Exhibit 10.2
Contingent Payment Agreement
THIS AGREEMENT (the "Agreement") is made by and among Availent Financial,
Inc., a Delaware corporation (the "Buyer"), and Broyd, Inc., a Texas corporation
d/b/a First Texas Residential (the "Seller").
WHEREAS, Seller has sold to Buyer and the Buyer has purchased from Seller
substantially all of the assets of Seller (the "Purchase Transaction") pursuant
to that certain Agreement for Sale and Purchase of Assets (the "Purchase
Agreement") dated as of the date hereof, by and among the parties hereto, and
also Xxxxxx X. Xxxx and Xxxxxxxx X. Xxxxx, and
WHEREAS, part of the Purchase Price is contingent and to be payable
pursuant to the terms of this Agreement, and
WHEREAS, the parties hereto have entered into this Agreement to set forth
their agreements and understandings related to the matters herein set forth.
NOW, THEREFORE, in consideration of the mutual promises contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, it is hereby agreed as follows:
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Any defined terms used herein shall have the definition given to them in the
Purchase Agreement, unless another definition is given to any term in this
Agreement, in which event the definition herein used shall be controlling
for purposes of this Agreement.
The Buyer shall pay $100,000.00 ("Contingent Amount") to the Seller for every
$20,000,000.00 or portion thereof (pro-rata calculation) that X. Xxxxx, C.
Xxxxx, Xxxx and any employees, contractors or agents (in the aggregate) of
the Business located at one of the branch offices generates in mortgage
loan closings (the "Closings"), during the period beginning March 1, 2004
and ending twelve (12) months thereafter (the "Earnings Period"), which
exceed $400,000,000.00 (the "Minimum Threshold") in the aggregate. If the
Minimum Threshold is satisfied, to the extent that Closings generated
during the Earning Period exceed 1.00 but not $20,000,000.00, the Seller
shall be paid a pro-rata portion of the Contingent Amount.
(a) Seller or Seller's representative (the "Representative") shall determine
the Contingent Amount within thirty (30) days following the expiration of
the Earnings Period; provided, however, that the Representative may
determine the Contingent Amount prior to the end of the Earnings Period if
the Minimum Threshold and any $20,000,000.00 increment is satisfied prior
thereto (i.e., the Seller shall be entitled to be paid the portion of the
Contingent Amount earned prior to the end of the Earnings Period within the
Earnings Period itself rather than at the end of the Earnings Period). The
Representative's methodology for determination of the Contingent Amount and
the results thereof shall be forwarded to Buyer. The Representative shall
provide Buyer with access upon request to the data it used to determine the
Contingent Amount including all relevant books and records of the Business
to the extent required to review the Contingent Amount computation. Buyer
shall review the calculation of the Contingent Amount within fifteen (15)
days after delivery thereof and notify the Representative in writing of any
disagreement with such calculation. If within such fifteen (15) days
following delivery Buyer does not object in writing thereto, then the
Representative's determination of the Contingent Amount shall be
conclusive. If Buyer objects in writing to the Representative's
computation, then Buyer shall pay to Seller the undisputed amount and the
Buyer and the Representative shall negotiate in good faith and attempt to
resolve their disagreement with respect to the disputed amount. Should such
negotiation not result in an agreement within twenty (20) days of receipt
by the Representative of Buyer's objection, then the matter shall be
submitted to arbitration by an independent accounting firm of national
reputation mutually acceptable to Buyer and the Representative (the
"Neutral Auditor"). All fees and expenses relating to appointment of a
Neutral Auditor and the work, if any, to be performed by such Neutral
Auditor will be borne equally by Buyer and the Seller. If Buyer and the
Representative are unable to agree on the Neutral Auditor, then either or
both of them shall request the American Arbitration Association to appoint
the Neutral Auditor. The Neutral Auditor shall deliver to Buyer and the
Representative a written determination (such determination to include a
worksheet setting forth all material calculations used in arriving at such
determination and to be based solely on information provided to Neutral
Auditor by Buyer and the Representative, or their respective Affiliates) of
the disputed items within thirty (30) days of receipt of the disputed
items, which determination shall be final, binding and conclusive on the
parties.
(b) The Contingent Amount shall be payable to the Seller within three (3) days
following agreement on or determination of the final, binding and
conclusive calculation of the Contingent Amount. To the extent that Buyer
does not make a payment of any portion of the Contingent Amount on the
required payment date, such unpaid amount shall bear interest at eighteen
percent (18%) per annum from and after the required payment date to the
date on which such unpaid amount (or a portion thereof) is paid.
This Agreement may be amended or modified at any time and in all respects, or
any provisions may be waived by an instrument in writing executed by all of
the parties hereto.
Neither this Agreement nor any right created hereby shall be assignable by the
Seller or the Buyer without the prior written consent of the other. Nothing
in this Agreement, expressed or implied, is intended to confer upon any
person, other than the parties hereto and their successors, any rights or
remedies under or by reason of this Agreement.
It is the intention of the parties that the laws of the State of Texas shall
govern the validity of this Agreement, the construction of its terms and
the interpretation of the rights and duties of the parties, without giving
effect to any choice or conflict of law provision or rule. Any action
involving or relating to this Agreement shall be brought in any Federal or
state court sitting in Xxxxxx County, Texas, and the parties hereto agree
to the exclusive jurisdiction of such court.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute but one
and the same agreement. Facsimile signatures may be deemed binding for this
Agreement, or any modification or amendment thereto, or any documents
contemplated hereby, provided that originals of same are delivered within a
reasonable time.
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The parties hereto have participated jointly in the negotiation and drafting of
this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local,
or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise.
The word "including" shall mean including without limitation. The parties
intend that each representation, warranty, and covenant contained herein
shall have independent significance. If any party has breached any
representation, warranty, or covenant contained herein in any respect, the
fact that there exists another representation, warranty, or covenant
relating to the same subject matter (regardless of the relative levels of
specificity) which the party has not breached shall not detract from or
mitigate the fact that the party is in breach of the first representation,
warranty, or covenant.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
effective as of the 31st day of December, 2003.
AVAILENT FINANCIAL, INC.
By: /s/ Xxxxxxx X. XxXxxxxx
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Xxxxxxx X. XxXxxxxx, Chairman/CEO
BROYD, INC.
By: /s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx, President
