ASSET PURCHASE AGREEMENT

Exhibit 10(a)

ASSET PURCHASE AGREEMENT

Agreement entered into on June 6, 2005, by and between ALFA FINANCIAL CORPORATION, an Alabama corporation (the “ Seller ”), and OFC SERVICING CORPORATION, a Georgia corporation (the “ Buyer ”). The Buyer and the Seller are referred to collectively as the “ Parties .”

The Seller has conducted an equipment leasing business under the name OFC Capital, a division of Alfa Financial Corporation , since on or about April 1, 2000.

This Agreement contemplates a transaction in which (a) the Buyer will purchase a substantial part of the assets (and assume certain of the liabilities) of the Seller related to such equipment leasing business (the “ OFC Business ”), and (b) the parties will enter into certain other agreements related to the OFC Business .

Now, therefore, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the Parties agree as follows.

1. Definitions. In addition to other terms defined elsewhere in this Agreement, the following terms shall have the following meanings.

“ Accounting Arbitrator ” has the meaning set forth in Section 2(c)(3)(C) below.

“ Acquired Assets ” means all right, title, and interest in and to the following assets of the Seller: (a) the Finance Leases and all Finance Lease Equipment associated therewith, (b) the Perfect Pay Agreements , (c) the Acquired Receivables , (d) the usufruct in the Office Lease and all improvements, fixtures, and fittings thereon, (e) the FF&E , (f) the Seller Intellectual Property , goodwill associated therewith, licenses and sublicenses granted and obtained with respect thereto, and rights thereunder, remedies against infringements thereof, and rights to protection of interests therein under the laws of all jurisdictions, (g) the Pre-Funded Leases and the Pending Leases , (h) the Prepaid Expenses and Other Receivables , (i) Seller’s claims, deposits, prepayments, refunds, causes of action, choses in action, rights of recovery, rights of set off, and rights of recoupment (not including any such item relating to the payment of Taxes ) to the extent that each such item relates to a Finance Lease, a Perfect Pay Agreement or a Pre-Funded Lease (the “ Seller Intangible Rights ”), and (j) Seller’s books, records, ledgers, files, documents, correspondence, lists, creative materials, advertising and promotional materials, studies, reports, and other printed or written materials relating exclusively to the other Acquired

 

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Assets identified in items (a) through (i) above, provided that Seller may retain copies of all such materials. For the avoidance of doubt, the term “ Acquired Assets ” does not include repossessed assets acquired by the Seller in connection with the OFC Business , Excluded Leases , Previously Transferred Leases , or any other Retained Assets .

“ Acquired Receivables ” means the Seller’s accounts receivable under the Finance Leases and under the Perfect Pay Agreements .

“ Adverse Consequences ” means all actions, suits, proceedings, hearings, investigations, charges, complaints, claims, demands, injunctions, judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid in settlement, Liabilities , obligations, Taxes , liens, losses, expenses, and fees, including court costs and reasonable attorneys’ fees and expenses.

“ Affiliate ” means, with respect to any Person , any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person . For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (i) vote 10% or more of the capital stock having ordinary voting power for the election of directors of such Person or (ii) direct or cause the direction of the management and policies of such person whether by contract or otherwise. Notwithstanding anything herein to the contrary, the Seller’s ownership of equity of the Buyer’s parent corporation, MidCountry Financial Corp., shall be disregarded for purposes of determining the Affiliates of each of the Buyer and the Seller.

“ Assumed Liabilities ” means all obligations and Liabilities of the Seller of whatever nature under and with respect to the Finance Leases, the Perfect Pay Agreements , the Acquired Receivables , the Pre-Funded Leases , the Pending Leases , the Office Lease , the Seller Intellectual Property, the Prepaid Expenses , the Other Receivables , the FF&E and the Seller Intangible Rights ; provided, however , that the Assumed Liabilities shall not include (1) any Liability of the Seller for Taxes for any period ending on or before the Closing Date, other than with respect to sales Taxes as set forth in Section 2(h), (2) any Liability of the Seller for the unpaid Taxes of any Person (other than the Seller) under Reg. §1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise, (3) any obligation of the Seller to indemnify any Person by reason of the fact that such Person was a director, officer, employee, or agent of the Seller or was serving at the request of any the Seller as a partner, trustee, director, officer, employee, or agent of another entity (whether such indemnification is for judgments, damages, penalties, fines, costs, amounts paid in settlement, losses, expenses, or otherwise and whether such indemnification is pursuant to any statute, charter document, bylaw, agreement, or otherwise), (4) any Liability of the Seller for costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby, except as expressly set forth in the Seller Financing Documents, (5) any Liability or obligation of the Seller under this Agreement, including the repurchase and indemnification obligations pursuant to Section 5, or (6) any other Liability of the Seller not expressly covered in this

 

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definition of Assumed Liabilities . For the avoidance of doubt, the Assumed Liabilities include any and all recourse and repurchase obligations of the Seller under the UNL Leases and the Perfect Pay Agreements , and the Seller’s Liabilities associated with security deposits under the Finance Leases , Perfect Pay Agreements and UNL Leases .

“ Business Day ” means any day other than a Saturday, a Sunday or a day on which commercial banks in the State of Georgia are authorized or required to close.

“ Buyer Affiliate Regulatory Approvals ” means (1) the approval of the Office of Thrift Supervision for changes to the business plan of Buyer’s parent corporation, MidCountry Financial Corp., necessitated by the transactions contemplated hereby, and (2) the approval (either by affirmative approval or non-objection) of the Office of Thrift Supervision and the Federal Deposit Insurance Corporation for the notice of Buyer’s Affiliate, OFC Capital Corporation, that it intends to engage in the equipment leasing business.

“ Buyer Credits ” means an amount equal to the sum of (1) the unapplied advanced lease payments held by the Seller with respect to the Pending Leases as shown on Schedule 1.5 as of the Closing Date, plus (2) the outstanding sales taxes due from the lessees and borrowers under the Finance Leases and Perfect Pay Agreements as of the Closing Date, plus (3) all funds held by the Seller as of the Closing Date as collateral under the Perfect Pay Agreements , typically referred to as “reserves” in the Perfect Pay Agreements , as shown on the Reserve Listing , plus (4) all funds held by the Seller as of the Closing Date as collateral for the Seller’s recourse obligations under the UNL Leases , as shown on the Reserve Listing , plus (5) the total future funding obligations under Finance Leases as reflected on Schedule 1.7 .

“ Closing ” has the meaning set forth in Section 2(f) below.

“ Closing Date ” has the meaning set forth in Section 2(f) below.

“ Closing Date Payment ” has the meaning set forth in Section 2(c)(2) below.

“ Conclusive Statement ” has the meaning set forth in Section 2(c)(3)(C) below.

“ Confidential Information ” means any information concerning the Acquired Assets and Assumed Liabilities that is not already generally available to the public.

“ Confidentiality Agreement ” means the Confidentiality Agreement between MidCountry Financial Corp. and the Seller dated November 15, 2004.

“ Contract Trial Balance ” means a listing of the entire portfolio of Finance Leases and Perfect Pay Agreements from the Classic Financial Systems, Inc. Computerized Lease Accounting Solution Software, showing for each Finance Lease and Perfect Pay Agreement

 

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the gross current contract receivable, gross noncurrent contract receivable, unearned income, unguaranteed residual balance, unearned income for the unguaranteed residual, security deposit and suspense balance. As an example, a Contract Trial Balance listing all Finance Leases and Perfect Pay Agreements , as well as all Excluded Leases, as of February 28, 2005 is attached hereto as Schedule 1.1 . The Contract Trial Balance that will be prepared as of the Closing Date in accordance with Section 2(c)(3) will include all of the Finance Leases and Perfect Pay Agreements , but will not include any Excluded Leases .

“ Defaulted Receivable ” means an Acquired Receivable related to either a Past Due Lease or a VenCore Receivable as to which the applicable lessee or borrower: (a) has failed to make scheduled monthly payments for a period of ninety (90) days or more or (b) has become insolvent, admitted or shown an inability to pay its debts as they mature, made an assignment for the benefit of creditors, or instituted or has had instituted against it any proceeding under the federal bankruptcy code or applicable receivership laws if such proceeding is not withdrawn or dismissed within sixty (60) days.

“ Disclosure Schedule ” has the meaning set forth in Section 3 below.

“ Excluded Leases ” means (a) all of the Seller’s leases, installment sales contracts, loans, notes and/or security agreements and rental contracts whose payments owed to the Seller are now or have been during the term of the applicable lease or note 90 days or more past due, (b) all of the Seller’s leases, installment sales contracts, loans, notes and/or security agreements and rental contracts where the applicable lessee or borrower has filed for bankruptcy protection, (c) the NorVergence Leases , (d) each of Seller’s leases, installment sales contracts, loans, notes and/or security agreements and rental contracts that is the subject of a lawsuit to which the Seller is a party, (e) the Previously Transferred Leases , and (f) the Hudson Machinery Leases .

“ FF&E ” means all furniture, fixtures and equipment that is both owned by the Seller and used exclusively in the operation of the OFC Business at its offices at 576 Colonial Park, Roswell, Georgia 30075. Schedule 1.2 hereto lists all FF&E as of February 28, 2005.

“ Finance Lease Equipment ” means all equipment and other property now or hereafter covered by a Finance Lease .

“ Finance Leases ” means all of the Seller’s leases, installment sales contracts, loans, notes and/or security agreements and rental contracts (whether originated by the Seller or acquired by the Seller after origination), including all schedules, riders, addenda or supplements thereto, other than the Perfect Pay Agreements, Pre-Funded Leases and Pending Leases and specifically excluding the Excluded Leases ; provided, however, that all of Seller’s UNL Leases with Enterprise and Fisher-Anderson will be Finance Leases , regardless of whether they would have otherwise been Excluded Leases pursuant to the definition of that term set forth in this Agreement. For transactions involving master lease agreements and schedules, the Finance Lease includes both the master lease agreement and the relevant schedules.

 

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“ Force Majeure ” means acts of nature or acts of third parties that can be neither anticipated nor controlled that prevent a Party from discharging its obligations under this agreement.

“ Hudson Machinery Leases ” means all of the leases assumed by Seller under which Hudson Machinery Corp. (predecessor to USM Corporation) is the original lessor.

“ Inactive Master Agreements ” means all of the Seller’s master leases, installment sales contracts, loans, notes and/or security agreements and rental contracts that are still in effect but under which there are not currently outstanding leases, loans or amounts owed to the Seller.

“ Intellectual Property ” means (a) all trademarks, service marks, trade dress, logos, trade names, and corporate names, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith, (b) all copyrightable works, all copyrights, and all applications, registrations, and renewals in connection therewith, (c) all mask works and all applications, registrations, and renewals in connection therewith, and (d) all other similar proprietary rights.

“ Knowledge ” of Seller means the actual knowledge of Robert E. Leas, Claudine Aquillon, Lorraine Kirby, Alfred E. Schellhorn, Gordon T. Carter, Mike Rowell, Ralph Forsythe and Bill Harper.

“ Liability ” means any debt, obligation or other liability (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any liability for Taxes.

“ Loss ” means an amount equal to the outstanding Net Book Value of any Defaulted Receivable, minus any Recoveries received with respect to such Defaulted Receivable , plus the Buyer’s out-of-pocket expenses incurred in attempting to collect such Defaulted Receivable pursuant to Section 5(b)(3).

“ Net Book Value ” means (a) with respect to each Acquired Receivable , as shown on a Contract Trial Balance as of the applicable date, the outstanding aggregate gross current and noncurrent contract receivables, , less the unearned income, plus the unguaranteed residual, less the unearned income on the guaranteed residual, and less the suspense balance, or (b) with respect to the FF&E, $119,000 minus $6,700 per month beginning with March 2005 through and including the month in which Closing occurs, and plus or minus the value net of depreciation of any FF&E that is purchased or sold by the Seller between the date hereof and Closing.

 

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“ NorVergence Leases ” means all of the leases assumed by Seller under which NorVergence, Inc. is the original lessor.

“ OFC ” means OFC Capital, a division of Alfa Financial Corporation.

“ Office Lease ” means that certain Agreement of Lease dated January 25, 1999 by and between Heide Lot, L.L.C. and OFC Capital Corporation, as amended by First Amendment to Lease Agreement dated June 1, 1999, Second Amendment to Lease Agreement dated December 10, 2001, and Second Amendment to Lease Agreement dated May 18, 2005.

“ Offline Residuals ” means those items of equipment or other collateral in which the Seller retains an interest despite having sold its interest in the associated lease, installment sales contract or rental contract to a third party.

“ Ordinary Course of Business ” means the ordinary course of business consistent with past custom and practice (including with respect to quantity and frequency).

“ Other Receivables ” means the Seller’s receivables listed on Schedule 1.3 .

“ Past Due Leases ” means collectively each Finance Lease and Perfect Pay Agreement under which a payment owed to Seller is 30 days or more past due as of the Closing Date or has ever been 30 days or more past due at any time prior to the Closing Date, but under which no such payment has ever been 90 days or more past due at any time prior to the Closing Date; provided, however, that the Perfect Pay Agreements between the Seller and AXIS Capital, Inc. are not Past Due Leases , even though they may have in the past been erroneously flagged as 30 or more days past due in the Seller’s system. Schedule 1.4 hereto lists all Past Due Leases as of February 28, 2005.

“ Pending Lease ” means any lease agreement that has been entered into by the Seller and a lessee that has not yet been finally accepted by the Seller and is, therefore, not on a Contract Trial Balance . Schedule 1.5 hereto lists all Pending Leases as of February 28, 2005.

“ Perfect Pay Agreements ” means all of the Seller’s loans, notes, sales contracts, leases, rental contracts and security agreements with the Perfect Pay Counterparties . For transactions involving master agreements and schedules, the Perfect Pay Agreement includes both the master agreement and the relevant schedules.

“ Perfect Pay Counterparty ” means each of the Persons listed on Schedule 1.6 .

“ Person ” means an individual, a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, a governmental entity or any department, agency, or political subdivision thereof, or any other entity.

 

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“ Pre-Funded Lease ” means any lease transaction in which, as of the Closing Date, the Seller has advanced partial funding of the full lease amount, with an obligation to fund the remainder after the Closing Date, and the lessee has entered into a lease therefor. Schedule 1.7 hereto lists all Pre-Funded Leases as of February 28, 2005.

“ Prepaid Expenses ” means those expenses of Seller identified on Schedule 1.8 .

“ Previously Transferred Leases ” means all leases, installment sales contracts, loans, notes and/or security agreements and rental contracts that the Seller has transferred to another Person before Closing but for which the Seller has retained the servicing obligations.

“ Purchase Price ” has the meaning set forth in Section 2(c)(1) below.

“ Recoveries ” means all amounts received by Servicer with respect to Defaulted Receivables , whether through repossession and sale of the related Finance Lease Equipment or otherwise.

“ Repurchase Price ” means 100% of the Net Book Value of the Defaulted Receivable as of the repurchase date, less any related security deposit amount, the related Liability for which the Seller will assume.

“ Reserve Listing ” means a list of all funds held by the Seller as collateral under the Perfect Pay Agreements , typically referred to as “reserves” in the Perfect Pay Agreements , and all funds held by the Seller as collateral for the Seller’s recourse obligations under the UNL Leases . Schedule 1.9 is a Reserve Listing as of February 28, 2005, which the parties agree is an estimate; the actual Reserve Listing prepared in accordance with Section 2(c)(3) will be actual amounts as of the Closing Date.

“ Resolution Period ” has the meaning set forth in Section 2(c)(3)(B) below.

“ Revised Settlement Statement ” has the meaning set forth in Section 2(c)(3)(A) below.

“ Retained Assets ” means all assets of the Seller that are not Acquired Assets , including the Excluded Leases , the repossessed assets acquired by the Seller in connection with the OFC Business , the Offline Residuals , and Seller’s reserves associated with the Excluded Leases and the Finance Leases other than the UNL Leases .

“ Retained Liability ” means any Liability of the Seller that is not an Assumed Liability .

“ Security Interest ” means any mortgage, pledge, lien, encumbrance, charge, or other security interest, other than (a) mechanic’s, materialmen’s, and similar liens, (b) liens for Taxes not yet due and payable or for Taxes that the taxpayer is contesting in good faith through

 

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appropriate proceedings, (c) purchase money liens and liens securing rental payments under capital lease arrangements, and (d) other liens arising in the Ordinary Course of Business and not incurred in connection with the borrowing of money.

“ Seller Financing Documents ” means collectively the Loan and Security Agreement to be entered into at the Closing between the Buyer and the Seller, the Term Note to be executed and delivered at Closing by the Buyer, the Guaranty to be executed and delivered at Closing by the Buyer’s parent corporation, MidCountry Financial Corp., and the Pledge Agreement to be entered into at the Closing between the Seller and MidCountry Financial Corp., each substantially in the form of Exhibit A attached hereto, and all documents, certificates and instruments referenced therein.

“ Seller Intellectual Property ” means all of the Intellectual Property owned or licensed by the Seller and used exclusively in connection with the OFC Business as listed in Schedule 1.10 .

“ Servicer ” means the Buyer in its capacity as servicer or subservicer under the Servicing Agreements .

“ Servicing Agreement ” means the Servicing Agreement between the Seller and the Buyer to be entered into at the Closing , in substantially the form of Exhibit B attached hereto.

“ Settlement Statement ” has the meaning set forth in Section 2(c)(2) below.

“ Subservicing Agreement ” means the Subservicing Agreement between the Seller and the Buyer to be entered into at the Closing, in substantially the form of Exhibit C attached hereto.

“ Tax ” means any federal, state, local, or foreign income, gross receipts, license, payroll, leasing, personal property, sales, use, transfer, registration or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not.

“ Tax Return ” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“ Term Note ” has the meaning set forth in Section 2(c)(2) below.

“ Transferred Employees ” means all of the Seller’s full-time, part-time and temporary employees (employed by Seller’s Affiliate , Alfa Mutual Insurance Company) who work exclusively in the OFC Business and are listed on Schedule 1.11 .

“ UNL Leases ” means those Finance Leases that are under ultimate net loss agreements. Schedule 1.12 lists all UNL Leases as of February 28, 2005.

 

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“ Updated Schedules ” has the meaning set forth in Section 2(c)(3)(A) below.

“ Vehicle Leases ” means those Finance Leases for which the collateral includes a titled motor vehicle. Schedule 1.13 lists all Vehicle Leases as of February 28, 2005.

“ VenCore Receivables ” means the receivables due under the Master Loan and Security Agreement between VenCore Solutions LLC and Seller, dated as of May 14, 2004, which is one of the Perfect Pay Agreements . Schedule 1.14 lists all VenCore Receivables as of February 28, 2005.

2. Basic Transaction.

(a) Purchase and Sale of Assets . On and subject to the terms and conditions of this Agreement, the Buyer agrees to purchase from the Seller, and the Seller agrees to sell, transfer, convey, and deliver to the Buyer, all of the Acquired Assets at the Closing for the consideration specified below in this Section 2. The Seller will not sell to the Buyer, and the Buyer will not acquire, however, any other asset of the Seller not included within the definition of Acquired Assets .

(b) Assumption of Liabilities . On and subject to the terms and conditions of this Agreement, the Buyer agrees to assume and become responsible for all of the Assumed Liabilities at the Closing. The Buyer will not assume or have any responsibility, however, with respect to any other obligation or Liability of the Seller not included within the definition of Assumed Liabilities .

(c) Purchase Price .

(1) Determination of Purchase Price . In addition to assuming the Assumed Liabilities , the Buyer agrees to pay to the Seller an amount (the “ Purchase Price ”) equal to the sum of (A) 100% of the aggregate Net Book Value of all Acquired Receivables as of close of business on the Closing Date, plus (B) $1,000,000, plus (C) the Net Book Value of the FF&E as of the Closing Date, plus (D) the amount of the Prepaid Expenses and the Other Receivables as of close of business on the Closing Date, plus (E) the aggregate amount paid by the Seller under the Pre-Funded Leases prior to Closing, less (F) the Buyer Credits as of close of business on the Closing Date. The Purchase Price , plus the interest described in Section 2(e), is payable as set forth below.

(2) Closing Date Payment . At the Closing, the Buyer shall pay to the Seller $77,550,238.71 (the “ Closing Date Payment ”), which is the Purchase Price computed as of February 28, 2005 as set forth on the settlement statement attached hereto as Schedule 2 (the

 

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“ Settlement Statement ”). Such Closing Date Payment shall be paid by (i) the Buyer delivering to the Seller a promissory note (the “ Term Note ”) in accordance with the Seller Financing Documents in the principal amount of $75,755,929.52, and (ii) the Buyer paying to the Seller the amount of $1,794,309.19 in cash.

(3) Post-Closing Adjustment . The Closing Date Payment shall be adjusted in accordance with the following procedure:

(A) Not later than 20 days after the Closing Date, the Buyer will prepare and deliver to the Seller updated schedules as follows, in each case as of the close of business on the Closing Date (collectively, the “ Updated Schedules ”):

 

The Updated Schedules will be accompanied by a revised Settlement Statement , computing the Purchase Price as of close of business on the Closing Date (the “ Revised Settlement Statement ”).

(B) After receipt of the Updated Schedules and Revised Settlement Statement , the Seller will have 15 days to review the Updated Schedules and Revised Settlement Statement . During such 15 day period, Buyer will, and will cause its representatives to, make available to Seller and its representatives on a timely basis all books, records and appropriate personnel to provide Seller and its representatives with such information regarding the Updated Schedules and Revised Settlement Statement as Seller and its representatives may reasonably request. Unless Seller delivers written notice to Buyer setting forth the specific items disputed by Seller on or prior to the 15 ^th day after its receipt of the Updated Schedules and Revised Settlement Statement , Seller will be deemed to have accepted and agreed to the Updated Schedules and Revised Settlement Statement and such agreement will be final and binding. If Seller so notifies Buyer of its objections to the Updated Schedules and Revised Settlement Statement , Buyer and Seller will, within 30 days following such notice (the “ Resolution Period ”), attempt to resolve their differences.

 

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(C) If Buyer and Seller do not resolve all disputed items set forth in the Updated Schedules and Revised Settlement Statement by the end of the Resolution Period , then Buyer and Seller shall mutually select a public accounting firm that is independent of each of Seller and Buyer (the “ Accounting Arbitrator ”) as expeditiously as practicable, and all items remaining in dispute will be submitted to the Accounting Arbitrator by the parties, in writing, within 30 days after the selection of the Accounting Arbitrator . The failure by either Seller or Buyer to submit a statement regarding any items remaining in dispute within such 30 day period shall be deemed a waiver by such party of its right to do so. The Accounting Arbitrator shall act as an arbitrator to determine only those items in dispute. All fees and expenses relating to the work, if any, to be performed by the Accounting Arbitrator will be allocated between Buyer and Seller in the same proportion that the aggregate amount of the disputed items so submitted to the Accounting Arbitrator that is unsuccessfully disputed by each such party (as finally determined by the Accounting Arbitrator ) bears to the total amount of such disputed items so submitted. The Accounting Arbitrator will deliver to Buyer and Seller a written determination (such determination to include a work sheet setting forth all material calculations used in arriving at such determination) of the disputed items within 30 days of receipt of the disputed items, which determination will be final, binding and conclusive. The final, binding and conclusive Updated Schedules and Revised Settlement Statement , which either are agreed upon by Seller and Buyer or are delivered by the Accounting Arbitrator in accordance with this Section 2(c)(3), will be the “ Conclusive Statement .”

(D) If the Purchase Price as of close of business on the Closing Date as indicated on the Conclusive Statement exceeds the Closing Date Payment , then within three Business Days after the parties obtain the Conclusive Statement , the Buyer shall pay such excess to the Seller by (i) executing and delivering to the Seller an additional Term Note with a principal amount equal to ninety-five percent (95%) of the amount by which the Net Book Value of the Acquired Receivables on the Conclusive Statement exceeds such Net Book Value on the Settlement Statement , and (ii) paying the remainder of such excess to the Seller in cash. At the same time, the Buyer shall also pay to the Seller the interest required by Section 2(e).

(E) If the Closing Date Payment exceeds the Purchase Price as of close of business on the Closing Date as indicated on the Conclusive Statement , then within three Business Days after the parties obtain the Conclusive Statement , the Seller shall pay such excess to the Buyer by (i) accepting from the Buyer an additional Term Note with a principal amount equal to ninety-five percent (95%) of the amount by which the Net Book Value of the Acquired Receivables on the Settlement Statement exceeds such Net Book Value on the Conclusive Statement , and (ii) paying the remainder of such excess to the Buyer in cash. At the same time, the Seller shall also pay to the Buyer the interest required by Section 2(e).

(F) Any excess amount paid by the Buyer or the Seller in accordance with Section 2(c)(3)(D) or 2(C)(3)(E) shall be treated as an adjustment to the Purchase Price for all Tax purposes by the Seller and the Buyer.

 

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(d) Seller Financing . In accordance with the provisions of Section 2.3(c), the Seller shall finance a portion of the Purchase Price equal to 95% of the Net Book Value of the Acquired Receivables , on the terms set forth in the Seller Financing Documents .

(e) Interest Due; Cash Payments . The full amount of any excess paid by either the Buyer pursuant to Section 2(c)(3)(D) or the Seller pursuant to Section 2(c)(3)(E) shall bear interest at the annual rate of 3.75% (computed on the basis of a 360-day year) for the number of days from and including the Closing Date, through and including the date of payment. Each payment of cash required under this Agreement shall be paid in U.S. dollars by means of a wire transfer of immediately available funds.

(f) The Closing . The closing of the transactions contemplated by this Agreement (the “ Closing ”) shall take place at the offices of Womble Carlyle Sandridge & Rice PLLC in Atlanta, Georgia, on the last Business Day of the first month in which all conditions set forth in Section 7 (other than conditions with respect to actions the respective Parties will take at the Closing itself) have been satisfied or waived, or such other date as may be determined by mutual agreement of the Parties (the “ Closing Date ”).

(g) Deliveries at the Closing . At the Closing,

(1) the Seller will deliver to the Buyer the various certificates, instruments, and documents referred to in Section 7(a) below;

(2) the Buyer will deliver to the Seller the various certificates, instruments, and documents referred to in Section 7(b) below;

(3) the Seller will execute, acknowledge (if appropriate), and deliver to the Buyer:

(A) an Assignment and Assumption Agreement for the Finance Leases and associated Finance Lease Equipment , the Perfect Pay Agreements , and the Pre-Funded Leases , the Pending Leases , the Prepaid Expenses , the Other Receivables and the Seller Intangible Rights , substantially in the form of Exhibit D hereto (the “ Assignment and Assumption Agreement ”), together with the sole executed original chattel paper for each Finance Lease , Perfect Pay Agreement, Pre-Funded Lease and Pending Lease .

(B) an Assignment of Office Lease, Consent to Assignment of Office Lease, Landlord Estoppel and Tenant Estoppel substantially in the forms of Exhibits E-1 through E-4 hereto (the “ Office Lease Assignment ”),

(C) a Bill of Sale of the FF&E substantially in the form of Exhibit F hereto (the “ Bill of Sale ”),

 

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(D) a Deed of Trademark Assignment, substantially in the form of Exhibit G hereto,

(E) an Assignment of License Agreement, a Consent to Assignment of License Agreement, End-User Estoppel and Vendor Estoppel for the Classic Lease Accounting Solutions Software substantially in the form of Exhibits H-1 though H—4 hereto (the “ Software License Assignment ”),

(F) the Servicing Agreement ,

(G) the Subservicing Agreement ,

(H) the Seller Financing Documents , and

(I) such other instruments necessary or appropriate to effect the transactions contemplated hereby as the Buyer and its counsel may reasonably request;

(4) the Buyer will execute, acknowledge (if appropriate), and deliver to the Seller:

(A) the Assignment and Assumption Agreement ,

(B) the Office Lease Assignment ,

(CD) the Bill of Sale ,

(D) the Software License Assignment ,

(E) the Servicing Agreement ,

(F) the Subservicing Agreement ,

(G) the Seller Financing Documents ,

(H) the Closing Date Payment , and

(I) such other instruments necessary or appropriate to effect the transactions contemplated hereby as the Seller and its counsel may reasonably request.

(h) Sales Taxes . The Buyer will be responsible for and will remit all sales Tax related to the Finance Leases prior to the Closing Date to the extent that the Seller’s accounts receivable for sales Taxes are part of the Acquired Receivables and to the extent the Buyer receives a Buyer Credit for the amount of all such Taxes at the Closing.

 

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(i) UCC Filings . Seller hereby gives the Buyer a limited power of attorney for a period of 90 days after the Closing Date to prepare, make ready for filing and file a UCC Financing Statement Amendment (a “ UCC-3 ”) in order to show the Buyer as the secured party for each item of Finance Lease Equipment in each jurisdiction in which a UCC Financing Statement (a “ UCC-1 ”) has been filed. The Buyer shall be responsible for all expenses associated with preparing and filing a UCC-3 for each item of Finance Lease Equipment , and the Seller shall pay or reimburse the Buyer for the filing fees.

(j) Insurance Coverage for the Finance Lease Equipment . If the Buyer in good faith establishes that any item of Finance Lease Equipment is not insured by the lessee as required under the associated Finance Lease , the Buyer shall have the right to require the Seller to repurchase the affected Finance Lease for the Repurchase Price for a period of 45 days after the Closing Date.

(k) Allocation . The Parties agree to allocate the Purchase Price (and all other capitalizable costs) among the Acquired Assets for all purposes (including financial accounting and tax purposes) in accordance with a schedule mutually determined by the Parties prior to the Closing.

(l) OFC Capital Corporation . On or before the Closing Date, the Buyer shall have the right to designate its Affiliate , OFC Capital Corporation (“ OFC Capital ”), as the party to which the Pre-Funded Leases , the Office Lease and the FF&E are to be transferred and assigned, in which case OFC Capital shall be the party to execute, acknowledge and deliver to the Seller the Finance Lease Assignment (with respect to the Pre-Funded Leases ), the Office Lease Assignment and the Bill of Sale ; provided, however, that such a designation of OFC Capital shall not relieve the Buyer of any of its obligations to the Seller hereunder.

3. Representations and Warranties of the Seller. The Seller represents and warrants to the Buyer that the statements contained in this Section 3 are correct and complete as of the date of this Agreement and will be true and correct as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this Section 3) (except for any representation or warranty that specifically relates to an earlier date), except as set forth in the disclosure schedule accompanying this Agreement and initialed by the Parties (the “ Disclosure Schedule ”). The Disclosure Schedule will be arranged in paragraphs corresponding to the lettered and numbered paragraphs contained in this Section 3.

(a) Organization of the Seller. The Seller is a corporation duly organized, validly existing, and in good standing under the laws of the State of Alabama.

(b) Authorization of Transaction. The Seller has full power and authority (including full corporate power and authority) to execute and deliver this Agreement and to perform its obligations hereunder. Without limiting the generality of the foregoing, the board of directors of the Seller has duly authorized the execution, delivery, and performance of this Agreement by the

 

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Seller. This Agreement constitutes the valid and legally binding obligation of the Seller, enforceable in accordance with its terms and conditions, except as such enforcement may be affected by bankruptcy and similar laws affecting creditors’ rights generally.

(c) Noncontravention. Subject to those consents listed in Section 3(c) of the Disclosure Schedule , neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby (including the assignments and assumptions referred to in Section 2 above), will (1) violate any law, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which the Seller is subject or any provision of the articles of incorporation or bylaws of the Seller or (2) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any of the Finance Leases or any other agreement, contract, lease, license, instrument, or other arrangement to which the Seller is a party or by which it is bound or to which any of the Acquired Assets is subject (or result in the imposition of any Security Interest upon any of the Acquired Assets ). The Seller is not required to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the Parties to consummate the transactions contemplated by this Agreement (including the assignments and assumptions referred to in Section 2 above).

(d) Brokers’ Fees. The Seller has no Liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which the Buyer could become liable or obligated.

(e) Title to Assets . The Seller has good and marketable title to, a leasehold interest in or a perfected security interest in all of the Acquired Assets . To the extent the Seller owns Acquired Assets , such ownership is free and clear of any Security Interest or restriction on transfer.

(f) Legal Compliance. The Seller has complied in all material respects with all applicable laws (including rules, regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder) of federal, state, local, and foreign governments (and all agencies thereof) with respect to the Acquired Assets , and no action, suit, proceeding, hearing, investigation, charge, complaint, claim, demand, or notice has been filed or commenced, or to the Knowledge of Seller, threatened against Seller alleging any failure so to comply.

(g) Finance Leases .

(1) The Seller has made available to the Buyer copies of all forms of leases currently used by the Seller for leases originated by the Seller.

(2) The Contract Trial Balance attached hereto as Schedule 1.1 includes all the Finance Leases as of February 28, 2005.

 

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(3) Title to each Finance Lease is vested in the Seller and each Finance Lease is free of liens, claims or encumbrances created by, through or under the Seller; and Seller’s assignment of the Finance Leases to the Buyer pursuant to this Agreement and to the Finance Lease Assignment transfers the Finance Leases to Buyer free of liens, claims or encumbrances created by, through or under the Seller;

(4) All Finance Lease Equipment is owned by the Seller free and clear of all liens, claims or encumbrances (except for the rights of the lessee pursuant to the applicable Finance Lease) or Seller has perfected security interests in all such Finance Lease Equipment ; all such rights will be validly assigned and transferred by the Seller to the Buyer pursuant to this Agreement and the Finance Lease Assignment ; the Seller has filed a financing statement with the appropriate governmental entity or entities in each jurisdiction where such filing is required;

(5) The Seller has not executed any other currently effective document, other than this Agreement, assigning or otherwise transferring to any other Person any interest in and to the Finance Leases or any rights thereunder or amounts due thereunder, or in and to any item of the Finance Lease Equipment or any other collateral for the Finance Leases ;

(6) The lease payments due under the Finance Leases represent obligations properly owing to the Seller at