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EXHIBIT 2.2
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (hereinafter the "Agreement") is made in
San Juan, Puerto Rico this 30th day of June, 2000, by and between ORIENTAL BANK
AND TRUST, a banking corporation duly authorized, organized and existing under
the laws of the Commonwealth of Puerto Rico (hereinafter, the "Seller") and
POPULAR LEASING & RENTAL, INC., a corporation duly authorized, organized and
existing under the laws of the Commonwealth of Puerto Rico (hereinafter called
the "Purchaser").
WHEREAS, Seller is in the business of making and/or purchasing finance
leases on vehicles and equipment;
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, certain assets of Seller upon the terms and conditions set
forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, Seller and Purchaser agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 CERTAIN DEFINITIONS. As used in this Agreement,
unless the context requires otherwise, the following terms shall have the
meanings indicated, and additional capitalized terms shall have the meanings
assigned elsewhere in this Agreement (with terms being defined in the singular
having a corresponding meaning in the plural and vice versa):
(a) "Assets" means the Leases, the Equipment and the Vehicles.
(b) "Commonwealth" means the Commonwealth of Puerto Rico.
(c) "Closing Date" means June 30, 2000.
(d) "Deposit" means an amount delivered or to be delivered to
Seller at the inception of a Lease as a deposit or advance
payment, as shown on Exhibit A hereto.
(e) "Documents" means (i) the documents comprising the Leases,
(ii) credit application data provided by the Lessees on the
Leases, as well as credit reports and other related documents
and verifications obtained by the Seller, (iii) vehicle
licenses (including licenses on file for prior years) and,
when applicable, Certificates of Title, Public Service
Commission certificates of addition, other documents
evidencing title to any equipment, and certificates of
insurance and insurance policies maintained by Lessees
relating to the Vehicles with evidence of payment of premiums,
and (iv) Certificate of Title or Ownership or any other
evidence of ownership pertaining
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to the Equipment, and certificates of insurance and insurance
policies maintained by the Lessees relating to the Equipment
with evidence of payment of premiums.
(f) "Equipment" means any equipment or any other personal
property, together with all related parts and accessories,
which has been leased by Seller to a Lessee pursuant to a
Lease.
(g) "Lease" means any finance lease agreement between Seller and a
Lessee, together with all related schedules, amendments and
supplements thereto and all amounts owed by Lessees thereto as
principal (includes any insurance premiums that have been
financed as part of the principal amount of the lease) and
interest, but excluding the following: (i) leases delinquent
for ninety (90) days or more, (ii) leases on which the Lessees
are disputing the balance owed or payments posted, (iii)
leases on which any Lessee is subject to bankruptcy
proceedings, (iv) leases subject to an existing legal
proceeding in the courts or in which the Vehicle or Equipment
has been confiscated or has been repossessed or designated for
repossession from the Lessee, (v) leases in the process of an
insurance claim, and (vi) leases which have an outstanding
principal amount of less than $1,000.
(h) "Lessee" means the person(s) or entity(ies) leasing a Vehicle
or Equipment from Seller pursuant to a Lease.
(i) "Purchase Price" means the total price to be paid by Purchaser
for the purchase of the Assets, as described in Section 2.02
hereof.
(j) "Vehicle" means a motor vehicle together with all related
equipment and accessories, which is owned by Seller and has
been leased by Seller to a Lessee pursuant to a Lease.
(k) "Final Closing and Settlement Date" means a date which is a
Friday and which complies with both of the following
requirements: (i) no earlier than seven (7) days following the
Closing Date, and (ii) no later the fifth business day
following the satisfaction or waiver, to the extent permitted
hereunder, of the conditions to the final consummation of the
purchase and sale specified in Article IX of this Agreement.
(l) "Final Net Leases Amount" means the Net Leases Amount computed
as of the Closing Date.
(m) "Net Leases Amount" means the outstanding balance of the
Leases (not including the Late and Other Charges (as defined
below) covered in Section 6.05 hereto) minus the unearned
interest portion of such outstanding balance of the Leases
(computed using the interest method).
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(m) "Preliminary Net Leases Amount" means the Net Leases Amount
computed as of seven (7) days prior to the Closing Date.
(n) "Escrow Rate" means the rate determined by the escrow agent
(or the party paying such interest) based on the offered
quotation for the rate of interest on three-month deposits of
United States dollars in the London interbank market, as
published by Telerate Systems, Inc. (currently on page 3750 of
the financial information reporting services published
electronically by Telerate Systems, Inc.) at approximately
11:00 a.m. (London Time) on the date of the initial deposit of
funds in an escrow account (or the date when the obligation to
pay interest commences hereunder), plus 2%
ARTICLE II
SALE AND PURCHASE OF ASSETS
SECTION 2.01 SALE AND PURCHASE. Seller agrees to sell, convey,
assign, transfer and deliver to Purchaser, and Purchaser agrees to purchase from
Seller, subject to the terms and conditions hereinafter set forth, all of the
Assets free and clear of all liens and encumbrances, except for interests of
Lessees under the Leases. Seller will not guarantee the collectibility of the
Leases, and, with the exception of the repurchase obligations set forth in
Section 7.02 and Article XII hereto and any amounts that could become payable by
Seller to Purchaser pursuant to the indemnification provisions included in
Article XII hereto, the sale, conveyance, assignment and delivery to Purchaser
of the Assets shall be without recourse to Seller.
SECTION 2.02 PURCHASE PRICE. The Purchase Price for the Assets
shall be 97.72% of the outstanding balance of the Leases (not including the Late
and Other Charges (as defined below) covered in Section 6.05 below) as of the
Closing Date minus the unearned interest portion of such outstanding balance of
the Leases as of the Closing Date (computed using the interest method). The
Purchase Price shall be calculated according to the formula set forth in Exhibit
A hereto.
SECTION 2.03 PAYMENT OF THE PURCHASE PRICE.
(a) The Purchase Price shall be paid in two installments. The
first installment of the Purchase Price shall be paid on the Closing Date and
shall be equal to the Preliminary Net Leases Amount multiplied by .9772, less
the amount of ONE MILLION DOLLARS ($1,000,000) which shall be retained by
Purchaser (the "Retained Amount").
(b) The second installment of the Purchase Price shall be paid on
the Final Closing and Settlement Date and shall be equal to the sum of (a)
Retained Amount and (b) the difference between the Preliminary Net Leases Amount
and the Final Net Leases Amount multiplied by .9772 (provided that if such
difference is negative then the product of such negative number and .9772 shall
be subtracted from the Retained Amount). Purchaser shall pay Seller together
with the second
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installment interest on such amount for the period from the Closing Date to the
Final Closing and Settlement Date at the Escrow Rate (or to the extent that the
difference between Preliminary Net Leases Amount and the Final Net Leases Amount
multiplied by .9772 is negative and exceeds the Retained Amount, the payment
from the Seller to the Purchaser shall be paid with interest at the Escrow
Rate).
SECTION 2.04 CLOSING AND SETTLEMENT.
(a) An escrow closing of the sale and purchase of the Leases shall
take place on the Closing Date at the Legal Division of Popular, Inc., 209 Munoz
Rivera Avenue, 9th Floor, San Juan, Puerto Rico or at such other place, at such
other time, or on such other date as the parties may mutually agree upon. The
escrow closing shall be conditioned on the fulfillment on or prior to the
Closing Date of all of the conditions set forth in Sections 9.01 and 9.02
hereto.
(b) Purchaser shall deposit the first installment of the Purchase
Price on the Closing Date in an escrow account with Banco Popular de Puerto Rico
(the "Purchase Price Escrow Account"). Such moneys shall remain deposited in the
Purchase Price Escrow Account until the Final Closing and Settlement Date. The
Purchase Price Escrow Account shall accrue interest at the Escrow Rate.
(c) The Leases shall be held by the Seller in escrow until the
Final Closing and Settlement Date. All payments received by Seller after the
Closing Date from or on behalf of Lessees under the Leases to be purchased by
Purchaser hereunder shall be deposited by Seller in an escrow account with
Seller (the "Lease Payments Escrow Account"). Such moneys shall remain deposited
in the Lease Payments Escrow Account until the Final Closing and Settlement
Date. The Lease Payments Escrow Account shall accrue interest at the Escrow
Rate.
(d) The final closing and settlement of the purchase and sale of
the Leases hereunder shall take place on the Final Closing and Settlement Date
at the Legal Division of Popular, Inc., 209 Munoz Rivera Avenue, 9th Floor, San
Juan, Puerto Rico or at such other place, at such other time, or on such other
date as the parties may mutually agree upon. The final closing and settlement
shall be conditioned on the fulfillment of all of the conditions set forth in
Sections 9.03 hereto. On the Final Closing and Settlement Date the parties will
settle any difference between the preliminary purchase price amount to be
deposited in the Purchase Price Escrow Account on the Closing Date and the final
purchase price amount determined as of the Closing Date, when the final figures
to determine the Final Net Leases Amount are available.
(e) Title and beneficial ownership of the Leases will be
transferred from the Seller to the Purchaser on the Final Closing and Settlement
Date effective as of the Closing Date once the following payments, transfers or
deliveries have been made: (i) the amounts deposited in the Purchase Price
Escrow Account are transferred to Seller; (ii) the amounts deposited in the
Lease Payments Escrow Account are transferred to Purchaser, (iii) Purchaser
shall pay to Seller the second installment of the Purchase Price; and (iv) the
various deliveries contemplated in Section 8.02 hereto have been completed.
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(f) From the Closing Date to the Final Closing and Settlement
Date, Seller shall be obligated to receive and deposit in the Lease Payments
Escrow Account all payments and make all collections from or on behalf of
Lessees under the Eligible Leases and pursuant to such collection it shall
execute and perform the following: (i) establish and maintain a complete,
accurate and separate account of each Lease; (ii) collect all amounts due with
respect to each Lease, as each payment becomes due; (iii) apply all sums
collected by it with respect to each Lease to the account of such Lease and
allocate such sums to the principal, interest, late charges, insurance and other
charges due under such Lease; and (iv) provide any reports relating to such
collection and servicing efforts that Purchaser may reasonably request. Seller
shall conduct these collection and servicing efforts with due care and in
accordance with the same policies, procedures and processing priorities that are
presently followed by Seller with respect to the Leases, and in accordance with
all applicable laws, rules and regulations.
SECTION 2.05 TERMINATION OF AGREEMENT. This Agreement may, by
giving prior notice, be terminated:
(a) (i) on or before the Closing Date, by Purchaser if any of
the conditions in Section 9.01 has not been satisfied as of the Closing Date or
if satisfaction of such a condition is or becomes impossible (other than through
the failure of Purchaser to comply with its obligations under this Agreement)
and Purchaser has not waived such condition on or before the Closing Date; or
(ii) on or before the Closing Date, by Seller, if any of the conditions in
Section 9.02 has not been satisfied of the Closing Date or if satisfaction of
such a condition is or becomes impossible (other than through the failure of
Seller to comply with its obligations under this Agreement) and the Seller has
not waived such condition on or before the Closing Date; (iii) on or before the
Final Closing and Settlement Date, by either Purchaser or Seller if any of the
conditions in Section 9.03 has not been satisfied as of the Final Closing and
Settlement Date or if satisfaction of such a condition is or becomes impossible
(other than through the failure of the party terminating the Agreement to comply
with its obligations under this Agreement);
(b) by mutual consent of Purchaser and Seller; or
(c) by either Purchaser or Seller if the Final Closing and
Settlement Date has not occurred (other than through the failure of any party
seeking to terminate this Agreement to comply fully with its obligations under
this Agreement) on or before July 31, 2000, or such later date as Purchaser and
Seller may agree upon.
SECTION 2.06 EFFECT OF TERMINATION. Each party's right of
termination under Section 2.05 is in addition to any other rights it may have
under this Agreement or otherwise, and the exercise of a right of termination
will not be an election of remedies. If this Agreement is terminated pursuant to
Section 2.05, all further obligations of the parties under this Agreement will
terminate, except that the obligations in Sections 12.01, 12.02 and 12.03 will
survive. If the termination takes place after the Closing Date, then the
obligations of the parties hereunder shall terminate after the following
payments and transfers have been made: (i) the amounts deposited in the Purchase
Price Escrow
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Account are transferred to Purchaser; (ii) the amounts deposited in the Lease
Payments Escrow Account are transferred to Seller, and (iii) the escrow
maintained by Seller of the Leases shall terminate.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF SELLER
Seller represents, warrants and covenants to Purchaser that:
SECTION 3.01 ORGANIZATION. Seller is a banking corporation duly
organized, existing and in good standing under the laws of the Commonwealth with
the requisite corporate power and authority to own, operate and lease its
properties and to carry on its business as now being conducted.
SECTION 3.02 CORPORATE AUTHORITY. Seller has all requisite
corporate power and authority to carry on its business as it is now being
conducted, to enter into this Agreement and perform the transaction contemplated
hereunder, and to sell, convey, assign, transfer and deliver the Assets.
Seller's board of directors has authorized the execution of this Agreement, and
the sale, conveyance, assignment, transfer and delivery to Purchaser of the
Assets, and no approval of Seller's shareholders is required.
SECTION 3.03 TITLE OF ASSETS. Seller holds title to the Assets
free and clear of any and all liens, claims and encumbrances or interests of
other parties whatsoever, except for interests of Lessees under the Leases, and
on the Final Closing and Settlement Date Purchaser will receive good and
marketable title to the Assets, free and clear of any and all liens, claims and
encumbrances or interests of other parties whatsoever, except for interests of
Lessees under the Leases.
SECTION 3.04 NO CONFLICTS. Neither the execution or delivery by
the Seller of this Agreement nor the performance of the transactions
contemplated hereby to be performed by it shall:
(i) conflict with or result in a breach of any provision
of the Articles of Incorporation (or other charter documents) or Bylaws of the
Seller;
(ii) violate any law or regulation applicable to the
Seller or by which the Seller or any of its properties is bound, which violation
could have a material adverse effect on the Assets, on the Purchaser's ability
to acquire the Assets on the terms set forth herein or on the Seller's ability
to perform its obligations under this Agreement (a "Seller Material Adverse
Effect"); or
(iii) violate, constitute an event of default under, permit
the termination of, give rise to a right to accelerate any indebtedness under,
or otherwise breach or conflict with, any Lease; or require any consent,
approval, authorization or other order of action of, or notice to, or
declaration, filing or registration with any governmental agency or other third
party (except as otherwise described herein); in each case other than such of
the foregoing matters which, or the
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absence of which, would not, either individually or when taken together with all
other such matters, have a Seller Material Adverse Effect.
SECTION 3.05 PAYMENT OF TAXES. All excise taxes related to the
Assets which are the responsibility of Seller as owner of the Assets and which
are due and payable on or before the Closing Date, together with any interest or
penalties thereon, have been paid in full.
SECTION 3.06 COMPLIANCE; ASSIGNABILITY. Seller is in complete
compliance with all of the promises, covenants and undertakings assumed by it
under the Leases. Each Lease is assignable to Purchaser hereunder without
consent of any Lessee or other third party (except as otherwise described
herein), and consummation of the transaction provided for in this Agreement will
not result in any breach or default under a Lease or under any other contract or
obligation to which Seller is a party.
SECTION 3.07 INSURANCE POLICIES. Except as set forth in Schedule
3.07 hereto, from the inception of each Lease through the Final Closing and
Settlement Date, Seller has maintained and will maintain in full force and
effect all the insurance policies required by all laws, regulations and
governmental orders for the ownership, maintenance, use and operation of the
Assets. Seller has paid and will pay all premiums for such insurance, which
relate to all periods through the Final Closing and Settlement Date. The
insurance policies maintained by Lessees with respect to the remaining Assets
hereto are in full force and effect and are in such form and provide sufficient
coverage to comply with all applicable laws and regulations. To best of our
knowledge, Lessees have repaired the Vehicles or Equipment with the proceeds of
any insurance payable as a result of destruction, loss, theft, damage or
impairment paid to Lessees for the purpose of repairing the Vehicle or
Equipment.
SECTION 3.08 NO PENDING LITIGATION; COMPLIANCE WITH LAWS. There
has been no decision, judgment, order, consent decree or settlement which will,
nor is there pending or threatened any litigation or governmental investigation
which if adversely decided or concluded could, adversely affect Purchaser's
retention, ownership and enjoyment of the Assets. Except as otherwise described
herein, Seller has duly obtained all consents, licenses, approvals and
authorizations and has effected all declarations, filings and registrations
necessary for the due execution, delivery and performance by the Seller of this
Agreement and the transactions contemplated hereunder. Seller, and to Seller's
best knowledge the Lessees, have complied with all laws, regulations and
governmental orders relating to the ownership, maintenance, use and operation of
the Assets, the violation of which could adversely affect Purchaser's retention,
ownership and enjoyment of the Assets.
SECTION 3.09 BROKERS OR FINDER'S FEES. Seller will not incur any
liability for any broker's or finder's fees or commissions or similar charges in
connection with the transaction contemplated by this Agreement.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
Purchaser represents, warrants and covenants to Seller that:
SECTION 4.01 ORGANIZATION; CORPORATE AUTHORITY. Purchaser is a
corporation duly organized, existing and in good standing under the laws of the
Commonwealth, and has all requisite corporate power and authority to carry on
its business as it is now being conducted, to enter into this Agreement and
perform the transaction contemplated hereunder, and to purchase and accept the
Assets.
SECTION 4.02 CORPORATE AUTHORITY. Purchaser has all requisite
corporate power and authority to carry on its business as it is now being
conducted, to enter into this Agreement and perform the transaction contemplated
hereunder, and to purchase and accept the Assets. Purchaser's board of directors
has authorized the execution of this Agreement, and the purchase and acceptance
of the Assets from Seller, and no approval of Purchaser's shareholders is
required.
SECTION 4.03 BROKERS OR FINDER'S FEES. Purchaser will not incur
any liability for any broker's or finder's fees or commissions or similar
charges in connection with the transaction contemplated by this Agreement.
SECTION 4.04 NO CONFLICTS. Neither the execution or delivery by
the Purchaser of this Agreement nor the performance of the transactions
contemplated hereby to be performed by it shall:
(i) conflict with or result in a breach of any provision
of the Articles of Incorporation (or other charter documents) or Bylaws of the
Purchaser;
(ii) violate any law or regulation applicable to the
Purchaser or by which the Seller or any of its properties is bound, which
violation could have a material adverse effect on the Purchaser's ability to
acquire the Assets on the terms set forth herein or on the Purchaser's ability
to perform its obligations under this Agreement (a "Purchaser Material Adverse
Effect"); or
(iii) require any consent, approval, authorization or other
order of action of, or notice to, or declaration, filing or registration with
any governmental agency or other third party(except as otherwise described
herein); in each case other than such of the foregoing matters which, or the
absence of which, would not, either individually or when taken together with all
other such matters, have a Purchaser Material Adverse Effect.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
AS TO THE LEASES
Seller makes the following representations and warranties as to the
Leases. The representations and warranties shall survive the sale of the Leases.
Purchaser's knowledge of any breach of the representations or warranties
contained herein shall not void any of the representations or warranties or
Seller's obligation to indemnify Purchaser for any such breach as provided in
Article XII hereto; provided, however, that Purchaser shall inform Seller if
Purchaser becomes aware prior to the Closing Date of any breach by Seller of the
representations and warranties contained herein:
SECTION 5.01 CHARACTERISTICS OF LEASES. Each Lease,
(i) is for a Vehicle or Equipment in the Commonwealth and
complies with the requirements set forth in Section 1.01(g) hereto;
(ii) has been fully and properly executed by the parties
thereto and contains the original signature of the Lessee;
(iii) is the only unsatisfied original executed Lease for
the applicable Vehicle or Equipment;
(iv) accurately reflects all of the actual terms and
conditions of the Lessee's lease of the Vehicle or Equipment with installment
payments;
(v) is properly documented according to Seller's
standards in effect at the time of origination of the Lease; and
(vi) is not in the process of being closed out or
otherwise liquidated.
SECTION 5.02 SCHEDULES. The information to be set forth in the
Closing Schedule (as defined herein) and in the Settlement Schedule (as defined
herein) will be true and accurate as of the dates reflected in such schedules.
SECTION 5.03 COMPLIANCE WITH LAW. Each Lease complied at the time
it was made, and each Lease will comply at the time it is purchased by
Purchaser, with all requirements of applicable federal, state and local laws and
regulations, including, without limitation, usury laws, the Regulation of
Personal Property Lease Contracts Act, the Puerto Rico Retail Installment Sales
Act, the Puerto Rico Public Service Commission Act, the Federal Truth-in-Lending
Act, the Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair
Credit Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the Federal Reserve Board's Regulations "B" "M" and "Z" and
other regulations promulgated under the aforementioned laws, and other
applicable consumer credit laws and equal credit opportunity and disclosure
laws. Seller has made all filings
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required under applicable laws and regulations in connection with the Leases to
protect its interests in the Vehicles and Equipment.
SECTION 5.04 ACCOUNT HISTORY. Seller has maintained accurate and
complete records of all financial transactions regarding the Leases and the
underlying Vehicle or Equipment.
SECTION 5.05 BINDING OBLIGATION. Each Lease is a legal, valid and
binding obligation of the Lessee thereunder, enforceable by the holder thereof
in accordance with its terms, except as the enforcement thereunder may be
affected by (i) applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting the enforcement of creditors' rights generally or laws
affecting fraudulent conveyances or (ii) the availability of certain remedies
may be subject to equitable principles and to the discretion of the court before
which any proceeding therefor may be brought.
SECTION 5.06 NO DEFENSES. Seller is not aware of any claims of
rescission, setoff, counterclaim or defense have been asserted or threatened
with respect to any Lease.
SECTION 5.07 SERVICING COMPLIANCE. Seller has conducted its
business with respect to the Leases, including but not limited to the collection
and administration of the Leases, in accordance with all applicable laws, rules
and regulations. The delinquency of the Leases is accurately stated in the
servicing system of Seller, based on standard contractual delinquency
parameters.
SECTION 5.08 REGISTRATION OF VEHICLES. Each Vehicle has been
registered with the Commonwealth of Puerto Rico Department of Motor Vehicles and
all payments required in connection with such registration have been paid in
full.
ARTICLE VI
LEASE PAYMENTS, EXPENSES, DEPOSITS AND OTHER COVENANTS
SECTION 6.01 APPLICATION OF LEASE PAYMENTS; PAYMENTS AFTER THE
FINAL CLOSING AND SETTLEMENT DATE. (a) Other than the Late and Other Charges
which are covered under Section 6.05 hereto, all rentals, insurance charges and
other revenues derived from the Leases which were due and paid to Seller as of
the Closing Date shall be the property of Seller, and all rentals, insurance
charges and other revenues derived from the Leases which were due and unpaid as
of the Closing Date or which became due thereafter, shall be the property of
Purchaser.
(b) All payments received by Seller from Lessees under the Leases
purchased by Purchaser hereunder after the Final Closing and Settlement Date,
including, but not limited to mail, ACH or Seller's branches, or any other
electronic or digital method, will be kept by Seller only as a trustee. In order
to assure prompt credit to Lessees' Leases, no later than the business day
following the date of receipt by Seller, Seller will provide information to
Purchaser regarding the payments received by Seller from Lessees under the
Leases and remit such payments to Purchaser. If any such payment
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is received by Seller after a period of ninety (90) days from the Final Closing
and Settlement Date, Purchaser shall pay Seller a service fee equal to 2% of the
amount of the payments received by Seller and forwarded to Purchaser after such
ninety (90) day period.
SECTION 6.02 EXPENSES. Seller shall be responsible and pay for (i)
all costs and expenses pertaining to the Leases, Vehicles or Equipment which are
the responsibility of the Lessor under the Leases and which relate to any period
on or before the Closing Date (including, but not limited to, annual vehicle
registration fees, compulsory insurance premiums and other required insurance
premiums); and (ii) all costs and expenses related to the cancellation of any
lien or encumbrance on the Assets. Purchaser shall be responsible for all costs
and expenses pertaining to the Leases, Vehicles or Equipment which are the
responsibility of the Lessor under the Leases and which relate to any period
after the Closing Date (including, but not limited to, traffic violation fines,
annual vehicle registration fees, compulsory insurance premiums and other
required insurance premiums). Each party will bear its expenses incurred in
connection with the preparation and execution of this Agreement. Seller and
Purchaser shall share equally all costs and expenses relating to the
transferring of title to the Assets from Seller to Purchaser.
SECTION 6.03 DEPOSITS AND PREPAID EXPENSES. On the Closing Date,
Seller shall deposit in the Lease Payments Escrow Account with respect to each
Asset being purchased, all Deposits received by Seller and any and all other
monies received by Seller representing prepayments of rentals, insurance, taxes,
licenses or other charges under the Leases, to the extent that they relate to
any period of time after the Closing Date.
SECTION 6.04 REGULATORY APPROVALS. Purchaser and Seller shall use
their best efforts to secure all regulatory approvals required to consummate the
transactions contemplated by this Agreement, including, but not limited to, the
filing of notices required under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the expiration or early termination of the
applicable waiting period thereunder. Purchaser and Seller agree to cooperate
fully in obtaining any such approvals and in completing any such notices or
applications as shall be necessary in connection with the transactions
contemplated by this Agreement. The filing fee required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended shall be paid
by the Purchaser.
SECTION 6.05 LATE CHARGES AND OTHER CHARGES. (a) Purchaser agrees
that after the Final Closing and Settlement Date it will undertake its best
efforts to collect from the Lessees upon cancellation of the Leases all the late
charges and other charges and amounts (other than principal and interest) owed
to Seller thereunder (the "Late and Other Charges") as of the Closing Date;
provided, however, that all amounts received by Purchaser during the 45-day
period following the Final Closing and Settlement Date that represent payments
of late and other charges owed under any Lease shall be understood to first
represent a collection of Late and Other Charges owed to Seller under such
Lease. Purchaser's best efforts to collect Late and Other Charges shall include,
to the
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extent permitted by law, withholding the transfer of title to the Vehicles and
Equipment to Lessees until the payment in full of the Late and Other Charges.
The exact amount of the Late and Other Charges covered hereunder shall be set
forth in a closing document to be executed by both parties on the Closing Date.
On the Closing Date, Purchaser shall deposit the amount of the Late and Other
Charges shown in such document in an escrow account in Banco Popular de Puerto
Rico (the "Escrow Agent").
(b) The Escrow Agent will pay to Seller on a monthly basis the
following (after deducting the servicing fee payable to Purchaser described
herein below); (i) all amounts Purchaser collects from Lessees upon cancellation
of the Leases with respect to such Late and Other Charges; (ii) all amounts
Purchaser collects during the 45-day period following the Final Closing and
Settlement Date that represent payments of late and other charges owed under any
Lease as described in the preceding paragraph; and (iii) all amounts Purchaser
collects after such 45-day period that represent payments of late and other
charges owed under any Lease in excess of the late and other charges that are
owed to Purchaser under such Lease. This payment shall be made by the Escrow
Agent to Seller no later than the tenth calendar day of the following month and
the Escrow Agent shall pay to Purchaser an amount equal to 5% of the amount
payable to Seller as a servicing fee for its collection efforts. Together with
such monthly payment, Purchaser shall deliver to Seller a monthly report
detailing the following: (i) the Leases canceled in the previous month and the
results of the collection efforts of Purchaser of any Late and Other Charges
owed under such canceled Leases; and (ii) all other amounts collected by
Purchaser representing Late and Other Charges.
(c) The parties agree that Seller shall be solely responsible for
proving the validity and legality of any Late and Other Charge, and that Seller
shall respond to any request by Purchaser in this respect within 48 hours. If
Seller is unable to prove the validity or legality of a Late or Other Charge or
does not respond within such 48-hour period, Purchaser shall have the right to
waive such Late or Other Charge and receive the amount represented by such Late
or Other Charge from the escrow account.
(d) In the event that Purchaser is required to charge-off any
Lease in accordance with Purchaser's charge-off policy or any applicable law or
regulation or in the event that there is a repossession or a confiscation, theft
or accident resulting in the total loss of the Vehicle or Equipment, Purchaser
shall have the right to receive the amount represented by any Late or Other
Charge with respect to such Lease from the escrow account.
(e) In the event that Purchaser waives any Late or Other Charge
for any particular Lessee (i.e., the Late or Other Charge is valid and
collectible under the terms of the Lease but such Late or Other Charge is waived
by Purchaser whether at the cancellation of the Lease or beforehand), Seller
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shall have the right to receive the amount represented by such Late or Other
Charge from the escrow account.
(f) All of the interest earned on the escrow account shall be
prorated between Purchaser and Seller in accordance with the percentage of the
amount received by each party of the original deposit in such escrow account.
The escrow account shall accrue interest at the Escrow Rate.
SECTION 6.06 BEST EFFORTS. Between the date of this Agreement and
the Settlement Date, the Purchaser and the Seller will use their best efforts to
cause all of the conditions set forth in Article IX hereto to be satisfied.
SECTION 6.07 DELIVERY OF CLOSING SCHEDULE AND SETTLEMENT SCHEDULE.
(a) Seller shall deliver to Purchaser on the Closing Date a schedule (the
"Closing Schedule") showing the following information for the Assets to be
purchased hereunder: (i) the name of the Lessee(s) and the Lease number assigned
to the Lease by Seller; (ii) the original amount of the Lease, the date of
commencement of the Lease, the initial term of the Lease and the remaining term
on the Lease; (iii) the annual percentage rate of the Lease; (iv) the monthly
rent of the Lease (principal and interest) and the monthly rent of the Lease
(vehicle license and related fees); (v) the residual value of the Lease; (vi)
the outstanding balance of the Lease (not including Late and Other Charges) as
of seven (7) days immediately prior to the Closing Date; (vii) the unearned
interest portion of the outstanding balance of the Lease as of seven (7) days
immediately prior to the Closing Date (computed using the interest method);
(viii) the Late and Other Charges owed under such Lease as of seven (7) days
immediately prior to the Closing Date; (ix) the Deposits under such Lease as of
seven (7) days immediately prior to the Closing Date; (x) a description of the
Vehicle (including license plate number and vehicle registration) and Equipment
and related accessories that are being leased under the Lease; and (xi) days
past due of the Lease as of seven (7) days immediately prior to the Closing
Date.
(b) Seller shall also deliver to Purchaser on the Final Closing
and Settlement Date a schedule (the "Settlement Schedule") showing the following
information for the Assets to be purchased hereunder: (i) the name of the
Lessee(s) and the Lease number assigned to the Lease by Seller; (ii) the
original amount of the Lease, the date of commencement of the Lease, the initial
term of the Lease and the remaining term on the Lease; (iii) the annual
percentage rate of the Lease; (iv) the monthly rent of the Lease (principal and
interest) and the monthly rent of the Lease (vehicle license and related fees);
(v) the residual value of the Lease; (vi) the outstanding balance of the Lease
(not including Late and Other Charges) as of the Closing Date; (vii) the
unearned interest portion of the outstanding balance of the Lease as of the
Closing Date (computed using the interest method); (viii) the Late and Other
Charges owed under such Lease as of the Closing Date; (ix) the Deposits under
such Lease as of the Closing Date; (x) a description of the Lease and Equipment
and related
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<PAGE> 14
accessories that are being leased under the Lease; and (xi) days past due of the
Lease as of the Closing Date.
SECTION 6.08 NOTICES TO LESSEES. No later than five (5) days
following the Final Closing and Settlement Date, Seller and Purchase shall
jointly mail notices to the Lessees, in a form mutually approved by Purchaser,
informing the Lessees of this transaction (and the fact that this transaction
does not affect the terms and conditions of their Leases) and instructing them
to forward future Lease payments to Purchaser, which notices shall also include
a statement with respect to the past due payments, late charges and other
charges owed by each Lessee and requesting the Lessee to contact the Seller or
the Purchaser if there are any questions or disputes regarding the amount of
such past due payments, late charges and other charges. The costs and expenses
related to the preparation and mailing of such joint notices shall be shared
equally by the parties.
SECTION 6.09 RIGHT OF FIRST REFUSAL. For a period of twelve (12)
months from the Final Closing and Settlement Date, Seller shall be obligated to
refer to Purchaser the credit application of any customer that requests a
finance lease on a vehicle or equipment from Seller. If such credit application
is approved by Purchaser and a finance lease is closed by the Purchaser that
meets the conditions set forth in Schedule 6.9 hereto, the Seller shall be
entitled to receive from Purchaser the payments set forth in Schedule 6.9
hereto. The right of first refusal provision described in this Section 6.9 shall
terminate if there is a change in control of the Seller or of the Seller's
holding company. For purposes of this provision, the term "control" shall be
defined as such term is defined in the Change in Bank Control Act, as amended,
and the regulations promulgated thereunder by the Federal Deposit Insurance
Corporation.
SECTION 6.10 NON-SOLICITATION. For a period of twelve (12) months
subsequent to the twelve (12) month period after the Final Closing and
Settlement Date, Seller will not directly solicit and offer a finance lease to
any Obligor on any Lease being sold by Seller to Purchaser hereunder. In the
event that Seller breaches the aforementioned non-solicitation provision and
pays off a Lease by entering into a finance lease with an Obligor, Seller will
pay to Purchaser a premium of 0.0250 on the then principal balance plus accrued
interest of such Lease. During the aforementioned 12-month period, Seller shall
be permitted to make a finance lease which pays off a Lease only if an Obligor,
on an unsolicited basis, requests such a lease product from Seller. This
provision shall cease to be in effect if there is a change in control of the
Seller or the Seller's holding company. For purposes of this provision, the term
"control" shall be defined as such Term is defined in the Change in Bank Control
Act, as amended, and the regulations promulgated thereunder.
ARTICLE VII
INSURANCE AND LOSSES
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<PAGE> 15
SECTION 7.01 INSURANCE. Effective on the Final Closing and
Settlement Date, Seller shall assign to Purchaser any and all rights of Seller
under the policy or policies of insurance maintained by Seller as lessor or by
the Lessees, providing for automobile liability insurance and automobile
collision and comprehensive physical damage insurance with respect to the
Vehicles and any other insurance related to public liability, physical damage,
destruction, loss, theft, damage or impairment insurance with respect to the
Equipment.
SECTION 7.02 RISK OF LOSS. Except as otherwise provided in Article
XII of this Agreement, prior to the Closing Date Seller shall bear, and on and
after the Closing Date Purchaser shall bear the risk of destruction, theft, loss
or damage occurring with respect to the Vehicles or the Equipment. If prior to
the Closing Date any Vehicle or Equipment is destroyed, lost, stolen or damaged,
or the use thereof is materially impaired, Seller shall promptly notify
Purchaser and Purchaser may at its option (i) require that the proceeds of any
insurance payable as a result of such destruction, loss, theft, damage or
impairment be paid to Purchaser or applied to repair the Vehicle or Equipment,
or (ii) if Purchaser is so notified prior to the Closing Date, elect not to
purchase such Vehicle, Equipment and its related Lease, in which case the
Purchase Price shall be reduced accordingly, or (iii) if Purchaser is notified
after the Closing Date, require Seller to repurchase such Vehicle, Equipment and
its related Lease in accordance with Section 12.05 hereof.
ARTICLE VIII
SETTLEMENT AND POST SETTLEMENT REVIEW
SECTION 8.01 FINAL CLOSING AND SETTLEMENT. The final closing and
settlement of the purchase and sale of the Assets provided for in this Agreement
shall take place on the Final Closing and Settlement Date as contemplated in
Section 2.04(d) hereto.
SECTION 8.02 EVENTS AT FINAL CLOSING AND SETTLEMENT. All
transactions consummated on the Final Closing and Settlement Date will be deemed
to have been made simultaneously and no documents or funds will be deemed to
have been delivered until all required documents and funds have been delivered.
The following events will take place on the Final Closing and Settlement Date:
(i) Seller shall deliver to Purchaser a duly executed
assignment of all insurance policies being assigned
to Purchaser pursuant to Section 7.01 hereof,
together with original copies of all insurance
policies being assigned (including all current
endorsements, premium notices and other related
documents); and
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(ii) Seller shall deliver to Purchaser duly executed
copies of all documents that are necessary to be
filed by Purchaser with the Public Service Commission
and the Department of Transportation and Public
Works.
SECTION 8.03 JOINT REVIEW OF FILES AND DOCUMENTS. During a period
of sixty (60) days following the Final Closing and Settlement Date,
representatives of Purchaser and Seller shall jointly review all of the files
relating to the Assets to ascertain that the Documents are included therein. At
the end of such sixty-day review period, the parties agree that: (i) Seller
shall deliver to Purchaser the Documents; (ii) Purchaser shall deliver to Seller
a list of the missing Documents in the files; and (iii) Seller shall deliver to
Purchaser the missing Documents within sixty (60) days after receiving the list
from Purchaser. Seller shall not be responsible for any missing Document not
requested by Purchaser on the list prepared by Purchaser hereunder, or for any
loss or liability resulting from the non-existence or disappearance of any
Document not included in the list.
ARTICLE IX
CONDITIONS PRECEDENT
SECTION 9.01 CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER. The
obligations of Purchaser to purchase the Assets hereunder shall be subject to
the fulfillment of the following conditions on or prior to the Closing Date:
(a) The representations and warranties of Seller contained in
Articles III and V hereof shall be true and correct in all material respects as
of the Closing Date as though such representations and warranties had been made
on and as of the Closing Date.
(b) Seller shall have performed all obligations and covenants
required to be observed and performed by Seller hereunder on or prior to the
Closing Date.
(c) Seller must have delivered to Purchaser a certificate executed
by Seller stating that all obligations and covenants required to be observed and
performed by Seller hereunder on or prior to the Closing Date have been
performed.
(d) Seller shall deliver to Purchaser a certificate of resolution
approved by its Board of Directors authorizing the execution of this Agreement
and the consummation of the transactions contemplated hereby without any further
approvals being required.
SECTION 9.02 CONDITION PRECEDENT TO OBLIGATIONS OF SELLER. The
obligations of Seller to sell the Assets hereunder shall be subject to the
fulfillment of the following conditions on or prior to the Closing Date:
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(a) The representations and warranties of Purchaser contained in
Article IV hereof shall be true and correct all material respects as of the
Closing Date as though such representations and warranties had been made on and
as of the Closing Date.
(b) Purchaser shall have performed all obligations and covenants
required to be observed and performed by Purchaser hereunder on or prior to the
Closing Date.
(c) Purchaser must have delivered to Seller a certificate executed
by Purchaser stating that all obligations and covenants required to be observed
and performed by Purchaser hereunder on or prior to the Closing Date have been
performed.
(d) Purchaser shall deliver to Seller a certificate of resolution
approved by its Board of Directors authorizing the execution of this Agreement
and the consummation of the transactions contemplated hereby without any further
approvals being required.
SECTION 9.03 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER AND
PURCHASER. The obligations of Seller and Purchaser set forth herein shall be
subject to the fulfillment of the following conditions prior to the Final
Closing and Settlement Date:
(a) All regulatory approvals required to consummate the
transaction contemplated hereunder and referred to in Section 6.04 hereto, if
any, shall have been secured and shall not have been withdrawn.
(b) The waiting period referred to in Section 6.04 hereto shall
have expired or been terminated.
ARTICLE X
ASSIGNMENT OF LEASES
SECTION 10.01 ASSIGNMENT OF LEASES. In accordance with the terms
and conditions of this Agreement, Seller will sell, convey, transfer and assign
to Purchaser, and Purchaser agrees to purchase, accept and assume all of
Seller's rights, title and interests in and to the Leases in accordance with the
terms of this Agreement.
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ARTICLE XI
SALE
SECTION 11.01 SALE OF EQUIPMENT AND VEHICLES. (a) In accordance
with the terms and conditions of this Agreement, Seller will grant, bargain,
sell, convey, transfer, assign, set over, confirm and deliver unto Purchaser,
its successors and assigns, the Equipment, Vehicles and related accessories to
be described in the Closing Schedule and Settlement Schedule and made a part
hereof and all warranties and representations by the vendor and/or manufacturer
of any of the same pertaining thereto.
(b) Seller does hereby bind itself, its successors and assigns, to
warrant and forever defend the title to the Equipment and Vehicles, to
Purchaser, its successors and assigns, from and against every person whomsoever
claiming the same or any part thereof.
(c) In accordance with the terms and conditions of this Agreement,
all of the foregoing Equipment and Vehicles are hereby bargained, sold, granted,
conveyed, assigned, transferred, set over, confirmed, and delivered by Seller to
Purchaser free and clear of any and all liens, claims, encumbrances or
indebtedness of any kind whatsoever, whether matured or unmatured, liquidated or
unliquidated, contingent or otherwise, and are hereby warranted to be free and
clear of any of same and subject to no obligations or commitments of any kind
except for the rights of the Lessees under the Leases.
(d) Notwithstanding anything to the contrary contained herein as
to the effectiveness of this Agreement, it is understood and agreed that legal
title and possession of the Vehicles and Equipment shall be deemed vested and
transferred to Purchaser on the Final Closing and Settlement Date.
ARTICLE XII
INDEMNIFICATION AND REPURCHASE.
SECTION 12.01 INDEMNIFICATION. Seller agrees to defend, indemnify
and hold harmless Purchaser, its successors and assigns, from and against the
following (collectively, the Purchaser's Claims"):
(i) Any losses, claims, damages, costs or expenses resulting from
or arising out of, or any liabilities, obligations, debts,
actions or claims that may be asserted against Purchaser or
any part of the Assets resulting from or arising out of, the
following: (1) the ownership, use, maintenance or operation of
any Vehicles or Equipment prior to the Closing Date, (2) the
failure of Seller to satisfy any of its obligations under a
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Lease prior to the Closing Date, (3) the failure of Seller to
procure or maintain or to cause any Lessee to procure or
maintain, automobile liability insurance and automobile
collision and comprehensive physical damage insurance on any
Vehicle or comparable insurance coverage on any Equipment or
any insurance required by applicable laws or regulations
(whether the claim, action, liability, obligation, accident or
loss arises or occurs before or after the Closing Date), (4)
the inability of Purchaser to collect on any Lease because of
a missing Document identified in the list to be provided by
Purchaser to Seller pursuant to Section 8.03 hereto, or (5)
any action taken or omitted to be taken by Seller during the
period from the Closing Date to the Final Closing and
Settlement Date, relating in any such case to its collection
and servicing efforts under Section 2.04(f);
(ii) Any losses, claims, damages, obligations, actions,
liabilities, costs or expenses that result if any of the
warranties, representations or covenants of Seller set forth
in this Agreement or in any closing document delivered by
Seller pursuant to this Agreement, should prove to be untrue
or misleading, or if any covenant or agreement of Seller under
this Agreement is not fulfilled; and
(iii) Any costs and expenses (including reasonable attorney fees) of
all actions, suits, proceedings, demands, assessments and/or
judgments incident to any of the foregoing.
SECTION 12.02 INDEMNIFICATION. Purchaser agrees to defend,
indemnify and hold harmless Seller, its successors and assigns, from and against
the following (collectively, the "Seller's Claims"):
(i) Any losses, claims, damages, costs or expenses resulting from
or arising out of, or any liabilities, obligations, debts,
actions or claims that may be asserted against Seller
resulting from or arising out of, the following: (1) the
ownership, use, maintenance or operation of any Vehicles or
Equipment after the Closing Date (except with respect to those
Vehicles or Equipment that at the Closing Date are not covered
by insurance), and (2) the failure of Purchaser to satisfy any
of its obligations under a Lease after the Closing Date;
(ii) Any losses, claims, damages, obligations, actions,
liabilities, costs or expenses that result if any of the
warranties, representations or covenants of Purchaser set
forth in this Agreement or in any closing document delivered
by Purchaser pursuant to this Agreement, should prove to be
untrue or misleading, or if any covenant or agreement of
Purchaser under this Agreement is not fulfilled; and
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(iii) Any costs and expenses (including reasonable attorney fees) of
all actions, suits, proceedings, demands, assessments and/or
judgments incident to any of the foregoing.
SECTION 12.03 PROCEDURES RELATING TO INDEMNIFICATION. In order for
the Seller or the Purchaser to be entitled to any indemnification provided for
under this Agreement, arising out of or involving a Seller's Claim or a
Purchaser's Claim, the indemnified party must notify the indemnifying party in
writing, and in reasonable detail, of the Seller's Claim or the Purchaser's
Claim, as the case may be, within thirty (30) days after receipt by the
Purchaser of written notice of the Seller's Claim or the Purchaser's Claim, as
the case may be; provided, however, that failure to give such notification shall
not affect the indemnification provided hereunder except to the extent the
indemnifying party shall have been actually prejudiced as a result of such
failure (except that the indemnifying party shall not be liable for any expenses
incurred during the period following the end of such 30-day period referred to
above in which the indemnified party failed to give such notice and the date on
which such notice is given). Thereafter, the indemnified party shall deliver to
the indemnifying party, within twenty (20) business days after the Purchaser's
receipt thereof, copies of all notices and documents (including court papers)
received by the Purchaser relating to the Seller's Claim or the Purchaser's
Claim, as the case may be
The indemnifying party will be entitled to participate in the defense
thereof and, if it so chooses, to assume the defense of the indemnified party
(unless the indemnified party is also a party to such Seller's Claim or the
Purchaser's Claim, as the case may be, and the indemnified party determines in
good faith that joint representation would be inappropriate due to a potential
conflict of interest) with counsel selected by the indemnifying party and
reasonably satisfactory to the indemnified party. Should the indemnifying party
be entitled under the preceding sentence to assume the defense of a Seller's
Claim or the Purchaser's Claim, as the case may be, and so elects to assume such
defense, the indemnifying party will not be liable to the indemnified party for
legal expenses subsequently incurred by the indemnified party in connection with
the defense thereof. If the indemnifying party assumes such defense, the
indemnified party shall have the right to participate in the defense thereof and
to employ counsel, at its own expense, separate from the counsel employed by the
indemnified party, it being understood that the indemnifying party shall control
such defense (except in the circumstances set forth in the parenthetical to the
first sentence of this paragraph). The indemnifying party shall be liable for
the fees and expenses of counsel employed by the indemnified party for any
period during which the indemnifying party has not assumed the defense thereof
(other than during any period following the 30-day period referred to in the
first sentence of this Section 12.03 in which the indemnified shall have failed
to give notice of the Seller's Claim or the Purchaser's Claim, as the case may
be, as provided above). If the indemnifying party chooses to defend or prosecute
any Seller's Claim or the Purchaser's Claim, as the case may be, all of the
parties hereto shall cooperate in the defense or prosecution thereof. Such
cooperation shall include the retention and (upon the indemnifying party's
request) the provision to
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the indemnifying party of records and information which are reasonably relevant
to such Seller's Claim or the Purchaser's Claim, as the case may be, and making
employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. Whether or not
the indemnifying party shall have assumed the defense of a Seller's Claim or the
Purchaser's Claim, as the case may be, the indemnified party shall not admit any
liability with respect to, or settle, compromise or discharge, such Seller's
Claim or the Purchaser's Claim, as the case may be, without the indemnifying
party's prior written consent (which consent shall not be unreasonably withheld
or delayed).
SECTION 12.04 GOVERNMENT APPROVALS. If despite the best efforts of
Purchaser and Seller, Purchaser is unable to obtain any authorization from the
Public Service Commission, the Department of Transportation and Public Works or
other governmental authority necessary to Purchaser's retention, ownership and
enjoyment of the Vehicles as evidenced by written statement to that effect from
the Public Service Commission, the Department of Transportation and Public Works
or such other governmental entity, Purchaser may require Seller to repurchase
the Assets in accordance with Section 12.05 hereof.
SECTION 12.05 VEHICLE REPURCHASE. Without limiting any other rights
or remedies available to Purchaser, if any indemnification obligation arises
under Section 12.01 hereof and relates to a particular Vehicle, Equipment or
Lease, or if Purchaser is permitted to require repurchase of any Vehicle or
Equipment under Section 7.02 hereof or of all Vehicles under Section 12.04
hereof, Purchaser may at its option require Seller to repurchase each such
Vehicle or Equipment and its related Lease for a purchase price equal to (i) its
original Purchase Price, plus (ii) vehicle licenses, Puerto Rico compulsory
insurance premiums (ACAA and the mandatory vehicle liability insurance), any
other insurance premiums and any other reasonable out-of-pocket costs and
expenses related only to the towing and storing the repurchased Vehicles and
Equipment, minus (iii) any related Deposit or other prepaid expense previously
transferred to Purchaser and any rentals (net of the earned interest portion of
those rentals, computed using the interest method) paid to Purchaser with
respect to the repurchased Vehicle or Equipment and its related Lease and any
other payments made under the Lease to Purchaser for the reimbursement of the
expenses described in (ii) above.
Upon any such repurchase Purchaser shall deliver to Seller the Vehicle
or Equipment free and clear of liens and encumbrances, liabilities or claims
other than those which may have arisen prior to the Final Closing and Settlement
Date or by reason of Seller's prior ownership of the Vehicle or Equipment, will
provide Seller with evidence of insurance on the Vehicle or Equipment from the
Final Closing and Settlement Date to the time of such repurchase (to the extent
the Vehicle or Equipment had such insurance prior to the Final Closing and
Settlement Date) and will assign to Seller any and all rights of Purchaser under
said policy or policies which may have arisen during the period of Purchaser's
ownership.
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ARTICLE XIII
MISCELLANEOUS
SECTION 13.01 ENTIRE AGREEMENT. When properly executed and
delivered, this Agreement and its Exhibits, each of which is incorporated
herein, embodies all of the representations, warranties and agreements of the
parties with respect to its subject matter, and no representations, warranties,
covenants, undertakings or agreements in relation thereto exist between the
parties except as herein expressly set forth. This Agreement supersedes all
prior agreements between the parties with respect to the subject matter.
SECTION 13.02 SUCCESSORS AND ASSIGNS. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and assigns.
SECTION 13.03 FURTHER ASSURANCES. Upon request by Purchaser before
or after the Final Closing and Settlement Date, Seller shall do, execute,
acknowledge and deliver, or shall cause to be done, executed, acknowledged and
delivered, all such further acts, deeds, assignments, transfers, conveyances,
powers of attorney and assurances as may be required to vest in Purchaser full
title, ownership and control of and over the Assets. Upon request by Purchaser
before or after the Final Closing and Settlement Date, Seller shall also provide
to Purchaser any additional information or documents available to Seller and
relating to the Assets and/or Lessees. Seller and Purchaser shall cooperate to
preserve intact the good will of the Lessees and to facilitate the timely
collection of rentals and the servicing of the Leases.
SECTION 13.04 RIGHTS AND REMEDIES. No right or remedy conferred
upon or reserved to any party by this Agreement shall exclude any other right or
remedy, but each such right or remedy shall be cumulative and shall be in
addition to every other right or remedy hereunder or available by law. No party
will be deemed to have waived any right or remedy unless the waiver is in
writing, nor shall the waiver of any right or remedy be deemed or construed as a
waiver of any other right or remedy or as a waiver of the same right or remedy
on a different occasion.
SECTION 13.05 NOTICES. Any notice or other communication required
or permitted hereunder shall be delivered by certified mail, return receipt
requested, postage prepaid, addressed as follows or by fax:
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<TABLE>
<CAPTION>
If to Seller: If to Purchaser:
<S> <C>
Oriental Bank and Trust Popular Leasing & Rental, Inc.
P.O. Box 195115 M1046 Federico Costas Street,
San Juan, PR 00919-5115 Tres Monjitas Industrial Park,
Hato Rey, Puerto Rico 00918
Attn: Jose E. Fernandez, President Attn: Andres F. Morrell, President
Fax: (787) 771-6770 Fax No. (787) 753-6308
With a copy to: With a copy to:
McConnell Valdes Banco Popular de Puerto Rico-Legal Division
P.O. Box 364225 P.O. Box 362708
San Juan, P.R. 00936-4225 San Juan, P.R. 00936-2708
Attn: Carlos O. Souffront Attn. Ramon D. Lloveras
</TABLE>
SECTION 13.06 AMENDMENTS. This Agreement may be amended or
terminated only in writing executed by both parties hereto.
SECTION 13.07 SURVIVAL. All warranties, representations, covenants
and agreements of Seller set forth in this Agreement shall survive the Closing
Date, notwithstanding any investigation or inspection previously or hereafter
made by or on behalf of Purchaser.
SECTION 13.08 INTERPRETATION AND CONSTRUCTION. The captions in this
Agreement are for convenience only and shall not be considered part of this
Agreement. This Agreement has been made in the Commonwealth and shall be
interpreted, construed and governed by and in accordance with the laws of the
Commonwealth.
SECTION 13.09 SEVERABILITY. The parties hereby agree that it is not
the intention of any party to violate any public policy or statutory or common
law by execution of this Agreement or consummation of the transactions
contemplated by this Agreement and that if any provision in this Agreement is
held to be invalid, illegal or unenforceable to any extent or in any
application, then the remainder of this Agreement, including such provision
except to such extent or application, shall not be affected thereby and shall
remain binding and enforceable to the extent lawfully permitted under applicable
laws.
SECTION 13.10 PROTECTION OF CONFIDENTIAL INFORMATION. Seller and
Purchaser will keep confidential and will not, without the other party's written
consent, divulge to any person or entity the terms and conditions of this
Agreement , except to the extent that in the opinion of counsel of either party
it is required to do so by any applicable law or regulation. In the event Seller
or
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Purchaser, as the case may be, is, in the opinion of its counsel, required to
disclose any information related to the transaction contemplated herein, said
party may make such disclosure after giving notice of the terms thereof to the
other party.
SECTION 13.11 EXPENSES. Except as may be otherwise provided herein,
each party to this Agreement will bear its respective expenses incurred in
connection with the preparation, execution and performance of this Agreement
including all fees and expenses of agents, representatives, counsel and
accountants.
SECTION 13.12 NO OBLIGATIONS AS TO EMPLOYEES. It is the intention
of parties hereto to purchase and sell the Assets pursuant to the terms and
conditions stated herein. Therefore, under no circumstances anything herein
shall be construed as imposing upon Purchaser any obligation or liability to
Seller's employees or in connection with Seller's other assets, or imposing upon
Seller any obligation or liability to Purchaser's employees or in connection
with Purchaser's other assets.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized officers on the date set forth above.
SELLER: PURCHASER:
ORIENTAL BANK AND TRUST POPULAR LEASING & RENTAL, INC.
By: By:
----------------------------- -----------------------------
Eli Diaz Andres F. Morrell
Executive Vice President President
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