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MERGER AGREEMENT
This MERGER AGREEMENT (this "Agreement") is entered into as of August
18, 1999, by and among AMERICA'S SENIOR FINANCIAL SERVICES, INC., a Florida
corporation ("ASFS"); AMSE ACQUISITION 2 CORP., a Florida corporation and
wholly-owned subsidiary of ASFS (the "ASFS Merger Sub," and together with ASFS,
the "ASFS Companies"); JUPITER MORTGAGE CORPORATION, a Florida corporation (the
"Company") and XXXXXX X. XXXXXXXX ("Xxxxxxxx") and XXXXXXX X. XXXXX ("Xxxxx"),
each a resident of the State of Florida who together constitute all of the
shareholders of the Company (the "Shareholders"). Certain other capitalized
terms used herein are defined in Article X and throughout this Agreement.
RECITALS
The Boards of Directors of ASFS and the Company have determined that it
is in the best interests of their respective shareholders for ASFS, through its
wholly owned subsidiary, to acquire the Company upon the terms and subject to
the conditions set forth in this Agreement. In order to effectuate the
transaction, ASFS has organized the ASFS Merger Sub as a wholly-owned subsidiary
of ASFS, and the parties have agreed, subject to the terms and conditions set
forth in this Agreement, to merge the ASFS Merger Sub with and into the Company
so that the Company continues as the surviving corporation. As a result of the
Merger, the Company will become a wholly-owned subsidiary of ASFS, and the
Shareholders will be issued certain shares of common stock of ASFS and other
consideration.
TERMS OF AGREEMENT
In consideration of the mutual representations, warranties, covenants
and agreements contained herein, the parties hereto, intending to be legally
bound hereby, agree as follows:
ARTICLE I
THE MERGER
1.1 THE MERGER. Subject to the terms and conditions of this Agreement
and in accordance with the Florida Business Corporation Act (the "Corporations
Code"), at the Effective Time (as defined below), the ASFS Merger Sub will be
merged with and into the Company (the "Merger") pursuant to the Plan of Merger
annexed hereto as EXHIBIT A (the "Plan of Merger"). The terms and conditions of
the Plan of Merger are incorporated herein by reference as if fully set forth
herein. As a result of the Merger, the separate corporate existence of the ASFS
Merger Sub shall cease and the Company shall continue as the surviving
corporation ("Surviving Corporation") and a wholly-owned subsidiary of ASFS.
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1.2 THE CLOSING. Subject to the terms and conditions of this Agreement,
the consummation of the Merger (the "Closing") shall take place not later than
August 31, 1999, subject to satisfaction or waiver of the conditions set forth
in Articles VI and VII, at the offices of Akerman, Senterfitt & Xxxxxx, P.A., in
Fort Lauderdale, Florida, or such other time and place as the parties may
otherwise agree.
1.3 DIRECTORS AND OFFICERS. The initial Board of Directors of the
Surviving Entity will consist of five Directors. ASFS shall be entitled to
nominate three members of the Board of Directors of the Surviving Corporation.
The Shareholders shall be entitled to nominate two members of the Board of
Directors of the Surviving Corporation. ASFS shall use its best efforts to cause
the election of the following persons to the Surviving Corporation's Board of
Directors, as indicated below, for as long as Xxxxxxx X. Xxxxx, Xxxxxx X.
Xxxxxxxx and Xxxx Xxxxxx are employed by the Surviving Corporation in the
capacities indicated below. The following persons shall serve in the capacities
indicated next to their respective names with respect to the initial Directors
and Officers of the Surviving Corporation.
Xxxxxx Xxxxx -- Director and Chairman of the Board
Xxxxxxx X. Xxxxx --- Director and Chief Executive Officer
Xxxxxx X. Xxxxxxxx --- Director and President
Xxxx Xxxxxx -- Chief Operating Officer
Xxxxxx Xxxxxxx - Director
Xxxx Xxxx -- Director
Xxxxxxx X. Xxxxx and Xxxxxx X. Xxxxxxxx shall be considered
for purposes hereof nominees of the Shareholders. These Directors and Officers
will hold office until their successors shall have been duly elected or
appointed and qualified. The Shareholders shall also serve on the Executive
Committee of the ASFS Board of Directors. The Executive Committee shall report
to the Board of Directors of ASFS from time to time to assist the Board of
Directors of ASFS, when and to the extent so requested, in formulating and
implementing business and managerial decisions.
1.4 AGGREGATE CONSIDERATION; CONVERSION OF SECURITIES.
(a) AGGREGATE CONSIDERATION. For purposes of this Agreement "Aggregate
Consideration" means:
(i) a number of shares (the "Stock Consideration") of
common stock, par value $.001 per share, of ASFS (the "ASFS
Common Stock") determined by dividing
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$2,500,000 by the average closing price of a share of ASFS
Common Stock as reported by the OTC Bulletin Board and/or
National Quotation Bureau for the twenty (20) consecutive
trading day period ending three calender days prior to the
Effective Time (the "Exchange Price"); and
(ii) an amount (the "Closing Date Payment") equal to
Five Hundred Thousand Dollars ($500,000).
(b) At the Effective Time, each share of common stock of ASFS Merger
Sub issued and outstanding at the Effective Time shall be converted into one
share of the common stock of the Surviving Corporation.
(c) At the Effective Time by virtue of the Merger and without any
action on the part of the Company, ASFS Merger Sub or the Shareholders, all of
the common stock, par value $1.00 per share of the Company ("Company Common
Stock") issued and outstanding immediately prior to the Effective Time shall be
converted into the right to receive the Aggregate Consideration, which shall be
delivered to the Shareholders and First Fidelity Capital Markets, Inc. in the
amounts set forth on SCHEDULE 1.4(C).
1.5 MANNER OF PAYMENT OF AGGREGATE CONSIDERATION. At the Closing, each
of the Shareholders shall deliver the certificates representing all issued and
outstanding shares of the Company Common Stock to ASFS for cancellation; and
ASFS shall pay the Aggregate Consideration to the Shareholders and First
Fidelity Capital Markets, Inc. as follows: (i) the Closing Date Payment shall be
made in immediately available funds by wire transfer to the accounts designated
by the Shareholder to whom the payment is owed in accordance with SCHEDULE
1.4(C) and (ii) delivery to the Shareholders of certificate(s) issued in the
name of the Shareholders representing the Stock Consideration in accordance with
SCHEDULE 1.4(C). The shares of ASFS Common Stock issuable by ASFS in the Merger
are sometimes referred to herein as the "ASFS Shares."
1.6 ADJUSTMENT TO AGGREGATE CONSIDERATION. If, at the first year
anniversary of the Closing (the "Adjustment Date"), the average closing price of
the ASFS Common Stock for the previous twenty (20) consecutive trading day
period is less than Seven Dollars ($7.00) (the "Current Share Price"), ASFS
shall, within ten (10) days following the Adjustment Date, issue pro-rata to the
Shareholders additional shares of ASFS Common Stock (the "Additional Shares") to
the Shareholders in such amount so that the PRODUCT of the number of Price
Protection Shares, as defined below, held by the Shareholders (or their assigns)
on the Adjustment Date plus the number of Additional Shares TIMES the Current
Share Price is equal to the PRODUCT of the number of Price Protection Shares
held by the Shareholders (and their assignees) on the Adjustment Date times
$7.00; provided that, ASFS will in no event be obligated to issue an aggregate
number of additional shares of ASFS Common Stock in excess of such number as
shall equal $2,000,000 divided by the Exchange Price. The aggregate number of
Additional Shares issued pursuant to this Section 1.6 shall be divided pro rata
among the Shareholders based upon the percentage of the aggregate Stock
Consideration shares issued to each Shareholder.
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For purposes of this Section 1.6, "Price Protection Shares" is defined
as the number of shares of ASFS Common Stock issued as Stock Consideration
pursuant to Section 1.4 determined by dividing $2,000,000 by the Exchange Price.
By way of example and not limitation, if (1) the Exchange Price is
$7.00, (2) the Current Share Price is $5.00, (3) the number of Price Protection
Shares held by the Shareholders and their assignees is 1,000 on the Adjustment
Date, then the aggregate number of Additional Shares to be issued by ASFS to the
Shareholders would be determined as follows:
(a) 1,000 x $7.00 = $7,000
(b) 1,000 x $5.00 = $5,000
(c) Deficiency Amount = $2,000
(d) Additional Shares = 400 ($2,000/$5.00)
For purposes of this Section 1.6, the average closing price of the ASFS
Common Stock shall be determined by reference to the closing prices reported by
(1) the NASDAQ Stock Market or a national securities exchange, if the ASFS
Common Stock is listed for trading therein or (2) the OTC Bulletin Board and/or
National Quotation Bureau, if the ASFS Common Stock is traded in the
over-the-counter market. If no prices are reported for the twenty business days
prior to the Adjustment Date, then the price used to make the calculations
required in this Section 1.6 shall be the reported closing price on the first
preceding day on which so reported.
The number of shares and the share price used in the calculations
required to be made in this Section 1.6 shall be proportionately adjusted to
reflect any division, combination or other reclassification of the ASFS Common
Stock occurring on or prior to the Adjustment Date.
1.7 FILING OF ARTICLES OF MERGER. At the time of the Closing, the
parties shall cause the Merger to be consummated by filing duly executed
Articles of Merger (with the completed Plan of Merger annexed thereto) with the
Secretary of State of the State of Florida, in such form as ASFS reasonably
determines is required by, and is in accordance with, the relevant provisions of
the Corporation Code (the date and time of such filing is referred to herein as
the "Effective Date" or "Effective Time").
1.8 ACCOUNTING AND TAX TREATMENT. The parties hereto acknowledge and
agree that the transactions contemplated hereby are intended to be treated for
tax purposes as a reorganization under Section 368 of the Internal Revenue Code
of 1986, as amended (the "Code"), and for accounting purposes as a purchase.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE ASFS COMPANIES
As a material inducement to the Shareholders to enter into this
Agreement and to consummate the transactions contemplated hereby, each of the
ASFS Companies makes the following representations and warranties to the
Shareholders:
2.1 CORPORATE STATUS. Each of the ASFS Companies is a corporation duly
organized, validly existing and in good standing under the laws of the state of
its incorporation and has the requisite power and authority to own or lease its
properties and carry on its business as now being conducted. ASFS Merger Sub is
a wholly owned subsidiary of ASFS. Each of the ASFS Companies is duly qualified
and in good standing as a foreign corporation in all jurisdictions where such
qualification is required under applicable law, except where the failure to be
so qualified would not have a Material Adverse Effect on either of the ASFS
Companies.
2.2 CORPORATE POWER AND AUTHORITY. Each of the ASFS Companies has the
corporate power and authority to execute and deliver this Agreement, to perform
its respective obligations hereunder and to consummate the transactions
contemplated hereby. Each of the ASFS Companies has taken all action necessary
to authorize its execution and delivery of this Agreement, the performance of
its obligations hereunder and the consummation of the transactions contemplated
hereby.
2.3 ENFORCEABILITY. This Agreement has been duly executed and delivered
by each of the ASFS Companies and constitutes a legal, valid and binding
obligation of each of the ASFS Companies, enforceable against each of the ASFS
Companies in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and general equitable
principles regardless of whether such enforceability is considered in a
proceeding at law or in equity.
2.4 ASFS COMMON STOCK. Upon consummation of the Merger and the issuance
and delivery of certificates representing the ASFS Shares to the Shareholders,
the ASFS Shares will be validly issued, fully paid and non-assessable shares of
ASFS Common Stock.
2.5 NO COMMISSIONS. None of the ASFS Companies has incurred any
obligation for any finder's or broker's or agent's fees or commissions or
similar compensation in connection with the transactions contemplated hereby,
other than fees payable to ViStra Growth Partners, Inc, which are solely
obligations of, and payable by, the ASFS Companies.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
AND OF THE COMPANY
As a material inducement to each of the ASFS Companies to enter into
this Agreement and to consummate the transactions contemplated hereby, each of
the Company and the Shareholders, jointly and severally, makes the following
representations and warranties to ASFS:
3.1 CORPORATE STATUS. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the state of its
incorporation and has the requisite power and authority to own or lease its
properties and to carry on its business as now being conducted. The Company is,
and has been since inception, an "S Corporation" pursuant to Subchapter S of the
Code. Each jurisdiction in which the Company is qualified to do business as a
foreign corporation is listed on SCHEDULE 3.1. The Company has fully complied
with all of the requirements of any statute governing the use and registration
of fictitious names, and has the legal right to use the names under which it
operates its business. There is no pending or threatened proceeding for the
dissolution, liquidation, insolvency or rehabilitation of the Company.
3.2 POWER AND AUTHORITY. The Company has the corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The Company
has taken all action necessary to authorize the execution and delivery of this
Agreement, the performance of its obligations hereunder and the consummation of
the transactions contemplated hereby. Each of the Shareholders represent that
they are individuals residing in the State of Florida, and have the requisite
competence and authority to execute and deliver this Agreement, to perform their
respective obligations hereunder and to consummate the transactions contemplated
hereby.
3.3 ENFORCEABILITY. This Agreement has been duly executed and delivered
by the Company and the Shareholders, and constitutes the legal, valid and
binding obligation of each of them, enforceable against them in accordance with
its terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and general equitable principles regardless of
whether such enforceability is considered in a proceeding at law or in equity.
3.4 CAPITALIZATION. As of the date hereof, the Company has (a) 1,000
authorized shares of Company Common Stock at $1.00 per share par value and no
other shares of any class of capital stock, and (b) 1,000 shares of Company
Common Stock issued and outstanding, none of which is held in treasury. All of
the issued and outstanding shares of capital stock of the Company (i) have been
duly authorized and validly issued and are fully paid and non-assessable, (ii)
were issued in compliance with all applicable state and federal securities laws,
and (iii) were not issued in violation of any preemptive rights, rights of first
refusal or similar rights. No preemptive rights, rights of first
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refusal or similar rights exist with respect to the shares of capital stock of
the Company and no such rights arise by virtue of or in connection with the
transactions contemplated hereby. There are no outstanding or authorized rights,
options, warrants, convertible securities, subscription rights, conversion
rights, exchange rights or other agreements or commitments of any kind that
could require the Company to issue or sell any shares of its capital stock (or
securities convertible into or exchangeable for shares of its capital stock).
There are no outstanding stock appreciation, phantom stock, profit participation
or other similar rights with respect to the Company. There are no proxies,
voting rights or other agreements or understandings with respect to the voting
or transfer of the capital stock of the Company.
3.5 SHAREHOLDERS OF THE COMPANY. The Shareholders are the holders of
all issued and outstanding shares of capital stock of the Company, and own such
shares free and clear of all Liens, restrictions and claims of any kind
whatsoever.
3.6 NO VIOLATION. The execution and delivery of this Agreement by the
Company and the Shareholders, the performance by them of their respective
obligations hereunder and the consummation by them of the transactions
contemplated by this Agreement will not (i) violate or conflict with any
provision of the articles of incorporation or bylaws of the Company, as amended,
(ii) violate or conflict with any law, statute, ordinance, rule, regulation,
decree, writ, injunction, judgment or order of any Governmental Authority or of
any arbitration award which is either applicable to, binding upon or enforceable
against either of the Company or the Shareholders, (iii) except as set forth on
SCHEDULE 3.6, conflict with, result in any breach of, or constitute a default
(or an event which would, with the passage of time or the giving of notice or
both, constitute a default) under, or give rise to a right to terminate, amend,
modify, abandon or accelerate, any Contract which is applicable to, binding upon
or enforceable against each of the Company or the Shareholders, (iv) result in
or require the creation or imposition of any Lien upon or with respect to any of
the property or assets of the Company, or (v) require the consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Authority, any court or tribunal or any other Person.
3.7 COMPANY RECORDS. The copies of the articles of incorporation and
bylaws of the Company which were provided to ASFS are true, accurate and
complete and reflect all amendments made through the date of this Agreement. The
minute books for the Company made available to ASFS for review were correct and
complete in all material respects as of the date of such review, no further
entries have been made through the date of this Agreement, such minute books
contain the true signatures of the persons purporting to have signed them, and
such minute books contain an accurate record of all corporate actions of the
shareholders and directors (and any committees thereof) of the Company taken by
written consent or at a meeting since incorporation. All material corporate
actions taken by the Company have been duly authorized or ratified. All
accounts, books, ledgers and official and other records of the Company have been
fully, properly and accurately kept and completed in all material respects, and
there are no material inaccuracies or discrepancies of any kind contained
therein. The stock ledgers of the Company, as previously made available to ASFS,
contain accurate and complete records of all issuances, transfers and
cancellations of shares of the capital stock of the Company.
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3.8 FINANCIAL STATEMENTS. The Shareholders have delivered to ASFS (i)
the financial statements of the Company, including the notes thereto, for the
years ended December 31, 1998, and December 31, 1997, audited by Xxxxxxxx,
Blakiston & Xxxxxx, P.A., and (ii) the financial statements of the Company for
the period ended June 30, 1999 prepared by the Company, copies of all of which
are attached to SCHEDULE 3.8 hereto (collectively, the "Financial Statements").
The balance sheet of the Company dated as of June 30, 1999, included in the
Financial Statements is referred to herein as the "Current Balance Sheet." The
Financial Statements fairly present in all material respects the financial
position of the Company at each of the balance sheet dates and the results of
operations for the periods covered thereby, and have been prepared in accordance
with GAAP consistently applied throughout the periods indicated except, in the
case of the Current Balance Sheet and the accompanying income statement which
(i) are subject to normal year-end audit adjustments (which will not be
material, individually or in the aggregate) and (ii) lack footnotes. The books
and records of the Company fully and fairly reflect in all material respects all
of its transactions, properties, assets and liabilities. There are no
extraordinary or material non-recurring items of income or expense (subject to
fluctuations in the ordinary course of business) during the periods covered by
the Financial Statements and the balance sheets included in the Financial
Statements do not reflect any write-up or revaluation increasing the book value
of any assets, except as specifically disclosed in the notes thereto. The
Financial Statements reflect all adjustments necessary for a fair presentation
of the financial information contained therein, except for the Current Balance
Sheet and the accompanying income statement to the extent indicated above.
3.9 CHANGES SINCE THE LAST AUDITED BALANCE SHEET DATE. Except as set
forth on SCHEDULE 3.9, since December 31, 1998, the Company has not (i) issued
any capital stock or other securities; (ii) made any distribution of or with
respect to its capital stock or other securities or purchased or redeemed any of
its securities; (iii) paid any bonus to or increased the rate of compensation of
any of its officers or salaried employees or amended any other terms of
employment of such persons; (iv) sold, leased or transferred any of its
properties or assets other than in the ordinary course of business consistent
with past practice; (v) made or obligated itself to make capital expenditures
out of the ordinary course of business consistent with past practice; (vi) made
any payment in respect of its liabilities other than in the ordinary course of
business consistent with past practice; (vii) incurred any obligations or
liabilities (including any indebtedness) or entered into any transaction or
series of transactions involving in excess of $10,000 in the aggregate out of
the ordinary course of business, except for this Agreement and the transactions
contemplated hereby; (viii) suffered any theft, damage, destruction or casualty
loss, not covered by insurance and for which a timely claim was filed, in excess
of $10,000 in the aggregate; (ix) suffered any extraordinary losses (whether or
not covered by insurance); (x) waived, canceled, compromised or released any
rights having a value in excess of $10,000 in the aggregate; (xi) made or
adopted any change in its accounting practice or policies; (xii) made any
adjustment to its books and records other than in respect of the conduct of its
business activities in the ordinary course consistent with past practice; (xiii)
entered into any transaction with any Affiliate other than intercompany
transactions in the ordinary course of business consistent with past practice;
(xiv) entered into any employment agreement; (xv) terminated, amended or
modified in any material respect any agreement involving
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an amount in excess of $10,000; (xvi) imposed any security interest or other
Lien on any of its assets other than in the ordinary course of business
consistent with past practice; (xvii) delayed paying any accounts payable which
are due and payable except to the extent being contested in good faith; (xviii)
made or pledged any charitable contribution in excess of $5,000; (xix) entered
into any other transaction or, been subject to any event which has or may have a
Material Adverse Effect on the Company; or (xx) agreed to do or authorized any
of the foregoing.
3.10 LIABILITIES. The Company does not have any liabilities or
obligations, whether accrued, absolute, contingent or otherwise, except (a) to
the extent reflected or taken into account in the Current Balance Sheet and not
heretofore paid or discharged, (b) liabilities incurred in the ordinary course
of business consistent with past practice since the date of the Current Balance
Sheet (none of which relates to breach of contract, breach of warranty, tort,
infringement or violation of law, or which arose out of any action, suit, claim,
governmental investigation or arbitration proceeding), (c) normal accruals,
reclassifications, and audit adjustments which would be reflected on an audited
financial statement and which would not be material in the aggregate, and (d)
liabilities incurred in the ordinary course of business prior to the date of the
Current Balance Sheet which, in accordance with GAAP consistently applied, were
not recorded thereon.
3.11 LITIGATION. There is no action, suit, arbitration or other legal
or administrative proceeding or governmental investigation pending, or to the
knowledge of the Company and the Shareholders threatened, anticipated or
contemplated against, by or affecting the Company, or any of its properties or
assets, or the Shareholders, or which questions the validity or enforceability
of this Agreement or the transactions contemplated hereby, and, to the knowledge
of the Company and the Shareholders, there is no basis for any of the foregoing.
There are no outstanding orders, decrees or stipulations issued by any
Governmental Authority in any proceeding to which the Company is or was a party
which have not been complied with in full or which continue to impose any
material obligations on the Company.
3.12 ENVIRONMENTAL MATTERS.
The Company is and has at all times been in full compliance in all
material respects with all applicable environmental laws.
3.13 REAL ESTATE
(a) The Company does not own any real estate.
(b) SCHEDULE 3.13(B) sets forth a list of all leases, licenses
or similar agreements ("Leases") to which any of the Company is a party (copies
of which have previously been furnished to ASFS), in each case setting forth (A)
the lessor and lessee thereof and the date and term of each of the Leases, and
(B) the street address of each property covered thereby (the "Leased Premises").
The Leases are in full force and effect and have not been amended, and no party
thereto is in default or breach under any such Lease. No event has occurred
which, with the passage of time or the
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giving of notice or both, would cause a material breach of or default under any
of such Leases. There is no breach or anticipated breach by any other party to
such Leases.
3.14 GOOD TITLE TO AND CONDITION OF ASSETS.
Except as set forth in SCHEDULE 3.14, the Company has good and
marketable title to all of its assets, free and clear of any Liens or
restrictions on use.
3.15 COMPLIANCE WITH LAWS.
(a) The business of the Company is and has been operated in
compliance in all material respects with all applicable laws and regulations
including, without limitation to any and all laws and regulations relating to
reverse mortgages.
(b) The Company is not subject to any Contract, decree or
injunction in which the Company is a party which restricts the continued
operation of any business of the Company or the expansion thereof to other
geographical areas, customers and suppliers or lines of business. In addition,
the portfolio of mortgages owned by the Companies is accurately set forth in the
Financial Statements and all reserves for contingent liabilities are accurately
set forth therein. The Company has conducted its business in the ordinary course
since June 30, 1999 and has not acquired mortgages since that date that would
materially increase any reserves for contingent liability that the Company must
maintain.
3.16 LABOR AND EMPLOYMENT MATTERS. SCHEDULE 3.16 sets forth the name,
address, social security number and current rate of compensation of each of the
Company's employees, all of whom are leased from an unaffiliated third party.
The Company is not a party to or bound by any collective bargaining agreement or
any other agreement with a labor union. Neither the Company nor each of the
Shareholders is aware that any executive or key employee or group of employees
has any plans to terminate his, her or their employment with the Company as a
result of the Merger or otherwise. The Company has complied in all material
respects with applicable laws, rules and regulations relating to employment,
civil rights and equal employment opportunities, including but not limited to,
the Civil Rights Act of 1964, the Fair Labor Standards Act, and the Americans
with Disabilities Act, as amended.
3.17 EMPLOYEE BENEFIT PLANS.
(a) EMPLOYEE BENEFIT PLANS. SCHEDULE 3.17 contains a list
setting forth each employee benefit plan or arrangement of the Company,
including but not limited to, employee pension benefit plans, as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), multi-employer plans, as defined in Section 3(37) of ERISA, employee
welfare benefit plans, as defined in Section 3(1) of ERISA, deferred
compensation plans, stock option plans, bonus plans, stock purchase plans,
hospitalization, disability and other insurance plans, severance or termination
pay plans and policies, whether or not described in Section 3(3) of
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ERISA, in which employees, their spouses or dependents, of the Company
participate ("Employee Benefit Plans") (true and accurate copies of which,
together with the most recent annual reports on Form 5500 and summary plan
descriptions with respect thereto, were furnished to ASFS).
(b) COMPLIANCE WITH LAW. With respect to each Employee Benefit
Plan (i) each has been administered in all material respects in compliance with
its terms and with all applicable laws, including, but not limited to, ERISA and
the Code; (ii) no actions, suits, claims or disputes are pending, or, to the
knowledge of the Company and the Shareholders, threatened; (iii) no audits,
inquiries, reviews, proceedings, claims, or demands are pending with any
governmental or regulatory agency; (iv) there are no facts which, to the
knowledge of the Company and the Shareholders, could give rise to any material
liability in the event of any such investigation, claim, action, suit, audit,
review, or other proceeding; (v) all material reports, returns, and similar
documents required to be filed with any governmental agency or distributed to
any plan participant have been duly or timely filed or distributed; and (vi) no
"prohibited transaction" has occurred within the meaning of the applicable
provisions of ERISA or the Code.
(c) QUALIFIED PLANS. With respect to each Employee Benefit
Plan intended to qualify under Code Section 401(a) or 403(a) (i) the Internal
Revenue Service has issued a favorable determination letter, true and correct
copies of which have been furnished to ASFS, that such plans are qualified and
exempt from federal income taxes; (ii) no such determination letter has been
revoked nor has revocation been threatened, nor has any amendment or other
action or omission occurred with respect to any such plan since the date of its
most recent determination letter or application therefor in any respect which
would adversely affect its qualification or materially increase its costs; (iii)
no such plan has been amended in a manner that would require security to be
provided in accordance with Section 401(a)(29) of the Code; (iv) no reportable
event (within the meaning of Section 4043 of ERISA) has occurred, other than one
for which the 30-day notice requirement has been waived; (v) as of the Effective
Date, the present value of all liabilities that would be "benefit liabilities"
under Section 4001(a)(16) of ERISA if benefits described in Code Section
411(d)(6)(B) were included will not exceed the then current fair market value of
the assets of such plan (determined using the actuarial assumptions used for the
most recent actuarial valuation for such plan); (vi) all contributions to, and
payments from and with respect to such plans, which may have been required to be
made in accordance with such plans and, when applicable, Section 302 of ERISA or
Section 412 of the Code, have been timely made; and (vii) all such contributions
to the plans, and all payments under the plans (except those to be made from a
trust qualified under Section 401(a) of the Code) and all payments with respect
to the plans (including, without limitation, PBGC (as defined below) and
insurance premiums) for any period ending before the Effective Date that are not
yet, but will be, required to be made are properly accrued and reflected on the
Current Balance Sheet (other than routine claims for benefits under the terms of
such plans).
(d) MULTIEMPLOYER PLANS. With respect to any multiemployer
plan, as described in Section 4001(a)(3) of ERISA ("MPPA Plan") (i) all
contributions required to be made with respect to employees of the Company have
been timely paid; (ii) the Company has not incurred or is expected to incur,
directly or indirectly, any withdrawal liability under ERISA with respect to any
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such plan (whether by reason of the transactions contemplated by the Agreement
or otherwise); (iii) SCHEDULE 3.17 sets forth (A) the withdrawal liability under
ERISA to each MPPA Plan, (B) the date as of which such amount was calculated,
and (C) the method for determining the withdrawal liability; and (iv) no such
plan is (or is expected to be) insolvent or in reorganization and no accumulated
funding deficiency (as defined in Section 302 of ERISA and Section 412 of the
Code), whether or not waived, exists or is expected to exist with respect to any
such plan.
(e) WELFARE PLANS. (i)The Company is not obligated under any
employee welfare benefit plan as described in Section 3(1) of ERISA ("Welfare
Plan") to provide medical or death benefits (other than routine claims for
benefits under the terms of its health insurance plan) with respect to any
employee or former employee of the Company or its predecessors after termination
of employment except as required by COBRA; (ii) the Company has complied with
the notice and continuation coverage requirements of Section 4980B of the Code
and the regulations thereunder with respect to each Welfare Plan that is, or was
during any taxable year for which the statute of limitations on the assessment
of federal income taxes remains, open, by consent or otherwise, a group health
plan within the meaning of Section 5000(b)(1) of the Code; and (iii) there are
no reserves, assets, surplus or prepaid premiums under any Welfare Plan which is
an Employee Benefit Plan. The consummation of the transactions contemplated by
this Agreement will not entitle any individual to severance pay, and, will not
accelerate the time of payment or vesting, or increase the amount of
compensation, due to any individual.
(f) CONTROLLED GROUP LIABILITY. Neither of the Company nor any
entity that would be aggregated with it under Code Section 414(b), (c), (m) or
(o): (i) has ever terminated or withdrawn from any employee benefit plan under
circumstances resulting (or expected to result) in liability to the Pension
Benefit Guaranty Corporation ("PBGC"), the fund by which the employee benefit
plan is funded, or any employee or beneficiary for whose benefit the plan is or
was maintained (other than routine claims for benefits); (ii) has any assets
subject to (or expected to be subject to) a lien for unpaid contributions to any
employee benefit plan; (iii) has failed to pay premiums to the PBGC when due;
(iv) is subject to (or expected to be subject to) an excise tax under Code
Section 4971; (v) has engaged in any transaction which would give rise to
liability under Section 4069 or Section 4212(c) of ERISA; or (vi) has violated
Code Section 4980B or Section 601 through 608 of ERISA.
(g) OTHER LIABILITIES. (i) None of the Employee Benefit Plans
obligates the Company to pay separation, severance, termination or similar
benefits solely as a result of any transaction contemplated by this Agreement or
solely as a result of a "change of control" (as such term is defined in Section
280G of the Code); (ii) all required or discretionary (in accordance with
historical practices) payments, premiums, contributions, reimbursements, or
accruals for all periods ending prior to or as of the Effective Date shall have
been made or properly accrued on the Current Balance Sheet; and (iii) none of
the Employee Benefit Plans has any unfunded liabilities which are not reflected
on the Current Balance Sheet or the books and records of the Company other than
for routine claims under the terms of such plans.
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3.18 TAX MATTERS. All Tax Returns required to be filed prior to the
date hereof with respect to the Company or any of its income, properties,
franchises or operations have been timely filed, each such Tax Return has been
prepared in compliance in all material respects with all applicable laws and
regulations, and all such Tax Returns are true and accurate in all material
respects. All Taxes due and payable by or with respect to the Company have been
paid, and all Taxes which have been incurred by the Company but which are not
yet due are accrued on the Current Balance Sheet, subject to customary year end
adjustments and accruals for current year Taxes. Without limiting the foregoing,
except as set forth in SCHEDULE 3.18 hereto: (i) with respect to each taxable
period of the Company, either such taxable period has been audited by the
relevant taxing authority or the time for assessing or collecting Taxes with
respect to each such taxable period has closed and such taxable period is not
subject to review by any relevant taxing authority; (ii) no deficiency or
proposed adjustment which has not been settled or otherwise resolved for any
amount of Taxes has been asserted or assessed by any taxing authority against
the Company; (iii) the Company has not consented to extend the time in which any
Taxes may be assessed or collected by any taxing authority; (iv) the Company has
not requested or been granted an extension of the time for filing any Tax Return
to a date later than the Effective Date; (v) there is no action, suit, taxing
authority proceeding, or audit or claim for refund now in progress, pending or,
to the knowledge of the Company or the Shareholders, threatened against or with
respect to the Company regarding Taxes; (vi) the Company has not made an
election or filed a consent under Section 341(f) of the Code (or any
corresponding provision of state, local or foreign law) on or prior to the
Effective Date; (vii) there are no Liens for Taxes (other than for current Taxes
not yet due and payable and delinquent) upon the assets of the Company; (viii)
the Company will not be required (A) as result of a change in method of
accounting for a taxable period ending on or prior to the Effective Date, to
include any adjustment under Section 481(c) of the Code (or any corresponding
provision of state, local or foreign law) in taxable income for any taxable
period (or portion thereof) beginning after the Effective Date or (B) as a
result of any "closing agreement,"as described in Section 7121 of the Code (or
any corresponding provision of state, local or foreign law), to include any item
of income or exclude any item of deduction from any taxable period (or portion
thereof) beginning after the Effective Date; (ix) the Company has not been a
member of an affiliated group (as defined in Section 1504 of the Code) or filed
or been included in a combined, consolidated or unitary income Tax Return; (x)
the Company is not a party to or bound by any tax allocation or tax sharing
agreement or has any current or potential contractual obligation to indemnify
any other Person with respect to Taxes; (xi) there are no material additional
Taxes owed by the Company for any period for which Tax Returns have been filed
in excess of the amounts shown as due and payable thereon; (xii) the Company has
not made any payments, and will not become obligated (under any contract entered
into on or before the Effective Date) to make any payments, that will be
non-deductible under Section 280G of the Code (or any corresponding provision of
state, local or foreign law); (xiii) neither of the Shareholders is a "foreign
person" within the meaning of Section 1445 of the Code; (xiv) no claim has ever
been made by a taxing authority in a jurisdiction where the Company does not
file Tax Returns that the Company is or may be subject to Taxes assessed by such
jurisdiction; (xv) the Company does not have any permanent establishment in any
foreign country, as defined in the relevant tax treaty between the United States
of America and such foreign country; (xvi) true, correct and complete copies of
all income and sales Tax Returns filed by or with respect to the
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Company for the past three years have been furnished or made available to ASFS;
(xvii) the Company will not be subject to any Taxes for the period ending at the
Effective Date or for any period for which a Tax Return has not been filed and
imposed pursuant to Section 1374 or Section 1375 of the Code (or any
corresponding provision of state, local or foreign law); (xviii) no Florida
sales or use tax, Florida non-recurring intangibles tax, Florida documentary
stamp tax or other Florida excise tax (or comparable tax imposed by the State of
Florida) will be payable by any of the ASFS Companies merely by virtue of the
transactions contemplated in this Agreement; (xix) no interest or penalties
relating to Taxes arising as a result of activities during periods ending on or
before the Closing date have been or will be incurred by the Company or its
successors; (xx) the Company has withheld all Taxes required to be withheld by
it in connection with payments to any persons and remitted such Taxes to the
appropriate governmental authorities on a timely basis in accordance with all
applicable laws; and (xxi) the Company is and has been an S Corporation under
the Code for all periods ending on or before the Closing date.
3.19 INSURANCE The Company is covered by valid, outstanding and
enforceable policies of insurance, which are described in SCHEDULE 3.19, issued
to it by reputable insurers covering its properties, assets and businesses
against risks of the nature normally insured against by corporations in the same
or similar lines of business (the "Insurance Policies"). Such Insurance Policies
are in full force and effect, and all premiums due thereon have been paid. As of
the Effective Time, each of the Insurance Policies will be in full force and
effect. None of the Insurance Policies will lapse or terminate as a result of
the transactions contemplated by this Agreement. The Company has complied in all
material respects with the provisions of such Insurance Policies. SCHEDULE 3.19
contains (i) a complete and correct list of all Insurance Policies and all
amendments and riders thereto (copies of which have been provided to ASFS) and
(ii) a detailed description of each pending claim under any of the Insurance
Policies for an amount in excess of $10,000 that relates to loss or damage to
the properties, assets or businesses of the Company. The Companies has not
failed to give, in a timely manner, any notice required under any of the
Insurance Policies to preserve its rights thereunder and the Company and the
Shareholders have no knowledge of any uninsured claims or losses.
3.20 LICENSES AND PERMITS. The Company possesses all licenses and
required governmental or official approvals, permits or authorizations,
including but not limited to those required by the State of Florida, HUD, VA and
Xxxxxx Xxx for the operation of a mortgage lending business (collectively, the
"Mortgage Lending Permits") and, to the knowledge of the Company and the
Shareholders all other required governmental or official approvals, permits or
authorizations (collectively, with the Mortgage Lending Permits, the "Permits")
for its businesses and operations. SCHEDULE 3.20 contains a true and complete
list of all such Permits. All such Permits are valid and in full force and
effect, and the Company is in compliance in all material respects with the
respective requirements thereof and no proceeding is pending or threatened to
revoke or amend any of them. Subject to obtaining any required governmental
consents, none of such Permits is or will be impaired or in any way affected in
any material respect by the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
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3.21 INTELLECTUAL PROPERTY. The Company has full legal right, title and
interest in and to all trademarks, service marks, trade names, copyrights,
know-how, patents, trade secrets, proprietary computer software, data bases and
compilations, licenses (including licenses for the use of computer software
programs and technical specifications), and other intellectual property used in
the conduct of its business (the "Intellectual Property"). The business of the
Company as presently conducted, and the unrestricted conduct and the
unrestricted use and exploitation of the Intellectual Property, does not, to the
knowledge of the Company and the Shareholders, infringe or misappropriate any
rights held or asserted by any Person, and, to the knowledge of the Company and
the Shareholders, no Person is infringing on the Intellectual Property. No
payments are required for the continued use of the Intellectual Property. None
of the Intellectual Property has ever been declared invalid or unenforceable, or
is the subject of any pending or threatened action for opposition, cancellation,
declaration, infringement, or invalidity, unenforceability or misappropriation
or like claim, action or proceeding.
3.22 CONTRACTS. SCHEDULE 3.22 sets forth a list of each Contract to
which the Company is a party or by which it or its properties and assets are
bound and which is material to its business, assets, properties or prospects
(the "Designated Contracts"), true and correct copies of which have been
provided to ASFS. The copy of each Designated Contract furnished to ASFS is a
true and complete copy of the document it purports to represent and reflects all
amendments thereto made through the date of this Agreement. The Company has not
violated any of the terms or conditions of any Designated Contract, or any term
or condition which would permit termination or material modification of any
Designated Contract, and all of the covenants to be performed by any other party
thereto have been performed in all material respects and there are no claims for
breach or indemnification or notice of default or termination under any
Designated Contract, and no event has occurred which constitutes, or after
notice or the passage of time, or both, would constitute, a material default by
the Company under any Designated Contract, and no such event has occurred which
constitutes or would constitute a material default by any other party. The
Company is not subject to any material liability or payment resulting from
renegotiation of amounts paid it under any Designated Contract. As used in this
Section, Designated Contracts shall include, without limitation, (a) loan
agreements, indentures, mortgages, pledges, hypothecations, deeds of trust,
conditional sale or title retention agreements, security agreements, equipment
financing obligations or guaranties, or other sources of contingent liability in
respect of any indebtedness or obligations to any other Person, or letters of
intent or commitment letters with respect to same; (b) contracts obligating the
Company to provide products or services for a period of one year or more,
excluding standard maintenance contracts entered into in the ordinary course of
business without material modification from the preprinted forms used by the
Company in the ordinary course of its business; (c) leases of real property, and
leases of personal property not cancelable without penalty on notice of sixty
(60) days or less or calling for payment of an annual gross rental exceeding
$10,000; (d) distribution, sales agency or franchise or similar agreements, or
agreements providing for an independent contractor's services, or letters of
intent with respect to same; (e) employment agreements, management service
agreements, consulting agreements, confidentiality agreements, non-competition
agreements, any other agreements relating to any employee, officer or director
of the Company, and all employee handbooks, policy statements and similar plans;
(f) licenses,
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assignments or transfers of trademarks, trade names, service marks, patents,
copyrights, trade secrets or know how, or other agreements regarding proprietary
rights or intellectual property; (g) any Contract relating to pending capital
expenditures by the Company; and (h) other material Contracts or understandings,
irrespective of subject matter and whether or not in writing, not entered into
in the ordinary course of business by the Company and not otherwise disclosed on
the Schedules.
3.23 LOAN APPLICATION PIPELINE (WORK-IN-PROGRESS). SCHEDULE 3.23 sets
forth all of the mortgage loan applications that are currently being processed
by the Company.
3.24 ACCURACY OF INFORMATION FURNISHED BY THE SHAREHOLDERS. No
representation, statement or information made or furnished by the Shareholders
to ASFS or any of ASFS' representatives contained in this Agreement and the
various Schedules attached hereto contains any untrue statement of a material
fact or omits any material fact necessary to make the information contained
herein not misleading. The Shareholders have provided ASFS with true, accurate
and complete copies of all documents listed or described in the various
Schedules attached hereto.
3.25 INVESTMENT INTENT; ACCREDITED INVESTOR STATUS: SECURITIES
DOCUMENTS. Each of the Shareholders and First Fidelity Capital Markets, Inc.
("First Fidelity Capital Markets"), is acquiring the ASFS Shares hereunder for
his, her or its own account for investment and not with a view to, or for the
sale in connection with, any distribution of any of the ASFS Shares, except in
compliance with applicable state and federal securities laws. Each of the
Shareholders and First Fidelity Capital Markets has had the opportunity to
discuss the transactions contemplated hereby with ASFS and has had the
opportunity to obtain such information pertaining to the ASFS Companies as has
been requested, including but not limited to filings made by ASFS with the SEC
under the Exchange Act, including the most recent filing by ASFS on Form 10-SB,
as amended. The Shareholders and First Fidelity Capital Markets are "accredited
investors" within the meaning of Regulation D, promulgated under the Securities
Act, and have such knowledge and experience in business or financial matters
that make them capable of evaluating the merits and risks of an investment in
the ASFS Shares. The Shareholders further represent and warrant that they and
First Fidelity Capital Markets understand that the ASFS Shares being issued
hereunder to the Shareholders and First Fidelity Capital Markets will be deemed
"restricted" under the Securities Act and that the Shareholders will have to
bear the consequences of such Shares being illiquid.
3.26 BANK ACCOUNTS. SCHEDULE 3.26 sets forth all accounts of the
Company with any bank, broker or other depository institution, and the names of
all persons authorized to withdraw funds from each such account.
3.27 NAMES; PRIOR ACQUISITIONS. All names under which the Company does
business as of the date hereof are specified on SCHEDULE 3.27. Except as set
forth on SCHEDULE 3.27, the Company has not changed its name or used any assumed
or fictitious name, or been the surviving entity in a merger, acquired any
business or changed its principal place of business or chief executive office,
within the past three years.
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3.28 NO COMMISSIONS. Neither the Company nor the Shareholders has
incurred any obligation for any finder's or brokers or agent's fees or
commissions or similar compensation in connection with the transactions
contemplated hereby, other than fees and expenses due to First Fidelity Capital
Markets, Inc., which will be paid by the Shareholders.
3.29 YEAR 2000. The Company has assessed, evaluated and reviewed all
areas of its business and operations that could be adversely affected in any
material respect by date sensitive functions and has taken all necessary action
to assess, evaluate and correct in all material respects all of the hardware,
software, embedded microchips and other processing capabilities and capacities,
directly or indirectly involving date sensitive functions, to ensure that its
business and operations will continue accurately and without interruption or
ambiguity using date information before, during and after January 1, 2000.
3.30 CONSENTS. No third party consents are required in order to
effectuate the transactions contemplated herein, except as set forth on SCHEDULE
3.30; and the consummation of the transactions contemplated herein will not
contravene or otherwise violate any agreement or contract to which the Company
and/or the Shareholders are a party, or to which they may be bound, except as
set forth on SCHEDULE 3.30.
ARTICLE IV
CONDUCT OF BUSINESS PENDING THE MERGER
4.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. The Company
covenants and agrees that, between the date of this Agreement and the Effective
Time, the business of the Company shall be conducted only in, and the Company
shall not take any action except in, the ordinary course of business, consistent
in all material respects with past practice. The Company shall use its best
efforts to preserve intact its business organizations, to keep available the
services of its current officers, employees and consultants, and to preserve its
present relationships with customers, suppliers and other persons with which it
has significant business relations. By way of illustration and not limitation,
the Company shall not, between the date of this Agreement and the Effective
Time, directly or indirectly, do or propose or agree to do any of the following
without the prior written consent of ASFS:
(a) amend or otherwise change its articles of incorporation or
bylaws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, encumber, or, authorize
the issuance, sale, pledge, disposition, grant or encumbrance of (i) any shares
of its capital stock of any class, or any options, warrants, convertible
securities or other rights of any kind to acquire any shares of such capital
stock, or any other ownership interest, of it or (ii) any of its assets,
tangible or intangible, except in the ordinary course of business consistent in
all material respects with past practice;
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(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to any
of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock;
(e) (i) acquire (including, without limitation, for cash or
shares of stock, by merger, consolidation, or acquisition of stock or assets)
any interest in any corporation, partnership or other business organization or
division thereof or any assets, or make any investment either by purchase of
stock or securities, contributions of capital or property transfer, or, except
in the ordinary course of business, consistent with past practice, purchase any
property or assets of any other Person, (ii) incur any indebtedness for borrowed
money or issue any debt securities or assume, guarantee or endorse or otherwise
as an accommodation become responsible for, the obligations of any Person,
except endorsement of checks payable to the Company in the ordinary course of
business, or make any loans or advances, or (iii) enter into any Contract other
than in the ordinary course of business, consistent with past practice;
(f) increase the compensation payable or to become payable to
its officers or employees, or, except as presently bound to do, grant any
severance or termination pay to, or enter into any employment or severance
agreement with, any of its directors, officers or other employees, or establish,
adopt, enter into or amend or take any action to accelerate any rights or
benefits which any collective bargaining, bonus, profit sharing, trust,
compensation, stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any directors, officers or
employees;
(g) take any action other than in the ordinary course of
business and in a manner consistent in all material respects with past practice
with respect to accounting policies or procedures;
(h) make any capital investments;
(i) make any distributions to the Shareholders, other than
ordinary and customary salaries and expense reimbursements;
(j) pay, discharge or satisfy any existing claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the ordinary
course of business and consistent in all material respects with past practice of
due and payable liabilities reflected or reserved against in its financial
statements, as appropriate, or liabilities incurred after the date hereof in the
ordinary course of business and consistent with past practice; or
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(k) agree, in writing or otherwise, to take or authorize any
of the foregoing actions or any action which would make any representation or
warranty in Article III untrue or incorrect in any material respect.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 FURTHER ASSURANCES. Each party shall execute and deliver such
additional customary instruments and other documents and shall take such further
actions as may be reasonably necessary or appropriate to effectuate, carry out
and comply with all of the terms of this Agreement and the transactions
contemplated hereby.
5.2 COMPLIANCE WITH COVENANTS. The Shareholders shall cause the Company
to comply with all of the respective covenants of the Company under this
Agreement.
5.3 COOPERATION. Each of the parties agrees to cooperate with the other
in the preparation and filing of all forms, notifications, reports and
information, if any, required or reasonably deemed advisable pursuant to any
law, rule or regulation in connection with the transactions contemplated by this
Agreement and to use their respective commercially reasonably best efforts to
agree jointly on a method to overcome any objections by any Governmental
Authority to any such transactions.
5.4 OTHER ACTIONS. Each of the parties hereto shall use its
commercially reasonable best efforts to take, or cause to be taken, all
appropriate actions, and to do, or cause to be done, all things reasonably
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated herein, including,
without limitation, using its commer cially reasonable best efforts to obtain
all licenses, permits, consents, approvals, authorizations, qualifications and
orders of any Governmental Authority and parties to Contracts with the Company
as are necessary for the consummation of the transactions contemplated hereby.
Each of parties shall make on a prompt and timely basis all governmental or
regulatory notifications and filings required to be made by it for the
consummation of the transactions contemplated hereby. The parties also agree to
use commercially reasonable best efforts to defend all lawsuits or other legal
proceedings challenging this Agreement or the consummation of the transactions
contemplated hereby and to lift or rescind any injunction or restraining order
or other order adversely affecting the ability of the parties to consummate the
transactions contemplated hereby.
5.5 ACCESS TO INFORMATION. From the date hereof to the Effective Date,
the Company shall (and shall cause its directors, officers, employees, auditors,
counsel and agents to) afford ASFS and ASFS' officers, employees, auditors,
counsel and agents reasonable access at all reasonable times to its properties,
offices, and other facilities, to its officers and employees and to all books
and records, and shall furnish such persons with all financial, operating and
other data and information as may be requested. No information provided to or
obtained by ASFS shall affect any representation or warranty contained in this
Agreement.
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5.6 NOTIFICATION OF CERTAIN MATTERS. The Company and the Shareholders
shall give prompt notice to ASFS of the occurrence or non-occurrence of any
event which would likely cause any representation or warranty contained herein
to be untrue or inaccurate, or any covenant, condition, or agreement contained
herein not to be complied with or satisfied.
5.7 CONFIDENTIALITY; PUBLICITY. Except as may be required by law or as
otherwise permitted or expressly contemplated herein, no party hereto or their
respective Affiliates, employees, agents and representatives shall disclose to
any third party this Agreement or the subject matter or terms hereof without the
prior consent of the other parties hereto. No press release or other public
announcement related to this Agreement or the transactions contemplated hereby
shall be issued by any party hereto without the prior approval of the other
parties, except that ASFS may make such public disclosure which it believes in
good faith to be required by law or by the terms of any listing agreement with
or requirements of a securities exchange (in which case ASFS will consult with
an officer of the Company prior to making such disclosure).
5.8 NO OTHER DISCUSSIONS. Until this Agreement is terminated in
accordance with its provisions, the Company, the Shareholders, and their
respective Affiliates, employees, agents and representatives will not (i)
initiate, encourage the initiation by others of discussions or negotiations with
third parties or respond to solicitations by third persons relating to any
merger, sale or other disposition of any substantial part of the assets,
business or properties of the Company (whether by merger, consolidation, sale of
stock or otherwise) or (ii) enter into any agreement or commitment (whether or
not binding) with respect to any of the foregoing transactions. Until this
Agreement is terminated in accordance with its provisions, the Company and the
Shareholders will immediately notify ASFS if any third party attempts to
initiate any solicitation, discussion or negotiation with respect to any of the
foregoing transactions.
5.9 TRADING IN ASFS COMMON STOCK. Except as otherwise expressly
consented to by ASFS, from the date of this Agreement until the Effective Date,
neither the Company, First Fidelity Capital Markets nor the Shareholders (nor
any Affiliates thereof) will directly or indirectly purchase or sell (including
short sales) or trade any shares of ASFS Common Stock. In addition, the
Shareholders and/or First Fidelity Capital Markets further agree that they will
not directly or indirectly purchase or sell (including any short sales), except
for sales in a public offering by ASFS that is effectuated as a firm commitment
underwritten offering; or trade any shares of ASFS Common Stock during the
period commencing sixty (60) days prior to and ending one day after the
Adjustment Date.
5.10 RESALE RESTRICTIONS ON ASFS COMMON STOCK. The shares of ASFS
Common Stock to be issued pursuant to this Agreement will be restricted
securities which may not be sold, transferred or otherwise disposed of except
pursuant to an effective registration statement of ASFS filed under the
Securities Act of 1933, as amended (the "Securities Act"), or in accordance with
an opinion of counsel in form and substance reasonably satisfactory to ASFS that
an exemption from such registration is available. The Shareholders agree that,
at the Effective Time, they shall, and
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they shall cause First Fidelity Capital Markets to, enter into a lockup
agreement with ASFS providing that for a period ending on the first anniversary
of the Effective Date, except with respect to certain piggyback registration
rights provided in Section 8.3 herein, the Shareholders and First Fidelity
Capital Markets shall retain and not sell or otherwise transfer the ASFS Shares
received in the Merger (such restricted shares shall be referred to as the
"Locked-Up Shares"), a copy of which is attached to SCHEDULE 5.10.
5.11 CERTAIN TAX MATTERS. The parties agree that after the Effective
Time, ASFS shall prepare, or cause to be prepared, and file, or cause to be
filed, in accordance with applicable laws and regulations, all Tax Returns
(including any necessary amendments to previously filed Tax Returns) for the
Company for any period ending on or before the Effective Time. ASFS shall
provide such Tax Returns to the Shareholders and their accountants for review at
least thirty (30) days prior to their due date (including extensions where
applicable). After the Effective Time, the Shareholders shall provide ASFS with
such information and records and access to such of its former officers,
directors and agents as may be reasonably requested by ASFS in connection with
the preparation of any tax return or any audit or other proceeding relating to
the Company. The Shareholders agree to advise ASFS as to the name and address of
their accountants so that such Tax Returns may be provided.
5.12 SHAREHOLDER VOTE. The Shareholders, in executing this Agreement,
consent as Shareholders of the Company to the Merger and the transactions
contemplated hereby, and waive notice of any meeting in connection therewith,
and hereby release and waive all rights with respect to the transactions
contemplated hereby under the articles of incorporation of the Company and any
agreements between any Shareholder and the Company relating to the sale,
purchase or voting of any capital stock of the Company. At Closing, the
Shareholders and the Company agree that any and all agreements relating to the
sale, purchase or voting of capital stock of the Company shall be terminated.
5.13 COMPANY COMMON STOCK; STOCK POWERS; RELEASES.. At the Closing, the
Shareholders covenant and agree to deliver to ASFS all certificates evidencing
shares of capital stock of the Company held by them, together with stock powers
duly executed.
ARTICLE VI
CONDITIONS TO THE OBLIGATIONS OF THE ASFS COMPANIES
The obligations of the ASFS Companies to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the following
conditions, any or all of which may be waived in whole or in part by the ASFS
Companies:
6.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of the Shareholders and the
Company contained in this
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Agreement shall be true and correct in all material respects at and as of the
Effective Time with the same force and effect as though made at and as of that
time. The Shareholders and the Company shall have performed and complied with in
all material respects all of their respective obligations required by this
Agreement to be performed or complied with at or prior to the Effective Time.
The Company and the Shareholders shall have delivered to the ASFS Companies a
certificate, dated as of the Effective Date, duly signed by the Shareholders and
the Company (in the case of the Company, by its President), certifying that such
representations and warranties are true and correct and that all such
obligations have been complied with and performed.
6.2 NO MATERIAL ADVERSE CHANGE OR DESTRUCTION OF PROPERTY. Between the
date hereof and the Effective Time, (i) there shall have been no Material
Adverse Change to the Company, (ii) there shall have been no adverse federal,
state or local legislative or regulatory change affecting in any material
respect the services, products or business of the Company, and (iii) none of the
properties and assets of the Company shall have been damaged by fire, flood,
casualty, act of God or the public enemy or other cause (regardless of insurance
coverage for such damage) which damages may have a Material Adverse Effect on
the Company, and there shall have been delivered to the ASFS Companies a
certificate to that effect, dated the Effective Date and signed by or on behalf
of the Company and the Shareholders.
6.3 CONSENTS. Each of the Company and ASFS shall have received consents
to the transactions contemplated hereby and waivers of rights to terminate or
modify any material rights or obligations of the Company from any Person from
whom such consent or waiver is required under any Contract, Permit or instrument
on or prior to the Effective Date, or who, as a result of the transactions
contemplated hereby, would have such rights to terminate or modify such
Contract, Permits or instruments, either by the terms thereof or as a matter of
law.
6.4 SECURITIES LAWS. ASFS shall have received all necessary consents
and otherwise complied with any state or federal securities laws applicable to
the issuance of the ASFS Shares, in connection with the transactions
contemplated hereby.
6.5 CAPITAL STOCK OF THE COMPANY. At the Closing, the Shareholders
shall have delivered to ASFS all certificates evidencing the shares of capital
stock of the Company held by them.
6.6 NO ADVERSE LITIGATION. There shall not be pending or threatened any
action or proceeding by or before any court or other governmental body which
shall seek to restrain, prohibit, invalidate or collect damages arising out of
the Merger or any other transaction contemplated hereby, and which, in the
reasonable judgment of ASFS, makes it inadvisable to proceed with the Merger and
other transactions contemplated hereby.
6.7 EMPLOYMENT AGREEMENTS. At the Effective Time, (i) the Shareholders
and Xxxx Xxxxxx shall have entered into employment agreements (including a
non-compete provision) with
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the Surviving Corporation in substantially the form attached hereto as SCHEDULE
6.7 ("Employment Agreements").
6.8 UPDATED FINANCIAL STATEMENTS. At the Closing, the Shareholders
shall have delivered to ASFS the unaudited financial statements of the Company
for the period ended July 31, 1999 and a representation that these financial
statements fairly present in all material respects the financial position of the
Company as of such date and the results of operations for the period covered
thereby, and have been prepared in accordance with GAAP consistently applied
throughout the periods indicated except for (i) normal year-end audit
adjustments (which will not be material, individually or in the aggregate) and
(ii) footnotes.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF
THE COMPANY AND THE SHAREHOLDERS
The obligations of each of the Company and the Shareholders to effect
the Merger shall be subject to the fulfillment at or prior to the Effective Time
of the following conditions, any or all of which may be waived in whole or in
part by each of the Company and the Shareholders:
7.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of the ASFS Companies contained
in this Agreement shall be true and correct in all material respects at and as
of the Effective Time with the same force and effect as though made at and as of
that time. Each of the ASFS Companies shall have performed and complied with all
of its obligations required by this Agreement to be performed or complied with
at or prior to the Effective Time. Each of the ASFS Companies shall have
delivered to the Company and the Shareholders a certificate, dated as of the
Effective Date, and signed by an executive officer, certifying that such
representations and warranties are true and correct in all material respects and
that all such obligations have been complied with and performed.
7.2 ASFS SHARES. At the Closing, ASFS shall have issued all of the ASFS
Shares and shall have delivered to the Shareholders (i) certificates
representing the ASFS Shares issued hereunder; and (ii) the cash consideration
pursuant to Section 1.4.
7.3 NO ORDER OR INJUNCTION. No court of competent jurisdiction or other
governmental body shall have issued or entered any order or injunction
restraining or prohibiting the transactions contemplated hereby, which remains
in effect at the time of Closing and no litigation, claim or proceeding shall be
pending or threatened which seeks to restrain, prohibit or invalidate the
Merger.
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ARTICLE VIII
REGISTRATION RIGHTS
8.1 DISPOSITION OF SHARES. In addition to the restrictions set forth in
Section 5.10, the Shareholders represent and warrant, and shall cause First
Fidelity Capital Markets to represent and warrant, that the shares of ASFS
Common Stock being acquired by them hereunder are being acquired and will be
acquired for their own respective accounts and will not be sold or otherwise
disposed of, except pursuant to (a) an exemption from the registration
requirements under the Securities Act, which does not require the filing by ASFS
with the SEC of any registration statement, offering circular or other document,
in which case, the Shareholders shall first supply to ASFS an opinion of counsel
(which counsel and opinions shall be reasonably satisfactory to ASFS) that such
exemption is available, or (b) an effective registration statement filed by ASFS
with the SEC under the Securities Act.
8.2 LEGEND. The certificates representing the ASFS Shares shall bear
the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF BY THE HOLDER EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER
THE SECURI TIES ACT OF 1933, AS AMENDED, AND IN COMPLIANCE
WITH APPLICABLE SECURITIES LAWS OF ANY STATE WITH RESPECT
THERETO, OR IN ACCORDANCE WITH AN OPINION OF COUNSEL IN FORM
AND SUBSTANCE REASONABLY SATISFACTORY TO THE ISSUER THAT AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
ASFS shall, unless a registration statement is in effect covering such
shares or it has received an opinion of counsel reasonably acceptable to it that
registration is not required due to an exemption therefrom, place stop transfer
orders with its transfer agents with respect to such certificates in accordance
with federal securities laws.
8.3 PIGGY-BACK REGISTRATION RIGHTS. The Shareholders and First Fidelity
Capital Markets shall have, on a pro rata basis, the following piggy-back
registration rights with respect to the ASFS Shares issued to them hereunder:
(a) Within twelve (12) months from the Closing Date, whenever
ASFS proposes to file a Registration Statement (as defined below), it will, at
least twenty (20) business days prior to such filing, give written notice to the
Shareholders and First Fidelity Capital Markets of its
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intention to do so and, upon the written request of the Shareholders and First
Fidelity Capital Markets given within fifteen (15) business days after ASFS
provides such notice (which request shall state the intended method of
disposition of the Registrable Shares (defined below)), ASFS shall use its best
efforts to cause up to 115,000 of the ASFS Shares received by the Shareholders
in the Merger (the "Registrable Shares"), which ASFS has been requested by the
Shareholders to register, to be registered under the Securities Act, to the
extent necessary to permit their sale or other disposition in accordance with
the intended methods of distribution specified in the request of the
Shareholders; PROVIDED, HOWEVER, that ASFS shall have the right to postpone or
withdraw the offering contemplated by any registration effected pursuant to this
Section without any obligation to the Shareholders whatsoever.
(b) In connection with any registration under this ARTICLE
VIII involving an "underwritten offering," ASFS shall not be required to include
any Registrable Shares in such registration unless the holder thereof accepts
the terms of the underwriting as agreed upon between ASFS and the underwriters
of ASFS, which agreement may require that the Registrable Shares be withheld
from the market by the Shareholders for a certain period after the effective
date of the registration statement by which such public offering is being
effected. If, in the opinion of the managing underwriter, it is appropriate
because of marketing factors to limit the number of Registrable Shares to be
included in the offering, then ASFS shall be required to include in the
registration only that number of Registrable Shares, if any, which the managing
underwriter believes should be included therein, and shall be entitled to
include before such Registrable Shares up to the number of ASFS Shares to be
issued by ASFS in the offering. If the number of Registrable Shares to be
included in the offering in accordance with the foregoing is less than the total
number of shares which the holder of Registrable Shares has requested to be
included, then the holder of Registrable Shares who has requested registration
and other holders of securities entitled to be included in such registration
shall participate in the registration pro rata based upon their total ownership
of shares of common stock of ASFS subject to the managing underwriter's
discretion.
(c) For the purposes of this Section the term "Registration
Statement" means a registration statement filed by ASFS with the SEC for a
public offering and sale of Common Stock of ASFS (other than (1) the currently
contemplated public offering of Common Stock to be underwritten by American
Frontier; (2) a Form S-8 or Form S-4, or its successors, or any other form for a
similar limited purpose, or any registration statement covering only securities
proposed to be issued in exchange for securities or assets of another
corporation; or (3) any registration statement filed prior to the date hereof).
8.4 EXPENSES OF REGISTRATION. ASFS shall pay all expenses incurred by
ASFS in connection with the registration, qualification and/or exemption of the
ASFS Shares, including any SEC and state securities law registration and filing
fees, printing expenses, fees and disbursements of ASFS's counsel and
accountants, transfer agents' and registrars' fees, fees and disbursements of
experts used by ASFS in connection with such registration, qualification and/or
exemption, and expenses incidental to any amendment or supplement to the
Registration Statement or prospectuses contained therein. ASFS shall not,
however, be liable for any sales, broker's or underwriting
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commissions or other selling expenses incurred upon sale by any Shareholder or
First Fidelity Capital Markets of any of the ASFS Shares.
8.5 AMENDMENTS AND SUPPLEMENTS. ASFS shall prepare and promptly file
with the SEC and promptly notify the holders of the filing of such amendments or
supplements to the Registration Statement or prospectuses contained therein as
may be necessary to correct any statements or omissions if, at the time when a
prospectus relating to the ASFS Shares is required to be delivered under the
Securities Act, any event shall have occurred as a result of which any such
prospectus or any other prospectus as then in effect would include an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. ASFS shall also advise the Shareholders promptly
after it shall receive notice or obtain knowledge thereof, of the issuance of
any stop order by the SEC suspending the effectiveness of the Registration
Statement or the initiation or threatening of any proceeding for that purpose
and promptly use its reasonable best efforts to prevent the issuance of any stop
order or to obtain its withdrawal if such stop order should be issued. If, after
a Registration Statement becomes effective, ASFS advises the Shareholders that
ASFS considers it appropriate that the Registration Statement be amended, the
Shareholders shall suspend any further sales of the ASFS Shares until ASFS
advises the Shareholders that the Registration Statement has been amended, in
which case ASFS shall cause such amendment to be filed and become effective as
soon as reasonably practical.
8.6 FURTHER INFORMATION. If ASFS Shares owned by a Shareholder are
included in any registration, such holder shall furnish ASFS such information
regarding itself as ASFS may reasonably request and as shall be required in
connection with any registration, qualification or compliance referred to in
this Agreement.
ARTICLE IX
INDEMNIFICATION
9.1 AGREEMENT TO INDEMNIFY. The Company and each of the Shareholders,
jointly and severally, agree to indemnify and hold ASFS harmless from and
against the aggregate of all expenses, losses, costs, deficiencies, liabilities
and damages (including, without limitation, related reasonable counsel and
paralegal fees and expenses) in excess of an aggregate of $25,000 incurred or
suffered by ASFS arising or pursuant to out of or resulting from (i) any breach
of a representation or warranty made by the Company and the Shareholders in this
Agreement, (ii) any breach of the covenants or agreements made by the Company or
the Shareholders in this Agreement, (iii) any inaccuracy in any certificate
delivered by the Company or the Shareholders pursuant to this Agreement, (iv)
any tax liability relating to any period occurring on or prior to the Effective
Time, or (v) any regulating and licensing obligations arising on or prior to the
Effective Time, (collectively, "Indemnifiable Damages"). Without limiting the
generality of the foregoing, with respect to the measurement of Indemnifiable
Damages, ASFS shall have the right to be put in the same pre-tax
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consolidated financial position as it would have been in had each of the
representations and warranties of the Shareholders hereunder been true and
correct and had the covenants and agreements of the Company and the Shareholders
hereunder been performed in full.
9.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by the Shareholders or ASFS in this
Agreement or pursuant hereto shall survive for a period of twelve months after
the Effective Time. Notwithstanding any knowledge of facts determined or
determinable by any party by investigation, each party shall have the right to
fully rely on the representations, warranties, covenants and agreements of the
other parties contained in this Agreement or in any certificate delivered at the
Closing pursuant to this Agreement. Each representation, warranty, covenant and
agreement of the parties contained in this Agreement is independent of each
other representation, warranty, covenant and agreement.
9.3 INDEMNIFICATION OBLIGATION ASFS shall give written notice to the
Shareholders of any claim for Indemnifiable Damages or any other damages
hereunder, which notice shall set forth (i) the amount of Indemnifiable Damages
or other loss, damage, cost or expense which ASFS claims to have sustained by
reason thereof, and (ii) the basis of such claim. The parties agree that, in the
event a claim is contested and not resolved within fifteen (15) days of such
contest, they shall attempt to resolve the claim through non-binding mediation
(for a period not to exceed 60 days) at a mutually convenient time and place
before a certified and court-appointed mediator mutually agreed upon by the
parties.
9.4 NO BAR; WAIVER. ASFS may take any action or exercise any remedy
available to it by appropriate legal proceedings to collect the Indemnifiable
Damages. The Shareholders hereby waive any rights to contribution or any similar
rights they may have against the Company as of a result of their agreement to
indemnify ASFS under this Article IX.
9.5 REMEDIES CUMULATIVE. The remedies provided herein shall be
cumulative and shall not preclude ASFS from asserting any other right, or
seeking any other remedies against the Shareholders or the Company.
9.6 DEFENSE OF THIRD PARTY CLAIMS. With respect to each third party
claim for which ASFS seeks indemnification under this Article (a "Third Party
Claim"), ASFS shall give prompt notice to the Shareholders of the Third Party
Claim, provided that failure to give such notice promptly shall not relieve or
limit the obligations of the Shareholders under this Section 9.6 unless the
Shareholders have been materially prejudiced thereby (and such failure to notify
the Shareholders will not relieve him from any other liability he may have to
ASFS). If the remedy sought in the Third Party Claim is solely money damages or
if ASFS otherwise permits, then the Shareholders, at their sole cost and
expense, may, upon notice to ASFS within fifteen (15) days after they receive
notice of the Third Party Claim, assume the defense of the Third Party Claim. If
the Shareholders assume the defense of a Third Party Claim, then they shall
select counsel reasonably satisfactory to ASFS to conduct the defense. The
Shareholders shall not consent to a settlement of, or the entry of any judgment
arising from, any Third Party Claim, unless (i) the settlement or judgment is
solely
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for money damages and the Shareholders admit in writing their liability to hold
ASFS harmless from and against any losses, damages, expenses and liabilities
arising out of such settlement or judgment or (ii) ASFS consents thereto, which
consent shall not be unreasonably withheld. The Shareholders shall provide ASFS
with fifteen (15) days prior notice before he consents to a settlement of, or
the entry of a judgment arising from, any Third Party Claim. ASFS shall be
entitled to participate at ASFS' own expense in the defense of any Third Party
Claim, the defense of which is assumed by the Shareholders with their own
counsel and their own expense. With respect to Third Party Claims in which the
remedy sought is not solely money damages and ASFS does not permit the
Shareholders to assume the defense, the Shareholders shall, upon notice to ASFS
within fifteen (15) days after the Shareholders receive notice of the Third
Party Claim, be entitled to participate in the defense with their own counsel at
their own expense. ASFS shall not consent to a settlement of, or the entry of
any judgment arising from, any Third Party Claim unless the Shareholders consent
thereto, which consent shall not be unreasonably withheld. The parties shall
cooperate in the defense of any Third Party Claim and the relevant records of
each party shall be made available on a timely basis.
ARTICLE X
DEFINITIONS
10.1 DEFINED TERMS. As used herein, the following terms shall have the
following meanings:
"Affiliate" shall have the meaning ascribed to it in Rule
12b-2 of the General Rules and Regulations under the Exchange Act, as
in effect on the date hereof.
"Contract" means any agreement, contract, lease, note,
mortgage, indenture, loan agreement, franchise agreement, covenant,
employment agreement, license, instrument, purchase and sales order,
commitment, undertaking, obligation, whether written or oral, express
or implied.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"GAAP" means generally accepted accounting principles in
effect in the United States of America from time to time.
"Governmental Authority" means any nation or government, any
state, regional, local or other political subdivision thereof, and any
entity or official exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind whatsoever (including, but not
limited to, any conditional sale or other title
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retention agreement, any lease in the nature thereof, and the filing of
or agreement to give any financing statement under the Uniform
Commercial Code or comparable law or any jurisdiction in connection
with such mortgage, pledge, security interest, encumbrance, lien or
charge).
"Material Adverse Change (or Effect)" means a change (or
effect), in the condition (financial or otherwise), properties, assets,
liabilities, rights, obligations, operations, business or prospects
which change (or effect) individually or in the aggregate, is
materially adverse.
"Person" means an individual, partnership, corporation,
business trust, joint stock company, estate, trust, unincorporated
association, joint venture, Governmental Authority or other entity, of
whatever nature.
"Register", "registered" and "registration" refer to a
registration of the offering and sale of securities effected by
preparing and filing a registration statement in compliance with the
Securities Act and the declaration or ordering of the effectiveness of
such registration statement.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Tax Return" means any tax return, filing or information
statement required to be filed in connection with or with respect to
any Taxes.
"Taxes" means all taxes, fees or other assessments, including,
but not limited to, income, excise, property, sales, franchise,
intangible, withholding, social security, unemployment and payroll
taxes imposed by any federal, state, local or foreign governmental
agency, and any interest or penalties related thereto.
10.2 OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificates, reports or other documents made or
delivered pursuant hereto or thereto, unless the context otherwise requires.
(b) Terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) All matters of an accounting nature in connection with
this Agreement and the transactions contemplated hereby shall be determined in
accordance with GAAP applied on a basis consistent with prior periods, where
applicable.
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(d) As used herein, the neuter gender shall also denote the
masculine and feminine, and the masculine gender shall also denote the neuter
and feminine, where the context so permits.
ARTICLE XI
TERMINATION
11.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time:
(a) by mutual written consent of ASFS, Company and the
Shareholders at any time prior to the Closing; or
(b) by ASFS by written notice in the event of a material
breach by the Company or the Shareholders of any provision of this Agreement; or
(c) by the Company or the Shareholders by written notice in
the event of a material breach by ASFS of any provision of this Agreement; or
(d) by either ASFS, the Company or the Shareholders if the
Closing shall not have occurred by September 30, 1999.
11.2 EFFECT OF TERMINATION. Except for the provisions of Article IX
hereof, which shall survive any termination of this Agreement, in the event of
termination of this Agreement pursuant to Section 11.1, this Agreement shall
forthwith become void and of no further force and effect and the parties shall
be released from any and all obligations hereunder; provided, however, that
nothing herein shall relieve any party from liability for the willful breach of
any of its representations, warranties, covenants or agreements set forth in
this Agreement.
ARTICLE XII
GENERAL PROVISIONS
12.1 NOTICES. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered by certified
or registered mail (first class postage pre-paid), guaranteed overnight
delivery, or facsimile transmission if such transmission is confirmed by
delivery by certified or registered mail (first class postage pre-paid) or
guaranteed overnight delivery, to the following addresses and telecopy numbers
(or to such other addresses or telecopy numbers which such party shall designate
in writing to the other party):
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(a) IF TO ANY OF THE ASFS COMPANIES TO:
America's Senior Financial Services, Inc.
00000 X.X. 00xx Xxxxx
Xxxxx Xxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx, Chairman of the Board, President
and Chief Executive Officer
Telecopy: (305)
WITH A COPY TO:
Akerman, Senterfitt & Xxxxxx, P.A.
Xxx Xxxxxxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telecopy: (000) 000-0000
(b) IF TO THE COMPANY AND/OR THE SHAREHOLDERS TO:
Jupiter Mortgage Corporation.
0000 X. Xxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
Telecopy: (000) 000-0000
WITH A COPY TO:
Xxxxxxx X. Xxxxxxxxx, P.A.
Xxxxx xxx Xxxxxx
Xxxxx 0000, Xxxxxxx Financial Centre
000 X. Xxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
Notice shall be deemed given on the date sent if sent by facsimile
transmission and on the date delivered (or the date of refusal of delivery) if
sent by overnight delivery or by certified or registered mail.
12.2 ENTIRE AGREEMENT. This Agreement (including the Exhibits and
Schedules attached hereto) and other documents delivered at the Closing pursuant
hereto, contains the entire understanding of the parties in respect of its
subject matter and supersedes all prior agreements and
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understandings (oral or written) between or among the parties with respect to
such subject matter. The Exhibits and Schedules constitute a part hereof as
though set forth in full above.
12.3 EXPENSES. The parties shall pay their own fees and expenses,
including their own counsel fees, incurred in connection with this Agreement or
any transaction contemplated hereby.
12.4 AMENDMENT; WAIVER. This Agreement may not be modified, amended,
supplemented or waived, except by written instrument executed by all parties. No
failure to exercise, and no delay in exercising, any right, power or privilege
under this Agreement shall operate as a waiver, nor shall any single or partial
exercise of any right, power or privilege hereunder preclude the exercise of any
other right, power or privilege. No waiver of any breach of any provision shall
be deemed to be a waiver of any preceding or succeeding breach of the same or
any other provision, nor shall any waiver be implied from any course of dealing
between the parties. No extension of time for performance of any obligations or
other acts hereunder or under any other agreement shall be deemed to be an
extension of the time for performance of any other obligations or any other
acts. The rights and remedies of the parties under this Agreement are in
addition to all other rights and remedies, at law or equity, that they may have
against each other.
12.5 BINDING EFFECT; ASSIGNMENT. The rights and obligations of this
Agreement shall bind and inure to the benefit of the parties and their
respective successors and assigns. Nothing expressed or implied herein shall be
construed to give any other person any legal or equitable rights hereunder. This
Agreement may be assigned by ASFS to a wholly-owned subsidiary of ASFS, provided
that ASFS remains liable for all of the obligations imposed upon it in this
Agreement. Except as expressly provided herein, this Agreement may not be
assigned by the Company or the Shareholders without the prior written consent of
ASFS.
12.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one and the same instrument.
12.7 INTERPRETATION. When a reference is made in this Agreement to an
article, section, paragraph, clause, schedule or exhibit, such reference shall
be deemed to be to this Agreement unless otherwise indicated. The headings
contained herein and on the schedules are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement or the
schedules. Whenever the words "include,""includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." Time shall be of the essence in this Agreement.
12.8 GOVERNING LAW; SEVERABILITY. This Agreement shall be construed in
accordance with and governed for all purposes by the laws of the State of
Florida applicable to contracts executed and to be wholly performed within such
State. If any word, phrase, sentence, clause, section, subsection or provision
of this Agreement as applied to any party or to any circumstance is adjudged by
a court to be invalid or unenforceable, the same will in no way affect any other
circumstance or the validity or enforceability of any other word, phrase,
sentence, clause, section,
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subsection or provision of this Agreement. If any provision of this Agreement,
or any part thereof, is held to be unenforceable because of the duration of such
provision or the area covered thereby or otherwise, the parties agree that the
court making such determination shall have the power to reduce the duration
and/or area of such provision, and/or to delete specific words or phrases, and
in its reduced form, such provision shall then be enforceable and shall be
enforced.
12.9 ARM'S LENGTH NEGOTIATIONS. Each party herein expressly represents
and warrants to all other parties hereto that (a) before executing this
Agreement, said party has fully informed itself of the terms, contents,
conditions and effects of this Agreement; (b) said party has relied solely and
completely upon its own judgment in executing this Agreement; (c) said party has
had the opportunity to seek and has obtained the advice of counsel before
executing this Agreement; (d) said party has acted voluntarily and of its own
free will in executing this Agreement; (e) said party is not acting under
duress, whether economic or physical, in executing this Agreement; and (f) this
Agreement is the result of arm's length negotiations conducted by and among the
parties and their respective counsel.
12.10 FEES AND EXPENSES. Each of the parties hereto hereby agrees and
acknowledges that each party shall be responsible for all of its own fees and
expenses incurred in connection with the preparation, execution and consummation
of the transactions contemplated hereunder, including all legal fees, provided,
however, that the Shareholders hereby agree that they shall be solely
responsible for all of such costs and expenses, including legal fees, incurred
by the Company.
[Signatures on following pages]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
AMERICA'S SENIOR FINANCIAL SERVICES,
a Florida corporation
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
AMSE ACQUISITION 2 CORP., a Florida
corporation
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
JUPITER MORTGAGE CORPORATION, a
Florida corporation
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
/s/ Xxxxxx X. Xxxxxxxx
----------------------------------------
Xxxxxx X. Xxxxxxxx, Individually
/s/ Xxxxxxx X. Xxxxx
----------------------------------------
Xxxxxxx X. Xxxxx, Individually
AGREED AND ACCEPTED
(AS TO THOSE PROVISIONS RELATING TO IT)
FIRST FIDELITY CAPITAL MARKETS, INC.
BY: /s/ Xxxxxx Xxxxxx
---------------------------------
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