**Exhibit 10.17**

 

**CONFIDENTIAL**

 

 

**ASSETPURCHASE AGREEMENT**

 

**by****and among**

 

**WELLSFARGO FINANCIAL AMERICA, INC.,**

**WELLSFARGO FINANCIAL CAR LLC,**

**WELLSFARGO FINANCIAL KENTUCKY, INC.,**

**WELLSFARGO FINANCIAL NEVADA, INC.,**

**WELLSFARGO FINANCIAL NORTH CAROLINA, INC.,**

**WELLSFARGO FINANCIAL TEXAS, INC., and**

**WELLSFARGO FINANCIAL, INC.**

 

**and**

 

**CARSACQUISITION LLC, and**

**COMPUCREDITCORPORATION**

 

**Dated asof December 10, 2004**

 

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**EXECUTIONCOPY**

 

**ASSETPURCHASE AGREEMENT**

 

This ASSET PURCHASEAGREEMENT (this “Agreement”) dated as of December 10, 2004 byand among Wells Fargo Financial America, Inc., a Pennsylvania corporation,Wells Fargo Financial CAR LLC, a Delaware limited liability company, WellsFargo Financial Kentucky, Inc., a Kentucky corporation, Wells FargoFinancial Nevada, Inc., a Nevada corporation, Wells Fargo Financial NorthCarolina, Inc., a North Carolina corporation, and Wells Fargo FinancialTexas, Inc., a Texas corporation (each individually a “Seller” andcollectively, the “Sellers”) and each a wholly owned subsidiary of WellsFargo Financial, Inc., an Iowa corporation (“Sellers’ Parent”), andCARS Acquisition LLC, a Georgia limited liability company (the “Buyer”)and wholly owned subsidiary of CompuCredit Corporation, a Georgia corporation (“Buyer’sParent”).

 

**RECITALS**

 

WHEREAS, the Sellers arein the business of, among other things, purchasing and servicing motor vehicleretail installment sales contracts secured by new and used motor vehicles andlight-duty trucks primarily (but not exclusively) from Buy-Here/Pay-HereDealers throughout the United States (the “Business”); and

 

WHEREAS, the Sellers nowdesire to sell and assign, and the Buyer desires to buy, substantially all ofthe assets and assume certain liabilities of the Business.

 

NOW, THEREFORE, in considerationof the mutual covenants and promises contained herein and for other good andvaluable consideration, the receipt and adequacy of which the parties hereby acknowledge, the parties hereto agree as follows:

 

**ARTICLE I.  DEFINITIONS**

 

1.1       **Defined Terms**.  As used in this Agreement, the followingterms and variations thereof shall have the following meanings specified orreferred to in this *Section 1.1*:

 

“**Accounts Receivable**”means (i) all trade accounts receivable and other rights to payment fromcustomers of the Business, including an account with a Seller that representsthe unpaid principal balance, late fees and other charges incurred inconnection with an Obligor’s Vehicle Contract and the Related Security, (ii) allother accounts or notes receivable of the Business, (iii) the accrued butunpaid interest earned on any of the foregoing, and (iv) any claim, remedyor other right related to any of the foregoing.

 

“**Acquisition Date**”shall mean, with respect to a Vehicle Contract, the date on which a Selleracquired such Vehicle Contract from a Dealer.

 

“**AdverseClaims**” means, for any assets or property of a Person, a claimof ownership or any Lien in, of, or on, such asset or property in favor of anyother Person, except those in favor, or for the benefit, of Buyer.

 

“**Affiliate**”of a Person shall mean (i) any Person directly or indirectly owning,controlling or holding, with power to vote, ten percent (10%) or more of theoutstanding voting securities of such other Person; (ii) any Person tenpercent (10%) or more of whose outstanding voting securities are directly orindirectly owned, controlled or held with power to vote, by such other Person; (iii) anyPerson, directly or indirectly, controlling, controlled by or under commoncontrol with, such other Person; or (iv) any officer, director, partner,co-partner, or employee of such other Person.

 

“**AncillaryAgreements**” shall mean the Bill of Sale, Power of Attorney,Assignment and Assumption Agreement, Lease Assignment and AssumptionAgreements, Subscriber Agreement, Transition Services Agreement and such otherdocuments or agreements that the parties deliver in connection with theconsummation of the transactions contemplated hereby.

 

“**Ancillary Product**”means, with respect to any Vehicle Contract, any extended vehicle servicecontract, vehicle warranty, guaranteed auto protection policies or waivers,mechanical breakdown contracts or such other products or services sold to anObligor in connection with his or her financing of a Vehicle.

 

“**Bankruptcy Exception**”shall mean, with respect to the enforceability of any agreement, contract,obligation or commitment, any limitation thereon imposed by (i) bankruptcy,insolvency, fraudulent conveyance, reorganization, moratorium and other similarlaws affecting creditors’ rights generally and (ii) the general principlesof equity, regardless of whether asserted in a proceeding in equity or at law.

 

“**BestEfforts**” means the efforts a prudent Person desirous ofachieving a result would use in similar circumstances to achieve that result asexpeditiously as possible.

 

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“**Books and Records**”shall mean, to the extent they exist, (i) Records and lists of the Sellerspertaining to (a) the Purchased Assets, (b) the Business, (c) thecustomers (including former customers), Dealers (including any former Dealers),suppliers or Employees; (ii) all product, business and marketing plans ormaterials of Sellers relating to the Business, the Purchased Assets or AssumedLiabilities; and (iii) operating Records maintained by the Sellers relatingto the Business, the Purchased Assets or the Assumed Liabilities.

 

“**Breach**”means any breach of, or any inaccuracy in, any representation or warranty orany breach of, or failure to perform or comply with, any covenant orobligation, in or of this Agreement or any other contract, or any event whichwith the passing of time or the giving of notice, or both, would constitutesuch a breach, inaccuracy or failure.

 

“**Business**”shall have the meaning set forth in the Recitals.

 

“**Business Day**”means any day other than (i) Saturday or Sunday or (ii) any other dayon which bank institutions are authorized by law to be closed or any day theNew York Stock Exchange is closed.

 

“**Buy-Here/Pay-HereDealer**” means an independent or non-franchise automobile dealerwho provides consumer automobile financing on its own behalf through a captivefinance operation or Related Finance Company (as defined under the Code) forthe purpose of underwriting and servicing motor vehicle retail installmentcontracts that were originated directly by such dealer; provided, however,to the extent a Buy-Here/Pay-Here Dealer arranges for the contemporaneouspurchase of motor vehicle retail installment contracts through one or moreunrelated third parties, for purposes of this Agreement, such dealer shall notbe deemed a Buy-Here/Pay-Here Dealer with respect to such third party financingtransactions.  As used in thisdefinition, “contemporaneous purchase” shall refer to motor vehicle retailinstallment contracts which are approved prior to execution, as well as thosethat are approved for purchase within seven (7) days of the date ofexecution (i.e., “spot deliveries”), and in each case, purchased or acquired atpar or at a premium to par.

 

“**Closing Date**”shall mean the later of (i) March 1, 2005, or (ii) such otherdate on which the closing conditions set forth in *Article VII* are satisfied or waived by the partieshereto.

 

“**ClosingDate Data**” shall mean (i) the data file containing theelectronic Record and Accounts Receivable balance of each of the VehicleContracts and (ii) the Excel file containing the electronic Record andbalance of each Dealer’s Dealer Reserve, in each case, as transferred as partof the Purchased Assets and prepared as of the Closing Date.

 

“**Closing****Purchase Price**”shall mean the Purchase Price as determined based on the Closing Balance Sheet.

 

“**COBRA**”means the Consolidated Omnibus Budget Reconciliation Act of 1985.

 

“**Code**” shallmean the Internal Revenue Code of 1986, as amended.

 

“**Collections**”means, with respect to any Vehicle Contract, any and all of the following tothe extent received by a Seller or its Affiliate after the Closing Date or onor prior to the Closing Date but not applied to such Vehicle Contract (andreflected on its related Accounts Receivable): (i) all payments; (ii) allRecoveries, (iii) all proceeds received from the liquidation of therelated Vehicle; (iv) all insurance proceeds received under any InsurancePolicy with respect to such Vehicle Contract or the related Obligor; (v) allrebates of premiums and other amounts relating to an Insurance Policy orAncillary Product financed under the Vehicle Contract; and (vi) all feesand other receipts.

 

“**ComputerFiles**” shall mean all computer or other electronic files used inthe Business including the archived contact management data used exclusively bythe Business (i.e., “Goldmine data”). Notwithstanding the foregoing, this definition shall not include, to theextent licensed by the Sellers or their Affiliates pursuant to anon-transferable Third-Party license agreement or which is not used exclusivelyor primarily by the Business, any (i) word processing, spreadsheet,presentation or database programs, (ii) operating systems or system ofrecord (i.e., “Supreme”) used by the Business or (iii) other computerprograms or systems used in connection with Business.

 

“**Consent**”means any approval, consent, ratification, waiver or other authorization.

 

“**Contract**”means any agreement, contract, Space Lease, note, loan, evidence ofindebtedness, purchase order, letter of credit, indenture, employmentagreement, instrument, obligation or commitment to which a Seller is a party oris bound (or otherwise has acquired rights and duties thereunder) and whichrelates to the Business, whether oral or written.

 

“**Contract Files**”shall mean the Records relating to and evidencing a Contract maintained by aSeller as of the Closing Date.  Withrespect to the Vehicle Contracts, the Contract Files may include:

 

(a)   the fully executed original Vehicle Contract;

 

(b)   the original certificate of title or evidence of ownershipand security interest;

 

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(c)   to the extent they exist, the transaction history for theVehicle Contract from the Acquisition Date up to and including the ClosingDate;

 

(d)   tothe extent they exist, electronically stored collection and customer servicenotes from the Acquisition Date up to and including the Closing Date; and

 

(e)   to the extent that they exist, all other documentation orRecords held by or on behalf of a Seller, including vehicle theft registrationdocuments and references.

 

“**Damages**”shall mean any loss, Liability, claim, damage, cost or expense (includingreasonable Third-Party costs of investigation and defense and reasonableThird-Party attorneys’ fees and expenses), whether or not involving aThird-Party Claim.

 

“**Dealer**”means, with respect to any Vehicle Contract and the related Vehicle, theautomobile dealer or its Affiliate that (i) sold the related Vehicle, (ii) originatedthe Vehicle Contract, and/or (iii) sold and assigned such Vehicle Contractto a Seller.

 

“**Dealer Agreement**”means the agreement pursuant to which a Dealer has (i) assigned, and aSeller has acquired, a Vehicle Contract, including any short form purchaseagreement authorized by such agreement to affect subsequent transactionsbetween the parties thereto or (ii) assigned the right to service and/orcollect any payments payable on a Vehicle Contract owned by such Dealer.

 

“**Dealer Reserve**”shall mean the reserve account established for each Dealer pursuant to therelated Dealer Agreement and that is used to effect the Dealer’s repurchase ofany Vehicle Contract: (i) that is determined by the Sellers to beuncollectible (in a manner consistent with its internal collection andservicing procedures); (ii) as to which a Breach has occurred or toSellers’ Knowledge, is Threatened; or (iii) for any other reason set forthin such Dealer Agreement.

 

“**Disclosure Schedule**”shall mean the schedule attached hereto and delivered by the Sellers tothe Buyer contemporaneously herewith, which sets forth the exceptions to therepresentations and warranties contained in *Article IV*hereof and certain other information called for by this Agreement.  Unless otherwise specified, each reference inthis Agreement to any numbered schedule is a reference to that numbered schedule whichis included in the Disclosure Schedule.

 

“**Effective Time**”shall mean the time at which the parties consummate the transactionscontemplated by this Agreement in compliance with the terms and conditions setforth herein.

 

“**Employee**”means all full- and part-time employees of the Sellers employed exclusively inthe Business as conducted as of the date hereof.

 

“**EmployeePlans**” means (i) all “employee benefit plans,” as definedin Section 3(3) of ERISA, and all other material employee benefitarrangements (including any trusts maintained for such arrangements) relatingto the Employees or the Business, including any such arrangements providing forseverance pay, sick leave, vacation pay, salary continuation for disability,retirement benefits, deferred compensation, bonus pay, incentive pay, stockoptions, hospitalization insurance, medical insurance, life insurance,scholarships or tuition reimbursements, maintained by the Sellers or theirAffiliates or to which the Sellers or their Affiliates are obligated tocontribute thereunder for current or former Employees, and (ii) all “employeepension benefit plans,” as defined in Section 3(2) of ERISA,maintained by the Sellers or any ERISA Affiliate or to which the Sellers or anyERISA Affiliate have contributed or been obligated to contribute thereunderduring the last six (6) years.

 

“**ERISA**”shall mean the Employee Retirement Income Security Act of 1974 or any successorLaw, and regulations and rules issued pursuant to that Act or anysuccessor Law.

 

“**ERISA Affiliate**”shall mean any entity that is (or at any relevant time was) a member of a “controlledgroup of corporations” with, under “common control” with, or a member of an “affiliatedservice group” with, the Sellers or the Buyer, as applicable, as defined in Section 414(b),(c), (m) or (o) of the Code or Section 4001(a)(14)or 4001(b) of ERISA.

 

“**Facilities**”shall mean all Leased Real Property (including the Space Leases relatedthereto) and related facilities (and any improvements thereto) used in theoperation of the Business, including the Tangible Personal Property used oroperated by the Sellers or their Affiliate.

 

“**GAAP**” meansgenerally accepted accounting principles in the United States as in effect fromtime to time.

 

“**Governing Documents**”shall mean with respect to any Person: (i) if a corporation, the articlesor certificate of incorporation and the bylaws; (ii) if a generalpartnership, the partnership agreement and any statement of partnership; (iii) ifa limited partnership, the limited partnership agreement and the certificate oflimited partnership; (iv) if a limited liability company, the articles oforganization and operating agreement or (v) any amendment or supplement toany of the foregoing.

 

“**GovernmentalAuthorization**” shall mean any Consent, license, registration orpermit issued, granted, given or otherwise made available by or under authorityof any Governmental Entity or pursuant to any Law.

 

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“**GovernmentalEntity**” shall mean any court, administrative agency orcommission or other federal, state, provincial, local or foreign governmentalauthority, instrumentality, agency or commission.

 

 “**Insurance Policy**” means (i) anycomprehensive, collision, fire, theft or other insurance policy maintained byan Obligor that also lists a Seller as loss payee with respect to the relatedVehicle or (ii) any credit life, involuntary unemployment, or accident andhealth insurance maintained by an Obligor in connection with any VehicleContract.

 

“**IntellectualProperty Rights**” shall mean all of the following, owned or usedexclusively by the Sellers or their Affiliates, to the extent they exist: (i) trademarksand service marks (registered and unregistered), trade dress, trade names andother names and slogans embodying business goodwill or indications of origin,all applications or registrations in any jurisdiction pertaining to theforegoing and all goodwill associated therewith; (ii) patents, patentableinventions, discoveries, improvements, ideas, know-how, formula methodology,processes, technology and computer programs, software and databases (includingsource code, object code, development documentation, programming tools,drawings, specifications and data) and all applications or registrations in anyjurisdiction pertaining to any of the foregoing including all re-issues,continuations, divisions, continuations-in-part, renewals or extensionsthereof; (iii) all trade secrets, including confidential and othernon-public information, and the right in any jurisdiction to limit the use ordisclosure thereof; (iv) copyrights in writings, designs, mask works orother works, and applications or registrations in any jurisdiction for theforegoing; (v) database rights; (vi) Internet websites, domain namesand registrations or applications thereof; (vii) licenses, immunities,covenants not to sue and the like relating to any of the foregoing; (viii) booksand records described or used in connection with any of the foregoing; and (ix) claimsor causes of action arising out of or related to infringement ormisappropriation of any of the foregoing.

 

“**IRS**”means the Internal Revenue Service.

 

“**Knowledge**”for purposes of this Agreement, an individual will be deemed to have Knowledgeof a particular fact or other matter if that individual is actually aware ofthat fact or matter.  A Person (otherthan an individual or a Seller) will be deemed to have Knowledge of aparticular fact or other matter if any individual who is serving, or who has atany time served, as a director or officer of that Person (or in any similarcapacity) has, or at any time had, Knowledge of that fact or other matter.  A Seller will be deemed to have Knowledge ofa particular fact or other matter if any individual who is serving, or who hasat any time served, as a director, officer or Key Employee of that Seller orlegal counsel of Sellers’ Parent that provides legal services to the Business(or, in each case, in any similar capacity) has, or at any time had, Knowledgeof that fact or other matter.

 

“**Law**”shall mean any statute, rule, regulation or other provision of law, or anyorder, judgment or other direction of a court or other tribunal, or any othergovernmental requirement, permit, registration, license or authorization.

 

“**Liability**”means any direct or indirect liability, indebtedness, obligation, commitment,expense, claim, deficiency, guaranty or endorsement of or by any Person,whether accrued, absolute, contingent, liquidated or unliquidated.

 

“**License**”shall mean all Governmental Authorizations necessary or desirable for the past,present or anticipated conduct of, or relating to the operation of theBusiness.

 

“**Lien**” shallmean any claim, pledge, lien, security interest or other encumbrance of anykind whatsoever.

 

“**Material Adverse Change**”or “**Material Adverse Effect**” shall meanany change, event or effect that is or could reasonably be expected to bematerially adverse to the business, assets, condition (financial or other),results of operations or prospects of any party (or the Business, as the casemay be) or which otherwise could reasonably be expected to prevent theconsummation of the transactions contemplated hereby.

 

“**Obligor**”shall mean, for a Contract, each Person obligated to pay such Contract.

 

“**Order**”means any order, injunction, judgment, decree, ruling, assessmentor arbitration award of any Governmental Entity or arbitrator.

 

“**Ordinary Course ofBusiness**” shall mean the ordinary and usual course of theconduct of the Business as currently conducted and consistent with pastpractices and not knowingly in violation of any Law or Order; provided, however,that a Contract related to the employment of any Active Employee shall not bedeemed to have been entered into in the Ordinary Course of Business.

 

“**Person**”shall mean an individual, a partnership, a corporation, business trust, limited liability company, limited liability partnership,joint stock company, trust, unincorporated association, joint venture or otherentity or a Governmental Entity.

 

“**PreliminaryPurchase Price**” shall mean the Purchase Price as determinedbased on the Interim Balance Sheet prepared as of the month-end immediatelypreceding the Closing Date.  For theavoidance of doubt, an example of the application of the foregoing calculationis set forth in **Exhibit A**using the Initial Balance Sheet.

 

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“**Proceeding**”means any action, arbitration, audit, hearing, investigation, litigation orsuit (whether civil, criminal, administrative, judicial or investigative,whether formal or informal, whether public or private) commenced, brought,conducted or heard by or before, or otherwise involving, any GovernmentalEntity or arbitrator.

 

“**Purchased Assets**”shall mean substantially all of the assets of the Business, including thefollowing:

 

(i)            allFacilities;

 

(ii)           allAccounts Receivable;

 

(iii)          allContracts and related Contract Files except the Contracts and related ContractFiles set forth on Schedule 2.2(d);

 

(iv)          allLicenses or renewals thereof, in each case to the extent transferable to Buyer,including those listed on Schedule 4.1(d);

 

(v)           to the extent theyexist and are in the possession of the Active Employees or located in the Facilities(or otherwise held by the Sellers’ Representatives in connection with theBusiness), copies of all data and Books and Records related to and usedexclusively or primarily in the Business including client customer lists andRecords, current and historical operational data and Records, current andhistorical financial data and Records, referral sources, operating guides and manuals, all Computer Files,creative materials, advertising materials, sales and promotional materials,studies, reports, correspondence and other similar documents and Records and,subject to applicable Law, copies of personnel Records;

 

(vi)          except as set forth in *Section 2.2(g)*, all rights of Sellersrelating to deposits and prepaid expenses, claims for refunds and rights to offsetsin respect thereof, in each case to the extent related to the Business; and

 

(vii)         allinsurance benefits, including rights and proceeds, arising from or relating tothe Purchased Assets or the Assumed Liabilities prior to the Effective Time,unless expended in accordance with this Agreement.

 

“**PurchasePremium**” shall equal twenty-three million dollars ($23,000,000).

 

“**PurchasePrice**” shall mean (i) the Net Assets *plus* (ii) the Purchase Premium.

 

“**Record**”means information that is inscribed on a tangible medium or that is stored inan electronic or other medium and is retrievable in perceivable form.

 

“**Recoveries**”means, with respect to any Vehicle Contract that has been charged-off, allmonies collected by a Person (from whatever source, including proceeds of adeficiency balance or insurance proceeds recovered after the charge-off) onsuch Contract.

 

“**Related Person**”means, with respect to (i) a particular individual: (a) each othermember of such individual’s Family; (b) any Person that is directly orindirectly controlled by any one or more members of such individual’s Family; (c) anyPerson in which members of such individual’s Family hold (individually or inthe aggregate) a Material Interest; and (d) any Person with respect towhich one or more members of such individual’s Family serves as a director,officer, partner, executor or trustee (or in a similar capacity); and (ii) aspecified Person other than an individual: (a) any Affiliate and (b) anyPerson with respect to which such specified Person serves as a general partneror trustee (or in similar capacity).

 

For purposes of this definition: (i) “control”means the possession, direct or indirect, of the power to direct or cause thedirection of the management and policies of a Person, whether through theownership of voting securities, by contract or otherwise, and shall beconstrued as such term is used in the rules promulgated under theSecurities Act of 1933, as amended; (ii) the “Family” of an individualincludes (a) the individual, (b) the individual’s spouse, (c) anyother natural person who is related to the individual or the individual’sspouse within the second degree and (d) any other natural person whoresides with such individual; and (iii) “Material Interest” means director indirect beneficial ownership (as defined in Rule 13d-3 under theSecurities Exchange Act of 1934, as amended) of voting securities or othervoting interests representing at least ten percent (10%) of the outstandingvoting power of a Person or equity securities or other equity interestsrepresenting at least ten percent (10%) of the outstanding equity securities orequity interests in a Person.

 

“**Related Security**”means, for any Vehicle Contract, all of the Sellers’ right, title and interestin, to and under (i) the Vehicle related to such Vehicle Contract; (ii) anyInsurance Policies relating to such Vehicle or to the related Obligor, (iii) allLiens and property subject thereto, if any, purporting to secure payment ofsuch Vehicle Contract, together with all financing statements describing anycollateral securing such Vehicle Contract, (iv) all guarantees, letters ofcredit, insurance and other agreements supporting or securing payment of suchVehicle Contract, (v) all Ancillary Products related to such Vehicle Contract,(vi) rights or claims against the applicable Dealer and (vii) allproceeds of the foregoing.

 

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“**Representative**”means, with respect to a particular Person, any director, officer, employee,agent, consultant, advisor, accountant, financial advisor, legal counsel orother person acting on behalf of, or with the consent of, that Person.

 

“**Space Lease**”shall mean any lease or rental agreement pertaining to the occupancy of anyimproved space on any land.

 

“**Tangible Personal Property**”shall mean all machinery, equipment, tools, furniture, office equipment,computer hardware (except for any email or other mainframe computer serversthat are not used exclusively or primarily in the Business), supplies, materialsand other items of tangible personal property of every kind owned or leased bythe Sellers exclusively or primarily for use in the operation of the Business,together with any express or implied warranty (to the extent such warranty istransferable) by the manufacturers or sellers or lessors of any item orcomponent part thereof and all maintenance records and other documents relatingthereto.

 

“**Tax**” meansany federal, state, local or foreign income, gross receipts, license, payroll,employment, excise, severance, stamp, occupation, premium, windfall profits,environmental (including taxes under Code Section 59A), customs duties,capital stock, franchise, profits, withholding, social security, unemployment,disability, real property, personal property, sales, use, transfer,registration, value-added, alternative or add-on minimum, estimated or othertax, fee, assessment, levy, tariff, charge or duty of any kind whatsoever,whether computed on a separate or consolidated, unitary or combined basis or inany other manner, and any interest, penalty, addition or additional amountthereon imposed, assessed or collected by or under the authority of anyGovernmental Entity or payable under any tax-sharing agreement or any othercontract or agreement, whether disputed or not.

 

“**TaxReturn**” means any return (including any information return),report, statement, schedule, notice, form, declaration, claim for refund orother document or information (i) relating to Taxes, or (ii) filedwith or submitted to, or required to be filed with or submitted to, anyGovernmental Entity in connection with the determination, assessment,collection or payment of any Tax or in connection with the administration,implementation or enforcement of or compliance with any Law relating to anyTax.

 

“**Third Party**”means a Person that is not a party to this Agreement.

 

“**Third-Party Claim**”means any claim against either the Buyer or any of the Sellers by a Third Partywhether or not involving a Proceeding.

 

“**Threatened**”shall mean, with respect to an action, Proceeding or other matter, that anydemand or statement has been made (in writing or orally, if made to any of theofficers or directors of a Person), or that any other event has occurred or anyother circumstances exist, that would lead a reasonable person to conclude thatsuch Proceeding or other matter is likely to be asserted, commenced, taken orotherwise pursued in the future.

 

“**Vehicle**”means any new and used motor vehicle, light-duty truck, sports utility vehicle,van or minivan, together with all accessories thereto, the financing of whichgave rise to a Vehicle Contract.

 

“**Vehicle Contract**”shall mean a motor vehicle retail installment sale Contract (including anywritten amendments and assumptions thereto) owned or serviced by a Sellerpursuant to a Dealer Agreement pursuant to which the related Obligor has (i) agreedto pay the amount financed set forth therein for the purchase of the relatedVehicle and the related finance charge thereon and (ii) granted the Dealera security interest in the Vehicle to secure the payment of the amount financedand the finance charge.

 

1.2.          **Other Defined Terms**.  The following terms shall have the meaningsdefined for such terms in the Sections set forth below:

 
| **Term**                                        | ** ** | **Section** |
|-------------------------------------------------|------------|-------------|
| “Active Employees”                    |       | 9.1(a)      |
| “Adjustment Amount”                   |       | 2.6         |
| “Assignment and Assumption Agreement” |       | 3.2(a)(ii)  |
| “Assumed Liabilities”                 |       | 2.3         |
| “Bill of Sale”                        |       | 3.2(a)(i)   |
| “Buyer Indemnified Parties”           |       | 10.2        |
| “Closing”                             |       | 3.1         |
| “Closing Balance Sheet”               |       | 2.7(b)      |
| “Closing Net Assets”                  |       | 2.7(b)      |
| “Competing Business”                  |       | 9.6         |
| “Confidential Information”            |       | 11.1        |
| “Disclosing Party”                    |       | 11.1        |

 

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| “Excluded Assets”               |   | 2.2         |
|-------------------------------------------|--------|-------------|
| “Excluded  Liabilities”         |   | 2.4         |
| “Hired Active Employees”        |   | 9.1(b)      |
| “Initial Net Assets”            |   | 2.7(a)      |
| “Initial Balance Sheet”         |   | 4.1(f)      |
| “Interim Balance Sheet”         |   | 6.1(j)      |
| “Interim Financial Statements”  |   | 6.1(j)      |
| “Key Employee”                  |   | 7.1(h)(ii)  |
| “Lease and Novation Agreements” |   | 3.2(a)(iii) |
| “Leased Real Property”          |   | 4.1(l)      |
| “Net Assets”                    |   | 2.7(a)      |
| “Power of Attorney”             |   | 3.4         |
| “Receiving Party”               |   | 11.1        |
| “Seller Indemnified Parties”    |   | 10.3        |
| “Subscriber Agreement”          |   | 3.2(a)(iv)  |
| “Termination Fee”               |   | 8.2         |
| “WARN Act”                      |   | 4.1(k)      |

 

1.3.          **Usage**.

 

(a)   **Interpretation**.  Inthis Agreement, unless a clear contrary interpretation appears:

 

(i)            thesingular number includes the plural number and vice versa;

 

(ii)           reference to any Personincludes such Person’s successors and assigns but, if applicable, only if suchsuccessors and assigns are not prohibited by this Agreement, and reference to aPerson in a particular capacity excludes such Person in any other capacity orindividually;

 

(iii)          referenceto any gender includes each other gender;

 

(iv)          reference to anyagreement, document or instrument means such agreement, document or instrumentas amended or modified and in effect from time to time with the terms thereof;

 

(v)           reference to any Lawmeans such Law as amended, modified, codified, replaced or reenacted, in wholeor in part, and in effect from time to time, including rules andregulations promulgated thereunder, and reference to any section or otherprovision of any Law means that provision of such Law from time to time ineffect and constituting the substantive amendment, modification, codification,replacement or reenactment of such section or other provision;

 

(vi)          “hereby,”“hereunder,” “hereof,” and words of similar import shall be deemed referencesto this Agreement as a whole and not to any particular Article, Section orother provision hereof;

 

(vii)         “including”(and with correlative meaning “include”) means including without limiting thegenerality of any description preceding such term;

 

(viii)        “or”is used in the inclusive sense of “and/or”;

 

(ix)           withrespect to the determination of any period of time, “from” means “from andincluding” and “to” means “to but excluding”; and

 

(x)            referencesto documents, instruments or agreements shall be deemed to refer as well to alladdenda, exhibits, schedules or amendments thereto.

 

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(b)   **Legal Representation**. The parties negotiated this Agreement with the benefit of legalrepresentation, and any rule of construction or interpretation otherwiserequiring this Agreement to be construed or interpreted against any party shallnot apply to any construction or interpretation hereof.

 

**ARTICLE II.****  SALE AND PURCHASE**

 

2.1.          **Purchased Assets**.  Upon the terms and subject to the conditionsset forth in this Agreement, on the Closing Date, but effective as of theEffective Time, the Sellers shall sell, convey, assign, transfer and deliver toBuyer, and Buyer shall purchase and acquire from Sellers, free and clear of anyAdverse Claims, all of the Sellers’ rights, title and interest in and to all ofthe Purchased Assets without recourse, except as otherwise provided herein.

 

2.2.          **Excluded Assets**.  Notwithstanding anything to the contrarycontained in *Section 2.1* or elsewhere inthis Agreement, the following assets of the Sellers exclusively used in orrelating to the Business (collectively, the “Excluded Assets”) are notpart of the sale and purchase contemplated hereunder, are excluded from thePurchased Assets and shall remain the property of the Sellers after theClosing:

 

(a)   all cash, cash equivalents and short-term investments,including any loan loss allowance related to the Accounts Receivables;

 

(b)   all minute books, stock Records and corporate seals;

 

(c)   all insurance policies of the Sellers and rights thereunder(except to the extent specified in the definition of Purchased Assets);

 

(d)   all of the Contracts set forth in Schedule 2.2(d);

 

(e)   all Intellectual Property Rights;

 

(f)    allpersonnel Records and other Records that the Sellers are required by Law toretain in their possession; provided, however, subject toobtaining the Consent of any Employee or other Person, that, to the extentnecessary to the operation of the Business and not in violation of any Law, theSellers shall provide copies of such Records to Buyer (at Buyer’s expense);

 

(g)   all claims for refund of Taxes and other governmentalcharges of whatever nature;

 

(h)   allrights to or in any judgment, Orders or awards relating to any Proceedingcommenced by the Sellers against Third Parties prior to the Effective Time;

 

(i)    all Licenses, except to the extent transferred as aPurchased Asset; and

 

(j)    all rights of the Sellers under this Agreement and any ofthe Ancillary Agreements.

 

2.3.          **Assumed Liabilities**.  On the Closing Date, but effective as of theEffective Time, Buyer shall assume and agree to discharge only the followingLiabilities of the Sellers (collectively, the “Assumed Liabilities”):

 

(a)   any trade account payable incurred by a Seller in theOrdinary Course of Business between the date of the Initial Balance Sheet andthe Closing Date that remains unpaid as of the Effective Time;

 

(b)   anyLiability to the Sellers’ customers incurred by the Sellers in the OrdinaryCourse of Business outstanding as of the Effective Time (other than anyLiability arising out of or relating to an act or omission that occurred priorto the Effective Time);

 

(c)   the aggregate Dealer Reserve balance as set forth on theClosing Balance Sheet;

 

(d)   anyLiability arising after the Effective Time under the Contracts assignedpursuant to this Agreement (other than any Liability under such Contractsarising out of or relating to a Breach that occurred prior to the EffectiveTime);

 

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(e)   any Liability arising out of or relating to acts oromissions occurring after the Effective Time relating to any Vehicle Contractset forth on the Closing Date Data;

 

(f)    anyLiability of the Sellers (solely as such Liability relates to the Business)arising after the Effective Time under any Contract included in the PurchasedAssets that is entered into by any of the Sellers after the date hereof in theOrdinary Course of Business (other than any Liability under such Contractsarising out of or relating to a Breach that occurred prior to the EffectiveTime);

 

(g)   any other Liability of the Sellers described in Schedule 2.3(g);

 

(h)   anyLiability arising with respect to the Purchased Assets after the Effective Time(other than any Liability related to the Purchased Assets arising out of orrelating to an act or omission that occurred prior to the Effective Time);

 

(i)    any Liability arising as a result of the execution andperformance of the transactions contemplated under the Subscriber Agreement;and

 

(j)    withrespect to any Liability (regardless of whether it is assumed or excludedpursuant to this *Section 2.3*or *2.4*, respectively) arising outof any action or omission by the Sellers prior to the Effective Time, if,ninety (90) days after the Closing Date, such act or omission is continued bythe Buyer, the proportion of such Liability relating to such acts or omissionafter the Effective Time.

 

2.4.          **Excluded Liabilities**.  Notwithstanding *Section 2.3* or any other provision of this Agreement tothe contrary, all Liabilities of the Sellers (other than the AssumedLiabilities) shall remain the Liabilities of the Sellers and shall not beassumed by Buyer pursuant hereto (collectively, the “Excluded Liabilities”).  Without limiting the generality of theforegoing, Excluded Liabilities shall include the following Liabilities:

 

(a)           any Liability for Taxes arising as a result of the Sellers’operation of the Business or their ownership of the Purchased Assets prior tothe Effective Time, including any deferred Taxes of any nature;

 

(b)           any Liability under any Contract not assumed by Buyer under *Section 2.3*;

 

(c)           subjectto *Article X*, any Liabilityunder any Contract assumed by Buyer that arises out of or relates to any Breachthat occurred prior to the Effective Time;

 

(d)           anyLiability under any Employee Plans or any Liability relating to payroll, bonus,incentive (including sales commissions), vacation, sick leave, workers’compensation, unemployment benefits, pension benefits, employee stock option orprofit-sharing plans, health care plans or benefits or any other employee plansor benefits of any kind applicable to the Employees (or former Employees or both);

 

(e)           any Liability under any employment, severance, retention ortermination agreement with any Employee (or former Employee or both) of theSellers or any of their Affiliates;

 

(f)            any Liability arising out of or relating to any Employeegrievance arising out of or relating to events that occurred prior to theEffective Time whether or not the affected Employees are hired by Buyer;

 

(g)           anyLiability to indemnify, reimburse or advance amounts to any officer, director,employee or agent of the Sellers arising out of or relating to events occurringprior to the Effective Time;

 

(h)           any Liability arising out of any Proceeding pending as ofthe Effective Time;

 

(i)            anyLiability arising out of any Proceeding commenced after the Effective Time andarising out of or relating to any occurrence or event happening prior to theEffective Time;

 

(j)            subjectto *Section 2.3(j)*, anyLiability arising out of or resulting from the Sellers’ compliance ornon-compliance with any applicable Law or Order of any Governmental Entity,including non-compliance with any applicable environmental or health Law;

 

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(k)           any Liability of the Sellers arising out of or resultingfrom the consummation of the transactions contemplated by this Agreement or anyof the Ancillary Agreements;

 

(l)            any Liability of the Sellers based upon the Sellers’ actionsor omissions occurring after the Effective Time; and

 

(m)          any Liability of the Sellers not related to the PurchasedAssets or otherwise unrelated to the Business.

 

2.5.          **Consideration**.  The consideration for the Purchased Assetsshall be (a) the Preliminary Purchase Price *plus*or *minus* the Adjustment Amount and (b) theassumption of the Assumed Liabilities. At the Closing, Buyer shall deliver to the Sellers the PreliminaryPurchase Price by wire transfer in immediately available funds in accordancewith the wire transfer instructions delivered to Buyer as provided in *Section 3.2(b)*. The Adjustment Amount shall be paid in accordance with *Section 2.6*.

 

2.6.          **Adjustment Amount and Payment**.  The “Adjustment Amount” (which may bea positive or negative number) will be equal to the amount determined bysubtracting the Closing Purchase Price from the Preliminary PurchasePrice.  If the Adjustment Amount ispositive, the Sellers shall pay the Adjustment Amount by wire transfer anaccount specified by Buyer.  If theAdjustment is negative, the Buyer shall pay the Adjustment Amount by wiretransfer to the account specified in *Section 3.2(b)(i)*. Within three (3) Business days after the calculation of the ClosingNet Assets becomes binding and conclusive on the parties pursuant to *Section 2.7*, the Sellers or Buyer, asthe case may be, shall make the wire transfer payment provided for in this *Section 2.6*.

 

2.7.          **Adjustment Procedure**.

 

(a)   “Net Assets” as of agiven date shall mean the amount calculated by subtracting the book value ofAssumed Liabilities as of that date from the book value of the Purchased Assetsas of that date.  The Net Assets of theSellers as of the date of the Initial Balance Sheet (the “Initial Net Assets”)was one hundred five million four hundred eighty-eight thousand eight hundredthirty dollars ($105,488,830).

 

(b)   The Sellers shall prepare abalance sheet of the Business as of the Closing Date on the same basis andapplying the same accounting principles, policies and practices that were usedin preparing the Initial Balance Sheet (“Closing Balance Sheet”).  The Sellers shall then determine the NetAssets as of the Closing Date based upon the Closing Balance Sheet and usingthe same methodology as was used to calculate the Initial Net Assets (“ClosingNet Assets”).  The Sellers shalldeliver the Closing Balance Sheet and its determination of the Closing NetAssets to the Buyer within ten (10) Business Days after the Closing Date.

 

(c)   If within sixty (60) daysfollowing delivery of the Closing Balance Sheet and the Closing Net Assetscalculation the Buyer has not given the Sellers notice of its objection as tothe Closing Net Assets calculation (clearly identifying the basis of suchobjection), then the Closing Net Assets calculation shall be binding andconclusive on the parties and be used in computing the Adjustment Amount andthe Closing Purchase Price; provided that Buyer shall use its BestEfforts to notify the Sellers of any such objection within five (5) BusinessDays after determining the basis of such objection regardless of whether Buyerhas completed its audit of the Closing Balance Sheet as of the date of suchdetermination.

 

(d)   If Buyer timely gives theSellers such notice of objection, and if Buyer and the Sellers fail to resolvethe issues outstanding with respect to the Closing Net Assets calculationwithin sixty (60) days of the Sellers’ receipt of Buyer’s notice of objection,the parties shall submit any unresolved issues to arbitration before a singlemember panel administered by and in accordance with the rules of theAmerican Arbitration Association.  Theparties shall cooperate with and assist the arbitration panel by providingmaterials and information relating to the unresolved issues as requested by thearbitration panel.  The arbitration panel’sdetermination shall be final, binding and conclusive on the parties and shallbe used in the Closing Net Assets calculation. The Sellers (collectively) and Buyer shall each bear fifty percent (50%)of the fees and costs of any such arbitration.

 

2.8           **Contracts Not Transferable**.  Notwithstanding any provision of thisAgreement to the contrary, nothing in this Agreement shall be deemed toconstitute an agreement to transfer or assign any Contract if an attemptedtransfer or assignment, without the Consent of any Person, would constitute aBreach thereof or in any way adversely affect the rights of Buyer or Sellersthereunder.  Each Seller and Buyer shalluse its Best Efforts to obtain any Consent or waiver required to assign 

 

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to Buyer all rights, benefits and interestsunder each Contract being assumed by Buyer (or make available to Buyer thepractical benefit thereof) in a manner to permit the Business to be conductedin all material respects as currently conducted following the Effective Time.

 

#### *ARTICLE III.* CLOSING

####  

3.1.          **Closing**.  The purchase and sale provided for in thisAgreement will take place at Buyer’s offices at 245 Perimeter Center Parkway, Suite 600,Atlanta, GA 30346 commencing at 9:00 a.m. (Eastern Standard Time) on March 1,2005 or at such other date, time or location as the parties may agree (the “Closing”).  Notwithstanding the foregoing, the failure toconsummate the transaction contemplated by this Agreement on the date and timeand at the place determined pursuant to this *Section 3.1*shall not result in the termination of this Agreement and shall not relieve anyparty of any obligation under this Agreement. In such situation, the Closing shall occur as soon as practicable,subject to *Article VIII* of this Agreement.

 

3.2.          **Closing Obligations**.  In addition to any other documents to bedelivered under other provisions of this Agreement, at the Closing:

 

(a)   The Sellers shall deliver toBuyer:

 

(i)    anexecuted bill of sale for all of the Tangible Personal Property in the formattached hereto as **Exhibit B**(“Bill of Sale”);

 

(ii)   anexecuted copy of the assignment and assumption agreement relating to theContracts in the form attached hereto as **Exhibit C**(“Assignment and Assumption Agreement”);

 

(iii)  an executed copy of each leaseassignment and assumption agreement in the form attached hereto as **Exhibit D** (“Lease Assignment and AssumptionAgreements”) or such other appropriate document or instrument of transfer;

 

a.     an executed copy of thesubscriber agreement relating to the Business’ system of record, Supreme, uponterms and conditions mutually acceptable to the parties (the “SubscriberAgreement”);

 

b.     an executed copy of thetransition services agreement upon terms and conditions mutually acceptable tothe parties (the “Transition Services Agreement”);

 

(vi)  such other deeds, bills of sale,assignments, certificates of title, documents and other instruments of transferand conveyance as may be reasonably requested by Buyer, each in form andsubstance satisfactory to Buyer and its legal counsel and executed by theSellers;

 

(vii)a certificate executed by an officerof each of the Sellers as to the accuracy of their representations andwarranties as of the date of this Agreement and as of the Closing in accordancewith *Section 7.1(a) *and as to theircompliance with and performance of their covenants and obligations to beperformed or complied with at or before the Closing in accordance with *Section 7.1(b)*; and

 

(viii) a certificate of the secretary of each of the Sellerscertifying, as complete and accurate as of the Closing, attached copies of theGoverning Documents of each Seller, certifying and attaching all requisiteresolutions or actions of each Seller’s board of directors approving (A) theexecution and delivery of this Agreement and the Ancillary Agreements to whichthey are parties, (B) the consummation of the transactions contemplatedhereby and (C) certifying to the incumbency and signature of the officerof the Sellers executing this Agreement and the Ancillary Agreements.

 

(b)   Buyershall deliver to the Sellers:

 

(i)    thePreliminary Purchase Price by wire transfer to an account specified by theSellers in a writing delivered to Buyer at least three (3) Business Daysprior to the Closing Date; and

 

(ii)   an executed Assignment and Assumption Agreement;

 

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(iii)  anexecuted copy of each Lease Assignment and Assumption Agreement;

 

(iv)  anexecuted copy of the Subscriber Agreement;

 

(v)   anexecuted copy of the Transition Services Agreement;

 

(vi)          a certificate executedby an officer of Buyer as to the accuracy of its representations and warrantiesas of the date of this Agreement and as of the Closing in accordance with *Section 7.2(a) *and as to compliance with andperformance of its covenants and obligations to be performed or complied withat or before the Closing in accordance with *Section 7.2(b)*;and

 

(vii)         a certificate of thesecretary of Buyer certifying, as complete and accurate as of the Closing,attached copies of the Governing Documents of Buyer and certifying andattaching all requisite resolutions or actions of Buyer’s board of directorsapproving (A) the executing and delivery of this Agreement and theAncillary Agreements to which it is a party, (B) the consummation of thetransactions contemplated hereby, and (C) certifying to the incumbency andsignature of the officer of the Buyer executing this Agreement and theAncillary Agreements.

 

3.3.          **Closing Costs**; **Transfer Taxes and Fees**. The Sellers (collectively) and Buyer shall each be responsible for fiftypercent (50%) of any documentary and transfer Taxes imposed because of thetransfer of the Purchased Assets provided for hereunder, regardless of thePerson on whom applicable Law imposes such Taxes.  Each party shall pay any fees and costs oruse Tax they incur as a result of their recording or filing the applicableconveyance instruments described in *Section 3.2*.

 

3.4.          **Limited Power of Attorney**.  The Sellers hereby appoint Buyer, its agents,employees, successors and assigns, as their attorney-in-fact, which suchappointment is coupled with an interest, with full power of revocation andsubstitution by Buyer in the name and stead of each of the Sellers, but onbehalf of Buyer or its assignees, to do any and all of the following withrespect to the Vehicle Contracts: (a) receive, endorse, and collect allpayments, checks, money orders, drafts, or other instruments or documents madepayable to or owed to a Seller in connection with the Vehicle Contracts; (b) executeon behalf of a Seller, or enforce, release, modify and transfer the rights,privileges and interests (including security interests) of such Seller withrespect to the Vehicle Contracts including rights with respect to AncillaryProducts and Insurance Policies, if any, and any claims thereunder, andcertificates of title or other title documents or security documents; (c) enforceand exercise any rights and remedies of a Seller with respect to the VehicleContracts; and (d) to demand, collect and receive any and all VehicleContracts.  On the Closing Date and fromtime to time thereafter, the Sellers shall execute such limited powers ofattorney in the form attached hereto as **Exhibit E**(“Power of Attorney”) and additional instruments and take such otheraction as Buyer may reasonably request in order to more effectively effectuateany of the foregoing.

 

3.5.          **ObligorNotices**.  The Sellersconsent to permit Buyer to advise each of the Obligors that it has purchasedtheir applicable Vehicle Contract and that all future payments thereon shall bemade to Buyer.  No later than five (5) BusinessDays following the Closing Date, the Sellers shall also have the right tonotify each of the Obligors that it has sold their applicable Vehicle Contractto Buyer.

 

#### *ARTICLE IV.*  REPRESENTATIONS AND WARRANTIES OF THE SELLERS

####  

4.1.          **Relating to the Sellers**.  Except as set forth on the DisclosureSchedule, the Sellers hereby represent and warrant to Buyer that, solely as itrelates to the Business, as of (i) the date hereof and (ii) theClosing Date:

 

(a)   **DueOrganization and Good Standing**. Each of the Sellers is a corporation or limited liability company dulyorganized, validly existing and in good standing under the laws of its state ofincorporation or organization, as the case may be, with the requisite corporatepower and corporate authority to own or lease and operate its properties andassets related to the Business, and to carry on the Business as it is nowconducted, and to perform its obligations under the Contracts.  Each Seller is duly qualified to do businessas a foreign corporation or limited liability company, and is in good standingunder the laws of each state or other jurisdiction in which either theownership or use of the properties owned or used by it in the Business, or thenature of the activities conducted by it, requires such qualification, exceptwhere the failure to be so qualified would not have a Material Adverse Effecton the Business.

 

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(b)   **Authority and Capacity**. Each Seller has the full right, power, authority and capacity toexecute, deliver, and perform its obligations under this Agreement and each ofthe Ancillary Agreements to which it is a party, to consummate the transactionscontemplated hereby and thereby, and to perform its respective obligationshereunder and thereunder.  The execution,delivery and performance of this Agreement and each of the Ancillary Agreementsby each Seller to which it is a party, and the consummation of the transactionscontemplated hereby and thereby, has been duly authorized by all necessarycorporate action.  Assuming the dueauthorization, execution and delivery of this Agreement and each of theAncillary Agreements by the other parties hereto and thereto, this Agreementand each of the Ancillary Agreements to which each Seller is a party, is a valid and binding obligation of eachSeller, enforceable against it in accordance with their respective terms,subject to the Bankruptcy Exception.

 

(c)   **Consent; NoProceedings**.  Except as setforth on Schedule 4.1(c), none of the Sellers require Governmental Authorizationor Consent from any Person or Governmental Entity in connection with theexecution, delivery, performance, validity or enforceability of this Agreementand each Ancillary Agreement to which it is a party or the consummation of thetransactions contemplated hereby or thereby.

 

(d)   **Licenses**.  The Sellers have and maintain all Licensesnecessary for (i) the Business as currently conducted, (ii) theownership, use, operation and maintenance of the Facilities used in theoperation of the Business, and (iii) its performance of this Agreement andthe consummation of the transactions contemplated hereby.  Schedule 4.1(d) sets forth acomplete list of all Licenses used in the operation of the Business and thespecific Seller holding such license.

 

(e)   **No Violation**.  The Sellers’ execution, delivery andperformance of this Agreement and each of the Ancillary Agreements to whichthey are a party, and the consummation of the transactions contemplated herebyand thereby, do not and will not (i) materially contravene or conflictwith any of the Sellers’ Governing Documents, (ii) result in a materialBreach of, or constitute a material default under, any Contract or otheragreement or instrument binding on or affecting the Sellers and the PurchasedAssets, (iii) materially contravene or violate any Law applicable to,binding on or affecting the Sellers or the Purchased Assets, (iv) causeBuyer to become subject to, or to become liable for the payment of, any Tax; or(v) result in the creation of any Adverse Claim on the Purchased Assets.

 

(f)    **Financial Statements**. The Sellers have delivered to Buyer: (i) an unaudited balance sheetof the Business at May 31, 2004 (the “Initial Balance Sheet”), andthe related unaudited statement of income for the months then ended, and (ii) unauditedbalance sheets of the Business at December 31 in each of the fiscal years2002 through 2003, and the related unaudited statement of income for each ofthe fiscal years then ended.  Except asset forth on Schedule 4.1(f), these financial statements have been andwill be prepared in accordance with GAAP and fairly present (and the InterimFinancial Statements delivered pursuant to *Section 6.1(j)*and the Closing Balance Sheet delivered pursuant to *Section 2.7(b) *fairly present) the financial conditionand the results of operations of the Business as of the date and for theperiods referred to in such financial statements.  The financial statements referred to in this *Section 4.1(f),* the Interim FinancialStatements delivered pursuant to *Section 6.1(j)*and the Closing Balance Sheet delivered pursuant to *Section 2.7(b) *reflect and willreflect the consistent application of the Sellers’ internal accountingprinciples throughout the periods involved. The financial statements have been and will be prepared from, and are inaccordance with, the accounting Records of the Business.

 

(g)   **Litigation**.  Except asset forth in Schedule 4.1(g), solely with respect to the Business, thereare no Proceedings pending, or to Sellers’ Knowledge, Threatened or anticipated(i) against, related to or affecting the Sellers, the Business or thePurchased Assets, or (ii) that is seeking to delay, limit or enjoin thetransactions contemplated by this Agreement or the Ancillary Agreements.  To Sellers’ Knowledge, no event has occurredor circumstances exist that are reasonably likely to give rise to or serve as abasis for the commencement of any such Proceeding.  The Sellers’ have delivered or made availableto Buyer copies of all pleadings, correspondence and other documents relatingto each Proceeding listed on Schedule 4.1(g).  To Sellers’ Knowledge, none of theProceedings listed on Schedule 4.1(g) could have a Material AdverseEffect on any Seller (as relates to the Business) or the Business.  Solely with respect to the Business, theSellers are not in Breach with respect to or subject to any Order, and thereare no unsatisfied judgments against the Sellers, the Business or the PurchasedAssets.

 

(h)   **Purchased Assets**.  TheSellers have and will transfer good and marketable title to the PurchasedAssets and upon the consummation of the transactions contemplated hereby, Buyerwill acquire good and marketable title to all of the Purchased Assets, free andclear from any Adverse Claims.

 

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(i)    **Contracts**. (i)  Schedule 4.1(i) sets forth a true, complete andcorrect list of all material Contracts (excluding the Dealer Agreements)including:

 

A.    any Contract for or relatingto the employment of any Key Employee;

 

B.    any Contract that involvesperformance of services or delivery of goods by or to any Seller (solely assuch service or goods relate to or are used in the Business) of an amount inexcess of $50,000; and

 

C.    anyContract for the lease of personal property used by any Seller in the Businessthat obligates such Seller to pay in excess of $50,000 per year.

 

True, completeand correct copies of the aforementioned Contracts have heretofore beendelivered or otherwise made available by the Sellers to the Buyer.  The Contracts set forth on Schedule 4.1(i) arein full force and effect, constitute legal, valid and binding obligations ofeach of the Sellers or their Affiliates, as the case may be, and areenforceable in all material respects in accordance with their respective terms,subject to the Bankruptcy Exception. Subject to *Section 4.1(c)*, theconsummation of the transactions contemplated by this Agreement will not causeany such Contract to be invalid or unenforceable following the Closing.  Each Seller has, in all material respects,performed all of the obligations required by any such Contract to be performedby it to date, and there exists no Breach, or any event which upon the givingof notice or the passage of time, or both, would give rise to a claim of amaterial Breach in the performance by any Seller or, to Sellers’ Knowledge, anyother party, of their respective obligations thereunder.  The Sellers have not received any writtennotice to the effect that it is in Breach or otherwise not in compliance withany Contract set forth on Schedule 4.1(i).

 

(ii)   True, complete and correctcopies of the Dealer Agreements related to the top fifty (50) Dealers (asmeasured by accounts receivable balance) and copies of each form of DealerAgreement currently used in the Business have been provided to or madeavailable to the Buyer.  Each DealerAgreement related to an outstanding Vehicle Contract (and related AccountsReceivable) is in full force and effect, constitutes the legal, valid and bindingobligation of the Seller and the Dealer, each as set forth therein, and isenforceable in all material respects in accordance with its terms, subject tothe Bankruptcy Exception.  Subject to *Section 4.1(c)*, the consummation ofthe transactions contemplated by this Agreement will not cause any such DealerAgreement to be invalid or unenforceable following the Closing.  Each Seller has, in all material respects,performed all of the obligations required by any such Dealer Agreement to beperformed by it to date, and there exists no Breach, or any event, which uponthe giving of notice or the passage of time, or both, would give rise to aclaim of a material Breach in such Seller’s performance or, to Sellers’Knowledge, any other party, of their respective obligations thereunder.  The Sellers have not received any writtennotice or communication to the effect that it is in Breach or otherwise not incompliance with the terms of any such Dealer Agreement.

 

(j)    **Liabilities**.  Other thanExcluded Liabilities, the Sellers (solely with respect to the Business) have nomaterial Liabilities due or to become due, except (i) Liabilities arisingin the Ordinary Course of Business under the Contracts described in Schedule 4.1(i) andthe Closing Date Data; and (ii) Liabilities incurred in the OrdinaryCourse of Business and in accordance with this Agreement (none of which relatesto any material Breach under any Contract, breach of warranty, tort,infringement or violation of any Law or Order or arose out of any Proceeding)and none of which, individually or in the aggregate, has or would have aMaterial Adverse Effect on the Business or the Purchased Assets.

 

(k)   **Employees**.

 

(i)            Except as set forth in Schedule 4.1(k):

 

A.    none of the Employees are represented by anylabor union;

 

B.    the Sellers are not subject to any collectivebargaining arrangement with respect to any Employee;

 

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C.    none of the Employee Plans is a “defined benefitplan” within the meaning of Section 3(35) of ERISA nor do the Sellersparticipate in any “multi-employer plan” within the meaning of Section 3(37)of ERISA;

 

D.    each of the Employee Plans are in compliance inall material respects with terms of each such Employee Plan and applicable Law;and

 

E.     no Liabilities exist or are reasonably expectedto exist under any Employee Plan that, individually or in the aggregate, wouldhave a Material Adverse Effect on the transactions contemplated by thisAgreement.

 

(ii)           the Sellers shallindemnify and hold Buyer harmless from and against any Damages suffered as aresult of any failure to give any notice to the Employees required by theWorker Adjustment and Retraining Notification Act (the “WARN Act”),provided such notice is required as a result of any action by the Sellers on orprior to the Closing Date.

 

(iii)          A complete list of allEmployees, by name, hire date and position as of the date hereof is set forthin Schedule 4.1(k).  The Sellersshall not release any other personnel information without having first obtainedthe written consent of the respective Employee.

 

(l)    **Leased Real Property**.  Schedule 4.1(l)lists all Space Leases (including the property address, landlord or lessorname, tenant or lessee name, term, expiration date and rental expense) for allreal property used in connection with and for the operation of the Business towhich a Seller or one of their Affiliates is a party (“Leased Real Property”).  The Sellers have delivered true and completecopies of the Space Leases related to the Leased Real Property listed in Schedule 4.1(l)to the Buyer.  The Sellers or theirAffiliates have a valid and existing Space Lease for each Leased Real Propertyset forth on Schedule 4.1(l).  AllSpace Leases covering any of the Leased Real Property are valid and enforceableby the Sellers or their Affiliates, as the case may be, in accordance withtheir respective terms, are in full force and effect, and have not beenmaterially modified, supplemented or terminated except as set forth in Schedule 4.1(l)and there is not a material Breach by the Sellers or their Affiliates, as thecase may be, under any such Space Lease, or to Sellers’ Knowledge, by anylandlord or lessor under any such Space Lease. The Leased Real Property represents all of the real property used by theSellers in their operation of the Business.

 

(m)  **Tax Returns; Taxes**.  Solely with respect to the Business, theSellers or their Affiliates have filed or caused to be filed on a timely basisall material Tax Returns and all material reports with respect to Taxes thatare or were required to be filed pursuant to applicable Law.  All Tax Returns and reports filed by theSellers or their Affiliates with respect to the Business are true, correct andcomplete in all material respects.  Thereare no Adverse Claims on any of the Purchased Assets that arose in connectionwith any failure (or alleged failure) to pay any Tax, and the Sellers have noKnowledge of any basis for assertion of any claims attributable to Taxes that,if adversely determined, would result in any such Adverse Claim.

 

(n)   **Compliance with Law**. The Sellers, in the conduct of the Business, have not violated any andare in compliance with all applicable Laws and Orders relating to the PurchasedAssets or the Business, except where the violation or failure to comply,individually or in the aggregate, would not have a Material Adverse Effect onthe Purchased Assets or the Business.  ToSellers’ Knowledge, no event has occurred or circumstances exist that mayreasonably be thought to constitute or result in a violation by any Seller ofany Law or Order relating to the Purchased Assets or the Business in anymaterial respect.  The Sellers have notreceived any written notice to the effect that they are not in compliance withany such Laws or Orders.

 

(o)   **No Material Adverse Change**.  Since May 31, 2004,there has not been any material adverse change in the business, operations,prospects, assets, results of operation or condition (financial or other) ofthe Sellers (solely as it relates to the Business), and, to Sellers’ Knowledge,no event has occurred or circumstances exists that could result in a MaterialAdverse Change or otherwise affect the Sellers’ ability to perform theirobligations under this Agreement.

 

(p)   **Accuracy of Information**. The representations and warranties set forth in this *Article IV* and the data contained inthe documents referenced on Schedule 4.1(p) are true, accurate andcomplete in all material respects, the 

 

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otherrepresentations and warranties made by the Sellers in this Agreement do notcontain any untrue statement of material fact or omit any material factnecessary in order to make any statement contained herein, in the light of thecircumstances in which they are being made, not misleading; provided, however,that the representations in this *Section 4.1(p)*shall not apply to any information that constitutes projections, predictions,pro forma or other forward looking statements of any nature.

 

(q)   **Brokers’ or Finders’ Fees**.  None of the Sellers have incurred anyobligation or Liability for brokerage or finders’ fees or agents’ commissionsor other similar payment in connection with the transactions contemplatedhereby.

 

(r)    **Sufficiency of Assets**. Solely as of the Closing Date, the Purchased Assets and the AssumedLiabilities, together with the services provided pursuant to the SubscriberAgreement and Transition Services Agreement, constitute all of the assetsnecessary to operate the Business in substantially the same manner operated bythe Sellers prior to the Effective Time.

 

4.2.          **Vehicle Contracts**.  As of the Closing Date, the Sellers herebyrepresent and warrant to Buyer with respect to each Vehicle Contract that:

 

(a)   **Good Title**. Immediately prior to and up until the transfer and assignment herein contemplated,the Sellers legally own outright and have good and marketable title to all ofthe Vehicle Contracts, free and clear of all Adverse Claims.  The Sellers have not sold, assigned orotherwise transferred any right or interest in or to the Vehicle Contracts andhave not pledged the Vehicle Contracts as collateral for any debt or otherpurpose.  Upon payment of the PreliminaryPurchase Price hereunder, Buyer shall acquire good and marketable title to theVehicle Contracts.  Except as set forthon Schedule 4.1(g), there are no judgments against the Sellers or anypending Proceeding that could become a Lien against the Vehicle Contracts orcould otherwise create or result in an Adverse Claim in, of or on the VehicleContracts in favor of any Person other than Buyer.  The Closing Date Data sets forth all of theVehicle Contracts outstanding as of the Closing Date.

 

(b)   **C****ompliance with Law**.

 

(i)    EachVehicle Contract complies, in all material respects, with all applicable local,state and federal Laws relating to written disclosures required in motorvehicle retail installment contracts, including the federal Truth-in-LendingAct and Regulation Z promulgated thereunder.

 

(ii)   Assumingthe due authorization, execution and delivery by each party to a VehicleContract and the applicable Dealer’s compliance with all Laws applicable to thesale and origination of motor vehicle retail installment contracts (excludingthe Laws set forth in subsection (a)(i) above from such assumption),each Vehicle Contract is in full force and effect and, as of the AcquisitionDate, constituted the legal, valid and binding obligation of the applicableSeller and the related Obligor and is enforceable in all material respects inaccordance with its terms, subject to the Bankruptcy Exception.  The Sellers have not received any writtennotice or communication to the effect that any Dealer, prior to the AcquisitionDate, or that any Seller, since the Acquisition Date, is in Breach of orotherwise not in compliance with the terms of any such Vehicle Contract.

 

(iii)  Thecollection and servicing of the Vehicle Contracts have, from the applicableAcquisition Date, continuously complied with all applicable federal and stateLaws relating to the collection and servicing of motor vehicle retailinstallment contracts, including the Fair Credit Reporting Act and the FederalTrade Commission’s Rule on Credit Practices.

 

(c)   **No Amounts Owing**.  Except for the Dealer Reserves and theLiabilities described as “Other Liabilities” set forth on the Closing BalanceSheet, there are no holdbacks, participations, fees or other monetaryobligations due or owing to and payable by a Seller to a Dealer, insurancecarrier or Third Party service provider, contingent or otherwise, with respectto any Vehicle Contract.

 

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##### **ARTICLE V.**  REPRESENTATIONS AND WARRANTIES OF BUYER

##### ** **

5.1           **Buyer**.  Buyer hereby represents and warrants to theSellers that, as of (i) the date hereof and (ii) the Closing Date:

 

(a)   **DueOrganization and Good Standing**. Buyer is a limited liability company duly organized, validly existingand in good standing under the laws of the state of Georgia, with the requisitecorporate power and corporate authority to carry on its operations as presentlyconducted.  Buyer is duly qualified to dobusiness as a foreign corporation and is in good standing under the laws ofeach state or jurisdiction in which either the ownership or servicing of theVehicle Contracts requires such qualification, except where the failure to beso qualified would not have a Material Adverse Effect on the Business.

 

(b)   **Authorityand Capacity**.  The Buyer hasthe full right, power, authority and capacity to execute, deliver, and performits obligations under this Agreement and the Ancillary Agreements to which itis a party and to consummate the transactions contemplated hereby andthereby.  The execution, delivery andperformance of this Agreement and each of the Ancillary Agreements to which itis a party by Buyer, and the consummation of the transactions contemplatedhereby and thereby, have been duly authorized by all necessary corporateaction.  Assuming the due authorization,execution and delivery of this Agreement and the Ancillary Agreements by theother parties hereto and thereto, this Agreement and each of the AncillaryAgreements to which Buyer is a party, is a valid and binding obligation of theBuyer, enforceable against it in accordance with their respective terms, subject to the Bankruptcy Exception.

 

(c)   **Consent; No Proceedings.** Except as set forth on Schedule 5.1(c), Buyer requires neitherGovernmental Authorization nor Consent from any Person or Governmental Entityin connection with the execution, delivery, performance, validity orenforceability of this Agreement and each Ancillary Agreement to which it is aparty.  There is no pending claim, causeof action, suit or Proceeding presently pending or, to Buyer’s Knowledge,Threatened against Buyer that would have a Material Adverse Effect on thetransactions contemplated by, or Buyer’s ability to perform its obligationsunder, this Agreement or any of the Ancillary Agreements to which it is aparty.

 

(d)   **Brokers’ or Finders’****Fee**.  Buyer has not incurred any obligation orLiability for brokers’ or finders’ fees or agents’ commissions or other similarpayment in connection with the transactions contemplated by this Agreement.

 

#### *ARTICLE VI.*  COVENANTS

####  

6.1           **Covenants of the Sellers**.  Between the date of this Agreement and theClosing Date, the Sellers hereby covenant and agree to the following:

 

(a)   **Compliance with Law**.**** The****Sellersshall at all times comply in all material respects with all federal, state andlocal Laws and all Orders applicable to them, the Purchased Assets orobligations under this Agreement.

 

(b)   **Preservation of Existence**.  TheSellers shall use their Best Efforts to preserve and maintain their existence,rights, franchises and privileges in the jurisdiction of their organization,and qualify and remain qualified in good standing as a foreign organization ineach jurisdiction where the failure to preserve and maintain such existence,rights, franchises, privileges and qualification could have a Material AdverseEffect on the enforceability of the Purchased Assets, the Business or theability of the Sellers to perform their obligations under this Agreement.  The Sellers shall provide Buyer with noticeimmediately upon any change in their state of organization or any change intheir principal places of business.

 

(c)   **Access**.  The Sellersshall permit Buyer and its Representatives to have reasonable access duringregular business hours, with at least three (3) Business Days prioradvance notice, to the Leased Real Property, Books and Records, Contracts andother Purchased Assets and the Sellers shall, upon Buyer’s reasonable request,provide to Buyer and its Representatives, to the extent it exists or isobtainable, operating data regarding the Business consistent with the operatingdata it provided to Buyer prior to the date hereof.

 

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(d)   **No Adverse Claim**.  Except as provided herein, the Sellers shallnot sell, assign (by operation of law or otherwise) or otherwise dispose of, orcreate any Adverse Claim upon or with respect to, any Contracts or PurchasedAssets sold to Buyer hereunder or any Collections related to such Contracts.

 

(e)   **Post-Closing Payments**.  All Collections received by the Sellers afterthe Closing Date with respect to any Contract shall be promptly turned over toBuyer no later than five (5) Business Days from receipt.  After the Closing Date, Buyer shall notaccept any payments on behalf of the Sellers or their Affiliates.  In the event that Buyer collects anypayments, it shall forward them to the Sellers within five (5) BusinessDays after receipt.

 

(f)    **NoNegotiation**.  Until such timeas this Agreement shall be terminated pursuant to *Section 8.1*,the Sellers shall not, directly or indirectly, solicit or initiate anyinquiries or proposals from, negotiate with or provide any non-publicinformation to any Person (other than Buyer) relating to the Business or thePurchased Assets.

 

(g)   **Operations**.  The Sellers shall:

 

(i)    continueto conduct the Business in the Ordinary Course of Business;

 

(ii)   continueto use their Best Efforts to preserve intact the Business’ currentorganization, keep available the services of the Business’ officers, Employeesand agents and maintain its relations and good will with the Business’ Dealers,suppliers, customers, landlords, creditors, Employees, agents and others havinga relationship with the Business; provided, that, except as set forth in*Section 6.1(g)(iii) *and*(iv)*, nothing in this *Section 6.1(g) *shall prohibitthe Sellers from hiring, terminating or otherwise making any Employee-relateddecisions in the Ordinary Course of Business;

 

(iii)  not terminate any Key Employee unless for cause (other thanfor performance);

 

(iv)  notmaterially increase the salaries of the Employees, unless such increase wascontemplated prior to the date hereof;

 

(v)   continueto use their Best Efforts to maintain the Purchased Assets in a state of repairand condition that complies with all applicable Laws and is consistent with therequirements and normal conduct of the Business;

 

(vi)  continueto comply with all applicable Laws, Orders and contractual obligationsapplicable to the operations of the Business;

 

(vii)cooperate with Buyer and assistBuyer in identifying the Licenses required by Buyer to operate the Businessfrom and after the Closing Date and either transfer the Business’ existingLicenses to Buyer, where permissible, or provide reasonable assistance in Buyer’sefforts to obtain new Licenses; and

 

(viii)  continueto maintain all Books and Records in the Ordinary Course of Business.

 

(h)   **RequiredApprovals**.  As promptly as practicableafter the date of this Agreement, the Sellers shall make all filings requiredby Law to be made by them in order to consummate the transactions contemplatedby this Agreement.  The Sellers shallcooperate with Buyer and its Representatives with respect to all filings Buyerelects to make or, pursuant to applicable Law, shall be required to make inconnection with the transactions contemplated by this Agreement.

 

(i)    **Payment ofLiabilities**.  The Sellersshall continue to pay or otherwise satisfy in the Ordinary Course of Businessall of its Liabilities and obligations. Buyer and the Sellers hereby waive compliance with the bulk-transferprovisions of the Uniform Commercial Code (or other similar law) in connectionwith the transactions contemplated in this Agreement.

 

(j)    **Interim Financial Statements**. Until the Closing Date, the Sellers shall deliver to Buyer within ten (10) BusinessDays after the end of each month a copy of the unaudited balance sheet (the “InterimBalance Sheet”) and related unaudited income statement of the Business(together with the Interim Balance Sheet, the “Interim Financial Statements”),for such month prepared in accordance with GAAP (except as set forth on Schedule 4.1(f))and which sets forth a calculation of the Net Assets as of the date of suchInterim Financial Statements.

 

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(k)   **Best Efforts**.  The Sellers shall use their Best Efforts tocause the conditions in *Section 7.1*to be satisfied.

 

6.2.          **Covenants of Buyer**.  Between the date of this Agreement and theClosing Date, Buyer hereby covenants and agrees to the following:

 

(a)   **Required Approvals**. As promptly as practicable after the date of this Agreement, Buyer shallmake all filings required by Law to be made by it in order to consummate thetransactions contemplated by this Agreement. The Buyer shall cooperate with the Sellers and their Representativeswith respect to all filings the Sellers elect to make or, pursuant to applicableLaw, shall be required to make in connection with the transactions contemplatedby this Agreement.

 

(b)   **Best Efforts**.  Buyershall use its Best Efforts to cause the conditions in *Section 7.2*to be satisfied.

 

#### *ARTICLE VII.*  CONDITIONS TO PURCHASE

####  

7.1.          **Buyer’s Condition Precedent**.  Buyer’s obligation to consummate thetransactions contemplated hereby is subject to the satisfaction, at or prior tothe Closing, of each of the following conditions (any of which may be waived inwriting by Buyer, in whole or in part):

 

(a)   **Accuracy ofRepresentations**.

 

(i)    All of the Sellers’representations and warranties in this Agreement (considered collectively), andeach of these representations and warranties (considered individually), shallhave been accurate in all material respects as of the date of this Agreement,and shall be accurate in all material respects as of the Effective Time as ifthen made.

 

(ii)   Each of the representations andwarranties in *Sections 4.1(b) *and *4.1(e)*, and each of the representations and warranties inthis Agreement that contains an express materiality qualification, shall havebeen accurate in all respects as of the date of this Agreement, and shall beaccurate in all respects as of the Effective Time as if then made, withoutgiving effect to any supplement to the Disclosure Schedule.

 

(b)   **Sellers’Performance**.  All of thecovenants and obligations that the Sellers are required to perform or to complywith pursuant to this Agreement at or prior to the Closing (consideredcollectively), and each of these covenants and obligations (consideredindividually), shall have been duly performed and complied with in all materialrespects.

 

(c)   **AdditionalDocuments**.  The Sellers shallhave caused the documents and instruments required by *Section 3.2(a) *andthe following documents to be delivered (or tendered subject only to Closing)to Buyer:

 

(i)    agood standing certificate or similar certificate for each of the Sellers issuedby their state of incorporation or organization, as the case may be, as of arecent date acceptable to Buyer;

 

(ii)   theGoverning Documents and all amendments thereto of each Seller, duly certifiedas of a recent date by each Seller’s secretary; and

 

(iii)  suchother documents as Buyer may reasonably request for the purpose of:

 

A.    evidencing the accuracy of anyof the Sellers’ representations and warranties;

 

B.    evidencing the performance bythe Sellers of, or the compliance by Sellers with, any covenant or obligationrequired to be performed or complied with by them;

 

C.    evidencing the satisfaction ofany condition referred to in this *Section 7.1*;or

 

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D.    otherwise facilitating theconsummation or performance of any of the transactions contemplated in thisAgreement and the Ancillary Agreements.

 

(d)   **NoProceedings**.  Since the dateof this Agreement, there shall not have been commenced or Threatened againstBuyer, or against any Related Person of Buyer, any material Proceeding (i) involvingany challenge to, or seeking Damages or other relief in connection with, any ofthe transactions contemplated hereby or (ii) that may have the effect ofpreventing, delaying, making illegal, imposing limitations or conditions on orotherwise interfering with any of the transactions contemplated hereby.

 

(e)   **No Conflict**.  Neither the consummation nor the performanceof any of the transactions contemplated hereby will, directly or indirectly(with or without notice or lapse of time), contravene or conflict with orresult in a material violation of or cause Buyer or any Related Person of Buyerto suffer any adverse consequence under (a) any applicable Law or Order or(b) any Law or Order that has been published, introduced or otherwiseproposed by or before any Governmental Entity.

 

(f)    **GovernmentalAuthorizations**.  Buyer shallhave received all of the Governmental Authorizations (including any Licenses)necessary or desirable to allow Buyer to operate the Business from and afterthe Effective Time.

 

(g)   **Consents**.  All Consentsfrom any Person pursuant to the terms of any Contract or otherwise necessary toconsummate the transactions contemplated by this Agreement shall have been dulyobtained.

 

(h)   **Employees**.

 

(i)    Exceptfor the excluded or transferred Employees set forth on Schedule 9.1(a),substantially all of the Employees shall be available for hiring by Buyer onand as of the Closing Date.  Subject to *Section 9.1*, substantially all of theEmployees who are offered employment by Buyer shall have accepted such offer inaccordance with the terms of this Agreement.

 

(ii)   RickPotter and four of the remaining five Employees set forth on Schedule 7.1(h)(ii) (each a “Key Employee”) shall haveaccepted employment with the Buyer on terms satisfactory to the Buyer and suchKey Employees.

 

(i)    **Financing**.  Buyershall have negotiated and executed an agreement with a Third-Party financecompany or bank in order to pay seventy-five percent (75%) of thePreliminary Purchase Price to Sellers at the Closing in accordance with *Section 2.5* hereof.

 

7.2.          **Sellers’ Condition Precedent**.  The Sellers’ obligation to consummate thetransactions contemplated hereby is subject to the satisfaction, at or prior tothe Closing, of each of the following conditions (any of which may be waived inwriting by the Sellers in whole or in part):

 

(a)   **Accuracy ofRepresentations**.  All of Buyer’srepresentations and warranties in this Agreement (considered collectively), andeach of these representations and warranties (considered individually), shallhave been accurate in all material respects as of the date of this Agreement andshall be accurate in all material respects as of the Effective Time as if thenmade.

 

(b)   **Buyer’sPerformance**.  All of thecovenants and obligations that Buyer is required to perform or to comply withpursuant to this Agreement at or prior to the Closing (consideredcollectively), and each of these covenants and obligations (consideredindividually), shall have been duly performed and complied with in all materialrespects.

 

(c)   **AdditionalDocuments**.  Buyer shall havecaused the documents and instruments required by *Section 3.2(b) *andthe following documents to be delivered (or tendered subject only to Closing)to the Sellers:

 

(i)    a good standing certificate or similar certificate for Buyerissued by the state of organization as of a recent date acceptable to theSellers;

 

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(ii)   the Governing Documents and all amendments thereto of Buyer,duly certified as of a recent date by Buyer’s Secretary; and

 

(iii)  such other documents as the Sellers may request for thepurpose of:

 

A.    evidencingthe accuracy of any representation or warranty of Buyer;

 

B.    evidencingthe performance by Buyer of, or the compliance by Buyer with, any covenant orobligation required to be performed or complied with by Buyer;

 

C.    evidencingthe satisfaction of any condition referred to in this *Section 7.2*;or

 

D.    otherwisefacilitating the consummation or performance of any of the transactionscontemplated by this Agreement and the Ancillary Agreements.

 

(d)   **NoInjunction**.  There shall notbe in effect any Law or any injunction or other Order that (i) prohibitsthe consummation of the transactions contemplated hereby and (ii) has beenadopted or issued, or has otherwise become effective, since the date of thisAgreement.

 

(e)   **No Proceedings**.  Since the date of this Agreement, there shallnot have been or commenced or Threatened against the Sellers, or against anyRelated Person of the Sellers, any material Proceeding (i) involving anychallenge to, or seeking Damages or other relief in connection with, any of thetransactions contemplated hereby or (ii) that may have the effect ofpreventing, delaying, making illegal, imposing limitations or conditions on orotherwise interfering with any of the transactions contemplated hereby.

 

(f)    **Licenses**.  Buyer shallhave received all of the Licenses or other Government Authorizations necessaryto facilitate the transactions contemplated hereby.

 

#### *ARTICLE VIII.*  TERMINATION

####  

8.1.          **Termination Events**.  By notice given prior to or at the Closing,subject to *Section 8.3*, this Agreement may beterminated as follows:

 

(a)   byBuyer if a material Breach of any provision of this Agreement has beencommitted by the Sellers and such Breach has not been waived by Buyer;

 

(b)   by theSellers if a material Breach of any provision of this Agreement has beencommitted by Buyer and such Breach has not been waived by the Sellers;

 

(c)   by Buyer if any condition in *Section 7.1* has not been satisfied as of the datespecified for Closing in the first sentence of *Section 3.1*or if satisfaction of such a condition by such date is, or subsequent to suchdate becomes, impossible (other than through the failure of Buyer to complywith its obligations under this Agreement), and Buyer has not waived suchcondition on or before such date or such subsequent date;

 

(d)   by the Sellers if any conditionin *Section 7.2* has not been satisfiedas of the date specified for Closing in the first sentence of *Section 3.1* or if satisfaction of such a condition bysuch date is, or subsequent to such date becomes, impossible (other thanthrough the failure of the Sellers to comply with their obligations under thisAgreement), and the Sellers have not waived such condition on or before suchdate or such subsequent date;

 

(e)   bymutual consent of Buyer and the Sellers;

 

(f)    by Buyer if the Closing hasnot occurred on or before April 29, 2005, or such later date as theparties may agree upon, unless the Buyer is in material Breach of thisAgreement; or

 

(g)   by theSellers if the Closing has not occurred on or before April 29, 2005, orsuch later date as the parties may agree upon, unless the Sellers are inmaterial Breach of this Agreement.

 

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8.2.          **Termination Fee**.  If this Agreement is not consummated as a resultof Buyer’s failure to satisfy the financing condition set forth in *Section 7.1(i) *and issubsequently terminated by Buyer pursuant to *Section 8.1(c)*,Buyer shall immediately pay the Sellers a termination fee equal to two milliondollars ($2,000,000) (the “Termination Fee”).  Notwithstanding anything to the contrarycontained herein, if Buyer becomes obligated to pay the Termination Feepursuant to this *Section 8.2*,such Termination Fee shall constitute full settlement of any and all of theDamages of the Sellers under this Agreement in respect of a terminationpursuant to *Section 8.1(c) *asa result of the failure to satisfy or waive the condition set forth in *Section 7.1(i) *and shall be thesole measure of Damages with respect to such termination.

 

8.3.          **Effect of Termination**.  Each party’s right of termination under *Section 8.1* is in addition to any other rights it mayhave under this Agreement or otherwise, and the exercise of such right oftermination will not be an election of remedies.  If this Agreement is terminated pursuant to *Section 8.1*, all obligations of the parties under thisAgreement will terminate, except that the obligations of the parties in *Sections 8.2*and*8.3* and *Articles X* and *XI*will survive, provided, however, that, ifthis Agreement is terminated because of a Breach of this Agreement by thenon-terminating party or because one or more of the conditions to theterminating party’s obligations under this Agreement is not satisfied as aresult of the party’s failure to comply with its obligations under thisAgreement, the terminating party’s right to pursue all legal remedies shallsurvive such termination unimpaired.

 

#### *ARTICLE IX.*  ADDITIONAL COVENANTS

####  

9.1.          **Employees and Employee Benefits.**

 

(a)   **Information on Active Employees**.  For purpose of this Agreement, the term “ActiveEmployees” shall mean all Employees employed immediately prior to theClosing Date, but excluding Employees on temporary leave of absence, includingfamily or medical leave, military leave, personal, short-term disability,workers’ compensation, pregnancy leave or any other Employees the Sellersdesignate as excluded or inactive Employees. Notwithstanding the foregoing, any Employees excluded in the precedingsentence shall be deemed Active Employees if and when they return to workwithin ninety (90) days after the Closing Date. Schedule 9.1(a) sets forth a complete list of all ActiveEmployees and a list of all excluded or inactive Employees.

 

(b)   **Employment of Active Employees by Buyer**.

 

(i)            Prior to the ClosingDate, to be effective as of the Effective Time, Buyer shall offer employment toall of the Active Employees upon the terms and conditions described below.  Buyer shall provide the Sellers with a listof Active Employees to whom Buyer has made an offer of employment that has beenaccepted and which shall be effective at the Effective Time (the “HiredActive Employees”). Subject to the provisions of this *Section 9.1*, Hired Active Employeesshall be subject to the employment terms, conditions and rules applicableto other similarly-situated employees of Buyer. Nothing contained in this Agreement shall be construed as an employmentcontract between the Buyer and any Active Employee or Hired Active Employee.

 

(ii)                           After the date hereof until the ClosingDate, Buyer may speak with Employees (including Key Employees and other membersof the management team of the Business) during normal working hours. Buyer shall be solely responsible for any activity in connection with suchdiscussions. Buyer shall indemnify and hold the Sellers and their Affiliatesharmless from and against any Damages, resulting or arising from Buyer’s actsor omissions in connection with such discussions.

 

(iii)                          Seller agrees that Buyer shall have theright to conduct orientation sessions with Hired Active Employees as soon asreasonably practicable and in any event within thirty (30) days after executionof this Agreement; provided that Sellers shall have the right to havetheir Representatives present at any such sessions. The orientation sessionsmay include personal appearances by Buyer’s senior management and will coversubjects such as Buyer’s employee benefit plans, including any businessretention, sales incentive or other program specifically designed for ActiveEmployees (or any Employee who subsequently becomes an Active Employee whobecome Hired Active Employees after the Effective Time.  Buyer shall indemnify and hold the Sellersand their Affiliates harmless from and against any Damages, resulting orarising from Buyer’s acts or omissions in connection with such orientationsessions.

 

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(iv)                          For a period of one (1) yearfollowing the Closing Date, the Sellers and their Affiliates will not directlysolicit any Hired Active Employee to again become an employee of the Sellers;**provided*,*however*,*that the Sellers shall not be prohibited from hiring a Hired Active Employeeterminated by Buyer or if such Hired Active Employee contacts the Sellers orone of their Affiliates to seek hiring or retention, whether in response togeneral advertising or otherwise.

 

(c)   **Salaries and Benefits**.  Each Hired Active Employee shall be providedemployment with the Buyer subject to the following initial terms andconditions:

 

(i)    Base salary or hourly wage shall be at leastequivalent to the base salary or hourly wage paid by the Sellers to such HiredActive Employee as of the close of business on the Business Day prior to theClosing Date.

 

(ii)   Except as otherwise specifically providedherein, Hired Active Employees shall be provided employee benefits that are noless favorable in the aggregate than those provided to similarly situatedemployees of Buyer. Buyer shall provide each Hired Active Employee with creditfor such Hired Active Employee’s period of service with the Sellers towards thecalculation of eligibility and vesting for such purposes as vacation,severance, medical, dental or other welfare plans and other benefits, andparticipation and vesting in Buyer’s qualified profit-sharing and 401(k) plans,as such plans may exist.

 

(iii)  Each Hired Active Employee who otherwisesatisfies the eligibility criteria of Buyer’s employee benefit plans shall beeligible to participate in the medical, dental, or other welfare plans ofBuyer, as such plans may exist, as of the Effective Time and any pre-existingconditions provisions of such plans shall be administered in accordance withthe Health Insurance Portability and Accountability Act of 1996 with respect toany such Hired Active Employees.

 

(iv)  With respect to any Employee on temporary leaveof absence who is not an Active Employee as of the Effective Time, uponconclusion of his or her temporary leave of absence within ninety (90) days ofthe Closing Date, such Employee shall be deemed to be an Active Employee andshall be offered employment by Buyer, subject to the terms and conditions ofthis *Section 9.1*and theBuyer’s plans and policies and applicable Law, at a base salary or hourly wageat least equivalent to the base salary or hourly wage paid by the Seller tosuch Employee when he or she went on leave and shall otherwise be treated as aHired Active Employee.

 

(v)   Buyer shall be responsible for all severanceobligations arising out of the termination of any Hired Active Employee’semployment after the Closing Date in accordance with Buyer’s severance plan,policies and procedures with credit for the period of years of credited servicetowards the calculation of benefits determined in accordance with *Section 9.1(c)(ii) *of thisAgreement;*provided, however,* if,before the one (1) year anniversary of the Closing Date, any Hired ActiveEmployee experiences a reduction in base salary, a work site relocation of morethan thirty (30) miles or a termination of employment by Buyer for any reasonother than cause (as defined by Buyer’s personnel policies and procedures),such Hired Active Employee shall be entitled to severance pay in an amount atleast equivalent to the severance pay the Hired Active Employee would havereceived under the Sellers’ (or their Affiliates’) Employee Plans had suchemployee been eligible for payments under such plans.

 

(vi)  Exceptas provided herein, the Sellers shall pay, discharge, and be responsible for (A) allsalary and wages, bonus and incentive plans arising out of employment of theHired Active Employees through the Closing Date (and any payroll Tax andreporting obligations thereon), and (B) any employee benefits (including,but not limited to, accrued vacation) arising under the Sellers’ Employee Plansand employee programs prior to the Closing Date (but not including medicalbenefits, if any, to Hired Active Employees who retire after the Closing Date),including benefits with respect to claims incurred prior to the Closing Datebut reported after the Closing Date. From and after the Closing Date, Buyershall pay, discharge, and be responsible for all salary, wages, and benefitsarising out of or relating to the employment of the Hired Active Employees byBuyer from and after the Closing Date (and any payroll Tax and reporting obligationsthereon), including all claims for welfare benefits plans incurred after theClosing Date. Claims are 

 

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incurred as ofthe date services are provided or disability payments are accrued, notwithstandingwhen the injury or illness may have occurred.

 

(d)   **Sellers’ Retirement Plans**.  All Hired Active Employees who are vestedparticipants in the Sellers’ retirement plans shall retain their accruedbenefits under such retirement plans as of the Closing Date, and the Sellers(or their retirement plans) shall retain sole Liability for the payment of suchbenefits as and when such Hired Active Employees become eligible thereforeunder such plans.

 

(e)   **No Transfer of Assets**.  The Sellers shall not make any transfer ofpension or other employee benefit plan assets to Buyer.

 

(f)    **General Employee Provisions**.

 

(i)    TheSellers and Buyer shall give any notices required by applicable Law and takewhatever other actions with respect to the plans, programs and policiesdescribed in this *Section 9.1*as may be necessary to carry out the arrangements described in this *Section 9.1*.

 

(ii)   TheSellers and Buyer shall give notice to all Hired Active Employees that, exceptas otherwise provided for herein, all benefits and/or accruals previouslyprovided under the Employee Plans shall terminate on the Closing Date and allfuture benefits and/or accruals thereafter shall be provided under Buyer’semployee plans.

 

(iii)  TheSellers and Buyer shall provide each other with such plan documents and summaryplan descriptions, employee data or other information as may be reasonablyrequired to carry out the arrangements described in this *Section 9.1*.

 

(iv)  Ifany of the arrangements described in this *Section 9.1*are determined by the IRS or other Governmental Entity to be prohibited by Law,the Sellers and Buyer shall modify such arrangements to as closely as possiblereflect their expressed intent and retain the allocation of economic benefitsand burdens to the parties contemplated herein in a manner that is notprohibited by Law.

 

(v)   Buyersshall not have any responsibility, Liability or obligation, whether to ActiveEmployees, former Employees, their beneficiaries or to any other Person, withrespect to any Employee Plans, practices, programs or arrangements (includingthe establishment, operation or termination thereof and the notification andprovision of COBRA coverage extension) maintained by the Sellers.

 

9.2.          **DealerReserves**.  After theEffective Time, Buyer or its Affiliate shall manage and administer the DealerReserves in a manner consistent with the terms and conditions of the DealerAgreements and in the Ordinary Course of Business as conducted by the Sellersprior to the Effective Time.  Buyer shallhold the Sellers and their Affiliates harmless from and against any Damagesresulting or arising from Buyer’s acts or omissions in connection with themanagement and administration of the Dealer Reserves after the EffectiveTime.  The Sellers, jointly andseverally, shall hold the Buyer and its Affiliates harmless from and againstany Damages resulting or arising from the Sellers’ acts or omissions inconnection with the management and administration of the Dealer Reserves priorto the Effective Time.

 

9.3.          **Assistance in Proceedings**.  (a)                Buyer shallcooperate with the Sellers and their counsel (including their experts or otheragents) in the contest or defense of, and make available any Hired ActiveEmployee (to the extent such Hired Active Employee is still employed by theBuyer at the time of any request for assistance) to be interviewed, provide anytestimony (including depositions, trial testimony and responding tointerrogatories) and access to the Books and Records, if any, transferred inconnection with the transactions contemplated hereby in connection with, anyProceeding involving or relating to the Vehicle Contracts, Dealer Reserves orPurchased Assets arising out of a transaction or event that occurred prior tothe Effective Time.

 

(b)   TheSellers shall cooperate with Buyer and its counsel (including its experts orother agents) in the contest or defense of, and make available itsRepresentatives engaged in the Business prior to the Effective Time (who do notbecome Hired Active Employees) to be interviewed, provide any testimony(including depositions, trial testimony and responding to interrogatories) andaccess to Books and Records in connection with, any Proceeding involving orrelating to the Vehicle Contracts, Dealer Reserves or other Purchased Assetsarising out of a transaction that occurred 

 

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priorto the Effective Time.

 

9.4.          **FurtherAssurances**.  The partiesshall cooperate reasonably with each other and with their respectiveRepresentatives in connection with any steps required to be taken as part oftheir respective obligations under this Agreement, and shall (a) furnishupon request to each other such further information; (b) execute anddeliver to each other such other documents; and (c) do such other acts andthings, all as the other party may reasonably request for the purpose ofcarrying out the intent of this Agreement and the transactions contemplatedhereby.  Notwithstanding anything in thisAgreement to the contrary, nothing in this Agreement shall be construed as theSellers’ guarantee or assurance to the Buyer that (i) the Business shalloperate and perform in the same manner and produce the same results as setforth in the financial statements provided hereunder; (ii) the Dealersshall continue to sell Vehicle Contracts at the same volume, terms or similarquality as they sold to the Sellers prior to the Effective Time or (iii) thatthe Leased Real Property will be transferred on terms similar to or morefavorable than the Sellers’ current Space Leases.

 

9.5.          **Retentionof and access to Records**. After the Closing Date and to the extent not transferred as part of thePurchased Assets, the Sellers shall retain the Records of the Business for aperiod of time consistent with the Sellers’ record retention policies andpractices, but in no event shall the Sellers retain the documents for less thanfive (5) years after the Closing Date. The Seller shall also provide the Buyer or its Affiliate and theirrespective Representatives reasonable access thereto, during normal businesshours and on at least five (5) days notice, to enable them to preparefinancial statements or Tax Return or respond to a Tax audit.  Buyer shall retain any Records of theBusiness transferred as part of the Purchased Assets for a period of timeconsistent with Buyer’s record retention policies and practices, but in noevent shall Buyer retain the documents for less than five (5) years afterthe Closing Date.

 

9.6.          **Non-competition**.  For a period of two (2) years after theClosing Date, the Sellers’ Parent (either directly or through its subsidiaries)shall not, anywhere in the United States (a) engage in the business ofsoliciting, originating, purchasing or acquiring motor vehicle retailinstallment contracts from any Buy Here/Pay Here Dealers; or (b) directlyor indirectly invest in, own or acquire a controlling interest in, any Personengaged in an operation substantially similar to the Business (“CompetingBusiness”); provided, however, that the Sellers’ Parent(either directly or through its subsidiaries) may purchase or otherwise acquire(i) up to (but not more than) twenty-five percent (25%) of any class ofequity securities of any Person (but may not otherwise participate in theactivities of such Person) or (ii) all of the assets or otherwise mergewith another Person, so long as the portion of such Person’s operationsdedicated to the Competing Business constitutes no more than twenty-fivepercent (25%) of such Person’s total assets or net revenues, whichever isgreater.

 

#### *ARTICLE X.  INDEMNIFICATION; REMEDIES*

####  

10.1.        **Survival of Representations and Warranties**.** **All representations, warranties,covenants and obligations in this Agreement, the Disclosure Schedule (andany supplements thereto), the certificates delivered pursuant to *Section 3.2* and any other certificateor document delivered pursuant to this Agreement shall survive the Closing andthe consummation of the transactions contemplated by this Agreement, subject to*Section 10.5*.

 

10.2.        **Indemnification by the Sellers**.  The Sellers,jointly and severally, will indemnify and hold harmless Buyer and itsAffiliates and any of their respective Representatives (collectively referredto herein as the “Buyer IndemnifiedParties”), and will reimburse the Buyer Indemnified Parties for any Damagesarising from or in connection with:

 

(a)                                   any Breach of any representation or warranty madeby the Sellers in (i) this Agreement, (ii) the Disclosure Schedules, (iii) anyAncillary Agreements, (iv) any transfer instrument or (v) any othercertificate, document, writing or instrument delivered by the Sellers pursuantto this Agreement;

 

(b)                                   any Breach of any covenant or obligation of theSellers in this Agreement, any Ancillary Agreement or in any other certificate,document, writing or instrument delivered by the Sellers pursuant to thisAgreement;

 

(c)                                   any Liability arising out of the ownership oroperation of the Purchased Assets or the Business prior to the Effective Timeother than the Assumed Liabilities; provided, however, the Sellers’ indemnificationobligation for any Liabilities that arise as a result of any Dealer act oromission related to a Vehicle Contract or Dealer Agreement that occurred priorto the applicable Acquisition Date shall be subject to *Section 10.4(d)*;

 

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(d)   anyact or omission by the Sellers, any of their Affiliates or any of theirdelegees, agents or assigns (including any of their respective employees) inconnection with the servicing, billing, processing, recovery or collection ofany Vehicle Contract occurring prior to the Closing Date;

 

(e)   subjectto *Section 2.3(j)*, any act or omissionby the Sellers with respect to the management, accounting or administration ofthe Dealer Reserves prior to the Closing Date; or

 

(f)    any Excluded Liabilities.

 

Notwithstandingthe foregoing, no Buyer Indemnified Party shall be indemnified or held harmlessfor Damages to the extent such Damages resulted, in whole or in part, directlyor indirectly, from any action or omission by any Buyer Indemnified Party.

 

10.3.**        Indemnification by Buyer**. Buyer will indemnify and hold harmless the Sellers and their Affiliatesand any of their respective Representatives (collectively referred to herein asthe “Seller Indemnified Parties”), and will reimburse the SellerIndemnified Parties for any Damages arising from or in connection with:

 

(a)   anyBreach of any representation or warranty made by Buyer in this Agreement, anyAncillary Agreement or any in any certificate, document, writing or instrumentdelivered by Buyer pursuant to this Agreement;

 

(b)   any Breach of any covenant or obligation of Buyer in thisAgreement, Ancillary Agreement or in any other certificate, document, writingor instrument delivered by Buyer pursuant to this Agreement;

 

(c)   any Liability arising out of the ownership or operation ofthe Purchased Assets or the Business after the Closing Date;

 

(d)   anyact or omission by the Buyer, any of its Affiliates or any of their delegees,agents or assigns (including any of their respective employees) in connectionwith the servicing, billing, processing, recovery, collection of any VehicleContract occurring after the Closing Date, or any Dealer act or omissionrelating to any Vehicle Contract acquired after the Effective Time (regardlessof whether such Dealer act or omission also relates to Vehicle Contractstransferred pursuant to this Agreement);

 

(e)   any act or omission by the Buyer with respect to themanagement, accounting or administration of the Dealer Reserves after theClosing Date; or

 

(f)    any Assumed Liabilities.

 

Notwithstanding the foregoing, no SellerIndemnified Party shall be indemnified or held harmless for Damages to theextent such Damages resulted, in whole or in part, directly or indirectly, fromany action or omission by any Seller Indemnified Party.

 

10.4.        **Limitationson Amount**.

 

(a)   **Buyer’s Deductible**.  TheSellers shall have no Liability (for indemnification or otherwise) with respectto claims under *Section 10.2(a) *untilthe total of all Damages with respect to such matters exceeds two hundred fiftythousand dollars ($250,000) and then only for the amount which such Damagesexceed two hundred fifty thousand dollars ($250,000) (exclusive of any amountscharged to the Dealer Reserve). Notwithstanding the foregoing, this *Section 10.4(a) *shallnot apply to:  (i) claims under *Section 10.2(c) *through *(f) *(except as provided in*Section 10.4(d)*), (ii) claimsarising in respect of *Sections 4.1(g),4.1(m), 4.1(q) or 4.2(a) *(except as provided in *Section 10.4(d)*), (iii) any Breach of theSellers’ representations and warranties of which the Sellers’ had Knowledge atany time prior to the date such representation or warranty is made, or (iv) anyintentional Breach by the Sellers of any covenant or obligation under thisAgreement or the Ancillary Agreements, and the Sellers will be jointly andseverally liable for all Damages with respect to any such Breaches.

 

(b)   **Sellers’ Deductible**. Buyer shall have no Liability (for indemnification or otherwise) withrespect to claims under *Section 10.3(a) *untilthe total of all Damages with respect to such matters exceeds two hundred fiftythousand dollars ($250,000) and then only for the amount by which such Damagesexceed two hundred fifty thousand dollars ($250,000).  Notwithstanding the foregoing, this *Section 10.4(b) *shall not applyto: (i) claims under *Section 10.3(c) *through*(f)*, (ii) claims arising inrespect of *Section 5.1(d)*, (iii) anyBreach of any of Buyer’s representations and 

 

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warranties ofwhich the Buyer’s or its Affiliates had Knowledge at any time prior to the dateon which such representation and warranty is made, or (iv) any intentionalBreach by Buyer of any covenant or obligation under this Agreement or theAncillary Agreements, and Buyer will be liable for all Damages with respect toany such Breaches.

 

(c)   **Limitation**.  Except asset forth in subsection *(i) *and *(ii) *of this*Section 10.4(c) *and in*Section 10.4(e)*,no party’s aggregate Liability under this *Article X*and this Agreement shall exceed fifty percent (50%) of the Closing PurchasePrice.  Notwithstanding the limitationset forth in the immediately preceding sentence, there shall be no limitationon the aggregate Liability:

 

(i)    of Sellers with respect to (A) claims arising under *Section 10.2(c) *through *(f)*, (B) claims arising in respect of*Sections 4.1(g), 4.1(m)*or*4.1(q)*,(C) any Breach of the Sellers’ representations and warranties ofwhich the Sellers’ had Knowledge at any time prior to the date suchrepresentation or warranty is made, or (D) any intentional Breach by theSellers of any covenant or obligation under this Agreement or the AncillaryAgreements; and

 

(ii)   of Buyer with respect to (A) claimsunder *Section 10.3(c) *through*(f)*, (B) claims arising inrespect of *Section 5.1(d)*, (C) anyBreach of any of Buyer’s representations and warranties of which the Buyer’s orits Affiliates had Knowledge at any time prior to the date on which suchrepresentation and warranty is made, or (D) any intentional Breach byBuyer of any covenant or obligation under this Agreement or the AncillaryAgreements.

 

(d)   **Liability Arising Out of Dealer Acts or Omissions.**  Notwithstanding any provisions of this *Article X* to the contrary, the Sellers shall have noLiability (for indemnification or otherwise) with respect to claims arisingunder *Sections 4.2(a), 4.2(b)(i) *or*(ii) *or *10.2(c) *to the extent such claims relate to or arise out of any Dealer act,omission or Breach of any Vehicle Contract or Dealer Agreement until:

 

(i)            Buyerhas exhausted its remedies under the applicable Dealer Agreement, including (A) reassigningany Vehicle Contract giving rise to such Liability to the applicable Dealer tothe extent of the applicable Dealer Reserve and (B) pursuing andexhausting, in good faith, any and all legal remedies against the applicableDealer and its Representatives; and

 

(ii)           the total of all Damages with respect to such matters(exclusive of any amounts charged to the applicable Dealer Reserve) exceedsfive million dollars ($5,000,000) and then only for the amount which suchDamages exceed five million dollars ($5,000,000).

 

(e)   **Limitations on LiabilityRelating to Title to Vehicle Contracts.**  Notwithstanding any provisions of this *Article X* to the contrary, Sellers’ aggregate Liabilityrelating to a Breach of *Section 4.2(a) *shallnot exceed the Closing Purchase Price; provided, however, anyLiability of Seller for a Breach of *Section 4.2(a) *relating to or arising out of any Dealer act,omission or Breach of any Vehicle Contract or Dealer Agreement shallalso be subject to the provisions of *Section 10.4(d) *hereof.

 

10.5.        **TimeLimitations**.

 

(a)   If the Closing occurs, the Sellers shall haveLiability (for indemnification or otherwise) with respect to any Breach of (i) acovenant or obligation to be performed or complied with prior to the ClosingDate (other than those in *Sections 2.1*,*2.4* and *11.1*, and *Article IX*,as to which a claim may be made at any time) or (ii) a representation orwarranty, only if such Breach occurs within eighteen (18) months after theClosing Date, Buyer notifies the Sellers of a claim specifying the factualbasis of the claim in reasonable detail to the extent then known by Buyer.  Notwithstanding the foregoing or anything in thisAgreement to the contrary, a claim for indemnification arising under (*x*) *Section 10.2(c) *through*(e) *may be made at anytimeprior to six (6) years after the Closing Date or the expiration of theapplicable statute of limitations relating to such claim, whichever occursfirst, (*y*) *Section 4.2(a) *may be made atanytime prior to thirty (30) months after the Closing Date,**or (*z*)*Sections 10.2(f), 4.1(g), 4.1(m)*or *4.1(q)*may be made at anytime.

 

(b)   Ifthe Closing occurs, Buyer shall have Liability (for indemnification orotherwise) with respect to any Breach of (i) a covenant or obligation tobe performed or complied with prior to the Closing Date (other than in *Sections 2.3 and 11.1,* and *Article IX* as 

 

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to which aclaim may be made at any time) or (ii) a representation or warranty, onlyif such Breach occurs within eighteen(18) months after the Closing Date, the Sellers notify Buyer of a claimspecifying the factual basis of the claim in reasonable detail to the extentthen known by the Sellers. Notwithstanding the foregoing or anything in this Agreement to thecontrary, a claim for indemnification under (*x*)*Section 10.3(c) *through*(e) *may be made at anytimeprior to six (6) years after the Closing Date or the expiration of theapplicable statute of limitations relating to such claim, whichever occursfirst or (*y*) *Sections 10.3(f) or 5.1(d) *maybe made at anytime.

 

10.6.        **Third-PartyClaims**.

 

(a)**  **Promptlyafter receipt by an indemnified party of notice of any Proceeding brought orasserted by a Third Party for which such party is entitled to indemnificationunder *Sections 10.2 or 10.3*, such indemnifiedparty shall give prompt notice to the indemnifying party of such Proceeding,but the failure to notify the indemnifying party will not relieve theindemnifying party of any Liability that it may have to any indemnified party,except to the extent that the indemnifying party demonstrates that the defenseof such Proceeding is prejudiced by the indemnifying party’s failure to givesuch notice.

 

(b)   Ifany Proceeding is brought against an indemnified party and it gives notice tothe indemnifying party of the commencement of such Proceeding, the indemnifyingparty will be entitled to participate in such Proceeding and, to the extentthat it wishes (unless (i) the indemnifying party is also a party to suchProceeding and the indemnified party determines in good faith that jointrepresentation would be inappropriate, or (ii) the indemnifying partyfails to provide reasonable assurance to the indemnified party of its financialcapacity to defend such Proceeding) to assume the defense of such Proceedingwith counsel satisfactory to the indemnified party, which counsel shall keepthe indemnified party closely informed and shall consult with the indemnifiedparty regarding the defense, and, after notice from the indemnifying party tothe indemnified party of its election to assume the defense of the Proceeding,the indemnifying party will not, as long as it diligently conducts such defenseand keeps the indemnified party closely informed and consults with theindemnified party regarding the defense, be liable to the indemnified party forany fees of other counsel or any other expenses with respect to the defense ofsuch Proceeding, in each case subsequently incurred by the indemnified party inconnection with the defense of such Proceeding, other than reasonable costs ofinvestigation and settlement administration. If the indemnifying party assumes the defense of a Proceeding, nocompromise or settlement of such claims may be affected by the indemnifyingparty without the indemnified party’s consent. If notice is given to an indemnifying party of the commencement of anyProceeding and the indemnifying party does not within ten (10) days afterthe indemnified party’s notice is given, give notice to the indemnified partyof its election to assume the defense of such Proceeding, the indemnifyingparty will be bound by any determination made in such Proceeding or anycompromise or settlement effected by the indemnified party, provided it isultimately determined to be a matter for which an indemnity is owed to theindemnified party and further provided that the indemnified party has continuedto keep the indemnifying party reasonably informed of the Proceedings and actsin defending or compromising the matter.

 

(c)   Notwithstanding the foregoing, if an indemnifiedparty reasonably and in good faith determines that a Proceeding may materiallyaffect it or its Affiliates, other than as a result of monetary damages forwhich it would be entitled to indemnification under this Agreement, theindemnified party may, by notice to the indemnifying party, assume theexclusive right to defend, compromise, or settle such Proceeding, withoutprejudice to its right to be indemnified hereunder except that the indemnifyingparty shall only be responsible for the attorney’s fees and costs and expensesof one law firm (as well as one local counsel) retained by the indemnifiedparty to represent it in such Proceeding, provided it is ultimately determinedto be a matter for which an indemnity is owed to the indemnified party andfurther provided that the indemnified party has continued to keep theindemnifying party reasonably informed of the proceedings and acts in defendingor compromising the matter.

 

(d)   The indemnifying party agrees to confer with andobtain the consent of the indemnified party prior to initiating any contactwith any Obligors whose Vehicle Contract may be the subject of an indemnifiedclaim (this includes obtaining prior approval of any court orderedcommunication such as a class action), and further, the indemnifying partyagrees to obtain the consent of the indemnified party and to coordinate throughthe indemnified party’s legal department any contact with the indemnified party’semployees regarding the defense of any Proceeding.

 

10.7.        **OtherClaims**.  A claim forindemnification for any matter not involving a Third-Party Claim may beasserted by notice to the party from whom indemnification is sought and shallbe paid promptly after such notice.

 

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10.8         **Parent Guaranty**. The Sellers’ Parentand Buyer’s Parent hereby unconditionally guarantee and promise to pay any andall indemnification obligations the Sellers and Buyer, respectively, becomeobligated to pay pursuant to this *Article X*.  The Sellers’ Parent and Buyer’s Parent’sobligation under this *Section 10.8*shall (i) expire with Sellers’ or Buyer’s obligations as provided in *Section 10.5* and (ii) theirrespective Liability for a claim shall not exceed the amounts set forth in *Section 10.4*.

 

**ARTICLE XI.****  MISCELLANEOUS**

 

11.1.        **Confidentialityof Information**.  Unlessotherwise agreed to in writing by the party disclosing (or whoseRepresentatives disclosed) the same (a “Disclosing Party”), each party(a “Receiving Party”) shall, and shall cause its Representatives to, (i) keepall Confidential Information of the Disclosing Party confidential and notdisclose or reveal any such Confidential Information, (ii) use suchConfidential Information only in connection with consummating the transactionscontemplated hereby and enforcing the Receiving Party’s rights hereunder, and (iii) notuse Confidential Information in any manner detrimental to the DisclosingParty.  In the event that a ReceivingParty is requested pursuant to, or required by, applicable Law or by legalprocess to disclose any Confidential Information of the Disclosing Party, theReceiving Party shall provide the Disclosing Party with a copy of such requestor proof of service of process so the Disclosing Party can seek an appropriateprotective order.  A party’s obligationshereunder with respect to Confidential Information that (i) is disclosedto a Third Party with the Disclosing Party’s written approval, (ii) isrequired to be produced under order of a Governmental Entity of competentjurisdiction, or (iii) is required to be disclosed by applicable Law,will, subject in the case of clauses (ii) and (iii) above to theReceiving Party’s compliance with the preceding sentence, cease to the extentof the disclosure so consented to or required, except to the extent otherwiseprovided by the terms of such consent or covered by a protective order.  If a Receiving Party uses a degree of care toprevent disclosure of the Confidential Information that is at least as great asthe care it normally takes to preserve its own information of a similar nature,it shall not be liable for any disclosure that occurs despite the exercise ofthat degree of care, and in no event shall a Receiving Party be liable for anyindirect, punitive, special or consequential damages unless such disclosureresulted from its willful misconduct or gross negligence in which event itshall be liable in damages for the Disclosing Party’s lost profits resultingdirectly and solely from such disclosure. In the event this Agreement is terminated, each party shall, if sorequested by any other party, promptly return or destroy all of theConfidential Information of such other party, including all copies, reproductions,summaries, analyses or extracts thereof or based thereon in the possession ofthe Receiving Party or its Representatives; provided, however,that the Receiving Party shall not be required to return or cause to bereturned summaries, analyses or extracts prepared by it or its Representatives,but shall destroy (or cause to be destroyed) the same upon request of theDisclosing Party.

 

For purposesof this *Section 11.1*, “ConfidentialInformation” of a party means all confidential or proprietary informationabout such party that is furnished by it or its Representatives to the otherparty or the other party’s Representatives, in connection with this Agreementand the Ancillary Agreements and the transactions contemplated hereby andthereby, regardless of the manner in which it is furnished.  “Confidential Information” does notinclude, however, information which (a) has been or in the future ispublished or is now or in the future is otherwise in the public domain throughno fault of the Receiving Party or its Representatives, (b) was availableto the Receiving Party or its Representatives on a non-confidential basis priorto its disclosure by the Disclosing Party, (c) becomes available to theReceiving Party or its Representatives on a non-confidential basis from aPerson other than the Disclosing Party or its Representatives who is nototherwise bound by a confidentiality agreement with the Disclosing Party or itsRepresentatives, or is not otherwise prohibited from transmitting theinformation to the Receiving Party or its Representatives, or (d) isindependently developed by the Receiving Party or its Representatives throughPersons who have not, either directly or indirectly, had access to or knowledgeof such information.

 

11.2.        **Public Announcement**.  Buyerand the Sellers shall consult with each other and obtain each other’s approvalbefore issuing any press release or otherwise making any public statements withrespect to this Agreement or the transactions contemplated hereby; provided,however, that nothing contained herein shall prohibit either party frommaking a communication directed to its employees or the employees of any of itsAffiliates, or from making such disclosure as required by applicable Law.

 

11.3.        **Assignment; Successors**.  Neither party may assign this Agreementwithout the prior written consent of the other party, which consent may bewithheld in the other party’s discretion; provided, that either partymay assign this Agreement or parts thereof to its parent, an Affiliate or asubsidiary by providing at least thirty (30) days written notice to the otherparty and Buyer may and shall be entitled to assign its rights under thisAgreement to any Person providing financing to Buyer in connection with thisAgreement.  This Agreement shall be bindingupon and inure to the benefits of the parties hereto and their respectivesuccessors.

 

11.4.        **No Agency Relationship**.  The relationship between the Sellers andBuyer shall not be construed as a joint venture, partnership or principal-agentrelationship, and under no circumstances shall any of the employees of oneparty be 

 

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deemedto be employees of the other party for any purpose.  This Agreement shall not be construed asauthority for either party to act for the other in any agency or any othercapacity, except as expressly set forth in this Agreement.

 

11.5.        **Third Party Beneficiaries**.  Except as expressly provided in *Article X*, this Agreement is notintended and shall not be construed to create any rights or benefits upon anyperson not a party to this Agreement. Without limiting the generality of the foregoing, no Employee shall haveany rights under this Agreement as a result of *Section 9.1*hereof.  Buyer may and shall be entitledto assign its rights under this Agreement to any Person providing financing toBuyer in connection with this Agreement.

 

11.6.        **Costs and Expenses**.  Unless specifically provided for elsewhere inthis Agreement, each party will bear its own costs and expenses, including legalfees, accounting fees and taxes incurred in connection with the negotiation and performance of thisAgreement.

 

11.7.        **Notices**.  All notices and other communications requiredor permitted to be given under this Agreement shall be in writing and shall bedeemed given (a) three (3) Business Days after being deposited in theU.S. mail, first class, postage prepaid, (b) upon transmission, if sent byfacsimile transmission, or (c) upon delivery, if served personally or sentby any generally recognized overnight delivery service, to the followingaddresses:

 

If to theSellers:

 

Wells Fargo Financial, Inc.

800 Walnut St.

Des Moines, IA 50309

Facsimile: (515) 557-7602

Attn.: General Counsel

 

And if toBuyer:

 

CARS Acquisition LLC

c/o CompuCredit Corporation

245 Perimeter Center Parkway, Suite 600

Atlanta, Georgia 30346

Facsimile: (770) 206-6187

Attn.: General Counsel

 

witha copy to:

 

Troutman Sanders LLP

600 Peachtree Street, N.E.

Suite 5200

Atlanta, GA  30308-2216

Facsimile:  (404) 885-3995

Attn.:  W. Brinkley Dickerson, Jr.

 

11.8.        **Entire Agreement**.  This Agreement, including any exhibits orother documents attached hereto or referenced herein, each of which is herebyincorporated into this Agreement and made an integral part hereof, constitutesthe entire agreement between the parties relating to the subject matter hereofand there are no representations, warranties or commitments except as set forthherein.  This Agreement supersedes allprior understandings, negotiations and discussions, written or oral, of theparties relating to the transactions contemplated by this Agreement.

 

11.9.        **Modification**.  ThisAgreement may not be changed orally but only by an agreement in writing, signedby the party against whom enforcement of any waiver, change, modification, or dischargeis sought.

 

11.10.      **Governing Law**.  This Agreement shall be governed by andconstrued in accordance with the laws of the State of Iowa (without referenceto conflicts of laws rules thereof). Matters of law regarding the Vehicle Contracts shall be governed by andconstrued in accordance with the terms of such Vehicle Contracts or federallaw, as the case may be.

 

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11.11.      **Severability**.  If any provision of this Agreement shall beor become wholly or partially invalid, illegal or unenforceable, such provisionshall be enforced to the extent that its legal and valid and the validity,legality and enforceability of the remaining provisions shall in no way beaffected or impaired. This Agreement shall be binding upon and inure to thebenefit of the parties hereto and their respective successors, legalrepresentatives and permitted assigns.

 

11.12.      **Waivers; Cumulative Remedies**.  No failure or delay by a party to insist uponthe strict performance of any term or condition under this Agreement or toexercise any right or remedy available under this Agreement at law or inequity, shall imply or otherwise constitute a waiver of such right or remedy,and no single or partial exercise of any right or remedy by any party willpreclude exercise of any other right or remedy. All rights and remedies provided in this Agreement are cumulative andnot alternative; and are in addition to all other available remedies at law orin equity.

 

11.13.      **Waiver of Jury Trial**.  **EACH PARTY HEREBYKNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES, TO THE FULLEST EXTENTPERMITTED BY APPLICABLE LAW, THE RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDINGARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATEDHEREBY.**

 

11.14.      **Counterparts**.  This Agreement may be executed in one or morecounterparts, each of which shall be deemed to be an original copy of thisAgreement and all of which, when taken together, shall be deemed to constituteone and the same agreement.  The exchangeof copies of this Agreement and of signature pages by facsimiletransmission shall constitute effective execution and delivery of thisAgreement as to the parties and may be used in lieu of the original Agreementfor all purposes.  Signatures of the partiestransmitted by facsimile shall be deemed to be their original signature for allpurposes.

 

11.15.      **Right of Offset**.  Any payment required under the terms of thisAgreement to be made by one party to the other party may be offset by anypayment required under the terms of this Agreement to be made by the secondparty to the first party.

 

11.16.      **Construction**.  The headings of Articles and Sections in thisAgreement are provided for convenience only and will not effect itsconstruction or interpretation.

 

11.17       **Time of Essence**.  With regard to all dates and time periods setforth or referred to in this Agreement, time is of the essence.

 

(**Signature Page Follows**)

 

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**EXECUTIONCOPY**

 

IN WITNESS WHEREOF, the parties have dulyexecuted this Asset Purchase Agreement, effective as of the date first writtenabove.

 
|   | CARS ACQUISITION LLC                       |
|--------|--------------------------------------------|
|   |                                       |
|   |                                       |
|   | By:                                        |   |   |
|   |                                       | Name: |
|   |                                       | Title: |
|   |                                       |
|   | COMPUCREDIT CORPORATION                    |
|   |                                       |
|   |                                       |
|   | By:                                        |   |   |
|   |                                       | Name: |   |
|   |                                       | Title: |   |
|   |                                       |
|   |                                       |
|   | WELLS FARGO FINANCIAL AMERICA, INC.        |
|   | WELLS FARGO FINANCIAL CAR LLC              |
|   | WELLS FARGO FINANCIAL KENTUCKY, INC        |
|   | WELLS FARGO FINANCIAL NEVADA, INC.         |
|   | WELLS FARGO FINANCIAL NORTH CAROLINA, INC. |
|   | WELLS FARGO FINANCIAL TEXAS, INC.          |
|   |                                       |
|   |                                       |
|   | By:                                        |   |   |
|   |                                       | Reed Ramsay |   |
|   |                                       | President |   |
|   |                                       |
|   | WELLS FARGO FINANCIAL, INC.                |
|   |                                       |
|   |                                       |
|   | By:                                        |   |   |
|   |                                       | Greg M. Janasko |   |
|   |                                       | Senior Vice President |   |
|        |                                            |  |  |  |  |  |  |

 

S-1

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