Item 1.01 Entry into a Material Definitive Agreement
Effective May 8, 2020, American Insurance Acquisition, Inc. (“AIAI”), a subsidiary of Atlas Financial Holdings, Inc. (the “Company”), and the Director of Insurance of the State of Illinois, Robert Muriel (the “Director”), acting solely in his capacity as the statutory and court-affirmed successor to and rehabilitator (the “Rehabilitator”) of Gateway Insurance Company in rehabilitation (“Gateway”), entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Buckle Corp (“Buckle”). Pursuant to the Stock Purchase Agreement and subject to closing conditions, including certain insurance regulatory and court approvals, Buckle will acquire the stock (and thereby the charter and all rights to the state insurance licenses) of Gateway. The timing of such approvals may be impacted by COVID-19. Prior to the closing of the transaction, the Director, in his capacity as regulator and as Rehabilitator, will seek the entry of written court orders liquidating Gateway and approving the sale of the stock in, and channeling of the charter and rights to all licenses of, Gateway. The amount of $4,200,010, representing a portion of the purchase price, will be paid to the Rehabilitator for the benefit of the consolidated estates of the ASI Pool Companies at closing by Buckle. In addition, $500,000 will be escrowed and released as additional purchase price depending on how many insurance licenses of Gateway are in full force and effect without restriction following the closing. At the time of closing, affiliates of Buckle and affiliates of AIAI intend to enter into a general agency agreement relating to the transition of qualifying taxi, livery and limousine business written by Anchor Group Management, Inc., a wholly-owned indirect subsidiary of the Company (“AGMI”), to Gateway, as well as a program framework agreement relating to future administrative support to be provided by AIAI and AGMI in connection with the operation of Gateway. The parties also intend to discuss a claim handling arrangement following the closing.
The description of the Stock Purchase Agreement contained herein is a summary description only, and is qualified in its entirety by the terms of the Stock Purchase Agreement.
Forward-Looking Statements
This Current Report on Form 8-K includes forward-looking statements and information within the meaning of the federal securities laws regarding the Company and its businesses. Such statements are based on the current expectations, estimates, projections, and assumptions made by management. The words “anticipate,” “expect,” “believe,” “may,” “should,” “estimate,” “project,” “outlook,” “forecast” or similar words are used to identify such forward looking information. The forward-looking events and circumstances discussed in this report may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting the Company, including risks regarding the effects and duration of the COVID-19 outbreak, the insurance industry, economic factors, and the equity markets generally and the other risk factors discussed in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and subsequent periodic reports. Many of these uncertainties and risks are difficult to predict and beyond management’s control. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made, and the Company and its subsidiaries undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
