EXHIBIT 10.5
AGREEMENT TO PURCHASE STOCK
BETWEEN
BANKFIRST ("Purchaser")
AND
XXXXXX MORTGAGE COMPANY ("Xxxxxx Mortgage");
XXXXXXX X. XXXXXX AND XXXXXX X. XXXXXX
("Shareholders")
Dated: January 13, 1998
Table of Contents
I. DEFINITIONS....................................................Page 1 of 24
1.1 "Agreement"..........................................Page 2 of 24
1.2 "Benefit Plans"......................................Page 2 of 24
1.3 "Closing"............................................Page 2 of 24
1.4 "Closing Date".......................................Page 2 of 24
1.5 "Code"...............................................Page 2 of 24
1.6 "ERISA"..............................................Page 2 of 24
1.7 "Hazardous Substance"................................Page 2 of 24
1.8 "Interim Financial Statements".......................Page 2 of 24
1.9 "Xxxxxx Mortgage"....................................Page 2 of 24
1.10 "Personal Agreements"................................Page 2 of 24
1.11 "Purchaser"..........................................Page 2 of 24
1.12 "Shareholders".......................................Page 2 of 24
II. COVENANTS AND UNDERTAKINGS.....................................Page 2 of 24
2.1 Purchase of Stock....................................Page 2 of 24
2.2 Purchase Price.......................................Page 3 of 24
2.3 Escrow Account.......................................Page 3 of 24
2.4 Separate Entity......................................Page 4 of 24
2.5 Conduct of the Business of Xxxxxx
Mortgage Prior to Closing..........................Page 4 of 24
2.6 Lease Agreements.....................................Page 5 of 24
2.7 Filing of Tax Returns................................Page 5 of 24
2.8 Examination of Records...............................Page 5 of 24
2.9 Consents and Approvals...............................Page 6 of 24
2.10 Personal Agreements..................................Page 6 of 24
2.11 Supplying of Financial Statements....................Page 6 of 24
III. REPRESENTATIONS AND WARRANTIES OF XXXXXX MORTGAGE AND THE
SHAREHOLDERS...................................................Page 6 of 24
3.1 Organization and Standing............................Page 6 of 24
3.2 Authority and Status.................................Page 6 of 24
3.3 Capitalization.......................................Page 7 of 24
3.4 Absence of Equity Investments........................Page 7 of 24
3.5 Financial Statements of Xxxxxx Mortgage..............Page 7 of 24
3.6 Absence of Undisclosed Liabilities...................Page 8 of 24
3.7 Tax Returns..........................................Page 8 of 24
3.8 Ownership of Assets and Leases.......................Page 9 of 24
3.9 Agreement Does Not Violate Other Instruments.........Page 9 of 24
3.10 Absence of Changes...................................Page 9 of 24
3.11 Litigation..........................................Page 10 of 24
i
3.12 Licenses and Permits; Compliance with Law...........Page 10 of 24
3.13 Contracts, Etc......................................Page 10 of 24
3.14 Labor Matters.......................................Page 11 of 24
3.15 Benefit Plans.......................................Page 11 of 24
3.16 Mortgage Loans......................................Page 12 of 24
3.17 Environmental Matters...............................Page 12 of 24
3.18 Insurance...........................................Page 12 of 24
3.19 Related Party Relationships.........................Page 13 of 24
3.20 Exhibits............................................Page 13 of 24
3.21 Audited Net Worth...................................Page 13 of 24
3.22 Disclosure and Absence of
Undisclosed Liabilities...........................Page 13 of 24
IV. REPRESENTATIONS AND WARRANTIES OF PURCHASER...................Page 13 of 24
4.1 Organization and Standing...........................Page 13 of 24
4.2 Corporate Power and Authority.......................Page 13 of 24
4.3 Agreement Does Not Violate Other Instruments........Page 14 of 24
V. CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER..............Page 14 of 24
5.1 Representations True at Closing.....................Page 14 of 24
5.2 Acts and Undertakings of Xxxxxx
Mortgage and the Shareholders.....................Page 14 of 24
5.3 No Injunction, Etc..................................Page 14 of 24
5.4 Opinion of Counsel..................................Page 15 of 24
5.5 Consents, Approvals and Waivers.....................Page 15 of 24
5.6 Personal Agreements.................................Page 15 of 24
5.7 Due Diligence Investigation.........................Page 15 of 24
5.8 Life Insurance......................................Page 15 of 24
VI. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
XXXXXX MORTGAGE AND THE SHAREHOLDERS TO CLOSE.................Page 15 of 24
6.1 Representations True at Closing.....................Page 15 of 24
6.2 Covenants of Purchaser..............................Page 16 of 24
6.3 No Injunction, Etc..................................Page 16 of 24
6.4 Opinion of Counsel for Purchaser....................Page 16 of 24
6.5 Consents, Approvals and Waivers.....................Page 16 of 24
6.6 Personal Agreements.................................Page 16 of 24
VII. CLOSING.......................................................Page 16 of 24
7.1 Time and Place of Closing...........................Page 16 of 24
7.2 Transactions at Closing.............................Page 16 of 24
7.2.1 Xxxxxx Mortgage and the
Shareholders' Performance..............Page 16 of 24
7.2.2 Performance by Purchaser..................Page 18 of 24
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VIII.SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND INDEMNIFICATION
8.1 Survival of Representations and Warranties
of Xxxxxx Mortgage and the Shareholders...........Page 18 of 24
8.2 Survival of Representations and
Warranties of Purchaser...........................Page 20 of 24
IX. TERMINATION...................................................Page 20 of 24
9.1 Method of Termination...............................Page 20 of 24
9.2 Effect of Termination...............................Page 20 of 24
9.3 Risk of Loss........................................Page 21 of 24
X. GENERAL PROVISIONS............................................Page 21 of 24
10.1 Notices.............................................Page 21 of 24
10.2 Brokers.............................................Page 22 of 24
10.3 Further Assurances..................................Page 22 of 24
10.4 Waiver..............................................Page 22 of 24
10.5 Expenses............................................Page 23 of 24
10.6. Binding Effect......................................Page 23 of 24
10.7. Headings............................................Page 23 of 24
10.8. Entire Agreement....................................Page 23 of 24
10.9 Governing Law.......................................Page 23 of 24
10.10 Counterparts........................................Page 23 of 24
10.11 Pronouns............................................Page 23 of 24
10.12 Exhibits Incorporated...............................Page 23 of 24
10.13 Time of Essence.....................................Page 23 of 24
10.14 Intent and Due Diligence Standard...................Page 23 of 24
-iii-
AGREEMENT TO PURCHASE STOCK
This Agreement to Purchase Stock, made this 13th day of January, 1998, by
and among BankFirst, a Tennessee banking corporation, with its principal offices
at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000 (hereinafter referred to as
"Purchaser"), Xxxxxx Mortgage Company, a Tennessee corporation with its
principal office at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxx 00000
(hereinafter referred to as "Xxxxxx Mortgage"), and Xxxxxxx X. Xxxxxx and Xxxxxx
X. Xxxxxx (hereinafter referred to as the "Shareholders").
W I T N E S S E T H:
WHEREAS, Xxxxxxx Xxxxxx and Xxxxxx Xxxxxx are the only shareholders, and
the Shareholders own all of the authorized, issued and outstanding shares of
Xxxxxx Mortgage; and
WHEREAS, Purchaser has made an offer, pursuant to which Purchaser will
purchase all of the authorized, issued and outstanding shares of Xxxxxx Mortgage
owned by the Shareholders upon the terms and subject to the conditions set forth
herein; and
WHEREAS, Xxxxxx Mortgage and the Shareholders have accepted the offer
pursuant to the terms and conditions set forth herein.
WHEREAS, it is the intention of the Shareholders to allow Purchaser ample
time and access to information in order to fully and completely conduct any and
all due diligence investigation that it deems necessary to satisfy itself with
the condition of Xxxxxx Mortgage to be acquired by Purchaser pursuant to this
Agreement; and
WHEREAS, the parties hereto have intentionally not provided for a
substantial nonrefundable deposit, it being the intention of the parties that,
if Purchaser is not satisfied with the results of its due diligence
investigation, Purchaser may elect not to consummate the transactions
contemplated by this Agreement and neither party shall have any other claim
against the other party.
NOW, THEREFORE, in consideration of the premises and the mutual promises,
representations, warranties and covenants hereinafter set forth, the parties
agree as follows:
I. DEFINITIONS.
As used herein, the following terms shall have the following meanings
unless the context otherwise requires:
1.1 "Agreement" shall mean this Agreement to Purchase Stock
Agreement.
Page 1 of 24
1.2 "Benefit Plans" shall have the meaning set forth in Section
3.14.
1.3 "Closing" shall mean the consummation of the transactions
provided for in this Agreement.
1.4 "Closing Date" shall mean the date on which the Closing occurs
pursuant to Section 7.1 hereof.
1.5 "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.6 "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
1.7 "Hazardous Substance" shall have the meaning set forth in
Section 3.17.
1.8 "Interim Financial Statements" shall have the meaning set forth
in Section 3.5.
1.9 "Xxxxxx Mortgage" shall mean Xxxxxx Mortgage Company, a
Tennessee corporation.
1.10 "Personal Agreements" shall mean those Employment Agreements
between Xxxxxx Mortgage and those individuals set forth in Section 2.10,
substantially in the form attached as Exhibits 2.10(a), 2.10(b), and 2.10(c),
each of which may be referred to individually as a "Personal Agreement" and/or
"Employment Agreement".
1.11 "Purchaser" shall mean BankFirst, a Tennessee corporation.
1.12 "Shareholders" shall mean Xxxxxxx X. Xxxxxx and Xxxxxx X.
Xxxxxx, each of whom may be referred to individually as a "Shareholder".
II. COVENANTS AND UNDERTAKINGS.
2.1 Purchase of Stock. Subject to the terms and conditions
hereinafter set forth, the Shareholders shall, at the Closing, sell, assign,
transfer, convey and deliver to Purchaser, free and clear of all liens, claims,
charges, security interests and other encumbrances of any nature whatsoever, all
of the authorized, issues and outstanding shares of stock of Xxxxxx Mortgage
owned by Shareholders. Such sale, transfer, conveyance and delivery shall be
evidenced by the delivery to Purchaser of duly endorsed in blank share
certificates accompanied by duly executed stock powers (in other case, with
signatures guaranteed).
Page 2 of 24
2.2 Purchase Price. Purchaser, in full payment for the purchase of
stock pursuant to Section 2.1 hereof shall pay to the Shareholders Seven Million
Five Hundred Thousand Dollars ($7,500,000.00) cash. Seven Million Dollars
($7,000,000.00) shall be delivered to Shareholders at Closing and Five Hundred
Thousand Dollars ($500,000.00) shall be placed in the Escrow Account described
in Section 2.3 below.
2.3 Escrow Account. Shareholders shall deposit Five Hundred Thousand
Dollars ($500,000.00) into an interest-bearing escrow account to be held by
BankFirst, as Escrow Agent, for a period of thirty-six (36) months after the
date of Closing (the "Escrow Period"). The Escrow Agent shall be maintained at
BankFirst as long as BankFirst is paying a competitive interest rate. In the
event the Shareholders determine that BankFirst is not paying a competitive
interest rate and the Shareholders desire to move the account, the parties to
this Agreement and the new bank shall enter into an Escrow Agreement which will
adopt the terms of this Agreement. In the event that Xxxxxx Mortgage receives a
notification of an audit, or tax assessment, by federal or state tax
authorities, within the Escrow Period, then the Escrow Period shall be extended
until a final assessment or resolution of the tax liability is made. At the
expiration of the Escrow Period, as the same may be extended, the Escrow Agent
shall pay to Shareholders Five Hundred Thousand Dollars ($500,000.00) plus the
accrued interest, less the following items, if any:
(a) Any amounts paid by Xxxxxx Mortgage Company prior to the
expiration of such period, for liabilities or obligations which were
incurred or owed by Xxxxxx Mortgage prior to Closing, but which were
not included in the balance sheet of Xxxxxx Mortgage as of October
31, 1997. Such items include, but are not limited to, federal, state
or local tax liabilities relating to the operation of Xxxxxx
Mortgage prior to Closing and any undisclosed debts or liabilities
which arose or were incurred, or caused by Xxxxxx Mortgage to exist
by its operations through October 31, 1997.
(b) Any damages suffered by Purchaser as a result of the
breach of the Agreement for Purchase of Stock by Xxxxxx Mortgage or
the Shareholders, including any misrepresentation made therein, or
in any of the exhibits, schedules, or disclosures made in connection
with the negotiation and consummation of said Agreement.
If during the Escrow Period, any claim shall be made against the Escrow Fund,
the Escrow Agent and/or Purchaser, as the case may be, shall notify the
Shareholders in writing as to the nature and amount of such claim or debt.
Within ten (10) business days upon receipt of such notice, the Shareholders
shall notify the Escrow Agent and the Purchaser in writing whether the claim or
debt is valid and due. If Seller consents to payment, the Escrow Agent shall pay
the claim or debt and obtain a receipt therefor. If the Shareholders dispute the
claim or debt, the Escrow Agent shall notify Purchaser and not disburse any of
the Escrow Fund in connection with the disputed item until Escrow Agent receives
written directions with respect to it, signed by both Purchaser and
Shareholders. If any disputed claim or debt is unresolved when the Escrow is due
to expire, Escrow Agent shall continue to hold sufficient amounts to cover said
claim or debt until such claim or debt is disposed of to the satisfaction of
Purchase and Sellers. The Escrow Agent shall not be required to determine
Page 3 of 24
the amount of validity of any claim or debt alleged, or be responsible for the
sufficiency of any agreement or the payment of any claim or debt made by
Purchaser and Shareholders for such amount. Escrow Agent shall not be liable for
any acts or omissions of any kind unless caused by his negligence or wilful
misconduct. BankFirst will not charge an escrow fee for handling the escrow
fund; however, if a third party is appointed as the Escrow Agent, the new Escrow
Agent's fee shall be fixed by the parties under a separate agreement.
2.4 Separate Entity. Initially, Purchaser will maintain Xxxxxx
Mortgage as a separate entity; however, at its discretion, Purchaser shall be
entitled to change the corporate structure to meet the Purchaser's needs. In the
event of a change in corporate structure or otherwise, the Purchaser and the
Shareholders shall in no way be relieved of all other agreements and
undertakings set forth in this Agreement.
2.5 Conduct of the Business of Xxxxxx Mortgage Prior to Closing.
2.5.1 Except (i) with the consent in writing of Purchaser,
(ii) as may be required to effect the transactions contemplated by
this Agreement or (iii) as provided otherwise in this Agreement,
Xxxxxx Mortgage and the Shareholders covenant that, between the date
of this Agreement and the Closing Date, Xxxxxx Mortgage will conduct
its business in the ordinary course and that they will:
(a) use their best efforts deemed reasonable in the
normal course of business and in conformity to past practices
to preserve the organization of Xxxxxx Mortgage intact and to
preserve the goodwill of customers and others having business
relations with Xxxxxx Mortgage;
(b) maintain the properties of Xxxxxx Mortgage in the
same working order and condition as such properties are in as
of the date of this Agreement, reasonable wear and tear
excepted;
(c) keep in force at no less than their present limits
all existing bonds and policies of insurance insuring Xxxxxx
Mortgage and its respective properties and employees;
(d) not make or permit any change in Xxxxxx Mortgage's
Articles of Incorporation or Bylaws, or in its authorized,
issued or outstanding securities;
(e) not grant any stock option or right to purchase any
security of Xxxxxx Mortgage, issue any security convertible
into such securities, purchase, redeem, retire or otherwise
acquire any of such securities, or agree to do any of the
foregoing or declare, set aside or pay any dividend or other
distribution in respect of such securities; and
Page 4 of 24
(f) promptly advise Purchaser in writing of any matters
arising or discovered after the date of this Agreement which,
if existing or known at the date hereof, would be required to
be set forth or described in this Agreement or the Exhibits
hereto.
2.5.2 Except after prior notification to, and written consent
of Purchaser, Xxxxxx Mortgage will not make, and the Shareholders
will not permit Xxxxxx Mortgage to make, between the date of this
Agreement and the Closing Date, any change in its banking or safe
deposit arrangements or grant any powers of attorney. A list of all
bank accounts, safe deposit boxes (and the contents thereof) and
powers of attorney of Xxxxxx Mortgage and of all persons authorized
to act with respect thereto is attached hereto as Exhibit 2.5.2.
2.5.3 Except with the prior consent in writing of Purchaser,
Xxxxxx Mortgage will not make, and the Shareholders will not permit
Xxxxxx Mortgage to make, between the date of this Agreement and the
Closing Date, any changes in its accounting methods or practices.
2.6 Lease Agreement. Xxxxxx Mortgage and Shareholders shall at the
Closing enter into a Lease Agreement substantially in the form set forth in
Exhibit 2.6(a).
2.7 Filing of Tax Returns. Xxxxxx Mortgage will timely file all
federal, state and local tax returns required before Closing. For purposes of
this Section 2.7, such returns shall be deemed timely filed if Xxxxxx Mortgage
has obtained an extension from the appropriate taxing authority as to the time
in which it may file such tax returns. Xxxxxx Mortgage shall submit all such tax
returns to Purchaser prior to the date they must be filed, and Purchaser shall
have the opportunity to comment on the tax returns. Purchaser will file all such
tax returns due after the Closing. The Shareholders hereby agree to provide
Purchaser with all information within their knowledge or possession necessary to
file such returns. All such information shall be true, correct and accurate in
all respect to the best of the Shareholders' knowledge, information and belief.
2.8 Examination of Records. Between the date of the Letter of Intent
and the Closing Date, Xxxxxx Mortgage will allow, and the Shareholders will
cause Xxxxxx Mortgage to allow, Purchaser, its counsel and other representatives
full access to all the books, records, files, documents, assets, properties,
personnel, contracts, and agreements of Xxxxxx Mortgage which may be reasonably
requested, and shall furnish Purchaser, its officers and representatives during
such period with all information concerning the affairs of Xxxxxx Mortgage which
may be reasonably requested (herein collectively the "Information"). Purchaser
acknowledges that the Information would otherwise not be available and that it
is confidential. Purchaser agrees to hold the Information in strict confidence,
and agrees not to communicate or otherwise transmit any of the Information to
any other person, company or entity, or to use the Information for any purpose
other than to enable Purchaser to analyze Xxxxxx Mortgage for the purpose of
acquisition. Purchaser further agrees that (1) in the event it does not acquire
Xxxxxx Mortgage, or (2) upon demand by Xxxxxx Mortgage, Purchaser will promptly
return to Xxxxxx Mortgage any and all Information that was disclosed by Xxxxxx
Mortgage
Page 5 of 24
in written form, including all copies made by Purchaser, and will confirm in
writing to Xxxxxx Mortgage that all written information has been so returned.
Purchaser will conduct any investigation in a manner which will not unreasonably
interfere with the business of Xxxxxx Mortgage.
2.9 Consents and Approvals. Purchaser, Xxxxxx Mortgage and the
Shareholders agree to use their best efforts to obtain the waiver, consent and
approval of all persons and regulatory authorities whose waiver, consent or
approval is required in order to consummate the transactions contemplated by
this Agreement. All obtained written waivers, consents and approvals shall be
produced at Closing in form and content reasonably satisfactory to Purchaser and
the Shareholders.
2.10 Personal Agreements. Each Shareholder and Xxxxxxxx Xxxxxxx at
the Closing will enter into a Personal Agreement and/or Covenant Not to Compete
substantially in the form set forth in Exhibits 2.10(a) through 2.10(c). As
officers, employees and/or directors of Xxxxxx Mortgage, the Shareholders and
Xxxxxxx shall be entitled to all rights afforded by the contracts, by-laws and
the statutes of the State of Tennessee.
2.11 Supplying of Financial Statements. Xxxxxx Mortgage and the
Shareholders will deliver to Purchaser all regularly prepared unaudited
financial statements of Xxxxxx Mortgage prepared after the date of this
Agreement, in the format historically utilized internally, as soon as available,
but not later than the 10th day of each month.
III. REPRESENTATIONS AND WARRANTIES OF XXXXXX MORTGAGE AND THE
SHAREHOLDERS.
Xxxxxx Mortgage and the Shareholders, jointly and severally, represent and
warrant to Purchaser as follows:
3.1 Organization and Standing. Xxxxxx Mortgage is a Tennessee
corporation duly authorized, validly existing and in good standing. Copies of
Xxxxxx Mortgage's Articles of Incorporation, and all amendments thereof to date,
certified by the Secretary of State of Tennessee, and of Xxxxxx Mortgage's
Bylaws, as amended to date certified by Xxxxxx Mortgage's secretary, are
attached as Exhibit 3.1, and are true, correct and complete copies as of the
date of this Agreement.
3.2 Authority and Status. Each Shareholder and Xxxxxx Mortgage has
the capacity and authority to execute and deliver this Agreement, to perform
hereunder and to consummate the transactions contemplated hereby without the
necessity of any act or consent of any other person whomsoever. The execution,
delivery and performance by Xxxxxx Mortgage of this Agreement and each and every
agreement, document and instrument provided for herein have been duly authorized
and approved by the Board of Directors of Xxxxxx Mortgage. This Agreement and
each and every agreement, document and instrument to be executed, delivered and
performed by Xxxxxx Mortgage or any Shareholder in connection herewith
constitute or will, when executed and delivered, constitute the valid and
legally binding obligations of Xxxxxx Mortgage and the Shareholders, as the case
may
Page 6 of 24
be, enforceable against each of them in accordance with their respective terms,
except as enforceability may be limited by applicable equitable principles or by
bankruptcy, insolvency, reorganization, moratorium, or similar laws from time to
time in effect affecting the enforcement of creditors' rights generally.
3.3 Capitalization. The entire authorized capital stock of Xxxxxx
Mortgage consists of Five Hundred (500) shares of no par value common stock of
which Five Hundred (500) shares are issued and outstanding and are held by the
Shareholders as set forth below:
Shareholder Number of Shares Held
----------- ---------------------
Xxxxxxx Xxxxxx 250
Xxxxxx Xxxxxx 250
As of the Closing, all of the issued and outstanding shares of Xxxxxx Mortgage
owned by the Shareholders shall be free and clear of all liens, claims, charges
and encumbrances of any nature whatsoever, and the authorization of no other
person or entity will be required to consummate the transactions contemplated
herein by virtue of any such person or entity having an equitable or beneficial
interest in Xxxxxx Mortgage. There are no outstanding options, warrants, calls,
commitments or plans by Xxxxxx Mortgage to issue any additional shares of its
capital stock, to pay any dividends on such shares or to purchase, redeem, or
retire any outstanding shares of its capital stock, nor are there outstanding
any securities or obligations which are convertible into or exchangeable for any
shares of capital stock of Xxxxxx Mortgage.
3.4 Absence of Equity Investments. Xxxxxx Mortgage does not, either
directly or indirectly, own of record or beneficially any shares or other equity
interest in any corporation, partnership, limited partnership, joint venture,
trust or other business entity, except the following as described on Exhibit
3.4.
3.5 Financial Statements of Xxxxxx Mortgage. Xxxxxx Mortgage has
delivered to the Purchaser copies of the following financial statements, all of
which are true and complete and have been prepared in accordance with generally
accepted accounting principles consistently followed throughout the period
indicated:
(i) Balance Sheets of Xxxxxx Mortgage as of December 1996, 1995 and
1994, together with related statements of income and cash flow and the
related footnotes, all certified by H. Xxxxx Xxxxxxxx, Certified Public
Accountant. The Balance Sheets present a true and complete statement, as
of their dates, of Xxxxxx Mortgage's financial condition and the results
of its operations for the respective periods; and
(ii) Balance Sheet of Xxxxxx Mortgage with related statement of
operations as of and for the period ended October 31, 1997, prepared by
Xxxxxx Mortgage's personnel, which have not been formally audited,
certified as true and accurate by the Shareholders to
Page 7 of 24
the best of their knowledge. These statements present fairly Xxxxxx
Mortgage's financial condition as of October 31, 1997 and the results of
its operations for the period then ended (the Interim Financial
Statements).
3.6 Absence of Undisclosed Liabilities. Except as to the extent
fully reflected or reserved against in Xxxxxx Mortgage's Balance Sheets or set
forth in the Exhibits to this Agreement, Xxxxxx Mortgage as of October 31, 1997
had no liabilities of any nature, whether accrued, absolute, contingent or
otherwise, including, without limitation, tax liabilities due or to become due,
and whether incurred in respect of or measured by Xxxxxx Mortgage's income for
any period prior to October 31, 1997, or arising out of transactions entered
into, or any state of facts existing, prior thereto. Each Shareholder represents
and warrants that he does not know or have reasonable grounds to know of any
basis for the assertion against Xxxxxx Mortgage as of October 31, 1997, of any
liability of any nature or in any amount not fully reflected or reserved against
in the Balance Sheet. Except as disclosed in the interim financial statements
for the period ended October 31, 1997 or Exhibit 3.6, there has not been
(i) any change in Xxxxxx Mortgage's financial condition, assets,
liabilities, or business, other than changes in the ordinary course of
business;
(ii) any damage, destruction, or loss, whether or not covered by
insurance, materially and adversely affecting Xxxxxx Mortgage's properties
or business;
(iii) any declaration, or setting aside, or payment of any dividend
or other distribution in respect of Xxxxxx Mortgage's shares, or any
direct or indirect redemption, purchase, or other acquisition of any of
such shares;
(iv) any increase in the compensation payable or to become payable
by Xxxxxx Mortgage to any of its officers, employees or agents, or any
bonus payment or arrangement made to or with any of them; or
(v) any significant labor trouble, or any event or condition of any
character, materially and adversely affecting Xxxxxx Mortgage's business
or prospects.
3.7 Tax Returns. Xxxxxx Mortgage has, as of the date hereof, and
will prior to Closing have, timely and accurately filed all federal, state,
foreign and local tax returns and reports required to be filed by it prior to
such dates and has timely paid, or will prior to Closing pay, all taxes shown on
such returns as owed for the period of such returns, including all withholding
or other payroll related taxes shown on such returns. The tax basis of all
assets of Xxxxxx Mortgage as reflected on its tax returns and related records is
correct and accurate for use in tax periods ending after Closing. Xxxxxx
Mortgage's tax returns have not been audited, and Xxxxxx Mortgage has not
received notice of any impending audit. No unresolved assessments or notices of
deficiency or other communications have been received by Xxxxxx Mortgage with
respect to any tax returns filed or to be filed.
Page 8 of 24
3.8 Ownership of Assets and Leases. Each of the leases and
agreements described in Exhibit 3.8 is in full force and effect and constitutes
a legal, valid and binding obligation of Xxxxxx Mortgage and the other
respective parties thereto and is enforceable in accordance with its terms,
except as enforceability may be limited by applicable equitable principles or by
bankruptcy, insolvency, reorganization, moratorium, or similar laws from time to
time in effect affecting the enforcement of creditors' rights generally, and
there is not under any of such leases or agreements existing any default of
Xxxxxx Mortgage or of any other parties thereto (or event or condition which,
with notice or lapse of time, or both, would constitute a default). All
buildings, machinery and equipment owned or leased by Xxxxxx Mortgage are in
good operating condition and reasonable state of repair, subject only to their
age, and ordinary wear and tear to the best of the Seller's knowledge and belief
without any inspection. Xxxxxx Mortgage has not received any notice of violation
of any applicable zoning regulation, ordinance or other law, regulation or
requirement relating to its operations and properties, whether owned or leased,
there are no violations, or grounds therefor, which could adversely affect the
operation of the business conducted by Xxxxxx Mortgage. The accounts receivable
of Xxxxxx Mortgage reflect actual transactions, have arisen in the ordinary
course of business and are fairly stated in the financial statements.
3.9 Agreement Does Not Violate Other Instruments. Except as listed
in Exhibit 3.9, the execution and delivery of this Agreement by Xxxxxx Mortgage
and the Shareholders do not, and the consummation of the transactions
contemplated hereby will not, violate any provision of the Articles of
Incorporation, as amended, or Bylaws, as amended, of Xxxxxx Mortgage or violate
or constitute an occurrence of default under any provision of, or conflict with,
result in acceleration of any obligation under, or give rise to a right by any
party to terminate its obligations under, any mortgage, deed of trust,
conveyance to secure debt, note, loan, lien, lease, agreement, instrument, or
any order, judgment, decree or other arrangement to which Xxxxxx Mortgage or any
Shareholder is a party or is bound or by which Xxxxxx Mortgage's assets are
affected.
3.10 Absence of Changes. Except as disclosed on Exhibit 3.10
attached hereto, subsequent to October 31, 1997, Xxxxxx Mortgage has not:
(a) Suffered any change or become aware of any event or state of
facts that could have a material adverse effect on its financial
condition, assets, liabilities, business, or prospects, experienced any
labor difficulty, suffered any casualty loss, whether or not insured, or
otherwise been operated in any manner not in the ordinary course of
business.
(b) Except in the ordinary course of business and consistent with
past practice, paid any claim, or discharged or satisfied any lien or
encumbrance, or paid or satisfied any liability, whether absolute,
accrued, contingent, or otherwise and whether due or to become due.
Page 9 of 24
(c) Except in the ordinary course of business consistent with past
practice, sold or transferred any of its properties or assets, real,
personal, or mixed, tangible or intangible, related to Xxxxxx Mortgage.
(d) Disposed of or permitted to lapse any trademark or patent or any
trademark or patent application or license; or disposed of any trade
secret, formula, process, or know-how.
(e) Except in the ordinary course of business, made any capital
expenditures or commitments in excess of $10,000.00.
(f) Agreed, whether in writing or otherwise, to take any action
referred to in this Section 3.10 in the future.
3.11 Litigation. Except as otherwise set forth in Exhibit 3.11
hereto, there are no suits, actions, proceedings, known claims or investigations
pending, threatened against or affecting Xxxxxx Mortgage and Shareholders and
there exists no basis or grounds for any such suit, action, proceeding, claim or
investigation. The extent of the liability of any litigation known is described
in Exhibit 3.11.
3.12 Licenses and Permits; Compliance with Law. Xxxxxx Mortgage
holds all licenses, certificates, permits, franchises and rights from all
appropriate federal, state or other public authorities necessary for the conduct
of its business and the use of its assets. All material licenses, certificates,
permits, franchises and rights are listed in Exhibit 3.12. Except as noted in
Exhibit 3.12, Xxxxxx Mortgage is presently conducting its business so as to
comply substantially with all applicable statutes, ordinances, rules,
regulations and orders of any governmental authority.
3.13 Contracts, Etc. Exhibit 3.13 hereto consists of a true and
complete list of all contracts, agreements and other instrument to which Xxxxxx
Mortgage is a party, except for certain miscellaneous contracts entered in the
ordinary course of business, none of which, in the aggregate, are material to
the operations of Xxxxxx Mortgage. Except as set forth in Exhibits 3.7, 3.13,
3.16, or 3.18, Xxxxxx Mortgage is not a party or subject to, whether oral or
written, any of the following:
3.13.1 Any lease, rental agreement or other contract or commitment
affecting the ownership or leasing of, title to or use of any interest in
real or personal property and any maintenance or service agreements
relating to any real or personal property;
3.13.2 Any contract or commitment providing for payments based in
any manner upon the sales, purchases, receipts, income or profits of
Xxxxxx Mortgage;
3.13.3 Any single contract or commitment, or sales or purchase
order, which involves future payments, performance of services or delivery
of goods and/or materials, to or by Xxxxxx Mortgage with an amount or
value in the aggregate in excess of $10,000.00;
Page 10 of 24
3.13.4 Any franchise agreement, marketing agreement or royalty
agreement, and with respect to each such agreement. Exhibit 3.13 sets
forth the aggregate royalties or similar payment paid hereunder by Xxxxxx
Mortgage as of the date hereof;
3.13.5 Any contract or agreement with a creditor not made in the
ordinary course of business;
3.13.6 Any employment contract or arrangement regarding employees or
independent contractors which is not terminable by it within ninety (90)
days without payment of any amount for any reason whatsoever, or for any
continuing payment of any type or nature, including, without limitation,
any bonuses and vested commissions other than commissions due upon closing
of pending loans to Xxxxxxxx Xxxxxxx and Xxxxx X. Xxxxx;
3.13.7 Any plan or other arrangement providing for life insurance,
pensions, stock rights, distributions, options, deferred compensation,
retirement payments, profit sharing, medical reimbursements or other
benefits for officers or other employees or independent contractors;
3.13.8 Any instrument or arrangement evidencing or related to
indebtedness for money borrowed or to be borrowed, whether directly or
indirectly, by way of purchase money obligation, guaranty, subordination,
conditional sale, lease-purchase or otherwise; or
3.13.9 Any contraction with any labor organization.
All of the contracts, agreements, policies of insurance or
instruments described in Exhibits 3.7, 3.13, 3.16, or 3.18 hereto are valid and
binding upon Xxxxxx Mortgage and the other parties thereto and are in full force
and effect and enforceable in accordance with their terms, and neither Xxxxxx
Mortgage nor any other party to such contract, commitment or arrangement has
breached any provision of, or is in default under, the terms thereof.
3.14 Labor Matters. Exhibit 3.14 sets forth a list of the payroll of
all employees of Xxxxxx Mortgage as of the first payroll date subsequent to the
execution of this Agreement. Except as set forth in Exhibit 3.14, Xxxxxx
Mortgage is not in violation of any applicable federal or state law or
regulation relating to labor or labor practices. There has not been, and will
not be, any adverse change in relations with employees and independent
contractors of Xxxxxx Mortgage as a result of the transactions contemplated by
this Agreement.
3.15 Benefit Plans. Exhibit 3.15 lists every pension, retirement,
profit-sharing, deferred compensation, stock option, employee stock ownership,
severance pay, vacation, bonus or other incentive plan, health plan, life
insurance plan or any other employee benefit plan or fringe benefit plan,
including, without limitation, any "employee benefit plan", as that term is
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974
as amended ("ERISA"), maintained or contributed to by Xxxxxx Mortgage.
Page 11 of 24
3.16 Mortgage Loans. Exhibit 3.16 attached hereto consists of a true
and correct list of all mortgage loans owned by or serviced by Xxxxxx Mortgage
with the current principal balance, payment schedule, and escrow information for
each such loan.
3.17 Environmental Matters. Exhibit as set forth in Exhibit 3.17;
(a) neither Xxxxxx Mortgage nor any other party is using or has used
any real property owned or leased by Xxxxxx Mortgage (the "Real Property")
for the handling, treatment, storage or disposal of any Hazardous
Substance (as hereinafter defined);
(b) No release, discharge, spillage or disposal of any Hazardous
Substance and no soil or water contamination by any Hazardous Substance
has occurred or is occurring in or on the Real Property;
(c) Xxxxxx Mortgage and the Shareholders have complied with all
known reporting requirements under any applicable federal, state or local
environmental laws and permits, and so far as the Company and/or the
Shareholders know there are no existing violations by Xxxxxx Mortgage of
any such environmental laws or permits;
(d) there are no claims, actions, suits, proceeding or
investigations related to the presence, release, discharge, spillage or
disposal of any Hazardous Substance or contamination of soil or water by
any Hazardous Substance pending or threatened with respect to the Real
Property or otherwise against Xxxxxx Mortgage in any court or before any
state, federal, or other governmental agency or private arbitration
tribunal and there is no basis for any such claim, action, suit,
proceeding or investigation;
(e) there are no underground storage tanks on the Real Property.
For the purpose of this agreement, "Hazardous Substance" shall mean any
hazardous or toxic substance or wastes as those terms are defined by any
applicable federal or state law or regulation including, without limitation, the
Comprehensive Environmental Recovery Compensation and Liability Act, 42 U.S.C.
9601 et seq., and the Resource Conservation and Recovery Act, 42 U.S.C. 6901 et
seq. and petroleum, petroleum products and oil.
3.18 Insurance. Set forth in Exhibit 3.18 is a complete list of
insurance policies which Xxxxxx Mortgage maintained with respect to its
businesses, properties or employees within the preceding twenty-four (24)
months, except life insurance policies on the lives of the Shareholders. Except
as set forth in Exhibit 3.18, such policies are in full force and effect and no
event has occurred which would give any insurance carrier a right to terminate
any such policy. Such policies, with respect to their amounts and types of
coverage, are adequate to insure fully against risks to which Xxxxxx Mortgage
and its property and assets are exposed in the operation of its businesses.
Except as set forth in Exhibit 3.18, there has not been any change in Xxxxxx
Mortgage's relationship with its insurers or in the premiums payable pursuant to
such policies.
Page 12 of 24
3.19 Related Party Relationships. Except as set forth in Exhibit
3.19, no Shareholder nor any officer or director of Xxxxxx Mortgage, possesses,
directly or indirectly, any beneficial interest in, or is a director, officer or
employee of, any corporation, partnership, firm, association or business
organization which is a client, supplier, customer, lessor, lessee, lender,
creditor, borrower, debtor or contracting party with or of Xxxxxx Mortgage
(except as a stockholder holding less than a one percent interest in a
corporation whose shares are traded on a national or regional securities
exchange or in the over-the-counter market).
3.20 Exhibits. All Exhibits are to be attached hereto within two (2)
weeks of the execution of this Agreement and are true, correct and complete as
of the date of this Agreement and are true, correct and complete as of the date
of this Agreement and will be true, correct and complete as of the Closing,
except to the extent that such Exhibits may be untrue, incorrect or incomplete
due to changes occurring due to the operation of Xxxxxx Mortgage in the ordinary
course. Matters disclosed on each Exhibit shall be deemed disclosed only for
purposes of the matters to be disclosed on such Exhibit and shall not be deemed
to be disclosed for any other purpose unless expressly provided therein.
3.21 Audited Net Worth. The annual audit of Xxxxxx Mortgage will not
be completed prior to closing; however, the audit report as of December 31, 1997
will be issued on or before March 1, 1998 and will provide that the Audited Net
Worth of Xxxxxx Mortgage Company as of December 31, 1997 will be not less than
$1,737,786.00.
3.22 Disclosure and Absence of Undisclosed Liabilities. This
Agreement and the Exhibits hereto disclose all facts material to the assets,
business or operations of Xxxxxx Mortgage. No statement contained herein or in
any certificate, schedule, list, exhibit or other instrument furnished to
Purchaser pursuant to the provisions hereof contains or will contain any untrue
statement of any material fact or omits or will omit to state a material fact
necessary in order to make the statements contained herein or therein not
misleading.
IV. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser represents and warrants to Xxxxxx Mortgage and the
Shareholders as follows:
4.1 Organization and Standing. Purchaser is a duly organized and
validly existing corporation in good standing under the laws of the State of
Tennessee.
4.2 Corporate Power and Authority. Purchaser has the capacity and
authority to execute and deliver this Agreement, to perform hereunder and to
consummate the transactions contemplated hereby without the necessity of any act
or consent of any other person whomsoever, except for approval by its Board of
Directors, which Purchaser anticipates receiving. This Agreement, and each and
every other agreement, document and instrument to be executed, delivered
Page 13 of 24
and performed by Purchaser in connection herewith, constitute or will, when
executed and delivered, constitute the valid and legally binding obligation of
Purchaser enforceable against it in accordance with their respective terms,
except as enforceability may be limited by applicable equitable principles, or
by bankruptcy, insolvency, reorganization, moratorium, or similar laws from time
to time in effect affecting the enforcement of creditors' rights generally.
4.3 Agreement Does Not Violate Other Instruments. The execution and
delivery of this Agreement by Purchaser does not, and the consummation of the
transactions contemplated hereby will not, violate any provisions of the
Articles of Incorporation, as amended, or Bylaws, as amended, of Purchaser, or
violate or constitute an occurrence of default under any provision of, or
conflict with, result in acceleration of any obligation under, or give rise to a
right by any party to terminate its obligations under, any mortgage, deed of
trust, conveyance to secure debt, note, loan, lien, lease, agreement, instrument
or any order, judgment, decree or other arrangement to which Purchaser is a
party or is bound or by which it or its assets are affected.
V. CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER.
The obligations of Purchaser to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction, on or
before the Closing Date, of each and every one of the following conditions, all
or any of which may be waived, in whole or in part, by Purchaser for purposes of
consummating such transactions, but without prejudice to any other right or
remedy which Purchaser may have hereunder as a result of any misrepresentation
by, or breach of any covenant or warranty of, Xxxxxx Mortgage or the
Shareholders contained in this Agreement or any other certificate or instrument
furnished by Xxxxxx Mortgage or an Shareholder hereunder.
5.1 Representations True at Closing. The representations and
warranties made by Xxxxxx Mortgage and the Shareholder to Purchaser in this
Agreement, the Exhibits hereto or any document or instrument delivered to
purchaser or its representative hereunder shall be true and correct on the
Closing Date with the same force and effect as though such representations and
warranties had been made on and as of such time.
5.2 Acts and Undertakings of Xxxxxx Mortgage and the Shareholders.
Xxxxxx Mortgage and the Shareholders shall have duly performed all of the acts
and undertaking to be performed by them on or prior to the Closing Date, and the
President of Xxxxxx Mortgage and the Shareholders shall deliver to Purchaser a
certificate dated as of the Closing Date certifying to the fulfillment of this
condition and the condition set forth in Section 5.1 hereof.
5.3 No Injunction, Etc. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any court, governmental agency or legislative body to enjoin, restrain,
prohibit or obtain substantial damages in respect of, or which is related to, or
arises out of, this Agreement or the consummation of the transactions
contemplated hereby, or which is related to or arises out of the business of
Xxxxxx Mortgage, if such action,
Page 14 of 24
proceeding, investigation, regulation or legislation, in the reasonable judgment
of Purchaser would make it inadvisable to consummate such transactions.
5.4 Opinion of Counsel. A favorable opinion of Norton & Xxxx, P.C.,
counsel for Xxxxxx Mortgage, and the Shareholders, shall have been delivered to
Purchaser dated as of the Closing Date, substantially in form and substance of
the opinion attached hereto as Exhibit 5.4.
5.5 Consents, Approvals and Waivers. Purchaser shall have received a
true and correct copy of each consent, approval and waiver (a) referred to in
Section 2.10 hereof, or (b) otherwise required for the execution of this
Agreement and the consummation of the transactions contemplated hereby.
5.6 Personal Agreements. The Shareholders and Xxxxxxxx Xxxxxxx shall
have executed Personal Agreements substantially in the respective forms set
forth in Exhibits 2.10(a) through 2.10(c).
5.7 Due Diligence Investigation. Purchaser shall have performed a
due diligence investigation of the books and records and operations of Xxxxxx
Mortgage, the results of which investigation shall have been satisfactory to
Purchaser.
5.8 Life Insurance. Purchaser shall have the right to purchase a
$1,000,000.00 life insurance policy on the life of Xxxxxxx Xxxxxx. Xxxxxxx
Xxxxxx agrees to cooperate in the acquisition of the insurance policy by being
available to answer the insurance questionaire and take the physical examination
required by the insurance company.
VI. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF XXXXXX MORTGAGE AND THE
SHAREHOLDERS TO CLOSE.
The obligations of Xxxxxx Mortgage and the Shareholders to
consummate the transactions contemplated by this Agreement shall be subject to
the satisfaction, on or before the Closing Date, of each and every one of the
following conditions, all or any of which may be waived, in whole or in part, by
Xxxxxx Mortgage and the Shareholders, but without prejudice to any other right
or remedy which they may have hereunder as a result of any misrepresentation by,
or breach of any covenant or warranty of Purchaser contained in this Agreement,
or any certificate or instrument furnished by it hereunder.
6.1 Representations True at Closing. The representations and
warranties made by Purchaser in this Agreement to Xxxxxx Mortgage and the
Shareholders or any document or instrument delivered to Xxxxxx Mortgage, the
Shareholders or their representatives hereunder shall be true and correct on the
Closing Date with the same force and effect as though such representations and
warranties had been made on and as of such date, except for changes contemplated
by this Agreement.
Page 15 of 24
6.2 Covenants of Purchaser. Purchaser shall have duly performed all
of the covenants, acts and undertakings to be performed by it on or prior to the
Closing Date, and a duly authorized officer of Purchaser shall deliver a
certificate dated as of the Closing Date certifying to the fulfillment of this
condition and the condition set forth under Section 6.1 above.
6.3 No Injunction, Etc. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any court, governmental agency or legislative body to enjoin, restrain,
prohibit or obtain substantial damages in respect of, or which is related to or
arises out of, this Agreement or the consummation of the transactions
contemplated hereby, or which is related to or arises out of, the business of
Purchaser, if such action, proceedings, investigation, regulation or
legislation, in the reasonable judgment of Xxxxxx Mortgage or the Shareholders
would make it inadvisable to consummate same.
6.4 Opinion of Counsel for Purchaser. A favorable opinion of Xxxxxxx
& Xxxxxxx, P.L.L.C., counsel for Purchaser, shall have been delivered to Xxxxxx
Mortgage and the Shareholders dated as of the Closing Date, substantially in the
form and substance of the opinion attached hereto as Exhibit 6.4.
6.5 Consents, Approvals and Waivers. Xxxxxx Mortgage and
Shareholders shall have received a true and correct copy of each consent,
approval and waiver (a) referred to in Section 2.11 hereof, or (b) otherwise
required for the execution of this Agreement and the consummation of the
transactions contemplated hereby.
6.6 Personal Agreements. Shareholders and Xxxxxxxx Xxxxxxx shall
have executed Personal Agreements substantially in the respective forms set
forth in Exhibits 2.10(a) through 2.10(c).
VII. CLOSING.
7.1 Time and Place of Closing. The Closing shall be held at the
offices of BankFirst, 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, commencing
at 10:00 a.m. Eastern Time, on January 20, 1998, unless another place or date is
agreed to in writing by Xxxxxx Mortgage and Purchaser. The Closing Date may be
extended by agreement to a date no more than five (5) days following approval of
the Federal Reserve Bank of the acquisition by BankFirst.
7.2 Transactions at Closing. At the Closing, each of the following
transactions shall occur:
7.2.1 Xxxxxx Mortgage and the Shareholders' Performance. At
the Closing, Xxxxxx Mortgage and the Shareholders shall deliver to
Purchaser the following:
Page 16 of 24
(a) all certificates representing shares of the outstanding
capital stock of Xxxxxx Mortgage owned by the Shareholders, duly
endorsed for transfer or accompanied by instruments of transfer
reasonably satisfactory in form and substance to Purchaser and its
counsel, with signatures guaranteed;
(b) the certificate of the Shareholders and of the President
of Xxxxxx Mortgage described in Section 5.2;
(c) copies of the consents and waivers described in Section
2.9 and Section 5.5;
(d) Satisfactory evidences of the approvals described in
Section 5.5;
(e) certificates of compliance or certificates of good
standing of Xxxxxx Mortgage, as of the most recent practicable date,
from the appropriate governmental authority of the jurisdiction of
its incorporation and any other jurisdiction which is set forth in
Exhibit 3.1 hereto;
(f) certified copies of resolutions of the Board of Directors
of Xxxxxx Mortgage approving the transactions set forth in this
Agreement;
(g) certificate of incumbency for the officers of Xxxxxx
Mortgage;
(h) resignations of the directors and designated officers of
Xxxxxx Mortgage;
(i) Personal Agreements executed by the Shareholders
substantially in the form set forth in Exhibits 2.10(a) and (b); and
(j) Personal Agreement executed by Xxxxxxxx Xxxxxxx
substantially in the form set forth in Exhibit 2.10(c).
(k) opinion of counsel described in Section 5.4.
(l) executed Lease Agreements substantially in the forms of
Exhibits 2.6(a) and 2.6(b);
(m) such other evidence of the performance of all covenants
and satisfaction of all conditions required of Xxxxxx Mortgage and
the Shareholders by this Agreement, at or prior to the Closing, as
Purchaser or its counsel may reasonably require.
Page 17 of 24
7.2.2 Performance by Purchaser. At the Closing, Purchaser shall
deliver to the Shareholders and/or Escrow Agent the following:
(a) cash to Shareholders, by cashier's check or certified
check or wire transfer, in the aggregate amount of $7,000,000.00.
(b) cash to Escrow Agent, by cashier's check or certified
check or wire transfer, in the aggregate amount of $500,000.00;
(c) the certificate of the authorized officer described in
Section 6.2;
(d) satisfactory evidence of the approvals described in
Section 6.5;
(e) opinion of counsel described in Section 6.4;
(f) certificate of incumbency of the officers of Purchaser who
are executing this Agreement and the other documents contemplated
hereunder;
(g) executed Personal Agreements substantially in the forms of
Exhibits 2.10(a), 2.10(b), and 2.10(c);
(h) certified copy of resolutions of the Board of Directors of
Purchaser approving the transactions set forth in this Agreement;
(i) executed Lease Agreements substantially in the forms of
Exhibits 2.6(a) and 2.6(b); and
(j) such other evidence of the performance of all the
covenants and satisfaction of all of the conditions required of
Purchaser by this Agreement at or before the Closing as Xxxxxx
Mortgage.
VIII. SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND INDEMNIFI- CATION.
8.1 Survival of Representations and Warranties of Xxxxxx Mortgage
and the Shareholders. All representations, warranties, agreements, covenants and
obligations made or undertaken by Xxxxxx Mortgage and the Shareholders in this
Agreement or in any document or instrument executed and delivered pursuant
hereto are material, have been relied upon by Purchaser, shall survive the
Closing hereunder and shall not merge in the performance of any obligation by
any party hereto. To the extent provided in this section, Xxxxxx Mortgage and
the Shareholders, jointly and severally, agree to indemnify and hold Purchaser
harmless from and against all liability, loss, damage or injury and all
reasonable costs and expenses (including reasonable counsel fees and costs
Page 18 of 24
of any suit related thereto) suffered or incurred by Purchaser arising from:
(a) any misrepresentation by, or breach of any covenant or warranty
of, Xxxxxx Mortgage or any Shareholder contained in this Agreement or any
certificate or other instrument furnished or to be furnished by Xxxxxx
Mortgage or any Shareholder hereunder, or any claim by a third party
which, if true, would be such a misrepresentation or breach;
(b) any claim against or liability of Xxxxxx Mortgage which accrued
prior to the Closing, to the extent not accrued or reserved against in the
financial statements, disclosed in the Exhibits to this Agreement, or
incurred in the ordinary course of business since October 31, 1997.
Following the Closing, Xxxxxx Mortgage will be owned by the Purchaser, the
parties to this Agreement agree that the Shareholders will have no right of
reimbursement or contribution against Xxxxxx Mortgage.
In the event that a state of facts exist whereby the Purchaser intends to
assert a claim against the Shareholders, the Purchaser shall notify the
Shareholders in writing. If the claim relates to a claim asserted by a third
party against the Purchaser, the Purchaser may employ legal counsel reasonably
acceptable to Shareholders. Purchaser shall direct the defense or prosecution of
the claim or action of such third party as it relates to the Purchaser. The
Purchaser shall not pay or settle a claim of any third party as long as the
Shareholders defend or prosecute the claim of the third party in good faith;
provided, however, that in the event the Purchaser reasonably determines that it
may be adversely affected by a failure to pay or settle the claim of any third
party promptly, it may, upon written notice to Shareholders, pay or settle such
claims without affecting the rights of either party. In the event the claim
arises from other than a claim of a third party, the Shareholders shall have
thirty (30) days from the date of Purchaser's notice to cure such claim to the
satisfaction of the Purchaser, or to contest such claim.
In the event a disputed claim is not resolved in a manner satisfactory to
the Shareholders and Purchaser within thirty (30) days of receipt by the
Shareholders of the notice that Shareholders intend to dispute the claim, the
claim shall be submitted to arbitration pursuant to the rules of the American
Arbitration Association and the decision for the arbitrator shall be conclusive
and binding on all parties. In addition to the amount of the claim or liability
asserted hereunder, if any, the successful party or parties shall recover all
expense and costs reasonably incurred, including reasonable attorney's fees, as
a result of the action on the claim, together with interest at the maximum rate
allowed by law on the amount of the claim, to be paid by the Purchaser or by the
Shareholders, as the case may be as determined by the arbitrator.
Such right of indemnification shall expire three (3) years after the
Closing, unless a lawsuit, arbitration, or administrative proceeding based on an
asserted claim shall have been commenced within said period and is then pending,
or a tax assessment has been made or a notification of a tax audit has been
received within said period and is then pending.
Page 19 of 24
8.2 Survival of Representations and Warranties of Purchaser. All
representations, warranties, agreements, covenants and obligations made or
undertaken by Purchaser in this Agreement or in any document or instrument
executed and delivered pursuant hereto are material, have been relied upon by
Xxxxxx Mortgage and the Shareholders, shall survive the Closing hereunder and
shall not merge in the performance of any obligation by any party hereto.
Purchaser agrees to indemnify and hold Xxxxxx Mortgage and the Shareholders
harmless from and against all liability, loss, damage or injury and all
reasonable costs and expenses (including reasonable counsel fees and costs of
any suit related thereto) suffered or incurred by Xxxxxx Mortgage or the
Shareholders arising from any misrepresentation by, or breach of any covenant or
warranty of, Purchaser contained in this Agreement or any certificate or
instrument furnished or to be furnished by Purchaser hereunder, or any claim by
a third party (regardless of whether the claimant is ultimately successful)
which if true would be such a misrepresentation or breach.
IX. TERMINATION.
9.1 Method of Termination. This Agreement constitutes the binding
and irrevocable agreement of the parties to consummate the transactions
contemplated hereby, the consideration for which is (a) the covenants set forth
in Article II hereof, and (b) expenditures and obligations incurred and to be
incurred by Purchaser, on the one hand, and by Xxxxxx Mortgage and the
Shareholders, on the other hand, in respect of this Agreement, and this
Agreement may be terminated or abandoned only as follows:
9.1.1 By the mutual consent of the Boards of Directors of Xxxxxx
Mortgage and Purchaser, notwithstanding prior approval by the shareholders
of any or all of such corporations;
9.1.2 By the Board of Directors of Xxxxxx Mortgage after October 31,
1997, if any of the conditions set forth in Article VI hereof, to which
their obligations are subject, have not been fulfilled or waived, unless
such fulfillment has been frustrated or made impossible by any act or
failure to act of any of them; or
9.1.3 By Purchaser after October 31, 1997, if any of the conditions
set forth in Article V hereof, to which the obligations of Purchaser are
subject, have not been fulfilled or waived, unless such fulfillment has
been frustrated or made impossible by any act or failure to act of
Purchaser.
9.2 Effect of Termination. In the event of a termination of this
Agreement pursuant to Section 9.1.1 hereof, each party shall pay the costs and
expenses incurred by it in connection with this Agreement, and no party (or any
of its officers, directors, employees, agents, representatives or shareholders)
shall be liable to any other party for any costs, expenses, damage or loss of
anticipated profits hereunder. In the event of any other termination, the
parties shall retain any and all rights attendant to a breach of any covenant,
representation or warranty made hereunder.
Page 20 of 24
9.3 Risk of Loss. Xxxxxx Mortgage and the Shareholders assume all
risk of condemnation, destruction, loss or damage due to fire or other casualty
from the date of this Agreement up to the Closing. If the condemnation,
destruction, loss, or damage is such that the business of Xxxxxx Mortgage is
interrupted or curtailed or the assets of Xxxxxx Mortgage are materially
affected, then Purchaser shall have the right to terminate this Agreement. If
the condemnation, destruction, loss, or damage is such that the business of
Xxxxxx Mortgage is neither interrupted nor curtailed nor its assets materially
affected, or if the business is interrupted or curtailed or the assets are
materially affected and Purchaser nevertheless forgoes the right to terminate
this Agreement, the purchase price shall be adjusted at the Closing to reflect
such condemnation, destruction, loss, or damage to the extent that insurance
proceeds are not sufficient to cover such destruction, loss or damage, and if
Purchaser, on the one hand, and Xxxxxx Mortgage and the Shareholders, on the
other hand, are unable to agree upon the amount of such adjustment, the dispute
shall be resolved jointly by the independent accounting firms then employed by
Purchaser and Xxxxxx Mortgage, and if said accounting firms to not agree upon
the amount of such adjustment, they shall appoint a nationally recognized
accounting firm, whose determination of the dispute shall be final and binding.
X. GENERAL PROVISIONS.
10.1 Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be delivered by hand or
mailed by registered or certified mail, return receipt requested, first class
postage prepaid, addressed as follows:
10.1.1 If to Xxxxxx Mortgage or the Shareholders:
Xxxxxx Mortgage Company
Attn: Xxxxxxx X. Xxxxxx
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
and to
Xxxxxxx X. Xxxxxx
0000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Xxxxxx X. Xxxxxx
000 Xxxxxx Xxxxx Xxxx
Xxxxxx Xxxx, Xxxxxxxxx 00000
10.1.2 If to Purchaser:
Page 21 of 24
BankFirst
Attn: Xxxx X. Xxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
with a copy to:
BankFirst
Attn: R. Xxxxxxx Xxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
10.1.3 If delivered personally, the date on which a notice,
request, instruction or document is delivered shall be the date on
which such delivery is made and, if delivered by mail, the date on
which such notice, request, instruction or document is received
shall be the date of delivery. In the event any such notice,
request, instruction or document is mailed to a party in accordance
with this Section 10.1 and is returned to the sender as
nondeliverable, then such notice, request, instruction or document
shall be deemed to have been delivered or received on the fifth day
following the deposit of such notice, request, instruction or
document in the United States mail.
10.1.4 Any part hereto may change its address specified for
notices herein by designating a new address by notice in accordance
with this Section 10.1.
10.2 Brokers. Purchaser represents and warrants to Xxxxxx Mortgage
and the Shareholders, and Xxxxxx Mortgage and the Shareholders, jointly and
severally, represent and warranty to Purchaser that no broker or finder has
acted for it or them or any entity controlling, controlled by or under common
control with it or them in connection with this Agreement. Shareholders agree to
indemnify and hold harmless Purchaser against any fee, loss or expense arising
out of any claim by any broker or finder employed or alleged to have been
employed by them.
10.3 Further Assurances. Each party covenants that at any time, and
from time to time, after the Closing Date, it will execute such additional
instruments and take such actions as may be reasonably requested by the other
parties to confirm or perfect or otherwise to carry out the intent and purposes
of this agreement.
10.4 Waiver. Any failure on the part of any party hereto to comply
with any of its obligations, agreements or conditions hereunder may be waived by
any other party to whom such compliance is owed. No waiver of any provision of
this Agreement shall be deemed, or shall constitute, a waiver of any other
provision, whether or not similar, nor shall any waiver constitute a continuing
waiver.
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10.5 Expenses. All expenses incurred by the parties hereto in
connection with or related to the authorization, preparation and execution of
this Agreement and the Closing of the transactions contemplated hereby,
including, without limitation of the generality of the foregoing, all fees and
expenses of agents, representatives, counsel and accountants employed by any
such party, shall be borne solely and entirely by the party which has incurred
same.
10.6. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, legal
representatives, executors, administrators, successors and assigns. The
invalidity of nonenforceability of this Agreement as to any Shareholder shall
not affect the validity or enforceability of this Agreement as to any other
Shareholder.
10.7. Headings. The section and other headings in this Agreement are
inserted solely as a matter of convenience and for reference, and are not a part
of this Agreement.
10.8. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto and supersedes and cancels any prior
agreements, representations, warranties, or communications, whether oral or
written, among the parties hereto relating to the transactions contemplated
hereby or the subject matter herein. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally, but only by an
agreement in writing signed by the party against whom or which the enforcement
of such change, waiver, discharge or termination is sought.
10.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee.
10.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.11 Pronouns. All pronouns used herein shall be deemed to refer to
the masculine, feminine or neuter gender as the context requires.
10.12 Exhibits Incorporated. All Exhibits attached hereto are
incorporated herein by reference, and all blanks in such Exhibits, if any, will
be filled in as required in order to consummate the transactions contemplated
herein and in accordance with this Agreement.
10.13 Time of Essence. Time is of the essence in this Agreement.
10.14 Intent and Due Diligence Standard. The parties hereto have
entered into this Agreement in good faith with the intention of closing the
transaction contemplated herein in accordance with the terms and conditions of
this Agreement. It is the further intention of the parties hereto to provide
Purchaser ample time to conduct any and all due diligence investigation it deems
necessary to satisfy itself with the condition of Xxxxxx Mortgage. If, prior to
Closing, Purchaser is
Page 23 of 24
not satisfied with the condition of Xxxxxx Mortgage, Purchaser may elect to
terminate the transaction contemplated herein.
IN WITNESS WHEREOF, each party hereto has executed or caused this
Agreement to be executed on its behalf, all on the day and year first above
written.
BANKFIRST
("Purchaser")
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Xxxx X. Xxxxxx
Title: President
XXXXXX MORTGAGE COMPANY
("Xxxxxx Mortgage")
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx
Title: Chairman & CEO
SHAREHOLDERS:
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxx
--------------------------------------
Xxxxxx X. Xxxxxx
Page 24 of 24
