EX-10.13
PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into as of the 19th day of
May 1995 (the "Contract Date"), by and among CENCOR, INC., a
Delaware corporation with a place of business at 1100 Main Street,
Suite 416, Kansas City, Missouri, 64105 ("Holding Company"),
CENTURY ACCEPTANCE CORPORATION, a Delaware corporation with a place
of business at 1100 Main Street, Suite 2350, Kansas City, Missouri
64105 and a direct wholly owned subsidiary of Holding Company
("Parent"), the corporations listed on the attached Schedule 1
which are direct or indirect wholly owned subsidiaries of Parent
(herein collectively referred to as "Sellers" or individually as
"Seller"), and Fidelity Acceptance Corporation, a Minnesota
corporation with a place of business at 330 Second Avenue, South,
Suite 790, Minneapolis, Minnesota 55401 ("Buyer").
WITNESSETH THAT
WHEREAS, Holding Company wishes to cause Parent and Sellers to
sell, and Buyer wishes to buy from Parent and Sellers, certain
Contracts and Business Assets (as hereinafter defined), upon the
terms and conditions contained herein and, in addition, Holding
Company wishes to cause Parent and Sellers to assign and Buyer
wishes to assume the Assigned Obligations (as hereinafter defined);
NOW THEREFORE, in consideration of the mutual promises and
covenants contained in this Agreement, the parties agree as
follows:
1. DEFINITIONS: Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires,
shall have the following meanings:
Agreement means this purchase agreement, including all
schedules and exhibits attached hereto.
American Bankers means American Bankers Insurance Group.
Assigned Obligations shall mean all of Parent's and the
Sellers' obligations under the Leases and Third Party Agreements,
Unearned Insurance Commissions (as hereinafter defined), Dealer
Holdback (as hereinafter defined) and any other obligations of
Parent or any Seller as expressly agreed to by the parties, all as
listed on the attached Schedule 2.
Business means the consumer finance business of Parent and the
Sellers, considered in the aggregate, as presently conducted.
Business Assets means the assets of Sellers and Parent listed
on the attached Schedule 3 to be purchased by Buyer including
Sellers' and Parent's furniture, equipment, leasehold improvements,
security deposits and such other assets as agreed to by Parent and
Buyer.
Business Day means any day other than Saturday, Sunday or
legal holidays.
Contract means a promissory note, retail installment sales
contract, and any related security instrument payable to any Seller
by an Obligor and evidencing a loan or account made or acquired by
such Seller, including all such loans or accounts that have been
charged off as of the Purchase Date.
Closing means the consummation of the transactions contemplat-
ed by this Agreement, which shall be deemed to occur upon the
commencement of business on the Purchase Date.
Dealer Holdback means the aggregate amount reflected on the
books and records of Parent and Sellers as of any given date as
withheld from dealers in connection with purchases of retail
installment finance contracts by Parent and Sellers, which amount
is available to cover losses that may be incurred on such purchased
contracts and may be subject to repayment by Parent, Sellers or
their assignees in accordance with the terms of such purchases.
The dealer holdback amounts per dealer as of April 30, 1995 are
listed on Schedule 2.
Determination Date means the last calendar day preceding the
Purchase Date.
Gross Loan Amount means, as of any given date, the aggregate
amount reflected on the books and records of Parent and Sellers as
due from the Obligors with respect to all Contracts.
Interest Bearing Contracts means Contracts which are reflected
on the books and records of Parent and Sellers in an amount equal
to the principal balance of such Contracts without regard to any
interest charged or chargeable for such Contracts.
Leases means all real property leases, including all amend-
ments, modifications and extensions thereof, for each of the office
locations set forth in Schedule 2 hereto.
Master Insurance Policies means those various policies of
insurance issued by American Bankers as disclosed in Schedule 2
hereto.
Net Outstanding Balances means with respect to Interest
Bearing Contracts, the aggregate amount reflected on the books and
records of Parent and Sellers as due from the Obligors thereof as
of the Determination Date multiplied by a fraction equal to (X) the
aggregate amount reflected on the books and records of Parent and
Sellers for all Interest Bearing Contracts as of the end of the
preceding calendar month (the "Interest Bearing Contracts Month End
Balance") plus all accrued and unpaid interest thereon as of such
month end and less all deferred fees on such Contracts as of such
month end over (Y) the Interest Bearing Contracts Month End
Balance, and with respect to Precomputed Interest Contracts, the
gross amount reflected on the books and records of Parent and
Sellers for all such Precomputed Interest Contracts as of the
Determination Date multiplied by a fraction equal to (X) the
aggregate gross amount reflected on the books and records of Parent
and Sellers for all Precomputed Interest Contracts as of the end of
the preceding calendar month (the "Precomputed Interest Contracts
Month End Balance") less unearned interest and deferred fees on
such Contracts as of such month end over (Y) the Precomputed
Interest Contracts Month End Balance.
Obligor means the person or persons who obtained a loan from
any Seller or, if any Seller's ownership of a loan or account was
established by purchase, who obtained the extension of credit from
any such Seller's predecessor in interest, and who are obligated to
pay such Seller in accordance with the Contracts.
Post Closing Settlement Date shall be a date not later than
sixty (60) days after the Purchase Date.
Precomputed Interest Contracts means the Contracts which are
reflected on the books and records of Parent and Sellers in an
amount equal to the entire amount of principal and interest payable
under such Contracts to Sellers.
Purchase Date shall be the date on which the Closing occurs,
which shall take place at the offices of Parent at 1100 Main
Street, Suite 2350, Kansas City, Missouri or at such other place as
may be agreed upon by Buyer and Parent. In the event the Purchase
Date does not occur prior to September 30, 1995 or such later date
as shall have been agreed to in writing by Buyer and Parent (the
"Termination Date"), this Agreement shall be null and void and of
no further force or effect, subject, however, to Section 22 below.
Purchase Price shall be the aggregate cash amount to be paid
by Buyer to Parent and the Sellers on the Purchase Date for the
Contracts and Business Assets in accordance with the terms of this
Agreement.
Retrospective Insurance Commission Receivable means all of the
right, title and interest of Parent and the Sellers, considered
collectively, to receive amounts following the Closing payable by
American Bankers with respect to the Service Expense Reimbursement
Agreement.
Service Expense Reimbursement Agreement means that certain
agreement between Parent or Sellers as customer and American
Bankers and all modifications and addendums thereto, all as
disclosed in Schedule 2 hereto.
Third Party Agreements means each of the written agreements
between Parent or a Seller and a third party, including without
limitation all equipment and other personal property leases,
maintenance agreements and service agreements, which are disclosed
in Schedule 2 hereto.
Unearned Insurance Commissions means the aggregate amount
reflected on the books and records of Parent and Sellers as of any
given date of advanced commissions retained by Parent and/or the
Sellers less the earned portion thereof with respect to sales of
insurance products occurring prior to such date, where the
applicable insurance policies remain in effect as of such date,
which aggregate amount may be subject to repayment in whole or in
part by Parent, the Sellers or their assignees in accordance with
the Service Expense Reimbursement Agreement.
2. SUBSIDIARIES OF BUYER: Buyer may designate one or more
of its subsidiaries as the purchaser of any Contract or Business
Asset or assignee of any Lease or Third Party Agreement and the
word "Buyer" as used in this Agreement shall,. wherever applicable,
include each such subsidiary; provided, however, notwithstanding
any such designation, Fidelity Acceptance Corporation shall remain
jointly and severally responsible for the performance of all
obligations of Buyer under this Agreement. If a subsidiary of
Buyer purchases a Contract or Business Asset or assumes an Assigned
Obligation, the subsidiary shall have all the benefits and
obligations of this Agreement including, but not limited to, the
benefits of the representations, warranties and covenants made by
Holding Company, Parent and Sellers, and the indemnification
obligations thereof, and shall have the authorizations, rights and
powers granted by Parent and Sellers, with respect to the Contract,
Business Asset, Lease or Third Party Agreement as applicable.
3. SALE OF CONTRACTS AND BUSINESS ASSETS, Etc.:
On the Purchase Date and subject to the conditions of this
Agreement Parent and each Seller will sell, assign, transfer and
set over to Buyer the Business Assets, the Leases, the Third Party
Agreements, the Contracts, the Retrospective Insurance Commission
Receivable, and all of their rights, title and interest therein to
Buyer, Parent and Sellers shall deliver a Schedule of Contracts,
which shall include (i) a list of the Contracts, identified by name
of Obligor and account number as of the end of the calendar month
immediately preceding the month in which the Closing shall occur
(the "Pre-Closing Month End"), (ii) the amounts, calculated on an
aggregate and per account basis, for outstanding principal balance,
unearned interest (with respect to Precomputed Interest Contracts)
and deferred fees, and on an aggregate basis only for accrued and
unpaid interest (with respect to Interest Bearing Contracts), all
as of the Pre-Closing Month End, and (iii the Gross Loan Amount as
of the Determination Date, all of which shall be prepared by Parent
and Sellers on a basis consistent with the applicable policies,
procedures and practices of Parent and Sellers, as in effect on the
Contract Date and disclosed at such time by Parent to Buyer, and
shall be attached to this Agreement as Schedule 4 and (iii) Parent
and Sellers shall prepare supplements to Schedules 3 and 2 (the
Business Assets and the Leases and Third Party Agreements Sched-
ules) to add any Business Assets, Leases and Third Party Agreements
purchased or entered into and eliminate any Business Assets, Leases
and Third Party Agreements sold or terminated, all in the ordinary
course of business and as permitted under this Agreement, between
the date hereof or the date of the applicable schedule attached
hereto, whichever is applicable, and the Purchase Date, and Buyer
will purchase the Business Assets as listed on Schedule 3 as
supplemented and assume the Assigned Obligations under the Leases
and Third Party Agreements as listed on Schedule 2 as supplemented.
4. PURCHASE PRICE - CONTRACTS - BUSINESS ASSETS: On the
Purchase Date, Buyer shall pay to the Sellers and Parent an
aggregate amount equal to the Purchase Price, in U.S. Dollars
delivered by wire transfer in immediately available funds as
directed by Parent. The Purchase Price shall consist of the
aggregate amount of:
A. An amount equal to the Net Outstanding Balances, less
an amount equal to the Dealer Holdback as of the Determination
Date (which shall be estimated on the Purchase Date to be the
amount of the Dealer Holdback as of the Pre-Closing Month End and
shall be adjusted on the Settlement Sheet to reflect the actual
amount of the Dealer Holdback as of the Determination Date) and
less an amount equal to the Gross Loan Amount as of the Determina-
tion Date multiplied by a fraction equal to (x) the Unearned
Insurance Commissions balance as reflected on the books and records
of Parent and the Sellers as of the Pre-Closing Month End over (y)
the Gross Loan Amount as of the Pre-Closing Month End, plus (iv)
$18,501,000.00 plus (v) $750,000.00 (which the parties agree is the
value assigned to the Retrospective Insurance Commission Receiv-
able); and
B. An amount equal to the net book value of the Business
Assets listed on Schedule 3 as shown on the books and records of
Parent and Sellers as of the Pre-Closing Month End plus Parent's or
Sellers' actual cost of any Business Asset acquired less the book
value of any Business Assets sold between such calendar month end
and the Purchase Date.
5. ASSUMPTION OF ASSIGNED OBLIGATIONS: On the Purchase
Date, in addition to the payment of the Purchase Price to Parent
and Sellers, Buyer shall assume all of Parent's and/or Sellers'
obligations accruing on or after the Purchase Date under the
Assigned Obligations by the execution of an Assignment and
Assumption Agreement in substantially the form of Exhibit "A" and
Buyer shall not be responsible for, and shall not assume hereunder,
any other liabilities, responsibilities or obligations of Holding
Company, Parent or any Seller whatsoever.
6. POST CLOSING SETTLEMENT DATE: Within thirty (30) days
after the Purchase Date, Parent and Sellers shall prepare a
settlement sheet ("Settlement Sheet") setting forth adjustments to
the Purchase Price in order to prorate lease, utilities, personal
property tax, maintenance, service contract and other similar
payments as of the Purchase Date, compensate each respective
Seller for Contracts, if any, made or acquired and transferred by
such Seller to Buyer which were not included in the calculation of
the Purchase Price as of the Purchase Date, compensate each Seller
for not sufficient funds checks ("NSF Check(s)") received by such
Seller prior to the Purchase Date and returned by Seller's
depository bank on or after the Purchase Date, such that the Net
Outstanding Balances on the Determination Date incorrectly
reflected a payment and understated the amount due from the Obligor
by the amount of the NSF Check and charges related thereto;
provided, however, that no such adjustment shall be made under this
clause if and to the extent that the Contract(s) to which any such
NSF Check(s) relate shall have been required to have been written
down or charged off by such Seller as of the Determination Date in
accordance with this Agreement, in which case the Net Outstanding
Balances shall be appropriately adjusted to reflect such writedown-
s) or charge-off(s), and make such other adjustments, including
without limitation adjustments to the values of Net Outstanding
Balances, Dealer Holdback as of the Determination Date, Unearned
Insurance Commissions as of the Determination Date, Gross Loan
Amount as of the Determination Date and net book value of the
Business Assets as of the Determination Date (taking into account
depreciation from the Pre-Closing Month End through the Determina-
tion Date), appropriate to effectuate the terms of this Agreement.
Parent shall also deliver, together with the Settlement Sheet, a
revised Schedule of Contracts, which will update, to the extent
obtainable by Parent (using its best efforts), all of the informa-
tion that was previously provided in Schedule 4 as of the Pre-
Closing Month End to provide such information as of the Determina-
tion Date. Parent shall also include in such revised Schedule 4,
to the extent obtainable by Parent (using its best efforts), the
amounts as of the Determination Date for accrued and unpaid
interest with respect to Interest Bearing Contracts on an aggregate
and per account basis. Buyer shall notify Parent in writing of any
proposed adjustments to the Settlement Sheet within fifteen (15)
days after receipt of the Settlement Sheet. Buyer, at its expense,
shall have access to the books, records, personnel and representa-
tives of Holding Company, Parent and the Sellers, including all
financial statements, schedules and work papers of Holding Company,
Parent and the Sellers relating to the calculation of the Purchase
Price and preparation of the Settlement Sheet, in order to verify
to Buyer's reasonable satisfaction the validity of the Purchase
Price and the inclusion of all appropriate adjustments, and the
amounts thereof, in the Settlement Sheet. The parties will attempt
in good faith to agree upon the final version of the Settlement
Sheet on or before the Post Closing Settlement Date. If the
parties are unable to agree upon the Settlement Sheet by the Post
Closing Settlement Date, the independent auditors for Buyer and
Parent shall mutually select a nationally recognized accounting
firm (the "Accountant") to review the Settlement Sheets proposed by
Parent and Buyer and to determine the final version of the
Settlement Sheet. The cost of the Accountant shall be borne
equally by the Parent and Buyer, unless the Accountant determines
that one of the parties presented incorrect data or took a position
which was clearly contrary to the terms of this Agreement in which
case the entire cost of the Accountant shall be borne by such
party. On the Post Closing Settlement Date or, if the Accountant
determined the final Settlement Sheet, on the first Business Day
after the Accountant's determination, the Buyer will pay by wire
transfer in immediately available funds as directed by the Parent
the amount, if any, owed by Buyer to Parent or any Seller as shown
on the final Settlement Sheet, and the Parent will pay by wire
transfer in immediately available funds as directed by Buyer the
amount, if any, owed by Parent and Sellers to Buyer as shown on the
final Settlement Sheet. A single net payment may be made by Parent
or Buyer as appropriate at such time.
7. ENDORSEMENTS/ASSIGNMENTS OF MORTGAGES, Etc. On the
Purchase Date, upon payment of the Purchase Price, each respective
Seller will deliver to Buyer an executed assignment of mortgage for
each Contract secured by an interest in real property, in record-
able form and in a form to be agreed upon by Parent and Buyer
within thirty (30) days of the date of this Agreement. Buyer shall
be responsible for causing all such assignments to be recorded in
the appropriate public records and shall bear all costs, including
filing fees, in connection therewith. In addition, on the Purchase
Date each respective Seller will endorse and assign to Buyer such
Seller's interest in each Contract in order to evidence the
transfer of such Seller's interest in the Contracts to Buyer in
such manner as may be reasonable and appropriate. On the Purchase
Date, each Seller shall furnish Buyer with a Power of Attorney in
the form of the document attached hereto as Exhibit "B". Buyer
agrees to save and hold Parent and each Seller harmless from any
loss occasioned by Buyer's use of the Power of Attorney. Parent
and each Seller further agree, on the Purchase Date and from time
to time following the Purchase Date, to execute any individual
assignments and any other instruments of transfer or conveyance and
to take or cause to be taken all other actions, including without
limitation obtaining all third party releases and/or terminations
of liens and security interests affecting any of the Contracts or
Business Assets, which are necessary or desirable in the reasonable
judgment of Buyer to effect the sale, transfer, conveyance and
assignment to Buyer of all of Parent's and the Sellers' respective
rights, title and interest in and to each Contract, Business Asset,
Lease and Third Party Agreement to be so sold, transferred,
conveyed and assigned to Buyer upon the Closing in accordance with
the terms of this Agreement. Parent shall deliver all necessary
UCC Termination Statements on the Purchase Date and shall cause all
such UCC Termination Statements to be filed within five (5) days
thereafter in the appropriate public records and shall bear all
costs including filing fees, in connection therewith.
8. OTHER ITEMS SUBJECT TO SALE/DELIVERIES BY SELLER: On the
Purchase Date, upon payment of the Purchase Price, each Seller will
also sell, assign, transfer and deliver to Buyer in connection
with:
A. The Contracts:
(1) All of the Seller's interest and benefits in, to and
under all endorsements and guaranties by or of others held by it
with respect to the Contracts.
(2) All of the Seller's right, title and interest in all
security instruments, mortgages or deeds of trusts and the liens
created thereunder with respect to the Contracts.
(3) Subject to the Parent and Seller retaining such
documents that are subject to existing attorney-client privilege in order to
maintain the confidentiality of such documents, all individual
Contract files, ledger cards, bookkeeping memoranda, receipts,
correspondence, folders, credit files, fanfolds, indexes and all
other records of each respective Seller directly pertaining to both
the Contracts and contracts paid or charged off prior to the
Purchase Date; including filing receipts evidencing recordation or
filing in governmental filing or recording offices of financing
statements, mortgages, and other filing instruments. All such
materials, which may be in the form of microfilm or magnetic tape,
shall be delivered to Buyer on the Purchase Date.
(4) All of the interest of each Seller under each and every
existing policy or certificate of insurance, if any, to the extent
such relates to any property securing any Contracts and as relates
to the life or lives or health of any Obligors of said Contracts.
(5) All pending insurance claims and all claims filed in the
future, if any, and the proceeds thereof, if any, in connection
with any of the Contracts purchased by Buyer. The parties acknowl-
edge and agree that Buyer is not purchasing those Contracts related
to JoAnn's Instant Finance Cars, Inc. nor Parent's and Sellers'
claim against Lloyds' of London related to such Contracts.
B. The Business Assets, Leases and Third Party Agreements:
(1) A Bill of Sale covering the Business Assets in substan-
tially the form of Exhibit "C".
(2) Subject to the Parent and Seller retaining such
documents that are subject to existing attorney-client privilege in order to
maintain the confidentiality of such documents, all files,
receipts, correspondence and all other records of each respective
Seller directly pertaining to the Business Assets, Leases and Third
Party Agreements.
9. CREDIT INSURANCE: The obligations of Buyer, Parent and
the Sellers with respect to the transfer of Parent's or any
Seller's interest under policies or certificates of insurance
relating to the life or lives or sickness and/or disability or
property of any Obligor under any Contract shall be satisfied in
the following manner:
A. On the Purchase Date, each respective Seller and, to the
extent necessary, the Parent will execute and deliver to Buyer an
assignment of death benefits and/or sickness and/or disability
benefits under any and all group creditor life and/or sickness and
accident insurance or property insurance policies covering the
Contracts to be sold hereby, which assignment shall be acknowledged
and consented to as of the Purchase Date by the insurer and which
acknowledgment and consent shall be delivered by the insurer on the
Purchase Date or as soon thereafter as practicable.
B. Neither Parent nor any Seller will initiate, on or after
the Purchase Date, any action to terminate the insurance coverage
on any insured Contract until such time as such Contract is
terminated by prepayment, renewal, refinance or repossession of the
collateral, or charge-off by Buyer, whichever occurs first.
C. On the Purchase Date, Parent and each Seller shall notify
the insurance carrier(s) of this Agreement and instruct said
carrier(s) to pay to Buyer any and all unearned premiums from
cancellations occurring after the Purchase Date and claims due or
thereafter to become due to any Seller. Buyer agrees to refund to
the Obligors any applicable unearned insurance premiums to the
extent received by Buyer from the appropriate insurance carrier.
Buyer agrees to assume, to the extent effectively assigned on terms
and conditions reasonably satisfactory to Buyer, all obligations
arising under the Service Expense Reimbursement Agreement between
American Bankers and Parent and/or any Seller.
10. ALLOCATION: The aggregate amount of the Purchase Price
plus the value of the Assigned Obligations (such aggregate amount
being referred to herein as the "Acquisition Consideration"), as
may be adjusted in accordance with Section 6 above, shall be
allocated among all of the assets to be purchased by Buyer under
this Agreement (such assets being referred to herein as the
"Purchased Assets") in accordance with a Schedule 5 hereto, to be
prepared by Buyer and to be made a part of this Agreement at such
time as the Acquisition Consideration is finally determined in
accordance with the terms hereof The allocation of the Acquisition
Consideration among the Purchased Assets to be contained in
Schedule 5 shall be consistent with the allocation of value
contained in that certain sample schedule prepared by Buyer and
delivered to Parent under separate cover dated as of or prior to
the date hereof.
11. TRANSFER TAXES: All sales, transfer and other taxes
payable in connection with the sale, transfer, conveyance and
assignment of the Contracts (including all related security instru-
ments), Business Assets, Leases and Third Party Agreements by
Parent and the Sellers to Buyer as contemplated under this
Agreement shall be borne by Parent and/or Sellers, except as set
forth in Section 7 above.
12. PARENT'S AND SELLERS' WARRANTIES: The following
covenants, warranties and representations are made to Buyer by each
of the Holding Company, Parent and the Sellers, as of the Contract
Date and the Purchase Date, which covenants, warranties and
representations shall survive the execution of this Agreement and
the Closing as provided herein:
A. Holding Company, Parent and Sellers covenant, represent
and warrant that they have taken all appropriate corporate action
necessary to authorize the execution of and consummation of the
transactions contemplated by this Agreement. This Agreement has
been duly and validly executed and delivered by Holding Company,
Parent and the Sellers and constitutes the valid and binding
obligation of Holding Company, Parent and the Sellers, enforceable
against Holding Company, Parent and each of the Sellers in
accordance with its terms. The execution and performance of this
Agreement by Holding Company, Parent and each Seller do not violate
any laws, regulations, indentures, contracts, judgments or decrees
to which any of them is a party or by which any of their respective
properties or assets may be affected nor the respective Certifi-
cates of Incorporation and By-laws of Holding Company, Parent and
each Seller.
B. Holding Company, Parent and Sellers covenant, represent
and warrant that the ledger cards or equivalent record delivered to
Buyer shall fully and accurately reflect the true outstanding
unpaid balance of the Contracts as of the close of business on the
Determination Date, and the cards or equivalent record will
accurately reflect the collection activity on the Contracts and the
payments received on the Contracts from the respective Obligors.
C. Holding Company, Parent and Sellers covenant, represent
and warrant that, except as set forth on Schedule 6 hereto, each
respective Seller has good and marketable title to the Business
Assets and Contracts to be sold under this Agreement, free and
clear of any liens, encumbrances or charges whatsoever, and any
such claims shall be released on the Purchase Date; such Seller is
the absolute owner thereof with full and sole right to transfer all
right, title and interest in and to the Contracts and Business
Assets; and no person, firm, corporation or association has any
claim whatsoever to the Contracts sold under this Agreement or the
proceeds of the Contracts or any of the rights, title and interest
in and to any of the Leases and Third Party Agreements intended to
be transferred to Buyer under this Agreement.
D. Holding Company, Parent and Sellers covenant, represent
and warrant that, other than as may be set forth on Schedule 7
hereto, none of them is a party to any, and there is no pending or
threatened, litigation, legal or administrative proceeding, which
would, if decided against Holding Company, Parent or any Seller, as
applicable, have a material adverse effect on the Business
generally or the Contracts or Parent's or any Seller's right to
transfer same, or on any of the Business Assets, Leases or Third
Party Agreements to be sold and assigned pursuant to this Agree-
ment.
E. Holding Company, Parent and Sellers covenant, represent
and warrant, except as noted on the records of Parent or the
respective Seller, that each Contract sold under this Agreement is
genuine, valid and complete in all material respects and is
enforceable in accordance with its terms; no understanding or
agreement has been reached between the respective Seller and the
Obligor for any variation of the interest rate, schedule of
payments or other material item or condition of any Contract; and
no such variation or alteration has been made by any Seller or any
of its employees.
F. Holding Company, Parent and Sellers covenant, represent
and warrant, except as noted on the records of Parent or the
respective Seller, that no Contract is subject to any defense,
setoff or counterclaim to the payment of the amount of the unpaid
balance due on the Contract or a proceeding in bankruptcy.
G. Holding Company, Parent and Sellers covenant, represent
and warrant that, except as otherwise disclosed in their respective
records, each instrument or the property or goods described in
each instrument representing or securing a Contract is in the
possession of the respective Seller; and each mortgage and deed of
trust evidencing and securing any Contract sold hereunder will
constitute as of the Closing, a valid and enforceable and perfected
first, second or third lien, as indicated in the records of the
Seller, as against all persons on the real property described in
the mortgage or deed of trust or other agreement. All personal
property loans to be sold to Buyer under this Agreement will have
a valid and perfected lien as of the Closing, except where the
failure to be perfected would not have a material adverse effect,
individually or in the aggregate, on Parent or the respective
Seller.
H. Holding Company, Parent and Sellers covenant, represent
and warrant that all the Contracts and any security instruments
sold by Parent and the Sellers under this Agreement, and Parent's
and the Sellers' statements and applications relating thereto, and
Parent's and the Sellers' practices and the conduct of their
respective businesses with reference to the Contracts comply in all
material respects with all applicable state, federal and local laws
and regulations.
I. Holding Company, Parent and each respective Seller
covenant, represent and warrant that it has paid or will cause to
be paid any and all license, franchise, intangible or stamp taxes
or fees due and owing at the Purchase Date to the federal govern-
ment, any state government and any political subdivision thereof,
arising from or growing out of the acquisition, collection or
holding of any and all of the Contracts and Business Assets by
Parent or such Seller.
J. Holding Company, Parent and Sellers covenant, represent
and warrant that they will, from and after the Purchase Date, pay
over to Buyer any payments received in payment on the Contracts,
which are attributable to payments that become due and payable from
and after the Purchase Date for the Contracts listed on Schedule 4.
Other items pertaining to the Contracts received after the Purchase
Date by Parent or any Seller will be forwarded promptly to Buyer.
K. Holding Company, Parent and Sellers covenant, represent
and warrant that they are in compliance in all material respects
with all laws governing their labor, employment and employee
benefit practices, including but not limited to the Fair Labor
Standards Act, the Civil Rights Acts of 1964 and 1991, the Age
Discrimination in Employment Act, the Family and Medical Leave Act,
the Employee Retirement Income Security Act of 1974 and the
Internal Revenue Code of 1986.
L. As of April 30, 1995, the net book value of the Business
Assets as reflected on Parent's and Sellers' books and records is
approximately $2,139,463; the principal and accrued interest on
Interest Bearing Contracts is approximately $32,259,771 and
$460,923; the gross amount due under Precomputed Interest Contracts
and unearned interest on such Contracts is approximately $98,439,6-
08 and $20,034,514; the Net Outstanding Balance of the Contracts as
of such date is approximately $109,905,439; the amount of Dealer
Holdback is approximately $612,666; the amount of Unearned
Insurance Commissions is approximately $2,087,198; and the amount
of aggregate deferred fees on the Contracts is approximately
$1,220,349.
M. Except as may be set forth in Schedule 8 attached hereto,
no consents, waivers or approvals of, notices to or filings with
any governmental agency or authority, including without limitation
any court or judicial authority, are necessary, and no consents or
approvals of or notices to any nongovernmental third parties are
necessary, in connection with the execution and delivery by Holding
Company, Parent and each Seller of this Agreement or the consumma-
tion by Holding Company, Parent and each Seller of the transactions
contemplated by this Agreement.
N. Holding Company, Parent and each of the Sellers is in
compliance and has at all times been in compliance, in all material
respects, with all environmental laws, rules, regulations and
standards promulgated, adopted or enforced by the United States
Environmental Protection Agency and of similar agencies in states
in which they conduct their collective business. There is no suit,
claim, action or proceeding now pending before any court, govern-
mental agency or board or other forum or, to the knowledge of
Parent and the Sellers, threatened by any person for alleged
noncompliance with any environmental law, rule or regulation or
relating to the discharge or release into the environment of any
hazardous material or waste at or on a site presently or formerly
owned, leased or operated by Holding Company, Parent or any Seller.
O. Parent and each of the Sellers maintains insurance with
respect to the Business and the Business Assets of the kinds, with
respect to the risks, and in such amounts as are consistent with
prudent business practices.
P. Holding Company, Parent and each of the Sellers is, and
after giving effect to the transactions contemplated hereby will
be, in compliance in all material respects with all federal, state
and local laws, rules and regulations applicable to the Business.
Q. Parent has provided Buyer with a schedule of all
employees, other than those certain officers and other employees
identified in Schedule 9 hereto (the "Headquarters Employees"), of
Parent and the Sellers (the "Branch Employees"), showing for
each the position held, the date of birth and current salary. None
of the Branch Employees is a party to any employment or severance
agreement or covered by any collective bargaining or similar
agreement. There is no strike or other labor dispute pending or,
to the knowledge of Parent or any of the Sellers, threatened
against Parent or any Seller, which would have a material adverse
effect on the Business.
R. Parent is not aware of any reason why any of the
necessary consents or approvals of governmental agencies or
authorities or nongovernmental third parties referred to in
paragraph M of this Section 12 above would not be obtained within
a time period sufficient to enable the parties to consummate the
transactions contemplated by this Agreement within a time frame
customary for transactions of the nature contemplated hereby.
S. No representation or warranty contained in this Agree-
ment, and no statement contained in any certificate, list or other
writing, including but not necessarily limited to the exhibits and
any schedules attached hereto or to be included herewith, furnished
by Holding Company, Parent or any Seller to Buyer pursuant to the
provisions hereof contains or will contain any untrue statement of
a material fact or omits to state a material fact necessary in
order to make the statements herein or therein not misleading.
In the event of any breach or breaches of any of the foregoing
representations or warranties and subject to the provisions of
Section 13 below, Parent or the respective Seller will, upon thirty
(30) days prior written notice (which notice shall describe the
breach with specificity, setting out the nature of the breach and
such other information, documents, records and papers as necessary)
to Parent by Buyer and provided Parent or the appropriate Seller
has not cured, corrected or resolved such breach within such thirty
(30) day period, refund to Buyer the uncollected portion of each
Contract, if any, to which such breach relates, paying Buyer an
amount equal to the Net Outstanding Balance owing on said Contract
as of the date of refund, less any Dealer Holdback and Unearned
Insurance Commissions attributable to said Contract as of such
date; provided that Parent or such Seller receives the written
notice within thirty-six (36) months after the Purchase Date and
further provided that Buyer shall continue to own and pursue
collection of such Contracts and promptly pay over to Parent
seventy-five percent (75%) of any payments received in payment of
such Contracts.
13. INDEMNIFICATION
A. Indemnification; To the Buyer. Holding Company, Parent
and Sellers agree, Jointly and severally, to defend, indemnify and
hold harmless the Buyer and its officers, directors, employees,
successors and assigns, from and against any and all losses,
damages, claims, suits, proceedings, liabilities, costs and
expenses, including reasonable attorneys' fees ("Losses" or
"Claims" as the context requires), which may be imposed on,
sustained, incurred or suffered by or asserted against any such
persons, directly or indirectly, as a result of or relating to or
arising out of:
(1) The breach of any representation or warranty or covenant
or agreement of Holding Company, Parent or any Seller contained in
this Agreement; or
(2) The actions or omissions of Holding Company, Parent or
any Seller in the conduct of the Business or as related to the
ownership, possession or use of any of the Business Assets or as
related to the payment or performance of any of the Assigned
Obligations, in each case during the period prior to the Purchase
Date.
Notwithstanding anything herein to the contrary, Buyer shall have
no right of refund or indemnification for the noncollectibility for
any reason of any Contract transferred to Buyer which was assigned
a value of zero ($O) for purposes of calculating the Purchase
Price; provided, however, that the foregoing shall not limit the
indemnification obligations of Holding Company, Parent and the
Sellers otherwise imposed under this Section 13 with respect to any
Losses relating to any such Contract (other than noncollectibility)
in excess of any amounts collected by Buyer on such Contract
incurred by Buyer or any of its officers, directors, employees,
successors or assigns as a result of any breach of any representa-
tion or warranty or covenant or agreement of Holding Company,
Parent or any Seller relating to any such Contract contained in
this Agreement or the actions or omissions of Holding Company,
Parent or any Seller with respect to any such Contract during the
period prior to the Purchase Date.
B. Indemnification: To the Seller, Etc. The Buyer agrees to
defend, indemnify and hold harmless Holding Company, Parent, each
Seller and their officers, directors, employees, successors and
assigns, from and against any and all losses, damages, claims,
suits, proceedings, liabilities, costs and expenses (including
without limitation reasonable attorneys' fees) ("Losses" or
"Claims" as the context requires) which may be imposed on,
sustained, incurred or suffered by, or asserted against any such
persons, directly or indirectly, as a result of or relating to or
arising out of: the breach of any representation or warranty or
covenant or agreement of the Buyer contained in this Agreement, or
Buyer's conduct of the Business or its ownership or operation of
the Contracts or Business Assets purchased under this Agreement or
related to its assumption of the Assigned Obligations, at any time
on or after the Purchase Date.
C. Limitations on Parties' Respective Indemnification
Obligations. The Parties' respective indemnification of one
another as provided in Paragraphs A and B of this Section 13 above
(meaning the indemnification obligations of Holding Company, Parent
and the Sellers, together on the one hand, and of Buyer on the
other hand) shall be limited to an aggregate amount of Seven
Million and 00/100 Dollars ($7,000,000.00); provided, however,
notice of claims for indemnification of the Buyer by Holding
Company, Parent or any Seller or of Holding Company, Parent or any
Seller by Buyer, as the case may be, pursuant to the provisions of
this Section 13 must be received by Parent or Buyer, as applicable,
prior to the last day of the thirty-sixth (36th) calendar month
after the Purchase Date.
D. Procedure for Indemnification.
(1) If a party to this Agreement entitled to assert a Claim
under this Agreement shall receive notice of the assertion by a
person who is not a party to this Agreement of any claim or of the
commencement by any such person of any action or proceeding (a
"Third Party Claim") with respect to which Holding Company, Parent,
any Seller or the Buyer, as applicable, is obligated to provide
indemnification, the indemnified party (the "Indemnitee") shall
give the indemnifying party (the "Indemnitor") prompt written
notice thereof Such notice shall describe the Third Party Claim in
reasonable detail.
(2) The Indemnitor may elect to compromise or defend, at
such Indemnitor's own expense and by such Indemnitor's own counsel, any
Third Party Claim. If an Indemnitor elects to defend a Third Party
Claim, it shall, within thirty (30) days of receipt of the notice
referred to in Paragraph D(1) of this Section 13 above (or sooner
if the nature of such Third Party Claim so requires), notify the
related Indemnitee of its intent to do so, and such Indemnitee
shall reasonably cooperate in the compromise of, or defense against
such Third Party Claim. Such Indemnitor shall pay such Indemnitee-
's actual out-of-pocket expenses incurred in connection with such
cooperation. After written notice from an Indemnitor to an
Indemnitee of its election to assume the defense of a Third Party
Claim, such Indemnitor shall not be liable to such Indemnitee under
Paragraph A or Paragraph B of this Section 13 above, as the case
may be, for any legal expenses subsequently incurred by such
Indemnitee in connection with the defense thereof, provided,
however, that such Indemnitee shall have the right to employ one
counsel for each Third Party Claim to represent such Indemnitee if,
in such Indemnitee's good faith judgment, a conflict of interest
between such Indemnitee and such Indemnitor exists in respect of
such Third Party Claim, in which events the fees and expenses of
such separate counsel shall be paid by such Indemnitor. If an
Indemnitor elects not to defend against a Third Party Claim or
fails to notify an Indemnitee of its election as provided in
Paragraph D(1) of this Section 13 above, such Indemnitee may
without advance written notice to the Indemnitor, pay, compromise
or defend such Third Party Claim reasonably and in good faith on
behalf of and for the account and risk of the Indemnitor to the
extent that the Indemnitee is entitled to receive indemnification
from the Indemnitor hereunder. No Indemnitor shall consent to
entry of any Judgment or entry into any settlement against or with
respect to any Indemnitee without the written consent of such
Indemnitee, unless such judgment or settlement:
(a) Provides solely for money damages or other payments for
which such Indemnitee is entitled to indemnification hereunder, and
(b) Includes as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnitee of a release for all
liability in respect of such Third Party Claim.
(3) With respect to any Claim hereunder which does not
result from a Third Party Claim, the Indemnitor shall have a period of
thirty (30) days from receipt of written notice from the Indemnitee
within which to respond thereto. If such Indemnitor does not
respond within such 30-day period or rejects such Claim in whole or
in part, such Indemnitee shall be free to pursue such remedies as
may be available to such Indemnitee under applicable law or this
Agreement.
(4) If the amount of any Claim or Loss shall, at any time
subsequent to payment pursuant to this Agreement, be reduced by
recovery, settlement, insurance or otherwise, the amount of such
reduction, less any expenses incurred in connection therewith,
shall promptly be repaid by the Indemnitee to the related Indemni-
tor.
E. Collateral for Indemnification Obligations. To secure in
part the indemnification obligations of Holding Company, Parent and
the Sellers under this Section 13, on the Purchase Date Parent
shall deposit Five Million and 00/100 Dollars ($5,000,000.00) in
cash into an escrow account with The First National Bank of Boston
("FNBB") as escrow agent. The terms of such escrow arrangement
shall be governed by an escrow agreement to be entered into by the
parties on the Closing Date, in substantially the form attached
hereto as Exhibit "D" (the "Escrow Agreement").
14. PARTIES' COVENANT TO SEEK REGULATORY APPROVALS AND OTHER
CONSENTS AND APPROVALS: Each of the parties covenants that it will
timely file, to the extent required of such party to consummate the
transactions contemplated by this Agreement, and at its own
expense, all documents, forms, applications and fees necessary to
obtain all federal, state and local regulatory approvals necessary
to effectuate the transactions contemplated herein, including
without limitation the Notification and Report Form for Certain
Mergers and Acquisitions required pursuant to the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, the related filing fee and all
such further documents requested by the Federal Trade Commission or
the Department of Justice, and the applications, fees and
documents required to obtain licenses, if necessary, to operate
within each of the states in which the Sellers currently maintain
branch offices. Prior to the Purchase Date, the parties will use
their respective best efforts to obtain all consents and approvals,
of both governmental agencies or authorities and nongovernmental
third parties, required for Parent and Sellers to sell and assign
and Buyer to purchase and assume all of the Contracts, Business
Assets, Leases, Third Party Agreements and Assigned Obligations on
the Purchase Date in accordance with the terms of this Agreement
and to otherwise take all actions necessary or appropriate to
ensure the consummation of the transactions contemplated by this
Agreement as soon after the date hereof as reasonably practicable.
15. EMPLOYEES: Effective as of the Purchase Date, each
employee at will of Parent and Sellers shall be offered employment
with Buyer; provided, however, that any such employment shall not
be construed to limit the ability of the Buyer to terminate any
such employee at any time for any reason. Each such employee who
accepts such employment and becomes an employee of Buyer shall be
hereinafter referred to as a "Transferred Employee." Employment of
Transferred Employees shall be subject to all of Buyer's policies
and practices, including the policy of employment-at-will. On and
after the Purchase Date or such later date as Buyer in its
discretion may determine (the "Transition Date"), Buyer shall
provide the Transferred Employees with the employee benefits it
provides to all other new employees of Buyer, provided that the
Buyer will grant past service credit to the Transferred Employees
for the time of service at Parent or any Seller for purposes of
eligibility to participate, vesting and for other appropriate
benefits, but not for benefit accrual, under any pension benefit
plan or welfare benefit plan of Buyer. If the Transition Date is
later than the Purchase Date, from the Purchase Date through the
Transition Date Buyer shall provide the Transferred Employees with
employee benefits as nearly equivalent as practicable to either the
employee benefits theretofore maintained for them by Parent and
Sellers or to the employee benefits it provides to its other
employees, determined benefit by benefit by the Purchaser in its
discretion; provided, however, that Headquarters Employees shall be
entitled to no severance pay from the Buyer. The parties acknowl-
edge and agree that the Assigned Obligations do not include, and
Buyer has no ability, obligation or liability responsibility after
the Closing for, any and all liabilities, responsibilities and
obligations (current, runoff or other) under and with respect to
any employee benefit plans, including without limitation all
pension and profit-sharing plans, all severance pay plans and all
group health, life, disability and workers' compensation insurance
plans, of Holding Company, Parent or any Seller, and the responsi-
bility and obligation of maintaining and/or terminating any such
plans, including establishing appropriate reserves or accounts to
provide for any obligations under such plans incurred prior to the
Closing and becoming payable after the Closing, remains with
Holding Company, Parent and the Sellers; provided, however, Buyer
acknowledges and agrees that on and after the later of the Purchase
Date or such date as the Transferred Employees cease to be covered
under any group health plan maintained or contributed to by Holding
Company, Parent or Sellers, health care continuation coverage shall
be offered by Buyer under its appropriate group health plan to
"qualified beneficiaries" of Parent or Sellers, whether such
individuals become qualified beneficiaries prior to, on or after
the Purchase Date. Qualified beneficiaries shall have the meaning
set forth in Part 6 of Title I of ERISA and Section 4980B of the
Code. In the event that Buyer fails to offer employment to
Parent's or Sellers' current employees, then Buyer shall indemnify
and hold harmless Parent and Sellers for any loss or liability
incurred by Parent or any Seller with respect to any employees
under the Worker Adjustment and Retraining Notification Act,
including without limitation the costs and expenses associated with
defending a claim under said Act.
16. USE OF RECORDS BY PARENT OR ANY SELLER: Buyer agrees
that all records and memoranda of Parent and Sellers hereby
transferred will be maintained and made available for the use of
Holding Company, Parent and Sellers in making tax returns,
defending claims, or for any other legitimate purpose which does
not tend to injure Buyer in its competition with other companies
and will remain so liable for a period of not less than three (3)
years after the payment in full of the accounts represented by the
Contracts. Holding Company, Parent or Sellers may make copies of
any such documentation, at their expense, to the extent necessary
to fulfill the purposes of this Section 16.
17. NON-SOLICITATION/NON-COMPETE: Parent and each Seller
agree that neither they nor any of their present or future
subsidiaries, nor any purchaser of all or substantially all of the
voting shares of Parent or any Seller will, for a period of three
(3) years from the Purchase Date, directly and knowingly solicit
any of the Obligors for the purpose of making a loan to the
Obligors. Parent and each Seller further agree that, from and
after the Purchase Date, it will not, for a period of three (3)
years, open a consumer loan office for the purpose of engaging in
the same business as the Business within any state in which Buyer
operates or solicit or encourage to leave the employment of Buyer
or employ in any capacity or retain as a consultant any person who
is employed or retained in any capacity by Buyer following the
Purchase Date. As of the date hereof, each of the officers of
Parent identified in Schedule 10 hereto (the "Key Employees") has
entered into a protection agreement with Buyer, substantially in
the form attached hereto as Exhibit "E" (the "Protection Agree-
ment"), which by its terms shall become effective on the Purchase
Date.
18. ADDITIONAL COVENANTS OF HOLDING COMPANY, PARENT AND
SELLERS:
A. During the period from the Contract Date to the Purchase
Date, Holding Company and Parent will give or cause to be given to
Buyer and its officers, accountants, counsel and other representa-
tives full access during normal business hours to all of the
properties, assets, books, contracts, commitments and records of
Holding Company, Parent and the Sellers. All of the information
provided to Buyer or any of its representatives by Holding Company,
Parent and the Sellers hereunder shall remain subject to the
confidentiality requirements of the confidentiality agreement dated
March 10, 1995 between Parent and FNBB (the "Confidentiality
Agreement").
B. During the period from the Contract Date to the
Purchase Date, Holding Company, Parent and the Sellers shall:
(i) conduct the Business only in the ordinary course and
consistent with past practices;
(ii) maintain such insurance relating to the Business and
the Business Assets as is in place on the date hereof;
(iii) not increase any salaries or wages of any officer or
employee of Parent or any Seller nor establish or increase any
bonus, pension, option, incentive or deferred compensation,
retirement,, death, profit sharing, or similar benefits of the
officers or employees of Parent or any Seller except in all
instances in the ordinary course of business, consistent with past
practices, and as disclosed in Schedule 11 hereto or as otherwise
disclosed in writing by Parent to Buyer on or prior to the date
hereof;
(iv) not place any liens or encumbrances upon any of the
Contracts or Business Assets;
(v) not terminate (other than by expiration) or materially
amend or modify any Lease or Third Party Agreement, unless Buyer is
consulted prior to such action;
(vi) use their best efforts to prevent any material breach
of any contract or commitment that is materially related to the
Business;
(vii) not sell or transfer any property or asset of Parent
or any Seller, except in the ordinary course and consistent with past
practices;
(viii) not release or waive any claims of Parent or any Seller
relating to any Contract or rights thereunder, except in the
ordinary course and consistent with past practices.
(i use their best efforts to maintain the franchise value
and goodwill of the Business and the services of Parent's and the
Sellers' full-time officers and employees; and
(x) maintain the books of account and records of Holding
Company, Parent and the Sellers in the ordinary course and in
accordance with applicable laws, regulations and accounting
standards.
C. Unless and until this Agreement shall have been properly
terminated by either party pursuant to Section 21 hereof, neither
Holding Company nor Parent nor any Seller (including any officer,
director, employee, representative or agent, including but not
limited to any investment banker, attorney or accountant, of
Holding Company, Parent and any Seller) shall, directly or
indirectly, encourage, solicit, initiate or participate in any
discussions or negotiations with, or provide any information to,
any corporation, partnership, person or other entity or group
(other than Buyer and its affiliates or representatives) concerning
any merger, tender offer, sale of assets, sale of shares of capital
stock or debt securities or similar transaction involving Holding
Company, Parent or any Seller ("Acquisition Transaction"). Parent
will immediately communicate to Buyer the terms of any proposal,
discussion, negotiation or inquiry relating to an Acquisition
Transaction and the identity of the party making such proposal or
inquiry which it or Holding Company or any Seller may receive in
respect of any such transaction (which shall mean that any such
communication shall be delivered no less promptly than by telephone
within 24 hours of the receipt of any such proposal or inquiry) or
the receipt of any request for information from any governmental
agency or authority with respect to a proposed Acquisition
Transaction.
D. If this Agreement is terminated by Buyer pursuant to
Section 21 hereof as a result of a willful breach of this Agreement
by Holding Company, Parent or any of the Sellers, then Parent shall
pay to Buyer as soon as practicable, but in any event within five
(5) business days of the termination of this Agreement, a fee, in
cash. of Five Million and 00/100 Dollars ($5,000,000.00) (the
"Termination Fee"); provided, however, that the foregoing shall not
relieve any of Holding Company, Parent or any Seller from any
additional liability any of them may have for any such willful
breach of this Agreement. The provisions of this paragraph D shall
survive the termination of this Agreement.
E. Parent shall maintain its legal existence and good
standing for a period of time from and after the Purchase Date not
less than the period during which the Escrow Agreement remains in
effect in accordance with its terms.
19. BUYER'S WARRANTIES: Buyer hereby covenants, represents
and warrants to Holding Company, Parent and Sellers, as of the
Contract Date and the Purchase Date, which representations and
warranties shall survive the execution of this Agreement and the
Closing as provided herein:
A. Buyer is a corporation, duly organized, validly existing
and in good standing under the laws of the State of Minnesota.
Buyer has taken all appropriate corporate action necessary to
authorize the execution of and consummation of the transactions
contemplated by this Agreement. This Agreement has been duly and
validly executed and delivered by Buyer and constitutes the valid
and binding obligations of Buyer, enforceable against Buyer in
accordance with its terms. The execution and performance of this
Agreement by Buyer do not violate any laws, regulations, inden-
tures, contracts, judgments or decrees to which Buyer is a party or
by which any of Buyer's properties or assets may be affected nor
the Certificate of Incorporation or By-laws of Buyer.
B. Buyer is not a party to, and there is no pending or
threatened, litigation, legal or administrative proceeding, which
would, if decided against Buyer, have any material adverse impact
on Buyer's ability to purchase the Contracts and Business Assets to
be purchased pursuant to this Agreement or to otherwise perform its
obligations hereunder.
C. Except as may be set forth in Schedule 12 attached
hereto, no consents, waivers or approvals of, notices to or filings
with any governmental agency or authority, including without
limitation any court or judicial authority, are necessary, and no
consents or approvals of or notices to any nongovernmental third
parties are necessary, in connection with the execution and
delivery by Buyer of this Agreement or the consummation by Buyer of
the transactions contemplated by this Agreement.
D. Buyer is not aware of any reason why any of the necessary
consents or approvals of governmental agencies or authorities or
nongovernmental third parties referred to in paragraph C of this
Section 19 above would not be obtained within a time period
sufficient to enable the parties to consummate the transactions
contemplated by this Agreement within a time frame customary for
transactions of the nature contemplated hereby.
E. No representation or warranty contained in this Agree-
ment, and no statement contained in any certificate, list or other
writing, including but not necessarily limited to the exhibit and
any schedules attached hereto or to be included herewith, furnished
by Buyer to Holding Company, Parent or the Sellers pursuant to the
provisions hereof contains or will contain any untrue statement of
a material fact or omits to state a material fact necessary in
order to make the statements herein or therein not misleading.
20. ADDITIONAL EVIDENCE OF OWNERSHIP. Each Seller agrees
that it will, upon the reasonable request of Buyer, supply copIes
of any additional documents it may still have in its possession
which evidence such Seller's ownership of the Contracts sold
hereby.
21. TERMINATION: This Agreement may be terminated at any
time prior to the Closing in accordance with the following
provisions:
A. by mutual written consent of Parent and Buyer authorized
by their respective Boards of Directors;
B. by Parent or Buyer if the Closing shall not have occurred
on or prior to the Termination Date;
C. by Buyer or Parent if any governmental or regulatory
authority or agency, or court of competent jurisdiction, shall have
issued a final permanent order or injunction enjoining, denying
approval of, or otherwise prohibiting the consummation of the
transactions contemplated by this Agreement and the time for appeal
or petition for reconsideration of such order or injunction shall
have expired without such appeal or petition being granted; or
D. by Buyer or Parent (provided that the terminating party
is not then in material breach of any representation, warranty,
covenant or other agreement contained herein), in the event of a
material breach by the other party of any representation, warranty,
covenant or other agreement contained herein which breach is not
cured after 30 days written notice thereof is given to the party
committing such breach.
22. EFFECT OF TERMINATION: In the event of termination of
this Agreement by either Parent or Buyer as provided above, this
Agreement shall forthwith become null and void (other than Sections
18(D) (if applicable) and 33 hereof, which shall remain in full
force and effect, and there shall be no further liability on the
part of any of the parties or their respective officers or
directors to the others, except any liability of any party under
said Sections 18(D) (as may be applicable) and 33, and in the
event of a willful breach of any representation, warranty, covenant
or agreement contained in this Agreement, in which case, the
breaching party shall remain liable for any and all damages, costs
and expenses, including all reasonable attorneys' fees, sustained
or incurred by the nonbreaching party(ies) as a result thereof or
in connection therewith or with the enforcement of its rights
hereunder. In the event of any termination of this Agreement by
either Parent or Buyer, the Confidentiality Agreement shall remain
in full force and effect in accordance with its terms.
23. AMENDMENT, EXTENSION AND WAIVER: Subject to applicable
law and as may be authorized by their respective Boards of
Directors, at any time prior to the consummation of the transac-
tions contemplated by this Agreement or termination of this
Agreement in accordance with the provisions of Section 21 hereof,
the parties may, amend this Agreement, extend the time for the
performance of any of the obligations or other acts of any other
party hereto, waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant
hereto, or waive compliance with any of the agreements or
conditions contained in Sections 25, 26 and 27 (to the extent
legally permitted) hereof. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the
parties hereto. Any agreement on the part of a party hereto to any
extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party, but such
waiver or failures to insist on strict compliance with such
obligation, covenant, agreement or condition shall not operate as
a waiver of, or estoppel with respect to, any subsequent or other
failure.
24. CONDITIONS TO BUYER'S OBLIGATIONS: The obligation of
Buyer to purchase the Contracts and Business Assets and Assume the
Assigned Obligations under this Agreement shall be subject to
Holding Company, Parent and Sellers having performed and complied
with all agreements and conditions in this Agreement necessary to
be performed or complied with by them prior to or at the Purchase
Date unless otherwise waived in writing by the Buyer and the
satisfaction of the following conditions and delivery by Holding
Company, Parent and the Sellers of the following documents:
A. There shall not exist any fact or have occurred any
event, which has had, or is reasonably likely to have, individually
or in the aggregate, a material adverse effect on the Business
generally or the value of the Contracts or the Business Assets
specifically. In connection with Buyer's verification of the
satisfaction of this condition, but not in limitation hereof, Buyer
may undertake prior to the Closing, directly or through its
retention, at its expense, of an independent outside auditor, to
verify the existence and collectibility of the Contracts, and if
such verification review is undertaken then Buyer shall have
obtained reasonable assurance as a result of such review as to the
existence and collectibility of the Contracts.
B. An opinion of the Counsel to Holding Company, Parent and
Sellers, dated the Purchase Date, substantially in the form as
delivered in draft to, and accepted by, Buyer's counsel on or prior
to the date hereof
C. On the Purchase Date, a certificate signed by a duly
authorized officer of Holding Company, Parent and each Seller,
solely in his/her capacity as an officer of Holding Company, Parent
or such Seller, to the effect that:
(1) The warranties and representations of Holding Company,
Parent and such Seller were true on the date hereof and are true as
of the Purchase Date, and
(2) The covenants and agreements of Holding Company, Parent
or such Seller to be performed hereunder on or before the Purchase
Date have been performed.
D. Resolutions of the Board of Directors and stockholders,
to the extent legally required, of Holding Company, Parent and each
Seller certified by the Secretary or an Assistant Secretary,
authorizing the execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement.
E. The Escrow Agreement shall have been executed and deliv-
ered by Buyer, Parent and FNBB and shall be in full force and
effect.
F. The Protection Agreements as executed and delivered by
Buyer and each of the Key Employees shall be in full force and
effect.
G. There shall not be any action taken, or any statute,
rule, regulation or order enacted, entered, enforced or deemed
applicable to the transactions contemplated by this Agreement or
Buyer after the Closing, by any federal or state governmental
agency or authority which, in connection with the granting of any
Requisite Regulatory Approval (as such term is defined below)
imposes any condition or restriction upon Buyer or any Buyer
subsidiary after the Closing, which would so materially adversely
impact the economic or business benefits of the transactions
contemplated by this Agreement as to render inadvisable in the
reasonable judgment of Buyer the consummation of the transactions
contemplated hereby.
H. In addition to the foregoing, Holding Company, Parent and
the Sellers will furnish Buyer with such additional certificates,
instruments or other documents in the name or on behalf of Holding
Company, Parent or any Seller, executed by appropriate officers or
others, including without limitation certificates or correspondence
of governmental agencies or authorities or nongovernmental third
parties, to evidence fulfillment of the conditions set forth in
this Section 24 as Buyer may reasonably request.
25. CONDITIONS TO THE OBLIGATIONS OF PARENT AND SELLERS: The
obligations of Holding Company, Parent and Sellers to sell the
Contracts and Business Assets and assign the Leases and Third Party
Agreements under this Agreement shall be subject to Buyer having
performed and complied with all agreements and conditions in this
Agreement necessary to be performed or complied with by it prior to
or at the Purchase Date unless otherwise waived in writing by the
Parent and the delivery by Buyer of the following documents:
A. An opinion of the Counsel to Buyer, who may be a member
of the legal department of Buyer or an affiliate of Buyer,
substantially in the form as delivered in draft to, and accepted by
Parent's counsel on or prior to the date hereof.
B. On the Purchase Date, a certificate signed by a duly
authorized officer of Buyer, solely in his/her capacity as an
officer of Buyer, to the effect that:
(1) The warranties and representations of Buyer were true as
of the date hereof and are true as of the Purchase Date, and
(2) The covenants and agreements of Buyer to be performed
hereunder on or before the Purchase Date have been performed.
C. Resolutions of the Board of Directors of Buyer certified
by the Secretary or an Assistant Secretary, authorizing the
execution and delivery of this Agreement and the consummation of
the transactions contemplated by this Agreement.
D. In addition to the foregoing, Buyer will furnish Parent
with such additional certificates, instruments or other documents
in the name or on behalf of Buyer, executed by appropriate officers
or others, including without limitation certificates or correspon-
dence of governmental agencies or authorities or non-governmental
third parties, to evidence fulfillment of the conditions set forth
in this Section 25 as Parent may reasonably request.
26. CONDITIONS TO EITHER PARTY'S OBLIGATIONS: The obligation
of the Parent and Sellers to sell the Contracts and Business Assets
and assign the Leases and Third Party Agreements and the Buyer's
obligation to purchase such Contracts and Business Assets and
assume the Assigned Obligations shall be subject to (unless waived,
to the extent permitted by law, by all parties):
A. The absence of any action, proceeding or administrative
investigation against Buyer, Holding Company, Parent or any Seller
seeking to enjoin or otherwise affect the consummation of the
transactions contemplated by this Agreement, constituted or
threatened by any governmental agency or other party, that might
eventuate in an order of any court or administrative agency which,
in the reasonable opinion of either the Buyer and its counsel, or
Parent and its counsel, would render it impossible or inadvisable
to consummate the transactions contemplated by this Agreement.
B. All required licenses (including any licenses from state
authorities necessary to allow Buyer to operate a business similar
to that of the Sellers as presently conducted in their respective
branch offices), approvals, consents and notifications of any
relevant state and federal regulatory agencies including, without
limitation, the Federal Trade Commission and the Department of
Justice pursuant to the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, in respect of the transactions contem-
plated hereby having been obtained or made and any necessary
conditions, including all legally required waiting, notice or
protest periods, of such licenses, approvals, consents and
notifications having been fully satisfied (all such approvals,
consents and notifications, including all such legally required
waiting, notice or protest periods, being referred to collectively
as the "Requisite Regulatory Approvals").
C. All consents, approvals and notifications required to be
obtained from or made to nongovernmental third parties for the
purchase and sale of the Contracts and Business Assets and the
assignment of the Leases and Third Party Agreements and related
assumption of the Assigned Obligations having been obtained or
made.
27. ANNOUNCEMENTS; NOTIFICATIONS: Except as may be specifi-
cally required by law, the rules of the New York Stock Exchange or
any governmental agency, no party hereto will make any announcement
of this transaction or disclose any material provisions of this
Agreement either prior to or subsequent to the Purchase Date
without prior written approval of the other parties, which approval
shall not be unreasonably withheld. Buyer will notify at its
expense within thirty (30) days after the Purchase Date all
Contract Obligors of its ownership of the Contracts, provided that
Sellers shall have provided Buyer with the necessary information to
do so. Parent and each Seller authorize the use of their name in
the notices.
28. NOTICES: Any notice to be given or other documents to be
delivered by any party to the other party may be delivered in
person to such party, by fax with confirmed receipt, or may be
deposited in the United States certified mail, return receipt
requested, with postage thereon fully prepaid and addressed to the
party for whom intended at the address shown below:
To Buyer: To Parent or Seller:
Donald D. Davidson Jack L. Brozman
President Chairman of the Board
Fidelity Acceptance Century Acceptance
Corporation Corporation
330 Second Avenue, South Suite 416, City Center
Suite 790 Square 12th and Baltimore
Minneapolis, Minnesota 55401 Kansas City, Missouri 64196
Fax: (612) 337-5644 Fax: (816) 474-7610
with copies to: with a copy to:
Peter J. Manning Polsinelli, White, Vardeman
Executive Director, & Shalton
Mergers and Acquisitions Country Club Plaza
Bank of Boston Corporation 700 West 47th St., Ste. 1000
100 Federal Street Kansas City, Missouri 64112
Boston, Massachusetts 02110 Att: Lisa M. Schultes, Esq.
and
Bingham, Dana & Gould
150 Federal Street
Boston, Massachusetts 02110
Att: Stephen J. Coukos, Esq.
Any party to this Agreement may, from time to time by written
notice to the other, designate a different address which shall be
substituted for the one above. Notices sent by certified mail
shall be deemed effective when receipted for.
29. POST CLOSING COVENANT: Buyer agrees to maintain all
records pertaining to paid and charged off contracts currently
maintained at any of the locations covered by the real estate
leases listed on the attached Schedule 2 and for all Contracts sold
hereunder for a minimum of two (2) years after such contract is
paid or charged off.
30. SOLE UNDERSTANDING: It is understood and agreed that
this Agreement constitutes the sole mutual understanding regarding
the subject matter of this Agreement, and that no provision hereof
shall be modified or altered except in writing duly signed by the
parties to this Agreement.
31. APPLICABLE LAW: The laws of the State of Missouri shall
govern the validity and interpretation of this Agreement and the
performance of the parties to this Agreement, without giving effect
to the principles of conflicts of laws thereof.
32. HEADINGS: Headings are for informational purposes only
and are not a part of the Agreement.
33. EXPENSES: Except as is otherwise specifically provided
in this Agreement, regardless whether the Closing takes place or
whether this Agreement is terminated, all parties shall pay
their,own costs and expenses in connection with this Agreement and
the transactions contemplated hereby, including, but not by way of
limitation, an regulatory fees, attorneys' fees, accounting fees
and other expenses.
34. SUCCESSORS AND ASSIGNS: All terms and provisions of this
Agreement shall be binding upon and shall inure to the benefit of
the parties to this Agreement and their respective permitted
transferees, successors and assigns.
35. MULTIPLE COUNTERPARTS: This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original
for all purposes and all of which shall be deemed, collectively,
one agreement. but in making proof hereof it shall not be necessary
to exhibit more than one such counterpart.
36. INVALID PROVISIONS: If any provision of this Agreement
is held to be illegal, invalid or unenforceable under present or
future laws effective during the term of this Agreement, the
provision shall be fully severable; this document shall be
construed and enforced as if the illegal, invalid or unenforceable
provision had never comprised a part of this Agreement, and the
remaining provisions shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable
provision or by its severance from this Agreement. Furthermore, In
lieu of the illegal, invalid or unenforceable provision there shall
be added automatically as a part hereof a provision as similar in
terms to the illegal, invalid or unenforceable provision as may be
possible and be legal, valid and enforceable, and, as changed or
amended, continue to reflect the original intent of the parties
hereto.
37. ENTIRE AGREEMENT: The making, execution and delivery of
this Agreement by the parties have been induced by no representa-
tions, statements, warranties or agreements other than those herein
expressed. This Agreement embodies the entire understanding of the
parties and there are no further or other agreements or understand-
ing, written or oral, in effect between the parties the subject
matter of this Agreement.
38. TIME OF ESSENCE. The parties to this Agreement agree and
stipulate that time is of the essence with regard to the perfor-
mance by each party of its obligations under this Agreement.
39. BROKERAGE: Holding Company, Parent, each Seller and
Buyer represent and warrant to the other that it has not engaged or
dealt with any broker, finder or other person or entity who or
which may be entitled to any brokerage fee or finder's fee,
commission or similar charge in respect of the execution of this
Agreement or the consummation of the transactions contemplated
hereby, except that Parent has engaged Piper Jaffray, Inc. Each of
said parties hereby indemnifies and agrees to hold the other
harmless against any and all claims, losses, liabilities or
expenses which may be asserted against the other as the result of
the other party's dealings, arrangements or agreements with any
such broker, finder or person or entity.
[Remainder of Page Intentionally Blank]
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed for it and on its behalf by its respective
duly authorized officers, as of the day and year first set forth
above.
CENCOR, INC.
Attest: /s/Lisa M. Schultes By: /s/ Jack L. Brozman
Jack L. Brozman
Chairman and President
CENTURY ACCEPTANCE
CORPORATION
Attest: /s/Lisa M. Schultes By: /s/ Jack L. Brozman
FIDELITY ACCEPTANCE
CORPORATION
Attest: /s/Lisa M. Schultes By: /s/ William H. Ott, Jr.
William H. Ott, Jr.
Chairman
CENTURY FINANCE COMPANY OF
ALABAMA
CENTURY FINANCE COMPANY OF
COLORADO
CENTURY FINANCE COMPANY OF
FLORIDA
CENTURY FINANCE CO., INC. OF
GEORGIA
CENTURY FINANCE COMPANY OF KANSAS
CENTURY FINANCE COMPANY OF
KENTUCKY
CENTURY FINANCE COMPANY OF
LOUISIANA
CENTURY FINANCE COMPANY OF
MISSOURI
CENTURY FINANCE COMPANY OF
OMAHA, INC.
CENTURY FINANCE COMPANY OF
OKLAHOMA, INC.
CENTURY FINANCE COMPANY OF
GREENVILLE, INC.
CENTURY FINANCE COMPANY OF
TENNESSEE
CENTURY ACCEPTANCE
CORPORATION OF TEXAS
CENTURY FINANCE COMPANY OF UTAH
CENTURY HOME EQUITY CORPORATION
A FLORIDA CORPORATION
Attest: /s/ Lisa M. Henak By: /s/ Dennis C. Berglund
Lisa M. Henak, Dennis C. Berglund,
as Secretary of each as President of each of
of the foregoing the foregoing corporations
corporations