STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made and dated as of
September 4, 1998, between IMN Financial Corp., a Delaware corporation, whose
principal office is located at 000 Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000
("IMNF"), CFI Mortgage, Inc., a Delaware corporation, whose principal office is
located at 000 Xxxxxxx Xxxx., Xxxxx 000, Xxxx Xxxx Xxxxx, XX 00000 ("CFI"), and
Xxxxxxx Xxxxxxx, an individual residing at 0000 XX Xxxxxxxx Xxxx, Xxxx Xxxxx, XX
00000, as to the provisions of Paragraphs 1.5 and 3 only, and Xxxxxxxxxxx
Xxxxxxx, an individual residing at 00000 Xxxxxxxxx Xxxx, Xxxx Xxxxx Xxxxxxx, XX
00000, (the "Principals") as to the provisions of paragraph 3 only.
WHEREAS, CFI is the owner of all of the issued and outstanding shares of
capital stock of Bankers Direct Mortgage Company ("BDMC"),
WHEREAS, IMNF wishes to acquire and CFI wishes to sell all of the
outstanding shares of capital stock of BDMC, and CFI and the Principals will
agree not to compete in the retail mortgage business for a period of five (5)
years after Closing,
NOW, THEREFORE, in consideration of the premises and the representations,
warranties and covenants herein contained, and other good and valuable
consideration, the receipt of which is hereby acknowledged, IMNF, the
Principals, as indicated above, and CFI hereby agree as follows:
1. Purchase and Sale of Stock
1.1 Purchase and Sale. On the Closing Date, as defined herein, IMNF
shall
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purchase from CFI, and it will sell and transfer to IMNF, all the issued and
outstanding shares of stock of CFI's subsidiary, BDMC, of every kind and
description (the "Stock").
1.2 Delivery at Closing. At the Closing, as defined herein, CFI will
deliver certificate(s) for the Stock duly endorsed so as to make IMNF the sole
owner of the Stock, free and clear of all claims, liens, equities, encumbrances
and restrictions of any kind, except hereinafter provided.
1.3 Purchase Price and Payment terms. In exchange for 100% of the issued
and outstanding stock of BDMC, and the covenants not to compete of CFI and the
Principals, IMNF will pay CFI quarterly, forty-five days after the end of each
quarter, for the two years following the Closing, one eighth of one point on all
closed loans, provided BDMC's branch operations existing at the date of Closing
are profitable in that quarter, after deduction of all liabilities of any kind
of BDMC, including but not limited to undisclosed liabilities, trade accounts
payable, employee claims of whatever nature, litigation losses, or losses due to
loan buy-backs on warehouse lines or from investors.
1.4 Guarantee of Minimum Net Worth. CFI guarantees that BDMC will have a
net worth of $0. If BDMC's net worth is negative, such amount will be netted
against the payments to be made pursuant to Section 1.3 above.
1.5 Employment of Xxxxxxx Xxxxxxx. As a further inducement to IMNF to enter
into this Agreement, Xxxxxxx Xxxxxxx agrees to enter into an employment
agreement with IMNF as Vice President and National Manager of Sales, for a five
(5) year period, with duties customary to
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such a position in the mortgage banking industry, upon terms to be negotiated.
2. Closing Date. On the closing date, the date upon which all transactions
constituting conditions precedent to the sale shall have been consummated
("Closing Date"), Closing will be held at the offices of IMNF, 000 Xxxxxxxxxxx
Xxxx, Xxxxxxxx, Xxx Xxxx 00000, on September 4, 1998, or such other date and
time as the parties may agree.
3. Non-Competition/Non-Solicitation.
A. As a further inducement to IMNF to enter into this Agreement, CFI agrees
that for a period of five (5) years from the Closing Date of this Agreement,
CFI, its subsidiaries and affiliates shall not, directly or indirectly, (i)
engage in activities or businesses which compete with the business of BDMC as
currently conducted; or (ii) solicit, recruit, or hire any employees of BDMC as
of the date of this Agreement, or any persons who have worked for BDMC. CFI
recognizes that a breach of this obligation would result in irreparable injury
to CFI for which no adequate remedy would be available at law, and therefore
consents to the entry of such injunctive relief as shall be reasonable necessary
to restrain or prohibit conduct which violates this Section.
B. As a further inducement to IMNF to enter into this Agreement, Xxxxxxx
Xxxxxxx agrees that for a period of five (5) years form the Closing Date of this
Agreement, Xxxxxxx Xxxxxxx shall not, directly or indirectly, (i) engage in
activities or businesses which compete with the business of BDMC as currently
conducted; or (ii) solicit, recruit, or hire any employees of BDMC as of the
date of this Agreement, or any persons who have worked for BDMC. Xxxxxxx Xxxxxxx
recognizes that a breach of this obligation would result in irreparable injury
to IMNF for which no adequate remedy would be available at law, and therefore
consents to the entry of such injunctive
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relief as shall be reasonably necessary to restrain or prohibit conduct which
violates this Section.
C. As a further inducement to IMNF to enter into this Agreement,
Xxxxxxxxxxx Xxxxxxx agrees that for a period of five (5) years from the Closing
Date of this Agreement, Xxxxxxxxxxx Xxxxxxx shall not, directly or indirectly,
(i) engage in activities or businesses which compete with the business of BDMC
as currently conducted; or (ii) solicit, recruit, or hire any employees of BDMC
as of the date of this Agreement, or any persons who have worked for BDMC.
Xxxxxxxxxxx Xxxxxxx recognizes that a breach of this obligation would result in
irreparable injury to IMNF for which no adequate remedy would be available at
law, and therefore consents to the entry of such injunctive relief as shall be
reasonably necessary to restrain or prohibit conduct which violates this
Section.
4. Representations and Warranties by CFI. CFI represents and warrants to
IMNF as follows:
4.1 Organization and Standing, Powers, Qualification and Authority/Books
and Records/ Permits and Licenses.
A. BDMC is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida, has all requisite corporate
power and authority to own its properties and assets and carry on its business
as now conducted is duly qualified and authorized to transact business as a
mortgage lending company in the State of Florida, and is qualified and in good
standing as a foreign corporation in each jurisdiction where the nature of its
business required such qualification.
B. The copies of the Articles of Incorporation and Bylaws of BDMC
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attached as Schedule 4.1 are correct and complete. The stock transfer, minute
books, and corporate records of BDMC which have been made available to IMNF are
correct and complete and constitute the only written records and minutes of the
meetings, proceedings, and other actions of the shareholders and the Board of
Directors from the date of BDMC's organization to the date hereof.
C. BDMC (and/or, where necessary, its employees), has duly obtained and
holds in full force and effect all consents, authorizations, licenses, permits,
orders, or approvals of, and has made timely declarations and filings with all
federal state or local governmental or regulatory bodies that are material and
necessary in the conduct of its business as conducted at present, (collectively,
the "Permits"). All the Permits were duly obtained, are in full force and
effect, and no violations are or have been recorded in respect of any such
Permit. TO CFI's knowledge, no proceeding is pending or threatened to revoke,
deny or limit any such Permit.
4.2 Capital Stock. BDMC authorized capital stock consists of one class of
voting common stock, consisting of seven thousand five hundred (7500) shares,
each share having no par value. Of the authorized capital stock, all shares are
validly issued and outstanding, fully paid and nonassessable at the date hereof,
all of which are owned by CFI. There are no options, warrants or rights to
acquire any capital stock of BDMC or securities convertible into or exchangeable
for, or which otherwise confer on the holder or holders thereof any right
(whether or not upon the happening of any contingency or after any lapse of
time, and whether or not upon the payment or delivery of any consideration) to
acquire, any capital stock of BDMC, nor is BDMC committed to issue any such
option, warrant, right or security.
4.3 Dissolution; Forfeiture. No action at law or suit in equity and no
other
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investigation or proceeding whatsoever is now pending or threatened; (i) to
liquidate, dissolve or disincorporate BDMC, (ii) to declare any of the corporate
rights, powers, franchises or privileges of BDMC to be null and void or
otherwise than in full force and effect; (iii) to declare that BDMC or any of
its directors, officers, agents or employees have exceeded or violated any of
their corporate rights, powers, franchises or privileges; or (iv) to obtain any
decree, order, judgment or other judicial determination or administrative or
other ruling that will or may impede or detract from any of the corporate
rights, powers, franchises or privileges now vested in or claimed by BDMC.
4.4 Financial Statements.
(a) There have heretofore been furnished to IMNF copies of the audited
financial statements of CFI as to December 30, 1997 and December 30, 1998, and
the related statements of income and retained earnings for the fiscal years then
ended, all prepared by Xxxxx Xxxxxxxx, certified public accountant for CFI. Such
financial statements are complete and correct and have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods involved and fairly present the financial position
of CFI as at the dates indicated and the results of the operation of CFI for the
periods indicated.
(b) Prior to the Closing Date, CFI has delivered to IMNF a pro forma
balance sheet of BDMC as at August 31, 1998, and a pro forma statement of income
and retained earnings for the period then ended of BDMC, net of inter-company
balances with CFI or related entities, showing the guaranteed net worth of BDMC,
certified by the chief executive officer of BDMC (hereinafter collectively
referred to as the "August, 1998, Balance Sheet"). The financial statements
referred to above shall be prepared in conformity with generally accepted
accounting principles
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applied on a basis consistent with the financial statements referred to in
Subsection (a) above and will fairly present the financial position of BDMC as
at August 31, 1998, and the results of operations of BDMC for the period then
ended.
4.5 Properties. BDMC has and will have on the Closing Date all requisite
corporate power and authority to own and hold, and (except for assets disposed
of in the ordinary course of business) will have on the Closing Date good and
marketable indefeasible title to, all of the properties and assets reflected in
the most recent of the balance sheets referred to in Paragraph 3.4 above,
subject to no mortgage, pledge, lien, encumbrance, charge or security interest,
except only: (i) liens in respect of pledges or deposits under workers'
compensation laws or similar legislation; (ii) liens for property taxes,
assessments or like governmental charges not yet delinquent and payable without
penalty; (iii) defects and exceptions, none of which (individually or in the
aggregate) materially interfere with the use by BDMC of such properties for the
purposes for which they are held; and (iv) the liens described in Schedule 4.5A,
attached hereto, which schedule describes each such lien, describes the
transaction or other circumstances out of which it arises, describes the amount
of the obligation it secures, identifies the property affected thereby,
identifies the owner of such property, and is complete and correct. CFI agrees
to cooperate with IMNF in obtaining the discharge of any liens of record. Said
Schedule 4.5A will also describe all notes payables of August 31, 1998. Attached
hereto is Schedule 4.5B, which is complete and correct, listing all real
property owned by BDMC. All of the properties and assets of BDMC are in
existence, in the possession of BDMC and in good working order and repair,
except for minor
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defects which do not materially interfere with their use, or except as described
in Schedule 4.5C, attached hereto.
4.6 Changes in Condition. Sunce August 31, 1998, there has been no change
in the assets, liabilities, condition (financial or otherwise) or business of
BDMC from that set forth in or reflected in its financial statements as at said
date, except changes in the ordinary course of business, none of which
(individually or in aggregate) have been materially adverse. Since August 31,
1998, BDMC has not been adversely affected in any material manner as a result of
any fire, explosion, accident, flood, earthquake, seismic or tidal wave,
windstorm, strike, lockout, labor dispute, riot, civil commotion or disturbance,
sabotage, confiscation, condemnation or purchase of any property by governmental
authority, activities of armed forces, or acts of God or the public enemy,
except as shown on Schedule 4.6 attached hereto.
4.7 Tax Returns and Payments. All tax returns and reports of BDMC required
by law (including, without limiting the generality of the foregoing, all income,
unemployment compensation, social security, sales, compensating use, excise,
privilege and franchise tax laws of the United States or any state, territory or
municipal or political subdivision thereof) to be filed on or before the Closing
Date have been, or will be, duly and timely filed. All taxes, assessments, fees,
interest, penalties and other governmental charges or impositions which are, or
should be, shown on said returns and reports, reflected on xxxxxxxx by
governmental agencies, or required to be deposited on or before the Closing
Date, have been, or will be, duly and timely paid (other than those not yet due
and payable, those presently payable without penalty, and those currently being
contested in
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good faith).
BDMC has not received any notice of deficiency assessment or porposed
deficiency assessment of any United States, state, municipal or other tax or
penalty and has no knowledge of any basis for any additional deficiency
assessment of any such tax or penalty, nor has it knowingly waived any law or
regulation fixing, or consented to the extension of, any period of time for the
assessment of any tax or other governmental imposition, or become committed so
to do, except as shown on Schedule 4.7, attached hereto.
4.8 Compliamce with Other Instruments. BDMC is not in violation of or in
default with respect to any term or provision of its: (i) Articles of
Incorporation or Bylaws; (ii) material indentures, contracts, agreements or
instruments to which it may be bound; or (iii) any judgment, order, writ,
injunction or decree of any court or of any federal, state, territorial,
municipal or other commission, board or other administrative or governmental
agency or authority; and it is not in violation of any federal, state,
territorial, municipal or other statute, rule or regulation applicable to it or
by which it may be bound in any case in any manner so as at present or at any
future time to affect it adversely in any material respect.
4.9 Undisclosed Liabilities. At the date of the most recent balance sheet
referred to in Paragraph 4.4 herein, there was no material liabilities of BDMC
(actual, contingent or accrued) which are not shown or reflected in such balance
sheet or the notes thereto.
4.10 Books of Account. The books of account of BDMC are complete and
correct
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in all material respects, and all moneys due or to become due from or to or
owing by, and all liabilities (actual, contingent or acccrued) of, BDMC by
reason of any transaction, matter, cause or thing whatsoever which, in
accordance with generally accepted accounting practices or principles, should be
entered therein have been duly, correctly and completely entered therein.
4.11 Litigation, etc. BDMC is not a party to or affected by any pending,
and has no notice or knowledge of any threatened action, suit, proceeding or
investigation (at law or in equity or otherwise) in, before or by any court or
any governmental board, commission, agency, department or office in which an
adverse determination would have any material adverse effect on the business,
assets or financial condition of BDMC, except as shown on Schedule 4.11,
attached hereto.
4.12 Accounts and Notes Receivable/Accounts and Commissions Payable.
A. Except as specified in Schedule 4.12A, attached hereto, all accounts and
notes receivable of BDMC are and on the Closing Date will be valid, genuine and
subsisting; arise and/or will arise out of bona fide sales and/or performances
of services; and are subject and will be subject to no known defenses, set-offs
or counterclaims. BDMC will deliver to IMNF at the Closing Date Schedule 4.12,
showing the age of accounts and notes receivable of BDMC as at August 31, 1998,
which schedule will specify the amount, if any, of such accounts and notes
receivable which BDMC deems to be uncollectible.
B. Attached as Schedule 4.12B is the August 31, 1998 accounts payable run
for BDMC, listing balances outstanding and the last payment to each creditor,
which is true and correct as of the date of the Closing hereunder.
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C. Attached as Schedule 4.12C is the August 31, 1998 commissions payables
run for BDMC, xxxxxx all commissions owed to employees or others, which is true
and correct as of the Closing hereunder.
4.13 Others' Defaults. No other party with whom BDMC has any material
contractual arrangement is not in compliance with, or is in default (without
regard to any requirement of notice or grade period or both) in the observance
or performance of, any term, condition or provision of any such contractual
arrangement.
4.14 Collective Bargaining Agreements. BDMC is not a party to or bound by
any collective bargaining agreement or other labor agreement with any bargaining
agent (exclusive or otherwise) with respect to its employees.
4.15 Overtime, Back-Wage, Back Commission, Vacation, Discrimination, FMLA
Status/No Extraordinary Turnover in Key Staff.
A. Except as described in Schedule 4.15A, which will be delivered by BDMC
to IMNF on the Closing Date, no present or former employee of BDMC has any claim
against BDMC (whether under federal or state law, under any employment agreement
or otherwise) on account of or for: (i) overtime pay, other than overtime pay
for work done in the current payroll period; (ii) wages or salary or commissions
for any period other than the currect payroll period; (iii) vacation time off or
pay in lieu of vacation time off, other than (a) accumulated vacation pay as at
the Clsoing Date as shown in the schedule referred to above, and (b) vacation
time (or pay in lieu
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thereof) earned in or in respect of the current fiscal year; or (iv) any
violation of any statute, ordinance or regulation relating to minimum wages or
maximum hours of work. No employee is at present taking, or has notified BDMC of
any intention to take, a leave pursuant to the Family and Medical Leave Act of
1993, ("FMLA") or any state counterpart, except as noted in Schedule 4.15A
hereto. BDMC has designated the calander year as its FMLA leave year. No person
or party (including, but not limited to, governmental agencies of any kind) has
made any claim against, or asserted any basis for any action or proceeding
against, BDMC under or arising out of any statute, ordinance or regulation
relating to discrimination in employment or employment practices.
B. CFI warrants and represents that no key staff, defined as its branch
managers and loan officers, have left BDMC's employ since the date of the last
audited financial statement referred to in Paragraph 4.4a above, except as noted
in 4.15B.
4.16 Contracts for Personal Services. BDMC is not a party to or bound by
any contract, agreement or undertaking with any person whatsoever for personal
services to be rendered by any person for BDMC, except as set forth in Schedule
4.16A attached hereto. Attached hereto is Schedule 4.16B, showing the names,
positions and annual rates of compensation of all employees of BDMC, including
copies of employment contracts, or a statement that they are employed at will.
Copies of BDMC's written employment policies, including sick and vacation
policies, as well as a copy of its employee manual, if any, are also attached as
Schedule 4.16B.
4.17 Profit Sharing Arrangements; Bonuses. BDMC is not and will not be, at the
Closing Date, a party to or bound by any contract, agreement or undertaking by
the terms of which any person, firm, corporation, business trust or other entity
is or may be entitled (for any reason or in any capacity other than as a
shareholder or employee of BDMC) to any share in the
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gross receipts, earnings or profits of BDMC, except for any leases,concessions,
franchises or other agreements providing for payments by BDMC based on sales or
profits, true copies of all which leases, concessions, franchises or other
agreements have been delivered by BDMC to IMNF, and except as set forth on
Schedule 4.17, attached hereto.
4.18 Pensions and Other Deferred Compensation. BDMC will not as of the
Closing Date have a pension, profit sharing or retirement income plan, contract
or arrangement in force, except for those plans disclosed in Schedule 4.18,
attached hereto, copies of which plans have heretofore been delivered to IMNF.
4.9 Benefit Claims. No person or party whatsoever now has or will have on
the Closing Date any claim known to BDMC under which BDMC has any liability
under any health, sickness, disability, medical, surgical, hospital or similar
benefit plan or arrangement (whether or not legally binding) maintained by BDMC,
or to or by which BDMC is a party or is bound, or under any workers'
compensation or similar law, which is not fully covered by insurance maintained
with reputable, financially responsible insurers. CFI herewith delivers to IMNF
Schedule 4.19, listing all insurance contracts relating to all such benefit
plans, arrangements and copies of such benefit plans themselves.
4.20 Interests in Property, etc. No other party owns, holds or claims any
interest in any real or personal property or other assets (tangible or
intangible) used by BDMC in its businesses.
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4.21 Leases. BDMC is not either as lessee or lessor, a party to or bound by
any lease or any property or assets having a term of (or subject to renewal or
extension by any party other than BDMC for a total term, including the initial
term and any such renewal or extended term, aggregating) more than one year,
except for the leases described on Schedule 4.21, attached hereto, true copies
of which have been heretofore delivered to IMNF.
4.22 Contracts for Purchase or Sale. BDMC is not a party to or bound by any
contract, agreement or undertaking with any person or party whatsoever (other
than cost and insurance contracts entered into in the ordinary course of
business) for the purchase of any property or asset of any nature whatsoever
which requires that payment for such property or assets shall be made regardless
of the Closing Date of this Agreement, BDMC is not a party to, or bound by any
other contract, agreement or undertaking for, the sale of any property or assets
of any nature whatsoever, except only such as have been made in the ordinary
course of business and that expire by their terms or are otherwise cancelable by
BDMC (without any right of renewal or extension in any party other than BDMC)
no later than 30 days after the Closing Date.
4.23 Insurance Contracts; Banking Relationships. CFI hereby delivers to
IMNF Schedule 4.23A, showing all contracts of insurance and indemnity (not shown
in any other schedule referred to in this Agreement) in force at the date
hereof. CFI also hereby delivers to IMNF Schedule 4.23B, showing (i) the names
and locations of all banks in which BDMC has accounts or safe deposit boxes or
borrowing relationships and the names of all persons authorized
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to draw on such accounts, access such boxes, or borrow pursuant to such
relationships; the balance as of the Closing Date and a description of the use
and purpose of each account; and (ii) the names of all persons or entities
holding BDMC powers of attorney, with copies thereof.
4.24 Brokerage; Indemnity. CFI has retained no broker or finder in
connection with the transactions contemplated by this Agreement, and will
indemnify, defend and hold harmless IMNF against all the claims for brokers' or
finders' fees made or asserted by any party claiming to have been employed by
it, and all costs and expenses (including the reasonable fees of counsel) of
investigating and defending such claims.
4.25 Contracts, Leases, etc. As of the date hereof, BDMC is not a party to
any lease, contract, undertaking or other commitment, written or oral, except:
(a) Those leases, contracts, undertakings or other commitments listed
in the Schedules hereto; and
(b) Those leases, contracts, undertakings and commitments not
materially affecting the business of BDMC. The original or a full, true and
correct copy of each item listed in the aforementioned schedules (together
with supplements and amendments thereto) or a summary of the material
provisions, in the event a formal document is not in existence, has been
delivered to or examined by IMNF. BDMC is not in default under any lease,
contract, undertaking or other commitment materially affecting its
business. To the extent that any lease, contract, undertaking or other
commitment set forth in the aforementioned schedules requires the consent
of any other person or party to its assignment, CFI agrees to use its best
efforts to procure such consent and to deliver
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the same to IMNF on or before the Closing Date.
4.26 Permits. BDMC holds or has obtained all governmental permits,
licenses, consents, approvals and waivers necessary for the lawful conduct of
its business as now conducted. Copies of all such permits are attached hereto as
Schedule 4.26.
4.27A Warehouse Lines. BDMC has in place warehouse lines of credit in the
total amount of approximately ___________ dollars ($-) in force at the date
hereof. CFI hereby delivers to IMNF Schedule 4.27A showing the names, locations
balances and limits of all such warehouse lines of credit, together with a
listing of all mortgages comprising the balances thereof, with ageing details.
CFI warrants and represents that (X) is a warehouse line of credit used solely
by BDMC, and that (Y) is a non-segregated line used by BDMC and CFI. CFI agrees
that no amounts from the non-segregated line will be charged to, or become an
obligation of IMNF after Closing of this Agreement.
4.27B Investors. Schedule 4.27B, which CFI warrants is complete and
correct, lists the entities to which BDMC sells mortgages, their addresses and
contact names, as well as providing a percentage breakdown of business and type
of business for each, and a total for their volume. Also attached are agreements
with such entities.
4.27C All mortgage loans currently originated or still open. Attached as
Schedule 4.27C, which CFI warrants is complete and correct, is a listing of all
loans in BDMC's pipeline as of
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today's date, including all loans in all stages, application, commitment, and
all closed but unpurchased loans on BDMC's books, as well as all warehoused
loans and all amounts due and payable thereon, none of which amounts shall be
charged to, or become an obligation of IMNF after the Closing Date.
4.28 No Conflict with Other Agreements. Neither the execution and delivery
of this Agreement nor compliance with its terms and provisions will conflict
with or result in a breach of any agreement or instrument to which BDMC is a
party or by which it may be bound or constitute a default thereunder or result
in the creation or imposition of any lien, charge, encumbrance or restriction of
any nature whatsoever upon, or give to anyone any interest or rights, including
rights of termination or cancellation, in or with respect to, any of the
properties, assets, contracts, or business of BDMC.
4.29 no Restriction. Neither CFI nor BDMC is subject to any charter, bylaw,
judgment or other restriction which would prevent the consummation of the
transactions contemplated by this Agreement. The board of directors and the
shareholders of CFI have duly approved this agreement and the transactions
contemplated herein as required under the laws of the State of Delaware and have
authorized the execution and delivery of this Agreement.
4.30 Disclosure. Neither the financial statements, any schedule referred to
herein nor this Agreement contains any untrue statements of a material fact or
knowingly omits to state a material fact (other than facts generally known to
the business community) necessary in order to
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makes the statements contained therein or herein not misleading. To the best
knowledge of CFI, there is no such fact which materially adversely affects or in
the future may (so far as CFI can now reasonably foresee) materially adversely
affect the business or prospects or condition (financial or otherwise) of BDMC
or any of its properties or assets which has not been set forth herein in
Schedule 4.30, delivered to IMNF.
5. Representations, warranties, and covenants of IMNF. IMNF represents and
warrants to CFI as follows:
5.1 Organization and Standing. IMNF is a corporation duly organized and
existing and in good standing under the laws of the State of Delaware and has
full corporate power to carry out this Agreement.
5.2 Authority of IMNF. The execution and performance of this Agreement by
IMNF has been duly authorized and approved by its board of directors. Neither
the execution nor the performance by IMNF of this Agreement will result in the
breach of any term or provision of any other agreement to which IMNF is a party.
5.3 Brokerage; Indemnity. IMNF has not retained any broker or finder in
connection with the transactions contemplated by this Agreement, and IMNF will
indemnify, defend and hold harmless CFI against all claims for brokers' or
finders' fees made or asserted by any party claiming to have been employed by
IMNF, and all costs and expenses (including the reasonable fees of counsel) of
investigating and defending such claims.
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6. Certain covenants by CFI. CFI covenants and agrees with IMNF that:
6.1 Consents. CFI shall promptly apply for or otherwise seek, and use its
best efforts to obtain, all consents and approvals of all parties whose consent
or approval is necessary for the valid effective consummation and completion of
the transactions contemplated hereby or is otherwise necessary in order that CFI
may validly, lawfully and effectively perform and carry out its obligations
hereunder. BDMC will not apply for any mortgage or banking department approval,
but will cooperate with IMNF as requested in making such application.
6.2 Resignations of all Directors and Officers. CFI shall deliver to IMNF
written resignations signed by all Directors and Officers of BDMC dated as of
the Closing Date.
6.3 Transfer of Authority to Access and Draw upon Bank Accounts, etc. CFI
shall deliver to IMNF written transfer of authority to access and draw upon each
and every bank account of every nature and kind, every safe deposit box, and any
right to borrow, as set forth in Schedule 4.23, maintain by BDMC, into the name
of IMNF, dated as of the Closing Date.
7. Conditions to IMNF'S Obligations. The obligations of IMNF to complete
and consummate this Agreement shall be subject to compliance by CFI and, if
applicable, Principals, with all of the agreements herein contained and to the
satisfaction of the following conditions precedent:
7.1 Representations and Warranties True. The representations and warranties
contained in Paragraph 5 hereof shall be true and correct in all material
respects as of the Closing
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Date with the same force and effect as though made on and as of the Closing
Date, and IMNF shall have received on the Closing Date a certificate from CFI
dated the Closing Date signed by the president and secretary of CFI to those
effects.
7.2 Opinion of Counsel. At the Closing Date, CFI shall deliver or cause to
be delivered to IMNF an opinion (in form and content satisfactory to IMNF),
dated the Closing Date, from counsel for CFI, to the following effect:
(a) That BDMC is a corporation duly organized and valildly existing
and in good standing under the laws of the State of Florida, entitled to
own or to lease its properties and to carry on its business as and in the
places where such properties are now owned, or leased, or such businesses
are now conducted, and insofar as is known to such counsel, has fully
complied with all federal, state, and local laws with respect to the
operation of its business.
(b) That CFI has full power and authority to make, execute, deliver
and perform this Agreement in accordance with its terms; this Agreement has
been duly authorized and approved by proper corporate action of CFI and
constitutes a valid and legally binding obligation of CFI in accordance
with its terms. All of the shares of stock currently outstanding as
reflected in paragraph 5.2 of this agreement are validly issued and
outstanding and are not currently subject to any lien, pledge, encumbrance,
restriction or claims, and CFI has full right and authority to transfer the
same pursuant to this transaction. Upon assignment and delivery of the
share certificates to IMNF, it will take title thereto free and clear of
any lien, pledge, encumbrance, charge, agreement or claim.
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(c) That such counsel does not know that any action, suit, proceeding
or investigation is pending against BDMC which might result in any material
adverse change in the condition (financial or otherwise) or business of
BDMC (other than those referred to in Paragraph 5.11 hereof), or which
questions the legality, validity or propriety of this Agreement or any
actions taken or to be taken pursuant to or in connection with this
Agreement.
In rendering such opinion, counsel for BDMC may rely (and will state in
such opinion the belief that IMNF is justified in relying) upon the
certificates of an officer of BDMC as to matters of fact.
7.3 No Action to Prevent Completion. No action or proceeding shall have
been instituted or threatened on or prior to the Closing Date to set aside,
restrain or prohibit, or to obtain damages in respect of, this Agreement or the
consummation of the transactions contemplated herein which in the opinion of
IMNF makes it inadvisable to consummate such transactions.
7.4 Final Balance Sheet. CFI has delivered at Closing the Final Balance
Sheet of BDMC and related financial statements, which will show no material
adverse change in the financial position of BDMC from the date of the financial
statements described in Paragraph 4.3 hereof. In addition, there shall have been
no material adverse change in the financial position of BDMC, up to and
including the Closing Date.
7.5 Consent. To the extent specified in any paragraph or schedule with
respect to obtaining the consent of any other person or party to the assignment
of specified contracts, licenses, leases, agreements or commitments, CFI shall
have obtained by the Closing Date such consents in
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form and substance satisfactory to IMNF, except as provided on Schedule 6.5.
7.6 Full Compliance. IMNF's obligations to complete and consummate this
Agreement shall be subject to material compliance by CFI with all of its
agreements herein contained, and to the reasonable satisfaction of all of the
conditions of this Agreement.
7.7 Changes in Conditions. From the date of this Agreement to the Closing
Date, there will have been no material adverse change in the assets or
liabilities or condition (financial or otherwise) or business of BDMC, and BDMC
will not have been adversely affected in any material manner as the result of
any fire, explosion, accident, flood, earthquake, seismic or tidal wave,
windstorm, strike, lockout, labor dispute, riot, civil commotion or disturbance,
sabotage, confiscation, condemnation or purchases of any property by
governmental authority, activities of armed services, or acts of God or the
public enemy, whether covered by insurance or not.
8. Conditions to CFI's Obligations. CFI's obligations to complete and
consummate this Agreement shall be subject to material compliance by IMNF with
all of its agreements herein contained and to the reasonable satisfaction of the
following conditions precedent:
8.1 Representations and Warranties True. The representations and warranties
contained in Paragraph 5 hereof shall be true and correct in all material
respects as of the Closing Date, and IMNF shall have suffered no adverse
material changes in its financial condition that would affect its ability to
perform the transactions contemplated hereunder. CFI shall have received at the
Closing a certificate dated the Closing Date signed by the president or vice
president and the
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secretary or assistant secretary of IMNF to that effect.
8.2 No Action to Prevent Completion. No action or proceeding shall have
been instituted or threatened on or prior to the Closing Date to set aside the
authorizations of the transfers hereunder or any of them, and no action or
proceeding shall have been instituted or threatened before any court or
governmental agency to restrain or prohibit, or to obtain substantial damages in
respect of, this Agreement or the consummation of the transactions contemplated
herein which in the opinion of CFI makes it inadvisable to consummate such
actions.
9. Further Assurance. It is expressly understood and agreed that CFI will,
upon IMNF's request, from time to time prior to the closing execute and deliver
to IMNF all such instruments and documents of further assurance or otherwise,
and will do all such acts and things as in the sole judgement of IMNF may be
necessary or proper for the full, complete and effectual vesting in IMNF at the
Closing of all of BDMC's assets or otherwise to carry out and perform BDMC's
obligations hereunder.
10. Closing Deliveries. This Agreement shall close when all of the
deliveries referred to heretofore in this Agreement, and all of the deliveries
referred to in this Paragraph 10, are made on or prior to the Closing Date, in
form reasonably satisfactory to the parties and their legal and accounting
advisors. Such schedules and deliveries as cannot reasonably be made at Closing
shall be exchanged as soon as practicable, but in any event, within thirty (30)
days of the Closing Date referred to in Paragraph 2 hereof.
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10.1 IMNF and CFI shall deliver to each other certified copies of the
resolutions of their boards of directors authorizing the execution and
performance of this Agreement and the acts of the officers of each in carrying
out the terms and provisions thereof, and appropriate incumbency certificates
for such officers, certified by their secretaries or assistant secretaries.
10.2 IMNF and CFI agree to execute and deliver such instruments and take
such other action as any of them may reasonably require in order to carry out
the intent of this Agreement.
10.3 CFI shall deliver to IMNF a certificate of the Secretary of State of
Florida, evidencing the good standing of BDMC as of a date or dates not more
than ten (10) days prior to the Closing Date.
10.4 CFI shall cooperate with IMNF in seeking a tax clearance certificate
for BDMC to be issued by the appropriate Florida authority dated as of the
Closing Date.
10.5 CFI will issue and deliver to IMNF certificate(s) for the Stock sold
to IMNF by this Agreement.
10.6 CFI shall deliver to IMNF all BDMC's formal corporate records and
devices, including the corporate minute book, corporate stock transfer records
and corporate seal.
10.7 CFI shall deliver to IMNF written resignations signed by all Directors and
Officers of BDMC dated as of the Closing Date.
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10.8 CFI shall deliver to IMNF written transfer of authority to access and
draw upon each and every bank account of ever nature and kind, as set forth in
Schedule 4.23B, maintained by BDMC into the name of IMNF dated as of the Closing
Date.
11 Indemnification of IMNF.
11.1 CFI shall indemnify and hold IMNF harmless after the Closing Date from
and against any and all of the following:
(a) The breach by CFI of any warranty or representation made by CFI
pursuant to this Agreement;
(b) The nonperformance of any covenant of CFI;
(c) Any claim, action, suit or proceeding brought against IMNF based
on a undisclosed claim or liability (as herein defined) arising before the
Closing date and relating to CFI's operation of BDMC;
(d) Any claims for unpaid taxes of any kind which are asserted or
levied against IMNF or the properties or assets of BDMC after the Closing
Date which relate to any period before the Closing Date.
(e) All costs, assessments, judgments, demands (including costs of
defense and reasonable attorneys' fees) arising out of any claim, or the
defense thereof, made with respect to Paragraphs 11.1 (a) through 11.1 (d).
IMNF will seek in good faith by all reasonable means to defeat or reduce
any damages as to which indemnification may be sought so as to minimize
such indemnification and will give CFI timely notice of, and the
opportunity to participate in at its expense, the defense or compromise of
any claim which may give rise to such indemnification.
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Failure to give timely notice shall be a defense only to the extent it
prejudices CFI's rights. Final settlement authority remains with IMNF.
11.2 Except as provided in Subparagraph 11.1 (c), no liability of CFI under
this Agreement shall exist with respect to the representations, warranties and
covenants made in this Agreement or any schedule or certificate furnished by
them with respect thereto, except as 1to claims which are made within three
years of the Closing Date.
11.3 The aggregate of all claims for indemnification by IMNF hereunder must
exceed the sum of $25,000 before any claim may be made. The said amount of
$25,000 is a one-time deductible against all such future claims.
12. Indemnification of CFI
12.1 IMNF shall indemnify and hold CFI harmless after the Closing Date from
and against any and all of the following:
(a) The breach by IMNF of any warranty or representation made by IMNF
pursuant to this Agreement;
(b) The nonperformance of any covenant of IMNF;
(c) Any claims for unpaid taxes of any kind which are asserted or
levied against CFI or the properties or assets of CFI after the Closing
Date which relate to any period after the Closing Date.
(d) All costs, assessments, judgments, demands (including costs of
defense and reasonable attorneys' fees) arising out of any claim, or the
defense thereof, made with respect to Paragraphs 12.1 (a) through 12.1 (c).
CFI will seek in good faith by all reasonable means to
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defeat or reduce any damages as to which indemnification may be sought so as to
minimize such indemnification and will give IMNF timely notice of any claim
which may give rise to such indemnification.
12.2 Except as provided in Subparagraph 12.1(d), no liability of IMNF under
this Agreement shall exist with respect to the representations, warranties and
covenants made in this Agreement or any certificate furnished with respect
thereto, except as to claims which are made within three years of the Closing
Date.
12.3 The aggregate of all claims for indemnification by CFI hereunder must
exceed the sum of $25,000 before any claim may be made. The said amount of
$25,000 is a one-time deductible against all such future claims.
13. Miscellaneous.
13.1 Expenses. Whether or not the transactions herein set forth shall be
consummated, IMNF will pay all expenses of the preparation and performance of
this Agreement incurred by IMNF, and CFI will pay all expenses incurred by it in
connection with the preparation and performance of this agreement.
13.2. Confidentiality. Except as contemplated by this Agreement or
necessary to carry out the transactions herein set forth, all information or
documents furnished hereunder by IMNF or CFI to the other shall be kept
confidential by the party to whom furnished at all times to the Closing Date,
and in the event such transactions are not consummated, each shall return to the
other all documents furnished hereunder and copies thereof and shall continue to
keep confidential all information furnished hereunder and not thereafter use the
same for its advantage.
13.3 Notices. Any notice required or permitted hereunder shall be in
writing and
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shall be given by hand, or by overnight mail addressed, if to IMNF to: IMN
Financial Corp., 000 Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000, Attention:
General Counsel. If to CFI to: CFI Mortgage, Inc., 000 Xxxxxxx Xxxxxxxxx, Xxxxx
000, Xxxx Xxxx Xxxxx, Xxxxxxx 00000, Attention: Xxxxxxxxxxx X. Xxxxxxx.
13.4 Best Efforts Cooperation. IMNF, CFI and Principals shall exert their
best efforts to obtain all consents and approvals necessary for the due and
punctual performance of this Agreement and the satisfaction of the conditions
hereof on their part to be satisfied, and all shall cooperate with the other
with respect thereto.
13.5 Entire Agreement/Amendment. This Agreement and the Schedules thereto
constitute and contain the entire agreement of the parties and supersede any and
all prior negotiations, correspondence, understandings and agreements between
the parties respecting the subject matter hereof. No modification or amendment
of this Agreement shall be of any force or effect unless in writing and signed
by all the parties hereto.
13.6 Parties in Interest. All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
successors and permitted assigns of the parties hereto, whether herein so
expressed or not, but neither this Agreement nor any of the rights, interests or
obligations hereunder of any party hereunder shall be assigned without the prior
written consent of the other parties.
13.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and in making proof
hereof it shall not be necessary to produce or
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account for more than one such counterpart.
13.8 Time of the Essence. Time is of the essence in the performance of all
obligations of the parties under this Agreement.
13.9 Governing Law/Section and Paragraph Headings/Construction. This
Agreement shall be governed by the laws of the State of New York, without regard
to conflicts of law principles. The section and paragraph headings contained
herein are meant for convenience only, and shall form no part of the
interpretation or construction of this Agreement. All of the parties to this
Agreement have participated freely in its negotiation and preparation;
therefore, this Agreement shall not be more strictly construed against any one
of the parties hereto.
13.10 Survival. This Agreement's provisions, representations and
warranties, shall survive the Closing of this Agreement, and the transfer and
delivery of stock certificates hereunder.
13.11 Schedules. The following schedules are attached hereto and by this
reference form a part hereof. All schedules shall be delivered to IMNF at the
Closing unless otherwise indicated herein.
Schedule Subject Matter
4.1 Articles of Incorporation and BY-laws of BDMC
4.5A Notes Payable/Liens on Real Property
4.5B Real Property Owned
4.5C Defects in Properties or Assets
4.6 Changes in Condition
4.7 Taxes and Deficiency Assessments
4.11 Litigation
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4.12A Accounts and Notes Receivable
4.12B Accounts Payable
4.12C Commissions Payable
4.15A Overtime, Back-Wage, Vacation, Discrimination
Claims
4.15B Key Staff
4.16A Personal Service Contracts
416B Employees
4.17 Profit Sharing Arrangements; Bonuses
4.18 Pensions and Deferred Compensation
4.19 Benefits Policies and Claims
4.21 Leases
4.23A Insurance and Indemnity Policies
4.23B Banking Relationships
4.26 Permits
4.27A Warehouse Lines
4.27B Investors
4.27C Mortgage Originations
4.30 Disclosure
7.5 Consents
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
CFI MORTGAGE, INC.
By:________________________________
Xxxxxxxxxxx X. Xxxxxxx, President
IMN FINANCIAL CORP.
By:________________________________
Xxxxxx X. Xxxxxxx, President
As to the Provisions of Paragraphs 1.5 and 3 Only:
XXXXXXX XXXXXXX
___________________________________
As to the Provisions of Paragraph 3 Only:
XXXXXXXXXXX XXXXXXX
___________________________________
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