Exhibit 10.1
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AGREEMENT FOR PURCHASE AND SALE
OF MEMBERSHIP INTERESTS
by and among
GLOBALNET ENTERPRISES, LLC,
a Pennsylvania limited liability company,
as
SELLER,
LEARNED ASSOCIATES OF NORTH AMERICA, LLC, a New Jersey limited liability
company, SEVEN HILLS MANAGEMENT, LLC, a Pennsylvania limited liability
company, DIVERSIFIED DEVELOPMENT LLC, a Pennsylvania limited liability
company and
AJAX BARON, LLC, a Pennsylvania limited liability company
as
MEMBERS of SELLER,
and
FIRSTPLUS ENTERPRISES, INC., a Texas corporation and
FIRSTPLUS DEVELOPMENT COMPANY, a Texas corporation,
as
BUYERS
Dated July 30th, 2007
This AGREEMENT FOR PURCHASE AND SALE OF MEMBERSHIP INTERESTS (this
"AGREEMENT"), dated July 30, 2007, is by and among Globalnet Enterprises, LLC, a
Pennsylvania limited liability company ("SELLER"), and its members, to wit:
Learned Associates of North America, LLC, a New Jersey limited liability company
("LEARNED"), Seven Hills Management, LLC, a Pennsylvania limited liability
company ("SEVEN HILLS"), Diversified Development LLC, a Pennsylvania limited
liability company ("DIVERSIFIED") and Ajax Baron, LLC, a Pennsylvania limited
liability company ("AJAX") (Learned, Seven Hills, Diversified and Ajax are each
referred to herein as a "MEMBER" and collectively as the "MEMBERS") on the one
hand and FirstPlus Enterprises, Inc. ("FP ENTERPRISES") and FirstPlus
Development Company ("FP DEVELOPMENT") , each a Texas corporation (collectively,
and jointly and severally, the "BUYERS"), on the other hand.
W I T N E S S E T H:
WHEREAS, Seller owns all of the issued and outstanding membership
interests of each of Globalnet Development Co., LLC, a Pennsylvania limited
liability company ("DEVELOPMENT"), Globalnet Facility Services Co., LLC, a
Pennsylvania limited liability company ("FACILITY") and Globalnet Restoration
Co., LLC, a Pennsylvania limited liability company ("RESTORATION" and
collectively with Development and Facility, the "SUBSIDIARIES");
WHEREAS, FP Enterprises desires to purchase all of the issued and
outstanding membership interests of Facility (the "FACILITY INTERESTS") and all
of the issued and outstanding membership interests of Restoration (the
"RESTORATION INTERESTS") from Seller, and Seller desires to sell the Facility
Interests and the Restoration Interests to FP Enterprises;
WHEREAS, FP Development desires to purchase all of the issued and
outstanding membership interests of Development (the "DEVELOPMENT INTERESTS")
from Seller, and Seller desires to sell the Development Interests to FP
Development;
WHEREAS, Members are the sole members of Seller;
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and undertakings contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
agree as follows:
ARTICLE I
DEFINITIONS AND TERMS
Section 1.1 CERTAIN DEFINITIONS. As used in this Agreement, the following
terms have the meanings set forth below:
"AFFILIATE" means, with respect to any Person, any Person directly
or indirectly controlling, controlled by, or under common control with, such
other Person. For purposes of this definition, the term "control" (including the
correlative meanings of the terms "controlled by" and "under common control
with"), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
policies of such Person, whether through the ownership of voting securities or
by contract or otherwise.
"ANCILLARY AGREEMENTS" means collectively the Note, the Development
Assignment (as defined in SECTION 2.7(A)), the Facility Assignment (as defined
in SECTION 2.7(B)) and the Restoration Assignment (as defined in SECTION
2.7(C)).
"BOOKS AND RECORDS" means all books, ledgers, files, reports, plans,
records, manuals and other materials (in any form or medium) of, or maintained
for, the respective businesses of the Subsidiaries, but excluding any such items
to the extent (i) any Law prohibits their transfer or (ii) any transfer thereof
otherwise would subject Seller or any of its Affiliates to any Liability to
anyone other than Buyers.
"BUSINESS" means business of all or any, as applicable, of the
Subsidiaries.
"BUSINESS DAY" means any day other than Saturday, Sunday or a day on
which banks in Philadelphia, Pennsylvania are authorized or obligated by Law or
executive order to close.
"BUYER SHARES" is as defined in SECTION 2.2.
"CLOSING" means the closing of the sale of the Interests that is the
subject of this Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMON STOCK" means the common stock of FirstPlus, as defined in
SECTION 4.3.
"CONTRACTS" means all personal property leases, agreements and
contracts, of each of the Subsidiaries.
"ENVIRONMENTAL LAWS" shall mean all federal, state and local laws,
ordinances, rules and regulations and other provisions having the force or
effect of law pertaining to pollution or protection of the environment,
including without limitation, all those relating to the presence, use,
production, generation, handling, transportation, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, release, threatened
release, control or cleanup of any Hazardous Material and air, water, ground or
subsurface pollution and to the storage, use, handling, transportation,
discharge, and disposal (including spills and leaks) of gaseous, liquid,
semi-solid or solid materials.
"FINANCIAL STATEMENTS" is as defined in SECTION 3.5.
"FIRSTPLUS" means FirstPlus Financial Group, Inc., a Nevada
corporation, the parent corporation of Buyers.
"GAAP" means United States generally accepted accounting principles
as in effect from time to time, consistently applied.
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"GOVERNMENT ENTITY" means any federal, state, local, foreign or
domestic court, administrative body or other governmental or quasi-governmental
entity with competent jurisdiction.
"HAZARDOUS MATERIAL" shall mean any solid waste disposal, toxic
substance, hazardous substance, hazardous waste, toxic chemical, pollutant or
contaminant.
"INTERESTS" is as defined in SECTION 2.1.
"LAW" means any law, statute, ordinance, rule, regulation, code,
order, judgment, injunction or decree enacted, issued, promulgated, enforced or
entered by a Government Entity.
"LIABILITY" or "LIABILITIES" means any and all debts, liabilities,
commitments and obligations of any kind, whether fixed, contingent or absolute,
matured or unmatured, liquidated or unliquidated, accrued or not accrued,
asserted or not asserted, known or unknown, determined, determinable or
otherwise, whenever or however arising (including, whether arising out of any
contract or tort based on negligence or strict liability) and whether or not the
same would be required by GAAP to be reflected in financial statements or
disclosed in the notes thereto.
"LIEN" shall mean any security interest, lien, claim, pledge,
mortgage, charge, restriction on transfer, right under conditional sales
contract or other encumbrance or charge of any nature whatsoever.
"MATERIAL ADVERSE EFFECT" is as defined in SECTION 3.1.
"MEMBERS' AGENT" is as defined in SECTION 9.12.
"NON-COMPETITION PERIOD" is as defined in SECTION 5.8.
"NOTE" is as defined in SECTION 2.3.
"ORDINARY COURSE" or "ORDINARY COURSE OF BUSINESS" means the conduct
of the Business in accordance with the normal day-to-day customs, practices and
procedures of each of the Seller Companies, as applicable.
"PERMITS" are as defined in SECTION 3.10.
"PERSON" means any individual, corporation, partnership, limited
liability company, limited liability partnership, firm, joint venture,
association, joint-stock company, trust, unincorporated organization, estate,
sole proprietorship, association, Government Entity or other entity.
"REGULATION D" means Regulation D of the United States Securities
and Exchange Commission, as amended, issued under the Securities Act.
"RIGHTS" means warrants, options, rights, convertible securities and
other capital stock equivalents which obligate an entity to issue its
securities.
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"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SELLER COMPANIES" means, collectively, Seller, Development,
Facility and Restoration.
"TAX RETURNS" means all reports, returns or other information filed
or required to be filed with respect to Taxes, including any amendments thereto.
"TAX" or "TAXES" means all federal, state or local and all foreign
taxes, including income, gross receipts, windfall profits, value added,
property, sales, use, duty, license, excise, franchise, employment, withholding
or similar taxes, together with any interest, additions or penalties with
respect thereto and any interest in respect of such additions or penalties.
"TRANSACTION" means the purchase and sale of the Interests pursuant
to this Agreement.
Section 1.2 OTHER DEFINITIONAL PROVISIONS. Unless the express context
otherwise requires: (a) the words "hereof", "herein", and "hereunder" and words
of similar import, when used in this Agreement, shall refer to this Agreement as
a whole and not to any particular provision of this Agreement; (b) the terms
defined in the singular have a comparable meaning when used in the plural, and
vice versa; (c) the terms "Dollars" and "$" mean United States Dollars; (d)
references herein to a specific Section, Subsection or Schedule shall refer,
respectively, to Sections, Subsections or Schedules of this Agreement; (e)
wherever the word "include," "includes," or "including" is used in this
Agreement, it shall be deemed to be followed by the words "without limitation;"
and (f) references herein to any gender includes each other gender.
ARTICLE II
PURCHASE AND SALE OF INTERESTS
Section 2.1 PURCHASE AND SALE OF INTERESTS.
(a) On the terms and subject to the conditions set forth herein, at
the Closing, Seller shall sell, convey, transfer, assign and deliver to FP
Development, free and clear of all Liens, and FP Development shall purchase from
Seller all of Seller's right, title and interest, as of the Closing, in and to
the Development Interests.
(b) On the terms and subject to the conditions set forth herein, at
the Closing, Seller shall sell, convey, transfer, assign and deliver to FP
Enterprises, free and clear of all Liens, and FP Enterprises shall purchase from
Seller all of Seller's right, title and interest, as of the Closing, in and to
the Facility Interests and the Restoration Interests.
The Development Interests, the Facility Interests and the Restoration Interests
are herein collectively referred to as the "INTERESTS".
Section 2.2 PURCHASE PRICE. On the terms and subject to the conditions set
forth herein, in consideration of the sale of the Interests, Buyers shall pay
and deliver to Seller (a) FOUR MILLION FIVE HUNDRED FORTY THOUSAND DOLLARS
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($4,540,000), consisting of (i) THREE MILLION FORTY FIVE THOUSAND DOLLARS
($3,045,000) in cash at the Closing and (ii) ONE MILLION FOUR HUNDRED NINETY
FIVE THOUSAND DOLLARS ($1,495,000) payable subsequent to Closing, the obligation
of payment of which shall be evidenced by a promissory note providing for a
seven percent (7%) per annum interest rate and a maturity date two years from
the date hereof, and payment of the outstanding principal and interest due in a
balloon payment on such maturity date, which note is in the form of EXHIBIT A
(the "NOTE"); and (b) within five Business Days after the Closing, ONE MILLION
ONE HUNDRED THOUSAND (1,100,000) shares of common stock of FirstPlus (the "BUYER
SHARES") issued to the Seller under Regulation D, to be allocated and issued as
set forth on SCHEDULE 2.2(B) hereof (collectively, the "PURCHASE PRICE").
Section 2.3 PURCHASE PRICE ALLOCATION. The Purchase Price shall be
allocated among the Interests as set forth on SCHEDULE 2.3 hereof for all Tax
purposes including, without limitation, Code Section 1060. Seller and Buyers
(and their respective Affiliates) shall file all Tax Returns consistent with the
allocation described in this SECTION 2.3 hereof and use their reasonable
commercial efforts to sustain such allocation in any subsequent tax audit or
dispute. Each party shall file its respective IRS Form 8594 consistent herewith.
Section 2.4 CLOSING. The Closing shall take place at the offices of
FirstPlus at 10:00 a.m. prevailing Central Time, on the later of July 30th, 2007
or the day on which all of the conditions precedent set forth in ARTICLE VI
shall have been satisfied or waived. Such time and date are herein referred to
as the "CLOSING DATE." Subject to the provisions of ARTICLE VIII hereof, failure
to consummate such transactions on the date and the time determined pursuant to
this SECTION 2.4 shall not result in the termination of this Agreement and shall
not relieve any party of any obligation under this Agreement.
Section 2.5 DELIVERIES BY BUYERS.
(a) At the Closing, Buyers shall deliver to Seller the following:
(i) The cash portion of the Purchase Price payable at the
Closing in immediately available funds by wire transfer to an account or
accounts which have been designated by Seller;
(ii) The Note;
(iii)Duly executed counterparts of each of the Ancillary
Agreements, if any, as applicable; and
(iv) Resolutions of the Boards of Directors of Buyers
authorizing the execution and delivery of this Agreement by Buyers and the
performance of their obligations hereunder, certified by the Secretaries of
Buyers;
(b) Within five Business Days after the Closing Date, Buyers shall
deliver to Seller duly issued share certificates representing the Buyer Shares.
Section 2.6 DELIVERIES BY SELLER. At the Closing, Seller shall
deliver, or cause to be delivered, to Buyers the following:
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(a) An Assignment of Limited Liability Company Interest and
Assumption Agreement, duly endorsed, representing the transfer of the
Development Interest from Seller to FP Development in the form and content
attached hereto as EXHIBIT B (the "DEVELOPMENT ASSIGNMENT"), together with
Membership Certificate No. 1 for 100% of the Development Interests;
(b) An Assignment of Limited Liability Company Interest and
Assumption Agreement, duly endorsed, representing the transfer of the Facility
Interest from Seller to FP Enterprises in the form and content attached hereto
as EXHIBIT C (the "FACILITY ASSIGNMENT") together with Membership Certificate
No. 1 for 100% of the Facility Interests;
(c) An Assignment of Limited Liability Company Interest and
Assumption Agreement, duly endorsed, representing the transfer of the
Restoration Interest from Seller to FP Enterprises in the form and content
attached hereto as EXHIBIT D (the "RESTORATION ASSIGNMENT") together with
Membership Certificate No. 1 for 100% of the Restoration Interests;
(d) Duly executed counterparts of each of the other Ancillary
Agreements, as applicable;
(e) Resolutions of the members of Seller adopted at meetings or by
consent authorizing the execution and delivery of this Agreement by Seller and
the performance of its obligations hereunder, certified by the Manager of
Seller;
(f) Certificates of the Secretary of State of the Commonwealth of
Pennsylvania dated as of a recent date as to the good standing of the Seller
Companies;
(g) Resignations, effective immediately, of each incumbent manager
and officer of the Subsidiaries; and
(h) Such other separate bills of sale, assignments or documents of
transfer that Buyer may reasonably deem necessary or appropriate in order to
perfect, confirm or evidence title to all or any part of the Interests.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER AND MEMBERS
Seller and Members jointly and severally represent and warrant to Buyers
as of the date hereof and as of the Closing as follows:
Section 3.1 ORGANIZATION. The Seller Companies are limited liability
companies duly organized, validly existing and in good standing under the laws
of Pennsylvania. Seller has all requisite power and authority to own the
Interests. The Subsidiaries have all requisite power and authority to conduct
each such entity's respective Business as currently conducted. Complete and
correct copies of Certificates of Formation of each of the Seller Companies, and
all amendments thereto, certified by the Secretary of State of the Commonwealth
of Pennsylvania, and of the Limited Liability Company Operating Agreements of
the Seller Companies and all amendments thereto, previously have been delivered
to Buyers. Each of the Seller Companies is duly qualified to do business as a
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foreign limited liability company, and is in good standing in each jurisdiction
where the character of the properties owned, leased or operated by it or the
nature of its activities makes such qualification necessary, except where the
failure to be so duly qualified and in good standing would not reasonably be
expected to have a Material Adverse Effect. For the purposes of this Agreement,
"MATERIAL ADVERSE EFFECT" means any effect or change that would be materially
adverse to the Business or the Interests of any of the Seller Companies on one
hand, or Buyers on the other hand, or on the ability of Seller or Buyers to
consummate timely the transactions contemplated hereby.
Section 3.2 AUTHORIZATION. Each of Seller and Members has full power and
authority to execute and deliver this Agreement and each of the Ancillary
Agreements to which it is a party, and to perform its obligations hereunder and
thereunder. The execution, delivery and performance by Seller and Members of
this Agreement and such Ancillary Agreements has been duly and validly
authorized and no additional limited liability company authorization or consent
is required in connection with the execution, delivery and performance by Seller
or Members of this Agreement or such Ancillary Agreements. There are no
contractual, statutory or other restrictions of any kind upon the power and
authority of Seller to execute and deliver this Agreement or to consummate the
transactions contemplated hereunder and no action, waiver or consent by any
Government Entity is necessary to make this Agreement valid and binding upon
Seller in accordance with its respective terms. Assuming the due execution and
delivery of this Agreement by Buyers, this Agreement is a legal, valid and
binding obligation of Seller and Members, enforceable against them in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization and
moratorium laws and other laws of general application affecting the enforcement
of creditors' rights generally, and the fact that equitable remedies or relief
(including, but not limited to, the remedy of specific performance) are subject
to the discretion of the court from which such relief may be sought.
Section 3.3 NO BREACH OF STATUTE OR CONTRACT. Neither the execution and
delivery of this Agreement by Seller or Members, nor the consummation by Seller
or Members of the transactions contemplated hereby, nor compliance by Seller or
Members with any of the provisions hereof will violate or cause a default under
any statute (domestic or foreign), judgment, order, writ, decree, rule or
regulation of any Government Entity applicable to any of the Seller Companies or
Members or any of their respective properties; breach or conflict with any of
the terms, provisions or conditions of the Certificate of Formation or Limited
Liability Company Operating Agreement of any of the Seller Companies; or
violate, conflict with or breach any agreement, contract, mortgage, instrument,
indenture or license to which any of the Seller Companies or Members is a party
or by which Seller or Members is or may be bound with respect to the Interests
or the Business, or constitute a default (in and of itself or with the giving of
notice, passage of time or both) thereunder, or result in the creation or
imposition of any Lien upon, or give to any other party or parties any claim,
interest or right, including rights of termination or cancellation in, or with
respect to, the Interests.
Section 3.4 SUBSIDIARIES. Other than the Subsidiaries, Seller has no
subsidiaries or equity investments in any other corporation, association,
partnership, joint venture or other entity that carries on the Business.
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Section 3.5 FINANCIAL STATEMENTS. The following unaudited consolidated
financial statements of the Seller Companies (collectively, the "FINANCIAL
STATEMENTS"), which have been furnished previously to Buyers by Seller, have
been prepared from and are in accordance with the books and records of the
Seller Companies in conformity with GAAP applied on a consistent basis
throughout the periods involved, and fairly present the financial condition of
the Seller Companies as at the dates stated and the results of operations of the
Seller Companies for the periods then ended: consolidated balance sheets of the
Seller Companies at December 31, 2005 and the income statements for the year
then ended, including footnotes (audited); and consolidated balance sheets of
the Seller Companies at May 31, 2007 and monthly income statements for each of
the five months in the period then ended.
Section 3.6 ABSENCE OF CERTAIN CHANGES AND EVENTS. Except as set forth on
SCHEDULE 3.6, since December 31, 2006 there has not been with respect to any
Business or any Subsidiary:
(i) Any material adverse change in its operations (as now conducted
or as presently proposed to be conducted), assets, properties or rights,
prospects or condition (financial or otherwise);
(ii) Any material transaction entered into or carried out other than
in the ordinary and usual course of its business including, without limitation,
any transaction resulting in the incurrence of liabilities or obligations;
(iii) Any material change made in the methods of doing business or
in the accounting principles or practices or the method of application of such
principles or practices;
(iv) Any Lien imposed or agreed to be imposed on or with respect to
the Interests or the assets of any of the Subsidiaries that will not be
discharged prior to the Closing;
(v) Any modification, waiver, change, amendment, release, rescission
or termination of, or accord and satisfaction with respect to any term,
condition or provision of any Contract, other than any satisfaction by
performance in accordance with the terms thereof in the ordinary and usual
course of its business; or
(vi) Any damage, destruction or similar loss, whether or not covered
by insurance, adversely affecting the Business.
Section 3.7 LIABILITIES. Except as set forth on SCHEDULE 3.7, none of the
Seller Companies has any Liability or obligation of any nature (whether
liquidated, unliquidated, accrued, absolute, contingent or otherwise and whether
due or to become due) in respect of the Business except:
(i) those set forth or reflected in the Financial Statements that
have not been paid or discharged since the date thereof;
(ii) those arising under agreements or other commitments listed on
any Schedule hereto; and
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(iii) current Liabilities arising in the Ordinary Course of Business
subsequent to May 31, 2007 that are accurately reflected in the Books and
Records in a manner consistent with past practice.
Section 3.8 TAXES. Except as set forth on SCHEDULE 3.8:
(i) Each of the Seller Companies has duly filed all federal, state,
local and foreign tax returns and tax reports required to be filed by it. All
such returns and reports are true, correct and complete in all material
respects, none of such returns and reports has been amended, and all taxes,
assessments, fees and other governmental charges due with respect to the periods
covered by such returns and reports have been fully paid;
(ii) SCHEDULE 3.8 sets forth the dates and results of any and all
audits of federal, state, local and foreign tax returns of any of the Seller
Companies performed by federal, state, local or foreign taxing authorities. No
waivers of any applicable statutes of limitations are outstanding. All
deficiencies proposed as a result of any audits have been paid or settled. There
is no pending or to Seller's knowledge threatened federal, state, local or
foreign tax audit of any of the Seller Companies and no agreement with any
federal, state, local or foreign tax authority that may affect the subsequent
tax liabilities of any of the Seller Companies; and
(iii) None of the Seller Companies has any liabilities for taxes
other than those that are not yet due and payable, and no federal, state, local
or foreign tax authority is now asserting or threatening to assert any
deficiency or assessment for additional taxes with respect to any of the Seller
Companies.
Section 3.9 LITIGATION. Except as set forth on SCHEDULE 3.9, there are no
claims, actions, suits or proceedings pending or, to the knowledge of Seller or
Members, threatened against or affecting the Seller Companies, or any of them,
or any Member, officer or director of Seller in connection with the Business or
the Interests, before any federal, state, local or foreign court or Government
Entity. None of the Seller Companies or Members is subject to or in default with
respect to any judgment, order, writ, injunction or decree that is binding upon
the Seller Companies, or any of them, or Members with respect to the Business.
Section 3.10 COMPLIANCE WITH LAWS. Except as listed on SCHEDULE 3.10, each
of the Seller Companies and Members in compliance in all material respects with
all laws, ordinances, regulations and orders applicable to the Business and the
Interests and has no notice or knowledge of any violations, whether actual,
claimed or alleged, thereof. Each of the Seller Companies has such licenses and
permits issued by the relevant Government Entity as are necessary for the
conduct of its Business (the "PERMITS"). Each of the Permits is currently valid
and in full force and effect and the Permits constitute all franchises,
licenses, permits, consents, authorizations, approvals, and certificates of any
Government Entity necessary to the conduct of the Business. None of the Seller
Companies or Members is in violation of any of the Permits. There is no pending
or, to the knowledge of Seller or Members, threatened proceeding that could
result in the revocation or cancellation of, or inability of any of the Seller
Companies to renew, any Permit.
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Section 3.11 EMPLOYEE BENEFIT PLANS. None of the Seller Companies has any
pension, retirement, profit-sharing, deferred compensation, bonus, stock option
or other incentive plan, or other employee benefit program, arrangement,
agreement or understanding, or medical, vision, dental or other health plan, or
life insurance or disability plan, or any other employee benefit plan as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), (whether or not any such employee benefit plans are otherwise
exempt from the provisions of ERISA, whether or not legally binding), adopted,
established, maintained or contributed to by any of the Seller Companies or
under which it would otherwise be a party or have liability and under which
employees or former employees (whether or not retired employees) of any of the
Seller Companies (or their beneficiaries) are eligible to participate or derive
a benefit.
Section 3.12 TITLE TO ASSETS. (a) Each of the Seller Companies has good
and marketable title to all assets owned by it and valid leasehold interests in
all assets leased by it in the operation of its Business, free and clear of all
Liens, except as listed on SCHEDULE 3.12 hereto, and excluding (i) liens for
taxes, fees, levies, imposts, duties or governmental charges of any kind that
are not yet delinquent or are being contested in good faith by appropriate
proceedings that suspend the collection thereof; or (ii) liens for mechanics,
materialmen, laborers, employees, suppliers or others that are not yet
delinquent or are being contested in good faith by appropriate proceedings. None
of the Seller Companies is in violation of any covenant, condition, restriction,
easement, agreement, order or regulation of any Government Entity having
jurisdiction over the Seller Companies or their assets or the use thereof.
Except as listed on SCHEDULE 3.12, no financing statement under the
Uniform Commercial Code or similar law naming Seller as debtor has been filed in
any jurisdiction in respect of the Interests, and Seller is not a party to or
bound under any agreement or legal obligation authorizing any party to file any
such financing statement.
Section 3.13 CONTRACTS AND COMMITMENTS. Each of the Contracts is valid and
binding, in full force and effect and enforceable in accordance with its
respective provisions. Except as set forth on SCHEDULE 3.13, none of the Seller
Companies has assigned, mortgaged, pledged, encumbered, or otherwise
hypothecated any of its right, title or interest under the Contracts and no
Contract has been amended, supplemented or superseded. Except as set forth on
SCHEDULE 3.13, none of the Seller Companies or, to the knowledge of the Seller
or Members, any other party thereto is in material violation of, in default in
respect of, nor, to knowledge of the Seller or Members, has there occurred an
event or condition which, with the passage of time or giving of notice (or
both), would constitute a material violation or a default of any Contract. No
notice has been received by any of the Seller Companies claiming any such
default by any of the Seller Companies or indicating the desire or intention of
any other party thereto to amend, modify, rescind or terminate any Contract.
Section 3.14 BOOKS OF ACCOUNT; RECORDS. The general ledgers, books of
account and other records of the Seller Companies in respect of the Business are
complete and correct in all material respects, have been maintained in
accordance with sound business practices and the matters contained therein are
appropriately and accurately reflected in the Financial Statements.
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Section 3.15 CAPITALIZATION. The Subsidiaries are authorized to issue the
classes and numbers of Interests set forth on SCHEDULE 3.15, of which the number
of Interests set forth on Schedule 3.15 are issued and are owned by Seller, free
and clear of all Liens. No other Person owns any Interests. Seller has full
right, power, legal capacity and authority to transfer and deliver the Interests
pursuant to this Agreement and Seller is not a party to or bound by any
agreements, arrangements or understandings restricting in any manner the sale or
transfer of the Interests. There is not outstanding, and none of Seller or the
Subsidiaries is bound by or subject to, any subscription, option, warrant, call,
right, contract, commitment, agreement, understanding or arrangement to issue
any additional membership interests in the Subsidiaries, including any right of
conversion or exchange under any outstanding security or other instrument, and
no such membership interests are reserved for issuance for any purpose.
Section 3.16 REQUIRED FILINGS AND CONSENTS. Except as set forth on
Schedule 3.16 hereto, none of the Seller or the Subsidiaries is required to
submit any notice, report or other filing to or with any Government Entity in
connection with the execution, delivery or performance of the Agreement. The
execution, delivery and performance of this Agreement by Seller and the
consummation of the transactions contemplated hereby will not result in the loss
of any license, franchise, legal privilege or permit possessed by the
Subsidiaries or give a right of termination to any party to any agreement or
other instrument to which the Subsidiaries, or any of them, are parties or by
which any of their respective properties are bound.
Section 3.17 LABOR MATTERS. None of the Subsidiaries' employees is
represented by any labor union, association or other organization. No Subsidiary
has received any notice from any labor union, association or other organization
that it represents or intends to represent such Subsidiary's employees. The
Subsidiaries have complied in all material respects with all applicable laws
affecting employment and employment practices, terms and conditions of
employment and wages and hours. The Subsidiaries have not received any notice of
and there is no complaint alleging unfair labor practices against the
Subsidiaries pending, or to the knowledge of Seller or Members, threatened
before the National Labor Relations Board or any other charges or complaints
pending, or to the knowledge of Seller or Members, threatened before the Equal
Employment Opportunity Commission, any state or local Human Rights Commission or
any other state or local agency in respect of labor or employment matters. No
labor strike, material dispute, slowdown or stoppage has occurred with respect
to the Subsidiaries' employees and there is no labor strike, material dispute,
slowdown or stoppage pending or threatened with respect to the Subsidiaries'
employees. There are no pending grievances or arbitration proceedings against
the Subsidiaries.
Section 3.18 ENVIRONMENTAL MATTERS. (a) No Subsidiary is the subject of,
or, to the knowledge of the Seller or Members, being threatened to be the
subject of (i) any enforcement proceeding, or (ii) any investigation, brought in
either case under any Environmental Laws, at any time in effect or (iii) any
third party claim relating to environmental conditions on or off the premises or
properties of the Subsidiaries or any of their respective customers. No
Subsidiary has been notified that it must obtain any Permits or file documents
for the operation of its business under any Environmental Laws. No Subsidiary
has been notified of any conditions on or off the premises or properties of the
Subsidiaries or any of their respective customers that will give rise to any
liabilities, known or unknown, under any Environmental Laws, or as the result of
any claim of any third party. For the purposes of this Section 3.18, an
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investigation shall include, but is not limited to, any written notice received
by Seller, Members, or any Subsidiary that relates to the onsite or offsite
disposal, release, discharge or spill of any Hazardous Material.
(b) Except as set forth on SCHEDULE 3.18, there is no Hazardous Material
that any Subsidiary (or, to the knowledge of Seller or Members, any previous
occupant of any Subsidiary's facilities) has used, stored or otherwise held in
or on any of the facilities of any Subsidiary, which, are present at or have
migrated from such facilities, whether contained in ambient air, surface water,
groundwater, land surface or subsurface strata, that violate any Environmental
Laws. Such facilities have been maintained by each Subsidiary in compliance with
all Environmental Laws and occupational, health and safety or similar laws,
ordinances, restrictions, licenses, and regulations. No Subsidiary has disposed
of or arranged (by contract, agreement or otherwise) for the disposal of any
material or substance that was generated or used by it at any off-site location
that has been or is listed or proposed for inclusion on any list promulgated by
any Government Entity for the purpose of identifying sites that pose a danger to
health and safety. Except as disclosed on Schedule 3.18 hereto, (i) there have
been no environmental studies, reports and analyses made or prepared in the last
five years relating to the facilities of any Subsidiary; and (ii) none of such
facilities contains any underground storage tanks, incinerators, or waste
treatment, storage or disposal units, landfills, disposal areas or surface
impoundments.
Section 3.19 ILLEGAL PAYMENTS. No Subsidiary has directly or indirectly,
paid or delivered any fee, commission or other sum of money or item of property,
however characterized, to any finder, agent, government official or other party,
in the United States of America or any other country, that is in any manner
related to the business or operations of the Subsidiaries, which any of Seller,
Members or such Subsidiary knows or has reason to believe to have been illegal
under any federal, state or local laws or the laws of any other country having
jurisdiction.
Section 3.20 FINDERS' FEES. There is no investment banker, broker, finder
or other intermediary that has been retained by or is authorized to act on
behalf of Seller or Members who might be entitled to any fee or commission from
Seller, Members or Buyers in connection with the transactions contemplated
hereby.
Section 3.21 INVESTMENT STATUS. Seller represents that it will receive the
Buyer Shares for its own account, for investment only and not with a view to, or
any present intention of, effecting a distribution of such securities or any
part thereof, except pursuant to a registration statement or an available
exemption under applicable Law. Seller acknowledges that the Buyer Shares have
not been registered under the Securities Act or the securities laws of any state
or other jurisdiction and cannot be disposed of unless they are subsequently
registered under the Securities Act and any applicable state Laws or unless an
exemption from such registrations is available.
Section 3.22 DISCLAIMER; NO OTHER REPRESENTATIONS OR WARRANTIES. EXCEPT AS
MAY OTHERWISE BE EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER MAKES NO
REPRESENTATIONS OR WARRANTIES OF ANY KIND CONCERNING THE BUSINESS OR THE
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INTERESTS, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
Section 3.23 CLOSING DATE EFFECT. All of the representations and
warranties of Seller and Members are true and correct as of the date hereof and
shall be true and correct on and as of the Closing Date with the same force and
effect as if such representations and warranties were made by Seller and Members
to Buyers on the Closing Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYERS
The Buyers jointly and severally represent and warrant to Seller and
Members as of the date hereof and as of the Closing as follows:
Section 4.1 ORGANIZATION. Each Buyer is a corporation duly organized,
validly existing and in good standing under the laws of Texas. FirstPlus is a
corporation duly organized, validly existing and in good standing under the laws
of Nevada.
Section 4.2 AUTHORIZATION. Each Buyer Company has full corporate power and
authority to execute and deliver this Agreement and each of the Ancillary
Agreements and to perform its obligations hereunder and thereunder. Neither
Buyer has conducted or will conduct any business prior to the Closing Date. The
execution, delivery and performance by Buyers of this Agreement and each of the
Ancillary Agreements to which it is a party has been duly and validly authorized
and no additional corporate or shareholder authorization or consent is required
in connection with the execution, delivery and performance by Buyers of this
Agreement or any of such Ancillary Agreements. Assuming the due execution and
delivery of this Agreement by Seller, this Agreement is a legal, valid and
binding obligation of Buyers, jointly and severally, enforceable against Buyers
in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization and moratorium laws and other laws of general application
affecting the enforcement of creditors' rights generally, and the fact that
equitable remedies or relief (including, but not limited to, the remedy of
specific performance) are subject to the discretion of the court from which such
relief may be sought.
Section 4.3 CAPITALIZATION. The authorized capital stock of FirstPlus
consists of (i) 100,000,000 shares of common stock, par value $.01 per share
("COMMON STOCK"), of which at the date hereof, and prior to the issuance of the
Buyer Shares, 48,245,090 shares are validly issued and outstanding, fully paid
and non-assessable, and free of preemptive rights, and none are held as treasury
shares; (ii) 25,000,000 shares of non-voting common stock, par value $.01 per
share, of which at the date hereof no shares are issued and outstanding, and
none are held as treasury shares; and (iii) 2,600,000 shares of preferred stock,
par value $1.00 per share, of which at the date hereof no shares are issued and
outstanding and none are held as treasury shares. Once issued, the Buyer Shares
shall be Common Stock, subject only to the restrictions of Regulation D. Except
as disclosed on SCHEDULE 4.3 hereto, FirstPlus has not issued nor is FirstPlus
bound by any subscription, option, warrant, call, commitment, agreement or other
Right of any character relating to the purchase, sale, or issuance of, or right
to receive dividends or other distributions on, any shares of Common Stock or
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any other security of FirstPlus or any securities representing the right to
vote, purchase or otherwise receive any shares of Common Stock or any other
security of FirstPlus, other than pursuant to this Agreement.
Section 4.4 LITIGATION. There is no claim, litigation, action, suit,
proceeding, investigation or inquiry, administrative or judicial, pending or, to
the knowledge of Buyers, threatened against Buyers, at law or in equity, before
any local Government Entity that might have an adverse effect on Buyers' ability
to perform any of their respective obligations under this Agreement or to
consummate the transactions contemplated hereby.
Section 4.5 NO BREACH OF STATUTE OR CONTRACT. Neither the execution and
delivery of this Agreement by Buyers, nor the consummation by Buyers of the
transactions contemplated hereby, nor compliance by Buyers with any of the
provisions hereof, will violate or cause a default under any statute (domestic
or foreign), judgment, order, writ, decree, rule or regulation of any Government
Entity applicable to Buyers or any of their material properties; breach or
conflict with any of the terms, provisions or conditions of the organization
documents of Buyers; or violate, conflict with or breach any agreement,
contract, mortgage, instrument, indenture or license to which Buyers are parties
or by which Buyers are or may be bound, or constitute a default (in and of
itself or with the giving of notice, passage of time or both) thereunder, or
result in the creation or imposition of any Lien upon, or give to any other
party or parties, any claim, interest or right, including rights of termination
or cancellation in, or with respect to any of Buyers' properties.
Section 4.6 FINDERS' FEES. There is no investment banker, broker, finder
or other intermediary that has been retained by or is authorized to act on
behalf of Buyers or any Affiliate of Buyers who might be entitled to any fee or
commission from Seller, Members or Buyers in connection with the transactions
contemplated hereby.
Section 4.7 FINANCIAL CAPABILITY. On the Closing Date, Buyers will have
sufficient funds to effect the Closing and all other transactions contemplated
by this Agreement.
Section 4.8 DUE DILIGENCE. Buyers have had an adequate opportunity to
conduct such examinations, audits and all other forms of "due diligence" that
they deem necessary in furtherance of the transaction contemplated hereby.
Section 4.9 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties contained in this ARTICLE IV, neither Buyers nor
any other Person make any other express or implied representation or warranty on
behalf of Buyers.
Section 4.10 CLOSING DATE EFFECT. All of the representations and
warranties of Buyers are true and correct as of the date hereof and shall be
true and correct on and as of the Closing Date with the same force and effect as
if such representations and warranties were made by Buyers to Seller on the
Closing Date.
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ARTICLE V
COVENANTS
Section 5.1 TAX MATTERS.
(a) PROPERTY TAXES. All personal property and ad valorem Taxes
payable by the Subsidiaries ("PROPERTY TAXES") that have accrued and become
payable prior to the Closing Date shall be paid by Seller. All Property Taxes
that accrue and become payable subsequent to the Closing Date shall be paid by
Buyers. All Property Taxes in respect of a period that commences prior to the
Closing Date and ends subsequent to the Closing Date shall be prorated between
and paid by Seller and Buyers based upon the number of days in each such portion
of such period. The amount due any party as a result of proration shall be paid
to such party at the Closing.
(b) TAX REFUNDS. If, at any time on or after the Closing Date,
Buyers or Seller receives any refund, rebate, return, credit or other similar
payment with respect to Taxes paid by or on behalf of the other or any of their
Affiliates, such party shall promptly notify the other in writing of such
receipt and shall remit the full amount of such payment (including any interest
thereon received from the Government Entity) to the other.
(c) TRANSFER TAXES. All federal, state, local or foreign or other
excise, sales, use, value added, transfer (including real property transfer or
gains), stamp, documentary, filing, recordation and other similar Taxes that may
be imposed or assessed solely as a result of the Transaction, together with any
interest, additions or penalties with respect thereto and any interest in
respect of such additions or penalties ("TRANSFER TAXES") shall be borne by
Buyers. Any Tax Returns that must be filed in connection with Transfer Taxes
shall be timely prepared by Buyer. Buyers shall provide copies of such tax
returns to Seller no later than fifteen (15) days prior to their due date and
Buyers and Seller shall cooperate in the timely filing of all such Tax Returns.
(d) REGULATORY NOTICES AND CONSENTS. Seller and Buyers shall
cooperate fully in providing all applicable notices to Government Entities, and
shall secure all Permits of such Government Entities as are necessary for the
performance of this Agreement and for the conduct of the Business by Buyers
after the Closing Date.
(e) ASSISTANCE AND COOPERATION. After the Closing Date, the parties
shall cooperate fully in (i) preparing for any audits of, or disputes with
taxing authorities regarding, any Taxes or Tax Returns and (ii) preparing and
filing all Tax Returns to the extent reasonably requested, including, in each
case, by providing each other with access to information, records, documents,
properties and personnel relating to the Business or Interests. Each party shall
(A) provide timely notice to the other in writing of any pending or proposed
audits or assessments with respect to Taxes for which such other party may have
any Liability under this Agreement and (B) furnish the other with copies of all
relevant correspondence received from any taxing authority in connection with
any audit or information request with respect to any Taxes referred to in clause
(A) of this SECTION 5.1(e).
(f) MAINTENANCE OF BUYERS' BOOKS AND RECORDS. Until the later of
three years after the Closing Date or the expiration of the applicable statute
of limitations (including periods of waiver of which Buyers shall have received
written notice) for any Tax Returns filed or required to be filed covering the
periods up to and including the Closing Date, Buyers shall, and shall cause
their Affiliates to, retain all Books and Records with respect to the Business
in existence on the Closing Date and delivered or made available to Buyers by
Seller. After the Closing Date, prior to the expiration of such period, Buyers
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will provide Seller access to such Books and Records for inspection and copying
by Seller, or its agents upon reasonable request and upon reasonable notice.
After the expiration of such period, no such Books and Records shall be
destroyed by Buyers without first advising Seller in writing and giving Seller a
reasonable opportunity to obtain possession thereof, any costs of transferring
such Books and Records to be paid by Seller.
Section 5.2 CONFIDENTIALITY
(a) CONFIDENTIAL INFORMATION. Buyers acknowledge and agree for
themselves and their Affiliates that all information, know-how, trade secrets,
technical or non-technical data, materials, manuals, conclusions, operating and
testing procedures, formulas, formulations, proprietary information, business
plans, business records, marketing and sales information, reports, drawings, or
plans, or information relating to the business affairs or finances of Seller or
of any suppliers, agents, distributors, licensees or customers of Seller, or any
other non-public information of Seller, whether disclosed or provided in oral,
written (including electronic, facsimile, paper or other means), graphic,
photographic or any other form, shall be deemed confidential information of
Seller ("CONFIDENTIAL INFORMATION"). Confidential Information shall not include
any information with respect to the Interests or any information that: (i)
becomes generally available to the public other than as a result of disclosure
by recipient; (ii) was legally available to a recipient on a non-confidential
basis prior to being made available to such recipient by Seller; or (iii)
becomes legally available to a recipient on a non-confidential basis from a
source other than Seller, its directors, officers, employees or Representatives;
provided, that such source is not bound by a confidentiality agreement with
respect to such Confidential Information in favor of Seller and delivered or
made available by Seller to Buyers prior to the Closing.
(b) LIMITED USE BY BUYERS. Prior to the Closing Date, Buyers, for
themselves and their Affiliates, shall hold Confidential Information in strict
confidence and disclose it only to those of their respective Affiliates, agents,
advisors, subcontractors and employees (each, a "REPRESENTATIVE") on a
need-to-know basis in order to fulfill their rights and obligations under this
Agreement and only to the extent that such recipient Representative is under a
similar obligation to maintain the confidentiality of the information. It is
expressly understood and agreed by the parties that prior to the Closing Date
all Confidential Information that Buyers and their Affiliates or their
respective Representatives have received or may hereafter receive, shall be
maintained in the strictest confidence, and shall not be disclosed to any Person
that is not associated or affiliated with the recipient and involved in the
transactions contemplated hereby, without the prior written approval of Seller.
(c) NO DISCLOSURE BY SELLER. Subsequent to the Closing Date, Seller
shall not, for itself and its Affiliates, (a) disclose to any Person (other than
Buyers or those designated in writing by Buyers) in any manner, directly or
indirectly, any Confidential Information, or (b) use, or permit or assist, by
acquiescence or otherwise, any Person (other than Buyers or those designated in
writing by Buyers) to use, in any manner, directly or indirectly, any
Confidential Information, excepting only to enforce the provisions of this
Agreement.
(d) REQUIRED DISCLOSURE. If either party hereto or any of its
respective Representatives is required to disclose any Confidential Information
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pursuant to any applicable Law, or to enforce any rights under this Agreement or
any of the Ancillary Agreements, it will promptly notify the other party in
writing of any such requirement so that the other party may seek an appropriate
protective order or other appropriate remedy or waive compliance with the
provisions of this SECTION 5.2. If such order or other remedy is not obtained,
or the other party waives compliance with the provisions of this Agreement, the
recipient of such information will disclose only that portion of the
Confidential Information that it is legally required to so disclose.
Section 5.3 ORDINARY COURSE. During the term of this Agreement prior to
the Closing, Seller shall conduct and cause the Subsidiaries to conduct the
Business in the Ordinary Course. Seller shall not sell any of the Interests to
anyone other than Buyers.
Section 5.4 CONSENTS. The parties to this Agreement shall cooperate with
each other and use commercially reasonable efforts to obtain as promptly as
practicable all permits, consents, approvals, waivers and authorizations of all
third parties which are imposed in the event of a change in control or are
necessary or advisable to consummate the transactions contemplated by this
Agreement. Notwithstanding the foregoing, Seller shall be responsible and pay
for any fees, payments or other financial accommodation imposed by each third
party under each Contract (whether on Seller or Buyer) in the event of a change
in control. If, pursuant to the provisions of the immediately preceding
sentence, Seller would be required to expend in the aggregate in excess of
$100,000, then Seller may terminate this Agreement in accordance with the
provisions of SECTION 8.1(D) hereof.
Section 5.5 FURTHER ASSURANCES. From time to time after the Closing Date,
each party hereto shall, and shall cause its Affiliates, to promptly execute,
acknowledge and deliver any other assurances or documents or instruments of
transfer reasonably requested by the other party hereto and necessary for the
requesting party to satisfy its obligations hereunder or to obtain the benefits
of the transactions contemplated hereby.
Section 5.6 EXCLUSIVITY. During the term of this Agreement, Seller shall
not, directly or indirectly: (i) consummate or enter into any written or oral
agreement with any Person other than Buyers relating to the possible sale or
disposition of all or any portion of the Business or any of the Interests; (ii)
solicit, initiate, or encourage the submission of any proposal or offer from any
Person relating or enter into or consummate any transaction relating to the
Interests, or (iii) participate in any discussions or negotiations regarding,
furnish any information with respect to, assist or participate in, or facilitate
in any other manner any effort or attempt by any Person to do or seek any of the
foregoing. Seller shall notify Buyers immediately if any Person makes any
proposal, offer, inquiry, or contact with respect to any of the foregoing.
Section 5.7 NON-COMPETITION AND NON-SOLICITATION. Seller shall not,
directly or indirectly, for two years after the Closing (the "NON-COMPETITION
PERIOD"), in the States of Pennsylvania, New Jersey, Pennsylvania or Texas,
engage in or render services to, work for or on behalf of, have an interest in,
make any loan to, or assist in any manner, any business that is engaged in
competition with the Business. Seller shall not, directly or indirectly, during
the Non-competition Period, (i) solicit, entice away, call upon, divert, take
away, refer to a competitor, or otherwise interfere with Buyers' relationship
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with any customer or any future or prospective customers, business or suppliers,
wherever located or serviced, of Buyers, including, without limitation, through
the provision of services competitive with those of the Business, to any of the
foregoing persons or entities or (ii) hire, solicit, recruit, or entice away any
employee or consultant of Buyers or any person who was an employee or consultant
of Buyers during the preceding six months for any reason, attempt to persuade
any employee or consultant of Buyers to terminate, reduce or refrain from
engaging in his or her employment or other service relationship with Buyers for
any reason or otherwise interfere with Buyers' relationship with any of their
employees, consultants or anyone else who provides services similar to the
Business to Buyers. Notwithstanding the foregoing, nothing in this Agreement
shall prevent or otherwise restrict Seller from providing services other than
services competitive with the Business to any party or person.
Section 5.8 INJUNCTIVE RELIEF. Seller acknowledges and agrees that Buyers'
remedy at law for any breach of any of Seller's obligations under SECTIONS 5.2
AND 5.8 hereof would be inadequate, and agrees and consents that temporary and
permanent injunctive relief may be granted in a proceeding that may be brought
to enforce any provision of SECTIONS 5.2 AND 5.8 without the necessity of proof
of actual damage and without the requirement of the posting of any bond or
security.
Section 5.9 SEVERABILITY. With respect to any provision of this ARTICLE V
finally determined by a court of competent jurisdiction to be unenforceable,
such court shall have jurisdiction to reform such provision so that it is
enforceable to the maximum extent permitted by law, and the parties shall abide
by such court's determination. In the event that any provision of this ARTICLE V
cannot be reformed, such provision shall be deemed to be severed from this
Agreement, but every other provision of ARTICLE V of this Agreement shall remain
in full force and effect.
Section 5.10 UPDATE DISCLOSURE. From and after the date hereof until the
Closing Date, Seller and in all material respects, except that any such
representation and warranties qualified as to materiality shall be true and
correct, Buyers shall update each other on a regular basis by written notice to
the other party to reflect any matters that have occurred from and after the
date hereof, that if existing on the date hereof, would have been required to be
described under this Agreement.
ARTICLE VI
CONDITIONS TO CLOSING
Section 6.1 CONDITIONS TO THE OBLIGATIONS OF BUYERS AND SELLER. The
obligations of the parties hereto to effect the Closing are subject to the
following: (a) the other party's representations and warranties set forth herein
shall be true and correct in all material respects, except that any such
representations and warranties qualified as to materiality shall be true and
correct; (b) the other party shall have performed and complied in all material
respects with all of its covenants and obligations hereunder, and under the
Ancillary Agreements, through the Closing; (c) there being no law in effect
prohibiting the Transaction; and (d) there being no action or legal proceeding,
pending or threatened, in which an unfavorable injunction, judgment, order,
decree or other ruling would (i) prevent consummation of the Transaction, (ii)
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cause any of the Transaction to be rescinded following the Closing, or (iii)
affect adversely the right of Buyers to own the Interests or to operate the
Business after the Closing (and no such injunction, judgment, order, decree or
other ruling shall be in effect).
Section 6.2 CONDITIONS TO THE OBLIGATIONS OF BUYERS. The obligation of
Buyers to effect the Closing is subject to is subject to the satisfaction (or
waiver) prior to the Closing of the Seller having executed and delivered any
unexecuted Ancillary Agreements to which it is a party.
Section 6.3 CONDITIONS TO THE OBLIGATIONS OF SELLER. The obligation of
Seller to effect the Closing is subject to the satisfaction (or waiver) prior to
the Closing of the following conditions:
(a) ANCILLARY AGREEMENTS. The Buyers shall have executed and
delivered the unexecuted Ancillary Agreements.
(b) PURCHASE PRICE. The Buyers shall have delivered the cash portion
of the Purchase Price and the Note.
ARTICLE VII
INDEMNIFICATION; CERTAIN REMEDIES
Section 7.1 INDEMNIFICATION BY BUYERS. From and after the Closing Buyers
shall jointly and severally indemnify, defend and hold harmless Seller, its
Affiliates, and their respective directors, officers, shareholders, partners,
members, attorneys, accountants, agents, representatives and employees and their
heirs, successors and permitted assigns, each in their capacity as such (each, a
"SELLER INDEMNIFIED PARTY") from, against and in respect of any damages, losses,
charges, liabilities, claims, demands, actions, suits, proceedings, payments,
judgments, settlements, assessments, deficiencies, taxes, interest, penalties,
and costs and expenses (including removal costs, remediation costs, closure
costs, fines, penalties and expenses of investigation and ongoing monitoring,
attorneys' fees and disbursements) (collectively, "LOSSES") imposed on,
sustained, incurred or suffered by, or asserted against, any of the Seller
Indemnified Parties, whether in respect of third party claims, claims between
the parties hereto, or otherwise, directly or indirectly relating to, arising
out of or resulting from (i) any breach of any representation or warranty made
by Buyers in this Agreement and in the Ancillary Agreements; (ii) any breach of
any covenant or obligation of Buyers in this Agreement or in any writing
delivered by Buyers pursuant to this Agreement; or (iii) any Liability arising
out of the ownership of the Interests in respect of any period after the Closing
Date. The amount of any Loss for which indemnification is provided under this
Agreement shall be increased to take into account any net Tax cost incurred by
Seller arising from the receipt of such indemnity payment (grossed up for such
increase). The amount of any Loss for which indemnification is provided under
this Section 7.1 shall offset any amounts due and owing under the Note.
Section 7.2 INDEMNIFICATION BY SELLER AND MEMBERS. From and after the
Closing Seller and Members shall jointly and severally indemnify, defend and
hold harmless Buyers, their Affiliates, and their respective directors,
officers, shareholders, partners, members, attorneys, accountants, agents,
representatives and employees and their heirs, successors and permitted assigns,
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each in their capacity as such (each, a "BUYER INDEMNIFIED PARTY") from, against
and in respect of any Losses imposed on, sustained, incurred or suffered by, or
asserted against, any of the Buyer Indemnified Parties, whether in respect of
third party claims, claims between the parties hereto, or otherwise, directly or
indirectly relating to, arising out of or resulting from (i) any breach of any
representation or warranty made by Seller and Members in this Agreement and in
the Ancillary Agreements; (ii) any breach of any covenant or obligation of
Seller or Members in this Agreement or in any writing delivered by Seller or
Members pursuant to this Agreement; and (iii) any Liability arising out of the
ownership of the Interests in respect of any period prior to the Closing Date.
The amount of any Loss for which indemnification is provided under this
Agreement shall be increased to take into account any net Tax cost incurred by
the Buyers arising from the receipt of such indemnity payment (grossed up for
such increase).
Section 7.3 THIRD PARTY CLAIM INDEMNIFICATION PROCEDURES.
(a) In the event that any claim or demand for which Buyers may have
any Liability to any Seller Indemnified Party hereunder or for which Seller and
Members may have any Liability to any Buyer Indemnified Party hereunder, is
asserted against or sought to be collected from any Seller Indemnified Party or
Buyer Indemnified Party, as applicable (each, an "INDEMNIFIED PARTY"), by a
third party (a "THIRD PARTY CLAIM"), Seller and Members on the one hand, or
Buyers on the other hand, shall promptly notify the other of such Third Party
Claim. Buyers and Members or Seller, as applicable, shall then have 30 days (or
such lesser number of days set forth in the notice of the Third Party Claim as
may be required by court proceeding in the event of a litigated matter) after
receipt of the notice of the Third Party Claim to notify the other and such
Indemnified Party that it desires to defend such Third Party Claim.
(b) In the event that Buyers on the one hand, or Seller and Members
on the other hand, notify the other and such Indemnified Party within such
30-day period (or such shorter period as provided in the notice of the Third
Party Claim or as required by a court proceeding) that it desires to defend such
Indemnified Party against a Third Party Claim, such party shall have the right
to defend the Indemnified Party by appropriate proceedings using counsel
reasonably satisfactory to the Indemnified Party and shall have the power to
direct and control such defense at its expense. Once a party has duly assumed
the defense of a Third Party Claim, the Indemnified Party shall have the right,
but not the obligation, to participate in any such defense and to employ
separate counsel of its choosing. No party shall, without the prior written
consent of each Indemnified Party, settle, compromise or offer to settle or
compromise any Third Party Claim on a basis that would result in (i) the
imposition of a consent order, injunction or decree that would restrict the
future activity or conduct of the Indemnified Party or any of its Affiliates,
(ii) a finding or admission of a violation of Law or violation of the rights of
any Person by the Indemnified Party or any of its Affiliates, (iii) a finding or
admission that would have an adverse effect on other claims made or threatened
against the Indemnified Party or any of its Affiliates, or (iv) any monetary
Liability of the Indemnified Party that will not be promptly paid or reimbursed
by such party.
(c) If Buyers on the one hand, or Seller and Members on the other
hand, as applicable, (i) elect not to defend the Indemnified Party against a
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Third Party Claim, whether by not giving the Indemnified Party timely notice of
its desire to so defend or otherwise or (ii) after assuming the defense of a
Third Party Claim, fail to take reasonable steps necessary to defend diligently
such Third Party Claim, the Indemnified Party shall have the right but not the
obligation to assume its own defense; it being understood that the Indemnified
Party's right to indemnification for a Third Party Claim shall not be adversely
affected by such Indemnified Party's assuming the defense of such Third Party
Claim.
(d) Such party and the Indemnified Party shall cooperate in order to
ensure the proper and adequate defense of a Third Party Claim, including by
providing access to each other's relevant business records and other documents,
and employees; IT BEING UNDERSTOOD THAT the costs and expenses of the
Indemnified Party relating thereto shall be Losses.
(e) Such party and the Indemnified Party shall use reasonable best
efforts to avoid production of Confidential Information (consistent with
applicable Law), and to cause all communications among employees, counsel and
others representing any party to a Third Party Claim to be made so as to
preserve any applicable attorney-client or work-product privileges.
(f) Notwithstanding anything in this SECTION 7.3 to the contrary,
(i) the Indemnified Party shall have full control over the defense of any Third
Party Claim involving Taxes and the Indemnified Party shall not be required to
provide any other party hereto with access to the Indemnified Party's Tax
Returns or any other Tax information or proceedings that the Indemnified Party
reasonably deems to be confidential; and (ii) if there is a reasonable
probability that a Third Party Claim may materially and adversely affect an
Indemnified Party other than as a result of money damages or other monetary
payments, including without limitation, any Third Party Claim (a) relating to or
arising out of any criminal proceeding, action, indictment, allegation or
investigation, or (b) seeking an injunction or other equitable relief against
the Indemnified Party, the Indemnified Party shall have the right to control the
prosecution, defense or settlement of such Third Party Claim. In all of the
foregoing cases, such party shall nevertheless pay the reasonable fees and
expenses of counsel retained by the Indemnified Party in the foregoing
circumstances.
Section 7.4 CONSEQUENTIAL DAMAGES. EXCEPT AS SPECIFICALLY SET FORTH IN
THIS AGREEMENT, IN NO EVENT SHALL ANY PARTY BE LIABLE TO ANY OTHER PARTY FOR ANY
CONSEQUENTIAL, INDIRECT, INCIDENTAL OR OTHER SIMILAR DAMAGES, INCLUDING LOST
PROFITS, LOST REVENUES, BUSINESS INTERRUPTION, COST OF CAPITAL OR LOSS OF
BUSINESS REPUTATION OR OPPORTUNITY, FOR ANY BREACH OR DEFAULT UNDER, OR ANY ACT
OR OMISSION ARISING OUT OF OR IN ANY WAY RELATING TO, THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY, UNDER ANY FORM OF ACTION WHATSOEVER, WHETHER
IN CONTRACT OR OTHERWISE (OTHER THAN INDEMNIFICATION FOR AMOUNTS PAID OR PAYABLE
TO THIRD PARTIES IN RESPECT OF ANY THIRD PARTY CLAIM FOR WHICH INDEMNIFICATION
HEREUNDER IS OTHERWISE REQUIRED).
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ARTICLE VIII
TERMINATION
Section 8.1 TERMINATION. This Agreement may be terminated at any time
prior to the Closing:
(a) by written agreement of Buyers and Seller;
(b) by Buyers, if the Closing shall not have occurred on or prior to
August 3, 2007 or by Seller, if the Closing shall not have occurred on or prior
to August 3, 2007, by giving written notice of such termination to the other
party, so long as the terminating party is not in material breach of its
obligations under this Agreement; or
(c) by Buyers, if Seller and Members shall breach any of their
representations, warranties or obligations hereunder, or by Seller, if Buyers
shall breach any of its representations, warranties or obligations hereunder, by
giving written notice of such termination to the other party, provided that, in
each case, the party giving such notice shall have given the other party written
notice of the alleged breach in reasonable detail and afforded such other party
not less than ten (10) days opportunity to cure such alleged breach unless such
breach, by its nature, cannot be cured prior to the Closing Date; or
(d) by Seller, pursuant to the final sentence of SECTION 5.4 hereof.
Section 8.2 EFFECT OF TERMINATION. If this Agreement is terminated in
accordance with SECTION 8.1, all obligations of the parties under this Agreement
will terminate except that the obligations of the parties in this SECTION 8.2
and in SECTIONS 5.2 and 9.6 (and any related definitional provisions set forth
in ARTICLE I) will survive. Nothing herein shall relieve any party from
Liability for any breach of this Agreement or any representation, warranty,
covenant or agreement contained in this Agreement or shall restrict either
party's rights in the case thereof.
Section 8.3 WAIVER. At any time prior to the Closing Date, the parties may
(i) extend the time for the performance of any of the obligations or other acts
of the other party, (ii) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto and
(iii) waive compliance with any of the agreements or conditions contained
herein. Any such extension or waiver shall be valid only if set forth in a
written instrument signed on behalf of such party, but such extension, waiver or
failure to insist on strict compliance with an obligation, covenant, agreement
or condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.
ARTICLE IX
MISCELLANEOUS
Section 9.1 NOTICES. All notices and communications hereunder shall be
deemed to have been duly given and made if in writing and if served by personal
delivery upon the party for whom it is intended or delivered by overnight
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courier, registered or certified mail, return receipt requested, or if sent by
fax, PROVIDED THAT the fax is promptly confirmed by telephone confirmation
thereof, to the Person at the address set forth below, or such other address as
may be designated in writing hereafter, in the same manner, by such Person, and
shall be deemed to have been duly given when received, or five days after being
sent by registered or certified mail.
To Buyers:
▇▇▇▇ ▇▇▇▇▇▇▇, President and CEO
FirstPlus Financial Group, Inc.
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ P.C.
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esquire
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Frome ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
Park Avenue Tower
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
To Seller and Members:
Globalnet Enterprises, LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Manager
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C.
Two Commerce Square Suite 3410
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esquire
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Section 9.2 AMENDMENT; WAIVER. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Buyers and Seller, or in the case of a
waiver, by the party against whom the waiver is to be effective. No failure or
delay by any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
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preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law except as
otherwise specifically provided in ARTICLE VII hereof.
Section 9.3 NO ASSIGNMENT OR BENEFIT TO THIRD PARTIES. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors, legal representatives and permitted assigns. No party to
this Agreement may assign any of its rights or delegate any of its obligations
under this Agreement, by operation of Law or otherwise, without the prior
written consent of the other party hereto, except as provided in SECTION 9.5.
Nothing in this Agreement, express or implied, is intended to confer upon any
Person other than Buyers, Seller, the Indemnified Parties (under Article VII
only) and their respective successors, legal representatives and permitted
assigns, any rights or remedies under or by reason of this Agreement.
Section 9.4 ENTIRE AGREEMENT. This Agreement (including all Schedules and
Exhibits hereto) and the Ancillary Agreements contain the entire agreement
between the parties hereto with respect to the subject matter hereof and thereof
and supersedes all prior agreements and understandings, oral or written, with
respect to such matters.
Section 9.5 FULFILLMENT OF OBLIGATIONS. Any obligation of any party to any
other party under this Agreement, or any of the Ancillary Agreements, which
obligation is performed, satisfied or fulfilled completely by an Affiliate of
such party, shall be deemed to have been performed, satisfied or fulfilled by
such party.
Section 9.6 PUBLIC DISCLOSURE. Except as may be required to comply with
the requirements of any applicable Law and the rules and regulations of any
stock exchange or automated quotation system upon which the securities of
FirstPlus are listed, from and after the date hereof, no press release or
similar public announcement or communication shall be made or caused to be made
relating to this Agreement unless specifically approved in advance by both
parties hereto.
Section 9.7 SCHEDULES. The disclosure of any matter in any Schedule to
this Agreement shall be deemed to be a disclosure for all purposes of this
Agreement to which such matter could reasonably be expected to be pertinent, but
shall not be deemed to constitute an admission by Seller or to otherwise imply
that any such matter is material for the purposes of this Agreement.
Section 9.8 GOVERNING LAW; SUBMISSION TO JURISDICTION; SELECTION OF FORUM;
WAIVER OF TRIAL BY JURY. THE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. Each party hereto agrees that it shall bring any
action or proceeding in respect of any claim arising out of or related to this
Agreement or the transactions contained in or contemplated by this Agreement and
the Ancillary Agreements, exclusively in the United States District Court for
the Eastern District of Pennsylvania or any Pennsylvania court sitting in
Philadelphia (the "CHOSEN COURTS"), and solely in connection with claims arising
under this Agreement or the transactions that are the subject of this Agreement
or any of the Ancillary Agreements (i) irrevocably submits to the exclusive
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jurisdiction of the Chosen Courts, (ii) waives any objection to laying venue in
any such action or proceeding in the Chosen Courts, and (iii) waives any
objection that the Chosen Courts are an inconvenient forum or do not have
jurisdiction over any party hereto.
Section 9.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same Agreement.
Section 9.10 HEADINGS. The heading references herein and the table of
contents hereof are for convenience purposes only, and shall not be deemed to
limit or affect any of the provisions hereof.
Section 9.11 SEVERABILITY. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any Person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
Section 9.12 MEMBERS' AGENT. Each of Members by its execution of this
Agreement hereby appoints Seller as the Members' Agent (the "MEMBERS' AGENT") to
act on behalf of such Member for all purposes under this Agreement. Whenever
this Agreement requires that notice be given to or by Members, or provides for
an action to be taken by Members, such notice shall be given to Members' Agent,
and such action may be taken by Members' Agent, on behalf of all Members.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed or caused this Agreement to
be executed as of the date first written above.
SELLER:
GLOBALNET ENTERPRISES, LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Manager
MEMBERS:
LEARNED ASSOCIATES OF NORTH AMERICA, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, Manager
SEVEN HILLS MANAGEMENT, LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Manager
DIVERSIFIED DEVELOPMENT LLC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Manager
AJAX BARON, LLC
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Manager
BUYERS:
FIRSTPLUS ENTERPRISES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
FIRSTPLUS DEVELOPMENT COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
The undersigned hereby guarantees the payment and performance of the
liabilities and obligations of Buyers hereunder.
FIRSTPLUS FINANCIAL GROUP, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
