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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: December 9, 1999
----------------------------------
(Date of earliest event reported)
AUSTIN FUNDING.COM CORPORATION
--------------------------------
(Exact name of registrant as specified in its charter)
Nevada
-------
(State or other jurisdiction of incorporation)
000-26815
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(Commission File Number)
74-2923677
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(IRS Employer Identification No.)
823 Congress Avenue, Suite 515
Austin, Texas 78701
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(Address of principal executive offices)
(512) 481-8000
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(Registrant's telephone number)
Not Applicable
---------------
(Former name or former address,
if changed since last report)
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Item 1. Changes in Control of Registrant:
Not Applicable.
Item 2. Acquisition or Disposition of Assets:
Not Applicable.
Item 3. Bankruptcy or Receivership:
Not Applicable.
Item 4. Changes in Registrant's Certifying Accountant:
Not Applicable.
Item 5. Other Events:
On November 29, 1999, Austin Funding.com Corporation (the "Company"),
entered into an Agreement of Sale and Purchase (the "Agreement") with certain
shareholders of Greater South Texas Savings Bank, FSB ("South Texas"), pursuant
to which the Company will purchase 4,444 shares, or approximately 59% of the
7,500 issued and outstanding shares of common stock of South Texas. The Company
plans to conduct a tender offer for all of the remaining shares of South Texas
once it receives the necessary regulatory approvals.
South Texas is a federal savings bank based in Falfurrias, Texas and as
of June 30, 1999 reported total assets of $44.7 million, total deposits of $42.6
million and total equity capital of $2.1 million. It has a branch office located
in Hebronville, Texas.
The Company's obligation to purchase the shares of South Texas is
subject to a financial, technical and legal audit of South Texas and the Company
may, in its sole judgement and absolute discretion, terminate the Agreement for
any or no reason. Such due diligence review shall run for a period of ninety
days from the receipt of all the South Texas information requested by the
Company.
The Company's acquisition of South Texas remains subject to the
parties' receipt of required federal and state regulatory approvals and
satisfaction of various other customary closing conditions specified in the
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Agreement. A copy of the Agreement of Sale and Purchase pertaining to this
transaction is included as Exhibit 10.18 to this Current Report.
As of December 31, 1999, Terry G. Hartnett will resign as the Company's
Chief Financial Officer. Mr. Hartnett will continue to serve as a director of
the Company. On December 6, 1999, the Board of Directors appointed David Farrarr
as the Company's new Chief Financial Officer. A copy of Mr. Hartnett's Departure
Agreement is included as Exhibit 10.19 to this Current Report.
Item 6. Resignations of Registrant's Directors:
Not Applicable.
Item 7. Financial Statements and Exhibits:
(a) Financial Statements
Not Applicable.
(b) Pro Forma Financial Instruction
Not Applicable.
(c) Exhibits
The following exhibits are filed herewith:
Exhibit No. Description
10.18 Agreement of Sale and Purchase of
Greater South Texas Savings Bank,
FSB by the Company, dated November
29, 1999.
10.19 Departure Agreement dated
December 6, 1999 between Terry
G.Hartnett and the Company.
Item 8. Change in Fiscal Year:
Not Applicable.
Item 9. Sales of Equity Securities Pursuant to
Regulation S:
Not Applicable.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AUSTIN FUNDING.COM CORPORATION
(Registrant)
By: /s/ GLENN A. LAPOINTE
----------------------------
Glenn A. LaPointe
President
Dated: December 9, 1999
4
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
10.18 Agreement of Sale and Purchase of Greater South Texas
Savings Bank, FSB by the Company, dated November 29, 1999.
10.19 Departure Agreement dated December 6, 1999 between Terry
G. Hartnett and the Company.
</TABLE>
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EXHIBIT 10.18
AGREEMENT OF SALE
AND PURCHASE
This Agreement of Sale and Purchase (this "Agreement") dated as of the
29th day of November, 1999, is between Austin Funding.com Corporation, a Nevada
corporation ("Buyer") and the undersigned Greater South Texas Savings Bank, FSB
stockholders ("Sellers").
W I T N E S S E T H:
WHEREAS, Sellers own 4,444 shares, or approximately 59%, ("Sellers'
Shares") of the 7,500 issued and outstanding shares ("Shares") of Common Stock
of Greater South Texas Savings Bank, FSB (the "Bank"); and
WHEREAS, Buyer desires to acquire, upon the terms and subject to the
conditions for the consideration herein set forth, Sellers' Shares and to later
make a tender offer for the remaining capital stock of the Bank; and
WHEREAS, Sellers desire to sell Sellers' Shares upon the terms and
subject to the conditions and for the consideration herein set forth;
NOW, THEREFORE, the parties hereto agree as follows:
1. Closing; Sale and Purchase of Stock.
(a) Closing. The closing (the "Closing") of the transactions
provided for in this Agreement shall take place at the offices of Buyer's
counsel at 111 Congress Avenue, Suite 1000, Austin, Texas, at 10:00 a.m. on the
fifteenth (15th) business day following the last of the conditions precedent set
forth in Sections 6 and 7 hereof is satisfied (or waived, as the case may be) or
such other date as may be mutually approved in writing by Buyer and Sellers such
date being herein referred to as the "Closing Date." If the Closing has not
occurred prior to March 31, 2000 or such later date as shall be mutually
approved in writing by Buyer and Sellers, this Agreement shall be null and void;
and all parties shall be relieved therefrom without any liability or obligation
to each other or to any person except with regard to Section 8(n) of this
Agreement which shall remain in full force and effect.
(b) Sale and Purchase. At the Closing, Sellers shall deliver
to Buyer certificates representing Sellers' Shares, duly endorsed in blank or
accompanied by duly executed stock powers in blank, and in proper form for
transfer, with signatures guaranteed by a national or state bank. In
consideration therefor, Buyer shall on the Closing Date deliver or cause to be
delivered to each of the Sellers a check for the purchase price of their
respective Seller Shares. The purchase price for each of the Seller Shares will
be the price per share equal to 1.5 times the Book Value Per Share of the Bank
as of the Closing Date. As used in this Agreement, the term "Book Value Per
Share" shall mean the common shareholders' equity of the Bank on a per share
basis as calculated by independent certified public accountants of the Buyer's
choosing and pursuant to GAAP.
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2. Due Diligence Review.
(a) Information. Sellers will provide Buyer with all
information they may have regarding the Bank, including copies of annual
reports, meeting notices, financial information, shareholder lists, stock
certificates, proxies and other similar information that the Sellers may have
collected as a shareholder of the Bank. From the date of this Agreement until
the Closing Date, Sellers will provide Buyer with copies of all information or
communications it receives related to the Bank. Sellers will cooperate with
Buyer in making requests for information from officers and directors of the
Bank. Seller acknowledges and consents to Buyer and its representatives
communicating with and collecting information form the Bank's officers,
directors and shareholders in an effort to conduct its due diligence review and
complete the transactions contemplated herein. Seller further acknowledges that
in order for Buyer to conduct its due diligence review as contemplated in
subsection (b) hereof, the Buyer must receive full and free access to the Bank's
personnel, properties (including subsurface testing), contracts, books and
records, examination reports, environmental reports, audits, shareholder lists
and other existing documents and data as buyer may reasonably request (the "Bank
Information").
(b) Buyer's Review. Buyer's obligations in this Agreement are
specifically subject to Buyers' completion of a financial, technical and legal
audit of the Bank by Buyer, conducted by such accountants, technical employees
and attorneys as Buyer may desire, confirming to Buyer's sole satisfaction that
the assets, loans, securities, liabilities, deposits, insurance of accounts,
licenses, regulatory relationships, obligations, revenues, projections,
business, customer base, business operations and tax liabilities of the Bank are
as represented herein and to the Buyer's sole satisfaction. Confirmation of the
customer base shall include the right of Buyer to contact such customers and
conduct such due diligence investigation relating to customer relations as Buyer
deems necessary or appropriate. If Buyer determines within ninety (90) days from
the receipt of all of the Bank's Information, that, in Buyer's sole judgment and
absolute discretion, for any reason or no reason, that the Bank and the above
items are not suitable or desirable to Buyer, Buyer shall give Sellers written
notice thereof and Buyer shall thereafter be released from all further
obligations under this Agreement, except with regard to Section 8(n).
3. Representations, Warranties and Covenants of Sellers. Each of
Sellers hereby represents and warrants unto, and covenants with, Buyer as
follows:
(a) He, she or it, as the case may be, is the record and
beneficial owner of the number of Sellers' Shares specified on the signature
page of this Agreement and at the Closing will deliver good and marketable title
to his, her or its Shares free and clear of all liens, claims, encumbrances,
pledges, options, charges and assessments. Except for shares of the Preferred
Stock, the Sellers do not own or hold any rights to acquire any additional
shares of the capital stock of the Bank (by exercise of stock options or
otherwise) or any interest therein or any voting rights with respect to any
additional shares. Upon payment for, and delivery of, the Shares in accordance
with the terms of this Agreement, Buyer will be the owner of the Shares, free
and clear of any adverse claims.
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(b) He, she or it, as the case may be, will use his or her
best efforts to assist Buyer in obtaining all corporate, governmental or similar
approvals or consents.
(c) This Agreement constitutes the legal, valid and binding
obligation of Sellers, enforceable against Sellers in accordance with its terms.
Sellers have the absolute and unrestricted right, power, authority and capacity
to execute and deliver this Agreement and any and all closing documents and to
perform their obligations under this Agreement and the Sellers' closing
documents.
(d) To the best of Seller's knowledge, there exist no
contingencies or liabilities which would have a material adverse effect on (i)
the Bank or its financial condition, business, operations, properties or assets,
or (ii) the consummation of the transactions herein contemplated. There is no
event, circumstance, situation or fact known to any of the Sellers which has not
been disclosed to the Buyer and which, if disclosed, would reasonably be
expected to affect the decision of the Buyer to enter into this Agreement.
4. Reserved.
5. Representations, Warranties and Covenants of Buyer. Buyer hereby
represents and warrants unto, and covenants with, Sellers as follows:
(a) Buyer is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Nevada.
(b) This Agreement constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
Buyer has the right, power, and authority to execute and deliver this Agreement
and to perform its obligations under this Agreement.
(c) Buyer has no reason to believe that it would not be able
to obtain timely regulatory approval of its acquisition of the Sellers' Shares.
(d) Buyer has either available cash or irrevocable funding
commitments sufficient to enable it to pay the purchase price to the Sellers.
6. Conditions to Buyer's Obligations Hereunder. The obligation of Buyer
to acquire Sellers' Shares is, except as may be waived in writing by Buyer,
subject to the fulfillment at or prior to the Closing Date of each of the
following conditions:
(a) Representations. The representations, warrants and
covenants of the Sellers contained in this Agreement shall be true in all
material respects, and, in addition, shall be deemed to have been made again at
and as of the Closing Date and shall, (except as affected by transactions
permitted by this Agreement) then be true in all material respects. Sellers
shall deliver a certificate to Buyer at Closing affirming the foregoing.
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(b) Compliance with Terms. Sellers shall have performed and
complied with all terms and conditions required by this Agreement to be
performed or complied with by them at or prior to the Closing Date. In addition,
there shall not have occurred any event, change, development or trend in the
business or financial condition of either the Bank or the operations of the Bank
with respect to its assets or liabilities which could materially adversely
affect the business, properties, earnings or assets of either the Bank or the
value thereof, nor shall any action or proceeding have been commenced or
threatened or any judgment, decree or order been entered which would materially
adversely affect the business, assets or financial condition of either the Bank
or the transactions contemplated by this Agreement, nor shall any law,
resolution or order have been adopted, issued or announced by any governmental
entity or agency which would materially adversely affect the business, assets
and financial conditions of either the Bank or the transactions contemplated by
this Agreement.
(c) No Casualty. There shall not have occurred any substantial
casualty to the Bank's principal office building or its branch office as set
forth in Section 4(i) of this Agreement, or to the records or data, or any major
item of equipment, stored or installed therein.
(d) Consents to Purchase and Sale. Any third party consents,
including spousal consents if applicable, as, in the opinion of counsel for
Buyer, may be necessary to effect the sale of the Shares to the Buyer shall have
been delivered to the Buyer in form and substance satisfactory to it.
(e) Regulatory Approvals and Compliance. Full compliance with,
and all necessary approvals or waivers of approval of, the OTS and any other
governmental authority as may have or assert jurisdiction, and all rules and
regulations as may be promulgated by any of such authorities, to the entire
transaction herein contemplated, shall have been secured and documentation of
such approvals or waivers received by Buyer.
7. Condition to Sellers' Obligations Hereunder. The obligation of
Sellers hereunder to sell and deliver the Sellers' Shares to Buyer except as may
be waived in writing by Sellers, is subject to the fulfillment at or prior to
the Closing Date of each of the following conditions:
(a) Representations. The representations, warrants and
covenants of the Buyer contained in this Agreement shall be true in all material
respects, and, in addition, shall be deemed to have been made again at and as of
the Closing Date and shall, (except as affected by transactions permitted by
this Agreement) then be true in all material respects. Buyer shall deliver a
certificate to Sellers at Closing affirming the foregoing.
(b) Compliance with Terms. Buyer shall have performed and
complied with all terms and conditions required by this Agreement to be
performed or complied with by it at or prior to the Closing Date.
(c) Purchase Price. The purchase price as set forth in
provision (b) of Section 1(b) of this Agreement shall have been fully paid in
accordance with said provision.
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(d) Tender Offer. Buyer shall have made a binding tender offer
which commits Buyer to purchase for cash up to 100% of Common Stock of the Bank
at the purchase price set forth in Section 1(b) and up to 100% of the Bank's
preferred stock at its liquidation preference plus accrued and unpaid dividends.
(e) Regulatory Approvals and Compliance. Full compliance with,
and all necessary approvals or waivers of approval of, the OTS and any other
governmental authority as may have or assert jurisdiction, and all rules and
regulations as may be promulgated by any of such authorities, to the entire
transaction herein contemplated, shall have been secured and documentation of
such approvals or waivers received by Buyer.
8. Covenants.
(a) Best Efforts. Subject to the terms and conditions of this
Agreement, each of Sellers and Buyer (i) shall use its best efforts in good
faith to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary or advisable under applicable laws and regulations so
as to permit and otherwise enable consummation of the transactions contemplated
herein as promptly as reasonably practicable, it being the intention of the
parties that the tender offer be consummated following the Closing and (ii)
shall cooperate fully with each other to that end.
(b) Notification. Between the date of this Agreement and the
Closing Date, each party of this Agreement will promptly notify the other
parties in writing if such party becomes aware of any fact or condition that
causes or constitutes a breach of any other party's representations and
warranties as of the date of this Agreement, or if such party becomes aware of
the occurrence after the date of this Agreement of any fact or condition that
would be materially adverse to the other parties' interests or would (except as
expressly contemplated by this Agreement) cause or constitute a breach of any
such representation or warranty had such representation or warranty been made as
of the time of occurrence or discovery of such fact or condition.
(c) No Negotiation. Until such time, if any, as this Agreement
is terminated, Sellers will not, directly or indirectly solicit, initiate or
encourage any inquiries or proposals from, discuss or negotiate with, provide
any information to, or consider the merits of any unsolicited inquiries or
proposals from, any person or entity (other than Buyer) relating to any
transaction involving the sale of their Shares. Sellers will promptly inform
Buyer orally and in writing of any such negotiations or discussions.
9. Miscellaneous.
(a) Survival. The representations and warranties in this
Agreement of all parties to the Agreement shall survive the Closing.
(b) Assignment; Parties Bound. Neither party may assign any of
its rights under this Agreement without the prior consent of the other parties,
which will not be unreasonably withheld, except that Buyer may assign, delegate
or otherwise transfer, in whole or
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from time to time in part, to one or more Buyer affiliates. The terms,
provisions and conditions hereof shall be binding upon and inure to the benefit
of the parties hereto and their respective legal representative, successors,
heirs and assigns.
(c) Applicable Law. This Agreement shall be construed and
enforced in accordance with the laws of the State of Texas.
(d) Payment of Expenses. Buyer and Sellers will each be solely
responsible for the payment of their respective expenses regarding the
transactions contemplated hereby.
(e) Fees. Sellers represent and warrant to Buyer that no
corporation, firm or person is entitled to receive from them any brokerage
commission or finder's fee, or any other similar fee or commission, in
connection with this transaction. Buyer represents and warrants to Sellers that
any such commission or fee that it has incurred or authorized, it will pay and
each covenants to and agrees with the other to hold the other harmless from any
such fee or commission incurred or alleged to be incurred by authorization of
such party.
(f) Notices. Any notice provided for or permitted to be given
under this Agreement by any party to the other party must be in writing, and it
may be served by depositing same in the United States mail, addressed as
provided for hereinbelow, postage prepaid and registered or certified, return
receipt requested, or by delivering the same in person to such party, or by
prepaid telegram. Notice deposited in the mail in the manner hereinabove
described shall be effective upon expiration of two business days after it is so
deposited. Notice given in any other manner shall be effective if and when
received by the addressee. For the purposes of notice, the addresses of the
parties shall be as follows:
If to Buyer to: Glenn A. LaPointe
823 Congress Avenue, Suite 1000
Austin, Texas 78701
with a copy to: Selman & Munson, P.C.
111 Congress Avenue, Suite 1000
Austin, Texas 78701
Attention: Jack A. Selman
Facsimile No.: 512/505-5956
If to Sellers to: Ms. Anita Kibbe
P.O. Box 131
Falfurrias, Texas 78355
and Bracewell & Patterson, L.L.P.
South Tower Pennzoil Place
711 Louisiana Street, Suite 2900
Houston, Texas 77002-2781
Attn: William T. Luedke IV
Facsimile No.: 713/221-1212
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(g) Waivers. Either Sellers or Buyer may by an instrument in
writing extend the time for or waive the performance of any of the obligations
of the other or waive compliance by the other with any of the covenants
contained in this Agreement.
(h) Titles to Sections. The titles to and headings of
sections, subsections, and paragraphs are for convenience of reference only and
do not constitute a part of this Agreement.
(i) Entire Agreement. This instrument, together with any other
instruments, documents, exhibits and certificates to be delivered pursuant to
the terms hereof, together contain the entire agreement between the parties
hereto with respect to the transactions contemplated hereby.
(j) Amendments. This Agreement may be amended by an instrument
in writing executed by each of the parties hereto.
(k) Public Announcements. Any public announcement or similar
publicity with respect to this Agreement or the contemplated transactions will
be issued, if at all, at such time and in such manner as Buyer and Sellers
mutually agree upon, provided that Buyer may make such disclosures as required
under applicable securities laws without the agreement of the Sellers. Unless
consented to by Buyer in advance or required by any legal requirements, prior to
the Closing, Sellers shall keep this Agreement strictly confidential and may not
make any disclosure of this Agreement to any person.
(l) Further Assurances. The parties agree (i) to furnish upon
request to each other such further information, (ii) to execute and deliver to
each other such other documents and (iii) to do such other acts and things, all
as the other party may reasonably request for the purpose of carrying out the
intent of this Agreement and the documents referred to in this Agreement.
(m) Arbitration. Any controversy or claim arising out of this
Agreement, or the breach thereof, shall be settled by arbitration in accordance
with the rules of the American Arbitration Association, and judgment upon the
award rendered by the arbitration may be entered in any court having
jurisdiction thereof. The arbitration agreement set forth herein shall not limit
a court from granting a temporary restraining order or preliminary injunction in
order to preserve the status quo of the parties pending arbitration. Further,
the arbitrator(s) shall have power to enter such orders by way of interim award,
and they shall be enforceable in court. The place of such arbitration shall be
in Travis County, Texas.
(n) Confidentiality. All information furnished previously in
connection with the transactions contemplated by this Agreement or pursuant
hereto shall be treated as the sole property of the party furnishing the
information until consummation of the transactions contemplated hereby and, if
such transactions shall not occur, the party receiving the information shall
either destroy or return to the party which furnished such information all
documents or other materials containing, reflecting or referring to such
information, shall use its best efforts to keep confidential all such
information, and shall not directly or indirectly use such information for any
competitive or other commercial purposes. The obligation to keep such
information confidential shall continue for five years from the date the
proposed transactions are abandoned but shall not
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apply to (i) any information which (x) the party receiving the information can
establish was already in its possession prior to the disclosure thereof by the
party furnishing the information; (y) was then generally known to the public; or
(z) became known to the public through no fault of the party receiving the
information; or (ii) disclosures pursuant to a legal requirement or in
accordance with an order of a court of competent jurisdiction, provided that the
party which is the subject of any such legal requirement or order shall use its
best efforts to give the other party at least ten business days prior notice
thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
multiple counterparts, each of which shall be deemed an original but all of
which shall be deemed as one, as of the date and year first above written.
BUYER:
AUSTIN FUNDING.COM CORPORATION
By: /S/ GLENN A. LAPOINTE
--------------------------------
Glenn A. LaPointe, President
NO. OF SHARES OWNED: SELLERS:
720 /s/ ANNA S. KIBBE
--------------------------------
Anna S. Kibbe
1,245 /s/ AVERY L.R. KIBBE
--------------------------------
Avery L.R. Kibbe
AVERY L.R. KIBBE TRUST
112 By: /s/ CLYDE JOHNSON, III
--------------------------------
Clyde Johnson, III, Trustee
1,159 /s/ SCOTT KIBBE
-----------------------------------
Scott Kibbe
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ANNA S. KIBBE TRUST
By: BANK OF AMERICA, Trustee
76 By:
--------------------------------
Its:
-------------------------------
141 /s/ MARY ANN FUNK
-----------------------------------
Mary Ann Funk
13 /s/ ROBERT FUNK
-----------------------------------
Robert Funk
11 /s/ JOHN FUNK
-----------------------------------
John Funk
11 /s/ CHRISTOPHER FUNK
-----------------------------------
Christopher Funk
11 /s/ CARL FUNK
-----------------------------------
Carl Funk
37 /s/ ROBERT R. SCOTT, JR.
-----------------------------------
Robert R. Scott, Jr.
8 /s/ NEEL ANN SCOTT
-----------------------------------
Neel Ann Scott
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200 /s/ LAWRENCE J. HAUSER
-----------------------------------
Lawrence J. Hauser
100 /s/ LOUELLA P. HAUSER
-----------------------------------
Louella P. Hauser
367 /s/ PRESNALL C. CAGE
-----------------------------------
Presnall C. Cage
113 /s/ E.G. HOPPER
-----------------------------------
E.G. Hopper
75 /s/ NOVIA HOPPER OSBURN
-----------------------------------
Novia Hopper Osburn
15 /s/ JEAN MCINTYRE
-----------------------------------
Jean McIntyre
<PAGE> 1
EXHIBIT 10.19
DEPARTURE AGREEMENT
This Departure Agreement ("Agreement") is made and entered into as of
the 6th day of December, 1999 (the "Effective Date") by and among Austin
Funding Corporation, a Texas corporation (the "Company") and Terry G.
Hartnett ("Hartnett").
R E C I T A L S
WHEREAS, Hartnett is employed by, and an officer of the Company; and
WHEREAS, Hartnett desires to resign, and the Company desires to accept
his resignation, as an employee and officer of the Company, and all other
positions Hartnett may have with the Company's subsidiaries and affiliates, if
any (the "Other Entities"); and
WHEREAS, Hartnett and the Company desire to set forth certain
agreements with respect to Hartnett=s departure from the Company.
A G R E E M E N T S
NOW, THEREFORE, in consideration of the Recitals and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and confessed, the parties hereto agree as follows:
1. Hartnett agrees, effective as of December 31, 1999 (the "Departure
Date"), to resign his positions as an officer and employee with the Company and
the Other Entities and to execute and deliver to the Company a resignation
letter in substantially the same form as the letter attached hereto as Exhibit
"A".
2. Effective as of the Departure Date, Hartnett hereby RELEASES,
ACQUITS, and DISCHARGES the Company (together with its officers, directors,
agents, servants, employees, attorneys and all persons, natural or corporate, in
privity with it or any of them) from all obligations and liabilities relating to
Hartnett's employment by, and service as an officer on behalf of, the Company,
its subsidiaries and affiliates and all matters, causes of action, accountings,
suits, controversies, agreements, damages, claims and demands, whether
heretofore or hereafter accruing, whether now known or not known to the parties
prior to and including the date hereof, in any way directly or indirectly
arising out of or in connection with such employment or service and any
documents, transactions or dealings between the parties relating hereto, it
being the intent of Hartnett to fully and completely discharge the Company, its
subsidiaries and affiliates (together with its and their officers, directors,
agents, servants, employees, attorneys and all persons, natural or corporate, in
privity with it or any of them) from any and all liabilities and obligations
related to or arising from all prior relationships, instruments and courses of
dealing, except that the parties shall continue to be bound by the obligations
described in this Agreement.
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3. Hartnett agrees to indemnify and hold the Company, its officers,
directors and employees harmless from and against all expenses, claims, losses,
damages or liabilities (or actions in respect thereof), including any of the
foregoing, incurred with respect to the Stock sold pursuant to the Stock
Purchase Agreement by and between Hartnett and Austin Funding.com Corporation
and/or Hartnett's actions and activities while an officer, officer and/or
employee of the Company, whether in settlement of any litigation, commenced or
threatened, arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in this Agreement or any other agreement
executed by Hartnett on behalf of the Company, or based on any omission (or
alleged omission) to state herein a material fact required to be stated herein
or therein or necessary to make the statements herein or therein, in light of
the circumstances in which they were made, not misleading, or any violation by
Hartnett of any federal or state law or regulation during his service as an
officer and/or employee of the Company, and Hartnett will reimburse the Company
for any legal and any other expenses reasonably incurred in connection with
investigating, preparing or defending any such claim, loss, damage, liability or
action. The foregoing indemnity shall survive the Effective Date of this
Agreement.
4. The Company hereby RELEASES, ACQUITS, and DISCHARGES Hartnett
(together with his heirs, executors, administrators, assigns, legal
representatives and attorneys) from all matters, causes of action, accountings,
suits, controversies, agreements, damages, claims and demands, whether
heretofore or hereafter accruing, whether now known or not known to the parties
prior to and including the date hereof, in any way directly or indirectly
arising out of or in connection with his employment or service and any related
documents and any transactions or dealings between the parties hereto, it being
the intent of the Company to fully and completely discharge Hartnett (together
with his heirs, executors, administrators, assigns, legal representatives and
attorneys) from any and all liabilities related to or arising from all prior
relationships, instruments and courses of dealing, except that the parties shall
continue to be bound by the obligations described in this Departure Agreement
and those items not related to Hartnett's employment or service to the Company.
Notwithstanding the foregoing, the Company does not release, acquit or discharge
any matters, causes of action, accountings, suits, controversies, agreements,
damages, claims and demands to the extent they result from actions taken or
omitted to be taken by Hartnett fraudulently, in bad faith, or from Hartnett's
negligence.
5. The Company agrees to use reasonable efforts to obtain the release
of Hartnett as a guarantor for the benefit of the Company.
6. The Company agrees, commencing on the Departure Date and continuing
through June 30, 2001, to continue in full force and effect at its cost and
expense Hartnett=s existing health and, if any, life insurance coverage(s). Each
of the Company and Hartnett agree to reasonably cooperate with the other with
respect to such coverage during such period, including, without limitation, the
filing of insurance claims and the provision of insured benefits information.
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7. The Company agrees, commencing on the Departure Date and continuing
through December 31, 2003, to provide Hartnett, at the Company's cost and
expense, with a lease vehicle which comports with the specifications listed in
Exhibit "B" attached hereto; provided, however, the lease cost for such vehicle
shall not exceed the sum of $1,500.00 per month.
8. The undersigned represent and warrant that they are fully authorized
and empowered to execute this Agreement and that neither they, nor the entities
they represent, if any, are subject to any limitation or disability created by
law or otherwise which would in any manner or to any extent prevent or restrict
the undersigned (as a representative or as a principal) from entering into and
fully performing their obligations under this Agreement.
9. Hartnett and the Company each represent and warrant to each other
that they have not transferred to any person or entity any claim or cause of
action or any part thereof relating to Hartnett's employment and service or any
other matters covered by this Agreement, and that each is the 100% owner of all
claims and causes of action it may have or has ever had against the other.
10. This Agreement shall be binding upon and inure to the benefit of
the parties hereto, their respective heirs, legal representatives, successors
and assigns.
11. The construction and validity of this Agreement shall be governed
by the laws of the State of Texas. All obligations hereunder are performable in
Travis County, Texas.
12. Any controversy or claim arising out of this Agreement, or the
breach thereof, shall be settled by arbitration in accordance with the rules of
the American Arbitration Association, and judgment upon the award rendered by
the arbitration may be entered in any court having jurisdiction thereof. The
arbitration agreement set forth herein shall not limit a court from granting a
temporary restraining order or preliminary injunction in order to preserve the
status quo of the parties pending arbitration. Further, the arbitrator(s) shall
have power to enter such orders by way of interim award, and they shall be
enforceable in court. The place of such arbitration shall be in Travis County,
Texas.
13. In any case in which one or more of the provisions contained in
this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein.
14. This Agreement contains the entire agreement of the parties hereto.
There are no other agreements, oral or written, among the parties concerning
Hartnett=s employment by, or service as an officer, on behalf of, the Company,
and this Agreement can be amended only by written agreement signed by the
parties hereto and by reference made a part hereof.
15. This Agreement shall be effective as of the Effective Date,
notwithstanding the fact that certain obligations hereunder shall be effective
only as of the Departure Date.
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IN WITNESS WHEREOF, the parties have executed this Agreement in
multiple counterparts, each of which shall be deemed an original.
/s/ TERRY G. HARTNETT
-----------------------------------
Terry G. Hartnett, Individually
AUSTIN FUNDING CORPORATION, a Texas
corporation
By: /s/ GLENN A. LAPOINTE
--------------------------------
Glenn A. LaPointe, President
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EXHIBIT "A"
Terry G. Hartnett
6000 Shepherd Mountain Cove
Austin, Texas 78745
- ---------------------
VIA HAND DELIVERY
- ---------------------
December 31, 1999
Mr. Glenn A. LaPointe
President
Austin Funding Corporation
823 Congress Avenue, Suite 515
Austin, Texas 78701
Dear Glenn:
Please be advised that I resign my positions as an employee and officer of
Austin Funding.com Corporation, effective this date. I additionally resign all
my positions, if any, with Austin Funding Corporation, effective this date.
Very truly yours,
/s/ TERRY HARTNETT
<PAGE> 6
EXHIBIT "B"
Vehicle Lease Specifications
1998 Mercedes SL 500
