitted to, any Governmental Authority by any other party in connection with the transactions contemplated by this Agreement and the other Transaction Agreements.  Each party agrees to reasonably consider in good faith the comments of the other parties thereon.  The party responsible for any such action shall promptly deliver to the other parties evidence of the filing or making of all filings, applications and submissions relating thereto, and any supplement, amendment or item of additional information in connection therewith.  Each party shall promptly advise the other parties upon receiving any substantive communication from any Governmental Authority whose consent, approval, waiver or authorization is required to consummate the transactions contemplated by this Agreement, including promptly furnishing each other copies of any written or electronic communication, and shall promptly advise each other when any such communication causes such party to believe that there is a reasonable likelihood that any such Governmental Approval will not be obtained or that the receipt of any such Governmental Approval will be delayed or conditioned.  Prior to the Closing, each party shall not, and shall not permit any of its respective Representatives to, participate in any live or telephonic meeting with any Governmental Authority in respect of any consent, approval, waiver or authorization or investigation or other inquiry relating to the transactions contemplated by this Agreement and the other Transaction Agreements (other than (i) for routine or ministerial matters and (ii) accepting any unscheduled telephone call from any Governmental Authority, or responding to any question during a discussion with any Governmental Authority that was scheduled for purposes of discussing matters other than the transactions contemplated hereby, provided that promptly after such call or meeting the party involved therewith provide a summary thereof to the other parties) unless it obtains the prior approval of the other parties or their respective Representatives and, to the extent permitted by applicable Law and by such Governmental Authority, provides such other party or parties the opportunity to attend and participate in such meeting.

(e)          Each of Buyer, AFG and Seller shall (i) promptly furnish, or cause to be furnished, all agreements, documents, instruments, affidavits or information that may be required or requested by any Governmental Authority in connection with any Governmental Approval and (ii) make available their respective Representatives to each other and, upon request, any Governmental Authority, in connection with (A) the preparation of any statement, filing, notice or application made by or on their behalf to, or (B) any review or approval process by, any Governmental Authority in connection with the transactions contemplated by this Agreement and the other Transaction Agreements; provided that no party shall be required to disclose to the other any of its or its Affiliates’ confidential competitive information or any personally identifiable information of their respective officers, directors or other applicable individuals.

 

(f)          Notwithstanding anything to the contrary contained in this Agreement, in no event shall AFG, Seller or its Affiliates (including the Acquired Companies) be required to agree to take or enter into any action set forth in Section 7.03(b) which is not conditioned upon the Closing.  Notwithstanding anything to the contrary contained in this Agreement, in no event shall Buyer be obligated to take or refrain from taking or agree to it, its Affiliates, or any of the Acquired Companies taking or refraining from taking, any action, or to permit or suffer to exist any material restriction, condition, limitation or requirement that, individually or together with all other such actions, restrictions, conditions, limitations or requirements imposed by Governmental Authorities in connection with the transactions contemplated by this Agreement or the other Transaction Agreements, that constitutes a Burdensome Condition.  For purposes of this Agreement, a “Burdensome Condition” means any (i) restriction, condition, limitation or requirement that would reasonably be expected have a Company Material Adverse Effect, or (ii) with respect to any Insurance Company, (A) requirement for the contribution of a material amount of capital, (B) requirement to enter a material keep-well or capital maintenance arrangement, (C) requirement to maintain the risk-based capital levels in excess of 400% of company action level NAIC risk-based capital or (D) restrictions on dividends or distributions payable (other than restrictions on dividends or distributions imposed by generally applicable Ohio statute or published regulation, or any incremental limitation on dividends or distributions specifically imposed by a Governmental Authority with a duration of two (2) years or less following the Closing); provided, that none of the following shall constitute or be taken into account in determining whether a Burdensome Condition has occurred or exists: any restriction, condition, limitation or requirement arising out of, resulting from or attributable to (1) any proposed changes to the business and operations of the Acquired Companies by Buyer or its Affiliates, (2) the identity of Buyer or its Affiliates or (3) any cash dividends paid as contemplated by Section 7.12.  Prior to Buyer being entitled to invoke a Burdensome Condition, each of the parties and their respective Representatives shall promptly confer in good faith in order to (x) exchange and review their respective views and positions as to any Burdensome Condition or potential Burdensome Condition and (y) discuss and present to, and engage with, the applicable Governmental Authority regarding any approaches or actions that would avoid any actual Burdensome Condition or mitigate its impact so it is no longer a Burdensome Condition, and Buyer shall use its reasonable best efforts to take, or cause to be taken, any such actions in respect thereof which may mitigate a Burdensome Condition (other than any actions which themselves would constitute a Burdensome Condition).  For the avoidance of doubt, without the prior written consent of Buyer, neither GAAI nor any other Seller Party shall agree to any restriction to be imposed by FINRA as a condition to the approval of the FINRA CMA that constitutes a Burdensome Condition (with GAAI considered an “Insurance Company” for that purpose).

(g)          For the avoidance of doubt, this Section 7.03 shall not apply to Tax matters.

 

Section 7.04          Third-Party Consents.

 

(a)          Except as otherwise agreed by the parties, each party shall cooperate with the other, and shall cause their Affiliates to, use commercially reasonable efforts to make or obtain the Third-Party Consents set forth in Schedule 7.04 and the Third-Party Consents required for AFG and its Affiliates to provide Services (as defined in the Transition Services Agreement) under the Transition Services Agreement, in each case, prior to the Closing; it being understood and agreed by the parties that Seller shall lead such process and Buyer shall reasonably cooperate.  Each of Seller and Buyer shall bear its own and its Affiliates’ internal costs to obtain such Third-Party Consents and the aggregate amount of out-of-pocket consent fees payable to counterparties in order to make or obtain such Third-Party Consents (whether before or after Closing) shall be borne fifty percent (50%) by Buyer and fifty percent (50%) by Seller; provided, that none of the parties shall be required to compromise any right, asset or benefit or incur any Liabilities (other than such costs and expenses) or commence or participate in any Action in order to obtain any Third-Party Consent.

 

(b)          With respect to each Third-Party Consent required with respect to each GAAI Advisory Contract, Seller shall use, or shall cause GAAI to use, commercially reasonable efforts to obtain the written consent or, to the extent permitted by such GAAI Advisory Contract, Negative Consent of each GAAI Advisory Client to the assignment or deemed assignment of such GAAI Advisory Client’s GAAI Advisory Contract in connection with the transaction contemplated hereby.  In connection with obtaining the GAAI Advisory Client consents, Seller shall take reasonable steps to keep Buyer promptly informed of the status of obtaining such GAAI Advisory Client consents and, upon Buyer’s request, make available to Buyer copies of all such executed GAAI Advisory Client consents and other material records relating to the GAAI Advisory Client consent process.  In connection with obtaining GAAI Advisory Client consents, Buyer shall have the right to review in advance of distribution the general forms of any notices or other materials to be distributed by Seller or GAAI to GAAI Advisory Clients and shall have the right to have its reasonable comments considered by Seller in a commercially reasonable manner prior to distribution.

(c)        From and after the Closing Date through the date that is twelve (12) months following the Closing Date, the parties shall continue to use commercially reasonable efforts to obtain, as promptly as practicable, any such required Third-Party Consents that have not been obtained as of the Closing Date, subject to the limitations set forth in Section 7.04(a).  With respect to each Shared Contract, from and after the date of this Agreement through the earlier of (i) the date that is twelve (12) months following the Closing Date, and (ii) the termination or expiration of such Shared Contract, Seller shall, and shall cause its Affiliates to, cooperate with Buyer to the extent reasonably requested by Buyer to cause the counterparty to any Shared Contract to enter into a new agreement, on substantially the same terms and conditions as those set forth in the Shared Contract, with Buyer or an Acquired Company with respect to the matters addressed by such Shared Contract that are related to the Business; provided, that the costs and expenses associated therewith shall be allocated to Buyer and Seller in accordance with, and shall be subject to the limitations set forth in, Section 7.04(a); provided, further, that neither party shall in any event be required to compromise any right, asset or benefit or incur any Liabilities, make any accommodations, or commence or participate in any Action in connection therewith.

 

Section 7.05          Intercompany Obligations.  Except for (a) the intercompany obligations set forth in Schedule 7.05 or (b) intercompany receivables and payables with respect to Taxes, which shall be governed by Article X, AFG and Seller shall, and shall cause their respective Affiliates to, take such action, including making such payments as may be necessary, so that, prior to or concurrently with the Closing, the Acquired Companies, on the one hand, and AFG, Seller and their respective Affiliates (other than the Acquired Companies), on the other hand, shall settle, discharge, offset, pay or repay in full all intercompany loans, notes, and advances, regardless of their maturity, and all intercompany receivables and payables for the amount due, including any accrued and unpaid interest to but excluding the date of payment, such that after the Closing neither party has any ongoing obligations or liabilities under, any intercompany obligations.  AFG, Seller and Buyer shall take into account, and reflect, the settlement of the intercompany obligations pursuant to this Section 7.05 in connection with the preparation of the Estimated Statement and the Post-Closing Statement, as applicable, and the corresponding calculation of the Closing Stockholders’ Equity.

 

Section 7.06          Intercompany Arrangements.

 

(a)          Except as (i) otherwise contemplated by the Transaction Agreements, (ii) set forth in Schedule 7.06 or (iii) otherwise agreed by Seller and Buyer, AFG and Seller shall, and shall cause their respective Affiliates to, take such actions as may be necessary to terminate or commute prior to or concurrently with the Effective Time all Intercompany Agreements, after giving effect to Section 7.05, such that, following the Effective Time, the Acquired Companies shall have no further Liability under such Intercompany Agreements.

 

(b)          Except for any services provided pursuant to the Transition Services Agreement and any other applicable Transaction Agreements, as of and following the Effective Time, AFG, Seller and their respective Affiliates shall have no further obligation to provide any ancillary or corporate shared services to the Acquired Companies.

 

(c)          With respect to each surviving Intercompany Agreement, each of AFG and Seller, on behalf of itself and its Affiliates (other than the Acquired Companies) and the Acquired Companies, hereby waives (i) any breach by, default under or non-compliance with any such surviving Intercompany Agreement by any of AFG, Seller, the Acquired Companies or any of their Affiliates to the extent arising or occurring on or prior to the Closing Date, except in respect of Liabilities specifically recorded in a general ledger account or in the supporting workpapers or other detail to a balance sheet or statutory balance sheet, in each case contained in the books and records, and (ii) any rights that AFG, Seller or their Acquired Companies or any of their respective Affiliates (other than the Acquired Companies) may have to terminate, accelerate or cancel under such surviving Intercompany Agreements relating to, arising out of or in connection with (A) any “change of control,” “change in control” or similar phrase or concept as defined in such surviving Intercompany Agreement of any of the Acquired Companies occurring on or prior to the Closing Date or (B) any action or omission by any of AFG, Seller, the Acquired Companies or any of their Affiliates occurring prior to the Closing.

 

(d)          Each of AFG, Seller and the Acquired Companies shall not, and shall cause its Affiliates not to, seek any damages with respect to, or revoke, terminate or rescind any surviving Intercompany Agreement or otherwise claim that any surviving Intercompany Agreement is not in full force and effect or is invalid or unenforceable (in whole or in part), in each case, as a result of any of the matters waived pursuant to Section 7.06(c).

 

Section 7.07          Release.

 

(a)          Effective as of the Closing, each of AFG and Seller, for itself and on behalf of its Affiliates (other than the Acquired Companies) and each of its and their successors and assigns (each, a “Seller Releasor”), hereby irrevocably, knowingly and voluntarily releases, discharges and forever waives and relinquishes all claims, demands, Liabilities, defenses, affirmative defenses, setoffs, counterclaims, actions and causes of action of whatever kind or nature, whether known or unknown, which any Seller Releasor has, may have or might have or may assert now or in the future, against any of the Acquired Companies and any of their respective successors, assigns, officers, directors, partners, managers and employees (in each case in their capacity as such) (each, an “Acquired Company Releasee”), arising out of, based upon or resulting from any contract, transaction, event, circumstance, action, failure to act or occurrence of any sort or type, whether known or unknown, and which occurred, existed, was taken, permitted or begun prior to the Closing; provided, that nothing contained in this Section 7.07(a) shall release, discharge, limit, restrict, waive, relinquish or otherwise affect the rights or obligations of any party to the extent arising under or recoverable pursuant to any Intercompany Agreement that survives the Closing pursuant to Section 7.06 or any of the Transaction Agreements.  Each of AFG and Seller shall, and shall cause each Seller Releasor to, refrain from, directly or indirectly, asserting any claim or demand or commencing, instituting or maintaining, or causing to be commenced, any legal or arbitral proceeding of any kind against any Acquired Company Releasee based upon any matter released pursuant to this Section 7.07(a).  The execution and delivery of this Agreement shall not constitute an acknowledgment of, or an admission by, any Seller Releasor or Acquired Company Releasee of the existence of any such claims or of Liability for any matter or precedent upon which any Liability may be asserted.

 

(b)          Effective as of the Closing, Buyer, for itself and on behalf of the Acquired Companies and each of its and their successors and assigns (each, a “Buyer Releasor”), hereby irrevocably, knowingly and voluntarily releases, discharges and forever waives and relinquishes all claims, demands, Liabilities, defenses, affirmative defenses, setoffs, counterclaims, actions and causes of action of whatever kind or nature, whether known or unknown, which any Buyer Releasor has, may have or might have or may assert now or in the future, against any of AFG, Seller, their Affiliates (other than the Acquired Companies) and any of their respective successors and assigns (in each case in their capacity as such) (each, a “Seller Releasee”), arising out of, based upon or resulting from any contract, transaction, event, circumstance, action, failure to act or occurrence of any sort or type, whether known or unknown, and which occurred, existed, was taken, permitted or begun prior to the Closing; provided, that with respect to the Buyer Releasors that are not an Acquired Company or any of its successors or assigns, nothing contained in this Section 7.07(b) shall release, discharge, limit, restrict, waive, relinquish or otherwise affect the rights or obligations of any Buyer Releasor (other than the Acquired Companies) to the extent such rights or obligations do not arise out of or relate to any claims, demands, Liabilities, defenses, affirmative defenses, setoffs, counterclaims, actions or causes of action any Acquired Company may have had against the Seller Releasee prior to the Closing; provided, further, that nothing contained in this Section 7.07(b) shall release, discharge, limit, restrict, waive, relinquish or otherwise affect the rights or obligations of any party to the extent arising under or recoverable pursuant to any Intercompany Agreement that survives the Closing pursuant to Section 7.06 or any of the Transaction Agreements.  Buyer shall, and shall cause each Buyer Releasor to, refrain from, directly or indirectly, asserting any claim or demand or commencing, instituting or maintaining, or causing to be commenced, any legal or arbitral proceeding of any kind against any Seller Releasee based upon any matter released pursuant to this Section 7.07(b).  The execution and delivery of this Agreement shall not constitute an acknowledgment of, or an admission by, any Buyer Releasor or Seller Releasee of the existence of any such claims or of Liability for any matter or precedent upon which any Liability may be asserted.

 

Section 7.08         Bank Accounts.  To the extent any individual or entity other than a Transferred Employee or an Acquired Company has authority to draw on or has access to the bank, savings, deposit or custodial accounts and safe deposit boxes maintained by the Acquired Companies, Seller and its Affiliates shall remove, effective as of the Closing, such individual’s or entity’s authority unless otherwise directed in writing by Buyer, and shall indemnify and hold the Acquired Companies harmless for and against any Liabilities arising out of the acts or omissions of any such individuals or entities in relation to such bank, savings, deposit or custodial accounts and safe deposit boxes following the Closing.

 

Section 7.09          Transaction Agreements; Separation and Migration.

 

(a)         At or prior to the Closing, in the case of the Transition Services Agreement and the Trademark License Agreement, Seller and Buyer shall execute and deliver, or cause to be executed and delivered, each such agreement with any changes as may be required by any Governmental Authority to obtain any Governmental Approval that may be or become necessary for the execution and delivery of and the performance by the applicable parties of their respective obligations pursuant to, and consummation of the transactions contemplated by, such Transaction Agreements.  Between the date hereof and the Closing Date, Seller and Buyer shall negotiate in good faith the Great American Tower Sublease and the Dixie Terminal Lease on terms consistent in all material respects with those set forth on Exhibit B-1 and Exhibit B-2, respectively, and otherwise on terms that are mutually agreeable and shall, at the Closing, execute and deliver, or cause to be executed and delivered, each such agreement.

(b)          Between the date hereof and the Closing Date, Seller and Buyer shall, and shall cause their respective Affiliates and Representatives to, use reasonable best efforts to identify services other than the Services (as defined in the Transition Services Agreement) that are being performed by AFG or one of its Affiliates (other than the Acquired Companies) to or for the Acquired Companies or the Business as of the date hereof and, in connection therewith, work together in good faith to revise the services schedules to the Transition Services Agreement to include such identified services using a consistent cost methodology as was used to prepare the service schedules existing as of the date of this Agreement.

 

(c)          As promptly as reasonably practicable following the date hereof, Seller and Buyer shall each appoint such representatives as each of them deems appropriate, including at least one representative to service as such party’s lead, to a committee (the “Migration Committee”) tasked with, in good faith: (i) planning for both the separation of the Business following the Closing from the other businesses of Seller and its Affiliates (other than the Acquired Companies) and the integration and migration of the Business following the Closing into the business and operations of Buyer, with the goal of completing such migration planning prior to the Closing, (ii) identifying any additional services that both parties mutually agree to be added to the services schedules to the Transition Services Agreement pursuant to Section 7.09(b), (iii)  identifying any shared Intellectual Property owned by Seller or any of its retained Affiliates that both parties mutually agree should be licensed to Buyer and/or the Acquired Companies and, if applicable, the terms of such license and (iv) mutually agreeing on the treatment of domain names and websites (including Intranet sites) of Seller and its Affiliates currently used in the Business; provided that no party shall be required to take any actions or steps that it reasonably believes would conflict with applicable Law, including the HSR Act.  The Migration Committee shall use commercially reasonable efforts to meet regularly during the term of this Agreement and shall continue to work together diligently and in good faith after the Closing to complete the tasks undertaken as promptly as possible.

 

(d)          Without limiting the generality of the foregoing, as soon as practicable after the date hereof, Seller shall, and shall cause each of its Affiliates to, at Seller’s expense, in compliance with applicable Laws, use commercially reasonable efforts to begin to separate logically and physically the Information Technology of Seller and its Affiliates (other than the Acquired Companies) from the Information Technology of the Acquired Companies, in such a manner that the Information Technology of the Acquired Companies is not accessible to Seller and its Affiliates (other than the Acquired Companies) and the Information Technology of Seller and its Affiliates (other than the Acquired Companies) is not accessible to the Acquired Companies, except as and to the extent such access is necessary for the provision or receipt of services pursuant to the Transition Services Agreement or as otherwise set forth therein, and shall use commercially reasonable efforts to protect the confidentiality of any confidential information of the Acquired Companies, so long as Seller or any of its Affiliates (other than the Acquired Companies) has access to such information, using substantially the same confidentiality protections that Seller and its Affiliates (other than the Acquired Companies) use for their own confidential information.

Section 7.10          Release of Guarantees.  Prior to the Closing Date, if Seller identifies any contracts (a) that would be assigned to one of the Acquired Companies at or prior to the Closing and pursuant to which AFG or any of its Affiliates (other than the Acquired Companies) would be required to perform in lieu of such Acquired Company or (b) to which any of the Acquired Companies is a party and pursuant to which AFG or any of its Affiliates (other than the Acquired Companies) guarantees any liabilities or obligations of any Acquired Company, then Seller and Buyer shall cooperate and shall use their respective reasonable best efforts to, effective as of the Effective Time, terminate or cause to be terminated, or cause Buyer or one of its Affiliates to be substituted in all respects for Seller and any of its Affiliates (other than the Acquired Companies) on any such contract.  In the case of a failure to do so by the Closing Date, then Seller and Buyer shall continue to cooperate and use their respective reasonable best efforts as described in the preceding sentence, and the parties shall effectuate an arrangement that is mutually satisfactory, acting reasonably, under which the Acquired Companies would obtain the benefits associated with such contracts and bear the burdens associated with such contracts.  Neither Buyer and its Affiliates nor Seller and its Affiliates shall renew or extend the term of or increase any of their obligations under, or transfer to any third party, any such contract.

 

Section 7.11         Exclusivity.  From and after the date of this Agreement through the Closing, AFG and Seller shall not, and shall cause their respective Affiliates and direct their and their Affiliates’ respective Representatives not to, directly or indirectly, (a) solicit, initiate or knowingly encourage or facilitate any inquiry, indication of interest, proposal or offer from any Person other than Buyer or its Representatives (an “Alternate Bidder”) relating to or in connection with a proposal or offer for a merger, consolidation, amalgamation, bulk reinsurance, business combination, sale or transfer of properties or assets or sale of all or materially all of the Capital Stock (including by way of a tender or exchange offer), or similar transaction involving the Acquired Companies or all of materially all of the Business (in each case, other than as permitted under Section 7.01(a) or Section 7.01(b) or in connection with the acquisition, disposition or custody of investment assets in the ordinary course of business, an “Acquisition Proposal”), (b) participate in or attend any discussions or negotiations or enter into any legally binding agreement, arrangement or understanding with, or provide or confirm any material non-public information to, any Alternate Bidder relating to or in connection with any Acquisition Proposal by such Alternate Bidder or (c) accept any proposal or offer from any Alternate Bidder relating to a possible Acquisition Proposal or otherwise commit to, or enter into or consummate any transaction contemplated by any Acquisition Proposal with any Alternate Bidder.

 

Section 7.12          Pre-Closing Dividends.  From time to time between the date of this Agreement and the Closing Date, Seller shall use reasonable best efforts to cause GALIC to declare and pay ordinary cash dividends in such amounts as are equal to Seller’s good faith estimate at such time of the excess of the aggregate amount of stockholders’ equity of the Acquired Companies on a consolidated basis as expected at Closing over the Target Closing Stockholders’ Equity; it being understood and agreed that nothing in this Section 7.12 shall require Seller to cause GALIC to, or require GALIC to, declare or pay any dividend that is contrary to applicable Law.

 

Section 8.01          Access to Information.

 

(a)          After the Closing Date, Buyer shall, and shall cause its Affiliates (including the Acquired Companies) to, preserve, in accordance with and until such date as may be required by, Buyer’s or its applicable Affiliates’ standard document retention policies (but for not less than six (6) years from the Closing Date or such later date as may be required by applicable Law), all pre-Closing Date books and records of the Acquired Companies and the Business possessed or controlled by such Person.  During such period, upon any request from Seller or its Representatives, Buyer or any of its Affiliates holding such books and records shall (a) provide to Seller or its Representatives reasonable access to such books and records during normal business hours; provided, that such access shall not unreasonably interfere with the conduct of the business of Buyer or its Affiliates holding such books and records and (b) permit Seller to make copies of such books and records, in each case, at no cost to Seller or its Representatives (other than for reasonable out-of-pocket expenses).  Notwithstanding anything to the contrary contained in this Agreement or any other agreement between Buyer and Seller executed on or prior to the date hereof, Buyer shall have no obligation to make available to Seller or its Representatives, or to provide Seller or its Representatives with access to or copies of, any such books and records if Buyer determines, in its reasonable judgment, that making such information available would (A) jeopardize any attorney-client privilege, the work product immunity, any other legal privilege or immunity, or expose such party to Liability for disclosure of sensitive or personal information or (B) contravene any applicable Law, Governmental Order, any fiduciary duty or a contract or obligation of confidentiality owing to a non-Affiliated Person, it being understood that Buyer shall (x) cooperate with any requests for, and use its commercially reasonable efforts to obtain, any waivers and (y) use its commercially reasonable efforts to make other arrangements (including redacting information or entering into joint defense agreements), in each case, that would enable any otherwise required access or disclosure to Seller to occur without so jeopardizing any such privilege or immunity or contravening such applicable Law, Governmental Order, fiduciary duty or obligation of confidentiality.  Such books and records may be requested under this Section 8.01 for any reasonable business purpose, including to the extent reasonably required in connection with accounting, litigation, financial reporting, federal securities disclosure, compliance with contractual obligations of Seller or its Affiliates or other similar purpose.  Notwithstanding the foregoing, upon the expiration of such retention period, any and all such books and records may be destroyed by Buyer if Buyer sends to Seller written notice of its intent to destroy such books and records, specifying in reasonable detail the contents of the books and records to be destroyed; such books and records may then be destroyed after the sixtieth (60th) day following such notice unless Seller notifies Buyer that Seller desires to obtain possession of such books and records, in which event Buyer shall transfer the books and records to Seller and Seller shall pay all reasonable out-of-pocket expenses of Buyer in connection therewith.

 

Section 8.02         Books and Records.

 

(a)         Effective as of the Closing, (i) all books and records of the Acquired Companies and the Business located on the Business Premises shall be transferred to Buyer by possession of such premises and (ii) Seller shall transfer, or cause to be transferred, to Buyer all available original corporate records of the Acquired Companies relating to the legal existence, ownership and corporate governance of the Acquired Companies or the Business and all Permits of the Acquired Companies, and any other books and records of the Acquired Companies, in each case, that are not located on the Business Premises or otherwise possessed or controlled by the Acquired Companies.  Prior to the Closing, Seller and Buyer shall cooperate in good faith to develop and implement a plan that will result in the delivery or transfer of all books and records of the Acquired Companies and the Business to Buyer or the Acquired Companies at, or as soon as reasonably practicable following, the Closing, subject to applicable Law.  Subject to Section 8.03(b), except as otherwise required by applicable Law, Seller and its Affiliates shall have the right to retain copies of all books and records of the Acquired Companies and their business relating to periods ending on or prior to the Closing Date.

(b)        After the Closing Date, Seller shall, and shall cause its Affiliates to, preserve, in accordance with Seller’s or its applicable Affiliates’ standard document retention policies and until such date as such books and records are transferred to Buyer or the Acquired Companies, all pre-Closing Date books and records of the Acquired Companies and the Business that have not been transferred to Buyer.  During such period, upon any request from Buyer or its Representatives, Seller or any of its Affiliates holding such books and records shall (i) provide to Buyer or its Representatives reasonable access to such books and records during normal business hours; provided, that such access shall not unreasonably interfere with the conduct of the business of Seller or its Affiliates holding such books and records and (ii) permit Buyer to make copies of such books and records, in each case, at no cost to Buyer or its Representatives (other than for reasonable out-of-pocket expenses).  Notwithstanding anything to the contrary contained in this Agreement or any other agreement between Buyer and Seller executed on or prior to the date hereof, Seller shall have no obligation to make available to Buyer or its Representatives, or to provide Buyer or its Representatives with access to or copies of, any such books and records if Seller determines, in its reasonable judgment, that making such information available would (A) jeopardize any attorney-client privilege, the work product immunity, any other legal privilege or immunity, or expose such party to Liability for disclosure of sensitive or personal information or (B) contravene any applicable Law, Governmental Order, any fiduciary duty or a contract or obligation of confidentiality owing to a non-Affiliated Person, it being understood that Buyer shall (x) cooperate with any requests for, and use its commercially reasonable efforts to obtain, any waivers and (y) use its commercially reasonable efforts to make other arrangements (including redacting information or entering into joint defense agreements), in each case, that would enable any otherwise required access or disclosure to Buyer or its Representatives to occur without so jeopardizing any such privilege or immunity or contravening such applicable Law, Governmental Order, fiduciary duty or obligation of confidentiality.  Such books and records may be requested under this Section 8.02(b) for any reasonable business purpose, including to the extent reasonably required in connection with accounting, litigation, financial reporting, federal securities disclosure, compliance with contractual obligations of Buyer or its Affiliates or other similar purpose.  Notwithstanding the foregoing, upon expiration of such retention period, any and all such books and records may be destroyed by Seller, if Seller sends to Buyer written notice of its intent to destroy such books and records, specifying in reasonable detail the contents of the books and records to be destroyed, after the sixtieth (60th) day following such notice unless Buyer notifies Seller that Buyer desires to obtain possession of such books and records, in which event Seller shall transfer the books and records to Buyer and Buyer shall pay all reasonable out-of-pocket expenses of Seller in connection therewith.

 

Section 8.03          Confidentiality.

 

(a)        The terms of the confidentiality agreement, dated October 23, 2020 (the “Confidentiality Agreement”), between AFG and Massachusetts Mutual Life Insurance Company are incorporated into this Agreement by reference and shall continue in full force and effect until the Closing Date, at which time the confidentiality obligations under the Confidentiality Agreement shall terminate; provided, that remedies with respect to breaches of such Confidentiality Agreement that occurred prior to the Closing Date shall survive the Closing Date.  If for any reason the transactions contemplated by this Agreement are not consummated, AFG and Buyer hereby agree that they shall be bound by the terms of the Confidentiality Agreement until the later of (i) the date the Confidentiality Agreement terminates in accordance with its terms and (ii) the one (1) year anniversary of the date of termination of this Agreement.

(b)        For a period of twenty-four (24) months from the Closing Date, each of AFG and Seller and its Affiliates shall, and shall cause their respective Representatives to, maintain in confidence any written, oral or other information relating to the Acquired Companies or the Business obtained prior to the Closing Date or obtained from Buyer or its Affiliates pursuant to Section 8.01.

 

(c)         For a period of twenty-four (24) months from the Closing Date, Buyer and its Affiliates (including the Acquired Companies) shall, and shall cause their respective Representatives to, maintain in confidence any written, oral or other information relating to or obtained from Seller or its Affiliates prior to the Closing Date, other than information to the extent relating to the Acquired Companies or the Business.

 

(d)          The requirements of Section 8.03(b) and Section 8.03(c) shall not apply to the extent that (i) any such information is or becomes generally available to the public other than (A) in the case of Buyer, as a result of disclosure by Seller, its Affiliates or any of its Representatives and (B) in the case of Seller, as a result of disclosure by Buyer, the Acquired Companies (after the Closing Date) or any of their respective Affiliates or Representatives, (ii) any such information is required or requested by applicable Law, Governmental Order or a Governmental Authority to be disclosed after prior notice has been given to the other party (to the extent such prior notice is permitted to be given under applicable Law); provided, that the disclosing party, to the extent reasonably requested by the other party, shall cooperate with such other party in seeking an appropriate order or other remedy protecting such information from disclosure, (iii) any such information is reasonably necessary to be disclosed in connection with any Action or (iv) any such information was or becomes available to such party on a non-confidential basis and from a source (other than a party to this Agreement or any Affiliate or Representative of such party) that is not bound by a confidentiality agreement with respect to such information.  Each of the parties hereto shall instruct its Affiliates and Representatives having access to such information of such confidentiality obligations.

 

Section 8.04          Insurance.  Buyer acknowledges and agrees that all insurance coverage for the Acquired Companies under insurance policies of AFG, Seller or its Affiliates shall terminate as of the Effective Time and, following the Effective Time, no claims may be brought or maintained against any policy of AFG, Seller or its Affiliates in respect of the Acquired Company regardless of whether the events underlying such claim arose or were first discovered prior to or following the Closing Date.

Section 8.05          Trade Names and Trademarks.

 

(a)          Other than as expressly provided in the Transaction Agreements, Buyer is not purchasing, acquiring or otherwise obtaining any right, title or interest in or to any Intellectual Property owned by Seller or its Affiliates (other than the Acquired Companies), including the Seller Names and Marks.  Except as otherwise expressly provided in any Transaction Agreement, neither Buyer nor any of its Affiliates (including, after the Closing Date, the Acquired Companies) shall have any rights in any Intellectual Property owned by Seller or its Affiliates (other than the Acquired Companies), including the Seller Names and Marks, and neither Buyer nor any of its Affiliates (including, after the Closing Date, the Acquired Companies) shall contest the ownership or validity of any rights of Seller or any of its Affiliates in or to any Intellectual Property owned by Seller or its Affiliates (other than the Acquired Companies), including the Seller Names and Marks.

 

(b)          Except as otherwise expressly provided in the Trademark License Agreement, following the Closing Date, Buyer and its Affiliates (including the Acquired Companies) shall cease and discontinue all uses of the Seller Names and Marks, either alone or in combination with any other words or Trademarks.  The rights of the Acquired Companies to the Seller Names and Marks pursuant to the terms of any existing agreements shall terminate on the Closing Date.

 

(c)          Buyer and its Affiliates shall make all filings to affect the elimination of any use of the Seller Names and Marks from the businesses of the Acquired Companies as promptly as practicable and in any event shall have made all relevant filings prior to the first anniversary of the Closing Date.  After the Closing Date, Buyer and its Affiliates (including the Acquired Companies) shall not expressly, or by implication, do business as or represent themselves as, or as having any affiliation with, Seller or an Affiliate of Seller.

 

(d)          Following the Closing, promptly following receipt of any required regulatory approvals, Buyer shall execute any necessary documentation in order to amend the organizational documents with respect to the Acquired Companies such that each of the Acquired Companies can effect a change in its corporate and trade names, as applicable, to names not containing any Seller Names and Marks.  Promptly after the Closing, Buyer shall cause the Acquired Companies to file the application documents to register new corporate and trade names, as applicable, with each applicable Governmental Authority and take all other necessary action to fulfill its obligations set forth in this Section 8.05 as soon as reasonably practicable.

 

Section 8.06          Non-Solicitation.

 

(a)          For a period of twenty-four (24) months from the Closing Date, AFG and Seller shall not, and shall cause their respective Affiliates not to, without the prior written consent of Buyer, directly or indirectly, solicit for employment, employ or hire any Business Employee; provided, that AFG, Seller and their Affiliates may solicit, employ or hire any such Person who was terminated or otherwise discharged by any of the Acquired Companies or their respective Affiliates at least six (6) months prior to the first such solicitation or employment; provided, further, that nothing in this Section 8.06(a) shall prohibit AFG, Seller or any of their Affiliates from employing or hiring any Person who, after the six-month anniversary of the Closing Date, contacts Seller or any of its Affiliates on his or her own initiative without direct or indirect solicitation or as a result of a general solicitation to the public or general advertising not directed at Transferred Employees; provided, further, that on and following the Closing, AFG, Seller and their Affiliates may solicit, employ or hire any Business Employee who has not received an Offer of Employment.

(b)         For a period of twenty-four (24) months from the Closing Date, Buyer shall not, and shall cause its Affiliates (including the Acquired Companies) not to, without the prior written consent of Seller, directly or indirectly, solicit for employment, employ or hire any Business Employee who does not become a Transferred Employee or any individual who provides transition services pursuant to the Transition Services Agreement; provided, that Buyer and its Affiliates may solicit, employ or hire any such individual (other than any Business Employees who do not become Transferred Employees) who was terminated or otherwise discharged by Seller or any of its Affiliates at least six (6) months prior to the first such solicitation or employment; provided, further, that nothing in this Section 8.06(b) shall prohibit Buyer or any of its Affiliates from employing or hiring any Person (other than any Business Employees who do not become Transferred Employees) who, after the six-month anniversary of the Closing Date, contacts Buyer or any of its Affiliates on his or her own initiative without direct or indirect solicitation or as a result of a general solicitation to the public or general advertising not directed at such individuals; provided, further, that that nothing in this Section 8.06(b) shall prohibit Buyer or any of its Affiliates from employing or hiring, with the consent of Seller and following the expiration or termination of the Transition Services Agreement, any Person who provides transition services pursuant to the Transition Services Agreement.

 

Section 8.07          Non-Competition.

 

(a)        For purposes of this Agreement, “Competing Business” shall mean the business of issuing, underwriting, selling, marketing and administering annuities, including fixed, variable, registered index linked and fixed-indexed annuities, in the retail, financial institutions, broker-dealer, pension risk transfer and registered investment advisor markets.

 

(b)          Except as contemplated by the Transaction Agreements, from the Closing Date until the date that is thirty-six (36) months following the Closing Date, AFG and Seller shall not, and shall not permit any of their respective Affiliates (each, a “Restricted Person”) to, engage, as a principal or jointly with others, in the Competing Business in the United States.  Seller shall not have any obligation under this Section 8.07 with respect to any Restricted Person from and after such time as such Restricted Person ceases to be an Affiliate of Seller.  A “Restricted Person” shall not include any Person that purchases or receives assets, operations or a business from Seller or any of its Affiliates, if such Person is not an Affiliate of Seller after such transaction is consummated.

 

(c)          Notwithstanding anything to the contrary set forth in Section 8.07(b), and without implication that the following activities otherwise would be subject to the provisions of this Section 8.07, nothing in this Agreement shall preclude, prohibit or restrict AFG or Seller from engaging, or require AFG or Seller to cause any Restricted Person not to engage, in any manner in any of the following:

 

(i)          making investments in the ordinary course of business, including in a general or separate account of an insurance company, in Persons engaging in a Competing Business; provided, that each such investment is a passive investment where Seller or such Restricted Person: (A) does not have the right to designate any members of the board of directors or other governing body of such entity or to otherwise influence or direct the operation or management of any such entity, (B) is not a participant with any other Person in any group (as such term is used in Regulation 13D of the Exchange Act) with such intention or right, and (C) owns less than ten percent (10%) of the outstanding voting securities (including convertible securities) of such entity;

(ii)          selling any of its assets or businesses to a Person engaged in lines of business that compete with the Business;

 

(iii)        managing or controlling investment funds that make investments in Persons engaging in a Competing Business, so long as such investments are in the ordinary course of business and passive or non-controlling in nature;

 

(iv)         providing investment management, investment advisory or similar services to any Person;

 

(v)          providing reinsurance to any Person (including any Person engaging in a Competing Business); provided, that Seller and the Restricted Persons are not engaged in designing, underwriting or manufacturing any insurance products constituting the Competing Business;

 

(vi)       (A) underwriting, marketing, selling, issuing, administering or distributing any insurance products other than insurance products constituting the Competing Business, or (B) engaging in any activity that does not constitute the business of insurance in the applicable jurisdiction;

 

(vii)       acquiring (and thereafter, owning and operating) any Person or business that derived ten percent (10%) or less of its net operating revenue on a consolidated basis for its most recent fiscal year from a Competing Business; or

 

(viii)     acquiring (whether by way of merger or stock or asset acquisition or otherwise), directly or indirectly, any Person or business (an “Acquired Business”) where such Acquired Business derived more than twenty five percent (25%) of its net operating revenue on a consolidated basis for its most recent fiscal year from a Competing Business; provided, that Seller shall either (A) use reasonable efforts to, or shall cause the relevant Restricted Person to use reasonable best efforts to, sell, spin off or otherwise divest itself (or enter into a definitive agreement to sell, spin off or otherwise divest itself) of the portion of the division, unit or Person related to such Acquired Business that engages in the Competing Business within twelve (12) months of the closing of the acquisition of such Acquired Business; or (B) modify, or cause the relevant Restricted Person to modify, such Acquired Business such that such Acquired Business derives ten percent (10%) or less of its net operating revenue on a consolidated basis from a Competing Business.

 

Section 8.08          D&O Liabilities.  From and after the Closing Date until the sixth (6th) anniversary of the Closing Date, Buyer shall, and shall cause the Acquired Companies to, maintain in full the indemnification obligations set forth in the applicable organizational documents of the Acquired Companies, as in effect immediately prior to the Closing with such changes as may be required under applicable Law, with respect to all past directors, officers and managers of each of the Acquired Companies as well as all directors, officers and managers of each of the Acquired Companies as of the Closing Date, in each case, for acts or omissions occurring on or prior to the Closing Date in their capacities as such, and to indemnify and hold harmless such Persons in accordance therewith.  Buyer, Seller and any Person entitled to indemnification under this Section 8.08 shall cooperate in the defense of any litigation under this Section 8.08 and shall provide access to properties and individuals as reasonably requested and furnish or cause to be furnished records, information and testimony, and attend such conferences, discovery proceedings, hearings, trials or appeals, as may be reasonably requested in connection therewith.

Section 8.09          Further Action.

 

(a)          From time to time following the Closing Date, AFG, Seller and Buyer shall, and shall cause their respective Affiliates to, execute, acknowledge and deliver all reasonable further conveyances, notices, assumptions, releases and acquittances and such instruments, and shall take such reasonable actions as may be necessary or appropriate to make effective the transactions contemplated hereby as may be reasonably requested by the other party.

 

(b)          In the event that Seller or the Acquired Companies are unable to effectuate the assignment or transfer of any Excluded Asset as a result of the inability to obtain the consent or approval of a third party or Governmental Approval as of the Closing Date would adversely affect the rights of Seller or any Affiliate of Seller thereunder, Seller and Buyer shall use commercially reasonable efforts to: (i) reach a reasonable and lawful arrangement designed to provide to Seller or an Affiliate of Seller the benefit of such Excluded Asset provided Seller shall undertake to pay or satisfy the corresponding Liability for the enjoyment of such benefit to the extent Seller would have been responsible therefor if such consent or approval had been obtained, including, but not limited to, having: (A) Seller act as agent for the Acquired Company or its Affiliate; and (B) the Acquired Company enforcing for the benefit of Seller any and all rights of Acquired Company against any third party with respect to such Excluded Asset, (ii) obtain any such consent or approval that has not been obtained on or prior to the Closing Date until such time as such consent or approval has been obtained.

 

(c)          If after the Closing, (i) Buyer or any of its Subsidiaries (including the Acquired Companies) holds any Excluded Assets or (ii) Seller or any of its Subsidiaries holds any Transferred Assets, Buyer or Seller, as applicable, shall promptly transfer (or cause to be transferred) such assets and their corresponding liabilities to the other party.  Prior to any such transfer, the Person receiving or possessing any such asset shall hold it in trust for such other Person.

 

(d)          If, within three (3) months after the Closing Date, Buyer in good faith identifies any other assets that should properly have been conveyed with the Business at the Closing and, if both parties mutually agree on the identification and Transfer of such assets, Buyer and Seller (and its applicable Affiliates) shall work together in good faith to Transfer such assets to Buyer (or its applicable Affiliate).  All such Transfers shall be pursuant to instruments of Transfer in a form and substance reasonably acceptable to Buyer and Seller, and, except for assets that Buyer can demonstrate were included in the calculation of Closing Stockholders’ Equity (for which there shall be no additional compensation), shall be for a fair and reasonable compensation.

 

 

Section 9.01          Employee Matters.

 

(a)          Comparable Position.

 

(i)          On or prior to the Employment Offer Date, Buyer shall extend or shall cause one of its Affiliates to extend to all Business Employees and to provide each Business Employee with a written offer of employment, contingent on the Closing and effective as of the Closing Date (or such later date as is set forth below with respect to those Business Employees employed by Seller or any of its Affiliates who are Inactive Business Employees), that constitutes a Comparable Position with Buyer or its Affiliates (including, following the Closing Date, the Acquired Companies) (an “Offer of Employment”).  Buyer and Seller shall reasonably cooperate with respect to the process for making Offers of Employment, including sharing information about the duties and responsibilities of each Business Employee prior to, and as proposed with respect to employment with Buyer or its Affiliates (including the Acquired Companies) following, the Closing Date.  Buyer shall provide Seller with a reasonable opportunity to review and comment on each general form of Offer of Employment and, subject to the first sentence of this Section 9.01(a)(i), a list of the Business Employees to receive such Offer of Employment, which list shall set forth the compensation (including base salary, commission opportunity, benefit plan participation, target bonus and long-term award, phantom stock or similar compensation opportunity, in each case, only to the extent applicable) each such Business Employee will have with Buyer or its Affiliates (including an Acquired Company) following the Business Employee’s Effective Hire Date.

 

(ii)         Except as set forth below with respect to Inactive Business Employees, the employment relationship of each Business Employee with Seller or its applicable Affiliate shall terminate effective as of 11:59 p.m., Cincinnati, Ohio time, on the day prior to the Closing Date, and Buyer or an Affiliate of Buyer (including, following the Closing Date, the Acquired Companies) shall employ any Business Employee who (A) accepts the offer of employment in a timely fashion and (B) meets the Buyer employment requirements.  Each Business Employee who actually commences employment with Buyer or one of its Affiliates (including an Acquired Company) and performs work at his or her then applicable place of employment on the Closing Date (or such later date on which such Business Employee is scheduled, expected or permitted to work taking into account authorized or legally permitted time off or leave) shall be deemed to have terminated employment with Seller and accepted Buyer’s Offer of Employment and shall be considered and referred to as a “Transferred Employee” of Buyer or Buyer’s Affiliates (including the Acquired Companies) as of 12:00:01 a.m., Cincinnati, Ohio time, on the Closing Date (which shall be the “Effective Hire Date” for all Business Employees other than Inactive Business Employees) for all purposes of this Agreement.

(iii)       Inactive Business Employees shall remain employed by Seller or Seller’s Affiliate, as the case may be, until the earlier of the date the Inactive Business Employee becomes a Transferred Employee or the expiration of the Inactive Business Employee’s leave under Seller’s or such applicable Affiliate’s policies.  An Inactive Business Employee shall only become a Transferred Employee of Buyer or Buyer’s Affiliates (including the Acquired Companies) if, on or prior to the twelve month anniversary of the Closing Date, the Inactive Business Employee performs work at Buyer or any Affiliate (including any Acquired Company) on the first (1st) Business Day on which such Inactive Business Employee is scheduled, expected or permitted to work (taking into account authorized or legally permitted time off or leave) following the Inactive Business Employee’s release to return to work from the leave, which first such date shall be the Effective Hire Date for such Inactive Business Employee.

 

(iv)        During the period from the date hereof through the date that is not less than fifteen (15) Business Days prior to the Closing Date, Seller shall on a monthly basis (A) update Section 5.13(a) of the Seller Disclosure Schedule to add any individuals who become Business Employees after the date hereof and remove any individuals who have ceased to be Business Employees after the date hereof (in each case in compliance with Section 7.01(a)(ii) and (B) deliver such updated list of Business Employees to Buyer.

 

(v)          Buyer and Seller shall reasonably cooperate to sponsor, or transfer sponsorship of, the work permits or visas for all Transferred Employees who are foreign nationals on and after the Closing Date.

 

(b)          Employee Communications.  During the period from the date hereof through the Closing Date, Buyer and Seller shall reasonably cooperate to communicate to the Business Employees the details of the proposed terms and conditions of their employment after the Closing Date with Buyer or its designated Affiliates (including an Acquired Company).  All communications from Buyer or its Affiliates to the Business Employees during such period shall be subject to Seller’s reasonable prior approval.  All communications from Seller and its Affiliates to the Business Employees related to the transactions contemplated by this Agreement shall be subject to Buyer’s reasonable prior approval.

 

(c)          Maintenance of Overall Employment Level; Principal Office.  Notwithstanding anything to the contrary in this Section 9.01, Buyer covenants and agrees that subject to adjustment for voluntary attrition and voluntary transfers, if any, Buyer shall maintain the Business’ existing overall level of employment and principal office in Cincinnati, Ohio for at least three (3) years following the Closing Date.

 

(d)         Maintenance of Terms.  From a Transferred Employee’s Effective Hire Date and until eighteen (18) months after the Closing Date (the “Continuation Period”) or such earlier date on which such Transferred Employee’s employment with Buyer and its Affiliates terminates, Buyer shall, or shall cause its Affiliates to, provide such Transferred Employee with terms and conditions of employment (but excluding any obligation to maintain employment duties or responsibilities) that constitute a Comparable Position.

(e)       Employee Benefits.  Buyer and its Affiliates shall establish or make available to Transferred Employees benefit plans that waive any waiting period, probationary period, pre-existing condition exclusion, evidence of insurability requirement, or similar condition with respect to initial participation under any plan, program, or arrangement established, maintained, or contributed to by Buyer or any of its Affiliates under which the Transferred Employees, as applicable, may participate in respect of health insurance, dental insurance, vision insurance, life insurance, salary continuation, severance, employee assistance, education reimbursement, wellness incentives or disability benefits with respect to each Transferred Employee who has, prior to the Effective Hire Date, satisfied, under Seller’s or its Affiliates’ comparable plans (including the Acquired Companies), the comparable eligibility, insurability or other requirements referred to in this sentence.  Buyer and its Affiliates (including the Acquired Companies) shall establish or make available to Transferred Employees benefit plans that recognize the dollar amount of all co-insurance, deductibles and similar expenses incurred by each Transferred Employee (and his or her eligible dependents) during the calendar year in which the Effective Hire Date occurs for purposes of satisfying such year’s deductible and co-payment limitations under the relevant welfare benefit plans in which each Transferred Employee will be eligible to participate from and after the Effective Hire Date.  Each Transferred Employee shall, for purposes of determining such Transferred Employee’s (i) eligibility to participate in, (ii) vesting and (iii) solely for purposes of calculating the benefit accrual for vacation, severance and disability benefits, be credited under all employee benefit plans, programs and arrangements of Buyer and its Affiliates with the service of such Transferred Employee with Seller or its Affiliates up to the Effective Hire Date, to the same extent as if such Transferred Employee had performed such service for Buyer or any of its Affiliates (including any Acquired Companies) but only to the extent that such credit does not (y) result in a duplication of benefits or (z) apply to Buyer’s or its Affiliates’ pension plans or retiree health reimbursement plans.  In addition to the foregoing, Buyer shall, or shall cause one or more of its Affiliates to:

 

(i)         cause the defined contribution plan(s) maintained by Buyer or its Affiliates (the “Buyer 401(k) Plan”) to accept a direct rollover of the account (including earnings thereon through the date of transfer and any promissory note evidencing any outstanding loans) of any Transferred Employee in the investment and savings plan of Seller or Seller’s Affiliate or any other Tax-qualified retirement plan of Seller or Seller’s Affiliate (collectively, the “Seller 401(k) Plan”), that a Transferred Employee elects to make as a direct rollover, and Seller and Buyer shall cooperate in good faith to take any and all commercially reasonable actions needed to permit each Transferred Employee with an outstanding loan balance under the Seller 401(k) Plan as of the Effective Hire Date to continue to make scheduled loan payments to such plan after the Effective Hire Date, pending the distribution and in-kind rollover of the notes evidencing such loans from the Seller 401(k) Plan to the Buyer 401(k) Plan so as to prevent, to the extent reasonably possible, a deemed distribution or loan offset with respect to such outstanding loans; provided, that the amount of any outstanding participant loan that may be rolled over in-kind from the Seller 401(k) Plan to the Buyer 401(k) Plan in accordance with this provision by a Transferred Employee who is a “qualified individual,” as defined in Section 2202(b)(3) of the CARES Act, shall be the full amount of the outstanding loan, taking into account the increased loan limits provided under Section 2202(b)(1) of the CARES Act; provided, further, that Buyer shall, or shall cause one of its Affiliates to, cause the Buyer 401(k) Plan to provide each Transferred Employee who participates in the Buyer 401(k) Plan and is a “qualified individual” with the disaster-related relief permitted under Section 2202 of the CARES Act, including (x) the right to treat plan distributions as coronavirus-related distributions to the extent permitted under the CARES Act, (y) the right to recontribute coronavirus-related distributions taken from the Seller 401(k) Plan to the Buyer 401(k) Plan within three years after such distributions were taken, with such recontributed amounts treated as rollover contributions under the Buyer 401(k) Plan and (z) the right to delay the repayment of any loan amount that is otherwise due in 2020 to the extent permitted under the CARES Act and extend the loan amortization period accordingly; and

(ii)        during the Continuation Period, provide each Transferred Employee with vacation and paid time off that is no less favorable than what the Transferred Employee would have been eligible to receive under the applicable plan, policy or agreement of Seller or its Affiliates covering the Transferred Employee immediately prior to the Effective Hire Date, except that any vacation and paid time off accrued during the Continuation Period shall be subject to the carryover limitations included in the vacation and sick leave policies applicable to similarly situated employees of Buyer and its Affiliates.  In accordance with Seller’s paid time off policy, Seller or one of its Affiliates (other than the Acquired Companies) shall make a payment as soon as practicable following the Closing in settlement of all accrued and unused paid time off of any Transferred Employee.

 

(f)          Severance Obligations.  With respect to any Transferred Employee whose employment is terminated by Buyer, any of its Affiliates or any Acquired Company during the Continuation Period (or, for Transferred Employees who are part-time employees, within thirty (30) days after the Closing Date), Buyer shall, or shall cause its Affiliates or the Acquired Companies to, provide severance benefits to such Transferred Employee, which shall be determined and payable in accordance with the severance benefit policy set forth on Section 9.01(f) of the Seller Disclosure Schedule taking into account all service with the applicable Acquired Company, including before the Effective Time, in determining the amount of severance benefits payable.

 

(g)         WARN Obligations.  On the Closing Date, Seller shall deliver to Buyer a true and complete list of each employee and former employee of the Acquired Companies who experienced an “employment loss” (as defined by the WARN Act) during the ninety (90) days prior to the Closing Date.  For a period of ninety (90) days after the Closing Date, Buyer shall not engage in any conduct that would result in an employment loss or layoff for a sufficient number of employees of Buyer which, if aggregated with any such conduct on the part of Seller or any of its Affiliates prior to the Closing Date, would trigger the WARN Act.

 

(h)       Long-Term Incentive Compensation.  To the extent that any Business Employee (including any Inactive Business Employee) holds unvested equity or equity-based awards in an AFG Long Term Incentive Plan immediately prior to the Closing Date, promptly upon the Closing, Buyer shall grant to each such Business Employee who becomes a Transferred Employee a long-term incentive award, phantom stock unit or similar cash incentive compensation award, the grant date fair value of which is no less than the aggregate fair market value of the Transferred Employee’s unvested equity awards under an AFG Long Term Incentive Plan that are forfeited by such Transferred Employee solely as a result of the transactions contemplated by this Agreement based on the closing price of a share of common stock of Seller reported on the day immediately preceding the Closing Date (the “Buyer LTI Award”).  The vesting schedule for the Buyer LTI Award shall be the same as the remaining vesting schedule of the forfeited award; provided, however, that the Buyer LTI Award shall vest in full upon the Transferred Employee’s termination of employment by Buyer or any of its Affiliates for any reason other than for “cause” (as “cause” is determined by Buyer in good faith and determined pursuant to its ordinary course procedures).

(i)          Annual Incentive Compensation.  Buyer shall, or shall cause it Affiliate to, determine the annual cash incentive compensation (including sales commissions) payable to Transferred Employees in connection with their services to the Business (the “Cash Incentive Compensation”) for the calendar year in which the Closing occurs (the “Closing Year”).  All Cash Incentive Compensation shall be governed by plans, programs or arrangements maintained by Buyer and its Affiliates (including the Acquired Companies) in their discretion, subject to Buyer’s obligations under Section 9.01(d); provided, however, that Buyer or its Affiliates shall pay each Transferred Employee in respect of the portion of the Closing Year up to and including the Closing Date (the “Pre-Closing Period”) a minimum bonus (the “Pre-Closing Bonus Amount”) equal to (I) the target annual bonus applicable to the Transferred Employee for the Closing Year under the applicable Employee Benefit Plan of Seller and its Affiliates, multiplied by (II) a fraction, the numerator of which is the number of days in the Pre-Closing Period and the denominator of which is 365; provided, further, that the Buyer or its Affiliates shall pay the Pre-Closing Bonus Amount within thirty (30) Business Days following the Transferred Employee’s termination of employment by Buyer or any of its Affiliates for any reason other than for “cause” (as “cause” is determined by Buyer in good faith and determined pursuant to its ordinary course procedures).  The aggregate Pre-Closing Bonus Amount shall be accrued for purposes of the preparation of the Estimated Statement, the Post-Closing Statement and the calculation of the Estimated Closing Stockholders’ Equity and the Closing Stockholders’ Equity.

 

(j)          Cooperation.  Buyer and Seller shall cooperate, and cause their respective Affiliates to cooperate, including by (i) exchanging information and data relating to Business Employees and Employee Benefit Plans that Buyer may reasonably request so that Buyer may provide a Comparable Position and (ii) exchanging information and providing access to the employment records of the Business Employees that are reasonably requested by Buyer solely to the extent permitted by applicable Law and limited to records relating to (A) skill and development training, (B) seniority histories, (C) salary and benefit information, (D) Occupational, Safety and Health Administration reports and records, (E) form I-9s and (F) active medical restriction forms, in each case, as necessary and appropriate to carry out the provisions of this Section 9.01. Buyer shall use such files and records only in connection with the employment of such Transferred Employee and shall keep such employment files and records confidential.

 

(k)          Retention of Liabilities.  Following the Closing, Seller and its Affiliates (other than the Acquired Companies) shall retain and be responsible for (and shall indemnify and hold Buyer and the Acquired Companies from and against) (i) any and all Liabilities, whenever arising or occurring, under the Employee Benefit Plans and (ii) any and all Liabilities relating to the employment, compensation and employee benefits of the Transferred Employees which arise or are incurred prior to the Closing, in each case, other than any Liabilities under any Standalone Plan.

 

(l)          No Amendment of Plans; No Other Non-Party Right.  This Section 9.01 shall be binding upon and inure solely to the benefit of each of the parties to this Agreement, and nothing in this Section 9.01 or any other provision of this Agreement, expressed or implied, (i) shall be construed to establish, restate, amend, or modify any benefit plan, program, agreement or arrangement; (ii) shall alter or limit the ability of Seller or any of its Affiliates, or Buyer or any of their Affiliates to amend, modify or terminate any benefit plan, program, agreement or arrangement; (iii) is intended to or shall confer upon any current (including any Transferred Employee) or former employee of the Acquired Companies any rights or remedies (including third-party beneficiary rights) or any right to employment or continued employment for any period of time by reason of this Agreement or any right to a particular term or condition of employment; or (iv) shall prevent Buyer or its Affiliates (including any Acquired Companies), on or after the Closing Date, from terminating the employment of any Transferred Employee.

 

Section 10.01        Tax Matters.

 

(a)          All Transfer Taxes, if any, shall be borne fifty percent (50%) by Buyer and fifty percent (50%) by Seller, whether levied on Seller, Buyer or their respective Affiliates.  If any such Transfer Taxes are payable, the party responsible under applicable Law will pay such Transfer Taxes and file all necessary Tax Returns and other documentation with respect to all such Transfer Taxes and promptly provide a copy of such Tax Returns to the other party.  To the extent required by applicable Law, the other party will, and will cause its Affiliates to, join in the execution of any such Tax Returns and other documentation.  The non-paying party shall promptly provide the paying party with timely payment for its share of any such Transfer Taxes.

 

(b)          Seller shall cause all Tax Sharing Agreements involving any of the Acquired Companies, on the one hand, and Seller or any of its Affiliates (other than the Acquired Companies), on the other hand, to terminate as of the Closing Date, and shall ensure that such agreements are of no further force and effect as to the Acquired Companies on and after the Closing Date and that there shall be no present or future Liabilities or obligations imposed on the Acquired Companies under any such agreements.

 

Section 10.02       Tax Returns.

 

(a)         Seller shall prepare and timely file, or cause to be prepared and timely filed, (i) all Tax Returns in respect of Seller Consolidated Taxes and (ii) all Tax Returns (other than those described in clause (i) hereof) that are required to be filed by or with respect to the Acquired Companies for a Pre-Closing Date Taxable Period other than a Tax Return for a Straddle Period (those Tax Returns described in clause (ii) hereof, “Pre-Closing Date Tax Returns”).  Seller shall timely remit, or cause to be timely remitted, all Taxes due in respect of any Pre-Closing Date Tax Returns.  All Pre-Closing Date Tax Returns shall be prepared, and all elections with respect to Pre-Closing Date Tax Returns shall be made, in a manner consistent with past practice, except to the extent otherwise required by applicable Law.  Not later than thirty (30) days (in the case of an income Tax Return) or ten (10) days (in the case of a non-income Tax Return) prior to the due date for filing of each such Pre-Closing Date Tax Return that is due after the Closing Date, Seller shall provide Buyer with a draft copy of such Pre-Closing Date Tax Return for Buyer’s review and consent, which shall not be unreasonably withheld, conditioned or delayed.

(b)         Buyer shall prepare and timely file, or cause to be prepared and timely filed, all Tax Returns required to be filed by or with respect to the Acquired Companies for any Straddle Period, other than Tax Returns controlled by Seller pursuant to Section 10.02(a)(i).  Buyer shall timely remit, or cause to be timely remitted, all Taxes due in respect of such Straddle Period Tax Returns.  All such Straddle Period Tax Returns shall be prepared, and all elections with respect to such Straddle Period Tax Returns shall be made, in a manner consistent with past practice, except to the extent otherwise required by applicable Law.  Not later than thirty (30) days (in the case of an income Tax Return) or ten (10) days (in the case of a non-income Tax Return) prior to the due date for filing of each such Straddle Period Tax Return that includes any Taxes for which Seller could be liable pursuant to this Agreement, Buyer shall provide Seller with a draft copy of such Straddle Period Tax Return for Seller’s review and consent, which shall not be unreasonably withheld, conditioned or delayed.  Seller shall provide Buyer with an amount necessary to pay any Excluded Tax Liabilities due with respect to such Straddle Period Tax Returns no later than five (5) days prior to the applicable due date for each such Straddle Period Tax Return.

 

(c)         In the event of any disagreement that cannot be resolved between Buyer and Seller with respect to any Tax Return submitted for the other party’s consent pursuant to paragraph (a) or (b) of this Section 10.02, such disagreement shall be resolved by the Independent Accountant, and any such determination by the Independent Accountant shall be final.  The fees and expenses of the Independent Accountant shall be borne equally by Buyer and Seller.  If the Independent Accountant does not resolve any differences between Seller and Buyer with respect to such Tax Return at least five (5) days prior to the due date therefor, such Tax Return shall be filed as prepared by Buyer and amended to reflect the Independent Accountant’s resolution.

 

Section 10.03      Straddle Period Tax Liabilities. Where it is necessary for purposes of this Agreement to apportion between Seller and Buyer Taxes with respect to the Acquired Companies for a Straddle Period, such liability shall be apportioned between the period deemed to end on the Closing Date and the period deemed to begin at the beginning of the day following the Closing Date on the basis of an interim closing of the books, except that real or personal property Taxes shall be allocated ratably on a daily basis.

 

Section 10.04       Tax Refunds.  Buyer shall promptly forward to Seller any Tax Refund (and any interest received thereon from the applicable Tax Authority) that is received by Buyer or any of its Affiliates in respect of any Excluded Tax Liabilities, less any Taxes and any out-of-pocket expenses incurred in connection with obtaining such Tax Refund, except to the extent such Tax Refund (i) was taken into account as an asset on the Final Statement or (ii) is attributable to the carryback of any net operating loss or other Tax Attribute from any Post-Closing Date Taxable Period to any Pre-Closing Date Taxable Period.  Seller shall repay to Buyer the amount paid over pursuant to this Section 10.04 (plus any interest imposed by the applicable Tax Authority) in the event and to the extent that Buyer or any of its Affiliates is required to repay such Tax Refund to such Tax Authority.  For the avoidance of doubt, Buyer shall be entitled to all other Tax Refunds (including any interest received thereon from the applicable Tax Authority) in respect of any Taxes of the Acquired Companies, and Seller shall promptly forward to Buyer any such Tax Refund (and interest received thereon), net of any Taxes and out-of-pocket expenses in respect thereof to the extent received by Seller or any of its Affiliates.  For the purposes of this Section 10.04, any reduction in the amount of Taxes otherwise payable by any Acquired Company in any Post-Closing Date Taxable Period that is attributable to any decrease in the transition amount under section 13517(c)(3) of the Tax Cuts and Jobs Act, P.L. No. 115-97, as a result of any Tax adjustment to such amount after the date hereof shall be treated as a Tax Refund that is received by Buyer or any of its Affiliates in respect of any Excluded Tax Liabilities.

Section 10.05        Certain Actions. Without the prior consent of Seller (which consent shall be withheld, conditioned or delayed in Seller’s sole discretion), Buyer shall not, and shall not cause or permit any of its Affiliates to, (i) amend any Pre-Closing Date Tax Returns, (ii) make or change any Tax elections or accounting methods of the Acquired Companies relating to any Pre-Closing Date Taxable Period, or (iii) carry back any net operating loss or other Tax Attribute of the Acquired Companies from any Post-Closing Date Taxable Period to any Pre-Closing Date Taxable Period, in each case, except to the extent otherwise required by applicable Law.  To the extent permitted under Treasury Regulation Section 1.1502-36, Seller shall (i) make (or cause to be made) the election under Treasury Regulation Section 1.1502-36(d)(6)(i)(A) (including on a protective basis) in accordance with Treasury Regulation Section 1.1502-36(e)(5)(viii) to reduce Seller’s basis in the Shares, (ii) not make (or permit to be made) the election under Treasury Regulation Section 1.1502-36(d)(6)(i)(B), and (iii) otherwise reasonably cooperate with Buyer, in each case, to ensure that no Acquired Company shall suffer any reduction in or reattribution of any Category A, B, C or D attributes pursuant to Treasury Regulation Section 1.1502-36.  Seller and Buyer, as applicable, shall not make or permit to be made any election under Section 336(e) or Section 338 of the Code with respect to the disposition of shares of the Acquired Companies hereunder.

 

Section 10.06      Tax Contests. Each of Buyer and Seller shall notify the other party regarding, and within three (3) Business Days after, the receipt by Buyer or any of its Affiliates (including the Acquired Companies) or by Seller or any of its Affiliates, as the case may be, of notice of any inquiries, claims, notice of deficiency or other adjustment, assessments, redeterminations, audits or similar events relating to any Taxes of any of the Acquired Companies with respect to any Pre-Closing Date Taxable Period or for which Seller may otherwise be liable pursuant to this Agreement (“Tax Contests”); provided, that failure to so notify Seller or Buyer, as applicable, shall not relieve the other party of its obligations hereunder unless and to the extent Seller or Buyer, as applicable, is actually and materially prejudiced thereby.  Seller may elect, at Seller’s sole expense, to have control over the conduct of any Tax Contest with respect to any Pre-Closing Date Taxable Period other than a Tax Contest with respect to a Tax for a Straddle Period; provided that (i) Buyer shall have the right to participate in any such Tax Contest, (ii) Seller shall keep Buyer reasonably informed of the status of developments with respect to such Tax Contest and (iii) Seller shall not settle, discharge, or otherwise dispose of any such Tax Contest without the prior written consent of Buyer (which consent shall not be unreasonably withheld, conditioned or delayed).  Buyer shall be entitled to control the conduct of any other Tax Contest; provided that (i) Seller shall have the right to participate in any such Tax Contest, (ii) Buyer shall keep Seller reasonably informed of the status of developments with respect to such Tax Contest and (iii) Buyer shall not settle, discharge, or otherwise dispose of any such Tax Contest without the prior written consent of Seller (which consent shall not be unreasonably withheld, conditioned or delayed).  All other Tax audits or proceedings with respect to the Acquired Companies shall be exclusively controlled by Buyer.

 

Section 10.07        Assistance and Cooperation.  On and after the Closing Date, each of Seller and Buyer shall (and shall cause their respective Affiliates to):

 

(a)          assist the other party in preparing any Tax Returns which such other party is responsible for preparing and filing in accordance with Section 10.02;

 

(b)          cooperate fully in preparing for any audits of, or disputes with any Tax Authority regarding, any Tax Returns of the Acquired Companies;

(c)          make available to the other and to any Tax Authority as reasonably requested all information, records and documents relating to Taxes of the Acquired Companies;

 

(d)          provide timely notice to the other party in writing of any pending or threatened Tax audits or assessments of the Acquired Companies for Taxable Periods for which the other may have a Liability under Section 10.01;

 

(e)          furnish the other with copies of all correspondence received from any Tax Authority in connection with any Tax audit or information request with respect to any such Taxable Period;

 

(f)          timely sign and deliver such certificates or forms as may be necessary or appropriate to establish an exemption from (or otherwise reduce), or file Tax Returns or other reports with respect to, Transfer Taxes described in Section 10.01(a); and

 

(g)          timely provide to the other powers of attorney or similar authorizations necessary to carry out the purposes of this Article X.

 

In each case, the foregoing shall be conducted in a manner so as not to unreasonably interfere with the conduct of business of the parties.

 

 

Section 11.01      Conditions to Obligations of Seller.  The obligation of Seller to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or waiver by Seller, at or prior to the Closing, of each of the following conditions:

 

(a)         Representations and Warranties; Covenants. (i) The representations and warranties of Buyer contained in Section 6.01 and Section 6.08 shall be true and correct in all respects as of the date hereof and as of the Closing Date as if made on the Closing Date, (ii) the other representations and warranties of Buyer contained in Article VI shall be true and correct (without giving effect to any limitations as to materiality or Buyer Material Adverse Effect set forth therein) as of the date hereof and as of the Closing Date as if made on the Closing Date (other than any representation or warranty expressly made as of another date, which representation or warranty shall have been true and correct as of such date), except where the failure of such representations and warranties, individually or in the aggregate, to be true and correct has not had a Buyer Material Adverse Effect, (iii) the covenants and agreements contained in this Agreement to be performed or complied with by Buyer at or before the Closing shall have been performed or complied with in all material respects and (iv) Seller shall have received a certificate of Buyer dated as of the Closing Date to such effect signed by a duly authorized executive officer of Buyer.

 

(b)          Approvals of Governmental Authorities.  The Governmental Approvals listed in Schedule 11.01(b) shall have been received (or any waiting period shall have expired or shall have been terminated) and shall be in full force and effect.

 

(c)          No Governmental Order.  There shall be no Governmental Order or other legal restraint or prohibition in existence that prohibits the consummation of the transactions contemplated by this Agreement or the other Transaction Agreements, and no Action by any Governmental Authority of competent jurisdiction seeking the imposition of any such Governmental Order, restraint or prohibition shall be pending.

 

Section 11.02        Conditions to Obligations of Buyer.  The obligations of Buyer to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or waiver by Buyer, at or prior to the Closing, of each of the following conditions:

 

(a)          Representations and Warranties; Covenants. (i) The representations and warranties of Seller contained in Section 4.01, Section 4.05, Section 4.06 Section 5.01(a) and (b) and Section 5.02 shall be true and correct in all respects as of the date hereof and as of the Closing Date as if made on the Closing Date, (ii) the other representations and warranties of Seller contained in Article IV and Article V shall be true and correct (without giving effect to any limitations as to materiality or Company Material Adverse Effect set forth therein, other than the representation and warranty in Section 5.04(b) and any use of the defined terms “Material Contract” or “Material Distributor”) as of the date hereof and as of the Closing Date as if made on the Closing Date (other than any representation or warranty expressly made as of another date, which representation or warranty shall have been true and correct as of such date), except where the failure of such representations and warranties, individually or in the aggregate, to be true and correct has not had a Company Material Adverse Effect, (iii) the covenants contained in this Agreement to be performed or complied with by Seller on or before the Closing shall have been performed or complied with in all material respects and (iv) Buyer shall have received a certificate of Seller dated as of the Closing Date to such effect signed by a duly authorized executive officer of Seller.

 

(b)          Approvals of Governmental Authorities.  The Governmental Approvals listed in Schedule 11.02(b) shall have been received (or any waiting period shall have expired or shall have been terminated) and shall be in full force and effect.

 

(c)          No Governmental Order.  There shall be no Governmental Order or other legal restraint or prohibition in existence that prohibits the consummation of the transactions contemplated by this Agreement or the other Transaction Agreements, and no Action by any Governmental Authority of competent jurisdiction seeking the imposition of any such Governmental Order, restraint or prohibition shall be pending.

 

 

Section 12.01          Termination.  This Agreement may be terminated prior to the Closing:

 

(a)          by the mutual written consent of Seller and Buyer;

 

(b)          by either Seller or Buyer if the Closing shall not have occurred prior to September 30, 2021 (the “Outside Date”); provided, that if the Closing hereunder has not occurred due solely to the failure of a party to receive a Governmental Approval required pursuant to Section 11.01(b) or Section 11.02(b), as applicable, the Outside Date shall be automatically extended to December 31, 2021; provided, further, the right to terminate this Agreement under this Section 12.01(b) shall not be available to any party whose failure to take any action required to fulfill any of such party’s obligations under this Agreement shall have been a principal cause of, or shall have resulted in, the failure of the Closing to occur prior to such date;

 

(c)          by either Seller or Buyer in the event of the issuance of a final, nonappealable Governmental Order prohibiting the consummation of the transactions contemplated by this Agreement; provided, the right to terminate this Agreement under this Section 12.01(c) shall not be available to any party whose failure to take any action required to fulfill any of such party’s obligations under this Agreement shall have been a principal cause of, or shall have resulted in, the issuance of such final, nonappealable Governmental Order;

 

 

(d)          by Buyer in the event (i) Buyer is not in material breach of any of its covenants, representations or warranties contained herein and (ii) of a breach by Seller of any of Seller’s covenants, representations or warranties contained herein that would result in the conditions to Closing set forth in Section 11.02(a) not being satisfied, and such breach is either not capable of being cured prior to the Outside Date or, if curable, Seller shall have failed to cure such breach within sixty (60) days after receipt of written notice thereof from Buyer requesting such breach to be cured;

 

 

(e)          by Seller in the event (i) Seller is not in material breach of any of its covenants, representations or warranties contained herein and (ii) of a breach by Buyer of any of Buyer’s covenants, representations or warranties contained herein that would result in the conditions to Closing set forth in Section 11.01(a) not being satisfied, and such breach is either not capable of being cured prior to the Outside Date or, if curable, Buyer shall have failed to cure such breach within sixty (60) days after receipt of written notice thereof from Seller requesting such breach to be cured; or

 

 

(f)          by Seller if (i) the conditions set forth in Section 11.02 (other than conditions to be satisfied at the Closing) have been satisfied or waived (it being agreed that any conditions that are not so satisfied due to a breach by Buyer of any representation, warranty or covenant contained in this Agreement shall be deemed to be satisfied for purposes of this clause (f)), (ii) Buyer fails to consummate the transactions contemplated by this Agreement within three (3) Business Days of the date on which the Closing is required to occur pursuant to Section 3.01 (assuming the satisfaction of conditions deemed satisfied in accordance with the immediately preceding clause (i)) and (iii) Seller has notified Buyer in writing that Seller is ready, willing and able to consummate the transactions contemplated by this Agreement.

 

 

Section 12.02       Notice of Termination.  Any party desiring to terminate this Agreement pursuant to Section 12.01 shall give written notice of such termination to the other party to this Agreement.

 

Section 12.03        Effect of Termination.  In the event of the termination of this Agreement as provided in Section 12.01, this Agreement shall thereafter become void and there shall be no liability on the part of any party to this Agreement hereunder or in connection with the transactions contemplated hereby; provided, that nothing in this Section 12.03 shall relieve (i) any party from its obligations under Section 8.03(a) or this Article XII or (ii) any party from any liability for fraud or any willful and material breach of this Agreement (it being acknowledged and agreed by the parties hereto that the failure to effect the Closing by any party that was otherwise obligated to do so under the terms of this Agreement shall be deemed to be a willful and material breach of this Agreement).

 

Section 13.01      Survival.  The representations and warranties of AFG, Seller and Buyer contained in or made pursuant to this Agreement or in any certificate furnished pursuant to this Agreement and all claims and causes of action with respect thereto shall terminate on the date that is fifteen (15) months from the Closing Date, except that (i) the representations and warranties made in Section 4.01, Section 4.05, Section 4.06, Section 5.01(a) and (b), Section 5.02, Section 5.21(e), (f), (g) or (h), Section 6.01 and Section 6.08 and all claims and causes of action with respect thereto shall terminate on the date that is sixty (60) days after the expiration of the applicable statute of limitations, (ii) the representations and warranties made in Section 5.21 (other than those contained in Section 5.21(e), (f), (g), (h) or (n)) and all claims and causes of action with respect thereto shall terminate at the Closing and (iii) the representations and warranties made in Section 5.21(n) and Section 5.22 and all claims and causes of action with respect thereto shall terminate on the date that is three (3) years from the Closing Date.  The covenants and agreements that by their terms by their terms apply or are to be performed in their entirety at or prior to the Closing Date and all claims and causes of action with respect thereto shall terminate on the date that is fifteen (15) months from the Closing Date.  The covenants and agreements that by their terms apply or are to be performed in whole or in part after the Closing Date and all claims and causes of action with respect thereto shall survive the Closing and remain in effect for the period provided in such covenants and agreements, if any, or if later, until fully performed, but not to exceed the applicable statute of limitations in the event of a breach of any such covenant or agreement.  Notwithstanding the preceding sentences, any breach of representation, warranty, covenant or agreement in respect of which indemnity may be sought under this Agreement shall survive the time at which it would otherwise terminate pursuant to the preceding sentences until the final resolution of such claim, if, prior to such time the Indemnified Party provides written notice to the Indemnifying Party pursuant to Section 13.04.

 

Section 13.02       Indemnification by Seller.

 

(a)          After the Closing and subject to the other provisions of this Article XIII, and without duplication of amounts for which indemnification is provided by Seller under Article X, AFG and Seller, jointly and severally, shall indemnify Buyer and its Affiliates (including the Acquired Companies), Representatives, successors and permitted assigns (collectively, the “Buyer Indemnified Parties”) against all Losses suffered or incurred by any Buyer Indemnified Party, or to which any Buyer Indemnified Party otherwise becomes subject, as a result of or in connection with:

 

(i)          the inaccuracy or breach of any representation or warranty made by AFG or Seller in Article IV or Article V of this Agreement;

 

(ii)          any breach or failure by AFG or Seller to perform any of its covenants or obligations contained in this Agreement;

(iii)          any Excluded Tax Liabilities;

 

(iv)          the matter set forth on Schedule 13.02(a)(iv) (subject to the qualifications, limitations and procedures set forth on Schedule 13.02(a)(iv)); or

 

(v)          any liabilities arising out of or related to the Excluded Assets or the Excluded Subsidiaries.

 

(b)          Notwithstanding any other provision to the contrary, AFG and Seller shall not be required to indemnify any Buyer Indemnified Party against any Losses pursuant to Section 13.02(a)(i) (other than Losses to the extent arising as a result of the inaccuracy or breach of any representation or warranty made by Seller in Section 4.01, Section 4.05, Section 4.06, Section 5.01(a) and (b), or Section 5.02, as to which the limitations in this sentence shall not apply) (i) with respect to any claim (or series of related claims arising from substantially the same underlying facts, events or circumstances) unless such claim (or series of related claims arising from substantially the same underlying facts, events or circumstances) involves Losses in excess of $150,000 (nor shall any such claim or series of related claims that does not meet the $150,000 threshold be applied to or considered for purposes of calculating the aggregate amount of the Buyer Indemnified Parties’ Losses for which Seller has responsibility under clause (ii) below) and (ii) until the aggregate amount of the Buyer Indemnified Parties’ Losses exceeds $38,500,000, after which Seller shall, subject to the immediately succeeding sentence, be obligated to indemnify the Buyer Indemnified Parties against all Losses of the Buyer Indemnified Parties that, in the aggregate, are in excess of such amount.  The cumulative aggregate liability of Seller under Section 13.02(a)(i) shall in no event exceed $245,000,000 (other than in respect of Losses to the extent arising as a result of fraud or the inaccuracy or breach of any representation or warranty made by Seller in Section 4.01, Section 4.05, Section 4.06, Sections 5.01(a) and (b), or Section 5.02).  The cumulative aggregate liability of Seller under Section 13.02(a) shall in no event exceed the Base Amount; provided, however, that such limitation shall not apply to any Losses arising out of or related to any Seller Consolidated Taxes.

 

Section 13.03          Indemnification by Buyer.

 

(a)          After the Closing and subject to the other provisions of this Article XIII and Section 13.01, and without duplication of amounts for which indemnification is provided by Buyer under Article X, Buyer shall indemnify Seller and its Affiliates (but not the Acquired Companies), Representatives, successors and permitted assigns (collectively, the “Seller Indemnified Parties”) against all Losses suffered or incurred by any Seller Indemnified Party, or to which any Seller Indemnified Party otherwise becomes subject, as a result of or in connection with:

 

(i)          the inaccuracy or breach of any representation or warranty made by Buyer in Article VI of this Agreement;

 

(ii)          any breach or failure by Buyer to perform any of its covenants or obligations contained in this Agreement; or

 

(iii)         any liabilities arising out of or related to the Transferred Assets.

(b)          Notwithstanding any other provision to the contrary, Buyer shall not be required to indemnify any Seller Indemnified Party against any Losses pursuant to Section 13.03(a)(i) (other than Losses arising solely as a result of the inaccuracy or breach of any representation or warranty made by Buyer in Section 6.01 or Section 6.08, as to which the limitations in this sentence shall not apply) (i) with respect to any claim (or series of related claims arising from substantially the same underlying facts, events or circumstances), unless such claim (or series of related claims arising from substantially the same underlying facts, events or circumstances) involves Losses in excess of $150,000 (nor shall any such claim or series of related claims that does not meet the $150,000 threshold be applied to or considered for purposes of calculating the aggregate amount of the Seller Indemnified Parties’ Losses for which Buyer has responsibility under clause (ii) below) and (ii) until the aggregate amount of the Seller Indemnified Parties’ Losses exceeds $38,500,000, after which Buyer shall, subject to the immediately succeeding sentence, be obligated to indemnify the Seller Indemnified Parties against all Losses of the Seller Indemnified Parties that, in the aggregate, are in excess of such amount.  The cumulative aggregate liability of Buyer under Section 13.03(a)(i) shall in no event exceed $245,000,000 (other than in respect of Losses to the extent arising as a result of fraud or the inaccuracy or breach of any representation or warranty made by Buyer in Section 6.01 or Section 6.08).  The cumulative aggregate liability of Buyer under Section 13.03(a) shall in no event exceed the Base Amount.

 

 

Section 13.04          Notification of Claims.

 

(a)          A Person who may be entitled to be indemnified and held harmless under Section 13.02 or Section 13.03 (the “Indemnified Party”), shall promptly (and in any event within fifteen (15) Business Days) provide written notice to Buyer or Seller, as applicable (the “Indemnifying Party”) of any pending or threatened claim or demand by a third party that the Indemnified Party has determined has given or could reasonably give rise to such a right under this Agreement (including a pending or threatened claim or demand asserted by a third party against the Indemnified Party, such claim being a “Third-Party Claim”), setting forth (i) a reasonable detailed description of the claim, (ii) a good faith estimate of the amount of the claim (to the extent ascertainable) and (iii) the specific representation, warranty or provision of this Agreement that the Indemnified Party alleges to be breached; provided, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under this Article XIII except to the extent the Indemnifying Party is actually prejudiced by such failure, it being understood that notices for claims in respect of a breach of a representation, warranty, covenant or agreement must be delivered prior to the expiration of any applicable survival period specified in Section 13.01 for such representation, warranty, covenant or agreement.  Following delivery of a notice of a Third-Party Claim, the Indemnified Party shall deliver to the Indemnifying Party, promptly (and in any event within twenty (20) Business Days) after the Indemnified Party’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnified Party relating to such Third-Party Claim.

(b)          Following receipt of a notice of a Third-Party Claim from an Indemnified Party pursuant to Section 13.04(a), the Indemnifying Party may assume the defense and control of such Third-Party Claim by delivery of written notice to the Indemnified Party; provided, that the Indemnifying Party shall not be entitled to assume or maintain control of the defense of any Third-Party Claim and shall pay the reasonable fees, costs and expenses of one counsel retained by the Indemnified Party to the extent the Third-Party Claim is with respect to any criminal proceeding or any formal investigation or proceeding by FINRA or an Insurance Regulator against the Indemnified Party; provided, further, that the Indemnified Party shall allow the Indemnifying Party a reasonable opportunity to participate in the defense of such Third-Party Claim with its own counsel and at its own expense, it being understood that the Indemnified Party shall control such defense.  The assumption of the defense by the Indemnifying Party of any Third-Party Claim shall not require the Indemnifying Party to agree to be liable for any Losses in respect of such Third-Party Claim and shall be without prejudice to any rights or defenses of the Indemnifying Party in respect of whether the Indemnified Party is entitled to indemnification under this Article XIII for any particular Loss or Losses.

 

(c)          The Indemnified Party may take any actions reasonably necessary to defend such Third-Party Claim prior to the time that it receives a notice from the Indemnifying Party as contemplated by Section 13.04(b).  If the Indemnifying Party assumes the defense of any Third-Party Claim in accordance with Section 13.04(b), the Indemnifying Party shall allow the Indemnified Party a reasonable opportunity to participate in the defense of such Third-Party Claim with its own counsel and at its own expense, it being understood that the Indemnifying Party shall control such defense; provided, however, that notwithstanding the foregoing, the Indemnifying Party shall bear the reasonable fees, costs and expenses of one (1) such separate counsel if (i) the Indemnifying Party and the Indemnified Party are both named parties to the Action and the Indemnified Party shall have reasonably determined in good faith that the representation of both parties by the same counsel would be inappropriate due to actual differing interests between them or that there may be defenses or counterclaims available to the Indemnified Party that are inconsistent with those available to the Indemnified Party or (ii) the Indemnifying Party shall have authorized the Indemnified Party to employ separate counsel at the Indemnifying Party’s expense.  If the Indemnifying Party assumes the defense of any Third-Party Claim, the Indemnifying Party shall not, for so long as it conducts such defense in good faith, be liable to the Indemnified Party for legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof other than provided in this Section 13.04(c).  The Indemnifying Party shall be liable for the reasonable fees, costs and expenses of counsel employed by the Indemnified Party for any period during which Indemnifying Party has not assumed or is not conducting the defense in good faith of a Third-Party Claim for which the Indemnified Party is entitled to indemnification hereunder.  Seller or Buyer, as the case may be, shall, and shall cause each of its Affiliates and Representatives to, reasonably cooperate with the Indemnifying Party in the defense of any Third-Party Claim.  Without limiting the generality of the foregoing, from and after the delivery of a notice of a claim for indemnification with respect to a Third-Party Claim, at the reasonable request of the Indemnifying Party, each Indemnified Party shall grant the Indemnifying Party and its Representatives reasonable access, during normal business hours, to the books, records, personnel and properties of the Indemnified Party to the extent reasonably related to such Third-Party Claim, at no cost to the Indemnifying Party (other than for reasonable out-of-pocket expenses of the Indemnified Parties).  The Indemnifying Party shall be authorized to consent to a settlement of, or the entry of any judgment arising from, any Third-Party Claim, without the consent of any Indemnified Party; provided, that (A) such settlement provides only for the payment of monetary damages (and does not impose any injunctive relief or otherwise impose any conditions or restrictions on the applicable Indemnified Party or any of its Affiliates or Representatives) and does not involve any finding or admission of any violation of Law or admission of any wrongdoing or any violation of the rights of any Person and does not include a statement or admission of fault, culpability or failure to act by or on the part of any Indemnified Party or any of its Affiliates or Representatives, (B) the Indemnifying Party pays or causes to be paid all amounts arising out of such settlement or judgment concurrently with the effectiveness of such settlement or judgment (other than as contemplated by Section 13.02(b) or Section 13.03(b)), and (C) the Indemnifying Party obtains, as a condition of any settlement, entry of judgment or other resolution, a complete and unconditional release of each Indemnified Party from any and all Liabilities in respect of such Third-Party Claim.  If the Indemnifying Party elects not to defend the Indemnified Party against a Third-Party Claim to which it is entitled to indemnification hereunder, then the Indemnified Party shall have the right but not the obligation to assume its own defense, but without in any way waiving or otherwise affecting the Indemnified Party’s rights to indemnification pursuant to this Agreement, and the Indemnifying Party shall bear all fees, costs and expenses of one such counsel engaged by the Indemnified Party for Third-Party Claims for which such Indemnified Party was entitled to indemnification hereunder.

(d)          No Indemnifying Party shall have any liability under this Article XIII for any Losses arising out of or in connection with any Third-Party Claim that is settled or compromised by an Indemnified Party without the prior consent of such Indemnifying Party (such consent not to be unreasonably withheld, conditioned or delayed).

 

(e)          If an Indemnified Party shall have a claim under this Article XIII that does not involve a Third-Party Claim, the Indemnified Party shall promptly (and in any event within fifteen (15) Business Days) provide written notice to the Indemnifying Party setting forth (i) a reasonably detailed description of the claim, (ii) a good faith estimate of the amount of the claim (to the extent ascertainable) and (iii) the specific representation, warranty or provision of this Agreement that the Indemnified Party alleges to be breached, and such notice shall be accompanied by copies of all available documentation that may be necessary or appropriate for the purposes of enabling the Indemnifying Party to be informed and to take any and all appropriate decisions and actions in respect of the matter and Loss that is the subject of the claim; provided, that the failure to provide such notice on a timely basis shall not release the Indemnifying Party from any of its obligations under this Article XIII except to the extent the Indemnifying Party is actually prejudiced by such failure, it being understood that notices for claims in respect of a breach of a representation, warranty, covenant or agreement must be delivered prior to the expiration of any applicable survival period specified in Section 13.01 for such representation, warranty, covenant or agreement.

 

(f)          If there shall be any conflict between the provisions of this Section 13.04 and Section 10.06, the provisions of Section 10.06 shall control with respect to Tax Contests.

 

(g)          Notwithstanding any other provision to the contrary, the Buyer Indemnified Parties may bring a claim pursuant to Section 13.02 that relates to a breach of a representation or warranty under Section 5.22 even if no related Third-Party Claim has been first asserted or made against Buyer with respect thereto; provided, however, that any such claim must be based on the good faith determination by Buyer that a breach of representation or warranty under Section 5.22 has occurred.  If any Buyer Indemnified Party brings a claim for a breach of representation or warranty under Section 5.22 with respect to which no Third-Party Claim has previously been asserted (a “Direct Product Tax Claim”), Seller and Buyer shall cooperate in good faith to determine whether any breach of a representation or warranty under Section 5.22 has occurred (including making reasonably available personnel and all reasonably requested information, records and documents relating to such claim)  and, if necessary, to develop corrective measures that are reasonable and efficacious, taking into account all of the relevant facts and circumstances then applicable.  For the avoidance of doubt, the amount of any Buyer Indemnified Party’s Losses with respect to any such claim shall include all costs and expenses reasonably incurred by the Buyer Indemnified Parties (including allocable employee compensation and other internal costs and fees and expenses of attorneys, accountants, consultants and others and other out-of-pocket expenses) to analyze and correct or repair any Information Technology to avoid a recurrence of the circumstances that provided the basis for such claim (regardless of whether such circumstances would reasonably be expected to arise solely with respect to policies or contracts issued or administered following the Closing Date using such Information Technology).

 

(h)          If Seller and Buyer cannot agree as to whether a breach of a representation or warranty under Section 5.22 has occurred, and if Seller promptly (and in any event within forty-five (45) Business Days) after receiving notice of such Direct Product Tax Claim with respect to the alleged breach of a representation or warranty under Section 5.22 delivers or causes to be delivered to Buyer an opinion addressed to Buyer and issued by a reputable nationally recognized law firm, accounting firm or actuarial firm that is familiar with analyzing matters of the type covered by the representations and warranties set forth in Section 5.22 to the effect that it is more likely than not that no such breach has occurred with respect to such Direct Product Tax Claim then in dispute, then Seller shall not be required to indemnify the applicable Indemnified Party with respect to such Direct Product Tax Claim, unless and until either a Third-Party Claim with respect thereto subsequently arises, or such opinion is subsequently withdrawn or qualified (other than as a result of a change in applicable Law).  If Seller does not deliver or cause to be delivered to Buyer any such opinion within such forty-five (45)-Business Day period, then, within sixty (60) Business Days, Buyer shall develop in good faith and deliver to Seller for Seller’s review proposed corrective measures that are reasonable and cost-effective, taking into account all of the relevant facts and circumstances then applicable.  Seller shall have thirty (30) Business Days to provide comments on Buyer’s proposal, and Buyer will review and consider the Seller’s comments in good faith.

 

(i)          If Seller and Buyer cannot agree in good faith with respect to the reasonable and cost effective corrective measures, the disagreement shall be resolved by a reputable nationally recognized law firm, accounting firm or actuarial firm selected by mutual agreement of Buyer and Seller which will determine which of Buyer’s or Seller’s proposed corrective measures that are subject to disagreement should be included in Buyer’s revised plan as being the most reasonable and cost-effective, taking into account all of the relevant facts and circumstances then applicable, any such determination by such law firm, accounting firm or actuarial firm shall be final.  The fees and expenses of such law firm, accounting firm or actuarial firm shall be borne equally by Buyer and Seller.  In the event that the corrective measures described in this Section 13.04 include making any request to the IRS for relief with respect to such failure, Buyer and Seller shall jointly participate in all discussions or other proceedings with the IRS, including attendance at meetings and joint approval of all written submissions.  Buyer shall control the decision of whether or not to enter into a closing agreement or other arrangement with the IRS in connection with such discussions or other proceedings; provided that Buyer shall not enter into any such closing agreement or other arrangement without the consent of Seller, which shall not be unreasonably withheld, conditioned or delayed.  Buyer shall control the implementation of the corrective measures described in Section 13.04(g)-(i).  Similar procedures shall apply with respect to a claim that relates to a potential breach of the representation in Section 5.21(n) as applicable.

Section 13.05          Payment.  In the event an Action under this Article XIII shall have been finally determined, the amount of such final determination shall be paid to the Indemnified Party on demand in immediately available funds.  An Action, and the liability for and amount of damages therefor, shall be deemed to be “finally determined” for purposes of this Article XIII when the parties to such Action have so determined by mutual agreement or, if disputed, when a final nonappealable Governmental Order shall have been entered.

 

 

Section 13.06          No Duplication; Exclusive Remedies.

 

(a)          Any liability for indemnification hereunder and under any other Transaction Agreement shall be determined without duplication of recovery by reason of the same Loss.

 

(b)          Prior to the Closing, other than in the case of fraud, the sole and exclusive remedy of AFG, Seller and Buyer, respectively, for any breach or inaccuracy of any representation or warranty contained in this Agreement shall be refusal to consummate the transactions contemplated by the Transaction Agreements and termination of this Agreement in accordance with Section 12.01.

 

(c)          Following the Closing, other than in the case of fraud, and except for breaches or non-performance of provisions in this Agreement for which the remedy of specific performance is available pursuant to Section 14.13 the indemnification provisions of Article XIII shall be the sole and exclusive remedies of AFG, Seller and Buyer, respectively, for any breach of or inaccuracy in any representations or warranties in this Agreement and any breach or failure to perform or comply with any of the covenants or agreements contained in this Agreement.  In furtherance of the foregoing, each of Buyer, on behalf of itself and each other Buyer Indemnified Party, and AFG and Seller, on behalf of itself and each other Seller Indemnified Party, hereby waives, from and after the Closing, to the fullest extent permitted under applicable Law, any and all rights, claims and causes of action (other than claims of, or causes of action arising from, fraud) it may have against Seller or any of its Affiliates or Representatives and Buyer or any of its Affiliates or Representatives, as the case may be, arising under or based upon this Agreement, any certificate or instrument delivered in connection herewith (whether under this Agreement or arising under common Law or any other applicable Law), except pursuant to: (i) the indemnification provisions set forth in this Article XIII or (ii) as provided under (A) the provisions of Section 2.03, (B) the provisions hereof providing for equitable remedies or (C) the provisions of any other Transaction Agreement.

 

Section 13.07          Additional Indemnification Provisions.

 

(a)          With respect to each indemnification obligation in this Agreement (i) each such obligation shall be calculated on an After-Tax Basis (provided that, if any Tax benefit or detriment properly taken into account in the definition of After-Tax Basis is realized following the date on which an indemnity payment is made, the parties shall promptly cause a corrective payment to be made), (ii) all Losses shall be net of any actual non-refundable recoveries to the Indemnified Party described in Section 13.07(b) and (iii) in no event shall AFG or Seller have any liability or obligation under this Article XIII to any Buyer Indemnified Parties to the extent that any Loss, or portion thereof, as applicable, for which indemnification is sought hereunder is expressly reflected or reserved for on the Final Statement.

(b)          In any case where an Indemnified Party recovers from a third Person not affiliated with such Indemnified Party, including any third-party insurer, but excluding any amount in respect of any Loss paid by an Indemnifying Party pursuant to this Article XIII, such Indemnified Party shall promptly pay over to the Indemnifying Party the amount so recovered (net of any Expenses incurred by such Indemnified Party in procuring such recovery, which Expenses shall not exceed the amount so recovered), and, if applicable, net of such Indemnified Party’s (i) retroactive or prospective premium adjustments associated with such recovery from a third-party insurer and (ii) actual increase(s) in such Person’s and its Affiliates’ insurance premium that is reasonably attributable to such Loss (collectively, the “Premium Increase”), but not in excess of the sum of (A) any amount previously paid by the Indemnifying Party to or on behalf of the Indemnified Party in respect of such claim and (B) any amount expended by the Indemnifying Party in pursuing or defending any claim arising out of such matter.

 

(c)          An Indemnified Party shall use reasonable best efforts to mitigate the amount of its Losses upon and after becoming aware of any facts or circumstances that would reasonably be expected to result in any Losses that are indemnifiable hereunder.

 

(d)          If any portion of Losses to be paid by the Indemnifying Party pursuant to this Article XIII would reasonably be expected to be recoverable from a third party not affiliated with the relevant Indemnified Party (including under any applicable third-party insurance coverage) based on the underlying claim or demand asserted against such Indemnifying Party, then the Indemnified Party shall promptly after becoming aware of such fact give notice thereof to the Indemnifying Party and, upon the request of the Indemnifying Party, shall use reasonable best efforts to collect the maximum amount recoverable from such third party, in which event the Indemnifying Party shall reimburse the Indemnified Party for (i) all reasonable costs and expenses incurred in connection with such collection (which costs and expenses of collection shall not exceed the amount recoverable from such third party) and (ii) any related Premium Increase.  If any portion of Losses actually paid by the Indemnifying Party pursuant to this Article XIII could have been recovered from a third party not affiliated with the relevant Indemnified Party based on the underlying claim or demand asserted against such Indemnifying Party, then the Indemnified Party shall transfer, to the extent transferable, such of its rights to proceed against such third party as are necessary to permit the Indemnifying Party to recover from such third party any amount actually paid by the Indemnifying Party pursuant to this Article XIII.

 

(e)          The parties shall treat any indemnification payment made under this Agreement as an adjustment to the Purchase Price for applicable tax purposes.

 

(f)          For purposes of determining whether a breach of any representation or warranty made in this Agreement has occurred, and for calculating the amount of any Loss under this Article XIII, each representation and warranty contained in this Agreement shall be read without regard to any “materiality,” “Company Material Adverse Effect,” “Buyer Material Adverse Effect” or other similar qualification contained in or otherwise applicable to such representation or warranty, other than (i) the representations and warranties in Section 5.04(b), Section 5.09(a), Section 5.12, and the second sentence of Section 5.13(b) and (ii) any use of the defined terms “Material Contract” or “Material Distributor.”

(g)          Neither Buyer nor Seller shall have any right to set off any unresolved indemnification claim pursuant to this Article XIII against any payment due pursuant to Article II or Article III or any other Transaction Agreement.

 

Section 13.08          Reserves.  Notwithstanding anything to the contrary in this Agreement or the other Transaction Agreements, Buyer acknowledges and agrees that Seller makes no representation or warranty with respect to, and nothing contained in this Agreement, any other Transaction Agreements or in any other agreement, document or instrument to be delivered in connection with the transactions contemplated hereby or thereby is intended or shall be construed to be a representation or warranty (express or implied) of Seller with respect to (a) the adequacy or sufficiency of the Reserves of the Acquired Companies, (b) the future profitability of the Business, (c) the effect of the adequacy or sufficiency of the Reserves of the Acquired Companies on any “line item” or asset, Liability or equity amount, or (d) the collectability of any amounts under any reinsurance contract.  Furthermore, no fact, condition, circumstance or event relating to or affecting the development of the Reserves of the Acquired Companies may be used, directly or indirectly, to demonstrate or support the breach of any representation, warranty, covenant or agreement contained in this Agreement, any other Transaction Agreement or any other agreement, document or instrument to be delivered in connection with the transactions contemplated hereby or thereby.

 

 

Section 14.01          Expenses.  Except as may be otherwise specified in the Transaction Agreements, all costs and expenses, including fees and disbursements of counsel, financial advisers and independent accountants, incurred in connection with the Transaction Agreements and the transactions contemplated by the Transaction Agreements shall be paid by the Person incurring such costs and expenses, whether or not the Closing shall have occurred.

 

Section 14.02          Notices.  All notices, requests, consents, claims, demands and other communications under the Transaction Agreements shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service, by email or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 14.02):

 

(a)           if to Seller or AFG:

 

	American Financial Group, Inc.
	301 East Fourth Street, 39th Floor
	Cincinnati, Ohio  45202
	Attention:	Vito C. Peraino
	Email:	***@***

with a copy to (which shall not constitute notice to Seller for the purposes of this Section 14.02):

 

	Keating Muething & Klekamp PLL
	1 East Fourth Street, Suite 1400
	Cincinnati, Ohio  45202
	Attention:	Michael J. Moeddel
		Julie T. Muething
	Email:	***@***
		***@***
	and
	Skadden, Arps, Slate, Meagher & Flom LLP
	One Manhattan West
	New York, New York 10001
	Attention:	Todd E. Freed
	Email:	***@***

	Massachusetts Mutual Life Insurance Company
	1295 State Street
	Springfield, Massachusetts 01111
	Attention:	Michael Fanning
		Michael J. O’Connor
	Email:	***@***
		***@***
	with a copy to (which shall not constitute notice to Seller for the purposes of this Section 14.02):
	Debevoise & Plimpton LLP
	919 Third Avenue
	New York, New York  10022
	Attention:	Nicholas F. Potter
		Marilyn A. Lion
	Email:	***@***
		***@***

Section 14.03          Public Announcements.  No party to this Agreement or any Affiliate or Representative of such party shall issue or cause the publication of any press release or public announcement or otherwise communicate with any news media in respect of this Agreement or the transactions contemplated by this Agreement without the prior written consent of the other party (which consent shall not be unreasonably withheld, conditioned or delayed), except (a) as may be required by Law or applicable securities exchange rules, in which the case the party required to publish such press release or public announcement shall allow the other parties a reasonable opportunity to comment on such press release or public announcement in advance of such publication or (b) to enforce its rights and remedies under this Agreement or the other Transaction Agreements.

Section 14.04          Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced under any Law or as a matter of public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any party.  Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties to this Agreement shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated by this Agreement be consummated as originally contemplated to the greatest extent possible.

 

Section 14.05          Entire Agreement.  The Transaction Agreements constitute the entire agreement of the parties hereto with respect to the subject matter of the Transaction Agreements and supersede all prior agreements and undertakings, both written and oral (other than the Confidentiality Agreement to the extent not in conflict with this Agreement), between or on behalf of Seller or its Affiliates, on the one hand, and Buyer or its Affiliates, on the other hand, with respect to the subject matter of the Transaction Agreements.

 

Section 14.06          Assignment.  This Agreement shall not be assigned by any party hereto without the prior written consent of the other parties hereto; provided that Buyer may, prior to the date it makes the “Form A” filing pursuant to Section 7.03(c), without the prior written consent of AFG and Seller, assign all or part of its rights and obligations under this Agreement to a wholly-owned Subsidiary, so long as such assignment would not reasonably be expected to materially impair or delay the receipt of the Governmental Approvals listed in Schedule 11.02(b); provided, further, that (a) no such assignment shall relieve Buyer of any of its obligations hereunder and (b) Buyer shall provide Seller a copy any such assignment and a description of business and operations of the assignee within twenty-four (24) hours of such assignment.  Any attempted assignment in violation of this Section 14.06 shall be void.  This Agreement shall be binding upon, shall inure to the benefit of, and shall be enforceable by the parties hereto and their permitted successors and assigns.

 

Section 14.07          No Third-Party Beneficiaries.  Except as provided in (a) Section 8.08 with respect to the directors, officers and managers of the Acquired Companies and their successors, assigns heirs and executors and (b) Article XIII with respect to the Seller Indemnified Parties and Buyer Indemnified Parties, this Agreement is for the sole benefit of the parties to this Agreement and their permitted successors and assigns and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

Section 14.08          Amendment.  No provision of this Agreement may be amended, supplemented or modified except by a written instrument signed by all the parties hereto.

Section 14.09          Schedules.  Any disclosure set forth in the Seller Disclosure Schedule with respect to any Section or sub-Section of this Agreement shall be deemed to be disclosed for purposes of other Sections or sub-Sections of this Agreement to the extent that such disclosure sets forth facts in sufficient detail so that the relevance of such disclosure would be reasonably apparent to a reader of such disclosure.  Matters reflected in any Section of the Seller Disclosure Schedule are not necessarily limited to matters required by this Agreement to be so reflected.  Such additional matters are set forth for informational purposes or to avoid misunderstanding and do not necessarily include other matters of a similar nature.  No reference to or disclosure of any item or other matter in the Seller Disclosure Schedule shall be construed as an admission or indication that such item or other matter is material or that such item or other matter is required to be referred to or disclosed in this Agreement.  Without limiting the foregoing, no such reference to or disclosure of a possible breach or violation of any contract, Law or Governmental Order shall be construed as an admission or indication that a breach or violation exists or has actually occurred.

 

Section 14.10          Submission to Jurisdiction.

 

(a)          Each of the parties hereto irrevocably and unconditionally submits for itself and its property in any Action arising out of or relating to the Transaction Agreements, the transactions contemplated by the Transaction Agreements, the formation, breach, termination or validity of the Transaction Agreements or the recognition and enforcement of any judgment in respect of the Transaction Agreements, to the exclusive jurisdiction of the courts of the State of New York sitting in the County of New York, the federal courts for the Southern District of New York, and appellate courts having jurisdiction of appeals from any of the foregoing, and all claims in respect of any such Action shall be heard and determined in such New York courts or, to the extent permitted by Law, in such federal court.

 

(b)          Any such Action may and shall be brought in such courts and each of the parties irrevocably and unconditionally waives any objection that it may now or hereafter have to the venue or jurisdiction of any such Action in any such court or that such Action was brought in an inconvenient court and shall not plead or claim the same.

 

(c)          Service of process in any Action may be effected by mailing a copy of such process by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party at its address as provided in Section 14.02.

 

(d)          Nothing in this Agreement or any other Transaction Agreement shall affect the right to effect service of process in any other manner permitted by the Laws of the State of New York.

 

Section 14.11          Governing Law.  This Agreement, and the formation, termination or validity of any part of this Agreement, shall in all respects be governed by, and construed in accordance with, the Laws of the State of New York.

 

Section 14.12          Waiver of Jury Trial.  EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER TRANSACTION AGREEMENTS, OR ITS PERFORMANCE UNDER OR THE ENFORCEMENT OF THIS AGREEMENT OR ANY OTHER TRANSACTION AGREEMENT.

Section 14.13          Specific Performance.  The parties agree that irreparable damage would occur in the event that any of the covenants or obligations contained in this Agreement are not performed in accordance with their specific terms or were otherwise breached.  Accordingly, each of the parties hereto shall be entitled to injunctive or other equitable relief to prevent or cure any breach by the other party of its covenants or obligations contained in this Agreement and to specifically enforce such covenants and obligations in any court referenced in Section 14.10(a) having jurisdiction, such remedy being in addition to any other remedy to which any party may be entitled at law or in equity.  The parties acknowledge and agree that, in the event that the other party seeks an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the terms and provisions of this Agreement, the party seeking an injunction will not be required to provide any bond or other security in connection with any such order or injunction.

 

Section 14.14          Waivers.  Any term or provision of this Agreement may be waived, or the time for its performance may be extended, in writing at any time by the party or parties entitled to the benefit thereof.  Any such waiver shall be validly and sufficiently authorized for the purposes of this Agreement if, as to any party, it is authorized in writing by an authorized Representative of such party.  The failure of any party hereto to enforce at any time any provision of this Agreement shall not be construed to be a waiver of such provision, nor in any way to affect the validity of this Agreement or any part hereof or the right of any party thereafter to enforce each and every such provision.  No waiver of any breach of this Agreement shall be held to constitute a waiver of any preceding or subsequent breach.

 

Section 14.15          Rules of Construction.  Interpretation of this Agreement and the other Transaction Agreements (except as specifically provided in any such agreement, in which case such specified rules of construction shall govern with respect to such agreement) shall be governed by the following rules of construction: (a) words in the singular shall be held to include the plural and vice versa, and words of one gender shall be held to include the other gender as the context requires; (b) references to Articles, Sections, paragraphs, Exhibits and Schedules are references to the Articles, Sections, paragraphs, Exhibits and Schedules to this Agreement unless otherwise specified; (c) references to “dollars” or “$” shall mean United States dollars; (d) the word “including” and words of similar import when used in the Transaction Agreements shall mean “including without limiting the generality of the foregoing,” unless otherwise specified; (e) the word “or” shall not be exclusive; (f) the table of contents, articles, titles and headings contained in the Transaction Agreements are for reference purposes only and shall not affect in any way the meaning or interpretation of the Transaction Agreements; (g) the parties have participated jointly in the negotiation and drafting of the Transaction Agreements; consequently, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the parties and without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument to be drafted; (h) the Schedules and Exhibits referred to herein shall be construed with and as an integral part of this Agreement to the same extent as if they were set forth verbatim herein; (i) unless the context otherwise requires, the words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (j) all terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein; (k) any agreement or instrument defined or referred to herein or any agreement or instrument that is referred to herein means such agreement or instrument as from time to time amended, modified or supplemented, including by waiver or consent, and references to all attachments thereto and instruments incorporated therein; (l) any statement that a document has been “delivered,” “provided” or “made available” to Buyer means that such document has been uploaded to the electronic data site titled “Project Osprey” established by Seller and maintained by Intralinks not later than January 25, 2021 or transmitted to Buyer’s counsel by electronic mail between January 25, 2021 and the date of this Agreement; (m) any statute or regulation referred to herein means such statute or regulation as amended, modified, supplemented or replaced from time to time (and, in the case of any statute, includes any rules and regulations promulgated under such statute), and references to any section of any statute or regulation include any successor to such section; (n) all time periods within or following which any payment is to be made or act is to be done shall be calculated by excluding the date on which the period commences and including the date on which the period ends and by extending the period to the first succeeding Business Day if the last day of the period is not a Business Day; (o) references to any Person include such Person’s predecessors or successors, whether by merger, consolidation, amalgamation, reorganization or otherwise; (p) references to any contract (including this Agreement) or organizational document are to the contract or organizational document as amended, modified, supplemented or replaced from time to time, unless otherwise stated; (q) with respect to any determination of any period of time, unless otherwise set forth herein, the word “from” means “from and including” and the word “to” means “to but excluding,” (r) references to a “party” hereto means AFG, Seller or Buyer and references to “parties” hereto means AFG, Seller and Buyer unless the context otherwise requires and (s) references to “fraud” with respect to any party shall mean actual and intentional fraud by such party with the specific intent to deceive and mislead the other party in making the representations and warranties pursuant to Article IV, Article V, or Article VI; provided, that “fraud” shall not include any fraud claim based on constructive knowledge, negligent misrepresentation or a similar theory.

Section 14.16          Counterparts.  This Agreement and each of the other Transaction Agreements may be executed in two (2) or more counterparts, and by the different parties to each such agreement in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page to any Transaction Agreement by facsimile or by electronic delivery in PDF format shall be as effective as delivery of a manually executed counterpart of any such Agreement.

 

Section 14.17          Legal Representation; Privilege.  The parties hereby agree that, (a) in the event that a dispute arises after the Closing between Buyer or any of its Affiliates (including the Acquired Companies), on the one hand, and Seller or any of its Affiliates, on the other hand, Keating Muething & Klekamp PLL (“KMK”) or Skadden, Arps, Slate, Meagher & Flom LLP (“Skadden”) may represent Seller and its Affiliates in such dispute even though the interests of Seller or its Affiliates may be directly adverse to or any of its Affiliates (including the Acquired Companies) and (b) all privileged communications prior to the Closing between Seller, the Acquired Companies or any of their respective Affiliates, directors, officers, employees or Representatives, on the one hand, and KMK or Skadden, on the other hand, made in connection with the negotiation, execution, announcement or performance of this Agreement and the other Transaction Agreements or the pendency or consummation of the transactions contemplated hereby and thereby, or otherwise relating to the foregoing or any potential sale of the Acquired Companies or the Business, shall be deemed to be privileged and confidential communications of Seller, and the control of the confidentiality and privilege applicable thereto shall be retained by Seller.  Notwithstanding the foregoing, in the event that a dispute arises between Buyer or any of its Affiliates (including the Acquired Companies), on the one hand, and a Person other than a party to this Agreement or its Affiliates, on the other hand, after the Closing, Buyer or any of its Affiliates (including the Acquired Companies) may assert the attorney-client privilege to prevent disclosure to such third-party of such privileged communications; provided that none of Buyer or any of its Affiliates (including the Acquired Companies) may waive such privilege without the prior written consent of Seller.