EXHIBIT 2.1
OPTION AGREEMENT
THIS OPTION AGREEMENT (this "Agreement") is made as of this 13th day of
February, 2002 (the "Effective Date"), by and between CONSUMERS FINANCIAL
CORPORATION, a Pennsylvania corporation with its principal offices at 0000 Xxxxx
Xxxxx Xxxxx, Xxxx Xxxx, Xxxxxxxxxxxx 17011(the "Company"), and CFC PARTNERS
LTD., a New York corporation with its principal offices at 000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxx Xxxx 00000 (the "Optionee").
RECITALS
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WHEREAS, the Company desires to grant to Optionee the right and option to
purchase shares of the Common Stock of the Company at the Exercise Price (as
hereinafter defined) for such Option (as hereinafter defined); and
WHEREAS, in consideration of the grant of such Option at the Exercise
Price, the Company desires and the Optionee agrees to be bound by certain
confidentiality covenants as more particularly described herein; and
WHEREAS, Optionee desires to accept such grant of the Option and to be
bound by certain confidentiality covenants all as set forth in this Agreement.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
legal sufficiency of which is hereby acknowledged, the parties, intending to be
legally bound, hereby agree as follows:
1. Grant of Option. The Company hereby grants to Optionee the right
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and option to purchase 2,700,000 shares of the Common Stock of the Company,
stated value $.01 (the "Common Stock"), for the Exercise Price as set forth and
defined in Section 4, subject to the terms and conditions as hereinafter
provided (the "Option").
2. Exercise of Option and Provisions for Expiration.
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(a) Exercise Period. Optionee may only exercise this Option
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during the Exercise Period which shall commence on the first business day
following completion of the Company's tender offer (the "Tender Offer") to its
preferred shareholders which will be defined as the close of business on the day
the Company mails the final checks to tendering shareholders (subject to any
minor outstanding matters with respect to payee or address) and shall end on the
fifteenth business day following completion of the Company's Tender Offer.
(b) Expiration Date and Time of Option. This Option shall expire
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at 5:00 p.m., prevailing time, on the fifteenth business day after the
completion of the Tender Offer (the "Expiration Date"), but in no event shall
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the Optionee be entitled to exercise this Option later than 5:00 p.m. on May 31,
2002, unless the Tender Offer has commenced by May 31, 2002, in which case the
Option shall expire on the Expiration Date.
(c) Exercise Procedure. Subject to the conditions set forth in
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this Agreement, this Option shall be exercised by Optionee's delivery to the
treasurer of the Company (the "Treasurer") of (i) a written notice of exercise
(the "Exercise Notice"); and (ii) release of the Purchase Price in full in
accordance with Section 4 hereof. Such exercise shall be effective upon receipt
by the Treasurer of the Exercise Notice and release of the Purchase Price from
the Escrow Account to the Company.
(d) Escrow Account. Optionee shall deposit the full Purchase
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Price into an escrow account at Allfirst Bank, Lemoyne, Pennsylvania upon the
execution of this Agreement and pursuant to the Escrow Agreement attached hereto
as Exhibit A and incorporated by reference herein.
(e) Forfeiture Upon Expiration of Option. (i) If the Optionee
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does not exercise this Option during the Exercise Period, then the Optionee
shall forfeit $25,000 to the Company from the funds held in the Escrow Account
in accordance with Section 2(d) above. The remaining balance of the funds held
in the Escrow Account, including any interest accrued thereon, shall be returned
to the Optionee and this Agreement shall terminate with the exception of
Sections 12(a) and 12(b) which shall survive termination of this Agreement.
(ii) If this Agreement terminates in accordance with Section
2(g) below, and the Company's failure to complete the Tender Offer was the
result of any actions or inactions by the Optionee (including failure to provide
information acceptable to any governmental agency, including the U.S. Securities
and Exchange Commission), then the Optionee shall forfeit $25,000 to the Company
from the funds held in the Escrow Account in accordance with Section 2(d) above.
The remaining balance of the funds held in the Escrow Account, including any
interest accrued thereon, shall be returned to the Optionee and this Agreement
shall terminate with the exception of Sections 12(a) and 12(b) which shall
survive termination of this Agreement.
(iii) If this Agreement terminates in accordance with Section
2(g) and if the Company's failure to complete the Tender Offer is not the result
of any actions or inactions by the Optionee (including failure to provide
information acceptable to any governmental agency, including the U.S. Securities
and Exchange Commission), then the funds held in the Escrow Account, including
any interest accrued thereon, shall be returned to the Optionee, this Agreement
shall terminate, with the exception of Sections 12(a) and 12(b) which shall
survive termination of this Agreement, and the Company shall have no obligation
to pay a termination fee to the Optionee.
(iv) The parties agree that the maximum payment due from
Optionee pursuant to the forfeiture provisions of this Section 2(e) shall not
exceed $25,000.
(f) Termination of the Agreement at Sole Discretion of the
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Company. (i) The Company shall not solicit additional offers to purchase
interests in the Company but may consider and/or respond to a bona fide,
unsolicited inquiry or offer and, if it deems the inquiry or offer to be in the
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best interest of the shareholders, the Company may terminate this Agreement and
the underlying Option at any time before the Optionee exercises the Option. In
the event the Company terminates this Agreement pursuant to this Section
2(f)(i), the Company shall pay a termination fee of $50,000 to the Optionee and
the balance of the Escrow Account, including any interest accrued thereon, shall
be returned to the Optionee and this Agreement shall terminate with the
exception of Sections 12(a) and 12(b) which shall survive termination of this
Agreement.
(ii) The Company may terminate this Agreement and the
underlying Option, if the Board determines, in its sole discretion, that such
termination is in the best interests of the shareholders based on the criminal
background checks of the principals of the Optionee. These background checks
shall be completed on or before February 28, 2002. In the event the Company
terminates this Agreement and the underlying Option pursuant to this Section
2(f)(ii), the Company shall have no obligation to pay a termination fee to the
Optionee. The Escrow Account, including any interest accrued thereon, shall be
returned to the Optionee and this Agreement shall terminate with the exception
of Sections 12(a) and 12(b) which shall survive termination of this Agreement.
(g) Automatic Termination of the Agreement. If for any reason,
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the Optionee has not exercised this Option on or before May 31, 2002, this
Agreement and the underlying Option shall terminate at 5:00 p.m. on that date
unless (i) the Tender Offer has commenced by that date, in which case the Option
shall continue until the Expiration Date or (ii) the parties mutually agree in
writing to extend such termination date.
3. Delivery of Shares.
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(a) General. As promptly as reasonably practicable after receipt
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of the Exercise Notice and release of the full Purchase Price from the Escrow
Account in accordance with Section 2 above and the Escrow Agreement, the Company
shall execute and deliver, or cause to be executed and delivered, to Optionee a
certificate representing 2,700,000 shares of Common Stock (the "Stock
Certificate"). The Stock Certificate shall be issued in the name of Optionee or
Optionee's Permitted Designee. "Permitted Designee" shall mean an affiliate of
Optionee or any other person consented to by the Company. The Stock Certificate
shall be deemed to have been issued, and such Optionee shall be deemed for all
purposes to have become a holder of record of such shares, as of the date the
full Purchase Price is released from the Escrow Account and paid to the Company.
The Company shall pay all expenses, taxes (if any) and any other charges payable
in connection with the preparation, issuance and delivery of the Stock
Certificate, unless any such taxes or charges are imposed by law upon Optionee,
in which case such taxes or charges shall be paid by Optionee.
(b) Shares to be Fully Paid and Nonassessable. All shares of
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Common Stock issued upon the exercise of this Option shall be validly issued,
fully paid and nonassessable and free from all taxes, liens and charges with
respect to the issue thereof (other than transfer taxes).
(c) Share Legend. The Stock Certificate issued upon exercise of
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this Option shall have affixed thereto the following legend, in addition to any
other legends required by applicable law:
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THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), AS AMENDED, AND MAY NOT
BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT COVERING THE
TRANSFER OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT
REGISTRATION UNDER SAID ACT IS NOT REQUIRED.
Any share certificate issued at any time in exchange or substitution for
the Stock Certificate bearing such legend shall also bear such legend unless, in
the Opinion of Counsel, the shares represented thereby are no longer subject to
restrictions on resale under the Act, or any applicable state securities laws,
or under the Option Agreement. As used herein, an "Opinion of Counsel" shall
mean an opinion of counsel selected by Optionee, which opinion is reasonably
satisfactory to counsel for the Company as to the identity of the opining
counsel and the substance of the opinion.
(d) Majority Interest. The Stock Certificate shall, as of the
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date of delivery, represent a majority of the Company's outstanding Common
Stock.
4. Exercise Price. The Company shall sell each share of Common Stock
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upon exercise of the Option at an exercise price of $.04 per share (the
"Exercise Price") or $108,000.00 in the aggregate (the "Purchase Price").
5. Reservation; Authorization and Existing Litigation.
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(a) As of, from and after the date hereof, the Company shall at
all times reserve and keep available for issue upon the exercise of this Option
such number of its authorized but unissued shares of Common Stock as will be
sufficient to permit the exercise in full of this Option. If at any time the
number of authorized but unissued shares of Common Stock shall not be sufficient
to permit the exercise in full of this Option, the Company will take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purpose, including, without limitation, taking
appropriate board action, recommending such an increase to the shareholders of
Common Stock, holding shareholders meetings, soliciting votes and proxies in
favor of such increase to obtain the requisite shareholder approval and upon
such approval, the Company shall reserve and keep available such additional
shares solely for the purpose of permitting the exercise of this Option. All
shares of Common Stock which shall be so issuable, when issued upon exercise of
this Option and payment therefor in accordance with the terms of this Option,
shall be duly and validly issued, fully paid and nonassessable and free and
clear of any liens, claims and restrictions (other than as provided herein). No
shareholder of the Company has or shall have any preemptive rights to subscribe
for such shares of Common Stock. As of, from and after the date hereof, there
shall be no outstanding options or warrants for Common Stock except pursuant to
this Agreement.
(b) Except as set forth on Exhibit B, there is no litigation,
arbitration or mediation pending, or to the Company's knowledge threatened,
before any Court, arbitrator, mediator or administrative body which could
adversely affect the Company or its assets.
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6. Nontransferability of Option. This Option is personal and no rights
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granted hereunder may be transferred, assigned, pledged or hypothecated in any
way (whether by operation of law or otherwise), nor shall any such rights be
subject to execution, attachment or similar process. Upon any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of this Option or of
such rights contrary to the provisions hereof, or upon the levy of any
attachment or similar process upon this Option or such rights, this Option and
such rights shall, at the election of the Company, become null and void.
7. Appointment to the Board of Directors. Upon issuance of the Stock
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Certificate to Optionee, the Company shall identify three people, who are
satisfactory to the Optionee, to recommend to the existing directors to fill
three vacancies on the Board of Directors of the Company. Upon election to the
Company's Board of Directors of persons satisfactory to the Optionee, the two
current directors of the Company's Board of Directors have indicated their
intention to resign immediately.
8. Current Employees of Company. Upon issuance of the Stock
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Certificate to Optionee, the Company's President and Chief Executive Officer,
Xx. Xxxxx X. Xxxxxxxxx, shall resign effective immediately. At this time, the
Optionee shall have the right to request the resignation of the Company's two
remaining employees. If the Optionee does not request the resignation of the
two remaining employees of the Company, such employees may nonetheless elect to
so resign. Any position vacated as a result of a resignation under this Section
8 shall be filled by the Board of Directors. As of the date of the delivery of
the Stock Certificate, the Company shall not be bound by any pension obligation
or labor or employment contracts except for any remaining severance obligation
for which sufficient assets shall have been reserved.
9. No Rights as a Shareholder. The Optionee shall have no rights as a
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shareholder with respect to any shares of Common Stock which may be purchased by
exercise of this Option (including, without limitation, any rights to receive
dividends or non-cash distributions with respect to such shares) unless and
until the Stock Certificate representing such shares is duly issued and
delivered to the Optionee.
10. Investment Representations. The Optionee represents, warrants and
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covenants that:
(a) The shares purchased upon exercise of this Option shall be
acquired for the Optionee's account for investment only and not with a view to,
or for sale in connection with, any distribution of the shares in violation of
the Securities Act of 1933 (the "Act") or any rule or regulation under the Act.
No other person has any right with respect to or interest in the shares of the
Common Stock referenced in this Option nor has Optionee agreed to give any
person any such interest or right in the future.
(b) The Optionee is familiar with the operations of the Company
and has had such an opportunity as it has deemed adequate to obtain from the
Company such information as is necessary to permit Optionee to evaluate the
merits and risks of Optionee's receipt of this Option and has consulted with
Optionee's own advisors with respect to Optionee's receipt of shares of the
Common Stock pursuant to this Agreement.
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(c) The Optionee has sufficient experience in business, financial
and investment matters to be able to evaluate the risks and merits involved in
the receipt of this Option.
(d) The Optionee has had such opportunity as it has deemed
adequate to obtain from representatives of the Company such information as is
necessary to permit the Optionee to evaluate the merits and risks of its
investment in the Company. In making its decision, Optionee has relied on no
oral or written representations with respect to the Common Stock, the Company,
the Company's business or prospects, or other matters. Optionee confirms that
neither the Company, nor any of its affiliates or agents has made any
representations or warranties concerning Optionee's receipt of the rights
granted herein, including, without limitation, any representations or warranties
concerning the return Optionee may receive on its investment in the Company or
tax consequences that may arise in connection with the same. In making its
decision to execute this option, Optionee has relied upon independent
investigations made by it and by its professional advisors, if any. Optionee
and its advisors, if any, have been furnished with any and all nonproprietary
materials available to the Company reasonably requested by Optionee, and have
been afforded the opportunity to ask questions concerning the Company, the
Company's proposed business and any other matters relating to the formation of
the Company, and the grant of this Option. Optionee has also been afforded the
opportunity to obtain any additional nonproprietary information, to the extent
the Company possesses that information or can acquire it without unreasonable
effort or expense, and has the right to furnish it to Optionee, necessary to
verify the accuracy of any representations or information contained in this
Agreement.
(e) The Optionee is able to bear the economic risk of holding shares
acquired pursuant to the exercise of this Option for an indefinite period.
Optionee further understands that its receipt of the shares of the Common Stock
pursuant to this Option involves substantial risks and represents that it
understands these risks.
(f) The Optionee understands that (i) there is and will likely be
no public market for the Common Stock acquired pursuant to exercise of this
Option; (ii) the shares acquired pursuant to the exercise of this Option will
not be registered under the Act or any applicable state securities laws or "blue
sky" laws; (iii) such shares cannot be sold, transferred or otherwise disposed
of unless they are subsequently registered under the Act or an exemption from
registration is then available; and (iv) there is now no registration statement
on file with the Securities and Exchange Commission with respect to the shares
of Common Stock to be purchased by Optionee upon exercise of the Option and the
Company has no obligation or current intention to register any shares acquired
pursuant to the exercise of this Option under the Act. Optionee further
acknowledges that the Stock Certificate representing the shares of the Common
Stock acquired pursuant to this Option will bear restrictive legends reflecting
the foregoing. Optionee understands that it must bear the economic risk of this
Option indefinitely unless the shares of the Common Stock acquired hereunder are
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registered pursuant to the Act or an exemption from registration is available,
and unless the disposition of such shares is qualified under applicable state
securities laws or an exemption from such qualification is available. Optionee
acknowledges that the Company has no obligation or present intention of
registering the shares of Common Stock to be purchased upon exercise of the
Option. Optionee further understands that there is no assurance that any
exemption from the Act will be available, or, if available, that such exemption
will allow the Optionee to transfer any or all of such shares acquired
hereunder, in the amounts or at the times the Optionee may propose. Optionee
understands that an exemption from registration under Rule 144 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise under the
Act may not be available for at least one (1) year and even then will not be
available unless a public market then exists for the Common Stock, adequate
information concerning the Company is then available to the public and other
terms and conditions of Rule 144 are complied with.
(g) Optionee has the full power and legal right to execute and
deliver this Agreement and to perform its obligations hereunder.
11. Additional Representations of the Optionee. The Optionee:
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(a) acknowledges that the Tender Offer may deplete substantially
all of the Company's assets;
(b) acknowledges that the shares of Common Stock it purchases upon
exercise of the Option may be subject to certain antitakeover provisions under
the Pennsylvania Business Corporation Law of 1988, as amended, and the Company's
Articles of Incorporation and Bylaws, including, but not limited to (i)
disgorgement of profits realized from the sale of the shares of Common Stock
within 18 months after the purchase of the Common Stock upon exercise of the
Option; (ii) loss of voting power of the shares of Common Stock purchased upon
exercise of the Option until such time as the disinterested shareholders of the
Company vote to restore such voting rights; (iii) required severance payments to
certain employees whose employment is terminated within 90 days before or 24
months after disinterested shareholders of the Company vote to restore voting
rights on the shares of Common Stock purchased upon exercise of the Option; and
(iv) a prohibition against terminating or impairing a covered labor contract
within five years after disinterested shareholders of the Company vote to
restore voting rights on the shares of Common Stock purchased upon exercise of
the Option, provided, however, that the Company has represented, in Section 8
hereof that, as of the date of the delivery of the Stock Certificate, the
Company will not be bound by any such labor contracts;
(c) acknowledges that the Company's sole obligation with respect
to the antitakeover provisions that may be applicable to the shares of Common
Stock purchased by Optionee upon exercise of the Option is to submit the matter
to its shareholders to obtain the requisite approval for restoring voting rights
to the shares of Common Stock purchased by Optionee upon such exercise of the
Option either: (i) at the Company's own expense at the next annual or special
meeting called for another purpose and for which notice has not yet been sent
pursuant to 15 Pa.C.S.A Sec.2565(b); or (ii) upon the request of and at the
expense of the Optionee pursuant to15 Pa.C.S.A. Sec.2565(a), at a special
meeting called as soon as practical after receipt of such request. In either
event, the matter shall be submitted to shareholders after the new directors are
appointed to the Board of Directors and the current directors of the Company
resign from the Board of Directors in accordance with Section 7 and the current
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President and Chief Executive Officer of the Company resigns in accordance with
Section 8;
(d) represents that neither it nor any of its principals or
affiliates has ever been the subject of a bankruptcy, receivership, insolvency,
reorganization, liquidation, conservatorship or similar proceeding;
(e) represents that it is duly organized, validly existing and in
good standing under the laws of the State of its incorporation or organization
and has the power and authority to own and operate its assets and to conduct
business as now or proposed to be carried on, and is duly qualified, licensed
and in good standing to do business in all jurisdictions where its ownership of
property or the nature of its business requires such qualification or licensing;
it is authorized to execute this Agreement, all necessary action to authorize
the execution and delivery of this Agreement has been properly taken, and the
Optionee is and will continue to be authorized to exercise the Option; the
Optionee has full power and authority to enter into the transactions provided
for in this Agreement and has been duly authorized to do so by appropriate
action of its Board of Directors or otherwise as may be required by law,
charter, other organizational documents or agreements; and this Agreement, when
executed and delivered by the Optionee, will constitute the legal, valid and
binding obligation of Optionee enforceable in accordance with its terms;
(f) covenants that prior to delivery of the Stock Certificate it
shall not make or permit any material change in the nature of its business, in
its equity ownership, on its board of directors or in its management as of the
date hereof; and
(g) acknowledges that the Company intends, prior to delivery of
the Stock Certificate, to place into trust for the benefit of the preferred
shareholders of the Company, an amount equal to the price per share offered in
the Tender Offer multiplied by the number of preferred shares not tendered in
the Tender Offer. This amount may only be released by the trustee for the
purpose of distribution, including dividends, to the preferred shareholders.
12. Confidentiality Covenants.
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(a) Acknowledgments. Optionee acknowledges that:
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(i) as a result of entering into this Agreement and upon the
purchase of the shares acquired pursuant to the exercise of this Option,
Optionee will have access to and knowledge of confidential and proprietary
information of the Company which is of vital importance to the Company
(collectively, "Confidential and/or Proprietary Information");
(ii) the Optionee's compliance with the covenants in this Section
12 is necessary to protect the goodwill and other proprietary interests of
the Company;
(iii) the direct or indirect disclosure of any Confidential
and/or Proprietary Information would place the Company at a serious
competitive disadvantage and would do serious damage, financial and
otherwise, to the Company's business;
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(iv) Optionee's position with the Company as a majority
shareholder and association with the directors to be appointed to the
Company's Board of Directors by Optionee will be special and unique; and
(v) if Optionee becomes engaged, directly or indirectly, for a
competitive business, in any capacity, it would cause the Company
irreparable harm.
(b) Covenant Against Disclosure. Optionee, therefore, covenants
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and agrees that all Confidential and/or Proprietary Information relating to the
business of the Company, any subsidiary, affiliate or customer shall be and
remain the sole property and confidential and/or proprietary business
information of the Company, free of any rights of Optionee. Optionee further
agrees not to make any use of the Confidential and/or Proprietary Information
except in the performance of Optionee's duties hereunder and not to use or
disclose the information to third parties, without the prior written consent of
the Company or as otherwise required by law, whether or not such Confidential
and/or Proprietary Information was discovered or developed by Optionee. The
obligations of Optionee under this section, "Confidentiality Covenants," shall
survive any termination of this Agreement. Optionee agrees that, upon any
termination of Optionee's association with the Company as a majority
shareholder, all Confidential and/or Proprietary Information in Optionee's or
its representatives' possession, directly or indirectly, in any form or format
whatsoever (together with all duplicates thereof), will forthwith be returned to
the Company and will not be retained by Optionee or furnished to any third
party, either by sample, facsimile, film, audio or video cassette, electronic
data, verbal communication or any other means of communication.
(c) Termination. This Section 12 shall terminate upon the
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delivery of the Stock Certificate to Optionee.
13. Fundamental Changes. Prior to Optionee's exercise of the Option,
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the Company shall not: (i) merge or consolidate with or into any person, firm or
corporation; (ii) recapitalize; (iii) incur new indebtedness in excess of the
assets of the Company; (iv) distribute or declare dividends in excess of the
assets in the Company; (v) make material capital expenditures; or (vi) pay or
declare bonuses to employees, officers or directors. Notwithstanding the
foregoing, the Optionee acknowledges that it is the intention of the Company to
engage in a tender offer with preferred shareholders to allow the preferred
shareholders to sell their preferred stock to the Company.
14. Reporting Obligations. The Company has filed all returns and
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reports that are required to be filed by it in connection with any federal,
state or local tax, duty or charge and all of such taxes have either been paid
or adequate reserve or other provision has been made therefor. The Company has
filed all reports that are required to by filed by it with the U.S. Securities
and Exchange Commission.
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15. Miscellaneous.
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(a) No Impairment. Company shall not by any action avoid or seek
--------------
to avoid the observance or performance of any of the terms of this Option, but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such actions as may be necessary or appropriate to protect
the rights of Optionee against impairment. Without limiting the generality of
the foregoing, Company will (i) take all such action as may be necessary or
appropriate in order that Company may validly and legally issue fully paid and
nonassessable shares of the Common Stock upon the exercise of this Option, and
(ii) use its best efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable Company to perform its obligations under this Option.
(b) Amendment and Waiver. Except as otherwise provided herein, no
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modification, amendment or waiver of any provision of this Option shall be
effective against the Company or the Optionee unless such modification,
amendment or waiver is approved in writing by the Company and the Optionee. The
failure of any party to enforce any of the provisions of this Option shall in no
way be construed as a waiver of such provisions and shall not affect the right
of such party thereafter to enforce each and every provision of this Option in
accordance with its terms.
(c) Severability. Whenever possible, each provision of this
------------
Option shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Option is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Option shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(d) Entire Agreement. Except as otherwise expressly set forth
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herein, this document embodies the complete agreement and understanding between
the parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way.
(e) Successors and Assigns. Except as otherwise provided herein,
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this Option shall bind and inure to the benefit of and be enforceable by the
Company and the Optionee and the respective heirs, successors and assigns of
each of them.
(f) Limitation of Liability. No provision hereof, in the absence
------------------------
of affirmative action by the Optionee to purchase shares of the Common Stock,
and no enumeration herein of the rights or privileges of the Optionee hereof,
shall give rise to any liability of the Optionee for the Purchase Price of the
Common Stock or as a shareholder of Company, whether such liability is asserted
by Company or by creditors of Company. Notwithstanding this limitation of
Optionee's liability, Optionee shall be held liable for the $25,000 to be
forfeited to the Company upon failure to exercise the Option in accordance with
Section 2(e)(i) hereof, or for the $25,000 to be forfeited if this Agreement
terminates in accordance with Section 2(e)(ii) hereof, but in any event the
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maximum payment due from Optionee as a result of a forfeiture under Section 2(e)
shall be limited to $25,000.
(g) Notices. All notices, demands or other communications to be
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given or delivered under or by reason of the provisions of this Option shall be
in writing and shall be deemed to have been given when delivered personally to
the recipient, sent to the recipient by facsimile or reputable express courier
service (charges prepaid) or mailed to the recipient by certified or registered
mail, return receipt requested and postage prepaid. Such notices, demands and
other communications shall be sent to the Company and the Optionee at the
address indicated below:
If to the Company:
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Consumers Financial Corporation
0000 Xxxxx Xxxxx Xxxxx
Xxxx Xxxx, Xxxxxxxxxxxx 00000
Attn: R. Xxxxxxx Xxxxxxxxx, Senior Vice President and Treasurer
with a copy to:
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Xxxxx X. Xxxxxxxxxx, Esq.
Duane, Morris LLP
000 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000-0000
If to Optionee:
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CFC Partners Ltd.
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxxx
with a copy to:
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Xxxxxx X. Xxxxxxxxxx, Esq.
Xxxxxxxxx & Maidenbaum
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
(h) Governing Law. This Option is made pursuant to, and shall be
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construed and enforced in accordance with, the internal laws of the Commonwealth
of Pennsylvania, without giving effect to applicable principles of conflicts of
laws.
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(i) Descriptive Headings. The descriptive headings of this Option
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are inserted for convenience only and do not constitute a part of this Option.
IN WITNESS WHEREOF, the parties hereto have executed, or caused to be
executed, this Option Agreement as of the day and year first above written.
CONSUMERS FINANCIAL CORPORATION
By: /s/ R. Xxxxxxx Xxxxxxxxx
------------------------------
Its: Senior VP & CFO
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CFC PARTNERS LTD.
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------------
Its: President
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