Item 1.01 | | Entry into a Material Definitive Agreement |
On September 1, 2022, Rains Agency Inc. (“Rains Agency”), an indirect wholly-owned subsidiary of SmartFinancial, Inc., entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Sunbelt Group LLC (“Sunbelt”) and the sole member of Sunbelt, A. Mark Slater, Jr. (together with Sunbelt, the “Sellers”), pursuant to which Rains Agency has acquired substantially all of the assets and assumed certain liabilities of Sunbelt (the “Acquisition”). The Acquisition was completed on September 1, 2022.
Under the terms of the Purchase Agreement, the aggregate purchase price payable by Rains Agency is $6,500,000, of which $5,200,000 was paid in cash at the closing of the Acquisition, and the remainder of which will be payable in equal cash installments on September 1, 2023, and September 1, 2024 (the “Deferred Payments”). The Deferred Payments are subject to acceleration in certain circumstances involving a change in control of Rains Agency and are subject to set-off for any indemnification or other obligations of the Sellers to Rains Agency under the terms of the Purchase Agreement.
The parties have made customary representations, warranties and covenants in the Purchase Agreement. The Purchase Agreement also includes mutual indemnification provisions, subject to certain standard exceptions and limitations.
The representations, warranties and covenants set forth in the Purchase Agreement, which have been made only for the purposes of the Purchase Agreement and solely for the benefit of the parties to the Purchase Agreement, may be subject to limitations agreed upon by the contracting parties, including standards of materiality applicable to the contracting parties that differ from those applicable to investors. Accordingly, the Agreement is included with this filing only to provide investors with information regarding the terms of the Agreement, and not to provide investors with any other factual information regarding the parties or their respective businesses. You should not rely on the representations and warranties contained in the Purchase Agreement for any purpose.
The foregoing description of the Purchase Agreement and the Acquisition does not purport to be complete and is qualified in its entirety by reference to the Purchase Agreement, which is filed as Exhibit 2.1 hereto and is incorporated herein by reference.
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Item 7.01 | | Regulation FD Disclosure |
On September 6, 2022, SmartFinancial issued a press release announcing the execution of the Purchase Agreement. A copy of the press release is furnished as Exhibit 99.1 to this current report on Form 8-K and incorporated herein by reference.
