STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made and dated as of August
1, 1997, between IMN Financial Corp., a Delaware corporation, whose principal
office is located at 000 Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 ("IMNF"),
Xxxxxx Xxxxx, Inc., D/B/A Island Mortgage Network, a New York Corporation, whose
principal office is located at 000 Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000
("Island"), Green Shield Mortgage Corporation, a New Jersey corporation, whose
principal office is located at 0000 Xxxxxxxx Xxxxxx Xxxx, Xxxxx 00, Xxxxxxxx,
Xxx Xxxxxx 00000 ("GSM") and Xxxxx Xxxxxxx of 0000 Xxxxxxxx Xxxxxx Xxxx, Xxxxx
00, Xxxxxxxx, Xxx Xxxxxx 00000 ("Principal").
W I T N E S S E T H:
WHEREAS, Island is a wholly-owned subsidiary of IMNF and the parties hereto
desire that GSM shall be merged into Island and shall operate as a wholly-owned
subsidiary of Island by this Agreement;
NOW, THEREFORE, in consideration of the premises and the representations,
warranties and covenants herein contained, and other good and valuable
consideration, the receipt of which is hereby acknowledged, IMNF, Island, GSM
and the Principal hereby agree as follows:
1. Purchase and Sale of Stock.
1.1 Purchase and Sale. On the Closing Date, as defined herein, IMNF shall
purchase from GSM and Principal, and they will sell and transfer to IMNF, all
the issued and outstanding shares of stock of GSM of every kind and description
(the "Stock"). IMNF shall also purchase on the Closing Date and GSM and
Principal will assign to IMNF all of their rights to any and all agreements with
Lenders Association, Inc. and Bay City Mortgage Corporation.
1.2 Delivery at Closing. At the Closing, as defined herein, GSM and
Principal will deliver certificate(s) for the Stock duly endorsed so as to make
IMNF the sole owner of the Stock, free and clear of all claims, liens, equities,
encumbrances and restrictions of any kind. GSM and Principal will also deliver
to IMNF at the Closing any and all agreements with Lenders Association, Inc. and
Bay City Mortgage Corporation assigned to IMNF as successor in interest to GSM
and Principal.
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1.3 Purchase Price and Payment Terms. At the Closing, IMNF will deliver to
Principal: (i) One Hundred forty four thousand nine hundred six (144,906) shares
of IMNF common stock, subject to rule 144, in the name of Principal; (ii) the
Belansen note set forth on the 12/31/96 financial statement of GSM valued at
approximately one hundred forty seven thousand dollars ($147,000) on August 1,
1997; and (iii) a check payable to Principal in the amount of three hundred
fifty thousand dollars ($350,000).
2. Closing: Effective Date of Merger.
2.1 Closing. On the closing date, the date upon which all transactions
constituting conditions precedent to the sale shall have been consummated
("Closing Date"), shall be held at the offices of IMNF, 000 Xxxxxxxxxxx Xxxx,
Xxxxxxxx, Xxx Xxxx 00000, on August 1, 1997.
3. Representations and Warranties by GSM and Principals. GSM and Principal
each represent and warrant to IMNF as follows:
3.1 Organization, Powers, Qualification and Authority. GSM is a corporation
duly organized, validly existing and in good standing under the laws of the
State of New Jersey and in all other jurisdictions where the nature of its
business conducted therein requires such qualification; has all requisite
corporate power and authority to own its properties and assets and carry on its
business as now conducted; and has all requisite power and authority to enter
into, perform and carry out this Agreement.
3.2 Capital Stock. GSM authorized capital stock consists of one class of
voting common stock, consisting of twenty five thousand (25,000) shares, each
share having zero par value. Of the authorized capital stock, twenty two
thousand four hundred fifty (22,450) shares are validly issued and outstanding,
fully paid and nonassessable at the date hereof, all of which such shares are
owned by Principal. There are no options, warrants or rights to acquire any
capital stock of GSM or securities convertible into or exchangeable for, or
which otherwise confer on the holder or holders thereof any right (whether or
not upon the happening of any contingency or after any lapse of time, and
whether or not upon the payment or delivery of any consideration) to acquire,
any capital stock of GSM, nor is GSM committed to issue any such option,
warrant, right or security. 3.3 Dissolution; Forfeiture. No action at law or
suit in equity
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and no other investigation or proceeding whatsoever is now pending or
threatened: (i) to liquidate, dissolve or disincorporate GSM, (ii) to declare
any of the corporate rights, powers, franchises or privileges of GSM to be null
and void or otherwise than in full force and effect; (iii) to declare that GSM
or any of its directors, officers, agents or employees have exceeded or violated
any of their corporate rights, powers, franchises or privileges; or (iv) to
obtain any decree, order, judgment or other judicial determination or
administrative or other ruling that will or may impede or detract from any of
the corporate rights, powers, franchises or privileges now vested in or claimed
by GSM. 3.4 Financial Statements.
(a) There have heretofore been furnished to IMNF copies of the unaudited
financial statements of GSM as at December 31, 1997, and the related statements
of income and retained earnings for the fiscal years then ended, all prepared by
Hegar & Xxxxxxxx, Certified Public Accounts for GSM. Such financial statements
are complete and correct and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved and fairly present the financial position of GSM as at the
dates indicated and the results of the operations of GSM for the periods
indicated.
(b) Prior to the Closing Date, GSM will have delivered to IMNF a pro forma
balance sheet of GSM as at July 30, 1997, and a pro forma statement of income
and retained earnings for the period then ended of GSM, signed and certified by
Principal (hereinafter collectively referred to as the "December 1996 Balance
Sheet"). The financial statements referred to above shall be prepared in
conformity with generally accepted accounting principles applied on a basis
consistent with the financial statements referred to in Subsection (a) above and
will fairly present the financial position of GSM as at July 30, 1997, and the
results of operations of GSM for the period then ended.
3.5 Dividends; Stock Acquisitions; Stock Issues. Since the July 30, 1997
GSM unaudited financial statement, GSM has not: (i) declared or paid any
dividends (either in cash, property or its stock of any class) upon, nor made or
become committed to make any distribution with respect to, nor purchased,
redeemed or otherwise beneficially acquired, any of its outstanding capital
stock of any
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class, nor become committed so to do; nor (ii) split up, combined or
reclassified any of its outstanding stock of any class, nor become committed to
issue any additional capital stock of any class (whether or not from treasury
stock, heretofore authorized but unissued stock or newly acquired stock) or any
options, rights or warrants to acquire, or securities convertible into or
exchangeable for or which otherwise confer upon the holder or holders thereof
any right to acquire, any shares of capital stock of any class of GSM; and GSM
will not take any such actions from the date hereof to the Closing Date.
3.6 Properties. GSM has and will have on the Closing Date all requisite
corporate power and authority to own and hold, and (except for assets disposed
of in the ordinary course of business) will have on the Closing Date good and
marketable indefeasible title to, all of the properties and assets reflected in
the most recent of the balance sheets referred to in Paragraph 3.4 above,
subject to no mortgage, pledge, lien, encumbrance, charge or security interest,
except only: (i) liens in respect of pledges or deposits under workers'
compensation laws or similar legislation; (ii) liens for property taxes,
assessments or like governmental charges not yet delinquent and payable without
penalty; (iii) defects and exceptions, none of which (individually or in the
aggregate) materially interfere with the use by GSM of such properties for the
purposes for which they are held; and (iv) the liens described in Schedule 3.6A,
attached hereto, which schedule describes each such lien, describes the
transaction or other circumstances out of which it arises, describes the amount
of the obligation it secures, identifies the property affected thereby,
identifies the owner of such property, and is complete and correct. Said
Schedule 3.6A will also describe all notes payable of GSM as of December 31,
1996. Attached hereto is Schedule 3.6B, which is complete and correct, listing
all real property owned by GSM. All of the properties and assets of GSM are in
existence, in the possession of GSM and in good working order and repair, except
for minor defects which do not materially interfere with their use, or except as
described in Schedule 3.6C, attached hereto.
3.7 Changes in Condition. Since July 30, 1997, there has been no change in
the assets, liabilities, condition (financial or otherwise) or business of GSM
from that set forth in or reflected in its financial statements as at said
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date, except changes in the ordinary course of business, none of which
(individually or in aggregate) have been materially adverse. Since July 30,
1997, GSM has not been adversely affected in any material manner as a result of
any fire, explosion, accident, flood, earthquake, seismic or tidal wave,
windstorm, strike, lockout, labor dispute, riot, civil commotion or disturbance,
sabotage, confiscation, condemnation or purchase of any property by governmental
authority, activities of armed forces, or acts of God or the public enemy,
except as shown on Schedule 3.7, attached hereto.
3.8 Tax Returns and Payments. The balance sheets of GSM referred to in
Paragraph 3.4 hereof adequately provide in the accruals for taxes set forth
therein (on the basis of the rates applicable for the years in question) for the
payment of all federal, state, local and foreign income, profits, franchise,
sales, use, occupation, property, excise or other taxes, if any, for the periods
ended on the dates thereof and for the years prior thereto. All tax returns and
reports of GSM required by law (including, without limiting the generality of
the foregoing, all income, unemployment compensation, social security, sales,
compensating use, excise, privilege and franchise tax laws of the United States
or any state, territory or municipal or political subdivision thereof) to be
filed on or before the Closing Date have been, or will be, duly and timely
filed, other than those tax returns and reports subject to a valid extension of
time as of such date. All taxes, assessments, fees, interest, penalties and
other governmental charges or impositions which are, or should be, shown on said
returns and reports, reflected on xxxxxxxx by governmental agencies, or required
to be deposited on or before the Closing Date, have been, or will be, duly and
timely paid (other than those not yet due and payable, those presently payable
without penalty, and those currently being contested in good faith). GSM has not
received any notice of deficiency assessment or proposed deficiency assessment
of any United States, state, municipal or other tax or penalty and has no
knowledge of any basis for any additional deficiency assessment of any such tax
or penalty, nor has it knowingly waived any law or regulation fixing, or
consented to the extension of, any period of time for the assessment of any tax
or other governmental imposition, or become committed so to do, except as shown
on Schedule 3.8, attached hereto.
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3.9 Compliance with Other Instruments. GSM is not in violation of or in
default with respect to any term or provision of its: (i) Articles of
Incorporation or Bylaws; (ii) material indentures, contracts, agreements or
instruments to which it may by bound; or (iii) any judgment, order, writ,
injunction or decree of any court or of any federal, state, territorial,
municipal or other commission, board or other administrative or governmental
agency or authority; and it is not in violation of any federal, state,
territorial, municipal or other statute, rule or regulation applicable to it or
by which it may be bound in any case in any manner so as presently or at any
future time to affect it adversely in any material respect.
3.10 Undisclosed Liabilities. At the date of the most recent balance sheet
referred to in Paragraph 3.4 herein, there were no material liabilities of GSM
(actual, contingent or accrued) which are not shown or reflected in such balance
sheet or the notes thereto.
3.11 Books of Account. The books of account of GSM are complete and correct
in all material respects, and all moneys due or to become due from or to or
owing by, and all liabilities (actual, contingent or accrued) of, GSM by reason
of any transaction, matter, cause or thing whatsoever which, in accordance with
generally accepted accounting practices or principles, should be entered therein
have been duly, correctly and completely entered therein.
3.12 Litigation, etc. GSM is not a party to or affected by any pending, and
has no notice or knowledge of any threatened action, suit, proceeding or
investigation (at law or in equity or otherwise) in, before or by any court or
any governmental board, commission, agency, department or office in which an
adverse determination would have any material adverse effect on the business,
assets or financial condition of GSM, except as shown on Schedule 3.12, attached
hereto.
3.13 Accounts and Notes Receivable. Except as specified in Schedule 3.13,
attached hereto, all accounts and notes receivable of GSM are and on the Closing
Date will be valid, genuine and subsisting; arise and/or will arise out of bona
fide sales and/ or performances of services; and are subject and will be subject
to no known defenses, set-offs or counterclaims.
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3.14 Others Defaults. No other party with whom GSM has any material
contractual arrangement is not in compliance with, or is in default (without
regard to any requirement of notice or grade period or both) in the observance
or performance of, any term, condition or provision of any such contractual
arrangement.
3.15 Overtime, Back-Wage, Vacation and Discrimination Claims. Except as
described in Schedule 3.15, which will be delivered by GSM to IMNF on the
Closing Date, no present or former employee of GSM has any claim against GSM
(whether under federal or state law, under any employment agreement or
otherwise) on account of or for: (i) overtime pay, other than overtime pay for
work done in the current payroll period; (ii) wages or salary for any period
other than the current payroll period; (iii) vacation time off or pay in lieu of
vacation time off, other than (a) accumulated vacation pay as at the Closing
Date as shown in the schedule referred to above, and (b) vacation time (or pay
in lieu thereof) earned in or in respect of the current fiscal year; or (iv) any
violation of any statute, ordinance or regulation relating to minimum wages or
maximum hours of work. No person or party (including, but not limited to,
governmental agencies of any kind) has made any claim against, or asserted any
basis for any action or proceeding against, GSM under or arising out of any
statute, ordinance or regulation relating to discrimination in employment or
employment practices and which would, if upheld, result in any material monetary
loss to GSM.
3.16 Contracts for Personal Services. GSM is not a party to or bound by any
contract, agreement or undertaking with any person whatsoever for personal
services to be rendered by any person for GSM, except as set forth in Schedule
3.16A, attached hereto. Attached hereto is Schedule 3.16B, showing the names,
positions and annual rates of compensation of all employees of GSM.
3.17 Benefit Claims. No person or party whatsoever now has or will have on
the Closing Date any claim known to GSM under which GSM has any liability under
any health, sickness, disability, medical, surgical, hospital or similar benefit
plan or arrangement (whether or not legally binding) maintained by GSM, or to or
by which GSM is a party or is bound, or under any workers' compensation or
similar law, which is not fully covered by insurance maintained with reputable,
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financially responsible insurers. GSM herewith delivers to IMNF Schedule 3.17,
listing all insurance contracts relating to all such benefit plans, arrangements
and copies of such benefit plans themselves.
3.18 Leases. GSM is not, either as lessee or lessor, a party to or bound by
any lease or any property or assets having a term of (or subject to renewal or
extension by any party other than GSM for a total term, including the initial
term and any such renewal or extended term, aggregating) more than one year,
except only for the leases described on Schedule 3.18, attached hereto, true
copies of which have been heretofore delivered to IMNF.
3.19 Contracts for Purchase or Sale. GSM is not a party to or bound by any
contract, agreement or undertaking with any person or party whatsoever (other
than cost and insurance contracts entered into in the ordinary course of
business) for the purchase of any property or assets of any nature whatsoever
which requires that payment for such property or assets shall be made regardless
of the Closing Date of this Agreement. GSM is not a party to, or bound by any
other contract, agreement or undertaking for, the sale of any property or assets
of any nature whatsoever, except only such as have been made in the ordinary
course of business and that expire by their terms or are otherwise cancelable by
GSM (without any right of renewal or extension in any party other than GSM) no
later than 30 days after the Closing Date.
3.20 Insurance Contracts; Banking Relationships. GSM hereby delivers to
IMNF Schedule 3.20A, showing all contracts of insurance and indemnity (not shown
in any other schedule referred to in this Agreement) in force at the date
hereof. GSM also hereby delivers to IMNF Schedule 3.20B, showing the names and
locations of all banks in which GSM has accounts and the names of all persons
authorized to draw on such accounts.
3.21 Brokerage; Indemnity. Neither GSM or Principal have retained any
broker or finder in connection with the transactions contemplated by this
Agreement, and GSM and Principal, jointly and severally, will indemnify, defend
and hold harmless IMNF against all the claims for brokers' or finders' fees made
or asserted by any party claiming to have been employed by either of them, and
all costs and expenses (including the reasonable fees of counsel) of
investigating and
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defending such claims.
3.22 Contracts, Leases, etc. As of the date hereof, GSM is not a party to
any lease, contract, undertaking or other commitment, written or oral, except:
(a) Those leases, contracts, undertakings or other commitments listed in
Schedules attached hereto; and
(b) Those leases, contracts, undertakings and commitments not materially
affecting the business of GSM. The original or a full, true and correct copy of
each item listed in the aforementioned schedules (together with supplements and
amendments thereto) or a summary of the material provisions, in the event a
formal document is not in existence, has been delivered to or examined by IMNF.
GSM is not in default under any lease, contract, undertaking or other commitment
materially affecting its business. To the extent that any lease, contract,
undertaking or other commitment set forth in the aforementioned schedules
requires the consent of any other person or party to its assignment, GSM agrees
to use its best efforts to procure such consent and to deliver the same to IMNF
on or before the Closing Date.
3.23 No Conflict with Other Agreements. Neither the execution and delivery
of this Agreement nor compliance with its terms and provisions will conflict
with or result in a breach of any agreement or instrument to which GSM is a
party or by which it may be bound or constitute a default thereunder or result
in the creation or imposition of any lien, charge, encumbrance or restriction of
any nature whatsoever upon, or give to anyone any interest or rights, including
rights of termination or cancellation, in or with respect to, any of the
properties, assets, contracts, or business of GSM.
3.24 No Restrictions. GSM is not subject to any charter, bylaw, judgment or
other restriction which would prevent the consummation of the transactions
contemplated by this Agreement. The board of directors of GSM and the
Stockholders have duly approved this agreement and the transactions contemplated
herein as required under the laws of the State of New Jersey and have authorized
the execution and delivery of this Agreement by GSM.
3.25 Disclosure. Neither the financial statements, any schedule referred to
herein nor this Agreement contains any untrue statements of a material
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fact or knowingly omits to state a material fact (other than facts generally
known to the business community) necessary in order to make the statements
contained therein or herein not misleading. To the best knowledge of GSM, there
is no such fact which materially adversely affects or in the future may (so far
as GSM can now reasonably foresee) materially adversely affect the business or
prospects or condition (financial or otherwise) of GSM or any of its properties
or assets which has not been set forth herein in Schedule 3.25, delivered by GSM
to IMNF.
3.26 Licenses, etc. GSM owns or holds valid, subsisting licenses necessary
for the conduct of its business as now conducted, including valid Mortgage
Banking licenses. Attached hereto as Schedule 3.26 is a complete and correct
listing of all such licences, governmental permits, consents and approvals. GSM
holds or has obtained all governmental permits, licenses, consents and approvals
necessary for the lawful conduct of its business.
3.27 Warehouse Lines. GSM has in place warehouse lines of credit in the
total amount of approximately $________________ which warehouse lines are in
force at the date hereof. GSM hereby delivers to IMNF Schedule 3.27 showing the
names, locations and amounts of all such warehouse lines of credit.
3.28 Mortgage Originations in Process. GSM has in place existing mortgage
originations in process in the total amount of approximately forty three million
dollars ($43,000,000) at the date hereof. GSM hereby delivers to IMNF Schedule
3.28 setting forth the names, locations and amounts of all such mortgage
originations in process.
4. Representations and warranties by IMNF. IMNF represents and warrants to
Principal as follows:
4.1 Organization and Standing. IMNF is a corporation duly organized and
existing and in good standing under the laws of the State of Delaware and has
full corporate power to carry out this Agreement.
4.2 Authority of IMNF. The execution and performance of this Agreement by
IMNF has been duly authorized and approved by its board of directors. Neither
the execution nor the performance by IMNF of this Agreement will result in the
breach of any term or provision of any other agreement to which IMNF is a party.
4.3 Brokerage; Indemnity. IMNF has not retained any broker or
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finder in connection with the transactions contemplated by this Agreement, and
IMNF will indemnify, defend and hold harmless GSM and Principal against all
claims for brokers' or finders' fees made or asserted by any party claiming to
have been employed by IMNF, and all costs and expenses (including the reasonable
fees of counsel) of investigating and defending such claims.
4.4 Principal's Personal Guarantees/Notes. IMNF shall have Principal
released from all personal guarantees directly related to the business
operations of GSM and IMNF shall have Principal's personal residence released as
collateral for the note payable to Community National Bank of Westmont, New
Jersey in the sum of two hundred thousand dollars ($200,000) stated on the
December 31, 1996 financial statement of GSM, within six (6) months from August
1, 1997.
4.5 Island subsidiary of IMNF. Island is a New York corporation licensed as
a Mortgage lender in New York, New Jersey and other states and is a wholly owned
subsidiary of IMNF.
5. Certain covenants by GSM. GSM covenants and agrees with IMNF that:
5.1 Investments, Loans and Advances. From and after the date of this
Agreement, to and including the Closing Date, GSM will not make any investment
(whether by acquisition of stock, capital contribution or otherwise) in, or loan
or advance to, any person, firm, corporation, business trust or other party or
entity whatsoever, except GSM may invest temporarily surplus funds in readily
marketable obligations of, or fully guaranteed as to principal and interest by,
the United States of America, and prime commercial paper or certificates of
deposit having a maturity of less than one year form the date of such
investment.
5.2 Wage, Salary or Benefit Changes. From and after the date of this
Agreement, to and including the Closing Date, GSM will not: (i) grant any
general increase in the rates of pay of any of its hourly paid employees, except
only general increases consistent with past practice; (ii) grant any increase in
the salaries or other compensation of any of its officers or other salaried
employees; (iii) enter into any employment agreement with any person whatsoever,
other than employment agreements (on terms and conditions and for compensation
consistent with past practice) terminable by the employer without further
liability (except for accrued vacation and severance pay consistent with past
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practice) on not more than one month's notice; or (iv) grant any increase in
employee benefits of any character or grant any new benefits to any of its
officers or employees.
5.3 Advice of Claims and Changes. GSM will promptly advise IMNF in writing
of the commencement or threat of any claim, litigation or proceeding against or
affecting GSM of which it has knowledge, not covered by insurance, when the
amount claimed (taken alone or when added to other claims of which such advice
has not theretofore been given) exceeds $2,000. GSM shall also give IMNF prompt
written notice of any change in any of the information contained in the
representation and warranties made in Article 3 hereof or in the schedules
hereto and the financial statements described herein which occurs prior to the
Closing, and of any fact, occurrence, information, action, failure to act or
other event which, had it existed on the date of the schedules, would have been
required to be disclosed in one of the schedules.
5.8 Consents. GSM shall promptly apply for or otherwise seek, and use its
best efforts to obtain, all consents and approvals of all parties whose consent
or approval is necessary for the valid effective consummation and completion of
the transactions contemplated hereby or is otherwise necessary in order that GSM
may validly, lawfully and effectively perform and carry out its obligations
hereunder.
5.9 Resignations of all Directors and Officers. GSM shall deliver to IMNF
at the Closing written resignations signed by all Directors and Officers of GSM
dated as of August 1, 1997.
5.10 Transfer of Authority to Access and Draw upon Bank Accounts. GSM shall
deliver to IMNF at the Closing written transfer of authority to access and draw
upon each and every bank account of every nature and kind, as set forth in
Schedule 3.20B, maintained by GSM into the name of IMNF dated as of August 1,
1997.
6. Conditions to IMNF's Obligations. The obligations of IMNF to complete
and consummate this Agreement shall be subject to compliance by GSM and, if
applicable, Principal with all of the agreements herein contained and to the
satisfaction of the following conditions precedent:
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6.1 Representations and Warranties True. The representations and warranties
contained in Paragraph 3 hereof shall be true and correct in all material
respects as of the Closing Date with the same force and effect as though made on
and as of the Closing Date, and IMNF shall have received on the Closing Date a
certificate from GSM dated the Closing Date signed by the president and
secretary of GSM to those effects.
6.2 Opinion of Counsel. At the Closing Date, GSM shall deliver or cause to
be delivered to IMNF an opinion (in form and content satisfactory to IMNF),
dated the Closing Date, of August 1,1997, counsel for GSM, to the following
effects:
(a) That GSM is a corporation duly organized and validly existing and in
good standing under the laws of the State of New Jersey, entitled to own or
lease its properties and to carry on its business as and in the places where
such properties are now owned, or leased, or such businesses are now conducted,
and, insofar as is known to such counsel, has fully complied with all federal,
state and local laws with respect to its operation and the conduct of its
business.
(b) That GSM has full power and authority to make, execute, deliver and
perform this Agreement in accordance with its terms; this Agreement has been
duly authorized and approved by proper corporate action of GSM and constitutes
the valid and legally binding obligation of GSM in accordance with its terms.
All of the shares of stock currently outstanding as reflected in paragraph 3.2
of this Agreement are validly issued and outstanding and are currently not
subject to any lien, pledge, encumbrance, restriction or claim, and the
shareholders, and Principal have full right and authority to transfer the same
pursuant to this transaction. Upon assignment and delivery of the share
certificate(s) to IMNF, it will take title thereto free and clear of any lien,
pledge, encumbrance, charge, agreement or claim.
(c) That all acts required by law or by the provisions of this Agreement to
be taken by GSM and Principal in connection with the transactions provided for
in this Agreement have been duly and validly taken, and, insofar as is known to
such counsel, all conditions to the obligation of IMNF to consummate the
Agreement have been fulfilled.
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(d) That such counsel has examined the leases described in attached
schedules hereto and has concluded that such leases are valid, binding and
enforceable.
(e) That such counsel does not know, and has no reason to believe, that any
action, suit, proceeding or investigation is pending or threatened against GSM
which might result in any material adverse change in the condition (financial or
otherwise) or business of GSM (other than those referred to in Paragraph 3.12
hereof), or which questions the legality, validity or propriety of this
Agreement or of any actions taken or to be taken pursuant to or in connection
with this Agreement.
6.3 No Action to Prevent Completion. No action or proceeding shall have
been instituted or threatened on or prior to the Closing Date to set aside,
restrain or prohibit, or to obtain damages in respect of, this Agreement or the
consummation of the transactions contemplated herein which in the opinion of
IMNF makes it inadvisable to consummate such transactions.
6.4 December 31, 1996 Balance Sheet. IMNF shall have received prior to the
Closing Date the December 1996 Balance Sheet of GSM and related financial
statements, which balance sheet will show no material adverse change in the
financial position of GSM from the date of the March 31, 1997 financial
statement described in Paragraph 3.4 hereof. In addition, there shall have been
no material adverse change in the financial position of GSM from December 31,
1996, up to and including the Closing Date.
6.5 Consent. To the extent specified in any paragraph or schedule with
respect to obtaining the consent of any other person or party to the assignment
of specified contracts, licenses, leases, agreements or commitments, GSM shall
have obtained by the Closing Date such consents in form and substance
satisfactory to IMNF.
6.6 Full Compliance. IMNF's obligations to complete and consummate this
Agreement shall be subject to material compliance by GSM and Stockholders with
all of their agreements herein contained, and to the reasonable satisfaction of
all of the conditions of this Agreement.
7. Conditions to GSM and Principal's Obligations. GSM and Principal's
obligations to complete and consummate this Agreement shall be subject to
material
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compliance by IMNF with all of their agreements herein contained and to the
reasonable satisfaction of the following conditions precedent:
7.1 Representations and Warranties True. The representations and warranties
contained in Paragraph 4 hereof shall be true and correct in all material
respects as of the Closing Date, and GSM shall have received at the Closing a
certificate dated the Closing Date signed by the president or vice president and
the secretary or assistant secretary of IMNF to those effects.
7.2 Opinion of Counsel. At the Closing Date, IMNF shall deliver or cause to
be delivered to GSM an opinion dated the Closing Date, of the General Counsel
for IMNF to the following effects:
(a) That IMNF is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
(b) That IMNF has full power and authority to make, execute, deliver and
perform this Agreement in accordance with its terms; this Agreement has been
duly authorized and approved by proper corporate action of IMNF and constitutes
the valid and legally binding obligation of IMNF in accordance with its terms.
(c) Except for those items of litigation disclosed to GSM that such General
Counsel does not know, and has no reason to believe, that any action, suit,
proceeding or investigation is pending or threatened against IMNF which
questions the legality, validity or propriety of this Agreement or of any
actions taken or to be taken pursuant to or in connection with this Agreement.
In rendering such opinion, General Counsel for IMNF may rely (and will
state in such opinion the belief that GSM is justified in relying) upon opinions
of other counsels and upon the certificates of a principal officer of IMNF as to
matters of fact.
7.3 No Action to Prevent Completion. No action or proceeding shall have
been instituted or threatened on or prior to the Closing Date to set aside the
authorizations of the transfers hereunder or any of them, and no action or
proceeding shall have been instituted or threatened before any court or
governmental agency to restrain or prohibit, or to obtain substantial damages in
respect of, this Agreement or the consummation of the transactions contemplated
herein which in the opinion of GSM makes it inadvisable to consummate such
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actions.
8. Closing. This Agreement shall close when all of the deliveries referred
to heretofore in this Agreement, and all of the deliveries referred to in this
Paragraph 8, are made on or prior to the Closing Date.
8.1 IMNF and GSM shall deliver to each other copies of the resolutions of
their boards of directors authorizing the execution and performance of this
Agreement and the acts of the officers of each in carrying out the terms and
provisions thereof.
8.2 IMNF, GSM and Principal agree to execute and deliver such instruments
and take such other action as any of them may reasonably require in order to
carry out the intent of this Agreement.
8.3 GSM shall deliver to IMNF a certificate of the Secretary of State of
New Jersey evidencing the good standing of GSM as of a date or dates not more
than ten (10) days after the Closing Date.
8.4 GSM shall deliver to IMNF a tax clearance certificate issued by the
appropriate New Jersey authority as of the Closing Date.
8.5 Principal will issue and deliver to IMNF certificate(s) for the Stock
sold to IMNF by this Agreement.
8.6 GSM shall deliver to IMNF all formal corporate records and devices,
including the corporate minute book, corporate stock transfer records and
corporate seal.
8.7 GSM shall deliver to IMNF written resignations signed by all Directors
and Officers of GSM dated as of August 1, 1997.
8.8 GSM shall deliver to IMNF written transfer of authority to access and
draw upon each and every bank account of every nature and kind, as set forth in
Schedule 3.20B, maintained by GSM into the name of IMNF dated as of August 1,
1997.
9. Indemnification of IMNF.
9.1 Principal shall indemnify and hold IMNF harmless after the Closing Date
from and against any and all of the following:
(a) The breach by GSM or Principal of any warranty or representation made
by GSM or Principal pursuant to this Agreement;
(b) The nonperformance of any covenant of GSM or Principal;
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(c) Any claim, action, suit or proceeding brought against IMNF based on a
cause or causes of action arising before the Closing Date and relating to GSM or
Principal's operation of GSM;
(d) Any claims for unpaid taxes of any kind which are asserted or levied
against IMNF or the properties of GSM after the Closing Date and which relate to
any period before the Closing Date; and
(e) All costs, assessments, judgments, demands (including costs of defense
and reasonable attorneys' fees) arising out of any claim, or the defense
thereof, made with respect to Paragraphs 9.1 (a) through 9.1 (d). IMNF will seek
in good faith by all reasonable means to defeat or reduce any damages as to
which indemnification may be sought so as to minimize such indemnification and
will give Principal timely notice of, and the opportunity to participate in at
Principals' expense, the defense or compromise of any claim which may give rise
to such indemnification.
9.2 Except as provided in Subparagraph 9.1(d), no liability of GSM or
Principal under this Agreement shall exist with respect to the representations,
warranties and covenants made in this Agreement or any schedule or certificate
furnished by them with respect thereto, except as to claims which are made
within three years of the Closing Date.
9A. Indemnification of Principal.
9A.1 IMNF shall indemnify and hold Principal harmless after the Closing
Date from and against any and all of the following:
(a) The breach by IMNF of any warranty or representation made by IMNF
pursuant to this Agreement;
(b) The nonperformance of any covenant of IMNF. 9A.2 No liability of IMNF
under this Agreement shall exist with respect to the representations, warranties
and covenants made in this Agreement or any schedule or certificate furnished by
IMNF with respect thereto, except as to claims which are made within three years
of the Closing Date. 10. Miscellaneous. 10.1 Expenses. Whether or not the
transactions herein set forth shall be consummated, IMNF will pay all expenses
of the preparation and performance of this Agreement incurred by IMNF, and GSM
will pay all expenses
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incurred by it in connection with the preparation and performance of this
agreement, except that counsel fees of GSM incurred in the preparation and
performance of this Agreement shall be borne personally by Principal.
10.2 Confidentiality. Except as contemplated by this Agreement or necessary
to carry out the transactions herein set forth, all information or documents
furnished hereunder by IMNF or GSM to the other shall be kept confidential by
the party to whom furnished at all times to the Closing Date, and in the event
such transactions are not consummated, each shall return to the other all
documents furnished hereunder and copies thereof and shall continue to keep
confidential all information furnished hereunder and not thereafter use the same
for its advantage.
10.3 Notices. Any notice required or permitted hereunder shall be in
writing and shall be given by overnight mail addressed, if to IMNF to: IMN
Financial Corp., 000 Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000, Attention:
General Counsel. If to GSM and Principal to: Green Shield Mortgage Corporation,
0000 Xxxxxxxx Xxxxxx Xxxx, Xxxxx 00, Xxxxxxxx, Xxx Xxxxxx 00000, Attention:
Xxxxx Xxxxxxx, Chairman.
10.4 Best Efforts, Cooperation. IMNF, GSM and Principal shall exert their
best efforts to obtain all consents and approvals necessary for the due and
punctual performance of this Agreement and the satisfaction of the conditions
hereof on their part to be satisfied, and all shall cooperate with the other
with respect thereto.
10.5 Entire Agreement. This Agreement constitutes and contains the entire
agreement of the parties and supersedes any and all prior negotiations,
correspondence, understandings and agreements between the parties respecting the
subject matter hereof.
10.6 Parties in Interest. All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
successors and permitted assigns of the parties hereto, whether herein so
expressed or not, but neither this Agreement nor any of the rights, interests or
obligations hereunder of any party hereunder shall be assigned without the prior
written consent of the other parties, except that IMNF may, without such
consent, assign to another of its wholly-owned corporate subsidiaries all of its
duties,
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rights and privileges hereunder.
10.7 Controlling Law. This Agreement shall be governed by and construed in
accordance with the law of the state of New York.
10.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and in making proof
hereof it shall not be necessary to produce or account for more than one such
counterpart
10.9 Schedules. The following schedules are attached hereto and by this
reference herein. All schedules shall be delivered to IMNF at the Closing unless
otherwise indicated herein.
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Schedule Subject Matter
3.6A Liens and Encumbrances
3.6B Real Property Owned
3.6C Defects in Properties or Assets
3.7 Changes in Condition
3.8 Taxes and Deficiency Assessments
3.12 Litigation
3.13 Accounts and Notes Receivable
3.15 Overtime, Back-Wage, Vacation, Discrimination Claims
3.16A Personal Service Contracts
3.16B GSM Employees
3.17 Insurance Contracts; Benefit Plans
3.18 Leases
3.20A All other Insurance and Indemnity Contracts
3.20B All Bank Accounts and names of Persons Authorized to Draw
3.25 Disclosure
3.26 Licenses, etc.
3.27 Warehouse Lines
3.28 Mortgage originations in Process
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
GREENSHIELD MORTGAGE CORPORATION
By:______________________________
Xxxxx Xxxxxxx,
President
By:______________________________
Secretary
PRINCIPAL
By: _____________________________
Xxxxx Xxxxxxx
IMN FINANCIAL CORP.
By:_______________________________
Xxxxxx X. Xxxxxxx,
President
XXXXXX XXXXX, INC..
By:_______________________________
Xxxxxx X. Xxxxxxx,
President
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