EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
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This Purchase Agreement is made and entered into as of the 1st day of
May 1999, by and between Community Trust Financial Services Corporation, a
Georgia corporation ("Purchaser"); Xxxxxxxx Association, Inc., a Georgia
corporation ('Seller"); and Xxxxx X. Xxxxxxxx, an individual resident of the
State of Georgia and shareholder of Seller ("Xxxxxxxx").
W I T N E S S E T H
WHEREAS, Seller operates consumer finance offices located in the
following Georgia cities: Cartersville (two offices), Dahlonega, Xxxxxxx and
Rome (these five offices collectively referred to as the DAI offices);
WHEREAS, Seller desires to sell and Purchaser desires to acquire:
(a) Certain fixed assets, furnishings, equipment and certain
other personal property located at the DAI offices;
(b) Certain loans of Seller, including all "P&L" loans, which are
loans that have been charged off but are in the process of collection; and
(c) ownership of all insurance reserve accounts held at Life of
the South in the name of Xxxxxxxx Association, Inc.
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the sum of Ten Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, Purchaser and Seller agree as follows:
ARTICLE I
Defined Terms
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1.01 Definitions. The following defined terms used in this Agreement
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shall have the meanings specified below:
(a) "Closing" means the closing of the purchase of the assets,
assumption of liabilities, transfer of loans and other transactions contemplated
hereby, which shall take place at such time and place as shall be fixed by the
parties pursuant to Section 6.01 below.
(b) "Closing Date" means the date of the closing.
(c) "Transferred Loans" means all Gross Loans of Seller (other
than the so-called P&L loans which are referred to in Section 4.01 hereof) to be
transferred, sold and conveyed to Purchaser pursuant to this Agreement.
(d) "Gross Loan" means the entire unpaid balance of principal,
interest, insurance, and any other charges and fees payable or collectible on a
loan, whether such items are earned or unearned, or rebatable or not.
ARTICLE II
Assumption of Liabilities
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2.01 No Assumption of Liabilities. It is understood and agreed that
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except to the extent specifically set forth in the last sentence of this Section
2.01, Purchaser shall not assume or become liable for the payment of any debts,
liabilities, accounts payable, bank indebtedness, mortgages, or other
obligations of Seller, whether the same are known or unknown, now existing or
hereafter arising, of whatever nature or character, whether absolute or
contingent, liquidated or disputed. Purchaser specifically agrees to assume
Seller's liabilities identified on Exhibit 2. 01 attached hereto and
incorporated herein by this reference and any and all liabilities and
obligations of any kind arising from the operation, business or ownership of the
Other Assets (as hereinafter defined) , the Transferred Loans or the DAI offices
after the Closing Date.
2.02 Other Liabilities Not Assumed. In addition to the other
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provisions of this Agreement (including, but not limited to, Section 2.01
hereof), and not in limitation thereof, Purchaser and Seller agree that
Purchaser shall not assume any liabilities or obligations of Seller with respect
to any litigation, suits, claims, demands or governmental proceedings commenced
or made known to Seller prior to the Closing that are related to the DAI offices
or the Transferred Loans or that are commenced or made known to Seller on or
after Closing with respect to the operation of the DAI offices or the making,
handling or administration of the Transferred Loans prior to Closing; provided,
however, that if Purchaser receives notice of, or through any means becomes
aware of, any litigation, suits, claims, demands or proceedings that have, or
may have, arisen out of the operation of the DAI offices or the making, handling
or administration of the Transferred Loans, prior to Closing, it will notify
Seller thereof as soon as reasonably practicable.
Notwithstanding anything in this Agreement to the contrary, the
Purchaser shall hold harmless, defend and indemnify Seller from any and all
demands, damages, losses, expenses, liabilities or obligations incurred or paid
by Seller as a result of a claim of any kind arising from the operation,
business or ownership of the Other Assets, the Transferred Loans or the DAI
offices after the closing Date, provided that such demand, damage, loss,
expense, liability or obligation does not arise out of an act or omission of
Seller.
ARTICLE III
Transfer of Loans
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3.01 Loan Transfers. At the closing, Seller will transfer to
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Purchaser the Transferred Loans described in Exhibit 3.01, which Exhibit is
attached hereto, subject to adjustment as provided herein. At the Closing,
Seller will transfer to Purchaser all of Seller's right, title and interest in
and to all property and assets that secures any of the Transferred Loans. The
total Gross Loans to be transferred were, as of January 8, 1999, approximately
One Million Two Hundred Thirteen Thousand Two Hundred Twenty-Nine and 59/100
Dollars ($1,213,229.59) and are more fully identified in Exhibit 3.01. The exact
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amount of Transferred Loans to be transferred shall be fixed and shall be
updated at the Closing to identify and indicate the exact amounts of the
Transferred Loans to be transferred as of the Closing Date.
3.02 No Funding to Pay Transferred Loans. Seller agrees that it will
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not, in the period commencing with the date hereof and ending two years after
the Closing Date, directly or indirectly fund the payment in whole or in part of
any Transferred Loans. For the purposes hereof: (a) a direct funding shall be
regarded as an extension of credit by Seller to a borrower who uses the proceeds
of such credit to pay in full or in part the borrower's Transferred Loan
obligations; and (b) an indirect funding shall be regarded as an extension of
credit by Seller, with actual knowledge on the part of Seller or its agents of
the borrower's purpose for such credit extension, to a borrower who uses the
proceeds of such credit to pay in full or in Part an obligation such borrower
had obtained from another lender for the purposes of paying in full or in part
the borrower's Transferred Loan obligations.
3.03 Basis of Transferred Loan Sales. All Transferred Loans are to be
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sold and transferred, without recourse (subject to the representations and
warranties in Section 7.04), to, and assumed by, Purchaser.
All payments or property received by Seller on account of the
Transferred Loans shall be held by Seller in trust for Purchaser and paid over
to Purchaser promptly upon receipt.
ARTICLE IV
Sale of Other Assets
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4.01 Other Assets Sold. Seller agrees to sell, transfer, convey,
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assign, and deliver to Purchaser, and Purchaser agrees to purchase and accept
from Seller, at the Closing upon the terms and subject to the conditions
hereinafter set forth, the following assets, properties and rights (the "Other
Assets"): All of Seller's right, title and interest in and to (i) the fixed
assets, personal property, furniture, furnishings, and equipment located in and
used in connection with the operation of the DAI offices, as described in
Exhibit 4.01(a) attached hereto and incorporated herein, together with any
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manufacturer's warranties on any of the foregoing that are assignable and in
effect, but excluding those items of personal property described in Exhibit 4.
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01 (b) attached hereto, (ii) all insurance accounts held in the name of Seller,
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and (iii) all so-called P&L
loans of Seller including, but not limited to, those described on Exhibit
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4.01(c) attached hereto. It is understood and agreed that Purchaser will not
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assume any real or personal property lease obligations of Seller except as
specifically set forth in Section 2.0l hereof.
ARTICLE V
Purchase Price
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5.01 Purchase Price. The purchase price to be paid by Purchaser to
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Seller for the Transferred Loans and the Other Assets is $1,577,198.46, subject
to adjustment as provided in this Agreement. This purchase price has been
determined based upon an outstanding balance of total loans to be transferred as
of January 8, 1999 of $1,213,229.59.
5.02 Manner of Payment. Payment shall be made at the Closing in a
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combination of immediately available funds in the amount of $800,000, plus
Common Stock ($2.50 par value per share) of Purchaser ("CTFS Shares"). For the
purpose of establishing the purchase price under this Agreement, the value of
the CTFS Shares shall be deemed to be $17.00 per share. Such deemed value is an
arbitrary value established by the parties solely for the purpose of
establishing the purchase price, without regard to any other transactions
involving CTFS Shares or any prices quoted or hereafter quoted on any exchange
or quotation system. The parties acknowledge that from time to time the actual
fair market value of the CTFS Shares may be more or less than the deemed value
hereunder.
5.03 Post Closing Adjustment. The purchase price amount set forth in
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Section 5.01 hereof shall be adjusted in accordance with an updated
determination of the amount of Transferred Loans as of the Closing such that the
purchase price shall be adjusted upward or downward, as the case may be, by
$1.00 for each $1.00 adjustment in the outstanding loan balances of Transferred
Loans as of the Closing Date. For example, if the outstanding loan balances of
Transferred Loans as of the Closing Date total $1,214,229.59, the purchase price
would be increased by $1,000.00. Within fifteen (15) days after the Closing
Date, an adjustment shall be made. Such adjustment shall be made by increasing
or decreasing the number of CTFS Shares issued as part of the purchase price,
based on a deemed value of $17.00 per share, without regard for the actual value
of the CTFS Shares at the time of adjustment. If the purchase price is adjusted
upward, CTFS shall issue a certificate for additional CTFS Shares. If the
purchase price is adjusted downward, Seller shall return the certificate for
CTFS Shares it received at Closing to CTFS for cancellation, and CTFS shall
issue a new certificate for CTFS in the adjusted amount of CTFS Shares.
5.04 Purchase Price Allocation. The purchase price shall be allocated
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among the assets acquired by Purchaser as set forth on a certificate to be
provided by Purchaser to Seller within sixty (60) days following the Closing.
Purchaser and Seller acknowledge and agree that the allocation certificate to be
delivered by Purchaser pursuant to this Section 5.04 will be jointly negotiated
and agreed to by them. Purchaser and Seller agree they shall each fully comply
with the requirements of IRC Section 1060 and the regulations thereunder.
Purchaser and the Seller further agree to use said allocation certificate as the
basis for completing Form 8594 entitled
"Asset Acquisition Statement Under Section 1060," which shall be filed on a
timely basis with the Internal Revenue Service. Purchaser and the Seller further
agree to file their income tax returns on the basis of this allocation and
neither Purchaser nor the Seller shall thereafter take a return position
inconsistent with such respective returns.
ARTICLE VI
Closing
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6.01 Time and Place of Closing. The Closing shall take place no later
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than the close of business on the last day of the month in which all regulatory
approvals contemplated by Sections 10.01 and 11.01 hereof have been issued and
after all requisite waiting periods have elapsed, but prior to the opening of
business on the first business day of the following month, or such other
mutually agreed date, at a time and in a location mutually agreeable to both
parties.
ARTICLE VII
Representations and Warranties of Seller and Xxxxxxxx
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Seller and Xxxxxxxx, jointly and severally, represent and warrant to
Purchaser as follows:
7.01 Seller's Status. Seller is a corporation duly organized, validly
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existing and in good standing under the laws of the State of Georgia.
7.02 Authority. Seller has the full corporate right, power, capacity
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and authority to: own and operate its properties; conduct its business in the
manner in which it is presently being conducted; and execute, deliver, perform
and carry out all the transactions contemplated by this Agreement. The
execution, delivery and performance of this Agreement and each of the documents
and instruments contemplated hereby and the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on the part
of Seller, and upon execution and delivery, this Agreement and each of the
documents and instruments contemplated hereby will be valid and binding
obligations of Seller and Xxxxxxxx enforceable against Seller and Xxxxxxxx in
accordance with their respective terms.
7.03 Condition of Personal Property. The personal property that
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constitutes part of the Other Assets will be, at the time of closing, in
substantially the same operating condition and repair as on the date hereof,
subject only to ordinary wear and tear. Seller owns, and will own at the
Closing, all of the personal property to be transferred to Purchaser free and
clear of all mortgages, liens, charges, encumbrances, or other defects of title
of any nature whatsoever.
7.04 Status of Loans. Except as otherwise provided on Exhibit 7.04,
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with respect to each of the Transferred Loans; the loan is a valid loan; Seller
is the sole owner thereof, no participation therein having been sold; the loan
is not pledged or encumbered; the principal
balance of the loan as shown on Seller's book and records is true and correct as
of the last date shown thereon; to the best of Seller's knowledge all purported
signatures on and executions of any document in connection with such loan are
genuine; to the best of Seller's knowledge all loan documentation has been
actually signed or executed by all necessary parties; and Seller has custody of
all documents or microfilm record thereof related to such loan.
7.05 No Violations. The execution, delivery and performance of this
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Agreement and of all other instruments and documents contemplated hereby and the
performance of the transactions contemplated hereby and thereby do not and will
not conflict with, violate, breach or cause a default under the Articles of
Incorporation or bylaws of Seller, or, to Seller's knowledge, any contract
(except such contracts as Purchaser is a party to or Seller has previously
disclosed and delivered to Purchaser) , agreement, right, lease, pledge lien,
security interest, instrument, indenture, mortgage, charge, or encumbrance to
which Seller is a party or by which it or any of its property is bound or any
order, writ, judgment, injunction, decree or award of any court, arbitrator,
government or governmental agency by which Seller or any of its property is
bound; or result in the creation of any lien, charge or encumbrance upon the
assets of Seller or any part thereof; and, subject to obtaining all regulatory
approvals, do not and will not conflict with or violate any provisions of any
law, ordinance, rule or regulations of any governmental authority to which
Seller is subject.
7.06 Obligations to Employees. No obligations for payment to
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employees of Seller shall be outstanding or pending at the Closing Date and
there is no employment agreement in effect with respect to any of the employees
of Seller in the DAI offices.
7.07 No Suits or Proceedings. There is no pending or, to Seller's
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knowledge, threatened adverse claims, suits or judicial or administrative
proceedings which would affect the transactions contemplated by this Agreement.
7.08 No Liabilities. There are no other liabilities, contingent,
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direct, indirect or otherwise, affecting the DAI offices other than those
liabilities specifically described herein, including the pro rated items set
forth in Section 16.02 hereof.
7.09 True Statement. Neither this Agreement nor any certificate,
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document or other information furnished or to be furnished to Purchaser by or on
behalf of Seller in connection with this Agreement or the transactions
contemplated hereby contains or will contain any misstatement of a material
fact, or omits or will omit to state a material fact necessary in order to make
the representations and warranties and other statements herein or therein
contained not misleading, in the circumstances in which made.
7.10 Insurance. Seller has furnished to Purchaser true and correct
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copies of all casualty and hazard insurance policies in effect on the date
hereof with respect to the DAI offices.
7.11 Securities Representations.
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(a) Seller is acquiring the CTFS Shares for investment for its
account only, with the intent of holding the CTFS Shares for investment and
without the intent of participating directly or indirectly in the distribution
of the CTFS Shares.
(b) Seller has received and reviewed the following documents
filed with the United States Securities and Exchange Commission: (i) Form 10-KSB
f/y/e December 31, 1997; (ii) Form 10-QSB f/q/e March 31, 1998; (iii) Form 10-
QSB f/q/e June 30, 1998; (iv) Form 10-QSB f/q/e September 30, 1998; (v) Form 8-K
filed April 17, 1998; (vi) Form 8-K filed August 5, 1998; (vii) Form S-2
Registration Statement, originally filed April 6, 1998, as amended; (viii)
Schedule 13-D filed September 8, 1998; and (ix) Schedule 13-D filed September
18, 1998.
(c) Seller acknowledges that the CTFS Shares to be issued
hereunder are "restricted securities" under the rules of the Securities and
Exchange Commission, and may not be sold or transferred for a period of one year
from the date of the issuance of the shares, and thereafter, only in accordance
with Rule 144 promulgated under the Securities Act of 1933.
(d) Seller has asked Purchaser for all information Seller desires
in order to make an informed investment decision regarding the CTFS Shares. In
connection with such inquiry, Purchaser has furnished all such information
requested. Seller further acknowledges that Purchaser has made its officers and
key employees available to discuss any matter regarding Purchaser or the CTFS
Shares Seller desires to discuss in order for Seller to make an informed
investment decision.
ARTICLE VIII
Representations and Warranties of Purchaser
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Purchaser represents and warrants to Seller as follows:
8.01 Corporate Status. Purchaser is a corporation duly organized,
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validly existing and in good standing under the laws of the State of Georgia.
8.02 Authority. Purchaser has the full corporate right, power,
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capacity and authority to own and operate their respective properties and to
conduct their respective businesses in the manner in which they are presently
being conducted, and they have the corporate power, capacity and authority to
execute, deliver and perform this Agreement and to carry out all of the
transactions contemplated by this Agreement. The execution, delivery and
performance of this Agreement and each of the documents and instruments
contemplated hereby and the transactions contemplated hereby and thereby have
been duly authorized by all necessary corporate action on the part of Purchaser,
and upon execution and delivery, this Agreement and each of such other documents
and instruments will be valid and binding obligations of Purchaser, enforceable
against them in accordance with their respective terms.
8.03 No Violations. The execution, delivery and performance of this
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Agreement and of all other instruments and documents contemplated thereby and
the performance of the
transaction contemplated thereby do not and will not conflict with, violate,
breach or cause a default under the Charter or Bylaws of Purchaser, or any
contract, agreement, or other instrument to which Purchaser is a party or by
which it is bound or any order, writ, judgment, injunction, decree or award of
any court, arbitrator, government or governmental agency by which Purchaser is
bound; and do not and will not conflict with or violate any provisions of any
law, ordinance, rule or regulation of any governmental authority to which
Purchaser is subject.
8.04 No Suits or Proceedings. Purchaser is not aware of any pending
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or threatened adverse claims, suits or judicial or administrative proceedings
which would affect the transactions contemplated by this Agreement.
8.05 True Statement. Neither this Agreement nor any certificate,
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document or other information furnished or to be furnished to Seller by or on
behalf of Purchaser in connection with this Agreement or the transactions
contemplated hereby contains or will contain any misstatement of a material
fact, or omits or will omit to state a material fact necessary in order to make
the representations and warranties and other statements herein or therein
contained not misleading, in the circumstances in which made.
8.06 Securities Representations.
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(a) The CTFS Shares have not been registered under the Securities
Act of 1933, or the securities laws of any state, and are being offered and sold
in reliance on exemptions from the registration requirements of said Act and
such laws. The CTFS Shares may not be transferred or resold except as permitted
under applicable securities laws pursuant to registration or exemption
therefrom.
(b) No persons have been authorized in connection with this
transaction to give any information or make any representation other than those
contained in this Agreement or in those documents filed with the Securities and
Exchange Commission.
ARTICLE IX
Covenants
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9.01 Access to Properties and Records. From and after the date of
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this Agreement, Seller agrees that, upon notice and in the presence of a Seller
representative, it will afford full access to employees, agents and
representatives of Purchaser to inspect the real and personal property, deposit
account records, loan records and all other assets, properties, books and
records that are the subject of this Agreement or that relate to the Transferred
Loans or the Other Assets during normal business hours, provided that such
inspection shall not disrupt or unduly interfere with the conduct of Seller's
business, and Seller shall furnish representatives of Purchaser during such
period with all such information concerning the affairs of the DAI offices as
Purchaser may reasonably request. Purchaser stall be entitled to have an
observer on the premises of the DAI offices at any mutually agreeable time.
9.02 Conduct of Business Pending Closing. Seller agrees that from the
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date of this Agreement to the date of Closing, it will:
(a) use its reasonable, good faith efforts to promote the
successful operations of the DAI offices and avoid any act that would have a
material adverse effect upon the value of the Transferred Loans or the Other
Assets;
(b) operate the business of the DAI offices only in the ordinary
and usual manner and use its reasonable, good faith efforts to preserve intact
its present business organization, to keep available the services of its present
employees and to preserve its relations with customers having business dealings
with the DAI offices;
(c) at its expense, maintain all of the property at the DAI
offices in customary repair, order and condition, reasonable wear and tear
excepted, and maintain casualty and hazard insurance on all of the property at
the DAI offices at the same levels as maintained on the date of this Agreement;
(d) maintain its books of account and records concerning the DAI
offices and the Transferred Loans in the ordinary and usual manner, in
accordance with generally accepted accounting principles applied on a basis
consistent with prior years;
(e) not take any action which would cause any representation or
warranty made herein to be untrue at the date of Closing;
(f) not make any changes in its management policies or pricing,
without the concurrence of Purchaser, which shall not be unreasonably withheld
provided the changes suggested by Seller are consistent with competitive market
conditions;
(g) not directly compete for or solicit business originated from,
carried on the books of, or maintained or serviced by, the DAI offices in any
manner inconsistent with or adverse to Purchaser's interests.
9.03 Employee Information. Prior to the Closing Date, Seller shall,
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upon request, provide Purchaser with pertinent personnel information regarding
employees of the DAI offices; provided, however, that neither this section nor
any other provision of this Agreement shall be construed as an agreement,
consideration, inducement, or creation of any responsibility or liability on the
part of Purchaser, or as affecting in any manner or to any extent whatsoever the
rights or obligations of Purchaser, with respect to the employment of any
employee of Seller.
9.04 Transition Period. Each party shall make available to the other
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party personnel for consultation and the performance of services reasonably
necessary for an orderly transition during normal business hours for a period of
sixty (60) calendar days after the Closing.
9.05 Regulatory Approvals. Each party shall promptly apply for all
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regulatory approvals necessary for its consummation of the transactions
contemplated by this Agreement and shall exercise its reasonable, good faith
efforts to obtain such approvals.
9.06 Notices of Transactions. All notices, including, without
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limitation, notices to the public, customers or employees, issued by Seller or
Purchaser concerning the transactions contemplated by this Agreement shall be
approved in advance by both Seller and Purchaser.
9.07 Payments Accepted After Closing. Seller agrees to forward
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promptly to Purchaser:
(a) any payments which are accepted by Seller or after the
Closing Date that relate in any way to the Transferred Loans and to provide
sufficient information so that any such payments may be properly applied to the
extent such information is available to Seller; and
(b) any notices or other correspondence which are received on or
after the Closing Date that relate in any way to the Transferred Loans.
9.08 Documentation at Closing and Further Assurances.
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(a) At the Closing, Seller shall transfer, assign and deliver to
Purchaser all existing records, books, papers, collateral and agreements of
Seller relating to the Transferred Loans and the Other Assets and any other
assets, obligations or liabilities being purchased or assumed by Purchaser
hereunder, including, but not limited to, promissory notes, security agreements,
pledge agreements and all lease agreements referred to in Section 2.01 hereof.
(b) Seller agrees that it will, at the Closing and at any time
and from time to time after the Closing, upon the request of Purchaser, 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 reasonably required to complete the process of
assigning, transferring, granting, conveying, assuring and confirming to
Purchaser any or all of the Transferred Loans and other Assets and any other
assets or liabilities purchased or assumed by Purchaser hereunder and the
performance of any or all obligations of Seller hereunder. Seller agrees to
notify the Insurance Commissioner of the State of Georgia of this transaction
within fifteen days of the date of Closing.
9.09 Solicitation of Other Proposals. From and after the date of this
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Agreement until the earlier of Closing or the termination of this Agreement,
neither Xxxxxxxx, the Seller, nor any officer, director, employee or agent of
Xxxxxxxx or the Seller, shall solicit, encourage or authorize any person to
solicit, directly or indirectly, discussions or proposals for or enter into any
discussions or agreements with any other person relating to a merger,
consolidation, tender offer, acquisition or similar transaction concerning the
assets or securities of the Seller, or furnish or cause to be furnished to any
person other than Purchaser or its agents, information to be used by such person
or any other person for the purpose of evaluating or determining whether to make
any such inquiries, discussions or proposals.
ARTICLE X
Conditions Precedent to the Obligations of Purchaser
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The obligation of Purchaser to close under this Agreement and to carry
out the transactions contemplated by this Agreement is subject to the
satisfaction and fulfillment, or waiver by Purchaser, at or prior to the
Closing, of each of the following conditions:
10.01 Regulatory Approvals. Purchaser and Seller shall have received
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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; provided, however, that approval of
the Georgia Department of Insurance shall not be a condition to Closing.
10.02 Obligations Performed. Seller shall have performed and
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complied, in all material respects, with all the terms, covenants an conditions
required by this Agreement to be performed or complied with by it on or prior to
the Closing Date.
10.03 Representations and Warranties True. The representations and
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warranties made by Seller in this Agreement shall have been true and correct, in
all material respects, when made and shall be true and correct, in all material
respects, 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. A duly
authorized officer of Seller shall certify the foregoing and the substance of
Section 10.05 to Purchaser as of the Closing Date.
10.04 Receipt of Documents and Certificates. Purchaser shall have
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received from Seller, duly executed and delivered by Seller, in form and
substance satisfactory to Purchaser, the following:
(a) a Warranty Xxxx of Sale in the form attached hereto as
Exhibit 10.04 (a), conveying ownership to the personal property described in
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Exhibit 4.01 (a) free and clear of all mortgages, liens, charges, encumbrances,
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or other defects of title of any nature whatsoever;
(b) a schedule, certified by an officer of Seller as complete
and correct, listing the Transferred Loans, and an Assignment of the Transferred
Loans in the form of Exhibit 10.04 (b);
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(c) consents from each lessor of the assignment to, and
assumption by, Purchaser of each of the leases referred to in Section 2.01
hereof;
(d) such other instruments, agreements, certificates or other
documents as Purchaser may reasonably request to evidence compliance with the
conditions hereunder or to effect the transactions contemplated hereby.
10.05 No Adverse Litigation. No action, suit or proceeding shall have
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been instituted or threatened against Seller or Purchaser by or before any court
or governmental agency to restrain
or prohibit, or to obtain damages in respect of, or which is related to or
arises out of, this Agreement or the consummation of the transactions
contemplated hereby which in the opinion of Purchaser makes it inadvisable to
proceed to Closing under this Agreement.
10.06 Damage or Destruction. Any damage or destruction to the DAI
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offices or the Other Assets occurring between the date of this Agreement and the
Closing Date, other than ordinary wear and tear, stall have been repaired or
replaced by Seller, or Seller shall provide, on the Closing Date, funds,
including the assignment of any insurance proceeds owing to Seller, sufficient
to enable Purchaser to make such repairs or replacements.
ARTICLE XI
Conditions Precedent to the Obligations of Seller
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The obligations of Seller to carry out the transactions contemplated by
this Agreement are subject to the fulfillment, or waiver by Seller, at or prior
to the Closing Date, of each of the following conditions:
11.01 Regulatory Approvals. Purchaser and Seller shall have received
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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; provided, however, that approval of
the Georgia Department of Insurance shall not be a condition to Closing.
11.02 Obligations Performed. Purchaser shall have performed and
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complied with the terms, covenants and conditions required by this Agreement to
be performed or complied with by it on or prior to the Closing Date.
11.03 Representations and Warranties True. The representations and
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warranties made by 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. A duly authorized officer of Purchaser shall
certify the foregoing and the substance of Section 11.04 to Seller as of the
Closing Date.
11.04 No Adverse Litigation. No action, suit or proceeding shall have
---------------------
been instituted or threatened against Seller or Purchaser by or before any court
or governmental agency to restrain or prohibit, or to obtain damages in respect
of, or which is related to or arises out of, this Agreement or the consummation
of the transactions contemplated hereby which in the opinion of Seller makes it
inadvisable to proceed to Closing under this Agreement.
ARTICLE XII
Cooperation and Further Assurances
----------------------------------
12.01 Reasonable, Good Faith Efforts; Cooperation. Subject to the
-------------------------------------------
terms and conditions herein provided, each of the parties hereto agrees to use
its reasonable good faith efforts promptly to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations, or otherwise, including,
without limitation, attempting to obtain all necessary consents and waivers and
regulatory approvals, to consummate and make effective, as soon as practicable,
the transactions contemplated by this Agreement. The officers of each party
shall fully cooperate with officers, employees, accountants, counsel and other
representatives of the other party in all matters contemplated by this
Agreement.
12.02 Further Assurances. Each party will execute and deliver all
------------------
additional documents and instruments reasonably requested by the other party to
further evidence or assure the sales, transfers, and assignments contemplated by
this Agreement.
12.03 Customer Disputes. In the event of any dispute between either
-----------------
party and a borrower under a Transferred Loan, each party shall cooperate with
and make its records available to the other to the extent reasonably requested.
ARTICLE XIII
Termination
-----------
13.01 Methods of Termination. This Agreement may be terminated upon
----------------------
the occurrence of any of the following events and circumstances in any of the
following ways:
(a) at or prior to the Closing, by the mutual consent in
writing of Purchaser and Seller;
(b) at the Closing, by Purchaser in writing, if the conditions
set forth in Article X of this Agreement shall not have been met;
(c) at the Closing, by Seller in writing, if the conditions set
forth in Article XI of this Agreement shall not have been met;
(d) at any time at or prior to the Closing, by Purchaser or
Seller in writing if the other shall have been in breach of any representation
or warranty in any material respect (as if such representation or warranty had
been made on and as of the date hereof and on the date of the notice of breach
referred to in Section 13.02 below), or in breach of any covenant, undertaking
or obligation contained herein and such breach has not been cured by the earlier
of ten (10) days after the giving of notice to the breaching party of such
breach or the Closing Date;
(e) by Seller or Purchaser in writing at any time after any of
the regulatory authorities has denied any application of Seller or Purchaser for
approval of the transactions referred to in Sections 10.01 or 11.01 hereof or
otherwise contemplated herein; and
(f) by either party, in writing, if the necessary regulatory
approvals have not for any reason been received on or before May 1, 1999.
13.02 Procedure Upon Termination. In the event of termination pursuant
--------------------------
to Section 13.01 hereof, written notice thereof shall forthwith be given to the
other party in accordance with Section 16.03 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 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 is 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 by such party to third persons.
ARTICLE XIV
Survival of Representations, Warranties and Covenants
----------------------------------------------------
Reimbursement for Losses; Remedies
----------------------------------
14.01 Survival of Representations, Warranties and Covenants. Unless
-----------------------------------------------------
otherwise expressly provided herein, the respective representations, warranties
and covenants of the parties hereto shall survive the Closing for a period of
twelve (12) months.
14.02 Reimbursement for Losses. Upon discovery by Purchaser that any
------------------------
of the representations or warranties set forth in Section 7.04 hereof were
untrue as of the Closing Date with respect to any Transferred Loan, Purchaser
shall reassign such loan to Seller without recourse and Seller shall pay to
Purchaser at the time of reassignment the full amount of principal and interest
owed on any such loan.
14.03 Remedies. Each party shall be entitled to all remedies at law
or in equity for a default hereunder by the other party, including the remedy of
specific performance.
ARTICLE XV
Indemnification
---------------
15.01 Indemnification. Purchaser agrees to and does indemnify and hold
---------------
harmless Seller and its affiliates and their officers, directors, agents,
servants, attorneys and employees from and against any and all claims, actions,
demands, enforcement proceedings, causes of action, damages, liabilities,
expenses (including reasonable attorney's fees), costs and fines which may be
incurred, suffered, sustained or paid by Seller, arising out of or related to
the inaccuracy or breach by Purchaser of any representation, warranty, covenant
or agreement in this Agreement.
Seller and Xxxxxxxx, jointly and severally, agree to and do indemnify
and hold harmless Purchaser and its affiliates and their officers, directors,
agents, servants, attorneys and employees from and against any and all claims,
actions, demands, enforcement proceedings, causes of action, damages,
liabilities, expenses (including reasonable attorney's fees), costs and fines
which may be incurred, suffered, sustained or paid by Purchaser, arising out of
or related to the inaccuracy or breach by Seller of any representation,
warranty, covenant or agreement in this Agreement. In addition to any other
remedy under law or equity, Purchaser may offset any amounts due Purchaser
hereunder from Seller against the CTFS Shares to be issued hereunder. Seller
hereby appoints Purchaser its attorney in-fact to execute and deliver any and
all instruments on Seller's behalf to effect such transfer, including without
limitation endorsement of certificates, and execution and delivery of stock
powers and bills of sale.
ARTICLE XVI
Miscellaneous
-------------
16.01 Expenses. Except as otherwise specifically provided herein, each
--------
party to this Agreement shall bear and pay its own costs and expenses in
connection with the preparation, execution and delivery of this Agreement and
the transactions contemplated thereby, including all 1egal and accounting fees
and expenses.
16.02 Proration of Certain Items.
--------------------------
(a) Utilities; ad valorem taxes; maintenance contracts;
rentals, both payable and/or receivable; and equipment, alarm, and other service
agreement costs with respect to the Other Assets shall be prorated as of the
Closing Date and will be credited against or added to the amount due at Closing,
as applicable.
(b) Any items susceptible of being prorated, but which cannot
be prorated on the Closing Date because of lack of information, shall be
prorated as soon as the requisite information is available. Such post-Closing
adjustments shall take place at a mutually agreeable time and place within 60
days after the Closing Date.
16.03 Notices. All notices or other communications provided for or
-------
required under this Agreement shall be in writing and shall be deemed to have
been duly given if delivered or mailed (registered or certified mail, postage
prepaid) addressed as follows:
If to Seller:
Xxxxxxxx Association, Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxxx
with a copy to:
_______________________
_______________________
If to Purchaser:
Community Loan Company
P. O. Box 1700
0000 Xxxxxxx Xxxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxx Xxxxxx
with a copy to:
Xxxxxx & Xxxxxx LLP
000 Xxxxxxxx Xxxxxxx, X.X.
Twelfth Floor
Atlanta, Georgia 30339-3122
Attn: Xx. Xxxxxxx X. Xxxx
16.04 Modifications and Waivers. This Agreement may not be amended or
-------------------------
modified except by a written instrument duly executed by Seller and Purchaser.
Any waiver of any term of this Agreement must be in writing.
16.05 Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of Georgia.
16.06 Assignability. This Agreement shall not be assigned by either
-------------
party except with the express written consent of the other.
16.07 No Broker or Finder. Seller and Purchaser each represents and
-------------------
warrants to the other that it has not employed, used or incurred any liability
to any broker or finder in connection with this Agreement or the transactions
contemplated by this Agreement.
16.08 Severability. If any part of this Agreement shall be adjudged
------------
by any court of competent jurisdiction to be invalid, such judgment shall not
affect or impair any other provision and the remaining provisions of this
Agreement shall remain in effect.
16.09 Entire Agreement. This Agreement, including any exhibits hereto,
----------------
represents 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.
16.10 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 permitted assigns.
16.11 Public Announcements. Each party agrees that, unless approved by
--------------------
the other party in advance, such party will not make any public announcement,
including announcements to employees, or issue any press release or other
publicity or confirm any statements by third parties concerning the transactions
contemplated hereby until the Closing, except as otherwise required by law.
16.12 Time of the Essence. The parties hereto acknowledge that time is
-------------------
of the essence with respect to the performance of this Agreement.
16.13 Headings. The headings contained in this Agreement are for
--------
reference purposes 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.
16.14 Counterparts. This Agreement is being executed in one or more
------------
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized representatives as of the day and year
first above written.
SELLER:
Xxxxxxxx Association, Inc.
By: /s/Xxxxx X. Xxxxxxxx
--------------------------------
Title: President
----------------------------
/s/Xxxxxx X. Xxxxxxxxxxx
---------------------------
Secretary
/s/Xxxx Xxxxx
---------------------------
Witness
/s/Xxxx X. Xxxxx
---------------------------
Notary Public
XXXXXXXX:
/s/Xxxxx X. Xxxxxxxx
-----------------------------------
Xxxxx Xxxxxxxx
/s/Xxxx Xxxxx
---------------------------
Witness
/s/Xxxx X. Xxxxx
---------------------------
Notary Public
PURCHASER:
Community Trust Financial
Services Corporation
By: /s/Xxxxxx Xxxxxx
--------------------------------
Title: President
-----------------------------
/s/Xxxxx X. Xxxx
---------------------------
Secretary
/s/Xxxxxxxx Xxxxxx
---------------------------
Witness
/s/Xxx X. Xxxxxxx
---------------------------
Notary Public
