Exhibit 10.1
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ASSET PURCHASE AND ASSIGNMENT AND ASSUMPTION AGREEMENT
BY AND BETWEEN
WEBBANK
AND
ROCKLAND CREDIT FINANCE LLC
DATED AS OF DECEMBER 30, 2004
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TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS ........................................................1
Section 1.1 Certain Defined Terms.......................................1
ARTICLE 2 PURCHASE AND SALE OF ASSETS.........................................4
Section 2.1 Purchased Assets............................................4
ARTICLE 3 ASSUMED LIABILITIES.................................................4
Section 3.1 Assumption of Liabilities...................................4
ARTICLE 4 PURCHASE PRICE AND OTHER PAYMENTS AND DELIVERIES; CLOSING...........4
Section 4.1 Purchase Price..............................................5
Section 4.2 Expenses....................................................5
Section 4.3 Third Party Funds...........................................5
Section 4.4 Final Payment Under Servicing Agreement.....................5
Section 4.5 Payment.....................................................5
Section 4.6 Allocation..................................................5
Section 4.7 Closing and Closing Date....................................6
Section 4.8 Deliveries by Buyer.........................................6
Section 4.9 Deliveries by Seller........................................6
ARTICLE 5 REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF SELLER................7
Section 5.1 Corporate Status; Authorization.............................7
Section 5.2 No Conflicts................................................7
Section 5.3 Consents....................................................7
Section 5.4 Purchased Assets............................................7
Section 5.5 Litigation..................................................7
Section 5.6 No Brokers..................................................8
Section 5.7 Authority to Amend Financing Statements.....................8
Section 5.8 Lockbox Account and Zions Account...........................8
ARTICLE 6 REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF BUYER.................8
Section 6.1 Corporate Status; Authorization.............................8
Section 6.2 No Conflicts................................................9
Section 6.3 Consents....................................................9
Section 6.4 Litigation..................................................9
Section 6.5 No Brokers..................................................9
Section 6.6 Zions Account...............................................9
ARTICLE 7 MUTUAL RELEASE......................................................9
Section 7.1 Seller's Release............................................9
Section 7.2 Buyer's Release............................................10
Section 7.3 Covenants Not to ▇▇▇.......................................10
ARTICLE 8 INDEMNIFICATION....................................................11
Section 8.1 Indemnification by Seller..................................11
Section 8.2 Indemnification by Buyer...................................12
Section 8.3 Third Party Claims.........................................12
Section 8.4 Survival...................................................13
ARTICLE 9 MISCELLANEOUS......................................................14
Section 9.1 Notices....................................................14
Section 9.2 Successors and Assigns.....................................14
Section 9.3 No Third Party Beneficiaries...............................15
Section 9.4 Governing Law..............................................15
Section 9.5 Arbitration................................................15
Section 9.6 Entire Agreement...........................................15
Section 9.7 Severability...............................................15
Section 9.8 Counterparts...............................................15
Section 9.9 Headings...................................................15
Section 9.10 Further Assurances.........................................15
ASSET PURCHASE AND ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT made this 30th day of December, 2004, by and between WebBank, a
Utah chartered industrial loan corporation ("SELLER"), and Rockland Credit
Finance LLC, a Maryland limited liability company ("BUYER").
WITNESSETH:
WHEREAS, Buyer and Seller are party to that certain Amended and Restated
Servicing Agreement dated as of February 21, 2002 effective as of January 10,
2002, as amended (the "SERVICING AGREEMENT");
WHEREAS, Buyer sent a notice to Seller dated March 1, 2004 pursuant to
Section 7.1 of the Servicing Agreement exercising its option (the "OPTION") to
purchase Seller's interest in the WebBank Portfolio (as defined in the Servicing
Agreement);
WHEREAS, by letter agreement dated May 6, 2004, Buyer and Seller agreed
that the date by which the purchase and sale pursuant to the Option must be
consummated is December 31, 2004; and
WHEREAS, pursuant to the exercise of the Option, Buyer desires to purchase
from Seller, and Seller desires to sell to Buyer, in accordance with the terms
and conditions set forth in this Agreement, the Purchased Assets (as such term
is defined herein).
NOW, THEREFORE, in consideration of the premises and the mutual covenants,
agreements, representations and warranties herein contained, and subject to the
conditions hereinafter set forth, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 CERTAIN DEFINED TERMS.
As used herein, the following terms shall have the following meanings (all
terms defined in this Section 1.1 or in other provisions of the Agreement in the
singular to have the same meanings when used in the plural and VICE VERSA):
"ACCOUNTING DATE" shall mean the close of business on December 28, 2004.
"AFFILIATE" of a Person, shall mean a Person that directly, or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first Person. "CONTROL" (including the terms
"CONTROLLED BY" and "UNDER COMMON CONTROL WITH") shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management policies of a Person, whether through the ownership of voting
securities, by contract or credit arrangement, as trustee or executor, or
otherwise. Without limiting the generality of the previous sentence, any Person
owning thirty percent (30%) or more of the voting securities of another Person
shall be deemed to control that Person.
"ASSUMED LIABILITIES" shall have the meaning ascribed to such term in
Section 3.1
"BUSINESS DAY" shall mean a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required to close.
"BUYER" shall have the meaning ascribed to such term in the first paragraph
of this Agreement.
"BUYER CLAIMS" shall have the meaning ascribed to such term in Section 7.2.
"BUYER RELEASEES" shall have the meaning ascribed to such term in
Section 7.1.
"CLIENT" shall mean a Person from which Seller has purchased Receivables.
"CLOSING" shall have the meaning ascribed to such term in Section 4.3.
"CLOSING DATE" shall have the meaning ascribed to such term in Section 4.3.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"CONSENT" shall mean any consent, approval, authorization, waiver, permit,
grant, franchise, concession, agreement, license, exemption or order of,
registration, certificate, declaration or filing with, or report or notice to,
any Person, including but not limited to any Governmental Authority.
"CONTRACTS" shall have the meaning ascribed to such term in Section 2.1(b).
"COVERED ACTION OF BUYER" shall mean any action or omission of Buyer taken
or omitted during the term of the Servicing Agreement that violated or was
otherwise not in accordance with, or (unless expressly authorized, directed or
consented to by WebBank) was outside the ordinary course of conduct of, Buyer's
obligations under the Servicing Agreement.
"EXPENSES" shall have the meaning ascribed to such term in Section 4.2.
"FINAL SERVICING AGREEMENT PAYMENT" shall have the meaning ascribed to such
term in Section 4.4.
"GOVERNMENTAL APPROVAL" shall mean any Consent of, with or to any
Governmental Authority.
"GOVERNMENTAL AUTHORITY" shall mean any federal, state, regional, county,
city, municipal or local government, whether foreign or domestic, or any
department, agency, bureau or other administrative or regulatory body obtaining
authority from any of the foregoing, including, without limitation, courts,
public utilities and sewer authorities.
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"LIEN" shall mean any mortgage, pledge, hypothecation, claim, assessment,
security interest, lease, sublease, license, lien, conditional sale contract,
title retention contract, adverse claim or interest, easement, encroachment,
title defect, voting trust agreement, option, charge, right of first refusal or
other encumbrance or restriction of any kind, or rights of others or other
contract to give any of the foregoing.
"LOCKBOX ACCOUNT" shall have the meaning ascribed to such term in
Section 4.9(b).
"LOCKBOX AGREEMENT" shall have the meaning ascribed to such term in
Section 4.9(b).
"LOCKBOX BANK" shall have the meaning ascribed to such term in
Section 4.9(b).
"MUTUAL RELEASE" shall mean the releases granted pursuant to Article 7.
"OPTION" shall have the meaning ascribed to such term in the second
"Whereas" clause of this Agreement.
"PARTICIPANT" shall mean a Person who participates in the purchase by
Seller of Receivables pursuant to an agreement between Seller, as lead, and such
Person, as participant.
"PERSON" shall mean any natural Person, corporation, general partnership,
limited partnership, limited liability company, other business organization,
trust, union, association or Governmental Authority or other entity.
"PURCHASE PRICE" shall have the meaning ascribed to such term in
Section 4.1.
"PURCHASED ASSETS" shall have the meaning ascribed to such term in
Section 2.1.
"RECEIVABLES" shall have the meaning ascribed to such term in
Section 2.1(a).
"SELLER" shall have the meaning ascribed to such term in the first
paragraph of this Agreement.
"SELLER CLAIMS" shall have the meaning ascribed to such term in
Section 7.1.
"SELLER RELEASEES" shall have the meaning ascribed to such term in
Section 7.2.
"SERVICING AGREEMENT" shall have the meaning ascribed to such term in the
first "Whereas" clause of this Agreement.
"THIRD PARTY CLAIM" shall have the meaning ascribed to such term in
Section 8.3.
"THIRD PARTY FUNDS" shall have the meaning ascribed to such term in
Section 4.3.
"ZIONS" shall mean Zions First National Bank of Salt Lake City, Utah.
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"ZIONS ACCOUNT" shall mean Account # xxxxx in the name of Seller at Zions.
ARTICLE 2
PURCHASE AND SALE OF ASSETS
Section 2.1 PURCHASED ASSETS.
Subject to and upon the terms and conditions set forth in this Agreement,
Seller hereby sells, assigns, transfers and delivers to Buyer on and as of the
date hereof, and Buyer hereby purchases and acquires on and as of the date
hereof, free and clear of all Liens, all of the following assets of Seller
(collectively, the "PURCHASED ASSETS"):
(a) All accounts held by Seller and purchased by Seller from the clients
listed on SCHEDULE 2.1(A) hereto (the "RECEIVABLES");
(b) all of Seller's right, title and interest under the factoring
agreements and participation agreements (whether written or oral) listed on
SCHEDULE 2.1(B) hereto and all other contracts, arrangements, and other
agreements, arrangements, commitments and understandings, written or oral,
related thereto or to the Receivables (collectively, the "CONTRACTS"), including
but not limited to all right, interest and priority of Seller as secured party
in respect of collateral securing obligations to Seller under the Contracts; and
any right to assert claims and take other rightful actions in respect of
breaches, defaults and other violations of the Contracts;
(c) all rights to causes of action, lawsuits, judgments, claims and demands
of any nature available to or being pursued by Seller with respect to the
ownership, use, function or value of any Purchased Asset, whether arising by way
of counterclaim or otherwise; and
(d) all guarantees and similar rights in favor of Seller with respect to
any Purchased Asset.
ARTICLE 3
ASSUMED LIABILITIES
Section 3.1 ASSUMPTION OF LIABILITIES.
Subject to and upon the terms set forth in this Agreement and in
consideration for the Purchased Assets to be transferred to Buyer pursuant to
Section 2.1, Buyer hereby assumes and agrees to pay and perform all obligations
of Seller under the Contracts and otherwise in respect of the Purchased Assets
arising after 9:00 A.M. Eastern time on the Closing Date, including, without
limitation, all obligations, if any, to provide funding to Clients, and to pay
Third Party Funds to the parties entitled to receive such funds, in accordance
with the terms of any Contracts applicable thereto (collectively, the "ASSUMED
LIABILITIES").
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ARTICLE 4
PURCHASE PRICE AND OTHER PAYMENTS AND DELIVERIES; CLOSING
Section 4.1 PURCHASE PRICE. In consideration for the Purchased Assets to be
transferred to Buyer pursuant to Section 2.1, Buyer is obligated to pay to
Seller as the aggregate purchase price therefor the sum of $5,791,395.41 (the
"PURCHASE PRICE") (the computation of which is set forth in SCHEDULE 4.1
hereto).
Section 4.2 EXPENSES. Buyer is obligated to pay to Seller the amount of
$0.00 (the "EXPENSES"), in full payment of Seller's costs and expenses of
consummating the transactions contemplated by this Agreement.
Section 4.3 THIRD PARTY FUNDS. Seller is obligated to pay to Buyer an
amount equal to the aggregate of the following held by Seller as of the
Accounting Date (the "THIRD PARTY FUNDS"):
(a) $320,700.60, representing (i) funds collected from Clients' account
debtors not representing payments in respect of Receivables purchased by Seller
and (ii) balances owed to Clients in respect of the purchase price of
Receivables that have been duly paid and collected; and
(b) $649,931.36, representing (i) funds collected from Participants and not
yet invested by Seller in the purchase of Receivables and (ii) funds received in
payment of Receivables in which Participants have an interest that are allocable
to, but have not yet been remitted to, such Participants.
Section 4.4 FINAL PAYMENT UNDER SERVICING AGREEMENT. Seller is obligated to
pay to Buyer the amount of $107,062.64 (the "FINAL SERVICING AGREEMENT
PAYMENT"), representing payment in full of all amounts payable by to Buyer under
the Servicing Agreement, including without limitation Sections 6.3 and 4.2
thereof. The parties understand and agree that after such payment, the Deposit
Account (as that term is defined in the Servicing Agreement) will have a zero
balance.
Section 4.5 PAYMENT. The obligations of Buyer to Seller and of Seller to
Buyer under Sections 4.1, 4.2, 4.3 and 4.4 hereof shall be settled by a single
payment, which shall be made by Buyer to Seller simultaneously with the
execution and delivery of this Agreement by wire transfer of immediately
available funds to an account specified in writing by Seller, in the amount of
$4,713,700.81 (the "SETTLEMENT PAYMENT") (representing the Purchase Price plus
the Expenses reduced by the Third Party Funds and reduced by the Final Servicing
Agreement Payment).
Section 4.6 ALLOCATION. The parties agree that Buyer's acquisition of the
Purchased Assets will be an "applicable asset acquisition" governed by Section
1060 of the Code and that the Purchase Price shall be allocated entirely to the
Receivables. Each of Buyer and Seller agrees to complete IRS Form 8594
consistently with such allocation and, if requested by the other, to furnish the
other with a copy of such Form prepared in draft form no less than 45 days prior
to the filing due date of such Form. None of Buyer, Buyer's Affiliates or Seller
shall file any return or take a position with any taxing authority or in
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connection with any tax related litigation that is inconsistent with this
Section 4.6, unless required to do so pursuant to a determination within the
meaning of Section 1313(a) of the Code.
Section 4.7 CLOSING AND CLOSING DATE. The closing (the "CLOSING") of the
sale and purchase of the Purchased Assets shall take place simultaneously with
the execution and delivery of this Agreement by exchange of documentation by
mail and/or facsimile and payment of funds by wire transfer as provided herein,
or at such other time and place upon which the parties may agree. The day on
which the Closing actually occurs is herein sometimes referred to as the
"CLOSING DATE". At the Closing, the parties shall make the deliveries set forth
below.
Section 4.8 DELIVERIES BY BUYER. Buyer shall deliver to Seller at Closing
the following:
(a) payment of the Settlement Payment in the manner described in Section
4.5; and
(b) such other documents and instruments as Seller shall have reasonably
requested as to (i) the accuracy and validity of or compliance with all
representations, warranties and covenants made by Buyer in this Agreement and
the other documents and agreements contemplated hereby, (ii) the satisfaction of
all conditions contained herein or therein and (iii) all other matters
pertaining hereto and thereto.
Section 4.9 DELIVERIES BY SELLER. Seller shall deliver to Buyer at Closing
the following:
(a) a letter from Seller addressed to Bank of America, N.A. (the "LOCKBOX
BANK"), with respect to Account # XXXXXX at the Lockbox Bank in the name of
Rockland Credit Finance, LLC F/B/O WebBank (the "LOCKBOX ACCOUNT") and the Three
Party Agreement Relating to Lockbox Services dated as of January 10, 2002 with
respect to the Lockbox Account (the "LOCKBOX AGREEMENT"), directing the Lockbox
Bank, immediately upon receipt of such letter, to (i) cease making the daily
sweeps from the Lockbox Account to the Zions Account (referred to in Section
1(d) of the Lockbox Agreement) and (ii) remove from the Lockbox Account
designation the reference to Seller's beneficial interest therein, which letter
Buyer is authorized to deliver to the Lockbox Bank at any time after Closing;
(b) all original agreements, documents, plans, reports, books, records and
files in Seller's possession relating, directly or indirectly, to the Purchased
Assets not then in the possession of Buyer, PROVIDED that Seller may retain any
tax returns, reports or forms, and Buyer shall be provided with copies of such
returns, reports or forms only to the extent that they relate to the Purchased
Assets; and
(c) such other documents and instruments as Buyer shall have reasonably
requested as to (i) the accuracy and validity of or compliance with all
representations, warranties and covenants made by Seller in this Agreement and
the other documents and agreements contemplated hereby, (ii) the satisfaction of
all conditions contained herein or therein and (iii) all other matters
pertaining hereto and thereto.
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ARTICLE 5
REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF SELLER
Seller represents and warrants to and agrees with Buyer as follows:
Section 5.1 CORPORATE STATUS; AUTHORIZATION. Seller is a chartered
industrial loan corporation, duly organized, validly existing and in good
standing under the laws of the State of Utah. Seller has the corporate power and
authority to execute and deliver this Agreement and all other agreements and
documents to be executed and delivered by it in connection herewith, to perform
fully its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery by
Seller of this Agreement and all other agreements and documents to be executed
and delivered by it in connection herewith, the performance by Seller of its
obligations hereunder and thereunder, and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
requisite corporate acts and other proceedings of Seller. This Agreement and all
other agreements and documents to be executed and delivered by Seller in
connection herewith have been duly and validly executed and delivered by Seller
and constitute legal, valid and binding obligations of Seller, enforceable
against it in accordance with their respective terms except (i) as such
enforceability may be limited by or subject to any bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally, (ii) as such obligations are subject to general principles of equity
or (iii) as rights to indemnity may be limited by federal or state securities
laws or by public policy.
Section 5.2 NO CONFLICTS. Neither the execution and delivery of this
Agreement or any other agreement or document to be executed and delivered in
connection herewith, nor the consummation of the transactions contemplated
hereby, will (a) violate any law, statute, regulation, rule, judgment, order,
decree, stipulation, injunction, writ, charge, or other restriction of any
Governmental Authority to which Seller is bound or subject or by which any of
its properties or assets is subject or bound or any provision of the Articles of
Incorporation and By-laws of Seller, or (b) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify or cancel, or require any
notice under, any contract, instrument, agreement or other arrangement to which
Seller is a party or by which Seller or any of its properties or assets are
bound or subject.
Section 5.3 CONSENTS. No Governmental Approval or other Consent is required
to be obtained or made by Seller in connection with the execution, delivery and
performance of this Agreement or any other agreement or document executed and
delivered in connection herewith or the consummation by Seller of the
transactions contemplated hereby or thereby that has not been obtained or made.
Section 5.4 PURCHASED ASSETS. Seller is the owner of, and has valid title
to, all of the Purchased Assets, free and clear of Liens.
Section 5.5 LITIGATION. As of the date of this Agreement, there are no
claims, demands, suits, proceedings or litigations of any kind pending or, to
the knowledge of Seller, threatened to which Seller is a party and which relate
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to this Agreement or the performance by Seller of its obligations hereunder.
Section 5.6 NO BROKERS. Seller has not entered into and will not enter into
any agreement, arrangement or understanding with any Person which will result in
the obligation of Buyer to pay any finders fee, brokerage commission or similar
payment in connection with the transactions contemplated hereby.
Section 5.7 AUTHORITY TO AMEND FINANCING STATEMENTS. Seller hereby
authorizes Buyer to amend any and all Uniform Commercial Code financing
statements of record naming Seller as secured party and any of the Clients as
debtor so as to name Buyer as secured party thereunder.
Section 5.8 LOCKBOX ACCOUNT AND ZIONS ACCOUNT.
(a) If, after the Accounting Date, any funds paid in respect of the
Receivables are swept from the Lockbox Account to the Zions Account, contrary to
the direction letter referred to in Section 4.9(a) hereof, or are otherwise paid
by the Lockbox Bank to Seller or are paid by account debtors directly to the
Zions Account, then Seller shall remit such funds to Buyer promptly after
receipt.
(b) Seller shall keep the Zions Account open, and shall permit Buyer to
have internet access to information concerning the Zions Account to the same
extent that Buyer currently has such access, for a period ending on the earlier
of (i) 180 days following the Closing or (ii) receipt by Seller of a written
notice from Buyer authorizing Seller to close the Zions Account, provided that
Buyer pays to Seller amounts equal to all account maintenance, wire transfer and
other fees payable by Seller with respect to the Zions Account promptly after
Seller's request for such payments from time to time.
ARTICLE 6
REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF BUYER
Buyer represents and warrants to and agrees with Seller as follows:
Section 6.1 CORPORATE STATUS; AUTHORIZATION. Buyer is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Maryland. Buyer has the limited liability company power and
authority to execute and deliver this Agreement and all other agreements and
documents to be executed and delivered by it in connection herewith, to perform
fully its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery by
Buyer of this Agreement and all other agreements and documents to be executed
and delivered by it in connection herewith, the performance by Buyer of its
obligations hereunder and thereunder, and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
requisite limited liability company acts and other proceedings of Buyer. This
Agreement and all other agreements and documents to be executed and delivered by
Buyer in connection herewith have been duly and validly executed and delivered
by Buyer and constitute legal, valid and binding obligations of Buyer,
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enforceable against it in accordance with their respective terms except (i) as
such enforceability may be limited by or subject to any bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally, (ii) as such obligations are subject to general principles of equity
and (iii) as rights to indemnity may be limited by federal or state securities
laws or by public policy.
Section 6.2 NO CONFLICTS. Neither the execution and delivery of this
Agreement or any other agreement or document to be executed and delivered in
connection herewith, nor the consummation of the transactions contemplated
hereby, will (a) violate any law, statute, regulation, rule, judgment, order,
decree, stipulation, injunction, writ, charge, or other restriction of any
Governmental Authority to which Buyer is bound or subject or by which any of its
properties or assets is subject or bound or any provision of the articles of
organization or operating agreement of Buyer, or (b) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify or cancel, or require any
notice under, any contract, instrument, agreement or other arrangement to which
Buyer is a party or by which Buyer or any of its properties or assets are bound
or subject.
Section 6.3 CONSENTS. No Governmental Approval or other Consent is required
to be obtained or made by Buyer in connection with the execution and delivery of
this Agreement or any other agreement or document to be executed and delivered
in connection herewith or the consummation of the transactions contemplated
hereby or thereby.
Section 6.4 LITIGATION. As of the date of this Agreement, there are no
claims, demands, suits, proceedings or litigations of any kind pending or, to
the knowledge of Buyer, threatened to which Buyer is a party and which relate to
this Agreement or the performance by Buyer of its obligations hereunder.
Section 6.5 NO BROKERS. Buyer has not entered into, and will not enter
into, any agreement, arrangement or understanding with any Person which will
result in the obligation of Seller to pay a finder's fee, brokerage commission
or similar payment in connection with the transactions contemplated hereby.
Section 6.6 ZIONS ACCOUNT. Promptly after Closing, Buyer shall notify
account debtors that have been making payments directly to the Zions Account to
remit funds to an account designated by Buyer other than the Zions Account.
ARTICLE 7
MUTUAL RELEASE
Section 7.1 SELLER'S RELEASE. Seller hereby remises, releases and forever
discharges Buyer, and each of its predecessors, parents, subsidiaries,
Affiliates, and the past, present and future members, partners, officers,
directors, employees, agents, consultants, representatives, attorneys, and
insurers of any of the foregoing, together with all successors and assigns of
any of the foregoing (the "BUYER RELEASEES") of and from all claims, demands,
actions, causes of action, rights of action, controversies, covenants,
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obligations, agreements, damages, penalties, interest, fees, expenses, costs,
remedies, reckonings, extents, responsibilities, liabilities, suits, and
proceedings of whatsoever kind, nature, or description, direct or indirect,
vested or contingent, known or unknown, suspected or unsuspected, in contract,
tort, law, equity, or otherwise, under the laws of any jurisdiction, that Seller
or its successors or assigns, ever had, now has, or hereafter can, shall, or may
have, against the Buyer Releasees, including without limitation any of the
foregoing relating to or arising out of the Servicing Agreement, from the
beginning of the world through and including the date of this Mutual Release
("SELLER CLAIMS"), other than any and all rights that Seller may have under this
Agreement.
Seller hereby expressly waives any and all laws or statutes, of any
jurisdiction whatsoever, which may provide that a release does not extend to
claims not known or suspected to exist at the time of executing a release which
if known would have materially affected the decision to give said release. It is
expressly intended and agreed that this Mutual Release does in fact extend to
such unknown or unsuspected Seller Claims related to anything that has happened
to the date hereof even if knowledge thereof would have materially affected the
decision to give said release. Seller hereby represents and warrants to Buyer
that it has not assigned, transferred or otherwise conveyed any of the Seller
Claims being released herein.
Section 7.2 BUYER'S RELEASE. Buyer hereby remises, releases and forever
discharges Seller, and each of its predecessors, parents, subsidiaries,
Affiliates, and the past, present and future shareholders, partners, officers,
directors, employees, agents, consultants, representatives, attorneys, and
insurers of any of the foregoing, together with all successors and assigns of
any of the foregoing (the "SELLER RELEASEES") of and from all claims, demands,
actions, causes of action, rights of action, controversies, covenants,
obligations, agreements, damages, penalties, interest, fees, expenses, costs,
remedies, reckonings, extents, responsibilities, liabilities, suits, and
proceedings of whatsoever kind, nature, or description, direct or indirect,
vested or contingent, known or unknown, suspected or unsuspected, in contract,
tort, law, equity, or otherwise, under the laws of any jurisdiction, that Buyer
or its successors or assigns, ever had, now has, or hereafter can, shall, or may
have, against the Seller Releasees, including without limitation any of the
foregoing relating to or arising out of the Servicing Agreement, from the
beginning of the world through and including the date of this Mutual Release
("BUYER CLAIMS"), other than any and all rights that Buyer may have under this
Agreement.
Buyer hereby expressly waives any and all laws or statutes, of any
jurisdiction whatsoever, which may provide that a release does not extend to
claims not known or suspected to exist at the time of executing a release which
if known would have materially affected the decision to give said release. It is
expressly intended and agreed that this Mutual Release does in fact extend to
such unknown or unsuspected Buyer Claims related to anything that has happened
to the date hereof even if knowledge thereof would have materially affected the
decision to give said release. Buyer hereby represents and warrants to Seller
that it has not assigned, transferred or otherwise conveyed any of the Buyer
Claims being released herein.
Section 7.3 COVENANTS NOT TO ▇▇▇.
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(a) Seller covenants and agrees that, in the event Seller obtains, directly
or indirectly, a Seller Claim or the right to assert a Seller Claim, against any
one or more of the Buyer Releasees, it shall not pursue or assert, or cause to
be pursued or asserted, any such Seller Claim. In furtherance and not in
limitation of the foregoing, Seller covenants and agrees that neither it nor any
of its Affiliates shall ever, individually or with any other Person, commence,
aid in any way, prosecute or cause or permit to be commenced or prosecuted any
action or other proceeding, including, without limitation, any arbitration or
other alternative dispute resolution procedure, based upon any Seller Claim, and
represents and agrees that neither it nor any of its Affiliates has made or
filed or will make or file or cause to be made or filed any claim, charge,
allegation, or complaint, whether formal, informal, or anonymous, with any
Governmental Authority, relating in any manner to any Seller Claim. The
provisions of this Article 7 may be pleaded as a full and complete defense to,
and may be used as the basis for an injunction against, any action, suit or
other proceeding that may be instituted, prosecuted or attempted in breach
thereof.
(b) Buyer covenants and agrees that, in the event Buyer obtains, directly
or indirectly, a Buyer Claim or the right to assert a Buyer Claim, against any
one or more of the Seller Releasees, it shall not pursue or assert, or cause to
be pursued or asserted, any such Buyer Claim. In furtherance and not in
limitation of the foregoing, Buyer covenants and agrees that neither it nor any
of its Affiliates shall ever, individually or with any other Person, commence,
aid in any way, prosecute or cause or permit to be commenced or prosecuted any
action or other proceeding, including, without limitation, any arbitration or
other alternative dispute resolution procedure, based upon any Buyer Claim, and
represents and agrees that neither it nor any of its Affiliates has made or
filed or will make or file or cause to be made or filed any claim, charge,
allegation, or complaint, whether formal, informal, or anonymous, with any
Governmental Authority, relating in any manner to any Buyer Claim. The
provisions of this Article 7 may be pleaded as a full and complete defense to,
and may be used as the basis for an injunction against, any action, suit or
other proceeding that may be instituted, prosecuted or attempted in breach
thereof.
ARTICLE 8
INDEMNIFICATION
The parties hereto agree to indemnify, defend and hold each other harmless
as follows:
Section 8.1 INDEMNIFICATION BY SELLER. Seller shall defend, indemnify and
hold Buyer and its Affiliates and the directors, officers, members, shareholders
and employees of Buyer and its Affiliates harmless from and against all claims,
charges, losses, damages, fines, penalties, expenses (including reasonable
attorneys' fees), other costs, amounts paid in settlement, judgments and other
liabilities that they may suffer, sustain or incur or become subject to, arising
out of, based upon, or in connection with any of the following:
11
(a) any misrepresentation or breach or violation of the representations and
warranties of Seller set forth in this Agreement, the Schedules annexed hereto
or any certificate delivered in connection herewith;
(b) any failure to perform any of the covenants and agreements of Seller
set forth in this Agreement or any certificate delivered in connection herewith;
(c) any claim or proceeding against Seller by the Federal Deposit Insurance
Corporation, the Utah Department of Financial Institutions or any other
Governmental Authority having jurisdiction over WebBank, other than any such
claim or proceeding based on a Covered Action of Buyer; or
(d) any actions, suits, proceedings or demands in connection with the
foregoing or the enforcement of Buyer's rights under this Agreement.
Section 8.2 INDEMNIFICATION BY BUYER. Buyer shall defend, indemnify and
hold Seller and its Affiliates and the directors, officers, members,
shareholders and employees of Seller and its Affiliates harmless from and
against all claims, charges, losses, damages, fines, penalties, expenses
(including reasonable attorneys' fees), other costs, amounts paid in settlement,
judgments and other liabilities that they may suffer, sustain or incur or become
subject to, arising out of, based upon, or in connection with any of the
following:
(a) any misrepresentation or breach or violation of the representations and
warranties of Buyer set forth in this Agreement or any certificate delivered in
connection herewith;
(b) any failure to perform any of the covenants and agreements of Buyer set
forth in this Agreement, the Schedules annexed hereto or in any certificate
delivered in connection herewith;
(c) any Third Party Claim arising out of a Covered Action of Buyer; or
(d) any actions, suits, proceedings, or demands in connection with the
foregoing or the enforcement of Seller's rights under this Agreement.
Section 8.3 THIRD PARTY CLAIMS.
(a) If any claim or demand is asserted against an indemnified party by a
third party with respect to any matter under the indemnities set forth in
Sections 8.1 or 8.2 (a "THIRD PARTY CLAIM"), the indemnified party shall
promptly give written notice and details thereof, including copies of all
pleadings and the pertinent documents, to the indemnifying party, but the
indemnifying party's obligations shall not be affected by the failure to give
such notice except to the extent that it can demonstrate that it was materially
prejudiced thereby. Within twenty (20) days of receipt of such notice, the
indemnifying party shall (i) pay the Third Party Claim either in full or upon
compromise agreed to by the indemnifying party or (ii) notify the indemnified
party that the indemnifying party disputes the Third Party Claim and intends to
defend against it, and thereafter so defend and pay any adverse final judgment
or award or settlement amount in regard thereto. Such defense shall be
12
controlled by the indemnifying party, and the cost of such defense shall be
borne by it, except that the indemnified party shall have the right to
participate in such defense at its own expense. The indemnifying party shall
have the right to settle or compromise any Third Party Claim of which it has
assumed the defense only upon the receipt of written consent to such settlement
or compromise from the indemnified party, which consent shall not be
unreasonably withheld; PROVIDED, HOWEVER, that the indemnified party shall not
be obligated to consent to any settlement unless it involves claims for money
damages only, which are being paid in full by the indemnifying party, and any
such failure to consent shall not be deemed unreasonable.
(b) If the indemnifying party fails to take action within twenty (20) days
as set forth above, then the indemnified party shall have the right to pay,
compromise or defend any Third Party Claim and to assert the amount of any
payment on the Third Party Claim plus the expense of defense or settlement as an
indemnity claim. The indemnified party shall also have the right, exercisable in
good faith and upon reasonable prior notice to the indemnifying party, to take
such action as may be necessary to avoid a default prior to the assumption of
the defense of the Third Party Claim by the indemnifying party and any expenses
incurred by so acting shall be paid by the indemnifying party.
(c) Payment of Third Party Claims shall be made in accordance with Section
8.3(a) above. With respect to all claims other than Third Party Claims, the
indemnifying party shall promptly pay or reimburse the indemnified party in
respect of any claim or liability to which the foregoing indemnities relate
after receipt of written notice from the indemnified party outlining with
reasonable particularity the nature and amount of the claim(s). In the event the
indemnifying party fails or refuses to make payment for such claims within a
period of twenty (20) days from the date of notice to the indemnifying party,
the indemnified party shall be entitled to exercise all legal means of relief
available and also shall be entitled to receive from the indemnifying party
interest on the full amount of such claims, such interest to accrue at the
maximum rate allowable by law from and after such twentieth day until such
claims are paid in full.
(d) With respect to any claim for indemnification hereunder, the
indemnified party will give to the indemnifying party and its counsel,
accountants and other representatives reasonable access, during normal business
hours and upon the giving of reasonable prior notice, to its books and records
relating to such claims, and to its employees, accountants, counsel and other
representatives, all without charge to the indemnifying party, except for
reimbursement of reasonable out-of-pocket expenses. In this regard, after the
assertion of a claim for indemnity, the indemnified party agrees to maintain any
of its books and records which may relate to the claim for indemnification
hereunder for such period of time as may be necessary to enable the indemnifying
party to resolve such claim.
Section 8.4 SURVIVAL. Except as otherwise specifically provided in this
Agreement, all representations, warranties, covenants and agreements of Seller
and Buyer hereunder, and the obligations of defense and indemnity contained in
this Article 8, shall survive the Closing.
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ARTICLE 9
MISCELLANEOUS
Section 9.1 NOTICES. Any notice, request, demand, waiver, consent, approval
or other communication which is required or permitted hereunder shall be in
writing and shall be deemed given only if delivered personally or sent by
registered or certified mail or by Federal Express or other overnight mail
service, postage prepaid, or by facsimile, with written confirmation to follow,
as follows:
to Seller:
WebBank
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention:
Facsimile:
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Frome ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
Park Avenue Tower
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Facsimile: 212-451-2222
to Buyer:
Rockland Credit Finance LLC
▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile:
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ P.A.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Section 9.2 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of Seller and Buyer and their respective successors,
assigns, heirs and legal representatives. This Agreement shall not be assignable
by either party without the prior written consent of the other party.
14
Section 9.3 NO THIRD PARTY BENEFICIARIES. This Agreement shall not confer
any rights or remedies upon any Person other than the parties and their
respective successors and permitted assigns, and the Persons entitled to
indemnification as provided in Article 8.
Section 9.4 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York without
giving effect to principles of conflicts of law.
Section 9.5 ARBITRATION. Notwithstanding anything to the contrary set forth
in the is Agreement, in the event that there shall be a dispute between the
parties arising out of or relating to this Agreement, the parties agree that
such dispute shall be submitted to confidential binding arbitration in the
Borough of Manhattan, New York, New York before a panel of three arbitrators
jointly agreed by Seller, on one hand, and Buyer, on the other hand, in
accordance with the rules of the American Arbitration Association within 45 days
of a party providing notice of the existence of a dispute; provided that if the
parties are unable to jointly agree on the arbitrators, each of them shall
select one arbitrator and the two selected arbitrators shall jointly select a
third arbitrator within 30 days thereafter. Any award issued as a result of such
arbitration shall be final and binding on the parties hereto, and shall be
enforceable by any court having jurisdiction over the party against whom
enforcement is sought.
Section 9.6 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
there are no terms other than contained herein; this Agreement cannot be changed
or terminated orally; no waiver of any breach of any provision of this Agreement
shall be deemed a waiver of a breach of a similar or dissimilar provision at the
same time or any prior or subsequent time or of the provision itself.
Section 9.7 SEVERABILITY. In the event that any one or more of the
provisions of this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement and this Agreement shall
be construed as if such invalid, illegal or unenforceable provision had not been
contained herein.
Section 9.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be an original, but all of which shall be
deemed to be one and the same instrument and facsimile or photostatic copies of
an executed counterpart shall be given the same effect as the original.
Section 9.9 HEADINGS. The headings of this Agreement are for convenience of
reference only and shall not affect in any manner any of the terms and
conditions hereof.
Section 9.10 FURTHER ASSURANCES. Each of the parties hereto agrees to
execute and deliver such documents and to take such other actions as the other
party hereto may reasonably request to confirm or evidence the purchase, sale
and transfer of the Purchased Assets or the assumption of the Assumed
Liabilities as provided herein.
15
[Signatures appear on the following page.]
16
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
WEBBANK
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chairman of the Board
ROCKLAND CREDIT FINANCE LLC
By /s/ ▇▇▇▇ ▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇
Title: President and General Manager
SCHEDULES
The following schedules are annexed to and form a part of the Asset Purchase and
Assignment and Assumption Agreement dated as of December 30, 2004 between
WebBank and Rockland Credit Finance LLC.
SCHEDULE 2.1(A)
FACTORING CLIENTS
ABLE TECHNOLOGIES INC., NYLON WORLDWIDE MEDIA, LLC
d/b/a AQUARIUS
ADTECH SYSTEMS, INC PERSONNEL SERVICES INC.
ALLAGE INTELLIGENT TECHNOLOGIES, LLC PHOENIX HOLDING COMPANY, INC
APPALACHIAN RESOURCES, INC POCKET VALLEY NURSERY, INC
BUSINESS PRODUCTS EXPRESS PROCLINICAL ASEPTIC
MANUFACTURING, LLC
CAFE EUROPA, LLC QUANTUM NUTRITIONALS, LLC
▇▇▇▇ ▇▇▇▇▇, INC. RELIABLE TELECOMMUNICATION
SERVICES, LLC
CENTURY STAFFING, LLC SELECTIVE MEDIA, LLC
COLLEGEVILLE FLAG & BANNER SELLEBRITIES, INC.
CRANES FOR HIGHER, INC. SOUTHWINDS SOD, INC.
DIRECT BROKERAGE MANAGEMENT INC. TRISTAR ENTERPRISES, L.L.C.
ENGINEERED FRAMING SYSTEMS, INC TRISTAR PATROL SERVICES
GLOBAL WIRELESS ACCESSORIES, INC TUNED IN SPORTS, INC
GMT, INC. US GAS & ELECTRIC, INC
▇▇▇▇▇▇▇ TOOL & MACHINE CO WORLD WIDE BOOK, INC.
HARVARD CLINICAL TECHNOLOGIES, INC
I-ELEMENT, INC.
IDS CELLULAR, INC./A DIV OF CYBERADS, IN
IMPACT HOSPITALITY SERVICES, Inc.
IN TOUCH LOGISTIC SERVICES, INC.
INTERNATIONAL AMERICAN PRODUCTS, INC.
INTERNATIONAL DIALING SERVICES, INC.
ITBG, INC.
ITM, INC.
JAYMORE ELECTRICAL PRODUCTS AND
LACE CONSTRUCTION, INC. DBA ▇.▇. ▇▇▇▇▇
▇▇ ▇▇▇▇▇ SHIRTS, INC.
LIFESTYLE EXPONENTS USA, INC.
LINTEL INDUSTRIES, INC.
MILLENNIUM BIOTECHNOLOGIES, INC.
MOUNTAIN SHORE INDUSTRY, INC.
MYBIZOFFICE, INC.
NEOPROBE CORPORATION
NEW STAR UNITED, INC.
NURSES PRN, LLC
SCHEDULE 2.1(B)
FACTORING AND PARTICIPATION AGREEMENTS
FACTORING AGREEMENTS
Master Factoring Agreements, as amended, between WebBank and the entities
listed on SCHEDULE 2.1(A).
PARTICIPATION AGREEMENTS
1. Participation agreements between WebBank and the following participants
where WebBank is lead lender:
Capital Growth Asset Based Bridge Loan Fund, LLC
Creative Capital Corporation
Crestview Capital a/k/a Sandhurst Collateralized Return Fund L.P.
Highbridge/▇▇▇▇▇ Special Opportunities Fund L.P.
Key Capital Factoring, Inc.
RAI Funding LLC
Sage Crest II, LLC
2. Participation agreements between WebBank and the following lead lenders
where WebBank is participant:
Prestige Capital Corporation
Key Capital Factoring
3. Sub-participation agreement between WebBank, as lead participant, and
Crestview Capital a/k/a Sandhurst Collateralized Return Fund L.P., as
sub-participant.
SCHEDULE 4.1
PURCHASE PRICE
The Purchase Price consists of the following components:
Funds Invested $4,547,673.32
Accrued Client Fees* 157,331.84
Accrued Participation Fees* 246,460.41
Post Accounting Date/Preclosing Activity 839,929.84
-------------
Total Purchase Price $5,791,395.41
=============
* Fees in respect of WebBank Receivables accrued in calculating the amount
payable under Section 4.4 but unpaid as of the close of business on the
Accounting Date.
