Exhibit 10.17


 


CONFIDENTIAL


 


 


ASSET
PURCHASE AGREEMENT


 


by and among


 


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., and


WELLS
FARGO FINANCIAL, INC.


 


and


 


CARS
ACQUISITION LLC, and


COMPUCREDIT
CORPORATION


 


Dated as
of December 10, 2004


 





















 


EXECUTION
COPY


 


ASSET
PURCHASE AGREEMENT


 


This ASSET PURCHASE
AGREEMENT (this “Agreement”) dated as of December 10, 2004 by
and among Wells Fargo Financial America, Inc., a Pennsylvania corporation,
Wells Fargo Financial CAR LLC, a Delaware limited liability company, Wells
Fargo Financial Kentucky, Inc., a Kentucky corporation, Wells Fargo
Financial Nevada, Inc., a Nevada corporation, Wells Fargo Financial North
Carolina, Inc., a North Carolina corporation, and Wells Fargo Financial
Texas, Inc., a Texas corporation (each individually a “Seller” and
collectively, the “Sellers”) and each a wholly owned subsidiary of Wells
Fargo Financial, Inc., an Iowa corporation (“Sellers’ Parent”), and
CARS Acquisition LLC, a Georgia limited liability company (the “Buyer”)
and wholly owned subsidiary of CompuCredit Corporation, a Georgia corporation (“Buyer’s
Parent”).


 


RECITALS


 


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


 


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


 


NOW, THEREFORE, in consideration
of the mutual covenants and promises contained herein and for other good and
valuable 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 following
terms and variations thereof shall have the following meanings specified or
referred to in this Section 1.1:


 


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


 


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


 


“Adverse
Claims” means, for any assets or property of a Person, a claim
of ownership or any Lien in, of, or on, such asset or property in favor of any
other 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 the
outstanding voting securities of such other Person; (ii) any Person ten
percent (10%) or more of whose outstanding voting securities are directly or
indirectly owned, controlled or held with power to vote, by such other Person; (iii) any
Person, directly or indirectly, controlling, controlled by or under common
control with, such other Person; or (iv) any officer, director, partner,
co-partner, or employee of such other Person.


 


“Ancillary
Agreements” shall mean the Bill of Sale, Power of Attorney,
Assignment and Assumption Agreement, Lease Assignment and Assumption
Agreements, Subscriber Agreement, Transition Services Agreement and such other
documents or agreements that the parties deliver in connection with the
consummation of the transactions contemplated hereby.


 


“Ancillary Product”
means, with respect to any Vehicle Contract, any extended vehicle service
contract, vehicle warranty, guaranteed auto protection policies or waivers,
mechanical breakdown contracts or such other products or services sold to an
Obligor 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 similar
laws affecting creditors’ rights generally and (ii) the general principles
of equity, regardless of whether asserted in a proceeding in equity or at law.


 


“Best
Efforts” means the efforts a prudent Person desirous of
achieving a result would use in similar circumstances to achieve that result as
expeditiously as possible.


 





















 


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


 


“Breach”
means any breach of, or any inaccuracy in, any representation or warranty or
any breach of, or failure to perform or comply with, any covenant or
obligation, in or of this Agreement or any other contract, or any event which
with the passing of time or the giving of notice, or both, would constitute
such 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 day
on which bank institutions are authorized by law to be closed or any day the
New York Stock Exchange is closed.


 


“Buy-Here/Pay-Here
Dealer” means an independent or non-franchise automobile dealer
who provides consumer automobile financing on its own behalf through a captive
finance operation or Related Finance Company (as defined under the Code) for
the purpose of underwriting and servicing motor vehicle retail installment
contracts that were originated directly by such dealer; provided, however,
to the extent a Buy-Here/Pay-Here Dealer arranges for the contemporaneous
purchase of motor vehicle retail installment contracts through one or more
unrelated third parties, for purposes of this Agreement, such dealer shall not
be deemed a Buy-Here/Pay-Here Dealer with respect to such third party financing
transactions.  As used in this
definition, “contemporaneous purchase” shall refer to motor vehicle retail
installment contracts which are approved prior to execution, as well as those
that are approved for purchase within seven (7) days of the date of
execution (i.e., “spot deliveries”), and in each case, purchased or acquired at
par or at a premium to par.


 


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


 


“Closing
Date Data” shall mean (i) the data file containing the
electronic Record and Accounts Receivable balance of each of the Vehicle
Contracts and (ii) the Excel file containing the electronic Record and
balance of each Dealer’s Dealer Reserve, in each case, as transferred as part
of 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” shall
mean the Internal Revenue Code of 1986, as amended.


 


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


 


“Computer
Files” shall mean all computer or other electronic files used in
the Business including the archived contact management data used exclusively by
the Business (i.e., “Goldmine data”). 
Notwithstanding the foregoing, this definition shall not include, to the
extent licensed by the Sellers or their Affiliates pursuant to a
non-transferable Third-Party license agreement or which is not used exclusively
or primarily by the Business, any (i) word processing, spreadsheet,
presentation or database programs, (ii) operating systems or system of
record (i.e., “Supreme”) used by the Business or (iii) other computer
programs 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 of
indebtedness, purchase order, letter of credit, indenture, employment
agreement, instrument, obligation or commitment to which a Seller is a party or
is bound (or otherwise has acquired rights and duties thereunder) and which
relates to the Business, whether oral or written.


 


“Contract Files”
shall mean the Records relating to and evidencing a Contract maintained by a
Seller as of the Closing Date.  With
respect 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 ownership
and security interest;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Effective Time”
shall mean the time at which the parties consummate the transactions
contemplated by this Agreement in compliance with the terms and conditions set
forth herein.


 


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


 


“Employee
Plans” means (i) all “employee benefit plans,” as defined
in Section 3(3) of ERISA, and all other material employee benefit
arrangements (including any trusts maintained for such arrangements) relating
to the Employees or the Business, including any such arrangements providing for
severance pay, sick leave, vacation pay, salary continuation for disability,
retirement benefits, deferred compensation, bonus pay, incentive pay, stock
options, hospitalization insurance, medical insurance, life insurance,
scholarships or tuition reimbursements, maintained by the Sellers or their
Affiliates or to which the Sellers or their Affiliates are obligated to
contribute thereunder for current or former Employees, and (ii) all “employee
pension benefit plans,” as defined in Section 3(2) of ERISA,
maintained by the Sellers or any ERISA Affiliate or to which the Sellers or any
ERISA Affiliate have contributed or been obligated to contribute thereunder
during the last six (6) years.


 


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


 


“ERISA Affiliate”
shall mean any entity that is (or at any relevant time was) a member of a “controlled
group of corporations” with, under “common control” with, or a member of an “affiliated
service 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 related
thereto) and related facilities (and any improvements thereto) used in the
operation of the Business, including the Tangible Personal Property used or
operated by the Sellers or their Affiliate.


 


“GAAP” means
generally accepted accounting principles in the United States as in effect from
time to time.


 


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


 


“Governmental
Authorization” shall mean any Consent, license, registration or
permit issued, granted, given or otherwise made available by or under authority
of any Governmental Entity or pursuant to any Law.


 


3





















 


“Governmental
Entity” shall mean any court, administrative agency or
commission or other federal, state, provincial, local or foreign governmental
authority, instrumentality, agency or commission.


 


 “Insurance Policy” means (i) any
comprehensive, collision, fire, theft or other insurance policy maintained by
an Obligor that also lists a Seller as loss payee with respect to the related
Vehicle or (ii) any credit life, involuntary unemployment, or accident and
health insurance maintained by an Obligor in connection with any Vehicle
Contract.


 


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


 


“IRS”
means the Internal Revenue Service.


 


“Knowledge”
for purposes of this Agreement, an individual will be deemed to have Knowledge
of a particular fact or other matter if that individual is actually aware of
that fact or matter.  A Person (other
than an individual or a Seller) will be deemed to have Knowledge of a
particular fact or other matter if any individual who is serving, or who has at
any time served, as a director or officer of that Person (or in any similar
capacity) has, or at any time had, Knowledge of that fact or other matter.  A Seller will be deemed to have Knowledge of
a particular fact or other matter if any individual who is serving, or who has
at any time served, as a director, officer or Key Employee of that Seller or
legal 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, Knowledge
of that fact or other matter.


 


“Law”
shall mean any statute, rule, regulation or other provision of law, or any
order, judgment or other direction of a court or other tribunal, or any other
governmental 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 the
Business.


 


“Lien” shall
mean any claim, pledge, lien, security interest or other encumbrance of any
kind whatsoever.


 


“Material Adverse Change”
or “Material Adverse Effect” shall mean
any change, event or effect that is or could reasonably be expected to be
materially adverse to the business, assets, condition (financial or other),
results of operations or prospects of any party (or the Business, as the case
may be) or which otherwise could reasonably be expected to prevent the
consummation 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, assessment
or arbitration award of any Governmental Entity or arbitrator.


 


“Ordinary Course of
Business” shall mean the ordinary and usual course of the
conduct of the Business as currently conducted and consistent with past
practices 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 be
deemed 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 other
entity or a Governmental Entity.


 


“Preliminary
Purchase Price” shall mean the Purchase Price as determined
based on the Interim Balance Sheet prepared as of the month-end immediately
preceding the Closing Date.  For the
avoidance of doubt, an example of the application of the foregoing calculation
is set forth in Exhibit A
using the Initial Balance Sheet.


 


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“Proceeding”
means any action, arbitration, audit, hearing, investigation, litigation or
suit (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 Governmental
Entity or arbitrator.


 


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


 


(i)            all
Facilities;


 


(ii)           all
Accounts Receivable;


 


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


 


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


 


(v)           to the extent they
exist and are in the possession of the Active Employees or located in the Facilities
(or otherwise held by the Sellers’ Representatives in connection with the
Business), copies of all data and Books and Records related to and used
exclusively or primarily in the Business including client customer lists and
Records, current and historical operational data and Records, current and
historical 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 Sellers
relating to deposits and prepaid expenses, claims for refunds and rights to offsets
in respect thereof, in each case to the extent related to the Business; and


 


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


 


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


 


“Purchase
Price” 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 in
an electronic or other medium and is retrievable in perceivable form.


 


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


 


“Related Person”
means, with respect to (i) a particular individual: (a) each other
member of such individual’s Family; (b) any Person that is directly or
indirectly controlled by any one or more members of such individual’s Family; (c) any
Person in which members of such individual’s Family hold (individually or in
the aggregate) a Material Interest; and (d) any Person with respect to
which 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) a
specified Person other than an individual: (a) any Affiliate and (b) any
Person with respect to which such specified Person serves as a general partner
or 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 the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise, and shall be
construed as such term is used in the rules promulgated under the
Securities Act of 1933, as amended; (ii) the “Family” of an individual
includes (a) the individual, (b) the individual’s spouse, (c) any
other natural person who is related to the individual or the individual’s
spouse within the second degree and (d) any other natural person who
resides with such individual; and (iii) “Material Interest” means direct
or indirect beneficial ownership (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended) of voting securities or other
voting interests representing at least ten percent (10%) of the outstanding
voting power of a Person or equity securities or other equity interests
representing at least ten percent (10%) of the outstanding equity securities or
equity interests in a Person.


 


“Related Security”
means, for any Vehicle Contract, all of the Sellers’ right, title and interest
in, to and under (i) the Vehicle related to such Vehicle Contract; (ii) any
Insurance Policies relating to such Vehicle or to the related Obligor, (iii) all
Liens and property subject thereto, if any, purporting to secure payment of
such Vehicle Contract, together with all financing statements describing any
collateral securing such Vehicle Contract, (iv) all guarantees, letters of
credit, insurance and other agreements supporting or securing payment of such
Vehicle Contract, (v) all Ancillary Products related to such Vehicle Contract,
(vi) rights or claims against the applicable Dealer and (vii) all
proceeds 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 or
other 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 any
improved 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 servers
that are not used exclusively or primarily in the Business), supplies, materials
and other items of tangible personal property of every kind owned or leased by
the Sellers exclusively or primarily for use in the operation of the Business,
together with any express or implied warranty (to the extent such warranty is
transferable) by the manufacturers or sellers or lessors of any item or
component part thereof and all maintenance records and other documents relating
thereto.


 


“Tax” means
any 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 other
tax, fee, assessment, levy, tariff, charge or duty of any kind whatsoever,
whether computed on a separate or consolidated, unitary or combined basis or in
any other manner, and any interest, penalty, addition or additional amount
thereon imposed, assessed or collected by or under the authority of any
Governmental Entity or payable under any tax-sharing agreement or any other
contract or agreement, whether disputed or not.


 


“Tax
Return” means any return (including any information return),
report, statement, schedule, notice, form, declaration, claim for refund or
other document or information (i) relating to Taxes, or (ii) filed
with or submitted to, or required to be filed with or submitted to, any
Governmental 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 any
Tax.


 


“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 Party
whether or not involving a Proceeding.


 


“Threatened”
shall mean, with respect to an action, Proceeding or other matter, that any
demand or statement has been made (in writing or orally, if made to any of the
officers or directors of a Person), or that any other event has occurred or any
other circumstances exist, that would lead a reasonable person to conclude that
such Proceeding or other matter is likely to be asserted, commenced, taken or
otherwise 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 which
gave rise to a Vehicle Contract.


 


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


 


1.2.          Other Defined Terms.  The following terms shall have the meanings
defined 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.  In
this Agreement, unless a clear contrary interpretation appears:


 


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


 


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


 


(iii)          reference
to any gender includes each other gender;


 


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


 


(v)           reference to any Law
means such Law as amended, modified, codified, replaced or reenacted, in whole
or in part, and in effect from time to time, including rules and
regulations promulgated thereunder, and reference to any section or other
provision of any Law means that provision of such Law from time to time in
effect 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 references
to this Agreement as a whole and not to any particular Article, Section or
other provision hereof;


 


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


 


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


 


(ix)           with
respect to the determination of any period of time, “from” means “from and
including” and “to” means “to but excluding”; and


 


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


 


7





















 


(b)   Legal Representation. 
The parties negotiated this Agreement with the benefit of legal
representation, and any rule of construction or interpretation otherwise
requiring this Agreement to be construed or interpreted against any party shall
not apply to any construction or interpretation hereof.


 


ARTICLE II.  SALE AND PURCHASE


 


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


 


2.2.          Excluded Assets.  Notwithstanding anything to the contrary
contained in Section 2.1 or elsewhere in
this Agreement, the following assets of the Sellers exclusively used in or
relating to the Business (collectively, the “Excluded Assets”) are not
part of the sale and purchase contemplated hereunder, are excluded from the
Purchased Assets and shall remain the property of the Sellers after the
Closing:


 


(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)    all
personnel Records and other Records that the Sellers are required by Law to
retain in their possession; provided, however, subject to
obtaining the Consent of any Employee or other Person, that, to the extent
necessary to the operation of the Business and not in violation of any Law, the
Sellers shall provide copies of such Records to Buyer (at Buyer’s expense);


 


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


 


(h)   all
rights to or in any judgment, Orders or awards relating to any Proceeding
commenced by the Sellers against Third Parties prior to the Effective Time;


 


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


 


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


 


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


 


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


 


(b)   any
Liability to the Sellers’ customers incurred by the Sellers in the Ordinary
Course of Business outstanding as of the Effective Time (other than any
Liability arising out of or relating to an act or omission that occurred prior
to the Effective Time);


 


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


 


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


 


8





















 


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


 


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


 


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


 


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


 


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


 


(j)    with
respect to any Liability (regardless of whether it is assumed or excluded
pursuant to this Section 2.3
or 2.4, respectively) arising out
of 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 by
the Buyer, the proportion of such Liability relating to such acts or omission
after the Effective Time.


 


2.4.          Excluded Liabilities.  Notwithstanding Section 2.3 or any other provision of this Agreement to
the contrary, all Liabilities of the Sellers (other than the Assumed
Liabilities) shall remain the Liabilities of the Sellers and shall not be
assumed by Buyer pursuant hereto (collectively, the “Excluded Liabilities”).  Without limiting the generality of the
foregoing, 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 to
the Effective Time, including any deferred Taxes of any nature;


 


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


 


(c)           subject
to Article X, any Liability
under any Contract assumed by Buyer that arises out of or relates to any Breach
that occurred prior to the Effective Time;


 


(d)           any
Liability 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 or
profit-sharing plans, health care plans or benefits or any other employee plans
or benefits of any kind applicable to the Employees (or former Employees or both);


 


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


 


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


 


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


 


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


 


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


 


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


 


9





















 


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


 


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


 


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


 


2.5.          Consideration.  The consideration for the Purchased Assets
shall be (a) the Preliminary Purchase Price plus
or minus the Adjustment Amount and (b) the
assumption of the Assumed Liabilities. 
At the Closing, Buyer shall deliver to the Sellers the Preliminary
Purchase Price by wire transfer in immediately available funds in accordance
with 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 be
a positive or negative number) will be equal to the amount determined by
subtracting the Closing Purchase Price from the Preliminary Purchase
Price.  If the Adjustment Amount is
positive, the Sellers shall pay the Adjustment Amount by wire transfer an
account specified by Buyer.  If the
Adjustment is negative, the Buyer shall pay the Adjustment Amount by wire
transfer to the account specified in Section 3.2(b)(i). 
Within three (3) Business days after the calculation of the Closing
Net Assets becomes binding and conclusive on the parties pursuant to Section 2.7, the Sellers or Buyer, as
the 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 a
given date shall mean the amount calculated by subtracting the book value of
Assumed Liabilities as of that date from the book value of the Purchased Assets
as of that date.  The Net Assets of the
Sellers as of the date of the Initial Balance Sheet (the “Initial Net Assets”)
was one hundred five million four hundred eighty-eight thousand eight hundred
thirty dollars ($105,488,830).


 


(b)   The Sellers shall prepare a
balance sheet of the Business as of the Closing Date on the same basis and
applying the same accounting principles, policies and practices that were used
in preparing the Initial Balance Sheet (“Closing Balance Sheet”).  The Sellers shall then determine the Net
Assets as of the Closing Date based upon the Closing Balance Sheet and using
the same methodology as was used to calculate the Initial Net Assets (“Closing
Net Assets”).  The Sellers shall
deliver the Closing Balance Sheet and its determination of the Closing Net
Assets to the Buyer within ten (10) Business Days after the Closing Date.


 


(c)   If within sixty (60) days
following delivery of the Closing Balance Sheet and the Closing Net Assets
calculation the Buyer has not given the Sellers notice of its objection as to
the Closing Net Assets calculation (clearly identifying the basis of such
objection), then the Closing Net Assets calculation shall be binding and
conclusive on the parties and be used in computing the Adjustment Amount and
the Closing Purchase Price; provided that Buyer shall use its Best
Efforts to notify the Sellers of any such objection within five (5) Business
Days after determining the basis of such objection regardless of whether Buyer
has completed its audit of the Closing Balance Sheet as of the date of such
determination.


 


(d)   If Buyer timely gives the
Sellers such notice of objection, and if Buyer and the Sellers fail to resolve
the issues outstanding with respect to the Closing Net Assets calculation
within sixty (60) days of the Sellers’ receipt of Buyer’s notice of objection,
the parties shall submit any unresolved issues to arbitration before a single
member panel administered by and in accordance with the rules of the
American Arbitration Association.  The
parties shall cooperate with and assist the arbitration panel by providing
materials and information relating to the unresolved issues as requested by the
arbitration panel.  The arbitration panel’s
determination shall be final, binding and conclusive on the parties and shall
be 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 this
Agreement to the contrary, nothing in this Agreement shall be deemed to
constitute an agreement to transfer or assign any Contract if an attempted
transfer or assignment, without the Consent of any Person, would constitute a
Breach thereof or in any way adversely affect the rights of Buyer or Sellers
thereunder.  Each Seller and Buyer shall
use its Best Efforts to obtain any Consent or waiver required to assign 


 


10





















 


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


 


ARTICLE III. 
CLOSING


 


3.1.          Closing.  The purchase and sale provided for in this
Agreement 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 to
consummate the transaction contemplated by this Agreement on the date and time
and at the place determined pursuant to this Section 3.1
shall not result in the termination of this Agreement and shall not relieve any
party 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 be
delivered under other provisions of this Agreement, at the Closing:


 


(a)   The Sellers shall deliver to
Buyer:


 


(i)    an
executed bill of sale for all of the Tangible Personal Property in the form
attached hereto as Exhibit B
(“Bill of Sale”);


 


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


 


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


 


a.     an executed copy of the
subscriber agreement relating to the Business’ system of record, Supreme, upon
terms and conditions mutually acceptable to the parties (the “Subscriber
Agreement”);


 


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


 


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


 


(vii) a certificate executed by an officer
of each of the Sellers as to the accuracy of their representations and
warranties as of the date of this Agreement and as of the Closing in accordance
with Section 7.1(a) and as to their
compliance with and performance of their covenants and obligations to be
performed 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 Sellers
certifying, as complete and accurate as of the Closing, attached copies of the
Governing Documents of each Seller, certifying and attaching all requisite
resolutions or actions of each Seller’s board of directors approving (A) the
execution and delivery of this Agreement and the Ancillary Agreements to which
they are parties, (B) the consummation of the transactions contemplated
hereby and (C) certifying to the incumbency and signature of the officer
of the Sellers executing this Agreement and the Ancillary Agreements.


 


(b)   Buyer
shall deliver to the Sellers:


 


(i)    the
Preliminary Purchase Price by wire transfer to an account specified by the
Sellers in a writing delivered to Buyer at least three (3) Business Days
prior to the Closing Date; and


 


(ii)   an executed Assignment and Assumption Agreement;


 


11





















 


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


 


(iv)  an
executed copy of the Subscriber Agreement;


 


(v)   an
executed copy of the Transition Services Agreement;


 


(vi)          a certificate executed
by an officer of Buyer as to the accuracy of its representations and warranties
as of the date of this Agreement and as of the Closing in accordance with Section 7.2(a) and as to compliance with and
performance of its covenants and obligations to be performed or complied with
at or before the Closing in accordance with Section 7.2(b);
and


 


(vii)         a certificate of the
secretary of Buyer certifying, as complete and accurate as of the Closing,
attached copies of the Governing Documents of Buyer and certifying and
attaching all requisite resolutions or actions of Buyer’s board of directors
approving (A) the executing and delivery of this Agreement and the
Ancillary Agreements to which it is a party, (B) the consummation of the
transactions contemplated hereby, and (C) certifying to the incumbency and
signature of the officer of the Buyer executing this Agreement and the
Ancillary Agreements.


 


3.3.          Closing Costs; Transfer Taxes and Fees. 
The Sellers (collectively) and Buyer shall each be responsible for fifty
percent (50%) of any documentary and transfer Taxes imposed because of the
transfer of the Purchased Assets provided for hereunder, regardless of the
Person on whom applicable Law imposes such Taxes.  Each party shall pay any fees and costs or
use Tax they incur as a result of their recording or filing the applicable
conveyance 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 such
appointment is coupled with an interest, with full power of revocation and
substitution by Buyer in the name and stead of each of the Sellers, but on
behalf of Buyer or its assignees, to do any and all of the following with
respect to the Vehicle Contracts: (a) receive, endorse, and collect all
payments, checks, money orders, drafts, or other instruments or documents made
payable to or owed to a Seller in connection with the Vehicle Contracts; (b) execute
on behalf of a Seller, or enforce, release, modify and transfer the rights,
privileges and interests (including security interests) of such Seller with
respect to the Vehicle Contracts including rights with respect to Ancillary
Products and Insurance Policies, if any, and any claims thereunder, and
certificates of title or other title documents or security documents; (c) enforce
and exercise any rights and remedies of a Seller with respect to the Vehicle
Contracts; and (d) to demand, collect and receive any and all Vehicle
Contracts.  On the Closing Date and from
time to time thereafter, the Sellers shall execute such limited powers of
attorney in the form attached hereto as Exhibit E
(“Power of Attorney”) and additional instruments and take such other
action as Buyer may reasonably request in order to more effectively effectuate
any of the foregoing.


 


3.5.          Obligor
Notices.  The Sellers
consent to permit Buyer to advise each of the Obligors that it has purchased
their applicable Vehicle Contract and that all future payments thereon shall be
made to Buyer.  No later than five (5) Business
Days following the Closing Date, the Sellers shall also have the right to
notify each of the Obligors that it has sold their applicable Vehicle Contract
to Buyer.


 


ARTICLE IV.  REPRESENTATIONS AND WARRANTIES OF THE SELLERS


 


4.1.          Relating to the Sellers.  Except as set forth on the Disclosure
Schedule, the Sellers hereby represent and warrant to Buyer that, solely as it
relates to the Business, as of (i) the date hereof and (ii) the
Closing Date:


 


(a)   Due
Organization and Good Standing. 
Each of the Sellers is a corporation or limited liability company duly
organized, validly existing and in good standing under the laws of its state of
incorporation or organization, as the case may be, with the requisite corporate
power and corporate authority to own or lease and operate its properties and
assets related to the Business, and to carry on the Business as it is now
conducted, and to perform its obligations under the Contracts.  Each Seller is duly qualified to do business
as a foreign corporation or limited liability company, and is in good standing
under the laws of each state or other jurisdiction in which either the
ownership or use of the properties owned or used by it in the Business, or the
nature of the activities conducted by it, requires such qualification, except
where the failure to be so qualified would not have a Material Adverse Effect
on the Business.


 


12





















 


(b)   Authority and Capacity. 
Each Seller has the full right, power, authority and capacity to
execute, deliver, and perform its obligations under this Agreement and each of
the Ancillary Agreements to which it is a party, to consummate the transactions
contemplated hereby and thereby, and to perform its respective obligations
hereunder and thereunder.  The execution,
delivery and performance of this Agreement and each of the Ancillary Agreements
by each Seller to which it is a party, and the consummation of the transactions
contemplated hereby and thereby, has been duly authorized by all necessary
corporate action.  Assuming the due
authorization, execution and delivery of this Agreement and each of the
Ancillary Agreements by the other parties hereto and thereto, this Agreement
and each of the Ancillary Agreements to which each Seller is a party, is a valid and binding obligation of each
Seller, enforceable against it in accordance with their respective terms,
subject to the Bankruptcy Exception.


 


(c)   Consent; No
Proceedings.  Except as set
forth on Schedule 4.1(c), none of the Sellers require Governmental Authorization
or Consent from any Person or Governmental Entity in connection with the
execution, delivery, performance, validity or enforceability of this Agreement
and each Ancillary Agreement to which it is a party or the consummation of the
transactions contemplated hereby or thereby.


 


(d)   Licenses.  The Sellers have and maintain all Licenses
necessary for (i) the Business as currently conducted, (ii) the
ownership, use, operation and maintenance of the Facilities used in the
operation of the Business, and (iii) its performance of this Agreement and
the consummation of the transactions contemplated hereby.  Schedule 4.1(d) sets forth a
complete list of all Licenses used in the operation of the Business and the
specific Seller holding such license.


 


(e)   No Violation.  The Sellers’ execution, delivery and
performance of this Agreement and each of the Ancillary Agreements to which
they are a party, and the consummation of the transactions contemplated hereby
and thereby, do not and will not (i) materially contravene or conflict
with any of the Sellers’ Governing Documents, (ii) result in a material
Breach of, or constitute a material default under, any Contract or other
agreement or instrument binding on or affecting the Sellers and the Purchased
Assets, (iii) materially contravene or violate any Law applicable to,
binding on or affecting the Sellers or the Purchased Assets, (iv) cause
Buyer 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 sheet
of the Business at May 31, 2004 (the “Initial Balance Sheet”), and
the related unaudited statement of income for the months then ended, and (ii) unaudited
balance sheets of the Business at December 31 in each of the fiscal years
2002 through 2003, and the related unaudited statement of income for each of
the fiscal years then ended.  Except as
set forth on Schedule 4.1(f), these financial statements have been and
will be prepared in accordance with GAAP and fairly present (and the Interim
Financial Statements delivered pursuant to Section 6.1(j)
and the Closing Balance Sheet delivered pursuant to Section 2.7(b) fairly present) the financial condition
and the results of operations of the Business as of the date and for the
periods referred to in such financial statements.  The financial statements referred to in this Section 4.1(f), the Interim Financial
Statements delivered pursuant to Section 6.1(j)
and the Closing Balance Sheet delivered pursuant to Section 2.7(b) reflect and will
reflect the consistent application of the Sellers’ internal accounting
principles throughout the periods involved. 
The financial statements have been and will be prepared from, and are in
accordance with, the accounting Records of the Business.


 


(g)   Litigation.  Except as
set forth in Schedule 4.1(g), solely with respect to the Business, there
are no Proceedings pending, or to Sellers’ Knowledge, Threatened or anticipated
(i) against, related to or affecting the Sellers, the Business or the
Purchased Assets, or (ii) that is seeking to delay, limit or enjoin the
transactions contemplated by this Agreement or the Ancillary Agreements.  To Sellers’ Knowledge, no event has occurred
or circumstances exist that are reasonably likely to give rise to or serve as a
basis for the commencement of any such Proceeding.  The Sellers’ have delivered or made available
to Buyer copies of all pleadings, correspondence and other documents relating
to each Proceeding listed on Schedule 4.1(g).  To Sellers’ Knowledge, none of the
Proceedings listed on Schedule 4.1(g) could have a Material Adverse
Effect on any Seller (as relates to the Business) or the Business.  Solely with respect to the Business, the
Sellers are not in Breach with respect to or subject to any Order, and there
are no unsatisfied judgments against the Sellers, the Business or the Purchased
Assets.


 


(h)   Purchased Assets.  The
Sellers have and will transfer good and marketable title to the Purchased
Assets and upon the consummation of the transactions contemplated hereby, Buyer
will acquire good and marketable title to all of the Purchased Assets, free and
clear from any Adverse Claims.


 


13





















 


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


 


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


 


B.    any Contract that involves
performance of services or delivery of goods by or to any Seller (solely as
such service or goods relate to or are used in the Business) of an amount in
excess of $50,000; and


 


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


 


True, complete
and correct copies of the aforementioned Contracts have heretofore been
delivered or otherwise made available by the Sellers to the Buyer.  The Contracts set forth on Schedule 4.1(i) are
in full force and effect, constitute legal, valid and binding obligations of
each of the Sellers or their Affiliates, as the case may be, and are
enforceable in all material respects in accordance with their respective terms,
subject to the Bankruptcy Exception. 
Subject to Section 4.1(c), the
consummation of the transactions contemplated by this Agreement will not cause
any 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 performed
by it to date, and there exists no Breach, or any event which upon the giving
of notice or the passage of time, or both, would give rise to a claim of a
material Breach in the performance by any Seller or, to Sellers’ Knowledge, any
other party, of their respective obligations thereunder.  The Sellers have not received any written
notice to the effect that it is in Breach or otherwise not in compliance with
any Contract set forth on Schedule 4.1(i).


 


(ii)   True, complete and correct
copies of the Dealer Agreements related to the top fifty (50) Dealers (as
measured by accounts receivable balance) and copies of each form of Dealer
Agreement currently used in the Business have been provided to or made
available to the Buyer.  Each Dealer
Agreement related to an outstanding Vehicle Contract (and related Accounts
Receivable) is in full force and effect, constitutes the legal, valid and binding
obligation of the Seller and the Dealer, each as set forth therein, and is
enforceable in all material respects in accordance with its terms, subject to
the Bankruptcy Exception.  Subject to Section 4.1(c), the consummation of
the transactions contemplated by this Agreement will not cause any such Dealer
Agreement 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 be
performed by it to date, and there exists no Breach, or any event, which upon
the giving of notice or the passage of time, or both, would give rise to a
claim 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 written
notice or communication to the effect that it is in Breach or otherwise not in
compliance with the terms of any such Dealer Agreement.


 


(j)    Liabilities.  Other than
Excluded Liabilities, the Sellers (solely with respect to the Business) have no
material Liabilities due or to become due, except (i) Liabilities arising
in the Ordinary Course of Business under the Contracts described in Schedule 4.1(i) and
the Closing Date Data; and (ii) Liabilities incurred in the Ordinary
Course of Business and in accordance with this Agreement (none of which relates
to 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 a
Material 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 any
labor union;


 


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


 


14





















 


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


 


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


 


E.     no Liabilities exist or are reasonably expected
to exist under any Employee Plan that, individually or in the aggregate, would
have a Material Adverse Effect on the transactions contemplated by this
Agreement.


 


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


 


(iii)          A complete list of all
Employees, by name, hire date and position as of the date hereof is set forth
in Schedule 4.1(k).  The Sellers
shall not release any other personnel information without having first obtained
the written consent of the respective Employee.


 


(l)    Leased Real Property.  Schedule 4.1(l)
lists all Space Leases (including the property address, landlord or lessor
name, tenant or lessee name, term, expiration date and rental expense) for all
real property used in connection with and for the operation of the Business to
which a Seller or one of their Affiliates is a party (“Leased Real Property”).  The Sellers have delivered true and complete
copies of the Space Leases related to the Leased Real Property listed in Schedule 4.1(l)
to the Buyer.  The Sellers or their
Affiliates have a valid and existing Space Lease for each Leased Real Property
set forth on Schedule 4.1(l).  All
Space Leases covering any of the Leased Real Property are valid and enforceable
by the Sellers or their Affiliates, as the case may be, in accordance with
their respective terms, are in full force and effect, and have not been
materially 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 the
case may be, under any such Space Lease, or to Sellers’ Knowledge, by any
landlord or lessor under any such Space Lease. 
The Leased Real Property represents all of the real property used by the
Sellers in their operation of the Business.


 


(m)  Tax Returns; Taxes.  Solely with respect to the Business, the
Sellers or their Affiliates have filed or caused to be filed on a timely basis
all material Tax Returns and all material reports with respect to Taxes that
are or were required to be filed pursuant to applicable Law.  All Tax Returns and reports filed by the
Sellers or their Affiliates with respect to the Business are true, correct and
complete in all material respects.  There
are no Adverse Claims on any of the Purchased Assets that arose in connection
with any failure (or alleged failure) to pay any Tax, and the Sellers have no
Knowledge 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 and
are in compliance with all applicable Laws and Orders relating to the Purchased
Assets or the Business, except where the violation or failure to comply,
individually or in the aggregate, would not have a Material Adverse Effect on
the Purchased Assets or the Business.  To
Sellers’ Knowledge, no event has occurred or circumstances exist that may
reasonably be thought to constitute or result in a violation by any Seller of
any Law or Order relating to the Purchased Assets or the Business in any
material respect.  The Sellers have not
received any written notice to the effect that they are not in compliance with
any 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) of
the Sellers (solely as it relates to the Business), and, to Sellers’ Knowledge,
no event has occurred or circumstances exists that could result in a Material
Adverse Change or otherwise affect the Sellers’ ability to perform their
obligations under this Agreement.


 


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


 


15





















 


other
representations and warranties made by the Sellers in this Agreement do not
contain any untrue statement of material fact or omit any material fact
necessary in order to make any statement contained herein, in the light of the
circumstances 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 any
obligation or Liability for brokerage or finders’ fees or agents’ commissions
or other similar payment in connection with the transactions contemplated
hereby.


 


(r)    Sufficiency of Assets. 
Solely as of the Closing Date, the Purchased Assets and the Assumed
Liabilities, together with the services provided pursuant to the Subscriber
Agreement and Transition Services Agreement, constitute all of the assets
necessary to operate the Business in substantially the same manner operated by
the Sellers prior to the Effective Time.


 


4.2.          Vehicle Contracts.  As of the Closing Date, the Sellers hereby
represent 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 of
the Vehicle Contracts, free and clear of all Adverse Claims.  The Sellers have not sold, assigned or
otherwise transferred any right or interest in or to the Vehicle Contracts and
have not pledged the Vehicle Contracts as collateral for any debt or other
purpose.  Upon payment of the Preliminary
Purchase Price hereunder, Buyer shall acquire good and marketable title to the
Vehicle Contracts.  Except as set forth
on Schedule 4.1(g), there are no judgments against the Sellers or any
pending Proceeding that could become a Lien against the Vehicle Contracts or
could otherwise create or result in an Adverse Claim in, of or on the Vehicle
Contracts in favor of any Person other than Buyer.  The Closing Date Data sets forth all of the
Vehicle Contracts outstanding as of the Closing Date.


 


(b)   Compliance with Law.


 


(i)    Each
Vehicle Contract complies, in all material respects, with all applicable local,
state and federal Laws relating to written disclosures required in motor
vehicle retail installment contracts, including the federal Truth-in-Lending
Act and Regulation Z promulgated thereunder.


 


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


 


(iii)  The
collection and servicing of the Vehicle Contracts have, from the applicable
Acquisition Date, continuously complied with all applicable federal and state
Laws relating to the collection and servicing of motor vehicle retail
installment contracts, including the Fair Credit Reporting Act and the Federal
Trade Commission’s Rule on Credit Practices.


 


(c)   No Amounts Owing.  Except for the Dealer Reserves and the
Liabilities described as “Other Liabilities” set forth on the Closing Balance
Sheet, there are no holdbacks, participations, fees or other monetary
obligations due or owing to and payable by a Seller to a Dealer, insurance
carrier or Third Party service provider, contingent or otherwise, with respect
to any Vehicle Contract.


 


16





















 


ARTICLE V.  REPRESENTATIONS AND WARRANTIES OF BUYER


 


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


 


(a)   Due
Organization and Good Standing. 
Buyer is a limited liability company duly organized, validly existing
and in good standing under the laws of the state of Georgia, with the requisite
corporate power and corporate authority to carry on its operations as presently
conducted.  Buyer is duly qualified to do
business as a foreign corporation and is in good standing under the laws of
each state or jurisdiction in which either the ownership or servicing of the
Vehicle Contracts requires such qualification, except where the failure to be
so qualified would not have a Material Adverse Effect on the Business.


 


(b)   Authority
and Capacity.  The Buyer has
the full right, power, authority and capacity to execute, deliver, and perform
its obligations under this Agreement and the Ancillary Agreements to which it
is a party and to consummate the transactions contemplated hereby and
thereby.  The execution, delivery and
performance of this Agreement and each of the Ancillary Agreements to which it
is a party by Buyer, and the consummation of the transactions contemplated
hereby and thereby, have been duly authorized by all necessary corporate
action.  Assuming the due authorization,
execution and delivery of this Agreement and the Ancillary Agreements by the
other parties hereto and thereto, this Agreement and each of the Ancillary
Agreements to which Buyer is a party, is a valid and binding obligation of the
Buyer, 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 neither
Governmental Authorization nor Consent from any Person or Governmental Entity
in connection with the execution, delivery, performance, validity or
enforceability of this Agreement and each Ancillary Agreement to which it is a
party.  There is no pending claim, cause
of action, suit or Proceeding presently pending or, to Buyer’s Knowledge,
Threatened against Buyer that would have a Material Adverse Effect on the
transactions contemplated by, or Buyer’s ability to perform its obligations
under, this Agreement or any of the Ancillary Agreements to which it is a
party.


 


(d)   Brokers’ or Finders’  Fee.  Buyer has not incurred any obligation or
Liability for brokers’ or finders’ fees or agents’ commissions or other similar
payment 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 the
Closing Date, the Sellers hereby covenant and agree to the following:


 


(a)   Compliance with Law.  The Sellers
shall at all times comply in all material respects with all federal, state and
local Laws and all Orders applicable to them, the Purchased Assets or
obligations under this Agreement.


 


(b)   Preservation of Existence.  The
Sellers 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 in
each jurisdiction where the failure to preserve and maintain such existence,
rights, franchises, privileges and qualification could have a Material Adverse
Effect on the enforceability of the Purchased Assets, the Business or the
ability of the Sellers to perform their obligations under this Agreement.  The Sellers shall provide Buyer with notice
immediately upon any change in their state of organization or any change in
their principal places of business.


 


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


 


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(d)   No Adverse Claim.  Except as provided herein, the Sellers shall
not sell, assign (by operation of law or otherwise) or otherwise dispose of, or
create any Adverse Claim upon or with respect to, any Contracts or Purchased
Assets sold to Buyer hereunder or any Collections related to such Contracts.


 


(e)   Post-Closing Payments.  All Collections received by the Sellers after
the Closing Date with respect to any Contract shall be promptly turned over to
Buyer no later than five (5) Business Days from receipt.  After the Closing Date, Buyer shall not
accept any payments on behalf of the Sellers or their Affiliates.  In the event that Buyer collects any
payments, it shall forward them to the Sellers within five (5) Business
Days after receipt.


 


(f)    No
Negotiation.  Until such time
as this Agreement shall be terminated pursuant to Section 8.1,
the Sellers shall not, directly or indirectly, solicit or initiate any
inquiries or proposals from, negotiate with or provide any non-public
information to any Person (other than Buyer) relating to the Business or the
Purchased Assets.


 


(g)   Operations.  The Sellers shall:


 


(i)    continue
to conduct the Business in the Ordinary Course of Business;


 


(ii)   continue
to use their Best Efforts to preserve intact the Business’ current
organization, keep available the services of the Business’ officers, Employees
and agents and maintain its relations and good will with the Business’ Dealers,
suppliers, customers, landlords, creditors, Employees, agents and others having
a 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 prohibit
the Sellers from hiring, terminating or otherwise making any Employee-related
decisions in the Ordinary Course of Business;


 


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


 


(iv)  not
materially increase the salaries of the Employees, unless such increase was
contemplated prior to the date hereof;


 


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


 


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


 


(vii) cooperate with Buyer and assist
Buyer in identifying the Licenses required by Buyer to operate the Business
from and after the Closing Date and either transfer the Business’ existing
Licenses to Buyer, where permissible, or provide reasonable assistance in Buyer’s
efforts to obtain new Licenses; and


 


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


 


(h)   Required
Approvals.  As promptly as practicable
after the date of this Agreement, the Sellers shall make all filings required
by Law to be made by them in order to consummate the transactions contemplated
by this Agreement.  The Sellers shall
cooperate with Buyer and its Representatives with respect to all filings Buyer
elects to make or, pursuant to applicable Law, shall be required to make in
connection with the transactions contemplated by this Agreement.


 


(i)    Payment of
Liabilities.  The Sellers
shall continue to pay or otherwise satisfy in the Ordinary Course of Business
all of its Liabilities and obligations. 
Buyer and the Sellers hereby waive compliance with the bulk-transfer
provisions of the Uniform Commercial Code (or other similar law) in connection
with the transactions contemplated in this Agreement.


 


(j)    Interim Financial Statements. 
Until the Closing Date, the Sellers shall deliver to Buyer within ten (10) Business
Days after the end of each month a copy of the unaudited balance sheet (the “Interim
Balance 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 such
Interim Financial Statements.


 


18





















 


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


 


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


 


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


 


(b)   Best Efforts.  Buyer
shall 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 the
transactions contemplated hereby is subject to the satisfaction, at or prior to
the Closing, of each of the following conditions (any of which may be waived in
writing by Buyer, in whole or in part):


 


(a)   Accuracy of
Representations.


 


(i)    All of the Sellers’
representations and warranties in this Agreement (considered collectively), and
each of these representations and warranties (considered individually), shall
have 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 if
then made.


 


(ii)   Each of the representations and
warranties in Sections 4.1(b) and 4.1(e), and each of the representations and warranties in
this Agreement that contains an express materiality qualification, shall have
been accurate in all respects as of the date of this Agreement, and shall be
accurate in all respects as of the Effective Time as if then made, without
giving effect to any supplement to the Disclosure Schedule.


 


(b)   Sellers’
Performance.  All of the
covenants and obligations that the Sellers are required to perform or to comply
with pursuant to this Agreement at or prior to the Closing (considered
collectively), and each of these covenants and obligations (considered
individually), shall have been duly performed and complied with in all material
respects.


 


(c)   Additional
Documents.  The Sellers shall
have caused the documents and instruments required by Section 3.2(a) and
the following documents to be delivered (or tendered subject only to Closing)
to Buyer:


 


(i)    a
good standing certificate or similar certificate for each of the Sellers issued
by their state of incorporation or organization, as the case may be, as of a
recent date acceptable to Buyer;


 


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


 


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


 


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


 


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


 


C.    evidencing the satisfaction of
any condition referred to in this Section 7.1;
or


 


19





















 


D.    otherwise facilitating the
consummation or performance of any of the transactions contemplated in this
Agreement and the Ancillary Agreements.


 


(d)   No
Proceedings.  Since the date
of this Agreement, there shall not have been commenced or Threatened against
Buyer, or against any Related Person of Buyer, any material Proceeding (i) involving
any challenge to, or seeking Damages or other relief in connection with, any of
the transactions contemplated hereby or (ii) that may have the effect of
preventing, delaying, making illegal, imposing limitations or conditions on or
otherwise interfering with any of the transactions contemplated hereby.


 


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


 


(f)    Governmental
Authorizations.  Buyer shall
have received all of the Governmental Authorizations (including any Licenses)
necessary or desirable to allow Buyer to operate the Business from and after
the Effective Time.


 


(g)   Consents.  All Consents
from any Person pursuant to the terms of any Contract or otherwise necessary to
consummate the transactions contemplated by this Agreement shall have been duly
obtained.


 


(h)   Employees.


 


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


 


(ii)   Rick
Potter and four of the remaining five Employees set forth on Schedule 7.1(h)(ii) (each a “Key Employee”) shall have
accepted employment with the Buyer on terms satisfactory to the Buyer and such
Key Employees.


 


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


 


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


 


(a)   Accuracy of
Representations.  All of Buyer’s
representations and warranties in this Agreement (considered collectively), and
each of these representations and warranties (considered individually), shall
have 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 if then
made.


 


(b)   Buyer’s
Performance.  All of the
covenants and obligations that Buyer is required to perform or to comply with
pursuant to this Agreement at or prior to the Closing (considered
collectively), and each of these covenants and obligations (considered
individually), shall have been duly performed and complied with in all material
respects.


 


(c)   Additional
Documents.  Buyer shall have
caused the documents and instruments required by Section 3.2(b) and
the following documents to be delivered (or tendered subject only to Closing)
to the Sellers:


 


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


 


20





















 


(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 the
purpose of:


 


A.    evidencing
the accuracy of any representation or warranty of Buyer;


 


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


 


C.    evidencing
the satisfaction of any condition referred to in this Section 7.2;
or


 


D.    otherwise
facilitating the consummation or performance of any of the transactions
contemplated by this Agreement and the Ancillary Agreements.


 


(d)   No
Injunction.  There shall not
be in effect any Law or any injunction or other Order that (i) prohibits
the consummation of the transactions contemplated hereby and (ii) has been
adopted or issued, or has otherwise become effective, since the date of this
Agreement.


 


(e)   No Proceedings.  Since the date of this Agreement, there shall
not have been or commenced or Threatened against the Sellers, or against any
Related Person of the Sellers, any material Proceeding (i) involving any
challenge to, or seeking Damages or other relief in connection with, any of the
transactions contemplated hereby or (ii) that may have the effect of
preventing, delaying, making illegal, imposing limitations or conditions on or
otherwise interfering with any of the transactions contemplated hereby.


 


(f)    Licenses.  Buyer shall
have received all of the Licenses or other Government Authorizations necessary
to 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 be
terminated as follows:


 


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


 


(b)   by the
Sellers if a material Breach of any provision of this Agreement has been
committed 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 date
specified for Closing in the first sentence of Section 3.1
or if satisfaction of such a condition by such date is, or subsequent to such
date becomes, impossible (other than through the failure of Buyer to comply
with its obligations under this Agreement), and Buyer has not waived such
condition on or before such date or such subsequent date;


 


(d)   by the Sellers if any condition
in Section 7.2 has not been satisfied
as of the date specified for Closing in the first sentence of Section 3.1 or if satisfaction of such a condition by
such date is, or subsequent to such date becomes, impossible (other than
through the failure of the Sellers to comply with their obligations under this
Agreement), and the Sellers have not waived such condition on or before such
date or such subsequent date;


 


(e)   by
mutual consent of Buyer and the Sellers;


 


(f)    by Buyer if the Closing has
not occurred on or before April 29, 2005, or such later date as the
parties may agree upon, unless the Buyer is in material Breach of this
Agreement; or


 


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


 


21





















 


8.2.          Termination Fee.  If this Agreement is not consummated as a result
of Buyer’s failure to satisfy the financing condition set forth in Section 7.1(i) and is
subsequently terminated by Buyer pursuant to Section 8.1(c),
Buyer shall immediately pay the Sellers a termination fee equal to two million
dollars ($2,000,000) (the “Termination Fee”).  Notwithstanding anything to the contrary
contained herein, if Buyer becomes obligated to pay the Termination Fee
pursuant to this Section 8.2,
such Termination Fee shall constitute full settlement of any and all of the
Damages of the Sellers under this Agreement in respect of a termination
pursuant to Section 8.1(c) as
a result of the failure to satisfy or waive the condition set forth in Section 7.1(i) and shall be the
sole 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 may
have under this Agreement or otherwise, and the exercise of such right of
termination will not be an election of remedies.  If this Agreement is terminated pursuant to Section 8.1, all obligations of the parties under this
Agreement 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, if
this Agreement is terminated because of a Breach of this Agreement by the
non-terminating party or because one or more of the conditions to the
terminating party’s obligations under this Agreement is not satisfied as a
result of the party’s failure to comply with its obligations under this
Agreement, the terminating party’s right to pursue all legal remedies shall
survive 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 “Active
Employees” shall mean all Employees employed immediately prior to the
Closing Date, but excluding Employees on temporary leave of absence, including
family or medical leave, military leave, personal, short-term disability,
workers’ compensation, pregnancy leave or any other Employees the Sellers
designate as excluded or inactive Employees. 
Notwithstanding the foregoing, any Employees excluded in the preceding
sentence shall be deemed Active Employees if and when they return to work
within ninety (90) days after the Closing Date. 
Schedule 9.1(a) sets forth a complete list of all Active
Employees and a list of all excluded or inactive Employees.


 


(b)   Employment of Active Employees by Buyer.


 


(i)            Prior to the Closing
Date, to be effective as of the Effective Time, Buyer shall offer employment to
all of the Active Employees upon the terms and conditions described below.  Buyer shall provide the Sellers with a list
of Active Employees to whom Buyer has made an offer of employment that has been
accepted and which shall be effective at the Effective Time (the “Hired
Active Employees”). Subject to the provisions of this Section 9.1, Hired Active Employees
shall be subject to the employment terms, conditions and rules applicable
to other similarly-situated employees of Buyer. 
Nothing contained in this Agreement shall be construed as an employment
contract between the Buyer and any Active Employee or Hired Active Employee.


 


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


 


(iii)                          Seller agrees that Buyer shall have the
right to conduct orientation sessions with Hired Active Employees as soon as
reasonably practicable and in any event within thirty (30) days after execution
of this Agreement; provided that Sellers shall have the right to have
their Representatives present at any such sessions. The orientation sessions
may include personal appearances by Buyer’s senior management and will cover
subjects such as Buyer’s employee benefit plans, including any business
retention, sales incentive or other program specifically designed for Active
Employees (or any Employee who subsequently becomes an Active Employee who
become Hired Active Employees after the Effective Time.  Buyer shall indemnify and hold the Sellers
and their Affiliates harmless from and against any Damages, resulting or
arising from Buyer’s acts or omissions in connection with such orientation
sessions.


 


22





















 


(iv)                          For a period of one (1) year
following the Closing Date, the Sellers and their Affiliates will not directly
solicit 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 Employee
terminated by Buyer or if such Hired Active Employee contacts the Sellers or
one of their Affiliates to seek hiring or retention, whether in response to
general advertising or otherwise.


 


(c)   Salaries and Benefits.  Each Hired Active Employee shall be provided
employment with the Buyer subject to the following initial terms and
conditions:


 


(i)    Base salary or hourly wage shall be at least
equivalent to the base salary or hourly wage paid by the Sellers to such Hired
Active Employee as of the close of business on the Business Day prior to the
Closing Date.


 


(ii)   Except as otherwise specifically provided
herein, Hired Active Employees shall be provided employee benefits that are no
less favorable in the aggregate than those provided to similarly situated
employees of Buyer. Buyer shall provide each Hired Active Employee with credit
for such Hired Active Employee’s period of service with the Sellers towards the
calculation of eligibility and vesting for such purposes as vacation,
severance, medical, dental or other welfare plans and other benefits, and
participation and vesting in Buyer’s qualified profit-sharing and 401(k) plans,
as such plans may exist.


 


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


 


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


 


(v)   Buyer shall be responsible for all severance
obligations arising out of the termination of any Hired Active Employee’s
employment after the Closing Date in accordance with Buyer’s severance plan,
policies and procedures with credit for the period of years of credited service
towards the calculation of benefits determined in accordance with Section 9.1(c)(ii) of this
Agreement; provided, however, if,
before the one (1) year anniversary of the Closing Date, any Hired Active
Employee experiences a reduction in base salary, a work site relocation of more
than thirty (30) miles or a termination of employment by Buyer for any reason
other than cause (as defined by Buyer’s personnel policies and procedures),
such Hired Active Employee shall be entitled to severance pay in an amount at
least equivalent to the severance pay the Hired Active Employee would have
received under the Sellers’ (or their Affiliates’) Employee Plans had such
employee been eligible for payments under such plans.


 


(vi)  Except
as provided herein, the Sellers shall pay, discharge, and be responsible for (A) all
salary and wages, bonus and incentive plans arising out of employment of the
Hired Active Employees through the Closing Date (and any payroll Tax and
reporting obligations thereon), and (B) any employee benefits (including,
but not limited to, accrued vacation) arising under the Sellers’ Employee Plans
and employee programs prior to the Closing Date (but not including medical
benefits, if any, to Hired Active Employees who retire after the Closing Date),
including benefits with respect to claims incurred prior to the Closing Date
but reported after the Closing Date. From and after the Closing Date, Buyer
shall pay, discharge, and be responsible for all salary, wages, and benefits
arising out of or relating to the employment of the Hired Active Employees by
Buyer from and after the Closing Date (and any payroll Tax and reporting obligations
thereon), including all claims for welfare benefits plans incurred after the
Closing Date. Claims are 


 


23





















 


incurred as of
the date services are provided or disability payments are accrued, notwithstanding
when the injury or illness may have occurred.


 


(d)   Sellers’ Retirement Plans.  All Hired Active Employees who are vested
participants in the Sellers’ retirement plans shall retain their accrued
benefits under such retirement plans as of the Closing Date, and the Sellers
(or their retirement plans) shall retain sole Liability for the payment of such
benefits as and when such Hired Active Employees become eligible therefore
under such plans.


 


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


 


(f)    General Employee Provisions.


 


(i)    The
Sellers and Buyer shall give any notices required by applicable Law and take
whatever other actions with respect to the plans, programs and policies
described in this Section 9.1
as may be necessary to carry out the arrangements described in this Section 9.1.


 


(ii)   The
Sellers and Buyer shall give notice to all Hired Active Employees that, except
as otherwise provided for herein, all benefits and/or accruals previously
provided under the Employee Plans shall terminate on the Closing Date and all
future benefits and/or accruals thereafter shall be provided under Buyer’s
employee plans.


 


(iii)  The
Sellers and Buyer shall provide each other with such plan documents and summary
plan descriptions, employee data or other information as may be reasonably
required to carry out the arrangements described in this Section 9.1.


 


(iv)  If
any 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 possible
reflect their expressed intent and retain the allocation of economic benefits
and burdens to the parties contemplated herein in a manner that is not
prohibited by Law.


 


(v)   Buyers
shall not have any responsibility, Liability or obligation, whether to Active
Employees, former Employees, their beneficiaries or to any other Person, with
respect to any Employee Plans, practices, programs or arrangements (including
the establishment, operation or termination thereof and the notification and
provision of COBRA coverage extension) maintained by the Sellers.


 


9.2.          Dealer
Reserves.  After the
Effective Time, Buyer or its Affiliate shall manage and administer the Dealer
Reserves in a manner consistent with the terms and conditions of the Dealer
Agreements and in the Ordinary Course of Business as conducted by the Sellers
prior to the Effective Time.  Buyer shall
hold the Sellers and their Affiliates harmless from and against any Damages
resulting or arising from Buyer’s acts or omissions in connection with the
management and administration of the Dealer Reserves after the Effective
Time.  The Sellers, jointly and
severally, shall hold the Buyer and its Affiliates harmless from and against
any Damages resulting or arising from the Sellers’ acts or omissions in
connection with the management and administration of the Dealer Reserves prior
to the Effective Time.


 


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


 


(b)   The
Sellers shall cooperate with Buyer and its counsel (including its experts or
other agents) in the contest or defense of, and make available its
Representatives engaged in the Business prior to the Effective Time (who do not
become Hired Active Employees) to be interviewed, provide any testimony
(including depositions, trial testimony and responding to interrogatories) and
access to Books and Records in connection with, any Proceeding involving or
relating to the Vehicle Contracts, Dealer Reserves or other Purchased Assets
arising out of a transaction that occurred 


 


24





















 


prior
to the Effective Time.


 


9.4.          Further
Assurances.  The parties
shall cooperate reasonably with each other and with their respective
Representatives in connection with any steps required to be taken as part of
their respective obligations under this Agreement, and shall (a) furnish
upon request to each other such further information; (b) execute and
deliver to each other such other documents; and (c) do such other acts and
things, all as the other party may reasonably request for the purpose of
carrying out the intent of this Agreement and the transactions contemplated
hereby.  Notwithstanding anything in this
Agreement to the contrary, nothing in this Agreement shall be construed as the
Sellers’ guarantee or assurance to the Buyer that (i) the Business shall
operate and perform in the same manner and produce the same results as set
forth in the financial statements provided hereunder; (ii) the Dealers
shall continue to sell Vehicle Contracts at the same volume, terms or similar
quality as they sold to the Sellers prior to the Effective Time or (iii) that
the Leased Real Property will be transferred on terms similar to or more
favorable than the Sellers’ current Space Leases.


 


9.5.          Retention
of and access to Records. 
After the Closing Date and to the extent not transferred as part of the
Purchased Assets, the Sellers shall retain the Records of the Business for a
period of time consistent with the Sellers’ record retention policies and
practices, but in no event shall the Sellers retain the documents for less than
five (5) years after the Closing Date. 
The Seller shall also provide the Buyer or its Affiliate and their
respective Representatives reasonable access thereto, during normal business
hours and on at least five (5) days notice, to enable them to prepare
financial statements or Tax Return or respond to a Tax audit.  Buyer shall retain any Records of the
Business transferred as part of the Purchased Assets for a period of time
consistent with Buyer’s record retention policies and practices, but in no
event shall Buyer retain the documents for less than five (5) years after
the Closing Date.


 


9.6.          Non-competition.  For a period of two (2) years after the
Closing Date, the Sellers’ Parent (either directly or through its subsidiaries)
shall not, anywhere in the United States (a) engage in the business of
soliciting, originating, purchasing or acquiring motor vehicle retail
installment contracts from any Buy Here/Pay Here Dealers; or (b) directly
or indirectly invest in, own or acquire a controlling interest in, any Person
engaged in an operation substantially similar to the Business (“Competing
Business”); 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 of
equity securities of any Person (but may not otherwise participate in the
activities of such Person) or (ii) all of the assets or otherwise merge
with another Person, so long as the portion of such Person’s operations
dedicated to the Competing Business constitutes no more than twenty-five
percent (25%) of such Person’s total assets or net revenues, whichever is
greater.


 


ARTICLE X.  INDEMNIFICATION; REMEDIES


 


10.1.        Survival of Representations and Warranties.  All representations, warranties,
covenants and obligations in this Agreement, the Disclosure Schedule (and
any supplements thereto), the certificates delivered pursuant to Section 3.2 and any other certificate
or document delivered pursuant to this Agreement shall survive the Closing and
the 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 its
Affiliates and any of their respective Representatives (collectively referred
to herein as the “Buyer Indemnified
Parties”), and will reimburse the Buyer Indemnified Parties for any Damages
arising from or in connection with:


 


(a)                                   any Breach of any representation or warranty made
by the Sellers in (i) this Agreement, (ii) the Disclosure Schedules, (iii) any
Ancillary Agreements, (iv) any transfer instrument or (v) any other
certificate, document, writing or instrument delivered by the Sellers pursuant
to this Agreement;


 


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


 


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


 


25





















 


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


 


(e)   subject
to Section 2.3(j), any act or omission
by the Sellers with respect to the management, accounting or administration of
the Dealer Reserves prior to the Closing Date; or


 


(f)    any Excluded Liabilities.


 


Notwithstanding
the foregoing, no Buyer Indemnified Party shall be indemnified or held harmless
for Damages to the extent such Damages resulted, in whole or in part, directly
or 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 Affiliates
and any of their respective Representatives (collectively referred to herein as
the “Seller Indemnified Parties”), and will reimburse the Seller
Indemnified Parties for any Damages arising from or in connection with:


 


(a)   any
Breach of any representation or warranty made by Buyer in this Agreement, any
Ancillary Agreement or any in any certificate, document, writing or instrument
delivered by Buyer pursuant to this Agreement;


 


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


 


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


 


(d)   any
act or omission by the Buyer, any of its Affiliates or any of their delegees,
agents or assigns (including any of their respective employees) in connection
with the servicing, billing, processing, recovery, collection of any Vehicle
Contract occurring after the Closing Date, or any Dealer act or omission
relating to any Vehicle Contract acquired after the Effective Time (regardless
of whether such Dealer act or omission also relates to Vehicle Contracts
transferred pursuant to this Agreement);


 


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


 


(f)    any Assumed Liabilities.


 


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


 


10.4.        Limitations
on Amount.


 


(a)   Buyer’s Deductible.  The
Sellers shall have no Liability (for indemnification or otherwise) with respect
to claims under Section 10.2(a) until
the total of all Damages with respect to such matters exceeds two hundred fifty
thousand dollars ($250,000) and then only for the amount which such Damages
exceed two hundred fifty thousand dollars ($250,000) (exclusive of any amounts
charged to the Dealer Reserve). 
Notwithstanding the foregoing, this Section 10.4(a) shall
not apply to:  (i) claims under Section 10.2(c) through (f) (except as provided in Section 10.4(d)), (ii) claims
arising 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 the
Sellers’ representations and warranties of which the Sellers’ had Knowledge at
any time prior to the date such representation or warranty is made, or (iv) any
intentional Breach by the Sellers of any covenant or obligation under this
Agreement or the Ancillary Agreements, and the Sellers will be jointly and
severally liable for all Damages with respect to any such Breaches.


 


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


 


26





















 


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


 


(c)   Limitation.  Except as
set 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 Purchase
Price.  Notwithstanding the limitation
set forth in the immediately preceding sentence, there shall be no limitation
on 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 of
which the Sellers’ had Knowledge at any time prior to the date such
representation or warranty is made, or (D) any intentional Breach by the
Sellers of any covenant or obligation under this Agreement or the Ancillary
Agreements; and


 


(ii)   of Buyer with respect to (A) claims
under Section 10.3(c) through
(f), (B) claims arising in
respect of Section 5.1(d), (C) any
Breach of any of Buyer’s representations and warranties of which the Buyer’s or
its Affiliates had Knowledge at any time prior to the date on which such
representation and warranty is made, or (D) any intentional Breach by
Buyer of any covenant or obligation under this Agreement or the Ancillary
Agreements.


 


(d)   Liability Arising Out of Dealer Acts or Omissions.  Notwithstanding any provisions of this Article X to the contrary, the Sellers shall have no
Liability (for indemnification or otherwise) with respect to claims arising
under 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)            Buyer
has exhausted its remedies under the applicable Dealer Agreement, including (A) reassigning
any Vehicle Contract giving rise to such Liability to the applicable Dealer to
the extent of the applicable Dealer Reserve and (B) pursuing and
exhausting, in good faith, any and all legal remedies against the applicable
Dealer 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) exceeds
five million dollars ($5,000,000) and then only for the amount which such
Damages exceed five million dollars ($5,000,000).


 


(e)   Limitations on Liability
Relating to Title to Vehicle Contracts.  Notwithstanding any provisions of this Article X to the contrary, Sellers’ aggregate Liability
relating to a Breach of Section 4.2(a) shall
not exceed the Closing Purchase Price; provided, however, any
Liability 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 shall
also be subject to the provisions of Section 10.4(d) hereof.


 


10.5.        Time
Limitations.


 


(a)   If the Closing occurs, the Sellers shall have
Liability (for indemnification or otherwise) with respect to any Breach of (i) a
covenant or obligation to be performed or complied with prior to the Closing
Date (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 or
warranty, only if such Breach occurs within eighteen (18) months after the
Closing Date, Buyer notifies the Sellers of a claim specifying the factual
basis of the claim in reasonable detail to the extent then known by Buyer.  Notwithstanding the foregoing or anything in this
Agreement to the contrary, a claim for indemnification arising under (x) Section 10.2(c) through
(e) may be made at anytime
prior to six (6) years after the Closing Date or the expiration of the
applicable statute of limitations relating to such claim, whichever occurs
first, (y) Section 4.2(a) may be made at
anytime 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)   If
the Closing occurs, Buyer shall have Liability (for indemnification or
otherwise) with respect to any Breach of (i) a covenant or obligation to
be performed or complied with prior to the Closing Date (other than in Sections 2.3 and 11.1, and Article IX as 


 


27





















 


to which a
claim may be made at any time) or (ii) a representation or warranty, only
if such Breach occurs within eighteen
(18) months after the Closing Date, the Sellers notify Buyer of a claim
specifying the factual basis of the claim in reasonable detail to the extent
then known by the Sellers. 
Notwithstanding the foregoing or anything in this Agreement to the
contrary, a claim for indemnification under (x)
Section 10.3(c) through
(e) may be made at anytime
prior to six (6) years after the Closing Date or the expiration of the
applicable statute of limitations relating to such claim, whichever occurs
first or (y) Sections 10.3(f) or 5.1(d) may
be made at anytime.


 


10.6.        Third-Party
Claims.


 


(a)   Promptly
after receipt by an indemnified party of notice of any Proceeding brought or
asserted by a Third Party for which such party is entitled to indemnification
under Sections 10.2 or 10.3, such indemnified
party shall give prompt notice to the indemnifying party of such Proceeding,
but the failure to notify the indemnifying party will not relieve the
indemnifying party of any Liability that it may have to any indemnified party,
except to the extent that the indemnifying party demonstrates that the defense
of such Proceeding is prejudiced by the indemnifying party’s failure to give
such notice.


 


(b)   If
any Proceeding is brought against an indemnified party and it gives notice to
the indemnifying party of the commencement of such Proceeding, the indemnifying
party will be entitled to participate in such Proceeding and, to the extent
that it wishes (unless (i) the indemnifying party is also a party to such
Proceeding and the indemnified party determines in good faith that joint
representation would be inappropriate, or (ii) the indemnifying party
fails to provide reasonable assurance to the indemnified party of its financial
capacity to defend such Proceeding) to assume the defense of such Proceeding
with counsel satisfactory to the indemnified party, which counsel shall keep
the indemnified party closely informed and shall consult with the indemnified
party regarding the defense, and, after notice from the indemnifying party to
the indemnified party of its election to assume the defense of the Proceeding,
the indemnifying party will not, as long as it diligently conducts such defense
and keeps the indemnified party closely informed and consults with the
indemnified party regarding the defense, be liable to the indemnified party for
any fees of other counsel or any other expenses with respect to the defense of
such Proceeding, in each case subsequently incurred by the indemnified party in
connection with the defense of such Proceeding, other than reasonable costs of
investigation and settlement administration. 
If the indemnifying party assumes the defense of a Proceeding, no
compromise or settlement of such claims may be affected by the indemnifying
party without the indemnified party’s consent. 
If notice is given to an indemnifying party of the commencement of any
Proceeding and the indemnifying party does not within ten (10) days after
the indemnified party’s notice is given, give notice to the indemnified party
of its election to assume the defense of such Proceeding, the indemnifying
party will be bound by any determination made in such Proceeding or any
compromise or settlement effected by the indemnified party, provided it is
ultimately determined to be a matter for which an indemnity is owed to the
indemnified party and further provided that the indemnified party has continued
to keep the indemnifying party reasonably informed of the Proceedings and acts
in defending or compromising the matter.


 


(c)   Notwithstanding the foregoing, if an indemnified
party reasonably and in good faith determines that a Proceeding may materially
affect it or its Affiliates, other than as a result of monetary damages for
which it would be entitled to indemnification under this Agreement, the
indemnified party may, by notice to the indemnifying party, assume the
exclusive right to defend, compromise, or settle such Proceeding, without
prejudice to its right to be indemnified hereunder except that the indemnifying
party shall only be responsible for the attorney’s fees and costs and expenses
of one law firm (as well as one local counsel) retained by the indemnified
party to represent it in such Proceeding, provided it is ultimately determined
to be a matter for which an indemnity is owed to the indemnified party and
further provided that the indemnified party has continued to keep the
indemnifying party reasonably informed of the proceedings and acts in defending
or compromising the matter.


 


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


 


10.7.        Other
Claims.  A claim for
indemnification for any matter not involving a Third-Party Claim may be
asserted by notice to the party from whom indemnification is sought and shall
be paid promptly after such notice.


 


28





















 


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


 


ARTICLE XI.  MISCELLANEOUS


 


11.1.        Confidentiality
of Information.  Unless
otherwise agreed to in writing by the party disclosing (or whose
Representatives disclosed) the same (a “Disclosing Party”), each party
(a “Receiving Party”) shall, and shall cause its Representatives to, (i) keep
all Confidential Information of the Disclosing Party confidential and not
disclose or reveal any such Confidential Information, (ii) use such
Confidential Information only in connection with consummating the transactions
contemplated hereby and enforcing the Receiving Party’s rights hereunder, and (iii) not
use Confidential Information in any manner detrimental to the Disclosing
Party.  In the event that a Receiving
Party is requested pursuant to, or required by, applicable Law or by legal
process to disclose any Confidential Information of the Disclosing Party, the
Receiving Party shall provide the Disclosing Party with a copy of such request
or proof of service of process so the Disclosing Party can seek an appropriate
protective order.  A party’s obligations
hereunder with respect to Confidential Information that (i) is disclosed
to a Third Party with the Disclosing Party’s written approval, (ii) is
required to be produced under order of a Governmental Entity of competent
jurisdiction, or (iii) is required to be disclosed by applicable Law,
will, subject in the case of clauses (ii) and (iii) above to the
Receiving Party’s compliance with the preceding sentence, cease to the extent
of the disclosure so consented to or required, except to the extent otherwise
provided by the terms of such consent or covered by a protective order.  If a Receiving Party uses a degree of care to
prevent disclosure of the Confidential Information that is at least as great as
the 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 of
that degree of care, and in no event shall a Receiving Party be liable for any
indirect, punitive, special or consequential damages unless such disclosure
resulted from its willful misconduct or gross negligence in which event it
shall be liable in damages for the Disclosing Party’s lost profits resulting
directly and solely from such disclosure. 
In the event this Agreement is terminated, each party shall, if so
requested by any other party, promptly return or destroy all of the
Confidential Information of such other party, including all copies, reproductions,
summaries, analyses or extracts thereof or based thereon in the possession of
the Receiving Party or its Representatives; provided, however,
that the Receiving Party shall not be required to return or cause to be
returned summaries, analyses or extracts prepared by it or its Representatives,
but shall destroy (or cause to be destroyed) the same upon request of the
Disclosing Party.


 


For purposes
of this Section 11.1, “Confidential
Information” of a party means all confidential or proprietary information
about such party that is furnished by it or its Representatives to the other
party or the other party’s Representatives, in connection with this Agreement
and the Ancillary Agreements and the transactions contemplated hereby and
thereby, regardless of the manner in which it is furnished.  “Confidential Information” does not
include, however, information which (a) has been or in the future is
published or is now or in the future is otherwise in the public domain through
no fault of the Receiving Party or its Representatives, (b) was available
to the Receiving Party or its Representatives on a non-confidential basis prior
to its disclosure by the Disclosing Party, (c) becomes available to the
Receiving Party or its Representatives on a non-confidential basis from a
Person other than the Disclosing Party or its Representatives who is not
otherwise bound by a confidentiality agreement with the Disclosing Party or its
Representatives, or is not otherwise prohibited from transmitting the
information to the Receiving Party or its Representatives, or (d) is
independently developed by the Receiving Party or its Representatives through
Persons who have not, either directly or indirectly, had access to or knowledge
of such information.


 


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


 


11.3.        Assignment; Successors.  Neither party may assign this Agreement
without the prior written consent of the other party, which consent may be
withheld in the other party’s discretion; provided, that either party
may assign this Agreement or parts thereof to its parent, an Affiliate or a
subsidiary by providing at least thirty (30) days written notice to the other
party and Buyer may and shall be entitled to assign its rights under this
Agreement to any Person providing financing to Buyer in connection with this
Agreement.  This Agreement shall be binding
upon and inure to the benefits of the parties hereto and their respective
successors.


 


11.4.        No Agency Relationship.  The relationship between the Sellers and
Buyer shall not be construed as a joint venture, partnership or principal-agent
relationship, and under no circumstances shall any of the employees of one
party be 


 


29





















 


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


 


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


 


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


 


11.7.        Notices.  All notices and other communications required
or permitted to be given under this Agreement shall be in writing and shall be
deemed given (a) three (3) Business Days after being deposited in the
U.S. mail, first class, postage prepaid, (b) upon transmission, if sent by
facsimile transmission, or (c) upon delivery, if served personally or sent
by any generally recognized overnight delivery service, to the following
addresses:


 


If to the
Sellers:


 


Wells Fargo Financial, Inc.


800 Walnut St.


Des Moines, IA 50309


Facsimile: (515) 557-7602


Attn.: General Counsel


 


And if to
Buyer:


 


CARS Acquisition LLC


c/o CompuCredit Corporation


245 Perimeter Center Parkway, Suite 600


Atlanta, Georgia 30346


Facsimile: (770) 206-6187


Attn.: General Counsel


 


with
a 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 or
other documents attached hereto or referenced herein, each of which is hereby
incorporated into this Agreement and made an integral part hereof, constitutes
the entire agreement between the parties relating to the subject matter hereof
and there are no representations, warranties or commitments except as set forth
herein.  This Agreement supersedes all
prior understandings, negotiations and discussions, written or oral, of the
parties relating to the transactions contemplated by this Agreement.


 


11.9.        Modification.  This
Agreement may not be changed orally but only by an agreement in writing, signed
by the party against whom enforcement of any waiver, change, modification, or discharge
is sought.


 


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


 


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


 


11.12.      Waivers; Cumulative Remedies.  No failure or delay by a party to insist upon
the strict performance of any term or condition under this Agreement or to
exercise any right or remedy available under this Agreement at law or in
equity, 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 will
preclude exercise of any other right or remedy. 
All rights and remedies provided in this Agreement are cumulative and
not alternative; and are in addition to all other available remedies at law or
in equity.


 


11.13.      Waiver of Jury Trial.  EACH PARTY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, THE RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.


 


11.14.      Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original copy of this
Agreement and all of which, when taken together, shall be deemed to constitute
one and the same agreement.  The exchange
of copies of this Agreement and of signature pages by facsimile
transmission shall constitute effective execution and delivery of this
Agreement as to the parties and may be used in lieu of the original Agreement
for all purposes.  Signatures of the parties
transmitted by facsimile shall be deemed to be their original signature for all
purposes.


 


11.15.      Right of Offset.  Any payment required under the terms of this
Agreement to be made by one party to the other party may be offset by any
payment required under the terms of this Agreement to be made by the second
party to the first party.


 


11.16.      Construction.  The headings of Articles and Sections in this
Agreement are provided for convenience only and will not effect its
construction or interpretation.


 


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


 


(Signature Page Follows)


 


31





















 


EXECUTION
COPY


 


IN WITNESS WHEREOF, the parties have duly
executed this Asset Purchase Agreement, effective as of the date first written
above.


 


	
   

  	
  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

  	
   

  
								



 


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