Free Opposition (Other) - District Court of Colorado - Colorado

Case 1:04-cr-00153-LTB

Document 406-3

Filed 01/12/2006

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benefit plan listed on Schedule 2.24 and subject to Title IV of ERISA, there have been no reportable events (as stich teml is defined in § 4043 of ERISA).

2.25 AuthorilY~lLQf No Breachby AgrS(el)}ent. Seller is authorizedto enter into this Agreementand this Agreement shan be binding on Seller's successors. The execution and delivery by Seller of this Agreementdoesnot, and the performanceand consummation the of transactionscontemplatedby this Agreementwill not, result in any conflict with, breachor violation of or default, tcnnination or forfeiture under(or upon the giving of notice or the lapse of time, or both, result in any conflict with, breachor violation of or default, terminationor forfeiture under) any terms or provisions of Twentieth Century's Articles of Incorporationor Bylaws, each as amendedthrough the date hereof, or any statute,rule, regulation,judicial or governmentaldecree,order or judgment, agreement, including, but not limited to Third Party Agreementsof Twentieth Century, lease or other instrument to which SeHeror Twentieth Centuryis a party or to which any of its or their assets subjectand which individually or in the is aggregate materialto TwentiethCentury. is 2.26 Bank Accounts. Schedule 2.26 identifies aU bank accountsused in connectionwith the operationsof Twentieth Century whetheror 110t such accountsare held in the name of TwentiethCentury andlists the respective signatories therefor.
Section 3 Representations and Warranties OfPtlfChaser. As a material inducement to Seller to enter into this Agreement and sell the Shares,Purchaserhereby representsand warrants that: 3.1 Enforceabihty. This Agreement, when executed and delivered by the parties thereto, will constitute the legal, valid, and binding obligation of Purchaser enforceable against him in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, and similar statutes affecting creditors' rights generally and judicial limits on equitable remedies. 3.2 NQ Conflict with Oth~r Instruments or Agu;;ements. The execution, delivery, and performance by Purchaser of this Agreement and all other agreements contemplated hereby to which Purchaser is a party will not result in a breach or violation of, or constitute a defau!t under, any material agreement to which Purchaser is a party or by which Purchaser is bound.

3.3 GovernmentalAutborities. Exceptas set forth in Schedule 3.3, (i) Purchaser not is required to submit any notice, report, Of other filing with any govemmental or regulatory authorityin connectionwith the executionanddelivery by Purchaser this Agreementand the of consummation of the purchase and (U) no consent, approval, or authorization of any governmental regulatory authority is requiredto be obtainedby Purchaser any affiJiatein or or connectionwith Purchaser'sexecution,delivery, and performanceof this Agreementand the consummation this purchase. of 3.4 Litigation. There are no actions,suits.proceedings, governmentalinvestigations or or inquiries pending or, to the knowledge of Purchaser,threatenedagainst Purchaseror its properties, assets, operations, or businessesthat might delay. prevent, or hinder the consummation this purchase. of Investment Repre~entations. 3.5.1 Purchaseris acquiring the Sharesfor his own account for purposesof investmentand without expectation,desire, or needfor resale and not with the view toward distribution,resale,subdivision,or fractionalization the Shares. of 3.5.2 During the courseof the negotiation this Agreement, of Purchaser has reviewedaUinformation provided to it by TwentiethCenturyand hashad the opportunityto ask questions of and receive answers from representatives Twentieth Century concerning of Twentieth Century, the securities offered and sold hereby, and this purchase,and to obtain certainadditionalinformationrequested Pure.haser. by 3.5

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Case 1:04-cr-00153-LTB

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3.5.3 Purchaseris an Accredited Investor as such term is defined in Rule 501(a) adopted under the Securities Act of 1933, as amended("1933 Act"), and the information containedin the PurchaserQuestionnaireattachedhereto as Schedule 3.5.3, is accurateand complete.
3.5.4 Purchaser understands that the Shares to be purchased have not been registered under Securities Act of 1933 (" 1933 Act"), or under any state securities laws.

3.5.5 Purchaserunderstands that the Sharescannot be resold in a transactionto which the 1933Act and state securitieslaws apply unless(i) subsequently registeredunderthe 1933 Act and applicable state securities laws or (ii) exemptionsfrom such registrationsare available. Purchaser awareof the provisions Rule 144promulgated undcr the 1933Act is of which penlllt limited resaleof shares purchased a privatetransaction in subjectto the satisfaction of certainconditions. 3.5.6 Purchaserunderstands that 110 public market now exists for the Sharesand
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3.5.7 Purchaser understandsthat the certificates for the Shares will bear the following legend: TIUS CERTIFICATE HAS NOT BEEN REGISTEREDUNDER THE SECURITIES ACT OF 1933. THE CORPORATION WILL NOT TRANSFER THIS CERTIFICATE UNLESS (i) THERE IS AN EFFECTIVE REGISTRATION COVERING THE SHARES REPRESENTEDBY THIS CERTIFICATE UNDER THE SECURITIES ACT OF 1933AND ALL APPLICABLE STATE SECURITIES LAWS, (ii) IT FIRST RECEIVES A LETTER FROM AN ATTORNEY, ACCEPTABLE TO THE BOARD OF DIRECTORSOR ITS AGENTS, STATING THAT IN THE OPINION OF THE ATIORNEY THE PROPOSED TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND UNDER ALL APPLICABLE STATE SECURITIES LAWS, OR (iii) THE TRANSFER IS MADE PURSUANT TO RULE 144 UNDER THE SECURITIES ACT OF 1933. 3.6 Brokerage.There are 110 claims for brokerage commissions, finders' fees,or similar compensation connectionwith this purchase in basedon any arrangement agreement or entered into by Purchaser binding upon any of thepartieshereto. and Section4 Covenant$of SeUer.Sellercovenants agrees and with Purchaser follows: as
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4.1 Satisfactionof Conditions.Sellerwill usereasonable efforts to obtain aspromptlyas practicable satisfactionof the conditionsto Gosing set forth in Section 6 and any necessary the consents waiversunder or amendments agreements which TwentiethCenturyis bound. or to by

4.2

Supplements S<,fuedules. time to time prior to the Closing,Seller wilt to From

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promptly supplement amendthe Schedules or with respectto any matterhereafterarisingthat, if existing or occurring at the date of this Agreement,would have beenrequired to be set forth or described any Scheduleand will promptly notify Purchaser any breachthat SeHer in of discovers of any representation,warranty, or covenantcontainedin this Agreement.No supplement or amendment any Schedulemadepursuantto this sectionwill be deemedto cure any breachof of any representation or warranty madein this AgreementunlessPurchaser of specifically agrees theretoin writing; provided, however,that if this purchase closed,Purchaser be deemed is will to have waivedits rights with respectto any breachof a representation, warranty, or covenantor anysupplement any Schedule which it shallhavebeennotified pursuantto this Section4.2. to of 4.3 ConductQfTwentieth Centul)"s Business Pendingthe Closing.From the datehereof until the Closing, and except as otherwise consentedto or approved by Purchaser,Seller covenants agrees and with Purchaser follows: as

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4.3.1 &:i.ill!!L,CQurseof Business.Seller will use his best efforts to ensurethat Twentieth Century will operateits business accordance in with the reasonable judgment of its management diligently and in good faith, consistentwith past managementpractices, and Twentieth Century will continue to useits reasonable efforts to keep available the servicesof presentofficers and employees(other than planned retirements)and to preserve its present relationships with persons havingbusiness dealings with it. 4.:';:l UlstntmUons. TwenUeth century w1l1 not deClare,pay, or set aSIdetor paymentany dividend or otherdistributionin respect its capital stock. of . - - - - - --. . ... -.
4.';,'; t.:apn:alt.:nanges. lwenuem LemUf)' WIll not Issue any snares ot ltS stOCK, or issue or sell any securities convertible into, or exchangeablefor, or options, warrants to purchase, or rights to subscribe to, any shares of its stock or subdivide or in any way reclassify any shares of its capita1stock, or repurchase reacquire, cancel, or redeem any such shares. 4.3.4 ~. The assets, property, and rights now owned by Twentieth Century

wiH be used,preserved, and maintained, far as practicable, the ordinary courseof business, as in
to the sameextent and in the same condition as said assets,property. and rights are on the date of this Agreement, and no unusual Of novel methods of purchase,sale, management, or operation of said properties or business or accumulation or valuation of inventory will be made or instituted. Without the prior consent of Purchaser,Twentieth Century wi!] not encumber any of its assetsor make any commitments relating to such assets,property. or business, except in the ordinary course of its business. 4.3.5 Insurance. SeHer and Twentieth Century will keep or cause to be kept in effect and undiminished the insurance now in effect on its various properties and assets,and will purchase such additional insurance, at Purchaser's cost, as Purchasermay request. 4.3.6 Employees. Twentieth Century will not grant to any employee any promotion, any increase in compensation, or any bonus or other award other than promotions. increases, or awards that are regularly scheduled in the ordinary course of business or contemplated on the date of this Agreement or that are, in t.he reasonable judgment of managementof Twentieth Century, in Twentieth Century's best interest. 4.3.7 NQ..YiQ)JlliQn~.. Twentieth Century will comply in all material respects with all statutes, laws, ordinances, rules, .and regulations applicable to it in the ordinary course of business.

4.4 Best Efforts. Seller will useits best efforts to causeaU conditions to Closing to be satisfied. Sedion 5 Covenant of Purchaser. Purchaser will use its best efforts to causethe conditions setforth in Section7 to be satisfied. SectiQn Conditions Precedentto the ObligatiQns9f Purchase~'. 6 Each and every obligation of Purchaser underthis Agreementis subjectto the satisfaction, or before the Closing, of each at of the following:conditions: 6.1 Representations and Warranties.Performance.Each of the representationsand warranties madeby Seller hereinwill be true andcorrectin all materialrespects of the Closing as with the sameeffect as thoughmadeat that time exceptfor changes contemplated, permitted,or required by this Agreement;Seller and Twentieth Century will have perfoffi1edand complied with all agreements, covenants, and conditionsrequiredby this Agreementto be performedand compliedwith by them prior to the Closing; and Purchaser havereceived,at the Closing, a will certificateof Seller,signedby Seller,statingthat eachof the representations warranties and made by Seller herein is true and correct in all materialrespects of the Closing exceptfor changes as contemplated, permitted.Of required by this Agreementand that Seller and Twentieth Century
have performed and complied with all agreements, covenants, and conditions required by this Agreement to be perlormed and complied with by them prior to the Closing.

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6.2 Litigation. No materialaction,suit, or proceeding beforeany court, governmental or regulatoryauthority wiH havebeencommenced be continuing, and no investigationby any and governmentalor regulatory authority will have beencommencedand be continuing, and no action,investigation,suit, or proceedingwin be threatened the time of Closing, against at SeHer, Twentieth Century, Of Purchaseror any of their affiliates, associates, officers, or directors, seekingto restrain,prevent,Of changethis purchase, questioningthc validity or legality of this Agreement seekingdamages connection or in with this Agreement. 6.3 Legal Opinion. Purchaser havereceivedan opinion of Seller's legal counsel,in will form and substance set forth in Schedule 6.3 attachedhereto,addressed the Buyer, and as to datedasof the ClosingDate; 6.4 MaNrjaI Change,From thedateof this Agreement the Closing,TwentiethCentury to shall not havesufferedany materialadverse change(whetheror not suchchangeis referredto or describedin any supplementto any Exhibit or Scheduleto this Agreement) in its business prospects, financial condition, working capital, assets, liabilities (absolute,accrued,contingent, or otherwise),or operations. 6.5 CQrporate Action. Sellerwin havefurnishedto Purchaser:
6.5.1 The corporate charter and all amendmentsthereto and restatementsthereof of Twentieth Century certified by the official having custody over corpQrate records in the jurisdiction of incorporation of Twentieth Century in question:

6.5.2 The currentbylaws and minutesof all meetingsand consents shareholders of anddirectorsof Twentieth Century; 6.4.3 Bach certit1catcof qualification to do businessas a foreign corporationof TwentiethCentury; 6.5.4 All stocktransaction recordsof TwentiethCentury;and 6.5.5 A certificate of the Secretary AssistantSecretaryof TwentiethCenturyas or to the accuracy,currency, and completeness eachof the above documents,the incumbency of and signaturesof officers of Twentieth Century,the absence any amendment the charter of to documents of Twentieth Century, and the absenceof any proceeding for dissolution or liquidationof Twentieth Century. 6.6 J3l11ployment Agr~ement. Treve Kinsey shall have entered into an employment agreement with Twentieth Century, suitablein all respects Purchaser, the form attached to in heretoasSchedule6.6. 6.7 DeJiverypf the Seller's Shares. Seller shall havedeliveredand Purchaser shall have receivedat the Closing certificatesrepresenting of the Shares, all duly endorsedto Purchaser or accompaniedby stock powers duly executedin blank (with signatures guaranteedby any national bank or trust company)and otherwisein foml acceptable transfer on the booksof for TwentiethCentury,duly endorsed Purchaser. to 6.8 Paymentof Consulting Fee by Dir~fJP9CS, Seller shall have confirmed and cause DirectDocsto havepaid to the Corporation consultingfee of $25.000.00 the described § 2. in ~~ction7 Conditions Precedent to the Obligati9ns of Seller. Each and every obligation of Sellerunderthis Agreementis subjectto the satisfaction, or beforethe Closing, of eachof the at following conditions:
7.1 Rep£~sentatiQns 1:11'1<:\ Warranties Performance. Each of the representations and warranties made by Purchaser herein will be true and correct in all material respects as of the Closing with the same effect as though made at that time except for changes contemplated, permitted, or required by this Agreement; Purchaserwill have performed and complied with all agreements,covenants, and conditions required by this Agreement to be perfomlCd and complied

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with by it prior to the Closing; and Seller will have received,at the:Closing, a certificate of Purchaser, signedby the Purchaser, stating that each of the representations warrantiesmade and by Purchaserherein is true and correct in all material respectsas of the Closing except for changescontemplated, permitted, or required by this Agreement and that Purchaserhas performed and complied with all agreements,covenants,and conditions required by this Agreement be performedandcompliedwith by it prior to the Closing. to 7.2 tlQYroceeding or Litigation. No action, suit, or proceedingbefore any court (other than suits seekingmonetarydamages only and in the aggregate sum of less than $10,000)and any governmental regulatory authority will havebeencommenced Of and be continuing.and no investigationby any governmentalOf regulatory authority will have been commencedand be continuing, and no action, investigation, suit, Of proceedingwill be threatenedat the time of Closing, againstSeller, Twentieth Century, Of Purchaser any of their affiliates, associates, or officers, or directors, seeking to restrain, prevent, or change this purchase, questioning the validity or legality of this purchase, seeking Of damages connectionwith this purchase. in
7.3 Release 011 First Collateral and An Other PQr.~on<1LG\)..f:!r.antjes. Purchaser shall cause Seller to be released from his personal guaranty to First Collateral Services, Inc. the Corporation's Master Mortgage Warehousing Agreement dated June 12, 2000 between First Collateral and Twentieth Century, as amended within sixty (60) days of Closing and all of Seller>sother personal guaranties of the obligations of the Corporation as listed in Schedule 7.3.

7.4 Retain Direi;t Enqorsement Underwriter/Non-Supervised Mortgagee.At or before the Closing, Purchaser shall have takenthosestepsnecessary Twentieth Centuryto become for designated approvedby the Departmentof Housingand Urban Development("HUD") for and participationin the Direct Endorsement Program,pursuantto the requirementsset forth in 24 C.F.R. §203.3 and Directive Number 4000A, REV~l, "Single Family Direct Endorsement Program,"Chapter 2, Mortgagee Approval. Such approval requirementsinclude, but are not limited to Purchaserobtaining at his expensefor employment with Twentieth Century an underwriter that is authorized by Twentieth Century to bind TwentiethCcntury on matters involving the origination of mortgagesthrough the Direct Endorsement procedureand that is registered with the Secretaryof HUD and suchregistrationis maintainedwith the Secretary of HUD, In addition, Purchaser shall, at his expense, take thosestepsin order to causeTwentieth Centuryto obtain from HUD its designation a non-supervised as mortgagee from BUD pursuant to 24 C.F.R.§202.14, 7.5 Checking and SflvingsAccounts and First Union Account. As soon as practicable after Closing, PurchasershaHcausethe Corporation'schecking and savingsaccounts,and the accountat First Union Bank of California in connectionwith the First Collateral warehouse credit facility to changethe authorizedsignatories such accountsfrom Seller to Purchaser's on designee. Purchaser Seller will cooperate and with eachother to ensurethat certainpre-Closing liabilities which becomepayable. after dosing, e.g.,employeepayroll and taxesfor the month of November, 2003,will be.satisfied. Section8. Additional Agreements.
8.1 Employment of &isting Management. For a period of at least three years following the Closing, Purchaser agrees to continue to offer continuous employment to the management of Twentieth Century, consisting of the Operations Manager, Closing Manager, Production Manager, Senior Underwriter, Quality Control Manger and the managers of each of the branches, according to the tenIlS of their employment agreementsor arrangements at the time of Closing, subject to standard policies concerning raises, bonuses and commissions, and subject further to Twentieth Century's right to terminate employment pursuant to the terms of their employment agreement, or if no written employment exists, for any reason with or without cause. The President of Twentieth Century at the time of Closing shall be subject to a written employment agreementpursuant to the provisions of Section 6.6 above.

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82

Confidenti
party is subject, no public announcement regarding the consummation of the transactions described herein, shall be made.without the mutual approval of both SeIler and Purchaser. Both SeHerand Purchaser agree to hold all information regarding this Agreement and the transactions described herein in confidence until tht~time of any such public announcement directed by the

parties.
8.3 Effortli..1Q...k..onsllmmate. Subject to the terms and conditions of this Agreement. each party agrees to use its reasonable efforts to take. or cause to be taken, an actions, and to do. or cause to be done, all things necessary,proper, or advisable under applicable laws to consummate and make effective, as soon as practicable after the date of this Agreement, the transactions contemplated by this Agreement, including using its commercially reasonable efforts to lift or rescind any Order adversely affecting its abiHty to consummate the transactions contemplated herein and to cause to be satisfied the conditions desc.ribedin this Agreement. Each Party shall use its reasonable efforts to obtain all Consents necessaryor desirable for the consummation of the transactions contemplated by this Agreement.

9.2 Cons1Jrnrnation Closing. All acts,deliveries, and confirmations comprising thc of Closing regardless chronologicalsequence of shall be decmedto occur contemporaneously and simultaneously upon the occucrcnce the last act, deJivery, confirmation of the Closing and of or none of such acts,deliveries, or confirmationsshall be effective unlessand until the last of the sameshall have occurred.The time of the Closinghas beenscheduledto co_rre_spon~ the ~ith
close of business at the principal office of Twentieth Century and, regardless of when the last act, delivery, or confirmation of the Closing shall take place, the transfer of the Shares shall be deemed to occur as of the close of business at the principal office of Twentieth Century on the date of the Closing. Section 1Q Survival of Representations and Warranties, Indemnification. 10.1 Survival. All representations and warranties in this Agreement and any other certificate, schedule or document delivered pursuant to this Agreement will survive the Closing for a period of two years, or the applicable statute of limitations, whichever is later (unless the damagedParty knew or had reason to know of any misre.presentation breach of wacranty at the or time of Closing).

10.2 Indemnification by Seller. Seller shall indemnify and hold Purchaserharmlessfor any loss, cost, expense other damagesufferedby Purchaser or resulting from, arising oot of, or incurred with respect to the falsity or the breachof any representation, warranty, covenantor agreement madeby Seller in connectionwith this Agreement. Without limiting the generalityof

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