EXHIBIT 2.1
PURCHASE AND ASSUMPTION AGREEMENT
dated
April 25, 2005
among
COMMUNITY BANK,
AMERICAN FAMILY MORTGAGE, LLC,
and
AMERIDOCS, LLC
PURCHASE AND ASSUMPTION AGREEMENT, dated April 25, 2005 (this "Agreement"),
among Community Bank, an Alabama banking corporation ("Purchaser"), American
Family Mortgage, LLC, an Alabama limited liability company ("American Family")
and AmeriDocs, LLC, an Alabama limited liability company ("AmeriDocs"). American
Family and AmeriDocs are sometimes referred to herein as "Sellers."
RECITALS
A. The Proposed Transaction. This Agreement provides for the purchase of certain
assets and the assumption of certain liabilities of Sellers by Purchaser.
B. Approvals. The board of directors of Purchaser and all of the members of
Sellers have determined that the acquisition and the other transactions
contemplated hereby are consistent with, and in furtherance of, their respective
business strategies and goals, and have approved of the acquisition and, in the
case of Purchaser's board of directors, believes that the acquisition is in the
best interests of Purchaser's shareholders.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants,
representations, warranties and agreements contained herein, the parties agree
as follows:
ARTICLE I
DEFINED TERMS
1.01 Definitions. The following terms used in this Agreement shall have the
meanings specified below:
(a) "Closing" means the closing of the purchase of the assets and the
assumption of the liabilities of the Sellers as provided herein.
(b) "Closing Date" means the date chosen by the Purchaser and Sellers
on which the Closing occurs.
(c) "Lien" means any conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title retention
or other security arrangement, or any adverse right or interest, charge, or
claim of any nature whatsoever of, on, or with respect to any property or
property interest.
(d) "Litigation" means any action, arbitration, cause of action,
lawsuit, claim, complaint, criminal prosecution, governmental or other
examination or investigation, audit (other than regular audits of financial
statements by outside auditors), compliance review, inspection, hearing,
administrative or other proceeding relating to or affecting a party, its
business, its records, its policies, its practices, its compliance with
applicable law, its actions, its assets (including contracts and agreements
related to it), or the transactions contemplated by this Agreement.
(e) "Loan" means each loan agreement, note or borrowing arrangement
(including all collateral relating thereto) to which a Seller is a party and
which are properly booked on such Seller's books and records at Closing.
(f) "Pipeline Loans" means applications for Loans taken by employees
of Sellers or approved correspondents of Sellers and entered into Seller's loan
tracking system.
ARTICLE II
SALE OF ASSETS
2.01 Assets Sold. On the terms and subject to the conditions of this
Agreement, at the Closing, the Sellers shall transfer, convey, assign and
deliver to the Purchaser and the Purchaser shall purchase and receive from the
Sellers, all of Sellers' right, title and interest in the following assets,
properties and rights (the "Purchased Assets") free and clear of all Liens:
(a) all ownership rights in and to the names "American Family Mortgage" and
"AmeriDocs;"
(b) all signs, logos, trademarks, tradenames, service marks, internet
sites, domain names and all licenses and registrations thereof, and
proprietarily marked stationery, forms, labels, shipping materials, brochures,
advertising material and similar property;
(c) all furniture, fixtures and equipment and any replacements thereof or
repairs thereto (together with any manufacturer's warranties or maintenance or
service agreements thereon which are in effect and are assignable) whether
leased or owned as identified on Exhibit 2.01(d) (the "Furniture, Fixtures and
Equipment");
(d) all of the Sellers' rights and title to real property and improvements
set forth on Exhibit 2.01(e), whether owned or leased by the Sellers (the "Real
Property");
(e) all income derived by Sellers' from Loans which were closed after
February 28, 2005;
(f) all of the Sellers' rights under the contracts and agreements listed on
Exhibit 2.01(g).
(g) all of Sellers' rights relating to the Loans (whether or not funds have
been disbursed to the customer and whether or not unexercised borrower rights of
rescission exist as of such time) held for sale by Sellers as of the Closing
Date; provided, however, that Purchaser shall not purchase any Loan which a
third-party buyer has rejected.
(h) all rights in, to and under the Pipeline Loans as of the Closing Date;
provided, however, that Purchaser shall not purchase any Pipeline Loan which a
third-party buyer has rejected.
2.02 Purchase Price. As consideration for the purchase of the Purchased
Assets, the Purchaser shall pay Sellers a purchase price (the "Purchase Price")
equal to $1,000,000.00 composed of the following.
(a) The Purchaser will pay $750,000 in cash at the Closing subject to the
terms and conditions of the Escrow Agreement of even date. Said terms
and conditions are incorporated herein as if set out in full.
(b) Purchaser shall pay the sum of $250,000 to Xxxxxx Xxxxxxxx
("Xxxxxxxx") subject to the terms and conditions as follows:
1. On May 1, 2006 Purchaser will pay Xxxxxxxx $83,333.00 if the
March 1, 2005 - February 28, 2006 pre-tax income of the American
Family Mortgage division of Community Bank equals or exceeds
$462,000.00. and
2. On May 1, 2007 purchaser will pay Xxxxxxxx $83,333.00 if the
March 1, 2006 - February 28, 2007 pre-tax income of the American
Family Mortgage division of Community Bank equals or exceeds
$476,000.00. and
3. On May 1, 2008 purchaser will pay Xxxxxxxx $83,334.00 if the
March 1, 2007 - February 28, 2008 pre-tax income of the American
Family Mortgage division of Community Bank equals or exceeds
$490,000.00.
Payment of the yearly amounts set out above is not contingent on meeting
the performance goals for the prior years. However, in the event American
Family Mortgage fails to meet the performance threshold for March 1, 2005
through February 28, 0000, Xxxxxxxx still may be entitled to collect the
first year payment as well as the second year payment on May 1, 2007 if the
collective pre-tax income for March 1, 2005 - February 28, 2007 exceeds
$938,000.00. Xxxxxxxx shall collect all unpaid yearly payments on March 1,
2008 if the March 1, 2005 - February 28, 2008 pre-tax income exceeds
$1,428,000.00. Any annual payments not earned by May 1, 2008 shall be
forfeited by Xxxxxxxx. If Xxxxxxxx voluntarily quits his employment with
Community Bank prior to March 1, 2008, all payments due after his last date
of employment shall be forfeited.
2.03 No Guaranty of Employment. The terms of this Agreement shall not
confer upon Xxxxxxxx any rights of employment with the Purchase or any of its
subsidiaries or affect the right of the Purchaser or its subsidiaries to
terminate the employment of the Xxxxxxxx at any time, with or without cause.
ARTICLE III
ASSUMPTION OF LIABILITIES
3.01 Liabilities Assumed. At the Closing, the Sellers shall transfer to
Purchaser and the Purchaser shall assume and agree to pay and discharge only
those specific existing liabilities listed below (the "Assumed Liabilities"):
(a) the liabilities of Sellers under leases for Real Property as set forth
on Exhibit 2.01(e), for all periods upon and following the Closing;
(b) the liabilities of Sellers relating to the Furniture, Fixtures and
Equipment, including service contracts and leases, set forth on Exhibit 2.01(d),
for all periods upon and following the Closing;
(c) the liabilities of Sellers under the terms of and relating to Loans
closed on and after the February 28, 2005 for which Purchaser is entitled to
income;
(d) the liabilities of Sellers under the terms of and relating to all the
Pipeline Loans as of the Closing Date; and
(e) the liabilities of Sellers under contracts set forth in Exhibit
2.01(g), but only to the extent that such liabilities arise after the Closing
Date. It is specifically agreed by the parties that Purchaser shall have no
liability to repurchase from a third party any Loan which was closed and sold by
Sellers prior to the Closing Date.
3.02 Liabilities Not Assumed. Except for the Assumed Liabilities
specifically assumed by the Purchaser under Section 3.01 above, the Purchaser is
not assuming any other liabilities or obligations of the Sellers, including, but
not limited to the following:
(a) all liabilities and obligations, including any repurchase or
indemnification obligation, of any nature arising from or connected with the
Sellers' operations prior to the Closing Date, including, but not limited to,
liabilities or obligations with respect to loans originated and sold to third
parties prior to the Closing, Seller will obtain insurance coverage ("tail
coverage") to insure against losses resulting from said liabilities; and
(b) all liabilities and obligations of the Sellers for fees, commissions,
costs and expenses incurred by the Sellers in connection with the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby, including, without limitation, legal, consulting, accounting and
appraisal fees and expenses.
3.03 Assumption Subject to Certain Terms. The liabilities being assumed by
the Purchaser pursuant to this Article shall be assumed subject to the terms and
conditions of the contracts and other written agreements relating thereto and
provided by Sellers to Purchaser and the laws, rules and regulations applicable
thereto.
ARTICLE IV
ASSUMPTION OF RISKS
4.01 Insurance Policies. Effective immediately following the Closing Date,
the Sellers will discontinue any casualty and public liability insurance
coverage maintained with respect to the Real Property and the Furniture,
Fixtures and Equipment. The Purchaser shall be solely responsible for all
casualty losses and liability claims arising from such assets after the time of
Closing. Nothing in this Section 4.01 shall be construed or deemed to require
the Purchaser to insure any assets of Sellers not transferred to Purchaser at
Closing pursuant to this Agreement, and the Sellers shall solely bear all risk
of loss to such property following Closing.
4.02 Casualty and Other Losses Prior to Closing. If the improvements on the
Real Property or the Furniture, Fixtures and Equipment shall be damaged by fire
or other casualty, whether insured or uninsured, and shall not be repaired or
restored to their original condition prior to the Closing, Sellers shall
promptly assign and pay over to Purchaser any insurance proceeds, or rights to
such proceeds, with respect to such assets.
ARTICLE V
EMPLOYEES
5.01 Transfer of Certain Employees. Sellers will use their reasonable
efforts to maintain the employees as employees of Sellers until the Closing
Date. Any employee whose employment shall be terminated for any reason prior to
the Closing Date or who shall elect not to be an employee of Purchaser shall be
dealt with by Sellers in their sole and absolute discretion, and Purchaser shall
have no liability whatsoever therefor. Effective at Closing, the Sellers will
terminate the employment of all employees, and such employees will become "at
will" employees of the Purchaser under such terms as may be established by
Purchaser in its sole discretion. The Sellers and the Purchaser shall mutually
agree upon any additions to or replacements of staff after the date of this
Agreement through Closing, and Sellers shall not employ any employees during
such time other than on an "at will" basis and upon prior notice to Purchaser.
6.02 Re-Employment Restriction. The Sellers agree that for a period of
three years following the Closing they shall not solicit the employment of any
of their former employees who transfer to the Purchaser at Closing.
6.03 Benefits. Each employee of Sellers who transfers to the Purchaser will
receive pension, profit sharing, insurance, vacation, sick leave and other
benefits on terms and conditions that in the aggregate are substantially similar
to comparable employees of Purchaser. Purchaser shall give each of Sellers'
employees who transfer to Purchaser credit for service with Sellers for purposes
of any vacation and sick leave policy.
6.04 Responsibility for Employees Transferring. With respect to all
employees transferring to the Purchaser, the Sellers will be responsible for all
salaries, wages and benefits payable to such employees during employment by the
Sellers up to and including the Closing Date, and all benefits under Sellers'
employee benefit plans shall be paid as soon as reasonably practicable in
accordance with the applicable plan to the extent that such benefits become
vested at the Closing Date as a result of the transactions contemplated hereby.
6.05 Employee Information. The Sellers shall provide the Purchaser at times
the Purchaser may deem necessary such records and information regarding such
transferred employees' service with the Sellers as the Purchaser may reasonably
need for purposes of the Purchaser's employment and benefits program records
including the complete personnel file on each transferring employee. The
Purchaser and the Sellers agree to assist each other by providing the employee
information needed to open and close employee files on those employees
transferred. To the extent required by applicable law, the Sellers reserves the
right to obtain the employee's prior consent to release information which the
Sellers reasonably believes (upon advice of counsel) cannot be released to the
Purchaser without the employee's prior consent. Should information be withheld,
the Sellers must advise the Purchaser of such prior to Closing. Purchaser shall
have no obligation to hire any employee of Sellers.
6.06 Employment of Xxxxxx Xxxxxxxx. The parties contemplate that Xxxxxxxx
("Xxxxxxxx") will become an employee of Purchaser on and after the Closing and
will devote his full attention to the business of Purchaser.
ARTICLE VII
ACCESS TO PROPERTIES AND RECORDS
7.01 Access and Confidential Treatment. From and after the date of this
Agreement, the Sellers shall permit the Purchaser and Purchaser's agents and
representatives full access, during normal business hours and upon reasonable
notice, to all assets, properties, data and databases books, records (except
employee records and information excluded by Section 6.05 hereof), agreements
and commitments of the Sellers, and the Sellers shall furnish representatives of
the Purchaser during such period with all such information as the Purchaser may
reasonably request. The Purchaser will hold in strict confidence all documents
and information concerning the Sellers so furnished that is not in the public
domain and will not publicly disclose such documents or information except to
its attorneys, accountants, or other advisers and representatives, to regulatory
and self-regulatory authorities, or as required by law or pursuant to legal
process. If the transactions contemplated by this Agreement are not consummated,
all such documents and information shall promptly be returned to the Sellers.
Nothing in this Section 7.01 shall be deemed to require Sellers to reveal any
proprietary information, trade secrets or marketing or strategic plans, and if
such information is the subject of a confidentiality agreement between the
Sellers and a third party, any disclosure will be subject also to the provisions
of such confidentiality agreement, which shall be provided to Purchaser. The
Sellers shall provide the Purchaser, on a confidential basis, the names and
addresses of all directors, officers, affiliates (as
defined in SEC Rule 405) and their relatives and the business interests related
to each of the foregoing (individually and collectively, "Seller Affiliates").
7.02 Recordkeeping and Access Following Closing. The Purchaser will
preserve and safely keep, for as long as may be required by applicable law, all
of the files, books of account and records which Purchaser has purchased
pursuant to Section 2.01. Purchaser shall permit the Sellers or its
representatives, at Sellers' expense, to inspect, make extracts from or copies
of, any files, books of account or records as may be necessary for Sellers to
satisfy any auditing or regulatory requirements placed upon Sellers or as may be
required by Sellers in connection with any Litigation. The Sellers will not use
such documents or information for the purpose of competing with the Purchaser.
ARTICLE VIII
SELLERS'S REPRESENTATIONS AND WARRANTIES
The Sellers represent and warrant to the Purchaser as follows:
8.01 Corporate Organization. The Sellers are limited liability companies
duly organized, validly existing and in good standing under the laws of the
State of Alabama.
8.02 Corporate Authority. The Sellers have full corporate right, power,
capacity and authority validly to enter into and to perform this Agreement and
the transactions contemplated by this Agreement, to sell, transfer, assign and
deliver the Purchased Assets referred to in Article II, and to carry on their
business as currently conducted. The execution, delivery and performance of this
Agreement, and the transactions contemplated by this Agreement have been duly
and validly authorized by all requisite corporate action, and this Agreement is
binding and enforceable against the Sellers in accordance with its terms. Except
as disclosed on Exhibit 8.02, no further corporate authorization or applications
or notices to any governmental or regulatory authority, agency or entity or any
consents, waivers or approvals from any such governmental authority is necessary
for Sellers to execute and deliver this Agreement or to consummate the
transactions contemplated hereunder or perform their obligations hereunder.
8.03 Title to or Right to Occupy Real Estate. Exhibit 8.03 describes all
real estate, improvements, and any related rights owned, leased, or otherwise
held by Sellers, and with respect to owned Real Property, the fully depreciated
net book value thereof. Sellers (a) have and at Closing will have indefeasible
fee simple title to, and own and at Closing will be the sole owner of all the
Real Property to be purchased by Purchaser pursuant to Article II, subject to no
Lien, tenant leases, participation, charge, encumbrance or conditional sale of
other title retention agreement (except for real estate taxes not yet due and
payable), restrictions, easements and rights of way of record, and (b) are and
at Closing will be the sole lessees with respect to the leases to be assigned to
Purchaser pursuant to said Article II, with the right to convey to Purchaser the
leasehold interest therein so as to assure that Purchaser shall have the full,
exclusive and peaceful possession of such leasehold interest. All Real Property
and Furniture, Fixtures and Equipment
will at the time of Closing be in good operating condition and repair, subject
only to ordinary wear and tear, and will otherwise be received in "AS IS"
condition with no other warranties by Sellers as to their condition or future
performance, except those warranties related to title. All Real Property and
Furniture, Fixtures and Equipment held under leases or subleases by the Sellers,
are held under valid contracts enforceable in accordance with their respective
terms, and each such contract is in full force and effect. Neither Seller nor,
to Seller's knowledge, any other party is in default thereof. All improvements
on the Real Property leased to, or used by, the Sellers conform to all
applicable state and local laws, regulations, zoning and building ordinances and
health and safety ordinances, and the Real Property is zoned for the various
purposes for which the real estate and improvements thereon are presently being
used. To the Knowledge of the Sellers, no condemnation proceedings or
proceedings for the taking of any Real Property by eminent domain by any
Governmental Authority are pending or threatened. Sellers has not entered into
any agreement regarding the Real Property or the Furniture, Fixtures and
Equipment, and neither Sellers nor the Real Property is subject to any claim,
demand, suit, Lien or Litigation of any kind, pending or outstanding, or to the
knowledge of Sellers, threatened or likely to be made or instituted, which would
in any way be binding upon Purchaser or its successors or assigns or materially
affect or limit Purchaser's or its successors' or assigns' use and enjoyment of
the Real Property or which would materially limit or restrict Purchaser's right
or ability to enter into this Agreement and consummate the sale and purchase
contemplated hereby.
8.04 Condition of Personal Property. Exhibit 8.04 sets forth by category or
item all of the tangible personal property owned or leased (identified as such)
which is used or useful in connection with Sellers' operations, with the fully
depreciated net book value of owned property being also set fort on Exhibit
8.04. The tangible personal property included in the Purchased Assets is, and at
the Closing will be, in good operating condition and repair, subject only to
ordinary wear and tear, and will be usable in the ordinary course of business
consistent with the Sellers' past practices. Sellers have and at Closing will
have good and marketable title to, and own and at Closing will be the sole owner
of, all personal property on Exhibit 8.04.
8.05 Loans. With respect to each Loan within the Purchased Assets: the Loan
complies in all material respects with all applicable laws and banking
regulations and is a valid loan enforceable in accordance with its terms; the
Seller is the sole owner thereof, no participation or other interest therein
having been sold or transferred; the Loan is not pledged or encumbered except as
set forth on Exhibit 8.05 and all such Liens shall have been satisfied and
released prior to Closing; the principal balance of the Loan as shown on Exhibit
8.05 is true and correct as of the last date shown thereon; all purported
signatures on and executions of any document in connection with such Loan are
genuine and authorized; all loan documentation has been actually signed or
executed by all necessary parties; the Seller has and will transfer to
Purchaser, custody of all originally executed documents, and microfilm or
photocopy records thereof related to such Loan and there are no other written or
unwritten agreements, understandings, or other arrangements with respect to such
Loan. None of the Loans is to or for the benefit of a Seller Affiliate. Each
Pipeline Loan shall as of the Closing Date meet all criteria established by a
third party buyer to be eligible for resale.
8.06 No Violations. The Sellers have been operated in all material respects
in accordance with all applicable laws, rules and regulations, including the
provisions of the Internal Revenue Code and related regulations pertaining to
back-up withholding and tax reporting. Subject to receipt of all necessary
corporate, regulatory and other third party approvals or consents, the
execution, delivery and performance of this Agreement and the transactions
contemplated herein do not and will not violate or conflict with the Sellers'
Articles of Organization or other governing documents or any provisions of law
to which the Sellers are subject and do not and will not conflict with or result
in the violation or breach of any material condition or provision of, or
constitute a material default under, any material contract, right, lease,
pledge, Lien, instrument, agreement, order, writ, injunction, decree or judgment
to which the Sellers are a party or which is binding on Sellers or to which any
of the property or assets of Sellers is subject, or create or result in any Lien
upon the Purchased Assets or Assumed Liabilities. Except as disclosed on Exhibit
8.06, no consent, license, approval or authorization of or designation,
declaration or filing with any governmental authority or other person or entity
is required on the part of Sellers. The Sellers are not in default under any
lease, agreement, contract, commitment, Assumed Liability or other obligation or
Purchased Asset which the Purchaser is assuming or purchasing or which affects
the property rights being transferred hereunder to the Purchaser.
8.07 Limitations of Warranties. Except as may be expressly represented or
warranted in this Agreement or in any document of transfer, the Sellers make no
representations or warranties whatsoever with regard to any Purchased Asset
being transferred to Purchaser, any liability or obligation being assumed by the
Purchaser or as to any other matter or transaction contemplated by this
Agreement.
8.08. Legal Proceedings.
(a) Except as set forth in Exhibit 8.08, Sellers are not a party to
any, and there are no pending or, to Sellers' knowledge, threatened, legal,
administrative, arbitral or other proceedings, claims, actions or governmental
or regulatory investigations of any nature against Sellers, the Loans, the other
Purchased Assets and Assumed Liabilities, or seeking to enjoin, restrain or
challenging the validity, enforceability or propriety of this Agreement or the
transactions contemplated by this Agreement. There are no employee disputes or
labor relations problems with respect to any employees.
(b) Except as set forth in Exhibit 8.08, there is no injunction,
order, judgment, decree, or regulatory restriction imposed upon Sellers or the
assets or liabilities of Sellers, including the Purchased Assets and Assumed
Liabilities.
8.09. Environmental Matters. Except as set forth in Exhibit 8.09:
(a) Sellers, and to the knowledge of Sellers, each of Sellers' Real
Property or the Participation Facilities and the Loan Properties (each as
hereinafter defined), are in compliance with all applicable federal, state and
local laws, including common law, regulations and ordinances, and with all
applicable decrees, orders and contractual obligations relating to
pollution or the protection of human health or the environment or the discharge,
emission, release or threatened release of, or exposure to, Hazardous Materials
(as hereinafter defined) in the environment or workplace or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of any Hazardous Material ("Environmental Laws");
(b) There is no suit, claim, action or proceeding, pending or, to the
knowledge of Sellers, threatened, before any governmental entity or other forum
in which Sellers, any Real Property or Participation Facility or any Loan
Property, has been or, with respect to threatened proceedings, may be, named as
a defendant (x) for alleged noncompliance (including by any predecessor) with
any Environmental Laws, or (y) relating to the release, threatened release or
exposure to any Hazardous Material whether or not occurring at or on a site
owned, leased or operated by Sellers, any Participation Facility or any Loan
Property;
(c) During the period of (x) Sellers' ownership or operation of any of
their respective current or former properties including the Real Property or,
(y) Sellers' participation in the management of any Participation Facility, or
(z) Sellers' interest in a Loan Property, there has been no release of Hazardous
Materials in, on, under or affecting any such property, Participation Facility
or Loan Property. To the knowledge of Sellers, prior to the period of (x)
Sellers' ownership or operation of current or former properties, (y) Sellers'
participation in the management of any Participation Facility, or (z) Sellers'
interest in a Loan Property, there was no release of Hazardous Materials in, on,
under or affecting any such property, Participation Facility or Loan Property;
and
(d) The following definitions apply for purposes of this Section: (x)
"Hazardous Materials" means (i) any hazardous substance, hazardous material,
hazardous waste, regulated substance, or toxic substance (as those terms are
defined by any applicable Environmental Laws) and (ii) any chemicals,
pollutants, contaminants, petroleum, petroleum products, or oil (and
specifically shall include asbestos requiring abatement, removal, or
encapsulation pursuant to the requirements of any governmental authorities and
any polychlorinated biphenyls)., (y) "Loan Property" means any property in which
Sellers hold a security interest which security interest or other Lien will be
transferred to Purchaser pursuant to this Agreement, and, where required by the
context, said term means the owner or operator of such property; and (z)
"Participation Facility" means any facility in which Sellers participates in the
management and, where required by the context, said term means the owner or
operator of such property.
8.10 ERISA Matters. The Sellers is in compliance in all material respects
with the provisions of ERISA. Each of Sellers' employee benefit plans has been
administered in accordance with its terms. No steps have been taken by the
Sellers to terminate any employee benefit plan (as defined in Section 3(3) of
ERISA) the assets of which are not sufficient to satisfy all of its benefit
liabilities (as determined under Title IV of ERISA), no contribution failure has
occurred with respect to any employee benefit plan sufficient to give rise to a
lien under Section 302(f) of ERISA, and each of Sellers' employee benefit plans
has been administered in all material respects in compliance with its terms and
applicable provision of ERISA and the Internal
Revenue Code of 1986, as amended and all regulations thereunder (the "Code"). To
Sellers' Knowledge, no prohibited transaction (as defined in Section 406 of
ERISA or Section 4975 of the Code) has occurred under any employee benefit plan
of Sellers. "ERISA" means the Retirement Income Security Act of 1974, as amended
and all related regulations of the Department of the Treasury and the Department
of Labor thereunder.
8.11 Employees; Labor Matters.
(a) No employee is bound by any agreement that purports to limit his
or her ability to engage in or continue or perform any conduct, activity, duties
or practice relating to the business conducted by Sellers;
(b) Sellers have operated in compliance in all material respects with
all applicable laws and regulations relating to the employment of labor, and
have made all withholdings and other payments with respect to such employment
and employment taxes and charges; and
(c) There is no collective bargaining agreement to which Sellers are a
party and no collective bargaining agreement is currently being negotiated or
proposed.
8.12 Books and Records; Financial Statements. The books of account and
other records of Sellers have been made available to Purchaser, are complete and
correct in all material respects and represent actual, bona fide transactions
and have been maintained in accordance with customary business practices and
generally accepted accounting practices consistently applied. Exhibit 8.12
contains the following financial information: audited balance sheet and income
statement for American Family for the fiscal year ended December 31, 2004 ("the
Financial Statements").
The Financial Statements of Sellers fairly present in all material respects the
financial condition of Sellers as of the respective dates of and for the periods
referred to in such Financial Statements, and are prepared in accordance with
generally accepted accounting principles consistently applied. The Financial
Statements were compiled or prepared from and are in accordance with the books
and records of the business.
8.13 Consents of Third Parties. Sellers shall use all commercially
reasonable efforts to obtain and preserve any consents or approvals to third
parties, whether of regulatory or governmental authorities or third parties or
persons necessary, appropriate or expedient to the consummation of the
transactions contemplated by this Agreement, including, but not limited to, the
consents of lenders to the Sellers and shall cooperate with Purchaser in seeking
and obtaining any consents or approvals it may require from any governmental
authorities or third parties in connection with this Agreement and the
transactions contemplated hereby.
8.14 Contracts; No Default. Sellers have made available to Purchaser as
complete a copy as Sellers have of each contract and agreement identified by
name on Exhibit 2.01(g) and, except as set forth Exhibit 2.01(g) and except with
respect to any contract or agreement identified on Exhibit 2.01(g) which is not
material in amount or to the operation of Sellers' business, (a)
each such contract or agreement is in full force and effect and is valid and
enforceable in accordance with its terms, (b) Sellers are not in Default in any
material respect under any such contract or agreement, (c) Sellers have not
repudiated or waived any material provision of any such contract or agreement
and (d) to Sellers' knowledge, no other party to such contract or agreement is
in default in any material respect nor, to Sellers' knowledge, has any other
party to such contract or agreement repudiated or waived any provision
thereunder, that would have a material adverse effect on Sellers, Purchaser or
Sellers' business.
8.15 Taxes. All tax returns for taxes with respect to Seller's business for
which the Purchaser could be liable ("Successor Liability Taxes") have been
timely filed by Seller or requests for extensions have been timely filed,
granted, and have not expired for periods ended on or before Closing, and all
tax returns filed are complete and accurate. All Successor Liability Taxes that
are due and owing with respect to periods (or portions thereof) ending on or
prior to the Closing Date have been paid or accrued for by Sellers, whether or
not such taxes are shown on filed tax returns. There are no liens on any of the
Purchased Assets resulting from any failure (or alleged failure) to pay any tax.
8.16 Intellectual Property. Sellers own or have valid, binding, enforceable
and adequate rights to use all computer software, patents, trademarks, trade
names, logos, service marks, URLs, Internet sites, domain names, service names,
trade secrets, copyrights, proprietary information, inventions, know-how, other
proprietary intellectual property rights, applications therefor, registrations
thereof and licenses or other rights in respect thereof ("Intellectual
Property") necessary for use in connection with the Sellers' business without
any conflict with the rights of others. Sellers have not received any notice
from any other person or any other source pertaining to or challenging the right
of Sellers to use any Intellectual Property or processes and procedures owned or
used by or licensed to Sellers or Sellers' business. No logos, trade names,
trademarks, service marks or licenses are used by the Sellers' business which
are not owned by Sellers or to which Sellers do not have valid rights of use. No
claims have been made or, to Sellers' knowledge, threatened against Seller with
respect to such logos, trade names, trademarks, service marks or licenses.
8.17 Governmental Licenses. Sellers hold and maintain in full force and
effect all licenses from governmental authorities required to conduct their
businesses in the manner and in all such jurisdictions as it is currently
conducted and to permit Sellers to own and use the Purchased Assets in the
manner in which they currently own and use such assets, and Sellers have no
knowledge of any threatened revocation of any such license, except in such
circumstances where the absence of such licenses would not have a material
adverse effect on Sellers, Purchaser or the Purchased Assets.
ARTICLE IX
PURCHASER'S REPRESENTATIONS AND WARRANTIES
The Purchaser represents and warrants to the Sellers as follows:
9.01 Corporate Organization. The Purchaser is a banking corporation duly
organized, validly existing and in good standing under the laws of the State of
Alabama.
9.02 Corporate Authority. Subject to regulatory approval, the Purchaser has
full corporate right, power, capacity and authority validly to enter into and to
perform this Agreement and the transactions contemplated by this Agreement. The
execution, delivery and performance of this Agreement by the Purchaser have
been, or will be prior to Closing, duly and validly authorized by all requisite
corporate action and this Agreement is binding and enforceable against the
Purchaser in accordance with its terms.
9.03 No Violations. Subject to the conditions set forth in Article XII
below, the execution, delivery and performance of this Agreement and the
transactions contemplated herein do not and will not violate or conflict with
the Purchaser's Articles of Incorporation, Bylaws or other governing documents
or any provision of law to which the Purchaser is subject and do not and will
not conflict with or result in the violation or breach of any material condition
or provision of, or constitute a material default under, any material contract,
right, lease, pledge, lien, security interest, instrument, indenture, mortgage,
charge, encumbrance, agreement, order, writ, injunction, decree or judgment to
which the Purchaser is a party or which is binding on the Purchaser or to which
any of the property or assets of Purchaser is subject. Except as set forth in
Article XII, no consent, license, approval or authorization of or designation,
declaration or filing with any governmental authority or other person or entity
is required on the part of the Purchaser in connection with the execution,
delivery or performance of this Agreement or the consummation of the
transactions contemplated herein.
9.04 Regulatory Approvals. The Purchaser will promptly apply and in good
faith diligently pursue all required regulatory approvals that it needs to
consummate the transactions contemplated hereby.
9.05 Consents of Third Parties. In addition to obtaining the requisite
regulatory approvals, the Purchaser shall use all commercially reasonable
efforts to obtain and preserve any consents or approvals of third parties
necessary, appropriate or expedient to the consummation of the transactions
contemplated by this Agreement, including, but not limited to, those consents of
its lenders.
9.06. Legal Proceedings. Except as set forth in Exhibit 9.06, Purchaser is
not a party to any, and there are no pending or, to Purchaser's knowledge,
threatened, legal, administrative, arbitral or other proceedings, claims,
actions or governmental or regulatory investigations of any nature challenging
the validity or propriety of the transactions contemplated by this Agreement.
9.07 Limitations of Warranties. Except as may be expressly represented or
warranted in this Agreement or in any document of transfer, the Purchaser makes
no representations or warranties whatsoever with regard to the Purchaser, any
liability or obligation being assumed by the Purchaser or as to any other matter
or transaction contemplated by this Agreement.
ARTICLE X
ADDITIONAL UNDERTAKINGS OF SELLERS
10.01 Conduct of Business Pending Closing. The Sellers agrees that from the
date of this Agreement to the Closing Date, they will:
(a) maintain their operations as presently conducted, and avoid any
act that would materially and adversely affect the amount or value of the
Purchased Assets or the liabilities being assumed;
(b) carry on their businesses substantially in the same manner as
conducted on the date thereof, and use all reasonable efforts to preserve intact
their present business organizations, to keep available the services of their
present employees and to preserve their relations with customers and vendors;
(c) maintain fire, casualty, and extended coverage insurance for the
benefit of the Sellers and Purchaser, as their interests may appear, on the
Purchased Assets in an amount reasonably adequate to cover the replacement costs
of the Purchased Assets;
(d) maintain the Real Property, Furniture, Fixtures and Equipment, and
other Purchased Assets in their respective current conditions;
(e) maintain their books of account and records in the ordinary and
usual manner, in accordance with generally accepted accounting principles
applied on a basis consistent with prior years;
(f) maintain all licenses and agreements which are currently in
effect; and
(g) not take any action which would cause any representation or
warranty made herein to be untrue at the Closing Date.
10.02 Documentation Delivered at Closing and Further Assurances. At the
Closing, the Sellers shall transfer, assign and deliver to the Purchaser all
original (to the extent these exist and are held by the Sellers) and other
records, books, papers, documents, instruments, collateral in its possession and
agreements of Sellers relating to the Purchased Assets and the liabilities being
assumed by the Purchaser hereunder. The Sellers agrees that they will, at the
Closing and at any time and from time to time after the Closing, upon the
Purchaser's request do, execute, acknowledge and deliver, or cause to be done,
executed, acknowledged and delivered, all such further acts, deeds, assignments,
transfers, conveyances and assurances as may be required to complete the process
of assigning, transferring, granting, conveying, assuring and confirming to
Purchaser, any and all of the Purchased Assets and liabilities purchased and
assumed by the Purchaser hereunder and the performance of any or all obligations
of the Sellers hereunder.
10.03 Non-Solicitation of Business; Name Changes. The Sellers will not, for
a period of two (2) years after the Closing, conduct any business which is the
same or similar to the business
conducted by Sellers as of the date of this Agreement. Sellers acknowledge that
they are transferring to Purchaser the rights to the names "American Family
Mortgage" and "AmeriDocs". On request of Purchaser, Sellers will promptly take
all steps necessary to change their corporate names.
10.04 Notice to Customers. To the extent required by law or otherwise
agreed upon by the parties, the Sellers and the Purchaser shall jointly notify
the customers of the Sellers affected by the transaction of the pending transfer
of their Loan to the Purchaser.
10.05 Conversion of Transferred Accounts. The Sellers agrees to cooperate
with the conversion of the customer asset and liability accounts in an orderly
and expeditious fashion, and to provide reasonable appropriate support to the
Purchaser for the timely conversion of such accounts, and related data
processing, computer, customer research and information conversions.
10.06 Diligence and Good Faith. The Sellers will diligently and
expeditiously:
(a) proceed in good faith in seeking the satisfaction of all
conditions set forth in Article XII below (except those conditions set forth in
Section 12.05); and
(b) cooperate in good faith with the Purchaser in its seeking the
satisfaction of all conditions set forth in Article XIII below.
10.08 Indemnity. Sellers agree to indemnify and hold harmless Purchaser and
its officers, directors, employees, affiliates, representatives, successors and
assigns (each a "Purchaser Indemnitee") against, from and in respect of:
(i) Any damage, expense (including reasonable attorney fees and
disbursements) or deficiency resulting from any default, misrepresentation,
breach of warranty, or nonfulfillment of any agreement on the part of Sellers
under this Agreement or from any material misrepresentation in or omission from
any certificate or other instrument furnished or to be furnished to Purchaser
pursuant to this Agreement.
(ii) Any liability of Sellers except the Assumed Liabilities.
(iv) Any and all expenses (including reasonable attorney fees),
obligations, assessments, suits, actions, proceedings, claims or demands
resulting from or in connection with any claim, liability, or obligation
asserted against any PURCHASER Indemnitee arising out of Sellers' operations or
the use of the Purchased Assets prior to the Closing. Sellers agrees promptly to
advance to any Purchaser Indemnitee, on demand, any expenses, attorney's fees
and disbursements incurred by any Purchaser Indemnitee, in respect of any
liability, obligation, or claim to which the foregoing indemnity by Sellers
relates.
10.09 Indemnity Claims. If any Purchaser Indemnitee desires to make a claim
under Section 10.08 hereof which does not involve a claim by any person other
than the Purchaser Indemnitee, then such Purchaser Indemnitee shall make such
claim by promptly delivering written notice to the Sellers. If any Purchaser
Indemnitee desires to make a claim against Sellers under Section 10.08 hereof
which involves a claim by a person other than the Purchaser Indemnitee, then the
Purchaser Indemnitee, upon receipt of written notice of any claim or the service
of a summons, or other initial legal process upon it in any action instituted
against it, in respect of which indemnity may be sought on account of any
indemnity agreement contained in Section 10.08 (an "Asserted Liability"), shall
promptly give notice (a "Claims Notice") of such claim or the commencement of
such action, or threat thereof, to the Sellers. If a Claims Notice is not
provided promptly as required by this Section 10.09, the Purchaser Indemnitee
nonetheless shall be entitled to indemnification by the Sellers to the extent
that the Sellers has not established that it has been materially prejudiced by
such late receipt of the Claims Notice. The Sellers shall be entitled at their
own expense to participate in the defense of such claim or action, or, if it
shall so elect, to assume the defense of such claim or action, in which case the
defense shall be conducted by counsel reasonably acceptable to the Purchaser
Indemnitee and such assumption shall constitute an acknowledgement by the
Sellers of their obligations to indemnify the Purchaser Indemnitee with respect
to such Asserted Liability, and such Purchaser Indemnitee shall bear the fees
and expenses of any additional counsel retained by it; provided, however, if the
Sellers shall elect not to assume the defense of such claim or action, the
Sellers shall reimburse the Purchaser Indemnitee for the reasonable fees and
expenses of any counsel retained by it. Notwithstanding the above, should the
Purchaser Indemnitee reasonably conclude that there may be defenses available to
it which are different from or additional to those available to the Sellers, the
Sellers shall not have the right to direct the defense of such action on behalf
of the Purchaser Indemnitee and all such fees and expenses of the Purchaser
Indemnitee shall be borne by the Sellers. The Claims Notice may be amended on
one or more occasions with respect to the amount of the Asserted Liability at
any time prior to final resolution of the obligation to indemnify relating to
the Asserted Liability. The Sellers shall not, without the written consent of
the Purchaser Indemnitee, settle or compromise any such claim or consent to the
entry of any judgment which does not include any unconditional term releasing
the Indemnified Party from all liability in respect of such Asserted Liability.
10.10 Breaches with Third Parties. Nothing in this Agreement shall
constitute an agreement to assign any claim, contract, license, lease,
commitment, sales order or purchase order or any claim or right or any benefit
arising thereunder or resulting therefrom if an attempted assignment thereof,
without the consent of a third party thereto, would constitute a breach thereof
or would in any way affect the rights of the Sellers thereunder so that
Purchaser would not in fact receive all such rights. The Sellers will cooperate
with the Purchaser in any arrangement desired to provide Purchaser with the
benefits under any such claims, contracts, licenses, leases, commitments, sales
or purchase orders. Sellers shall obtain at its sole cost and expense evidence
satisfactory to the Purchaser of transfer or assignment to the Purchaser of any
such property or property rights or any contract or agreement which shall
require the consent or approval of any third party.
10.11 Payments and Information Received After Closing. The Sellers agree to
forward promptly to the Purchaser:
(a) any payments (properly endorsed as necessary) which are received
by the Sellers on or after the Closing Date that relate in any way to the Loans
being purchased by the Purchaser hereunder, together with sufficient information
so that any such payments may be properly applied to the extent such information
is available to the Sellers; and
(b) any notices or other correspondence received on or after the
Closing Date that relate in any way to the Purchased Assets.
ARTICLE XI
ADDITIONAL UNDERTAKINGS OF PURCHASER
11.01 Diligence and Good Faith. The Purchaser will diligently and
expeditiously:
(a) proceed in good faith in seeking the satisfaction of all
conditions set forth in Section 12.05 and in Article XIII below; and
(b) cooperate in good faith with the Sellers in its seeking the
satisfaction of all conditions set forth in Article XII below (except those
conditions set forth in Section 12.05).
11.02 Indemnity. Purchaser agrees to indemnify and hold harmless Sellers
and their officers, members, employees, affiliates, and assigns (each a "Sellers
Indemnitee") against, from and in respect of:
(i) Any damage, expense or deficiency resulting from any default,
misrepresentation, breach of warranty, or nonfulfillment of any agreement on the
part of Purchaser under this Agreement or from any material misrepresentation in
or omission from any certificate or other instrument furnished or to be
furnished to Sellers pursuant to this Agreement.
(ii) Any and all expenses (including reasonable attorney fees),
obligations, assessments, suits, actions, proceedings, claims or demands
resulting from or in connection with any claim, liability, or obligation
asserted against any Sellers Indemnitee arising out of Purchaser's operations or
arising out of Purchaser's ownership of the Purchased Assets after the Closing.
Purchaser agrees promptly to advance to any Sellers Indemnitee, on demand, any
expenses, attorney's fees and disbursements incurred by any Sellers Indemnitee,
in respect of any liability, obligation, or claim to which the foregoing
indemnity by Purchaser relates.
11.03 Indemnity Claims. If any Sellers Indemnitee desires to make a claim
under Section 11.02 hereof which does not involve a claim by any person other
than the Sellers Indemnitee, then such Sellers Indemnitee shall make such claim
by promptly delivering written notice to the Purchaser. If any Sellers
Indemnitee desires to make a claim against Purchaser under Section
11.02 hereof which involves a claim by a person other than the Sellers
Indemnitee, then the Sellers Indemnitee, upon receipt of written notice of any
claim or the service of a summons, or other initial legal process upon it in any
action instituted against it, in respect of which indemnity may be sought on
account of any indemnity agreement contained in Section 11.02 (an "Asserted
Liability"), shall promptly give notice (a "Claims Notice") of such claim or the
commencement of such action, or threat thereof, to the Purchaser. If a Claims
Notice is not provided promptly as required by this Section 11.03, the Sellers
Indemnitee nonetheless shall be entitled to indemnification by the Purchaser to
the extent that the Purchaser has not established that it has been materially
prejudiced by such late receipt of the Claims Notice. The Purchaser shall be
entitled at its own expense to participate in the defense of such claim or
action, or, if it shall so elect, to assume the defense of such claim or action,
in which case the defense shall be conducted by counsel reasonably acceptable to
the Sellers Indemnitee and such assumption shall constitute an acknowledgement
by the Purchaser of its obligations to indemnify the Sellers Indemnitee with
respect to such Asserted Liability, and such Sellers Indemnitee shall bear the
fees and expenses of any additional counsel retained by it; provided, however,
if the Purchaser shall elect not to assume the defense of such claim or action,
the Purchaser shall reimburse the Sellers Indemnitee for the reasonable fees and
expenses of any counsel retained by it. Notwithstanding the above, should the
Sellers Indemnitee reasonably conclude that there may be defenses available to
it which are different from or additional to those available to the Purchaser,
the Purchaser shall not have the right to direct the defense of such action on
behalf of the Sellers Indemnitee and all such fees and expenses of the Sellers
Indemnitee shall be borne by the Purchaser. The Claims Notice may be amended on
one or more occasions with respect to the amount of the Asserted Liability at
any time prior to final resolution of the obligation to indemnify relating to
the Asserted Liability. The Purchaser shall not, without the written consent of
the Sellers Indemnitee, settle or compromise any such claim or consent to the
entry of any judgment which does not include any unconditional term releasing
the Indemnified Party from all liability in respect of such Asserted Liability.
11.04 Documentation of Assumption. At Closing the Purchaser shall deliver
to the Sellers an undertaking, reasonably satisfactory in form and substance to
counsel for the Sellers, under which the Purchaser will assume and agree to
perform, discharge and pay the obligations and liabilities assumed by the
Purchaser pursuant to this Agreement. An acceptable form of such undertaking is
attached as Exhibit 11.04 hereto and made a part hereof.
ARTICLE XII
CONDITIONS PRECEDENT TO THE PURCHASER'S OBLIGATIONS
The obligations of the Purchaser to close under this Agreement shall be subject
to the following conditions (all or any of which, except the conditions of
Section 12.05, may be waived in whole or in part by the Purchaser to the extent
permitted by law):
12.01 Representations and Warranties True. The representations and
warranties made by Sellers in this Agreement shall have been true and correct
when made and shall be true and correct on and as of the Closing Date with the
same force and effect as though such representations and warranties had been
made on and as of such date.
12.02 Obligations Performed. The Sellers shall have performed all covenants
and obligations and complied with all conditions required by this Agreement to
be performed or complied with by it on or before the Closing Date.
12.03 Certificate of Compliance; Secretary's Certificate. The Sellers shall
have executed and delivered to the Purchaser a certificate substantially in the
form and substance as attached hereto as Exhibit 12.03, dated as of the Closing
Date. At the Closing, Sellers shall provide Purchaser with a certificate of the
secretary of the Sellers, dated as of the Closing Date, certifying the
resolutions of the Sellers' members, approving the sale of the assets and the
assumption of the liabilities contemplated by this Agreement, certifying and
attaching the Articles of Organization of the Sellers, and also certifying the
authenticity of the signatures of officers of Sellers.
12.04 No Adverse Litigation. No action, suit, proceeding or Litigation
shall have been instituted or threatened against the Sellers or the Purchaser by
or before any court or governmental agency to restrain or prohibit, or to obtain
damages in respect of this Agreement or the consummation of the transactions
contemplated hereby which in the opinion of the Purchaser makes it inadvisable
to proceed to Closing under this Agreement.
12.05 Regulatory Approvals. The Purchaser shall have obtained, at its
expense, from all necessary governmental and regulatory authorities, all
necessary consents to and authorizations and approvals of this Agreement and the
transactions contemplated by this Agreement and the related transfers of
ownership and control of all licenses, permits or other governmental
authorizations necessary to carry on all aspects of the business of the Sellers
being transferred hereby, and the Sellers shall have obtained any consents and
approvals required hereby.
12.06 Due Diligence Review. Purchaser shall have completed and be satisfied
with the scope and results of a review of the business operations, assets,
properties, liabilities, and other matters regarding Sellers and the Branches,
and shall have reached agreements with Sellers satisfactory to Purchaser in all
respects regarding any matter or matters relating to such investigation.
12.07 Title Insurance. Purchaser shall have obtained at its own cost and
expense such owner's and leasehold policies of title insurance as it shall
desire, free of any exception or other qualification other than standard
exceptions and exclusions.
12.08 Material Adverse Change. From the date of this Agreement until the
Closing Date, no material adverse change shall have occurred or been threatened
with respect to the Purchased Assets or the Assumed Liabilities. A "material
adverse change" shall mean a change of ten percent (10%) or more in the
Purchased Assets or Assumed Liabilities from those existing at December 31,
2004.
12.09 Exhibits and Schedules. Sellers shall deliver to Purchaser prior to
the Closing Date all schedules and exhibits required to be delivered by Sellers
hereunder (including all exhibits required by Article VIII hereof) in form and
substance reasonably acceptable to Purchaser.
12.10 Noncompete Agreement. Xxxxxxxx shall have executed a Noncompete
Agreement in the form set forth in Exhibit 12.10 hereto.
12.11 Consent to Assignment of Contracts. Sellers shall have delivered to
Purchaser written consents executed by each person from whom consent is required
for the assignment to Purchaser of the contracts set forth on Exhibit 2.01(g).
12.12 Key Man Life Insurance. Xxxxxxxx shall have provided written consent
to the Purchaser's purchase of life insurance on him naming Purchaser as the
beneficiary of such insurance, and Xxxxxxxx shall have provided a written
undertaking to take all reasonable steps which may be necessary in order for
such life insurance to become effective.
ARTICLE XIII
CONDITIONS PRECEDENT TO THE SELLERS' OBLIGATIONS
The obligations of the Sellers to close under this Agreement shall be
subject to the following conditions (all or any of which may be waived, in whole
or in part, by the Sellers to the extent permitted by law):
13.01 Representations and Warranties True. The representations and
warranties made by the Purchaser in this Agreement shall have been true and
correct when made and shall be true and correct on and as of the Closing Date
with the same force and effect as though such representations and warranties had
been made on and as of such date.
13.02 Obligations Performed. The Purchaser shall have performed all
covenants and obligations and complied with all conditions required by this
Agreement to be performed or complied with by the Purchaser on or before the
Closing Date.
13.03 Certificate of Compliance. The Purchaser shall have executed and
delivered to the Sellers a certificate in substantially the same form and
substance as the one attached hereto as Exhibit 13.03, dated as of the Closing
Date.
13.04 No Adverse Litigation. No action, suit or proceeding shall have been
instituted or threatened against the Sellers, or the Purchaser by or before any
court or governmental agency to restrain or prohibit, or to obtain damages in
respect of, this Agreement or the consummation of the transactions contemplated
hereby which in the opinion of Sellers makes it inadvisable to proceed to
Closing under this Agreement.
13.05 Approvals. The Purchaser shall have obtained the approvals referenced
in Section 12.05 and the Sellers shall have obtained any consents and approvals
required hereby, including those set forth on Exhibit 8.06.
ARTICLE XIV
CLOSING
14.01 Time and Place. The hour, date and location of Closing under this
Agreement shall be at a location and on a date mutually acceptable to Purchaser
and Sellers as soon as practicable after the receipt of all regulatory and
governmental approvals and other consents and the expiration of any required
waiting period (the "Closing Date").
ARTICLE XV
TERMINATION
15.01 Methods of Termination. This Agreement may be terminated as follows:
(a) at any time by the mutual written consent of the Purchaser and the
Sellers;
(b) by the Purchaser in writing at any time that it determines in good
faith that the conditions set forth in Article XII of this Agreement will not be
met by April 30, 2005;
(c) by the Sellers in writing at any time that it determines in good
faith that the conditions set forth in Article XIII of this Agreement will not
be met by April 30, 2005;
(d) by the Sellers or the Purchaser in writing at any time after any
of the regulatory authorities has denied any application of the other party for
approval of the transactions contemplated herein;
(e) by the Purchaser in writing on or before the Closing Date if as a
result of its due diligence review or its review of the exhibits and schedules
to be provided by Sellers pursuant to this Agreement and attached hereto, it
discovers a fact, circumstance or valuation issue that makes it inadvisable in
Purchaser's sole discretion for Purchaser to proceed with the transaction
contemplated hereby;
(f) by the Purchaser or the Sellers if the Closing shall not have
occurred on or prior to April 30, 2005, unless the failure of such occurrence is
due to the failure of the party seeking termination failing to perform or
observe any of its agreements and conditions set forth herein.
(g) any time on or prior to the Closing Date, by Purchaser or Sellers
in writing if the other shall have been in breach of any representation and
warranty in any material respect (as if such representation and warranty had
been made on and as of the date hereof and on the date of the notice of breach
referred to below), or in breach of any covenant, undertaking or obligation
contained herein, and such breach has not been cured by the earlier of 30 days
after the giving of notice to the breaching party of such breach or the Closing
Date.
15.02 Procedure Upon Termination. In the event of termination pursuant to
Section 15.01 hereof, written notice thereof shall forthwith be given to the
other party in accordance with Section 17.08 of this Agreement, and this
Agreement shall terminate immediately unless an
extension is consented to by the party having the right to terminate. If this
Agreement is terminated as provided herein:
(a) each party will return all documents, work papers and other
materials and information of the other party relating to this transaction,
whether obtained before or after the execution hereof, to the party furnishing
the same; and
(b) all information received by either party hereto with respect to
the business of the other party (other than information which is a matter of
public knowledge or which has heretofore been or hereafter published in any
publication for public distribution or filed as public information with any
governmental authority) shall not at any time be used for any business purpose
by such party or disclosed or delivered by such party to third persons.
ARTICLE XVI
MUTUAL COVENANTS AND AGREEMENTS
16.01 Cooperation. Subject to the terms and conditions hereof, each party
hereto agrees promptly to take, or cause to be taken, all commercially
reasonable actions and to do or cause to be done, all things reasonably
necessary, proper or advisable under applicable laws and regulations, or
otherwise, including, without limitation, attempting to obtain all necessary
consents, waivers and regulatory approvals, to consummate and make effective at
the earliest practicable time, the transactions contemplated by this Agreement.
The officers and employees of each party shall fully cooperate with officers and
employees, accountants, counsel and other representatives of the other in all
matters contemplated by this Agreement.
16.02 Substitution of Legal Entities. Sellers and Purchaser hereby agree
that Purchaser (in its sole discretion) may direct that at Closing Sellers
assign all or part of the Purchased Assets to a subsidiary of Purchaser and may
cause such subsidiary to assume the Liabilities.
ARTICLE XVII
MISCELLANEOUS
17.01 Modifications and Waivers. This Agreement may not be modified except
by an instrument in writing duly executed by the parties. Any waiver of any term
of this Agreement must be in writing.
17.02 No Brokers or Finders. The Purchaser and the Sellers each represent
and warrant to each other that no broker or finder has been employed by or has
acted for it in connection with this Agreement or the transactions contemplated
hereby, and each party agrees to indemnify the other against all losses, costs,
damages or expenses arising out of claims for fees or commissions of brokers or
finders alleged to have been employed or engaged by such party.
17.03 Survival of Representations and Warranties. All representations and
warranties contained herein and in any written agreement or instrument delivered
or executed in connection herewith are true at and as of the times provided
herein, and all of which will survive the execution and delivery of this
Agreement, any examination on behalf of any party hereto, and the consummation
of all transactions contemplated herein.
17.04 Binding Effect. All terms of this Agreement shall be binding upon,
and inure to the benefit of, the parties hereto and their respective successors
and assigns.
17.05 Counterparts. This Agreement is being executed simultaneously in two
or more identical counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same instrument.
17.06 Expenses. Each party shall bear its own expenses incurred in
connection with this Agreement and all transactions contemplated herein.
17.07 Notices and Primary Contact Personnel. All notices, requests, demands
and other communications hereunder shall be in writing and shall be deemed to
have been duly given if delivered by hand, overnight courier or if mailed,
postage prepaid, by United States first class mail, or facsimile transmission to
the other party at its address shown on Exhibit 17.07 hereto. The parties
hereto, as a matter of convenience, are designating primary contact personnel on
Exhibit 17.07, and each party may contact such persons in day-to-day, routine
dealings with the other party leading up to and following the Closing.
17.08 Publicity. The Purchaser and the Sellers shall cooperate with each
other as to the content and timing of public and customer filings, publicity,
press releases and announcements concerning this Agreement, and all transactions
contemplated hereby, and prior to releasing any such information each party will
send such material to the other party for its review and consent, which consent
may not be withheld unreasonably.
17.09 Time of the Essence. The parties hereto acknowledge that time is of
the essence with respect to the performance of this Agreement and the
consummation of the transactions contemplated herein in accordance with the
terms hereof.
17.10 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Alabama applicable to contracts made
and to be performed wholly within such state.
17.11 Cover, Index and Headings, Etc. The cover, index and headings
contained in this Agreement are for convenience of reference only and shall not
affect the meaning or interpretation hereof. The use of the singular in this
Agreement shall be deemed to be or include the plural (and vice versa), whenever
appropriate. The words "include," "including" and similar phrases shall mean
including, without limitation, by enumeration or otherwise.
17.12 Severability. If any provision of this Agreement is determined by a
court of competent jurisdiction to be invalid or unenforceable, the balance of
this Agreement shall remain in full force and effect except to the extent
otherwise agreed by the parties in writing.
17.13 Entire Agreement. This Agreement including any exhibits hereto,
represent the entire agreement of the parties relating to the subject matter
hereof. All prior negotiations and understandings between the parties are merged
into this Agreement and there are no understandings or agreements other than
those incorporated herein.
17.14 Arbitration. All disputes arising or otherwise under this Agreement
shall be resolved first by the senior executive officers of each party, and if
they cannot resolve such disputes within 30 days, then by each party's chief
executive officers and if such chief executive officers cannot resolve such
dispute within 30 days, then by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. Arbitration shall be
by a single arbitrator experienced in the matters at issue and selected by
Sellers and Purchaser in accordance with the Commercial Arbitration Rules of the
American Arbitration Association. The arbitration shall be held in such place in
Birmingham, Alabama as may be specified by the arbitrator (or any place agreed
to by Sellers and Purchaser). The decision of the arbitrator shall be final and
binding as to any matters submitted under this Section 17.14; provided, however,
if necessary, such decision and satisfaction procedure may be enforced by either
Sellers or Purchaser in any court of record having jurisdiction over the subject
matter or over any of the parties to this Agreement. All costs and expenses
incurred in connection with any such arbitration proceeding (including
reasonable attorney's fees) shall be borne by the party against which the
decision is rendered, or, if no decision is rendered, such costs and expenses
shall be borne equally by the Sellers and Purchaser. If the arbitrator's
decision is a compromise, the determination of which party or parties bears the
costs and expenses incurred in connection with any such arbitration proceeding
shall be made by the arbitrator on the basis of the arbitrator's assessment of
the relative merits of the parties' positions.
SIGNATURES ON FOLLOWING PAGE
IN WITNESS WHEREOF, Purchaser and Sellers have caused this Agreement to be
executed by their respective duly authorized officers and their respective
corporate seals to be affixed hereto as of the day and year first above written.
AMERICAN FAMILY MORTGAGE, LLC
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx, its Manager
and Member
AMERIDOCS, LLC
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx its Manager
and Member
COMMUNITY BANK
By: /s/ Xxxxxx Xxxx
------------------------------------
Its: President
ATTEST:
/s/ Xxxxx Xxxxxx
-------------------------------------
Its Secretary
[CORPORATE SEAL]
