ASSET PURCHASE AGREEMENT
by and among
RUTGERS INVESTMENT GROUP, LLC,
a Delaware limited liability company,
LEARNED ASSOCIATES OF NORTH AMERICA, LLC,
a New Jersey limited liability company,
SEVEN HILLS MANAGEMENT, LLC,
a Pennsylvania limited liability company,
and XXXXX X. XXX,
as MEMBERS of SELLER,
RUTGERS INVESTMENT GROUP, INC.,
a Texas corporation,
Dated July 23, 2007
This ASSET PURCHASE AGREEMENT (this "AGREEMENT"), dated July 23, 2007, is
by and among Rutgers Investment Group, LLC, a Delaware limited liability company
("SELLER"), Learned Associates of North America, LLC, a New Jersey limited
liability company, Seven Hills Management, LLC, a Pennsylvania limited liability
company, and Xxxxx X. Xxx (each a "MEMBER" and collectively, the "MEMBERS") and
Rutgers Investment Group, Inc., a Texas corporation ("BUYER").
W I T N E S S E T H:
Seller desires to sell to Buyer and Buyer desires to purchase and assume
from Seller substantially all of the assets and liabilities related to Seller's
commercial and consumer lending business (the "BUSINESS"), as more particularly
set forth herein.
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:
DEFINITIONS AND TERMS
Section 1.1 CERTAIN DEFINITIONS. As used in this Agreement, the following
terms have the meanings set forth below:
"ACCOUNTS RECEIVABLE" are as defined in SCHEDULE 2.1.
"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 Assignment and
Assumption Agreement and the Xxxx of Sale, to be entered into at Closing between
Buyer and Seller.
"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 Business, but excluding any such items to the extent (i) they are
included in or primarily related to any Excluded Assets or Excluded Liabilities,
(ii) any Law prohibits their transfer or (iii) any transfer thereof otherwise
would subject Seller or any of its Affiliates to any Liability to anyone other
"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 2.5.
"CLIENT CONTRACTS" are as defined in SCHEDULE 2.1.
"CLOSING" means the closing of the asset sale that is the subject of
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMON STOCK" means the common stock of FirstPlus, as defined in
"CONTRACTS" means all personal property leases, agreements and
contracts, including the Client Contracts and the Vendor Contracts.
"FINANCIAL STATEMENTS" is as defined in SECTION 3.5.
"FIRSTPLUS" means FirstPlus Financial Group, Inc., a Nevada
"GAAP" means United States generally accepted accounting principles
as in effect from time to time, consistently applied.
"GOVERNMENT ENTITY" means any federal, state, local, foreign or
domestic court, administrative body or other governmental or quasi-governmental
entity with competent jurisdiction.
"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.
"ORDINARY COURSE" or "ORDINARY COURSE OF BUSINESS" means the conduct
of the Business in accordance with Seller's normal day-to-day customs, practices
"PERMITS" is 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 ACT" means the Securities Act of 1933, as amended.
"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 Transferred Assets
and the assumption of the Assumed Liabilities pursuant to this Agreement.
"VENDOR CONTRACTS" are as defined in SCHEDULE 2.1.
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.
PURCHASE AND SALE OF THE BUSINESS
Section 2.1 PURCHASE AND SALE OF ASSETS. On the terms and subject to the
conditions set forth herein, except as provided in SECTION 2.2 hereof, at the
Closing, Seller shall sell, convey, transfer, assign and deliver to Buyer, free
and clear of all Liens, and Buyer shall purchase from Seller all of Seller's
right, title and interest, as of the Closing, in and to the assets of Seller,
including without limitation, those set forth on SCHEDULE 2.1 (collectively, the
Section 2.2 EXCLUDED ASSETS. Notwithstanding anything herein to the
contrary, from and after the Closing, Seller shall retain all of its existing
right, title and interest in and to, and there shall be excluded from the sale,
conveyance, assignment or transfer to Buyer hereunder, those specified assets
listed on SCHEDULE 2.2 (collectively, the "EXCLUDED ASSETS").
Section 2.3 ASSUMPTION OF LIABILITIES. On the terms and subject to the
conditions set forth herein, at the Closing, Buyer shall assume and discharge or
perform when due the Liabilities relating to or arising out of the conduct of
the Business or the Transferred Assets set forth on SCHEDULE 2.3 (the "ASSUMED
Section 2.4 EXCLUDED LIABILITIES. Seller shall retain and be responsible
for those liabilities specified on SCHEDULE 2.4 and all other Liabilities
relating to or arising out of the conduct of the Business or the Transferred
Assets not expressly included within the Assumed Liabilities (the "EXCLUDED
Section 2.5 Section 2.5 PURCHASE PRICE. On the terms and subject to the
conditions set forth herein, in consideration of the sale of the Transferred
Assets, Buyer shall pay and deliver to Seller (a) ONE MILLION EIGHT HUNDRED
TWENTY FIVE THOUSAND DOLLARS ($1,825,000) in cash at the Closing and (b) within
five Business Days after the Closing, FIVE HUNDRED THOUSAND (500,000) shares of
common stock of FirstPlus (the "BUYER SHARES") issued to the Seller under
Regulation D (the "PURCHASE Price").
Section 2.6 PURCHASE PRICE ALLOCATION. The Purchase Price (which for
purposes hereof shall include the dollar amount of the Assumed Liabilities)
shall be allocated among the Transferred Assets as set forth on SCHEDULE 2.6
hereof for all Tax purposes including, without limitation, Code Section 1060.
Seller and Buyer (and its Affiliates) shall file all Tax Returns consistent with
the allocation described in this SECTION 2.6 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 2.7 CLOSING. The Closing shall take place at the offices of
FirstPlus at 3:00PM prevailing Central Time, on the later of July 23, 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 2.7 shall not result in the termination of this Agreement and shall
not relieve any party of any obligation under this Agreement.
Section 2.8 DELIVERIES BY BUYER. (a) At the Closing, Buyer 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) counterparts of an assignment and assumption agreement, duly
executed by Buyer to effect Buyer's assumption of the Assumed Liabilities and
the effective assignment of the Transferred Assets, substantially in the form of
EXHIBIT A (the "ASSIGNMENT AND ASSUMPTION AGREEMENT");
(iii) duly executed counterparts of each of the Ancillary
Agreements, if any, as applicable;
(iv) Resolutions of the Board of Directors of Buyer authorizing the
execution and delivery of this Agreement by Buyer and the performance of its
obligations hereunder, certified by the Secretary of Buyer; and
(v) Such other separate instruments of assumption that Seller may
reasonably deem necessary or appropriate in order to confirm or evidence Buyer's
assumption of the Assumed Liabilities.
(b) Within five Business Days after the Closing Date, Buyer shall
deliver to Seller a duly issued share certificate(s) representing the Buyer
Section 2.9 DELIVERIES BY SELLER. At the Closing, Seller shall
deliver, or cause to be delivered, to Buyer the following:
(a) a xxxx of sale, duly executed by Seller, transferring the
tangible personal property included in the Transferred Assets to Buyer,
substantially in the form of Exhibit B (the "XXXX OF SALE");
(b) the Books and Records (provided that Seller may retain copies
for archived purposes);
(c) duly executed counterparts of each of the other Ancillary
Agreements, as applicable;
(d) 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
(e) A certificate of the Secretary of State of the State of Delaware
dated as of a recent date as to the good standing of Seller in such state; and
(f) 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 Transferred Assets.
REPRESENTATIONS AND WARRANTIES OF SELLER AND MEMBERS
Seller and Members jointly and severally represent and warrant to Buyer as
of the date hereof and as of the Closing as follows:
Section 3.1 ORGANIZATION. Seller is a limited liability company duly
organized, validly existing and in good standing under the laws of Delaware, and
has all requisite power and authority to own, lease and operate the Transferred
Assets, and to carry on the Business as currently conducted. Complete and
correct copies of Certificate of Formation of Seller and all amendments thereto,
certified by the Secretary of State of the State of Delaware, and of the Limited
Liability Company Operating Agreement of Seller, and all amendments thereto,
previously have been delivered to Buyer. Seller is duly qualified to do business
as a 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 Transferred Assets of Seller on one
hand or Buyer on the other hand, or on the ability of either party 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. Assuming the due
execution and delivery of this Agreement by Buyer, 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 Governmental Entity applicable to Seller 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 Seller; or violate, conflict with or breach any
agreement, contract, mortgage, instrument, indenture or license to which Seller
or Members is a party or by which Seller or Members is or may be bound with
respect to the Transferred Assets 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 Transferred Assets.
Section 3.4 SUBSIDIARIES. Seller has no subsidiaries or equity investments
in any other corporation, association, partnership, joint venture or other
entity that carries on the Business.
Section 3.5 FINANCIAL STATEMENTS. The following unaudited financial
statements of Seller (collectively, the "FINANCIAL STATEMENTS"), which have been
furnished previously to Buyer by Seller, have been prepared from and are in
accordance with the books and records of Seller in conformity with GAAP applied
on a consistent basis throughout the periods involved, and fairly present the
financial condition of Seller as at the dates stated and the results of
operations of Seller for the periods then ended: balance sheets of Seller at
December 31, 2005 and 2006 and the income statements for the years then ended,
including footnotes (audited); and balance sheet of Seller at March 31, 2007 and
income statement for the three months then ended, including footnotes.
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 the
(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 Transferred Assets 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, Seller has
no 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
(iii) current liabilities arising in the ordinary and usual course
of the Business subsequent to March 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) Seller 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 Seller 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
Seller and no agreement with any federal, state, local or foreign tax authority
that may affect the subsequent tax liabilities of Seller; and
(iii) Seller has no 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 Seller.
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 Seller or any Member, officer or
director of Seller in connection with the Business or the Transferred Assets,
before any federal, state, local or foreign court or Governmental Entity.
Neither Seller nor Members is subject to or in default with respect to any
judgment, order, writ, injunction or decree that is binding upon Seller or
Members with respect to the Business.
Section 3.10 COMPLIANCE WITH LAWS. Except as listed on SCHEDULE 3.10,
(i) Each of Seller and Members are in compliance in all material
respects with all laws, ordinances, regulations and orders applicable to the
Business and the Transferred Assets and has no notice or knowledge of any
violations, whether actual, claimed or alleged, thereof.
(ii) SCHEDULE 3.10 lists all franchises, licenses, permits,
consents, authorizations, approvals and certificates of any Governmental Entity
(collectively, the "PERMITS") used in conducting the Business. 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 Governmental Entity necessary to the conduct
of the Business. Neither Seller nor 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 Seller to renew, any Permit.
Section 3.11 EMPLOYEE BENEFIT PLANS. Seller has no 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 Seller 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 Seller (or their beneficiaries)
are eligible to participate or derive a benefit.
Section 3.12 TITLE TO TRANSFERRED ASSETS. (a) Seller has good and
marketable title to all Transferred Assets owned by it and valid leasehold
interests in all Transferred Assets leased by it in the operation of the
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. Seller is not in violation of any covenant, condition, restriction,
easement, agreement, order or regulation of any Governmental Entity having
jurisdiction over the Transferred Assets that affects the Transferred 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 Transferred Assets, 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. SCHEDULE 2.1 lists all Contracts.
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 2.1, Seller has not 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 2.1, neither Seller nor, to the knowledge of Seller or
Members, any other party thereto is in material violation of, in default in
respect of, nor, to knowledge of 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 Seller claiming any such default by Seller 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 Seller 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.
Section 3.15 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 or Members in connection with the transactions contemplated hereby.
Section 3.16 ACCOUNTS RECEIVABLE. As of the Closing, each of the Accounts
Receivable is fully collectible without deduction or offset other than for the
Deferred Revenue associated therewith.
Section 3.17 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 3.18 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, THE
TRANSFERRED ASSETS OR THE ASSUMED LIABILITIES, EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR
Section 3.19 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 to Buyer on
the Closing Date.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller and Members as of the date hereof
and as of the Closing as follows:
Section 4.1 ORGANIZATION. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of Texas.
Section 4.2 AUTHORIZATION. Buyer has all requisite corporate power and
authority to own and operate its properties and assets and to carry on its
business as currently conducted, and 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. The execution, delivery and
performance by Buyer of this Agreement and each of the Ancillary Agreements 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 Buyer of this Agreement or any of the Ancillary Agreements.
Assuming the due execution and delivery of this Agreement by Seller, this
Agreement is a legal, valid and binding obligation of Buyer, enforceable against
Buyer 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
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 Buyer, threatened against Buyer, at law or in equity, before
any local Governmental Entity that might have an adverse effect on Buyer's
ability to perform any of its 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 Buyer, nor the consummation by Buyer of the
transactions contemplated hereby, nor compliance by Buyer 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
Governmental Entity applicable to Buyer or any of its material properties;
breach or conflict with any of the terms, provisions or conditions of the
organization documents of Buyer; or violate, conflict with or breach any
agreement, contract, mortgage, instrument, indenture or license to which Buyer
is party or by which Buyer is 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 Buyer's 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 Buyer or any Affiliate of Buyer who might be entitled to any fee or
commission from Buyer in connection with the transactions contemplated hereby.
Section 4.7 FINANCIAL CAPABILITY. On the Closing Date, Buyer will have
sufficient funds to effect the Closing and all other transactions contemplated
by this Agreement.
Section 4.8 DUE DILIGENCE. Buyer has had an adequate opportunity to
conduct such examinations, audits and all other forms of "due diligence" that it
deems 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 Buyer nor
any other Person makes any other express or implied representation or warranty
on behalf of Buyer.
Section 4.10 CLOSING DATE EFFECT. All of the representations and
warranties of Buyer 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 to Buyer on the Closing
Section 5.1 TAX MATTERS.
(a) PROPERTY TAXES. All personal property and ad valorem Taxes
relating to the Transferred Assets ("PROPERTY TAXES") which 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 Buyer. 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 Buyer 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, Buyer
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 its
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
Buyer. Any Tax Returns that must be filed in connection with Transfer Taxes
shall be timely prepared by Buyer. Buyer shall provide copies of such tax
returns to Seller no later than fifteen (15) days prior to their due date and
Buyer and Seller shall cooperate in the timely filing of all such Tax Returns.
(d) REGULATORY NOTICES AND CONSENTS. Seller and Buyer 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 Buyer 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 Transferred Assets. 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 BUYER'S 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 Buyer 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, Buyer shall, and shall cause its
Affiliates to, retain all Books and Records with respect to the Business in
existence on the Closing Date and delivered or made available to Buyer by
Seller. After the Closing Date, prior to the expiration of such period, Buyer
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 Buyer 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. Buyer acknowledges and agrees for
itself and its 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 Transferred Assets 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
Buyer prior to the Closing.
(b) LIMITED USE BY BUYER. Prior to the Closing Date, Buyer agrees,
for itself and its Affiliates, to 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 its 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 Buyer and its 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
agrees, for itself and its Affiliates, not to (a) disclose to any Person (other
than Buyer or those designated in writing by Buyer) in any manner, directly or
indirectly, any Confidential Information, or (b) use, or permit or assist, by
acquiescence or otherwise, any Person (other than Buyer or those designated in
writing by Buyer) to use, in any manner, directly or indirectly, any
Confidential Information, excepting only to enforce the provisions of this
(d) REQUIRED DISCLOSURE. If either party hereto or any of its
respective Representatives is required to disclose any Confidential Information
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 the Business in the Ordinary Course. Seller
shall not sell any of the Transferred Assets to anyone other than Buyer.
Section 5.4 CONSENTS. At the Closing, effective as of the Closing Date,
the Seller shall assign to the Buyer all its rights under the Contracts. With
respect to any Contract that cannot be assigned to Buyer on the Closing Date,
the performance obligations of the Seller thereunder shall be deemed to be
subleased or subcontracted to Buyer until such Contract has been effectively
assigned or terminated, or the subcontract is terminated by Buyer in its sole
discretion. Notwithstanding the foregoing, this Agreement shall not constitute
an agreement to assign, transfer, sublease or subcontract, as the case may be,
any contracts, leases, licenses, agreements or arrangements, whether oral or in
writing if such attempted assignment, transfer, sublease or subcontract, without
consent of the other party or parties thereto, is not permitted as a matter of
law or in accordance with the terms of the applicable Contract or would
constitute a breach of the applicable Contract or would in any way impair the
rights of Seller or Buyer thereunder. 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 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) assigned to and assumed by Buyer in connection with the
acquiring of such permits, consents, approvals, waivers and authorizations or
the assignment, transfer, sublease or subcontract of the Client Contracts and
other Transferred Assets. 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 NOTICES OF ASSIGNMENT. Immediately after the Closing, Buyer
shall deliver to each third party under each Client Contract and Vendor Contract
a notice of such assignment to Buyer. With respect to each Client Contract, such
notice shall inform the recipient that all sums payable thereunder shall be paid
to Buyer. With respect to each Vendor Contract, such notice shall inform the
recipient that Seller and its Affiliates have no authority thereunder to order
anything or cause anyone to incur fees, costs or expenses.
Section 5.6 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 5.7 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 Buyer relating to the possible sale or
disposition of all or any portion of the Business or any of the Transferred
Assets (except in the Ordinary Course of Business); (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 Transferred Assets
(other than in the Ordinary Course of Business), 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
Buyer immediately if any Person makes any proposal, offer, inquiry, or contact
with respect to any of the foregoing.
Section 5.8 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 Delaware, 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 Buyer's relationship
with any customer or any future or prospective customers, business or suppliers,
wherever located or serviced, of Buyer, 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 Buyer or any person who was an employee or consultant
of Buyer during the preceding six months for any reason, attempt to persuade any
employee or consultant of Buyer to terminate, reduce or refrain from engaging in
his or her employment or other service relationship with Buyer for any reason or
otherwise interfere with Buyer's relationship with any of its employees,
consultants or anyone else who provides services similar to the Business to
Buyer. 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 5.9 INJUNCTIVE RELIEF. Seller acknowledges and agrees that Buyer's
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
Section 5.10 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 5.11 UPDATE DISCLOSURE. From and after the date hereof until the
Closing Date, Seller and Buyer 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.
Section 5.12 INTERIM TRANSACTIONS. The Buyer and the Seller waive and
acknowledge any interim transactions between the parties while the transaction
contemplated hereby has been pending between June 20, 2007 and the date hereof.
CONDITIONS TO CLOSING
Section 6.1 CONDITIONS TO THE OBLIGATIONS OF BUYER 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; (b) the other party shall have performed and complied
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) cause any of the
Transaction to be rescinded following the Closing, or (iii) affect adversely the
right of Buyer to own the Transferred Assets 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 BUYER. The obligation of
Buyer to effect the Closing is subject to is subject to the satisfaction (or
waiver) prior to the Closing of the following additional conditions:
(a) ANCILLARY AGREEMENTS. Seller having executed and delivered the
unexecuted Ancillary Agreements to which it is a party.
(b) CUSTOMER CONSENTS. Assignment consents and novations in a form
reasonably satisfactory to Buyer related to the customer contracts set forth on
SCHEDULE 6.2(B) shall have been obtained.
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. Buyer shall have executed and delivered
the unexecuted Ancillary Agreements.
(b) PURCHASE PRICE. Buyer shall have delivered the cash portion of
the Purchase Price.
(c) CUSTOMER CONSENTS. Assignment consents and novations in a form
reasonably satisfactory to Seller related to the customer contracts set forth on
SCHEDULE 6.2(B) shall have been obtained.
INDEMNIFICATION; CERTAIN REMEDIES
Section 7.1 INDEMNIFICATION BY BUYER. Buyer hereby agrees that from and
after the Closing it shall 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 Buyer in this Agreement and in the Ancillary Agreements; (ii) any breach of
any covenant or obligation of Buyer in this Agreement or in any writing
delivered by Buyer pursuant to this Agreement; (iii) any Liability arising out
of the ownership or operation of the Transferred Assets after the Closing Date;
and (iv) any non-payment or non-performance of the Assumed Liabilities. 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
Section 7.2 INDEMNIFICATION BY SELLER AND MEMBERS. Seller and Members
hereby agree that from and after the Closing they shall jointly and severally
indemnify, defend and hold harmless Buyer, 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 "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 Excluded
Liability or other liability imposed upon Buyer as transferee of the Business
and the Transferred Assets, or otherwise relating to the conduct of the Business
prior to the Closing Date and not included within the Assumed Liabilities. 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 Buyer
arising from the receipt of such indemnity payment (grossed up for such
Section 7.3 THIRD PARTY CLAIM INDEMNIFICATION PROCEDURES.
(a) In the event that any claim or demand for which Buyer 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
Buyer on the other hand, shall promptly notify the other of such Third Party
Claim. Buyer 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 Buyer on the one hand, or Seller and Members
on the other hand, notifies 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 Buyer on the one hand, or Seller and Members on the other
hand, as applicable, (i) elects not to defend the Indemnified Party against a
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, fails 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
(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
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).
Section 8.1 TERMINATION. This Agreement may be terminated at any time
prior to the Closing:
(a) by written agreement of Buyer and Seller;
(b) by Buyer, if the Closing shall not have occurred on or prior to
July 31, 2007 or by Seller, if the Closing shall not have occurred on or prior
to July 31, 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 Buyer, if Seller and Members shall breach any of their
representations, warranties or obligations hereunder, or by Seller, if Buyer
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.
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
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.
Xxxx Xxxxxxx, President and CEO
FirstPlus Financial Group, Inc.
c/o Xxxxxxx Xxxxxxx P.C.
Attention: Xxxxxxx Xxxxxxx
0000 Xxxxx Xxxxxxx 000, Xxxxx 000
Xxxxxxx, XX 00000
With a copy to:
Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP
Park Avenue Tower
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx
To Seller and Members:
Rutgers Investment Group, LLC
0000 Xxxxxxxxxxx Xxxx, Xxx. 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxx, Manager
With a copy to:
Xxxxx Xxxxxxxx & XxXxxxxx, P.C.
Two Commerce Square Suite 3410
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxx X. XxXxxxxx, Esquire
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 Buyer 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
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 Buyer, 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
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 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
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]
IN WITNESS WHEREOF, the parties have executed or caused this Agreement to
be executed as of the date first written above.
RUTGERS INVESTMENT GROUP, LLC
a Delaware limited liability company
Name: Xxxxx Xxx
RUTGERS INVESTMENT GROUP, INC.
a Texas corporation
LEARNED ASSOCIATES OF NORTH AMERICA,
a New Jersey limited liability company
Name: Xxxx X. Xxxxxx
SEVEN HILLS MANAGEMENT, LLC
a Pennsylvania limited liability company
Name: Xxxxxx Xxxxxxxxxx
XXXXX X. XXX
The undersigned hereby guarantees the payment and performance of the
liabilities and obligations of Buyer hereunder.
FIRSTPLUS FINANCIAL GROUP, INC.