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Exhibit 10.24
ASSET PURCHASE
AGREEMENT
THIS ASSET PURCHASE
AGREEMENT (this “ Agreement ”) is made as of
June 19, 2007, by and among LEAF FUNDING, INC. , a
Delaware corporation, LEAF FINANCIAL CORPORATION , a
Delaware corporation, and LEAF COMMERCIAL FINANCE CO., LLC ,
a Delaware limited liability company (collectively, the “
Buyer ,” and whose obligations hereunder shall be
joint and several); and PACIFIC CAPITAL BANK, N.A. , a
national banking association (“ Seller ”).
Capitalized terms used, but not defined, in this Agreement shall
have the meaning ascribed thereto in Appendix A attached
hereto.
WHEREAS , Seller,
among other business activities, is engaged in the
Business;
WHEREAS , Seller
desires to sell to Buyer, and Buyer desires to purchase from
Seller, certain of the assets of Seller relating to the Business,
on the terms set forth herein; and
WHEREAS , Buyer has
agreed to assume certain specific liabilities related to such
assets.
NOW, THEREFORE , in
consideration of the premises and the mutual covenants and
agreements herein contained, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. Purchase and Sale .
Upon the terms and subject to the conditions set forth in this
Agreement, on the Closing Date, Seller shall irrevocably sell,
assign, transfer and deliver to Buyer, and Buyer shall purchase,
all of Seller’s right, title and interest in and to all of
the following (collectively, the “ Assets
”):
(a) all lease agreements or
other contracts for use, conditional sale, loan or financing
entered into or acquired by Seller as part of the Business, as a
lessor, lender or financier, that, are set forth on Schedule
1(a) (which schedule shall be provided in the form of a
read-only computer disc containing a file identifying all such
leases, and a separate file identifying the Performing Leases)
(each a “ Lease ” and collectively, the “
Leases ”);
(b) all right, title and
interest that Seller has in the Subject Equipment, collateral,
Related Property or Residual Value with respect to each Lease
(subject, however, to the possessory rights of lessee therein) and
any other collateral that secures the obligation of a lessee under
each Lease;
(c) all Contract Files
pertaining to each Lease;
(d) the rights of Seller with
respect to all lease transactions that have been approved, but for
which no lease has been finally executed as of the Record Date, as
set forth on Schedule 1(d) (which shall be in the form of a
read-only computer disc, and need not be updated as of the Closing
Date) (the “ Backlog ”);
(e) all of Seller’s
rights under any existing Customer agreement relating to any Leases
or the Backlog;
(f) all of Seller’s
intangible rights and property associated exclusively with the
Business (but excluding anything that is also used in any part of
the Seller’s business, other than the Business), including
but not limited to, all trademarks, patents, copyrights, other
intellectual property used exclusively in the Business, going
concern value, goodwill, telephone numbers, facsimile numbers,
processes, business and product names (if any), trade secrets (if
any), industrial models, designs, methodologies, technical
information, and know-how relating to the origination and servicing
of the Leases, but excluding (i) trade names, logos, slogans,
(ii) licenses to software that are not by their terms
transferable and (iii) telephone numbers, facsimile numbers
and post office boxes other than those listed on Schedule
1(f) ;
(g) all rights of Seller in
guaranties, collateral accounts, security deposits and other
collateral posted by any person in connection with the
Leases;
(h) those items of equipment,
furniture, computer hardware and software, leasehold improvements,
fixtures and other tangible personal property listed on Schedule
1(h) ;
(i) all books, records and
other documents and information related to the Business or the
Assets, including all Customer, prospect, third party originator
and distributor lists, sales literature, price lists, quotes and
bids, promotional programs, product catalogs and brochures,
inventory records, product data, purchase orders and invoices,
sales orders and sales order log books, commission records,
Customer information, correspondence (but excluding any such items
that relate to the business of Seller other than the Business, and
excluding any internal analyses by Seller with respect to its
decision to sell the Business) and all personnel records and other
records of Seller related to its employees set forth on Schedule
1(i) to the extent their transfer is permitted by
law;
(j) all insurance benefits
related to the Leases and the Subject Equipment, including rights
and proceeds, arising from or relating to the Assets or Assumed
Liabilities prior to the Closing Date, unless expended in
accordance with this Agreement; and
(k) all claims of Seller
against third parties relating to the Business or the Assets,
whether choate or inchoate, known or unknown, contingent or
noncontingent, including equipment warranties and those claims set
forth on Schedule 1(k) , but excluding any claims for
reimbursement of taxes advanced or tax refunds that relate to
periods before the Closing and claims relating to Excluded Assets
and Retained Liabilities.
Any other assets not set forth in this Section 1
shall remain the property of Seller (the “ Excluded
Assets ”).
2. Assumed Liabilities
. Upon the terms and subject to the conditions set forth herein,
Buyer hereby assumes and agrees to pay, perform, discharge or
otherwise satisfy in accordance with their respective terms, all of
the Assumed Liabilities. Buyer shall not assume the Retained
Liabilities.
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3. Purchase Price .
The purchase price of the Assets shall be an amount equal to the
sum of (i) 104.7643% of the Net Investment in the Performing
Leases, as of the Record Date, which will be reflected on the
Closing Date Report, (ii) 104.7643% of the Net Investment in
any Leases that are originated between the Record Date and the
Closing Date and (iii) accrued interest on the amounts in
(i) and (ii), calculated at the weighted average effective
yield of the Performing Leases from the Record Date to the date of
payment, and (iv) $2,000,000 (the “ Purchase
Price ”).
4. Closing . The
Closing will take place at the offices of Seller’s counsel at
11355 West Olympic Boulevard, Los Angeles, California, commencing
at 10:00 a.m. (local time) on the later of (a) June 22,
2007 or (b) the date that is five (5) Business Days
following the termination of the applicable waiting period under
the HSR Act, unless Buyer and Seller otherwise agree (the “
Closing Date ”).
5. Closing Obligations
.
(a) Deliveries by
Seller . In addition to any other documents to be delivered
under other provisions of this Agreement, at the Closing (unless
otherwise specified below, and except to the extent waived by
Buyer), Seller shall deliver to Buyer:
(i) the Closing Date Report,
to be delivered at least three business days prior to the Closing
Date;
(ii) a Bill of Sale
executed by a duly authorized officer of Seller;
(iii) an Interim
Servicing Agreement executed by a duly authorized officer of
Seller;
(iv) a bailment
agreement (the “Bailment Agreement”) with respect to
the Contract Files, in form acceptable to both parties, executed by
a duly authorized officer of Seller;
(v) a legal opinion of
Seller’s counsel in form and substance reasonably acceptable
to Buyer, in the form attached hereto as Exhibit A
;
(vi) a good standing
certificate for Seller, issued by the United States Office of the
Comptroller of the Currency, dated not more than thirty
(30) days prior to the Closing Date;
(vii) a certificate of
the Secretary of Seller certifying, as complete and accurate as of
the Closing Date, attached copies of its Governing Documents and
certifying and attaching all requisite resolutions or actions of
Seller approving the execution and delivery of the Transaction
Documents and the consummation of the Contemplated Transactions and
certifying to the incumbency and signatures of the officers of
Seller executing each of the Transaction Documents;
(viii) a certificate
executed by Seller as to the accuracy of its representations and
warranties as of the date of this Agreement and as of the Closing
Date in
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accordance with Section 6 and as
to its compliance with and performance of its covenants and
obligations to be performed or complied with on or before the
Closing Date in accordance with Section 8; and
(ix) such other deeds,
bills of sale, assignments, certificates of title, other
instruments of transfer and conveyance and other documents or
certificates as may reasonably be requested by Buyer, each in form
and substance satisfactory to Buyer and its legal counsel and
executed by a duly authorized officer of Seller.
(b) Deliveries by
Buyer . At the Closing, Buyer shall deliver to Seller (except
to the extent waived by Seller):
(i) an amount in cash
equal to (A) the portion of the Purchase Price described in
clauses (i) and (iv) of Section 3(a) and the
interest thereon pursuant to clause (iii) of
Section 3(a), plus (B) all property taxes on the Leases
or Subject Equipment that have been advanced by Seller and not yet
collected from the lessees as of the Record Date, less
(C) security deposits, and less (D) any booked but
undisbursed lease fundings, and less (E) property taxes on the
Leases or Subject Equipment that have been received from lessees
(or former lessees) as of the Record Date, and not yet remitted, as
reflected in a closing schedule, in the form of Schedule
5(b) , and less (F) $62,500, in payment of Seller’s
share of the Hart-Scott-Rodino Act filing fee, as agreed by the
parties, which amount shall be payable by wire transfer to the
account that is identified by Seller to Buyer at least two
(2) Business Days prior to the Closing Date;
(ii) a certificate of
the Secretary of each Buyer certifying, as complete and accurate as
of the date hereof, attached copies of the Certificate of
Incorporation and Bylaws of such Buyer and certifying and attaching
all requisite resolutions or actions of such Buyer’s boards
of directors approving the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereunder and
certifying to the incumbency and signatures of the officers of such
Buyer executing this Agreement and any other document required to
be delivered by such Buyer hereunder;
(iii) a duly executed
copy of the Interim Servicing Agreement;
(iv) the Bailment
Agreement, executed by a duly authorized officer of
Buyer;
(v) a good standing
certificate for each Buyer, issued by the state in which each Buyer
is incorporated, dated not more than thirty (30) days prior to
the Closing Date; and
(vi) such other
documents and instruments as may reasonably be requested by Seller,
each in form and substance satisfactory to Seller and its legal
counsel and executed by a duly authorized officer of
Buyer.
(c) Post-Closing
Payments . In addition, if and to the extent that any Leases
are originated between the Record Date and the Closing Date, then
no later than fifteen (15) days after the Closing Date, Buyer
shall pay to Seller an amount in cash equal to the portion of the
Purchase Price described in clause (ii) of Section 3(a)
and the interest thereon pursuant to clause (iii) of
Section 3(a).
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6. Representations and
Warranties of Seller . Seller makes the representations and
warranties to Buyer set forth in this Section 6. Except
as set forth in the next sentence, these representations and
warranties are true and correct as of the date hereof and shall be
true and correct as of the Closing Date. Notwithstanding the
foregoing, representations and warranties with respect to the
Leases are true and correct as of the date hereof and shall be true
and correct as of (i) the Record Date and (ii) except for
such changes as shall be set forth in amended Schedules to this
Agreement (which will be delivered to the Buyer not later than
three (3) Business Days following the Closing Date) and which
will not in the aggregate materially adversely affect the Assets as
a whole or the financial condition, results of operation or
business of the Business, as of the Closing Date.
(a) Organization .
Seller is a national banking association duly organized, validly
existing and in good standing under the laws of the United States,
with full corporate power and authority to conduct its business as
it is now being conducted, to own or use the properties and assets
that it purports to own or use, and to perform all its obligations
under the Leases. Seller is not required to be qualified to do
business as a foreign corporation under the laws of any state or
other jurisdiction in order to conduct its business.
(b) Authority . Seller
has taken all action necessary to approve the Transaction Documents
and the transactions contemplated thereby. Seller has all requisite
corporate power and authority and has taken all action necessary in
order to execute, deliver and perform its obligations under the
Transaction Documents. This Agreement has been duly authorized,
executed and delivered and, prior to the Closing, the other
Transaction Documents will have been, duly authorized and at
Closing will be duly executed and delivered by Seller and, assuming
due execution and delivery by Buyer, constitute or (with respect to
the Transaction Documents other than this Agreement) will at
Closing constitute, the legal, valid and binding obligations of
Seller, enforceable in accordance their terms, subject to
applicable bankruptcy, reorganization, insolvency, moratorium or
other similar laws affecting creditors’ rights
generally.
(c) No Conflict .
Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the transactions contemplated
in the Transaction Documents will, directly or indirectly (with or
without notice or lapse of time):
(i) breach (A) any
provision of any of the Governing Documents of Seller or
(B) any resolution adopted by the board of directors or the
shareholders of Seller;
(ii) give any
Governmental Authority or other Person the right to prevent any of
the Contemplated Transactions or to exercise any remedy or obtain
any relief under any Legal Requirement or any order of any
Governmental Authority to which Seller, or any of the Assets, may
be subject;
(iii) contravene,
conflict with or result in a violation or breach of any of the
terms or requirements of, or give any Governmental Authority the
right to revoke, withdraw, suspend, cancel, terminate or modify,
any Governmental Authorization that is held by Seller or that
otherwise relates to the Assets or to the Business, it being
understood that no representation is being made as to the licensing
requirements that may apply to Buyer as owner and operator of the
Business after the Closing;
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(iv) breach any provision of,
or give any Person the right to declare a default or exercise any
remedy under, or to accelerate the maturity or performance of, or
payment under, or to cancel, terminate or modify, any Lease or any
of the Backlog; or
(v) result in the
imposition or creation of any Lien upon or with respect to any of
the Assets, other than such equitable Lien as may run in favor of
Buyer as a result of this Agreement.
(d) Title . Seller
owns good and transferable title to all of the Assets free and
clear of any Liens other than those described on Schedule
6(d) . Seller warrants to Buyer that, at the time of Closing,
all Assets shall be free and clear of all Liens, other than, in the
case of Subject Equipment, the Lien of the Leases themselves, and
also subject to those other Liens described on Schedule 6(d)
.
(e) Financial
Information . The Closing Date Report will be in accordance
with Seller’s records and will accurately present the net
book value of the Leases as of the Record Date. In preparing the
Closing Date Report, Seller will not change its accounting
practices or methodologies from those used in the preparation of
any previous reports provided to Buyer. Since May 1, 2007,
there has been no material adverse change to the Assets or the
Business as a whole, or the financial conditions or operations of
the Business, except (a) as of the date hereof, as set forth
on Schedule 6(e) , and (b) as of the Closing Date, as
set forth on an updated Schedule 6(e) delivered at the
Closing.
(f) Taxes . Other than
as set forth on Schedule 6(f) , Seller has filed all United
States federal income tax returns and all other tax returns
(including, but not limited to, profits, premium, estimated,
excise, sales, use, occupancy, gross receipts, franchise, ad
valorem, severance, capital levy, production, transfer,
withholding, employment, and property taxes) which are required as
of the date hereof to be filed by them, or otherwise obtained
appropriate extensions to file, and has paid all Taxes due pursuant
to such returns or pursuant to any assessment received by Seller,
except such Taxes that are (i) being contested in good faith
by appropriate proceedings and (ii) are set forth on
Schedule 6(f) attached hereto. Seller will file all
such tax returns when due, and pay all Taxes due pursuant to such
returns, for all periods that include the date hereof. No Tax lien
has been filed and, to the knowledge of Seller, no claim is being
asserted with respect to any such Tax, fee or other
charge.
(g) Approvals . Other
than as set forth on Schedule 6(g) , no authorizations,
approvals or consents of, and no filings or registrations with, any
Governmental Authority or any other Person are necessary for the
execution, delivery or performance by Seller of the Transaction
Documents or for the validity or enforceability hereof or
thereof.
(h) Leases
.
(i) No Performing Lease
as of the date hereof is, nor as of the Record Date will be a Past
Due Lease, a Suspended Lease, or a Lease that is subject to any
pending repossession action or as to which Seller has received a
notice of an event that is, or with notice
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and/or lapse of time is likely to
constitute, a material default or of any claim by a lessee or
guarantor of a right of offset or counterclaim (as referenced in
Section 6(h)(x) and identified on Schedule 6(h)(x)
).
(ii) Each Lease (other
than a Charged-Off Lease) is evidenced by a written agreement, and
there are no material understandings, agreements, undertakings or
arrangements between any of Seller and the lessees or transferees
under any Lease which are not set forth therein or in a written
agreement included in the Contract File relating to such Lease. The
entries made on Seller’s system and on the Closing Date
Report with respect to each Lease (other than a Charged-Off Lease)
are consistent with the Contract Files relating thereto. Each such
Lease and any Contract Files pertaining thereto shall be supplied
by Seller to Buyer as promptly as possible but in any event at the
Closing Date.
(iii) No payments
required to be made under any Lease have been paid in advance of
the due dates thereof except for payments reflected in the amount
of the related Lease receivable as shown in the Records.
(iv) Seller has not
acted, or failed to act, in a manner which would materially alter
or reduce any of its rights or benefits under any
manufacturers’ or vendors’ warranties or guarantees
relating to property covered by any Performing Lease.
(v) Seller has properly
prepared and filed Financing Statements for each Lease (other than
a Charged-Off Lease) that was over $25,000 at the time of
origination, and each such Financing Statement is
current.
(vi) Each Lease (and
any related guarantees) is and will continue to be after the date
hereof a valid, binding and enforceable, non-cancelable obligation
of the lessee thereunder (and guarantors thereof, if any) in
accordance with its terms, except as the same may be affected by
bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting the rights of creditors generally. Each of
such lessees and any guarantor is a bona fide party thereto and, to
the knowledge of Seller, had the requisite legal capacity to enter
into the respective agreements to which it is a party as of the
time it entered into those agreements.
(vii) The property that
is the subject of each Performing Lease has been delivered to the
lessee thereunder, and accepted by such lessee.
(viii) Seller has
absolute, complete and indefeasible title to the property subject
to each Performing Lease (or a duly perfected first-lien security
interest in the property subject to such Performing Lease) and all
sums due thereunder, free and clear of any and all Liens or claims
of any Person (other than the lessee under the Performing Lease
itself). The supplier or vendor of said property has received
payment in full for said property.
(ix) Seller is not in
material breach of any obligation under any of the Performing
Leases.
(x) Other than as set
forth on Schedule 6(h)(x) , Seller has received no notice of
any event which is, or with notice and/or lapse of time is likely
to constitute, a material default under any Performing Lease or of
any claim by a lessee or guarantor of a right of offset or
counterclaim.
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(xi) None of the Performing
Leases is a Past Due Lease or has a lessee who is or has been
subject to an Insolvency Event. No Performing Lease that would
otherwise be a Past Due Lease has been restructured, and no
agreements to defer, or change the schedule of, any payments due
under any Performing Lease have been made within such time
period.
(xii) Each Performing
Lease has a corresponding Contract File, and each Contract File
includes proof of payment (either by copies of canceled checks or
confirmations of wire transfers or by such other evidence, all as
shall be satisfactory to Buyer in its sole discretion) for the
Subject Equipment underlying each Performing Lease.
(xiii) The descriptions
of each Performing Lease set forth on Schedule 1(a) are, and
on the Closing Date Report will be, properly coded with respect to
each of the following items of data: (a) the number of
payments remaining, (b) the periodic payment amount,
(c) the security deposit amount, (d) the end of lease
disposition, (e) the Residual Value or the Final Contractual
Payment.
(xiv) Except as set
forth on Schedule 6(h)(xiv) , the final payment on each
Performing Lease is a contractual obligation and not an optional
payment.
(xv) All payment
obligations by any lessee pursuant to each Performing Lease are due
to the Seller, and no payments are due to any third party
originator. No Performing Lease requires any current or future
payment to a third party originator.
It is understood that Buyer’s
acquisition of the Charged-Off Leases is on an as-is, where-is
basis. It is further understood that the sole remedy for any breach
of the representations and warranties with respect to any Lease
other than a Performing Lease shall be monetary damages, and that
the aggregate amount of all such damages shall be limited to a
maximum of $200,000 for all such breaches.
(i) Compliance .
Seller operates the Business in compliance with all applicable
federal and state statutes and all governmental regulations. There
are no existing violations, orders, claims, citations, penalty
assessments, orders, investigations or proceedings affecting the
Assets or the Business.
(j) Litigation .
Except as set forth on Schedule 6(j) , there is no action,
suit or proceeding pending or, to the knowledge of any Seller,
threatened against or affecting the Business or all or any portion
of the Assets, in any court or before or by any Governmental
Authority. To the knowledge of Seller, no event has occurred or
circumstance exists that is reasonably likely to give rise to or
serve as a basis for the commencement of any action, suit or
proceeding affecting the Business. Seller is not in default with
respect to any order of any court, Governmental Authority or agency
or arbitration board or tribunal pertaining to the
Business.
(k) Assignability of
Relationships . Except as set forth on Schedule 6(k) ,
all of Seller’s written Customer relationships with respect
to the Performing Leases are assignable to Buyer without notice to
or consent of any Person. Seller shall use its Best Efforts to, as
promptly
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as practicable but in no event later
than the Closing Date, obtain consents and give notices, to the
extent that any are required, in order to assign all such Customer
relationships to Buyer at the Closing.
(l) Brokers . Except
for The Alta Group, LLC, whose fee will be paid by Seller out of
the proceeds of the Contemplated Transactions, no Person is
entitled to any finder’s fee, brokerage commission or similar
payment by Seller in connection with or arising out of the
Contemplated Transactions.
(m) No Misstatements or
Omissions . These representations and warranties, the
information disclosed in the schedules and exhibits hereto and the
certificates and other documents delivered by Seller pursuant to
this Agreement, when considered together and in light of one
another, do not contain any untrue statement of material fact with
respect to the Assets or the Assumed Liabilities or omit to state a
material fact necessary to make the statements contained herein not
misleading. There is no fact of which Seller is aware with respect
to the Assets or the Assumed Liabilities or the Business that
Seller has not disclosed in writing to Buyer, the existence of
which would have a material adverse effect on the Assets,
considered as a whole.
(n) Bulk Sales
Compliance . The sale of the Assets by Seller to Buyer pursuant
to this Agreement will not violate any bulk transfer or any similar
statutory provisions in effect in any applicable
jurisdiction.
7.
Representations and Warranties of Buyer . Buyer
represents and warrants to Seller as follows:
(a) Organization .
Each Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Each Buyer
has full corporate power and authority to execute and deliver the
Transaction Documents and to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby
and thereby.
(b) Authority . Buyer
has taken all action necessary to approve the Transaction Documents
and the transactions contemplated thereby. Buyer has all requisite
corporate power and authority and has taken all action necessary in
order to execute, deliver and perform its obligations under the
Transaction Documents. This Agreement has been duly authorized,
executed and delivered and, prior to the Closing, the other
Transaction Documents will have been, duly authorized and at
Closing will be duly executed and delivered by Buyer and, assuming
due execution and delivery by Seller, constitute or (with respect
to the Transaction Documents other than this Agreement) will at
Closing constitute, the legal, valid and binding obligations of
Buyer, enforceable in accordance their terms, subject to applicable
bankruptcy, reorganization, insolvency, moratorium or other similar
laws affecting creditors’ rights generally.
(c) No Breach . Except
as set forth on Schedule 7(c) , neither the execution and
delivery of the Transaction Documents, nor compliance with the
terms and provisions thereof, will conflict with or result in a
breach of, or require any consent which has not been obtained as of
the date hereof under the charter or by-laws of either Buyer, or
any governmental
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requirement, or any agreement or
instrument to
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