ASSET PURCHASE AGREEMENT
THIS ASSET
PURCHASE AGREEMENT is entered into as of December 24, 2007, by
and between AGM, LLC, a Delaware limited liability company (“
Seller ”) and TEXAS AUTO CREDIT, INC., a Florida
corporation (“ Buyer ”), and sets forth the
terms and conditions whereby the Seller agrees to sell and the
Buyer agrees to purchase the Transferred Assets (as such term is
hereinafter defined).
W I T N E S S E T H :
WHEREAS,
Seller has acquired and as of the date hereof owns the Transferred
Assets and the OCCC License; and
WHEREAS ,
Seller has agreed to sell to the Buyer, and Buyer has agreed to
purchase from Seller, the Transferred Assets and the OCCC License
pursuant to the terms of this Agreement.
NOW,
THEREFORE, in consideration of the foregoing and the mutual
covenants set forth herein, the parties agree as follows:
1.
DEFINITIONS.
As used in this
Agreement (including in the preamble and recitals above), the
following terms have the following definitions:
“
Agreement ” means this Asset Purchase Agreement,
including all exhibits and schedules hereto, as the same may be
amended or supplemented from time to time in accordance with its
terms.
“
Agreement to Operate ” means that certain Agreement to
Operate dated as of the date hereof by and between Seller and
Buyer.
“
Closing ” means the closing of the purchase and sale
of the Transferred Assets pursuant to this Agreement.
“ Closing Date ” means the date on which the
Closing occurs.
“
Collections ” means all payments, proceeds and/or
awards, actually received by the Seller in respect of the
Contract(s) in the form received, including payments made in cash
and by check.
“
Collateral Document ” means the certificates of title
and/or lienholders notices and/or filings (if any) providing the
perfection of the Former Owner’s, Consignee’s and/or
Seller’s lien in the vehicle sold to the Obligor in
connection with each Contract.
“
Consignee ” means Auto Underwriters Finance Company,
Inc., a Texas corporation and its affiliates.
“
Contract(s) ” means each retail installment contract,
loan agreement, note and/or security agreement evidencing
indebtedness as listed on Schedule A , together with all
documents and agreements delivered in connection therewith,
including, without limitation, all service agreements,
representations and warranties and modifications, restructurings,
extensions, consolidations and amendments thereof.
“ Existing Custodian ” means CAR Financial
Services, Inc.
“ Former
Owner ” means, individually and collectively, the
entities from whom the Seller acquired the Loans and Motor Vehicle
Inventory pursuant to a foreclosure sale.
“ Future
Collateral Document ” means the certificates of title
and/or lienholders notices and/or filings (if any) providing the
perfection of the Former Owner’s, Consignee’s and/or
Seller’s lien in the vehicle sold to the Obligor in
connection with each Future Contract.
“ Future
Contract(s) ” means each retail installment contract,
loan agreement, note and/or security agreement evidencing
indebtedness for purchase of automobiles and light trucks owned by
Seller and identified to Buyer prior to the date hereof as Autostar
lot codes 5400, 6600 and 9000, together with all documents and
agreements delivered in connection therewith, including, without
limitation, all service agreements, representations and warranties
and modifications, restructurings, extensions, consolidations and
amendments thereof.
“ Future
Loans ” means the outstanding loan obligations and debts
evidenced by the Future Contracts, and includes (a) the Future
Contracts; (b) all rights to payment and other rights, title and
interests of the Seller in, to and under the Future Contracts,
specifically including, all accrued interest; (c) each Future
Collateral Document applicable to the Future Loans; (d) all rights,
title, interests, powers, liens or security interests of the Seller
in, to or under each Future Collateral Document applicable to the
Future Contracts; (e) any right, claim or cause of action, and any
liability or counterclaim associated therewith, arising out of or
in connection with litigation pending, if any; (f) any judgment or
execution based upon the Future Contracts or any Future Collateral
Document, to the extent attributable thereto, and any lien arising
from any such judgment or execution; and (h) all other documents
held by Seller contained in the Review File with respect to the
Loans.
“ Future
Loan Purchase Price ” means an amount to negotiated in
good faith between Buyer and Seller, which Future Loan Purchase
price shall in any event be not less than $1,000,000.
“ Future
Review File ” means all instruments and documents, in the
files of the Seller pertaining to the Future Loans, including
without limitation, the Future Contracts and any Future Collateral
Documents and any loan or inventory summaries prepared by or on
behalf of the Seller, but excluding any documents prepared by or
for the use of Seller regarding the valuation of the Future
Loans.
“
Governmental Authority ” means any government or any
agency, bureau, commission, court, department, official, political
subdivision, tribunal or other instrumentality of any government,
whether federal, state or local, domestic or foreign.
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“
Laws ” means all applicable laws (including common
law), statutes, rules, codes, ordinances or any requirement of any
Governmental Authority.
“
Lenders ” has the meaning assigned to that term in
that certain Loan and Security Agreement dated as of July 19, 2006
between TSM Holdings, Ltd., a Texas limited Partnership, Ranger
Credit Company, LLC, Ranger Credit Partners II, Ltd, Design
Extended Service, Ltd, George C. McIngvale, Jr., Debora McIngvale,
the lenders from time to time party thereto, and Seller, as
administrative agent for the benefit of such lenders.
“
Loans ” means the outstanding loan obligations and
debts evidenced by the Contract(s) and described on Schedule
A hereto, and includes (a) the Contracts; (b) all rights to
payment and other rights, title and interests of the Seller in, to
and under the Contracts, specifically including, all accrued
interest; (c) each Collateral Document applicable to the Loans; (d)
all rights, title, interests, powers, liens or security interests
of the Seller in, to or under each Collateral Document; (e) all
Collections received by the Seller on or after the effectiveness of
the Closing pursuant to Section 2(d) hereof (but only to the extent
actually collected in good funds, and excluding any Collections
received by the Consignee for the benefit of Seller prior to the
effectiveness of the Closing but not remitted to the Seller until
after the Closing) ; (f) any right, claim or cause of action, and
any liability or counterclaim associated therewith, arising out of
or in connection with litigation pending, if any; (g) any judgment
or execution based upon the Contracts or any Collateral Document,
to the extent attributable thereto, and any lien arising from any
such judgment or execution; and (h) all other documents held by
Seller contained in the Review File with respect to the Loans.
“ Motor Vehicle Inventory ” means the passenger
cars and light trucks described on Schedule B hereto.
“ New
Custodial Agreement ” means a Custodial Agreement to be
executed by and among Buyer, SWC Services LLC, as administrative
agent for certain lender parties and the New Custodian.
“ New
Custodian ” means CAR Financial Services, Inc., in its
capacity as the “Custodian” under that certain New
Custodial Agreement.
“
Obligor ” means the maker, co-maker of the Contracts
and any guarantor, surety or other primary, secondary or other
party obligated with respect to the Loans or any performance or
payment obligation in connection therewith, and any other party who
has granted collateral for or whose property or any part thereof is
subject to any encumbrance securing the Loans or any performance or
payment obligation in connection therewith
“ OCCC ” means the Texas Office of the Consumer
Credit Commissioner.
“ OCCC
License ” means that certain Motor Vehicle Sales Finance
License (License No. 12391-51449) issued by the OCCC to Seller
under Chapter 348 of the Texas Finance Code.
“
Order ” means any decree, injunction, judgment, order,
ruling or writ of any Governmental Authority.
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“ Purchase Price ” has the meaning assigned to
that term in Section 3.
“ Review
File ” means all instruments and documents, in the files
of the Seller pertaining to the Loans and Motor Vehicle Inventory,
including without limitation, the Contracts and any Collateral
Documents and any loan or inventory summaries prepared by or on
behalf of the Seller, but excluding any documents prepared by or
for the use of Seller regarding the valuation of the Loans or Motor
Vehicle Inventory.
“
Transaction Documents ” means this Agreement and the
Agreement to Operate, together with all other agreements,
instruments or documents entered into or executed in connection
herewith or therewith, in each case, as amended, supplemented or
otherwise modified from time to time.
“ Transferred Assets ” means the Loans and the
Motor Vehicle Inventory.
“ UCC
” means the Uniform Commercial Code as in effect from time to
time in the State of Illinois. Section references herein with
respect to the UCC are to Article 9 of the Uniform Commercial Code
as in effect from time to time in the State of Illinois.
2. PURCHASE AND
SALE.
(a)
Purchase and Sale of the Transferred Assets . Subject to the
terms and conditions of this Agreement, on the Closing Date, Seller
shall sell, transfer and assign to Buyer, and Buyer shall purchase
and acquire from Seller, all of the Transferred Assets. Title to
and ownership of the Transferred Assets shall be vested in the
Buyer on the Closing Date following Seller’s receipt of the
Purchase Price.
(b) Assumption of Liabilities . Except
with respect to obligations and liabilities under the Contracts
acquired from Seller pursuant hereto, which obligations Buyer
hereby expressly assumes, or as otherwise expressly set forth
herein, Buyer does not and will not assume any obligation or
liability of the Seller hereby.
(c) Transfer of Transferred Asset
Documentation . Promptly following the execution and delivery
of the New Custodian Agreement, Seller shall (i) promptly deliver
all Contracts and other components of the Review File in the
possession of Seller (including originals to the extent in
Seller’s possession) to the New Custodian on behalf of the
Buyer, and (ii) direct the Existing Custodian to promptly deliver
all Contracts and other components of the Review File in the
possession of the Existing Custodian (including originals, to the
extent in Existing Custodian’s possession) to the New
Custodian on behalf of the Buyer (the foregoing, collectively, the
“ Closing Documents ”).
(d) Effective Time of Closing
. The Closing shall be effective as of 2:30 p.m. central time on
the Closing Date.
(e) Transfer of OCCC License .
Subject to the terms and conditions of this Agreement, Seller shall
transfer and assign to Buyer, and Buyer shall acquire from Seller,
the OCCC License, provided that such transfer and assignment
shall occur only following the (i) the Closing of the purchase and
sale of the Transferred Assets pursuant hereto and (ii) the receipt
by
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Seller of evidence satisfactory to Seller of the
approval of the OCCC to the transfer of the OCCC License to Buyer
pursuant to the terms hereof. The Seller shall have no liability or
responsibility to Buyer to cause the transfer of the OCCC License
in the event such transfer is not approved by the OCCC. Buyer
covenants and agrees with Seller that Buyer shall, within five (5)
Business Days after the date hereof, submit a properly completed
application to the OCCC for (i) the issuance of a Motor Vehicle
Sales Finance License under Chapter 348 of the Texas Finance Code
and (ii) the transfer of the OCCC License from Seller to Buyer, and
shall provide Seller with a copy of such application as well as
copies of any correspondence with the OCCC with respect to such
application promptly after receipt thereof. Buyer shall use its
best efforts to cause the OCCC to (i) issue a Motor Vehicle Sales
Finance License under Chapter 348 of the Texas Finance Code and/or
(ii) consent to the transfer of the OCCC License from Seller to
Buyer. The obligation of Seller to transfer the OCCC License to
Buyer pursuant hereto shall terminate on June 24, 2008 in the event
such transfer has not been approved by the OCCC on or before such
date.
3. PURCHASE
PRICE. The purchase price for the Transferred Assets (and,
subject to the prior approval of the OCCC, the transfer of the OCCC
License) shall be Sixteen Million and No/100 Dollars ($16,000,000)
(the “ Purchase Price ”), such purchase price to
be paid in cash by Buyer to Seller on the Closing Date.
4.
DELIVERIES.
(a)
Deliveries by Seller . At the Closing, Seller shall deliver,
or cause to be delivered, to Buyer the following:
(i) an executed transfer
statement substantially in the form of Schedule C
hereto;
(ii) the Agreement to
Operate, duly executed by Seller; and
(iii) such other
instruments or documents as Buyer reasonably may request to fully
evidence the transfer of the Transferred Assets and to confer upon
Buyer the benefits contemplated by this Agreement.
(b) Deliveries by Buyer . At
the Closing, Buyer shall deliver, or cause to be delivered, to
Seller the following:
(i) Purchase Price
: The Purchase Price, paid to Seller in good and available funds to
such account as Seller may designate to Buyer at the time of the
Closing.
(ii) Agreement to
Operate . The Agreement to Operate, duly executed by Buyer;
(iii)
Secretary’s Certificates; Resolutions of Buyer : A
certificate from the Secretary of Buyer attesting to following: (x)
the incumbency of the officers of Buyer signing the Transaction
Documents, (y) the Buyer’s organizational documents, and (z)
the resolutions of Buyer’s Board of Directors authorizing the
execution, delivery, and
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performance of this
Agreement and the other Transaction Documents to which Buyer is a
party; and
(iv) Good Standing
Certificate : A Good Standing Certificate (or the local
equivalent) for Buyer from the Secretary of State of the State of
Florida.
5. TERMS OF
SALE.
(a)
THE SOLE REPRESENTATIONS AND WARRANTIES MADE BY SELLER TO BUYER ARE
SET FORTH IN SECTION 6 OF THIS AGREEMENT.
(b) IN ADDITION TO THE LIMITATION ON
REPRESENTATIONS AND WARRANTIES IN THE PRECEDING SECTION 5(a), THE
TRANSFERRED ASSETS AND OCCC LICENSE ARE BEING SOLD TO BUYER
HEREUNDER “AS-IS, WHERE-IS”, WITHOUT RECOURSE TO
SELLER, AND NONE OF SELLER, ANY LENDER, OR ANY OFFICERS,
AFFILIATES, DIRECTORS, MANAGERS, EMPLO
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