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EXHIBIT 10.6
OPTION AGREEMENT
THIS OPTION AGREEMENT (the "Agreement") is made and entered into as of the 11th
day of March, 1998, by and between each shareholder (each, a "Shareholder" and
collectively, the "Shareholders") whose names are set forth on the signature
page(s) to this Agreement and Habersham Bancorp (the "Company"), a Georgia
corporation.
WHEREAS, the shareholders are the record and beneficial owners of an aggregate
of 7,000 shares (the "Shares") of common stock (the "Common Stock") of Empire
Bank Corp. ("Empire"), a Georgia corporation, in the individual amounts set
forth on the signature page(s) to this Agreement; and
WHEREAS, the Company wishes to acquire an irrevocable option (the "Option") to
purchase the Shares from the Shareholders on the terms and conditions set forth
in this Agreement.
ARTICLE I
1.1 Option to Purchase Shares. The Shareholders hereby grant to the Company the
irrevocable Option to purchase all of the Shares, together with, at the
Company's election, any additional shares of Common Stock which may be
acquired by the Shareholders prior to the Closing (as defined in Section
1.3 below), for a purchase price of one and one-half times the book value
per share on February 28, 1998 (the "Purchase Price").
1.2 Option Price. In exchange for the Option, the Company has paid the
Shareholders an aggregate of $100,000 (the "Option Price"). The Option
Price will not be refundable unless the Closing does not occur due to
Section 1.8(b), in which event the Option Price will be promptly refunded
to the Company. At the Closing, the Option Price will be credited toward
the aggregate Purchase Price.
1.3 Exercise of Option. The Option may be exercised by the Company in whole
(but not in part) at any time. In the event the Company wishes to exercise
the Option, the Company shall send a written notice to the Shareholder
Representative (as defined on the signature page(s) to this Agreement)
specifying the place, date and time (but not earlier than five business
days nor later than ten business days from the date such notice is given)
for the Closing of such purchase (the "Closing").
1.4 Termination of Option. Unless exercised before such time, this Option shall
terminate upon the earlier of: (a) December 31, 1998 or (b) purchase of all
the Shares by the Company.
1.5 Option Adjustment. In the event that Empire institutes any change in the
Common Stock by reason of stock dividends, stock splits, mergers,
recapitalizations, combinations, conversions, exchanges of shares or the
like, the number and kind of Shares subject to this Agreement and the price
to be
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paid for such Shares shall be appropriately adjusted to reflect such
changes made in the Common Stock.
1.6 Closing Deliveries by Shareholders. At the Closing, the Shareholders will
deliver certificates representing the number of Shares being purchased in
proper form for transfer.
1.7 Closing Deliveries by the Company. At the Closing, the Company will deliver
to the Shareholders a certified or cashier's check in an amount equal to
the Purchase Price multiplied by the number of Shares being sold.
1.8 Conditions to Closing. The respective obligations of each party to effect
the Closing will be subject to the following conditions:
(a) all approvals shall have been received (and any waiting period,
including extensions, shall have expired) which are applicable to the
consummation of the purchase of the Shares under federal and state
laws and regulations applicable to financial institutions; and
(b) no preliminary or permanent injunction or other order by any federal
or state court of competent jurisdiction that makes illegal or
otherwise prevents the consummation of the purchase of the Shares
shall have been issued and remain in effect.
ARTICLE II
2.1 Proposed Empire Transaction.
(a) The Company wishes to acquire all of the outstanding common stock of
Empire (the "Empire Transaction"). The proposed Empire Transaction is
expected to involve a merger between Empire and the Company, with the
Company surviving the Merger. The purchase price would be $13.432
million, payable in Common Stock of the Company at a per share value
which is equivalent to the Company's 20-day average NASDAQ trading
price at the date of closing of the Empire Transaction.
(b) If Empire is not interested in pursuing the proposed Empire
Transaction, the Company will so advise the Shareholder
Representative. In the event the Shareholders locate other Empire
shareholders who wish to sell their shares to the Company, the Company
will purchase such shares for $350 per share, payable at the Closing.
(c) If the Shareholders arrange for the Company's purchase of an
additional 1,000 shares of Empire Common Stock, the Company will pay
the Shareholders a bonus equal to $50,000. If the Shareholders arrange
for the Company's purchase of an additional 2,000 shares of Empire
Common Stock, the Company will pay the Shareholders a second bonus
equal to $50,000 (for a total of $100,000).
(d) The Company will not, directly or indirectly, contact any Empire
shareholders unless and until (i) this Agreement is executed and (ii)
Empire has indicated its desire not to pursue the Empire Transaction.
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2.2 Inconsistent Action. During the term of this Agreement, no Shareholder will
(a) sell, transfer, pledge, hypothecate or otherwise dispose of or encumber
such Shareholder's Shares or make any agreement or commitment to do any of
the foregoing, other than upon exercise of the Option, or (b) take any
action which would have the effect of preventing or disabling such
Shareholder from fully performing such Shareholders' obligations under this
Agreement; provided, however, that nothing in this Section 2.2 shall
prevent the Shareholders from voting the Shares in favor of the Empire
Transaction, and the Shareholders have the affirmative obligation to do so.
ARTICLE III
3.1 Title and Authority. Each Shareholder represents and warrants that such
Shareholder has good, valid and marketable title to such Shareholder's
Shares, free and clear of all liabilities, claims, liens, options, proxies,
charges and encumbrances of any kind whatsoever. Each Shareholder
represents and warrants that such Shareholder has full power, authority and
individual capacity to enter into this Agreement.
3.2 Acquisition of Title. Each Shareholder represents and warrants that upon
exercise of the Option, the Company will acquire good, valid and marketable
title to such Shareholder's Shares, free and clear of all liabilities,
claims, liens, options, proxies, charges and encumbrances of any kind
whatsoever.
ARTICLE IV
4.1 No-Shop. During the term of this Agreement, no Shareholder will directly or
indirectly make, solicit, initiate or encourage proposals or offers from
any party other than the Company and its affiliates relating to any
recapitalization, merger, consolidation or acquisition or purchase of
substantially all of the assets of, or any equity interest in, Empire. Each
Shareholder will immediately cease and cause to be terminated all such
contracts or negotiations with third parties, if any. No Shareholder will
directly or indirectly participate in any negotiations regarding, furnish
to any other person any information with respect to, assist or participate
in or facilitate in any other manner any effort or attempt by any other
person to do or seek any of the foregoing, unless such Shareholder shall be
advised in writing by counsel that such Shareholder's fiduciary duties, in
the capacity as a Director of Empire, under applicable law require such
Shareholder to consider an unsolicited proposal with respect thereto. The
Shareholder Representative shall promptly notify the Company of any such
proposal or offer.
4.2 Public Disclosure. No party hereto shall make any public announcement with
regard to the transactions contemplated by this Agreement without the prior
approval of the Company or the Shareholder Representative, as applicable,
except as required by law.
ARTICLE V
5.1 Expenses. The Shareholders and the Company will each pay their own expenses
incurred in connection with the enforcement or consummation of this
Agreement.
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5.2 Successors. This Agreement will be binding upon and inure to the benefit of
and be enforced by the parties hereto and their respective heirs,
executors, representatives, successors and assigns.
5.3 Entire Agreement. This Agreement contains the entire understanding of the
parties hereto and supersedes all prior agreements and understanding
between the parties with respect to its subject matter. This Agreement may
be amended only by a written instrument duly executed by the parties
hereto.
5.4 Assignment. This Agreement may not be assigned by any Shareholder, and may
not be assigned by the Company to anyone other than to an affiliate of the
Company.
5.5 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be an original, but all of which together will
constitute one and the same Agreement.
5.6 Notices. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given (and shall be deemed to
have been duly given if so given) by actual delivery, overnight courier, by
cable, facsimile transmission, telegram or telex, or by mail (registered or
certified mail, postage prepaid, return receipt requested) to the
respective parties at the addresses on the signature page(s) hereto.
5.7 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Georgia, without
regard to its principles of conflicts of law.
5.8 Severability. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which will remain
in full force and effect.
5.9 Remedies. Each Shareholder acknowledges that performance of such
Shareholder's obligations pursuant to this Agreement is of vital importance
to the Company and that damages are an inadequate remedy for breach of a
Shareholder's obligations represented hereby and, accordingly, each
Shareholder agrees that an appropriate, but not exclusive, remedy for
failure to fulfill such obligations is that of specific performance.
5.10 Further Assurances. From time to time at or after the Closing, at the
Company's request and without further consideration, each Shareholder will
execute and deliver to the Company such documents and will take such action
as the Company may reasonably request in order to consummate more
effectively the transactions contemplated by this Agreement and to vest in
the Company good, valid and marketable title to the Shares, including, but
not limited to, using its best efforts to cause Empire's transfer agent to
transfer the Shares sold by the Shareholders on the books of Empire.
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IN WITNESS WHEREOF, the Company and the Shareholders have caused this Agreement
to be duly executed as of the day and year first above written.
HABERSHAM BANCORP
By: /s/ Xxxxx X. Xxxxxxx
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President
Xxxxxxx 000 Xxxxx
Xxxxxxxx, Xxxxxxx 00000
SHAREHOLDERS
/s/ *Xxxxxx X. Xxxxxx 4,202 Shares
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000 X. Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
/s/ X. X. Xxxxxx 1,232 Shares
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000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Various Others 1,566 Shares
/s/ Xxxxxx X. Xxxxxx
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* Shareholder Representative
