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EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement"), dated as
of August 23, 1999, is among E-Loan, Inc., a Delaware corporation ("Purchaser"),
Banc of America Auto Finance Corp., a Delaware corporation ("Bank of America"),
Xxxxxx X. Xxxxxx, a resident of the state of New York ("Xxxxxx"), and the
persons and entities named on the signature page hereof (the "Non-Bank
Stockholders" and each a "Non-Bank Stockholder"; Bank of America, Xxxxxx and the
Non-Bank Stockholders are collectively referred to herein as the
"Stockholders").
RECITALS
WHEREAS, Electronic Vehicle Remarketing, Inc., a Delaware corporation
("EVRI"), has issued and outstanding 679,820 shares of common stock, par value
$.01 per share (the "Common Stock"), constituting all of the issued and
outstanding capital stock of EVRI;
WHEREAS, Bank of America is the owner and registered holder of 80.61% of
the issued and outstanding Common Stock, and Xxxxxx and the Non-Bank
Stockholders are the owners and registered holders of 19.39% of the issued and
outstanding Common Stock, each Stockholder being the holder of the number of
shares of Common Stock set forth opposite its name on Schedule 1 attached hereto
and made a part hereof;
WHEREAS, Xxxxxx is the founder of EVRI and has been the President of
EVRI since its incorporation;
WHEREAS, the Purchaser desires to acquire from the Stockholders, and the
Stockholders desire to sell to the Purchaser, all of the issued and outstanding
shares of Common Stock on the terms and conditions provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and intending to be legally bound, Purchaser, and the
Stockholders hereby agree as follows:
ARTICLE 1. EXCHANGE
1.1 Exchange of Shares.
(a) On the Closing Date (as hereinafter defined) and subject
to the terms and conditions set forth herein, (i) the
Stockholders shall transfer, assign and deliver to
Purchaser all of the then issued and outstanding shares
of capital stock of EVRI (the "EVRI shares"), and (ii)
Purchaser shall issue to the Stockholders in
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exchange therefor (the "Exchange") an aggregate of
2,880,000 shares of the voting common stock, par value
$.001 per share, of Purchaser (the "Purchaser Stock").
The number of shares of Purchaser Stock to be issued to
each Stockholder will be determined by multiplying the
aggregate number of shares of Purchaser Stock (the
"Purchaser Shares") to be issued to the Stockholders as
determined in accordance with the preceding sentence by
a fraction, the numerator of which is the number of EVRI
Shares held by such Stockholder and the denominator of
which is the total number of EVRI Shares then
outstanding (a Stockholder's "Pro Rata Interest").
Schedule 1.1 sets forth the number of shares of
Purchaser Stock to be issued to each Stockholder in the
Exchange, based on the current holdings of EVRI Shares
by the respective Stockholders. In the event of any
stock split, dividend paid in stock, recapitalization or
reclassification with respect to Purchaser Stock prior
to the Closing, the number of Purchaser Shares (and if
appropriate the type of security) will be appropriately
adjusted.
(b) No fractions of Purchaser Stock will be issued in
connection with Purchaser's issuance of Purchaser Shares
in the Exchange. In lieu of the issuance of any such
fractional share, Purchaser will pay to the Stockholder
who would otherwise be entitled to receive such
fractional share an amount in cash determined by
multiplying (i) $23.26 by (ii) the fraction of a share
(rounded to the nearest thousandth when expressed in
decimal form) of Purchaser Stock to which such
Stockholder would otherwise be entitled to receive
pursuant to this Section 1.1.
1.2 Dividends. The Stockholders shall be entitled to receive from EVRI
any and all dividends declared upon the Common Stock (whether payable in cash,
securities or other property, a "Common Stock Dividend"), provided that the
record date for any such Common Stock Dividend is a date prior to the Closing
Date, and provided further that any such Common Stock Dividend is specifically
contemplated in Schedule 3.2(a) hereto.
1.3 Closing. Subject to the terms and conditions of this Agreement, the
closing of the Exchange (the "Closing") shall take place (a) at the offices of
Bank of America Corporation, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx,
at 2:00 p.m. local time on the day that is no later than the third business day
that is after the satisfaction or waiver of the conditions contained in Article
4 of this Agreement, or (b) at such other time, date or place as the parties
hereto may agree. The date on which the Closing occurs is hereinafter referred
to as the "Closing Date". At the Closing, Purchaser shall deliver to each of the
Stockholders, or the duly authorized agent of any Stockholder,
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share certificates representing shares of Purchaser Stock (bearing the legends
prescribed in Schedule 1.3 attached hereto and made a part hereof) in the
respective amounts to which each is entitled in accordance with Section 1.1,
together with payment for any fractional share, against delivery to Purchaser of
certificates for the EVRI Shares to be transferred in the Exchange, duly
endorsed or accompanied by stock powers duly executed in blank, with signatures
guaranteed by an entity whose guaranty is acceptable for the transfer of shares
of Purchaser Stock. Each Stockholder shall provide to Purchaser in writing prior
to the Closing Date such Stockholder's mailing address, taxpayer identification
number and any other stockholder information normally required by the transfer
agent and registrar of Purchaser Stock.
1.4 Tax-Free Reorganization. The Parties intend that the Exchange be
treated as a tax-free plan of reorganization under Section 368(a) of the Code,
the Purchaser Stock issued in the Exchange be issued solely in exchange for the
EVRI Shares, and no other transaction be an adjustment to the consideration paid
for the EVRI Shares. The Parties intend that no consideration that could
constitute "other property" within the meaning of Section 356(a) of the Code is
being transferred by Purchaser for the EVRI Shares. The parties shall not take a
position on any tax return or before any taxing authority that is inconsistent
with this Section 1.4 unless otherwise required by a final and binding
determination or resolution of a governmental body with appropriate
jurisdiction, and each party agrees to promptly notify the other party of any
assertion by a taxing authority of a position that is inconsistent with this
Section 1.4. No party represents or warrants that the Exchange and the other
transactions contemplated herein and in the exhibits hereto will qualify as a
reorganization under the Code.
ARTICLE 2. REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to the Stockholders as follows:
(a) Organization and Good Standing. Purchaser is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
(b) Subsidiaries. Schedule 2.1(b) sets forth for each
subsidiary of Purchaser (i) its name and jurisdiction of
incorporation, and (ii) the percentage of such Person's
issued and outstanding shares of capital stock owned by
Purchaser.
(c) Power and Authorization. Purchaser has the legal right,
power and authority to enter into and perform its
obligations under this Agreement and the other
agreements and documents required to be delivered by it
hereunder. The
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execution, delivery and performance by Purchaser of this
Agreement have been duly authorized by all necessary
corporate action on the part of Purchaser. This
Agreement constitutes the legal, valid and binding
obligation of Purchaser, enforceable against it in
accordance with its terms.
(d) Consents and Approvals; No Violation. Neither the
execution and delivery of this Agreement by Purchaser
nor consummation of the transactions contemplated hereby
will (i) conflict with or result in any breach of any
provision of the certificate of incorporation or bylaws
of Purchaser, (ii) require any consent, approval,
authorization or permit of, or filing with or
notification to, any governmental or regulatory
authority, except (A) any filings required under the HSR
Act and, if so required, compliance with the applicable
HSR Act waiting period, (B) any filings required under
applicable securities laws and regulations, and (C) any
approvals or filings required to be obtained or made by
Bank of America and the other Stockholders, (iii)
violate any constitution or material statute,
regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government,
governmental agency, or court to which Purchaser is
subject, or (iv) conflict with, result in a breach of,
constitute a default under, result in the acceleration
of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice
under any material agreement, contract, lease, license,
instrument, or other arrangement to which Purchaser is a
party or by which it is bound or to which any of its
assets is subject.
(e) Legal Proceedings. There are no legal, administrative,
arbitral or other actions, claims, suits or proceedings
or investigations instituted or pending or, to the
knowledge of Purchaser's management, threatened against
Purchaser, or against any property, asset, interest or
right of Purchaser, that might reasonably be expected to
have a Material Adverse Effect or that might reasonably
be expected to threaten or impede the consummation of
the transactions contemplated by this Agreement.
(f) Purchaser Stock. The Purchaser Stock to be issued
pursuant to the provisions of this Agreement will, upon
such issuance, be duly authorized, legally and validly
issued, and fully paid and nonassessable.
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(g) Purchase for Investment. Purchaser is not acquiring the
EVRI Shares with a view to or for sale in connection
with any distribution thereof within the meaning of the
Securities Act of 1933, as amended (the "Securities
Act"), and Purchaser will not transfer or otherwise
dispose of the Shares except in a transaction registered
or exempt from registration under the Securities Act.
(h) Financial Condition. The audited financial statements of
Purchaser for the fiscal year ended December 31, 1998,
and the unaudited financial statements of Purchaser for
the quarters ended March 31, 1999, and June 30, 1999
(collectively, the "Purchaser Financial Statements")
present fairly the financial position, results of
operations and cash flows of Purchaser at the dates and
for the fiscal periods then ended, in accordance with
GAAP (except, with respect to the unaudited interim
Purchaser Financial Statements, for the absence of
footnotes thereto and subject to customary year end
adjustments). Purchaser has delivered true and complete
copies of the Purchaser Financial Statements to each of
the Stockholders or any authorized agent of any
Stockholder.
(i) No Adverse Change. Since June 30, 1999, there has been
no Material Adverse Change in the business, financial
condition, results of operations, assets or liabilities
of Purchaser.
(j) No Brokers. Neither Purchaser nor any of its
subsidiaries has any liability or obligation to pay any
fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this
Agreement for which any Stockholder could become liable
or obligated.
(k) Other Matters. Purchaser has not taken and has not
agreed to take any action, and has no knowledge of any
fact or circumstances, that would materially impede or
delay the consummation of the transactions contemplated
hereby.
(l) Disclosure. The representations and warranties of
Purchaser contained in this Agreement and in any
agreement, certificate, affidavit, statutory declaration
or other document delivered or given pursuant to this
Agreement are true and correct and do not contain any
untrue statement of a material fact or omit to state a
material fact necessary to make the statements
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contained in such representations and warranties not
misleading to the Stockholders.
2.2 Representations and Warranties of Stockholders. Each Stockholder
hereby severally (and not jointly with respect to the other Stockholders)
represents and warrants to Purchaser as follows:
(a) Ownership of Shares. As of the date of this Agreement
and, as of the Closing Date, such Stockholder owns and
shall own of record and beneficially the EVRI Shares set
forth on Schedule 1 opposite such Stockholder's name and
such EVRI Shares constitute all of the shares of Common
Stock owned of record or beneficially by such
Stockholder. Except as set forth in the Amended and
Restated Stockholders' Agreement by and among Bank of
America, Xxxxxx and the Non-Bank Stockholders dated July
19, 1999, a copy of which has been delivered to
Purchaser, (the "Stockholders' Agreement"), such
Stockholder holds its EVRI Shares free and clear of any
restrictions on transfer (other than restrictions under
the Securities Act and state securities laws), taxes,
security interests, options, warrants, purchase rights,
contracts, commitments, equities, claims, and demands.
Such Stockholder is not a party to any option, warrant,
purchase right, or other contract or commitment that
could require the Stockholder to sell, transfer, or
otherwise dispose of any capital stock of EVRI (other
than this Agreement and the Stockholders' Agreement).
The Stockholders Agreement imposes no restriction on the
transfer of EVRI Shares to Purchaser pursuant to this
Agreement (or any such restriction has been validly
waived) and no person shall have any rights whatsoever
under the Stockholders Agreement with respect to such
transfer or any future transfer by Purchaser of the EVRI
Shares. Such Stockholder is not a party to any voting
trust, proxy, or other agreement or understanding with
respect to the voting of any capital stock of EVRI. Such
Stockholder will not sell or transfer any EVRI Shares
prior to the earlier of the Closing or the termination
of this Agreement, unless the prior written consent of
Purchaser shall have been obtained. Upon transfer and
delivery by such Stockholder to Purchaser of the EVRI
Shares owned by such Stockholder pursuant to this
Agreement, Purchaser shall acquire ownership of such
shares, free and clear of all adverse claims (other than
any created by or through Purchaser).
(b) Organization and Good Standing of Certain Stockholders.
Schedule 2.2(b) shows the residence of each Stockholder,
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including the principal office of each Stockholder which
is not a natural person. Schedule 2.2(b) identifies each
Stockholder which is not a natural person, provides a
description of the legal nature of such Stockholder
including the jurisdiction under whose laws it is
organized, its authorized signatories, and (unless its
shares or other equity interests are publicly traded in
an established market) the names of any 10% or greater
beneficial owner. The residence of each Stockholder,
including those who are natural persons, is shown in
Schedule 2.2(b). If the Stockholder is a corporation,
the Stockholder is duly organized, validly existing, and
in good standing under the laws of the jurisdiction of
its incorporation.
(c) Power and Authorization. Such Stockholder has full power
and authority (including, if the Stockholder is a
corporation, full corporate power and authority) to
execute and deliver this Agreement and to perform his or
its obligations hereunder. This Agreement constitutes
the valid and legally binding obligation of such
Stockholder, enforceable in accordance with its terms
and conditions. Except any filings required to be made
by Bank of America or its Affiliates with the Board of
Governors of the Federal Reserve System and Office of
the Comptroller of the Currency or the Federal Trade
Commission, the Stockholder need not give any notice to,
make any filing with, or obtain any authorization,
consent, or approval of any government or governmental
agency in order to consummate the transactions
contemplated by this Agreement.
(d) No Violation. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions
contemplated hereby, will (i) violate any constitution
or material statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or
court to which the Stockholder is subject or, if such
Stockholder is a corporation, any provision of its
certificate of incorporation or bylaws, or (ii) conflict
with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the
right to accelerate, terminate, modify, or cancel, or
require any notice under any material agreement,
contract, lease, license, instrument, or other
arrangement to which the Stockholder is a party or by
which he or it is bound or to which any of his or its
assets is subject.
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(e) Legal Proceedings. There are no legal, administrative,
arbitral or other actions, claims, suits or proceedings
or investigations instituted or pending or, to the
knowledge of any Stockholder, threatened against any
such Stockholder that might reasonably be expected to
have a Material Adverse Effect or that might reasonably
be expected to threaten or impede the consummation of
the transactions contemplated by this Agreement.
(f) Investment. The Stockholder (i) understands that the
Purchaser Stock to be issued in the Exchange has not
been registered under the Securities Act, or under any
state securities laws, and are being offered and sold in
reliance upon federal and state exemptions for
transactions not involving any public offering, (ii) is
acquiring the Purchaser Stock solely for his or its own
account for investment purposes, and not with a view to
the distribution thereof, (iii) is a sophisticated
investor with knowledge and experience in business and
financial matters and is an "accredited investor" within
the meaning of Rule 501 promulgated under the Securities
Act, (iv) has received a copy of Purchaser's SEC Filings
and has had the opportunity to obtain additional
information as desired in order to evaluate the merits
and the risks inherent in holding the Purchaser Stock,
(v) understands that the Purchaser Shares cannot be sold
or otherwise transferred unless registered pursuant to
the Securities Act or an exemption from registration is
available (such as Rule 144 promulgated under the
Securities Act, which requires a one-year holding period
and imposes certain other constraints), and is able to
bear the economic risk and lack of liquidity inherent in
holding the Purchaser Stock (notwithstanding any such
Stockholder's ability to transfer or dispose of such
shares of Purchaser Stock in one or more transactions
that are exempt from or otherwise not in violation of
the Securities Act and the rules and regulations
thereunder), and (vi) understands that the certificates
evidencing the Purchaser Stock may bear the legend(s)
set forth on Schedule 1.3 attached hereto and made a
part hereof.
(g) No Brokers. Excluding fees to be paid to Xxxxxx Xxxxxxx
Xxxx Xxxxxx pursuant to the letter agreement which has
been heretofore disclosed to Purchaser, none of the
Stockholders has entered into any contract, arrangement
or understanding with any person or firm which may
result in any obligation of EVRI or Purchaser to pay any
finder's fees, brokerage or agent's commissions or other
like payment in
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connection with the negotiations leading to this
Agreement or consummation of the transactions
contemplated by this Agreement except for any payment to
be made by EVRI immediately preceding the Closing as
specifically set forth in Schedule 2.2(g).
(h) Other Matters. None of the Stockholders has taken or
agreed to take any action, or has any knowledge of any
fact or circumstances, that would materially impede or
delay the consummation of the transactions contemplated
hereby.
(i) Disclosure. The representations and warranties of such
Stockholder contained in this Agreement and in any
agreement, certificate, affidavit, statutory declaration
or other document delivered or given pursuant to this
Agreement are true and correct and do not contain any
untrue statement of a material fact or omit to state a
material fact necessary to make the statements contained
in such representations and warranties not misleading to
Purchaser.
2.3 Representations and Warranties Concerning EVRI. Bank of America
hereby represents and warrants to Purchaser as follows:
(a) Organization; Qualification; Good Standing; Corporate
Power. EVRI is a corporation duly organized, validly
existing and in good standing under the laws of the
State of Delaware and is duly qualified to do business
and is in good standing in each jurisdiction in which
the nature of the business conducted or the properties
or assets owned or leased by it makes such qualification
necessary. EVRI has the corporate power and authority to
carry on its business as it is now conducted, to own,
lease, and operate its properties.
(b) Capitalization. The authorized capitalization of EVRI
consists solely of three million (3,000,000) shares,
consisting of (i) two million (2,000,000) shares of
Common Stock, par value $.01 per share, and (ii) one
million (1,000,000) shares of Preferred Stock, par value
$.01 per share, of which no shares of Preferred Stock
are issued and outstanding and an aggregate of 679,820
shares of Common Stock are issued and outstanding, all
of which are owned by the Stockholders and which
represent 100% of the issued and outstanding capital
stock of EVRI. No stock is held in the treasury of EVRI.
All of the EVRI Shares are validly issued, fully paid,
and nonassessable. To the knowledge of the management of
Bank of America and its Affiliates, including EVRI
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(collectively, the "Management"), none of the EVRI
Shares has been issued in violation of the securities or
blue sky laws of the United States or any state or
territory thereof. EVRI is not the owner, directly or
indirectly, of any debt, equity, or other proprietary
interest in any other corporation, joint venture,
partnership, entity, association, or other business.
There is no subscription, option, warrant, call, right,
agreement or commitment relating to the issuance, sale,
delivery or transfer by the Stockholders or EVRI
(including any right of conversion or exchange under any
outstanding security or other instrument) of any of the
EVRI Shares or any other equity securities of EVRI
(other than the Stockholders' Agreement). Upon
consummation of the transactions contemplated hereby,
Purchaser will acquire good and valid title to all of
the EVRI Shares free and clear of all pledges security
interests, liens, charges, encumbrances, equities,
claims and options of whatever nature.
(c) Government Approvals. No notice to, filing with,
authorization of, exemption by, or order or consent or
approval of, any public body, court, regulatory agency
or other governmental authority is necessary for the
consummation by EVRI of the transactions contemplated by
this Agreement. EVRI has not received any notice from
any federal, state, or other governmental agency
indicating that, and the Management has no reason to
believe that, such agency would oppose or not grant or
issue its consent or approval, if required, with respect
to the transactions contemplated hereby or that any such
agency would impose conditions on any required consents
or approvals which are materially adverse to Purchaser
or EVRI or which would make the transactions
contemplated hereby impracticable from the perspective
of Purchaser to complete in the manner contemplated
hereby and thereby.
(d) No Violation, Consents. Except as set forth in Schedule
2.3(d), neither the execution and delivery of this
Agreement nor the consummation of the transactions
contemplated hereby, with or without the giving of
notice or the lapse of time, or both, will: (i) violate,
conflict with, require any consent under, result in the
breach or termination of, constitute a default under,
accelerate the performance required by, or result in the
creation of any lien, charge or encumbrance upon the
EVRI Shares or any material lien, charge or encumbrance
upon the properties or assets of EVRI pursuant to any
indenture, mortgage, deed of trust, or
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other agreement or instrument to which EVRI is a party
or by which it or its properties or assets may be bound;
or (ii) violate, require that any consent be obtained
pursuant to, or require that any filing be made under,
any statute, rule, regulation, judgment, decree or order
(each a "Law") applicable to EVRI except for violations
of Law (but not consents or filings) which, individually
or in the aggregate, would not have a Material Adverse
Effect.
(e) Government Licenses, Certificates, Etc. EVRI, either
directly or through its status as an Affiliate of Bank
of America, holds all material licenses, certificates,
permits, franchises, and rights from all appropriate
federal, state, or other governmental authorities
necessary for the conduct of its business and, to the
knowledge of the Management, has conducted its business
so as to comply in all material respects with all
applicable federal, state, and local statutes,
ordinances, regulations, or rules. Except as set forth
in Schedule 2.3(e), to the knowledge of Management, no
government permits, licenses, franchises or certificates
will be required for EVRI to conduct its normal business
for so long as Bank of America and its Affiliates
perform the Services contemplated under the Transition
Services Agreement attached as Exhibit 3.5 hereto,
except for generic business permits and state
qualifications to transact business as a foreign
corporation. EVRI has not been charged with, and, to the
knowledge of the Management, EVRI is not under
governmental investigation with respect to any actual or
alleged material violations of any statute, ordinance,
regulation, or rule. EVRI is not the subject of any
pending or, to the knowledge of the Management,
threatened proceeding by any regulatory authority having
jurisdiction over EVRI's business, properties, or
operations.
(f) Legal Proceedings. As of the date of this Agreement,
there are no actions, suits, proceedings, or
investigations of any nature pending or, to the
knowledge of the Management, threatened against EVRI
which could reasonably be expected to materially
adversely affect the Stockholders' obligations hereunder
or which challenge the validity or legality of the
transactions contemplated by this Agreement or that
might result in the imposition of a lien or encumbrance
on the EVRI Shares or any asset or properties of EVRI or
otherwise adversely affect the EVRI Shares or such
assets or properties or have Material Adverse Affect.
Schedule 2.3(f) describes all litigation or other
claims, actions and proceedings (including
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arbitration or mediation proceedings) which are pending
or, to the knowledge of the Management, threatened
against EVRI, its assets or properties. EVRI is not
subject to or in default with respect to, nor are any of
its assets subject to, any outstanding judgment, order,
or decree of any court or of any governmental agency or
instrumentality which would have a Material Adverse
Effect.
(g) Financial Statements. The unaudited financial statements
of EVRI for the fiscal years ended December 31, 1998,
1997 and 1996, and the unaudited balance sheet and
income statement of EVRI for the four month period ended
April 30, 1999 (collectively, the "EVRI Financial
Statements") present the financial position and results
of operations as reflected in the books and records of
EVRI, with adjustments necessary to reflect the
financial position and results of operations of EVRI's
XxxXxxxxxx.xxx division as a stand-alone going concern
without the impact of the XxxxxXxxxXxxxxx.xxx and
XXxxxxxx.xxx divisions. Bank of America has delivered
true and complete copies of the EVRI Financial
Statements to Purchaser.
(h) No Adverse Change. Since April 30, 1999, there has been
no Material Adverse Change in the business, financial
condition, results of operations, assets or liabilities
of EVRI, or any material transaction not in the ordinary
course of business, except as described in Schedule
2.3(h) hereto.
(i) Taxes. Except as set forth on Schedule 2.3(i) hereto:
(i) All Tax Returns required to be filed by or on
behalf of EVRI have been timely filed, and all
such Tax Returns filed are complete and accurate
in all material respects.
(ii) There is no audit examination, deficiency or
refund litigation or matter that has been raised
by a taxing authority with respect to any
previously filed Tax Returns of EVRI or any
prior Tax payments or periods that could
reasonably be expected to result in a
determination the effect of which would have a
Material Adverse Effect.
(iii) EVRI has not executed an extension or waiver of
any statute of limitations on the assessment or
collection
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of any Tax due that is currently in effect.
(iv) Adequate provision for any Taxes due or to
become due for EVRI for any period or periods
through and including June 30, 1999, has been
made and is included in the EVRI Financial
Statements. Deferred Taxes of EVRI reflected in
the EVRI Financial Statements are adequate,
subject in the case of interim financial
statements to normal recurring year end
adjustments.
(v) EVRI has collected and withheld all Taxes which
it has been required to collect or withhold and
has timely submitted all such collected and
withheld amounts to the appropriate authorities.
EVRI is in compliance with the back-up
withholding and information reporting
requirements under the Code and any state, local
or foreign laws, and the rules and regulations
thereunder.
(vi) EVRI has not made any payments, is not obligated
to make any payments, and is not a party to any
contract, agreement or other arrangement that
could obligate it to make any payments that
would be disallowed as a deduction under Section
280G, 162(m) or 404 of the Code.
(vii) There are no liens with respect to Taxes upon
any of the assets of EVRI.
(viii) EVRI has not filed any consent under Section
341(f) of the Code concerning collapsible
corporations.
(ix) EVRI does not have and has not had a permanent
establishment in any foreign country, as defined
in any applicable tax treaty or convention
between the United States and such foreign
country.
(x) EVRI is (and will be at the Effective Time) a
member of the consolidated group of which Bank
of America is the common parent.
(xi) Bank of America has not made any election (i) to
reattribute losses of EVRI under Treasury
Regulation Section 1.1502-20(g) or (ii) to
apportion any consolidated Section 382
limitation under Treasury
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Regulation Section 1.1502-95T(c) (other than an
apportionment to EVRI in accordance with the
consolidated return regulations) or any similar
provision.
(j) Benefit Plans.
(i) Schedule 2.3(j) sets forth the employee benefit
plans and fringe benefits in which Employees
participate immediately prior to the Closing
Date (the "Bank of America Plans"). Bank of
America has made, or at Purchaser's request will
make, available to Purchaser summary
descriptions of the Bank of America Plans.
Except as set forth on Schedule 2.3(j), all Bank
of America Plans are sponsored by EVRI's parent
company, Bank of America Corporation, and
Purchaser shall not assume sponsorship of, or
liability under, any Bank of America Plan. For
purposes of this Agreement, "employee benefit
plans and other fringe benefits" includes,
without limitation, pension and profit sharing
plans, retirement and post retirement welfare
benefits, health insurance benefits (medical,
dental and vision), disability, life and
accident insurance, sickness benefits, vacation,
employee loans and banking privileges.
(ii) Each Bank of America Plan subject to the
Employee Retirement Income Security Act of 1974,
as amended ("ERISA Plan") is in substantial
compliance, in form and operation, in all
material respects with all applicable laws and
has been administered in all material respects
in accordance with its terms. To the knowledge
of either Xxxxxx or the management of Bank of
America, no event has occurred and no condition
exists with respect to any ERISA Plan which is
likely to subject Purchaser, directly or
indirectly (through an indemnification agreement
or otherwise), to any material liability
(including, without limitation, liability for
taxes, breach of fiduciary duty, or for a
"prohibited transaction" within the meaning of
Section 406 of ERISA or Section 4975 of the
Code). There is no action, suit, or claim (other
than routine claims for benefits in the ordinary
course) with respect to any ERISA Plan pending
or threatened which is reasonably likely to have
a Material Adverse Effect. Each ERISA Plan
intended to be a qualified plan under Section
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401(a) of the Code is so qualified and a
favorable determination letter as to
qualification under Section 401(a) of the Code
has been issued and the related trust has been
determined to be exempt from taxation under
Section 501(a) of the Code. All contributions
and premium payments required to have been made
or accrued under or with respect to any ERISA
Plan have been timely made or accrued.
(k) Employees. Set forth in Schedule 2.3(k) hereto is a list
of all persons employed by Bank of America or its
Affiliates to support EVRI as of the date of this
Agreement (the "Employees"). Also set forth on such
Schedule is a listing of all written (and any known
oral) employment, severance, non-competition, and
similar agreements between EVRI and the Employees,
copies of which have been provided to Purchaser. EVRI
has previously provided Purchaser with details regarding
the amount of base salary currently being paid to each
Employee on an annualized basis, as well as the amount
and terms of any applicable bonus or other incentive
compensation arrangements. As of the Closing Date, there
will be no persons employed by EVRI.
(l) Properties. Schedule 2.3(l) identifies all real property
owned or leased by EVRI. Except as set forth in said
Schedule 2.3(l), EVRI has good and marketable title to,
or a valid leasehold interest in, all of its real and
personal property, including those properties reflected
on the balance sheet included in the Financial
Statements, free, clear, and discharged of, and from,
any and all liens, charges, encumbrances, security
interests, and/or equities of any conceivable kind or
character whatsoever, except easements and restrictions
which do not materially adversely affect the use of the
property or materially detract from the value of any
individual property and except for liens for current
taxes not yet due and payable or which may be paid
without interest or penalty subsequent to the date of
this Agreement, and except those since sold or otherwise
disposed of in the ordinary course of business.
(m) Intellectual Property. Schedule 2.3(m)(i) lists each
registration which has been issued to EVRI with respect
to any of its Intellectual Property, lists each pending
application for registration which EVRI has made with
respect to any of its Intellectual Property, lists each
license, agreement, or other permission which EVRI has
granted to any third party
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with respect to any of its Intellectual Property
("Out-Licensed Intellectual Property") and lists each
license, agreement or other permission which any third
party (including Bank of America or its affiliates) have
granted to EVRI with respect to Intellectual Property
("In-Licensed Intellectual Property). Schedule
2.3(m)(ii) lists any proceedings before any court,
arbitrator or government agency related to any of EVRI's
Intellectual Property. To the Management's knowledge,
all fees required to be paid and all documents required
to be filed by EVRI to date in each pending registration
of EVRI Intellectual Property have been paid and filed.
The licenses, agreements and permissions listed in
Schedule 2.3(m)(i) are in full force and effect and will
not be breached by, nor will the other parties thereto
acquire any termination or other rights thereunder as a
result of, the execution or consummation of this
Agreement. Except as set forth on Schedule 2.3(m)(iii),
to the knowledge of the Management, EVRI owns or is
licensed to use all Intellectual Property necessary to
the present conduct of its business. Neither EVRI nor
Bank of America has received any claim or notice from
any person that the operation of EVRI's business
infringes the Intellectual Property of any person or
constitutes unfair competition or trade practices, or
that any Intellectual Property of EVRI has been
misappropriated by employees of EVRI, and the
Stockholders have no knowledge of any basis for any such
claim or notice. Except as set forth on Schedule
2.3(m)(iv), EVRI owns or has exclusive rights to all
Intellectual Property used by EVRI that was developed by
employees of EVRI or consultants hired for this purpose
by EVRI. To the knowledge of the Management, no person
is infringing any material Intellectual Property of
EVRI.
(n) Software. Schedule 2.3(n)(i) is a complete schedule of
all software used by EVRI in connection with the
operation of its business (the "Software") and all
software used by Bank of America or its Affiliates in
connection with the processing of loans originated
through EVRI. Other than as disclosed on
Schedule 2.3(n)(ii), the Stockholders are not aware of
any material known errors, malfunctions and/or defects
in the Software. The Software and all portions thereof
have been licensed for use by third parties only in
accordance with the terms and conditions of the software
license agreements referenced on Schedule 2.3(n)(iii).
(o) Orders, Injunctions, Decrees, Etc. Schedule 2.3(o) lists
all orders, injunctions or decrees of any governmental
body or
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court naming EVRI or to which EVRI is a party. EVRI is
not subject to any order, injunction or decree of any
governmental body or court, and is not in violation of
any order, injunction, or decree, or any other
governmental body or court, which would have a Material
Adverse Effect or a material adverse effect on the
ability of the Stockholders to consummate the
transactions contemplated by this Agreement.
(p) No Default or Violation. EVRI is not, and has not
received any notice, and the Management has no knowledge
that any other party is, in default in any respect under
any contract, agreement, commitment, arrangement, lease,
insurance policy or other instrument to which EVRI is a
party or by which EVRI or the assets, business or
operations thereof may be bound or affected or under
which it or its assets, business or operations receives
benefits, except for those defaults which would not
have, individually or in the aggregate, a Material
Adverse Effect; and there has not occurred any event
that with the lapse of time or the giving of notice or
both would constitute such a default, except for those
defaults which would not have, individually or in the
aggregate, a Material Adverse Effect.
(q) Labor. EVRI is not a party to any collective bargaining
or other similar labor agreement. Except as disclosed on
Schedule 2.3(q) EVRI is not a party to or liable under
any employment agreements with any of the Employees or
severance arrangements including those which provide for
payment of consideration based upon change of control or
termination of employment in connection with a change of
control of EVRI.
(r) Intercompany Agreements. Schedule 2.3(r) includes a
complete and accurate list of all material intercompany
agreements, indebtedness or other arrangements (other
than employee Plans and Tax Sharing Arrangements as
defined in Section 5.4(a)(iv) below) between EVRI, on
the one hand, and Bank of America and its other
Affiliates, on the other hand.
(s) Insurance. EVRI is presently insured and has been
insured at all times in the past for reasonable amounts
against such risks as companies engaged in similar
business to those engaged in by EVRI would, in
accordance with good business practice, customarily be
insured.
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(t) No Undisclosed Liabilities. At the Closing, EVRI will
not have any liability, whether absolute or contingent,
matured or unmatured, except as set forth in Schedule
2.3(t).
(u) Contracts. Except as set forth in Schedule 2.3(u)(i) or
any other Schedule to this Agreement, EVRI is not a
party to or bound by any contract, agreement or
arrangement of any kind whatever that:
(i) involves the payment by or to EVRI of $50,000 or
more in any single fiscal year; or
(ii) is material to EVRI's current or currently
proposed business or to its financial condition
at the Closing.
Except as set forth in Schedule 2.3(u)(ii), all material
contracts with Internet partners are cancelable by EVRI
without penalty or expense within 90 days of written
notice by EVRI.
Every contract identified in any schedule to the
Agreement is, unless otherwise identified in such
Schedule, in full force and effect as written, and the
parties thereto are performing thereunder in accordance
with the written terms thereof.
The material terms of the Internet partner contracts as
set forth in the table in Schedule 2.3(u)(iii) are
accurate.
(v) Interested Party Transactions. Schedule 2.3(v) lists all
material transactions between EVRI and any of its
Affiliates or officers since January 1, 1998, and all
agreements between them that will survive the Closing.
(w) Y2K Compliance. At the time of the Closing, all of
EVRI's computer functions will record, store, process
and calculate and present calendar dates on or after
December 31, 1999 and will calculate any information
dependent on or relating to such dates in the same
manner and with the same functionality, data integrity
and performance as dates before December 31, 1999. All
of EVRI's Intellectual Property will operate without
material error caused by date data that represents or
references different centuries. To Management's
knowledge, EVRI's business is not expected to be
materially adversely affected by the advent of the year
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2000 or the transition to the twenty-first century or to
incur material expenses in this regard.
(x) No Brokers. Excluding any payments to be made by EVRI to
PriceWaterhouseCoopers and Xxxxxx Xxxxxxx Xxxx Xxxxxx
immediately preceding the Closing as specifically set
forth in Schedule 2.2(g), EVRI has not entered into any
contract, arrangement or understanding with any person
or firm which may result in any obligation of EVRI or
Purchaser to pay any finder's fees, brokerage or agent's
commissions or other like payment in connection with the
negotiations leading to this Agreement or consummation
of the transactions contemplated by this Agreement. The
Xxxxxx Xxxxxxx engagement letter agreement has been
heretofore disclosed to Purchaser.
(y) Disclosure. The representations and warranties of Bank
of America contained in this Agreement and in any
agreement, certificate, affidavit, statutory declaration
or other document delivered or given pursuant to this
Agreement are true and correct and do not contain any
untrue statement of a material fact or omit to state a
material fact necessary to make the statements contained
in such representations and warranties not misleading to
Purchaser.
(z) Advice of Changes. Between the date hereof and the
Closing Date, Bank of America shall promptly advise
Purchaser in writing of any fact which, if existing or
known at the date hereof, would have been required to be
set forth or disclosed in or pursuant to this Agreement
or of any fact which, if existing or known at the date
hereof, would have made any of the representations
contained herein untrue.
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ARTICLE 3. OBLIGATIONS OF PARTIES PRIOR TO AND AFTER CLOSING
3.1 Conduct Prior to Closing. Each of Xxxxxx and Bank of America hereby
covenants and agrees with Purchaser, that, prior to the Closing, unless the
prior written consent of Purchaser shall have been obtained, which consent shall
not be unreasonably withheld, and except as otherwise contemplated in this
Agreement, EVRI shall operate its business only in the usual, regular and
ordinary course and in accordance with its prior practices, and shall use its
reasonable best efforts to preserve intact its business organizations and assets
and maintain its rights, franchises and business and customer relations
necessary to run its business as currently run.
3.2 Forbearances. From the date hereof until the Closing, each of Xxxxxx
and Bank of America covenants and agrees to ensure that EVRI does not (other
than as contemplated in this Agreement) do any of the following without the
prior written consent of Purchaser acting in good faith:
(a) declare, set aside, make or pay any dividend or other
distribution in respect of its capital stock or
otherwise purchase or redeem, directly or indirectly,
any shares of its capital stock, except as set forth in
Schedule 3.2(a);
(b) issue, sell or deliver or enter into any agreement to
issue, sell or deliver any shares of its capital stock
or any options, warrants, or other rights, agreements,
commitments, arrangements or understandings of any kind,
contingent or otherwise, to purchase, sell or deliver
any such shares, or any securities convertible into or
exchangeable for any such shares, or effect any stock
split, or otherwise change, combine or reclassify its
authorized capitalization;
(c) incur any indebtedness or issue or sell any debt
securities or prepay any debt;
(d) mortgage, pledge or otherwise subject to any material
lien or lease, any of its properties or assets, tangible
or intangible or permit or suffer any such property or
asset to be subjected to any material lien or lease; or
license or dispose of any material assets, except in the
ordinary course of business consistent with its prior
practice;
(e) forgive or cancel any debts or claims, or waive any
rights, except for fair value;
(f) modify or extend the current term of any material
agreement, or waive any material rights thereunder;
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(g) except as set forth on Schedule 3.2(g), pay any bonus to
any Employee, or grant to any Employee any increase in
compensation except in the ordinary course of business
consistent with its prior practice, or enter into any
employment, severance, termination or similar agreement
with any employee;
(h) amend its Certificate of Incorporation or Bylaws or any
other organizational documents;
(i) make any material changes in policies or practices
relating to business practices or other terms accounting
therefor or in policies of employment;
(j) enter into any type of business not conducted by EVRI as
of the date of this Agreement or create or organize any
subsidiary of EVRI or enter into or participate in any
joint venture or partnership;
(k) except as otherwise expressly contemplated by this
Agreement, enter into any agreement or transactions with
Xxxxxx, Bank of America or their respective Affiliates
or make any amendment or modification to any such
agreement; or
(l) make or change any election in respect of Taxes or
settle any claim related to Taxes;
(m) enter into any contract, commitment or arrangement to do
any of the foregoing.
3.3 Notices and Consents. Each of the Parties will (and Bank of America
will cause EVRI to) give any notices to, make any filings with, and use its
reasonable best efforts to obtain any authorizations, consents, and approvals of
governments and governmental agencies in connection with the matters referred to
in Sections 2.1(c) and 2.3(d) above. Without limiting the generality of the
foregoing, each of the Parties will file or cause to be filed any Notification
and Report Forms and related material that he or it may be required to file with
the Federal Trade Commission and the Antitrust Division of the United States
Department of Justice under the HSR Act, will use his or its reasonable best
efforts to obtain a waiver from the applicable waiting period, and will make or
cause to be made any further filings pursuant thereto that may be necessary in
connection therewith.
3.4 Full Access.
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(a) During the period from the date of this Agreement to the
Closing, Bank of America shall, upon reasonable notice,
cause EVRI to afford to Purchaser and its
representatives (including, without limitation, officers
and employees of Purchaser and counsel, accountants and
other professionals retained by Purchaser), such access
during normal business hours to its books, records,
properties and such other information as Purchaser may
reasonably request for the purpose of conducting any
review or investigation reasonably related to the
transactions contemplated hereby, provided that such
access shall not interfere with the normal business
operations of EVRI. Notwithstanding any investigation by
Purchaser before or after the date of this Agreement or
any knowledge gained therefrom, Purchaser shall be
entitled to rely fully on the representations and
warranties contained in Sections 2.2 and 2.3.
(b) Purchaser agrees that it will keep confidential any
information furnished to it in connection with the
transactions contemplated by this Agreement in
accordance with the terms of the Confidentiality
Agreement dated June 29, 1999, between Purchaser and the
other parties thereto (the "Confidentiality Agreement"),
which agreement shall remain in effect in accordance
with its terms.
3.5 Transition Services Agreement. In connection with the execution of
this Agreement, Bank of America, EVRI and Purchaser will execute and deliver the
Transition Services Agreement attached hereto as Exhibit 3.5.
3.6 Ongoing Strategic Relationship. Bank of America, EVRI and Purchaser
will execute and deliver the Strategic Alliance Agreement attached hereto as
Exhibit 3.6.
3.7 Assignment of License Rights. At the Closing, Bank of America will
assign or cause to assign or cause its Affiliates to assign to Purchaser the
Digex Server Contract and the Informix License Agreement referred to on Schedule
2.3(m)(i). With regard to the in-licensed intellectual property rights listed in
Schedule 2.3(m)(i) and not specifically referred to in the preceding sentence,
Bank of America agrees to use its best efforts to assign or cause its Affiliates
to assign to Purchaser such additional in-licensed intellectual property rights.
3.8 Registration Rights. At the Closing, Purchaser and the Stockholders
will execute and deliver the Registration Rights Agreement attached hereto as
Exhibit 3.8.
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3.9 Audit of EVRI Financial Statements. Prior to the Closing Date, Bank
of America shall cause EVRI to have the independent accounting firm that audits
the financial statements of Bank of America and its Affiliates perform an audit,
in accordance with generally accepted auditing practices, of the balance sheet
of EVRI as of December 31, 1998 and December 31, 1997 and the related statements
of income, changes in shareholders' equity and of cash flows for each of the
three years in the period ended December 31, 1998, making such adjustments as
are necessary to reflect the financial position and results of operations of
EVRI's XxxXxxxxxx.xxx division as a stand-alone going concern without the impact
of the XxxxxXxxxXxxxxx.xxx and XXxxxxxx.xxx divisions, and shall deliver such
financial statements, including the unqualified report of the independent
auditors with respect thereto, to Purchaser at least five business days before
the Closing Date.
3.10 Discharge of EVRI Liabilities, Minimum Required Assets at Closing.
Bank of America shall take all required actions to cause EVRI at the Closing to
have no liabilities (fixed or contingent) other than miscellaneous accrued
liabilities to third party (non-Affiliate) vendors in an amount not to exceed
$300,000 as reflected on the Projected Closing Balance Sheet set forth on
Schedule 2.3(t) and to have cash assets of $3.0 million, and to deliver to
Purchaser at the Closing an auditable balance sheet showing, at the Closing
Date, the assets of EVRI, the $3.0 million minimum cash, and no liabilities
other than those provided for on Schedule 2.3(t). Such action shall include, if
necessary, a capital contribution to EVRI or assumption of EVRI liabilities by
Bank of America. In addition, Bank of America shall at the closing deliver to
Purchaser an unconditional release of all undischarged liabilities and
obligations of EVRI to Bank of America and its Affiliates incurred on or before
the Closing Date, in form satisfactory to Purchaser.
3.11 Covenant Not to Compete.
(a) Bank of America hereby covenants with and for the
benefit of Purchaser that, subject to the exceptions set
forth in Section 3.11(b) and Section 3.11(c) below,
during the twelve (12) month period immediately
following the Closing (the "Non-Compete Period"), none
of Bank of America or any of its subsidiaries or
Affiliates shall (i) launch an Internet site that
engages in the Online Auto Finance Business (as defined
in Section 6.12) and utilizes a brand name other than
the Bank of America, N.A. brand name in existence as of
the date hereof, or (ii) launch an Internet site that
offers automobile loans originated or funded by
institutions other than Bank of America, N.A. or its
Affiliates; provided, however, that the restrictions set
forth in this Section 3.11(a) shall not apply to
Internet connections between Bank of America, N.A. and
its
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Affiliates, on the one hand, and unaffiliated automobile
dealers, on the other hand.
(b) Notwithstanding anything to the contrary in Section
3.11(a) above, following the last day of the six-month
period immediately following the Closing, Bank of
America and its Affiliates may launch an Internet site
that offers automobile loans originated or funded by
unaffiliated sub-prime lenders; provided, however, that,
during the remainder of the Non-Compete Period, Bank of
America and its Affiliates agree that the only sub-prime
lenders included in the site shall be those with which
Purchaser has established relationships (the "Purchaser
Sub-Prime Lenders") so long as the terms offered by such
Purchaser Sub-Prime Lenders are competitive with the
prevailing market rates and terms.
(c) Notwithstanding anything to the contrary in Section
3.11(a) above, during the Non-Compete Period, Bank of
America and its Affiliates may acquire any firm,
corporation, partnership or other entity (an "Acquired
Business") which prior to such acquisition engaged in
the Online Auto Finance Business, and Purchaser hereby
consents that any such Acquired Business shall be
permitted to continue its Online Auto Finance Business
activities from and after such acquisition, so long as
the Online Auto Finance Business activities of the
Acquired Business does not constitute more than 10% of
the gross revenues of such Acquired Business in such
entity's most recently completed fiscal year (or if
gross revenues are below $100 million, such activities
are reasonably anticipated to constitute more than 10%
of gross revenues within three years).
(d) In addition, notwithstanding anything to the contrary in
Section 3.11(a) above, during the Non-Compete Period,
Bank of America and its Affiliates may invest in any
firm, corporation, partnership or other entity (a "Third
Party Investment Entity") which prior to such investment
engaged, or subsequently engages, in the Online Auto
Finance Business, but if such activities constitute more
than 10% of the gross revenues (or if gross revenues are
below $100 million, such activities are reasonably
anticipated to constitute more than 10% of gross
revenues within three years), Bank of America's and its
Affiliates' aggregate ownership interest in such Third
Party Investment Entity shall represent no more than 5%
of the total outstanding equity of such Third Party
Investment Entity and they shall
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not influence or participate in the management of such
Third Party Investment Entity; provided, however, that
the limitations set forth in this Section 3.11(c) shall
not apply to any Affiliates that are venture capital
partnerships managed by Bank of America Corporation or
similar venture capital entities managed by Bank of
America Corporation or its Affiliates, so long as
neither Bank of America nor any Affiliate enters into a
strategic alliance or similar strategic relationship
with any such Third Party Investment Entity during the
Non-Compete Period.
3.12 Good Faith Efforts to Satisfy Conditions. Each of the Parties will
use its good faith efforts to cause each of the conditions to closing in Article
4 that is within its reasonable control to be satisfied as soon as reasonably
practical and in any event before the date specified in Section 6.6(a)(iv).
ARTICLE 4. CONDITIONS PRECEDENT
4.1 Certain Conditions Precedent to Purchaser's Obligations. The
obligations of Purchaser to enter into and consummate the transactions
contemplated hereby are subject to the fulfillment (or waiver in writing by
Purchaser in its sole discretion) on or prior to the Closing Date of the
conditions that:
(a) the representations and warranties of the Stockholders
contained in this Agreement, including the
representations and warranties of Bank of America and
Xxxxxx set forth in Section 2.3 above, shall be true and
correct on and as of the date hereof and in all material
respects on and as of the Closing Date with the same
force and effect as though made on and as of the Closing
Date;
(b) the Stockholders shall have performed and complied in
all material respects with all covenants and agreements
required by this Agreement to be performed or complied
with by the Stockholders on or prior to the Closing
Date;
(c) any waiting period applicable to the Exchange under the
HSR Act or under such other applicable Laws, including
any waiting periods imposed by the Office of the
Comptroller of the Currency, if any, shall have expired
or been terminated;
(d) Purchaser shall have reached an agreement with Xxxxxx
reasonably satisfactory to Purchaser, regarding the
terms of his continued employment by EVRI;
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(e) there shall not have occurred any Material Adverse
Change in respect to EVRI;
(f) Purchaser shall have received a written legal opinion
from counsel to Bank of America reasonably acceptable to
Purchaser with regard to matters customarily covered by
such legal opinions in transactions of this nature;
(g) Bank of America shall have delivered to Purchaser a
release of all its remaining rights under the
Stockholders' Agreement;
(h) any required third party consents shall have been
received and delivered to Purchaser; and
(i) an Executive Vice President of Bank of America shall
have delivered to Purchaser a certificate to the effect
that, to his knowledge, the conditions in paragraphs (a)
and (b) have been satisfied.
4.2 Certain Conditions Precedent the Stockholders Obligations. The
obligations of the Stockholders to enter into and complete the transactions
contemplated hereby are further subject to the fulfillment (or waiver in writing
by the Stockholders in their sole discretion) on or prior to the Closing Date of
the conditions that:
(a) the representations and warranties of Purchaser
contained in this Agreement shall be true and correct on
and as of the date hereof and in all material respects
on and as of the Closing Date with the same force and
effect as though made on and as of the Closing Date; and
(b) Purchaser shall have performed and complied in all
material respects with all covenants and agreements
required by this Agreement to be performed or complied
with by it on or prior to the Closing Date;
(c) any waiting period applicable to the Exchange under the
HSR Act or under such other applicable Laws, including
any waiting periods imposed by the Office of the
Comptroller of the Currency, if any, shall have expired
or been terminated;
(d) there shall not have occurred any Material Adverse
Change in respect to Purchaser;
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(e) Stockholders shall have received a written legal opinion
from counsel to Purchaser reasonably acceptable to
Stockholders with regard to matters customarily covered
by such legal opinions in transactions of this nature;
(f) The President or any Executive Vice President of
Purchaser shall have delivered to Stockholders a
certificate to the effect that, to his knowledge, the
conditions in paragraphs (a) and (b) have been
satisfied.
ARTICLE 5. INDEMNITY
5.1 Indemnity.
(a) Each Stockholder shall indemnify each of the Purchaser Indemnified
Parties from and against any and all Losses incurred by or asserted against any
such Purchaser Indemnified Party in connection with or arising from (i) any
breach by such Stockholder of any of his, her or its representations and
warranties in Section 2.2 of this Agreement, and (ii) any failure by such
Stockholder to comply with any covenant or agreement of such Stockholder
contained in this Agreement. No Stockholder shall be liable to indemnify for a
Loss arising from a breach of another Stockholder's representation or warranty
in Section 2.2 or from a failure by another Stockholder to comply with a
covenant or agreement, except that Xxxxxx agrees to indemnify for any Loss
arising from any such breach or failure by Titan Ltd.
(b) Bank of America shall indemnify each of the Purchaser Indemnified
Parties from and against any and all Losses incurred by or asserted against any
such Purchased Indemnified Party in connection with or arising from (i) any
breach of any of the representations and warranties in Section 2.3 of this
agreement, and (ii) any third party claim relating to the operation of EVRI's
business prior to the Closing. The Purchaser Indemnified Parties shall not,
however, be entitled to indemnification under this Section 5.1(b) unless the
aggregate amount of their Losses hereunder exceeds $200,000, and the maximum
aggregate liability of Bank of America to the Purchaser Indemnified Parties
under this Section 5.1(b) shall be $10,000,000; provided however that the
following Losses shall be fully indemnifiable and not subject to the $200,000
exclusion or $10,000,000 limitation: (i) Losses arising from any breach of a
representation and warranty in Section 2.3(b), and (ii) Losses arising from any
fraudulent misrepresentation.
(c) In no event shall the aggregate liability of any Stockholder to the
Purchaser Indemnified Parties exceed the product of $67 million multiplied by
such Stockholder's Pro Rata Interest.
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(d) From and after the Closing Date, Purchaser shall indemnify and hold
harmless the Stockholders, and their respective directors, officers, employees
and agents, and each of the heirs, executors, successors, and assigns of any of
the foregoing (the "Stockholder Indemnified Parties") from and against any and
all Losses (as defined below) incurred by or asserted against any of such
parties in connection with or arising out of (i) any breach by Purchaser of any
representation or warranty, (ii) any failure by Purchaser to comply with any
covenant or agreement set forth herein or (iii) any third party claim relating
to the operation of EVRI's business from and after the Closing; provided,
however, that the Stockholder Indemnified Parties shall be entitled to
indemnification under this Section 5.1 only if their aggregate amount of Losses
hereunder exceeds $200,000; and provided further, however, that in no event
shall Purchaser's aggregate liability hereunder exceed $10,000,000. The $200,000
exemption and the aggregate liability limitation set forth in the preceding
sentence shall not apply to losses arising from (I) any fraudulent
misrepresentation, or (II) any breach of the representation in Section 2.1(e);
provided, however, that, notwithstanding anything to the contrary in this
sentence, Purchaser's aggregate liability under this Article 5 shall in no event
exceed $67 million. Any amounts paid by Purchaser to one or more of the
Stockholders pursuant to this Article 5 shall be payable in shares of Purchaser
Stock.
(e) "Losses" means any and all losses, liabilities, claims, damages,
obligations (including those arising out of any action, such as any settlement
or compromise thereof or judgment or award therein), any diminution in the value
of any asset of EVRI, and any reasonable out-of-pocket costs and expenses
(including reasonable attorneys' fees and expenses incurred in defending any
lawsuit or other action). "Purchaser Indemnified Parties" means the Purchaser
and each of its directors, officers, employees and agents, and each of the
heirs, executors, successors and assigns of any of the foregoing.
5.2 Claims.
(a) The party being indemnified hereunder (the "Indemnified
Party") shall give written notice to the party against
whom a claim for indemnification is asserted hereunder
(the "Indemnifying Party") within the earlier of twenty
(20) days of receipt of written notice or forty (40)
days from discovery by the Indemnified Party of any
matters recognized by the Indemnified Party as providing
a basis for a claim for indemnification or reimbursement
under this Agreement (a "Claim"). The failure to give
such notice shall not affect the right of the
Indemnified Party to indemnity hereunder unless such
failure has materially and adversely affected the rights
of the Indemnifying Party.
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(b) In the event an action brought by a third party (a
"Third-Party Claim") shall be brought or asserted in
respect of which indemnity may be sought by an
Indemnified Party under this Section 5.2, the
Indemnified Party shall notify the Indemnifying Party in
writing thereof within such period of time as to not
prejudice the defense thereof, but in any case within
twenty (20) days thereof. Subject to this Section 5.2,
the Indemnifying Party shall have the opportunity to
defend and/or (subject to the provisions of Section
5.2(e) below) settle such Third-Party Claim, and employ
counsel reasonably satisfactory to the Indemnified
Party, and the Indemnifying Party shall pay all expenses
related thereto, including without limitation all fees
and expenses of counsel. After receipt of such notice,
the Indemnifying Party shall notify the Indemnified
Party within twenty (20) days (or such shorter period if
necessary so as not to prejudice the defense thereof) in
writing whether it will assume the defense thereof.
(c) Upon receipt of notice by the Indemnified Party from the
Indemnifying Party of its election to assume the defense
of such an action and approval of the Indemnified Party
of counsel to the Indemnifying Party, which approval
shall not be unreasonably withheld or delayed, the
Indemnifying Party shall not be liable to the
Indemnified Party for any legal or other expense
subsequently incurred by the Indemnified Party unless
(i) the Indemnifying Party agrees in writing to pay such
fees and expenses, (ii) the Indemnifying Party fails
either to assume the defense of such action or to employ
counsel reasonably satisfactory to the Indemnified
Party, or (iii) the Indemnified Party shall have been
advised of counsel that there may be one or more legal
defenses available to the Indemnified Party that are
different from or in addition to those available to the
Indemnifying Party or that there shall exist some other
legal conflict between the interests of the Indemnifying
Party and the Indemnified Party.
(d) If the Indemnifying Party shall not elect to assume the
defense of any Third-Party Claim, or if any of the
events specified in clauses (i) through (iii) in the
preceding subsection (c) occurs, the Indemnified Party
shall have the right to maintain the defense of and to
settle such Third-Party Claim, with counsel reasonably
satisfactory to the Indemnifying Party; provided,
however, that the Indemnifying Party shall retain the
right to assume the defense of such Third-Party Claim
pursuant to paragraph (c) above, provided
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that such assumption does not prejudice the defense of
such Third-Party Claim.
(e) In the event that an offer to settle a Third-Party Claim
is received, each of the Indemnified Party and the
Indemnifying Party shall notify the other thereof, in
writing, and shall consult with one another in
considering such offer. Such offer shall be accepted if
the Indemnifying Party so directs in writing unless
either (A) the Indemnified Party shall agree in writing
that any liability arising out of such Third-Party Claim
shall not be a Loss covered hereunder, in which case the
Indemnified Party shall have full right to maintain the
defense thereof, or (B) the failure to accept such
settlement offer is based on the Indemnified Party's not
receiving a full and unconditional release of liability
without incurring any payment obligation or other
material detriment or its reasonable objection to a
sanction, restriction, fine, or other penalty that would
be imposed on it or its affiliates under the settlement.
(f) Notwithstanding anything herein, and whichever party
shall have the right to maintain the defense of a
Third-Party Claim, each of the Indemnifying Party and
the Indemnified Party shall consult with the other with
respect thereto, provide each other with such assistance
as the other may reasonably require in order to promptly
and adequately defend such action, and have the right to
participate at its own expense in the defense thereof,
with counsel reasonably satisfactory to the other.
5.3 Survival. The representations and warranties set forth in Sections
2.1, 2.2 and 2.3 and the covenants and agreements of each party set forth herein
shall survive the Closing for a period of one (1) year, except that the
covenants set forth in Section 5.4 shall survive until the lapse of the
applicable statute of limitations with respect thereto. Except for the covenants
in Section 5.4, none of the parties hereto shall have any liability (for
indemnification or otherwise) with respect to any such representation, warranty,
covenant or agreement, unless on or before the first anniversary of the Closing
Date the other party shall notify such party of a claim specifying the factual
basis of that claim in reasonable detail. None of the representations or
warranties contained in Section 2.3 shall survive the Closing or termination of
this Agreement.
5.4 Tax Matters.
(a) Liability for Taxes.
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(i) Notwithstanding any other provision of this
Agreement, Bank of America shall be liable for (A) all Taxes imposed on EVRI for
any taxable year or period that ends on or before the Closing Date, (B) all
taxes for which EVRI may otherwise be liable under Treasury Regulation Section
1.1502-6 (or any similar provision of state or foreign law) for any taxable
period that ends on or before the Closing Date and (C) with respect to any
period beginning before and ending after the Closing Date (a "Straddle Period"),
the Taxes attributable to that portion of such Straddle Period ending on and
including the Closing Date;
(ii) Notwithstanding any other provision of this
Agreement, Purchaser shall be liable for all Taxes imposed on EVRI or for which
EVRI may otherwise be liable, for any taxable year or period that begins after
the Closing Date and (B) with respect to any Straddle Period, the Taxes
attributable to that portion of such Straddle Period beginning after the Closing
Date.
(iii) For purposes of paragraphs (a)(i) and (a)(ii) of
this Section 5.4, whenever it is necessary to determine the liability for Taxes
of EVRI for a portion of any Straddle Period, the determination of the Taxes of
EVRI for the portion of the Straddle Period ending on and including, and the
portion of the Straddle Period beginning after, the Closing Date shall be
determined by assuming that the Straddle Period consisted of two taxable years
or periods, one which ended at the close of the Closing Date and the other which
began at the beginning of the day following the Closing Date, and items of
income, gain, deduction, loss or credit of EVRI for the Straddle Period shall be
allocated between such two taxable years or periods on a "closing of the books
basis" by assuming that the books of EVRI were closed at the close of the
Closing Date; provided, however, that (I) Taxes imposed on EVRI as a result of
transactions (other than transactions in the ordinary course of business)
occurring on the Closing Date that are properly allocable to the portion of the
Closing Date after the Closing shall be allocated to the taxable year or period
that is deemed to begin at the beginning of the day following the Closing Date
and (II) exemptions, allowances or deductions that are calculated on an annual
basis, such as the deduction for depreciation, shall be apportioned between such
two taxable years or periods on a daily basis.
(iv) On or prior to the Closing Date, all Tax Sharing
Arrangements (other than this Agreement between EVRI, on one hand, and Bank of
America or any member of Bank of America's Tax Group, on the other hand, shall
terminate and EVRI shall not have any further rights or obligations thereunder.
For purposes of this paragraph, (A) a "Tax Sharing Arrangement" shall mean any
agreement or arrangement for the allocation or payment of Tax liabilities or
payment for Tax benefits with respect to a group of corporations which
constitutes a fiscal unity or which files a consolidated, combined or
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unitary Tax Return which includes EVRI, and (B) Bank of America's Tax Group
shall mean any group of corporations which includes EVRI and which files a
consolidated, combined or unitary Tax Return.
(b) Tax Returns. Bank of America shall file or cause to be filed
when due all Tax Returns that are required to be filed by or with respect to
EVRI for taxable years or periods ending on or before the Closing Date
(including any consolidated, combined or unitary Tax Returns of which EVRI is a
member) and shall remit any Taxes due in respect of such Tax Returns, and
Purchaser shall file or cause to be filed when due all Tax Returns that are
required to be filed by or with respect to EVRI for taxable years or periods
ending after the Closing Date other than the Tax Returns required to be filed by
Bank of America as provided above, and shall remit any Taxes due in respect of
such Tax Returns. Any Tax Returns required to be filed by Purchaser pursuant to
this Section 5.4(b) relating in whole or in part to Taxes for which Bank of
America is liable pursuant to paragraph (a) of this Section 5.4 shall be
submitted to Bank of America for Bank of America's approval (which approval
shall not be unreasonably withheld) prior to Purchaser filing such Tax Returns.
Bank of America or Purchaser shall reimburse the other party for the Taxes for
which Bank of America or Purchasers are liable pursuant to paragraph (a) of this
Section 5.4 but which are payable with Tax Returns to be filed by the other
party pursuant to the second preceding sentence upon the written request of the
party entitled to reimbursement, setting forth in detail the computation of the
amount owed by Bank of America or Purchaser, as the case may be, but in no event
earlier than 10 days prior to the due date for the payment of such Taxes.
(c) Contest Provisions.
(i) Purchaser shall promptly notify Bank of America in
writing upon receipt by Purchaser or EVRI of notice of any pending or threatened
federal, state, local or foreign Tax audits, examinations or assessments which
may affect any Tax liability for which Bank of America is liable pursuant to
paragraph (a) of this Section 5.4 provided that failure to comply with this
provision shall not affect Purchaser's right to indemnification hereunder except
to the extent such failure impairs Bank of America's ability to contest any such
Tax liabilities.
(ii) Bank of America shall have the right to represent
EVRI's interests in any Tax audit or administrative or court proceeding relating
to any Tax liability for which Bank of America is liable pursuant to paragraph
(a) of this Section 5.4 and to conduct such audits at a location designated by
Sellers; provided, however, that Purchaser shall have the right to take part in
any such proceeding to the extent that the outcome of such proceeding may
reasonably be considered to have an adverse impact on Purchaser or EVRI.
Purchaser and Bank of America each agree not to agree to settle any Tax claim
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which may be the subject of indemnification by the other party or which would
otherwise result in additional tax liability to the other party pursuant to
Section 5.4 without the prior written consent of the other party (which consent
shall not be unreasonably withheld).
i (d) Assistance and Cooperation. After the Closing Date, each of
Bank of America and Purchaser shall (and cause their respective Affiliates to):
(i) assist the other party in preparing any Tax Returns
which such other party is responsible for preparing and filing in accordance
with paragraph (b) of this Section 5.4;
(ii) cooperate fully in preparing for any audits of, or
disputes with taxing authorities regarding, any Tax Returns of EVRI;
(iii) make available to the other and to any taxing
authority as reasonably requested all information, records, and documents
relating to Taxes of EVRI, including all pertinent records for conduct of any
tax audit including, but not limited to, copies of all EVRI's tax returns,
copies of financial records and customers' invoices supporting such tax returns,
and copies of all sales and use tax exemption certificates obtained from
customers;
(iv) provide timely notice to the other in writing of
any pending or threatened Tax audits or assessments of EVRI for taxable periods
for which the other may have a liability under this Section 5.4; and
(v) furnish the other with copies of all correspondence
received from any taxing authority in connection with any Tax audit with respect
to any taxable period for which the other may have a liability under this
Section 5.4.
ARTICLE 6. MISCELLANEOUS
6.1 Further Action. The parties hereto shall, subject to the fulfillment
at or before the Closing Date of each of the conditions of performance set forth
herein or the waiver thereof, perform such further acts and execute such
documents as may reasonably be required to effect the transactions contemplated
hereby, in any case at the expense of the requesting party.
6.2 Parties in Interest; Assignment. Other than assignments by and among
Bank of America and any of its wholly owned Affiliates, none of the parties to
this Agreement may assign any of its rights or obligations under this Agreement
without the prior written consent of the other parties hereto. This Agreement
shall be binding upon, inure to the benefit of and be enforceable by the parties
hereto and their respective successors and permitted assigns. In
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the event, at the request of any Stockholder, Purchaser consents to a transfer
of EVRI Shares by such Stockholder, the transferee shall be made a party to this
Agreement by execution and delivery to Purchaser of a counterpart hereof, in
which case the transferee shall be treated as an original signatory and a
"Stockholder" for all purposes hereunder.
6.3 Entire Agreement; Amendments; Waiver. This Agreement contains the
entire understanding between the parties hereto with respect to its specific
subject matter. This Agreement may be amended only by written instrument duly
executed by the parties hereto. No party may waive any term, provision, covenant
or restriction of this Agreement except by a duly signed writing referring to
the specific provision to be waived.
6.4 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be delivered personally
or transmitted by telex, fax or telegram, to the respective parties as follows:
If to the Stockholders: c/o Xxxxxx X. Xxxxxx
000 Xxxxxxx Xxxx
Xxxxxx Xxxx, Xxx Xxxx 00000
Bank of America Corporation
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Attention: Xxxxx X. Xxxxxx,
Executive Vice President
Fax: (000) 000-0000
With copy to: Bank of America Corporation
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Office of the General Counsel
Fax: (000) 000-0000
If to Purchaser: E-Loan, Inc.
0000 Xxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxx
Fax: (000) 000-0000
With copy to: Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxx
Fax: (000) 000-0000
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or to such other address as any party may have furnished to the others in
writing.
6.5 Governing Law. This Agreement will be governed by and construed in
accordance with the internal laws of the State of Delaware.
6.6 Termination.
(a) This Agreement may be terminated and the transactions
contemplated herein may be abandoned at any time prior to the Closing:
(i) by mutual consent of Purchaser and the Stockholders;
(ii) by the Stockholders, if Purchaser has failed to
perform in any material respect any of its respective
obligations required to be performed by it under this Agreement
unless failure to so perform has been caused by or results from
a breach of this Agreement by the Stockholders or Xxxxxx;
(iii) by Purchaser, if any of the Stockholders shall
have failed to perform in any material respect any of the
obligations required to be performed by it under this Agreement
unless failure to so perform has been caused by or results from
a breach of this Agreement by Purchaser; or
(iv) by Purchaser or the Stockholders, if the Closing
does not occur on or prior to 120 days after the date of this
Agreement.
(b) A party terminating this Agreement pursuant to Section 6.6
shall give written notice thereof to each other party hereto, whereupon
this Agreement shall terminate and the transactions contemplated hereby
shall be abandoned without further action by any party; provided,
however, that if such termination is by Purchaser pursuant to Section
6.6(a)(iii) or if such termination is by the Stockholders pursuant to
Section 6.6(a)(ii), nothing herein shall affect the non-breaching
party's or parties' right to damages on account of such other party's or
parties' breach.
6.7 Counterparts; Headings. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same document. The article and
section headings contained herein are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.
6.8 Expenses. Each of the parties hereto shall pay the fees and expenses
it incurs in connection with this Agreement, other than as a result of
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the breach hereof by any other party hereto. All fees due to be paid to Xxxxxx
Xxxxxxx Xxxx Xxxxxx pursuant to the letter agreement with Xxxxxx Xxxxxxx Xxxx
Xxxxxx referenced in Section 2.2(g) above shall be paid by EVRI, Bank of America
and the other parties signatory thereto. The provisions of this Section 6.8
shall survive any termination of this Agreement pursuant to Section 6.6.
6.9 Press Releases and Public Announcements. Purchaser and Bank of
America have agreed to text of a press release to be made promptly after the
execution of this Agreement. No Party shall issue any further press release or
make any public announcement relating to the subject matter of this Agreement
without the prior approval of Purchaser and Bank of America; provided, however,
that any Party may make any public disclosure it believes in good faith is
required by applicable law or any listing or trading agreement concerning its
publicly-traded securities (in which case the disclosing Party will advise the
other Parties prior to making the disclosure).
6.10 Mediation. The parties hereto encourage the prompt and equitable
settlement of all controversies or claims (a "Dispute") between or among the
parties and their affiliates including but not limited to those arising out of
or relating to this Agreement or the transactions contemplated hereby. At any
time, either party can give the other written notice that it desires to settle a
Dispute. Within 10 days of delivery of such notice, the parties agree to cause
their officers having authority to resolve such differences to meet for two out
of four continuous days (the "Negotiation Period), the parties agree to submit
their Dispute to a mediator to work with them to resolve their differences. Such
mediator shall be selected by mutual agreement of the parties. The parties shall
participate in the mediation proceeding in good faith with the intention to
settle. The mediation shall be conducted pursuant to the rules generally used by
the mediator in the mediator's practice, which rules may be modified or amended
with the written consent of the parties. No later than three business days prior
to the mediation, each party shall deliver to the mediator all information
reasonably required for the mediator to understand the Dispute and the issues
presented. The mediation shall be determined upon the first to occur of the
following: (i) by the execution of a settlement agreement resolving the Dispute
by the parties; (ii) by a written declaration of the mediator to the effect that
further efforts at mediation are no longer worthwhile; or (iii) after the
completion of two full days of mediation effect that mediation proceedings are
terminated. No party shall xxx any other party hereto in connection with any
Dispute, except for enforcement of the negotiation and mediation process set
forth herein, and the arbitration provisions set forth in Section 6.11 hereof
shall not be applicable, in each case, prior to termination of the Negotiation
Period and of the mediation as provided above.
6.11 Arbitration. Except as otherwise set forth herein, following
termination of the Negotiation Period and of the mediation as provided under
Section 6.10 hereof, any Dispute shall at the request of any party hereto be
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determined by binding arbitration. The arbitration shall be conducted in
accordance with the Federal Arbitration Act (or if not applicable, the
applicable state law), the rules of practice and procedure for the arbitration
of commercial Disputes of J.A.M.S./Indispute of any successor thereof
("J.A.M.S."). The arbitrator shall give effect to applicable statutes of
limitations. No party shall be entitled to punitive or consequential damages in
respect of any Dispute relating solely to this Agreement. Any controversy
concerning whether an issue is arbitrable shall be determined by the arbitrator.
Judgment upon the arbitration award may be entered in any court having
jurisdiction. The institution and maintenance of an action for judicial relief
or pursuit of a provisional or ancillary remedy shall not constitute a waiver of
the right of any party, including the plaintiff, to submit the controversy or
claim to binding arbitration if any other party contests such action for
judicial relief. The expenses of the arbitration shall be borne equally by the
parties to the arbitration, provided that each party shall pay for and bear the
cost of its own experts, evidence and legal counsel.
6.12 Certain Definitions.
As used in this Agreement, the following terms shall have the meanings
as set forth below:
"Affiliate" of a Person shall mean a Person that directly or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first Person. "Control" (including the terms
"controlled by" and "under common control with") means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise; provided, however, that for purposes of this Agreement,
Purchaser shall not be deemed an Affiliate of Bank of America
"Code" shall mean the Internal Revenue Code of 1986, as amended, and the
rules and regulations thereunder.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"Intellectual Property" shall mean trademarks and service marks
(registered or unregistered), trade names, designs, and general intangibles of
like nature, and all goodwill relating to the foregoing; patents and copyrights
(registered and unregistered) and all applications for the foregoing; computer
software, databases, source codes, object codes, works of authorship, trade
secrets, know-how, customer lists, user interfaces, proprietary concepts, ideas,
techniques, business models and methodologies; and confidential data or
information related to the foregoing.
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"Material Adverse Change" shall mean a change which results in a
Material Adverse Effect.
"Material Adverse Effect" shall have the following meaning:
(a) with respect to Purchaser, the term "Material Adverse
Effect" shall mean (A) a material adverse effect
(whether taken individually or in the aggregate with all
other such effects) on the financial condition,
business, results of operations or properties of
Purchaser, (B) an effect which would materially impair
Purchaser's ability timely to consummate the
transactions contemplated hereby or (C) any event,
circumstance or condition affecting Purchaser which
would prevent or materially delay the consummation of
the transactions contemplated by this Agreement;
(b) with respect to EVRI, the term "Material Adverse Effect"
shall mean (A) a material adverse effect (whether taken
individually or in the aggregate with all other such
effects) on the financial condition, business, results
of operations or properties of EVRI or (B) any event,
circumstance or condition affecting EVRI which would
prevent or materially delay the consummation of the
transactions contemplated by this Agreement; and
(c) with respect to the Stockholders, the term "Material
Adverse Effect" shall mean (A) an effect which would
materially impair such Stockholder's ability timely to
consummate the transactions contemplated hereby or (B)
any event, circumstance or condition affecting such
Stockholder which would prevent or materially delay the
consummation of the transactions contemplated by this
Agreement
"Online Auto Finance Business" means the business of owning and
operating an Internet site to provide interest rate information or to receive
and accept credit applications submitted in connection with consumer direct
financing, refinancing or leasing of automobiles.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, or an
unincorporated organization.
"Purchaser's SEC Filings" shall mean Purchaser's registration statement
on Form S-1, which became effective June 28, 1999, including Part II and the
list of exhibits thereto (copies of which exhibits are available to Stockholders
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upon request to Purchaser's Chief Financial Officer) and Purchaser's report on
Form 10-Q for the quarter ended June 30, 1999.
"Tax" or "Taxes" shall mean any federal, state, local or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
section 59A), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not.
"Tax Return" shall mean any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
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(Signature Page to Agreement and Plan of Reorganization)
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written.
E-LOAN, INC.
By:/s/ XXXXX XXXXXX
--------------------------------
Name: Xxxxx Xxxxxx
Title: CEO
BANC OF AMERICA AUTO FINANCE CORP.
By:/s/ XXXXXXX X. XXXXX
--------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
TITAN LTD.
By:/s/ XXXXX X. XXXXXXXXX
--------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Managing Director
/s/ XXXXXX X. XXXXXX
----------------------------------
Xxxxxx X. Xxxxxx
/s/ XXXXXXX XXXXXXX
----------------------------------
Xxxxxxx Xxxxxxx
/s/ XXXXX XXXXXX
----------------------------------
Xxxxx Xxxxxx
40
