EXHIBIT 10.2
CC OPTION AGREEMENT
This CC OPTION AGREEMENT is made as of the 30th day of September, 2002,
between ASSET ACCEPTANCE HOLDINGS LLC, a Delaware limited liability company
("Holdings"), and XXXXX X. XXXXXXX, XX. ("Xxxxxxx").
RECITALS
Pursuant to that certain Asset Contribution and Securities Purchase
Agreement dated as of September 30, 2002 (the "Contribution Agreement"), at the
closing thereunder (the "Closing"), the membership interests in certain limited
liability companies, including Consumer Credit LLC, a Delaware limited liability
company ("CC LLC"), which holds the assets and liabilities relating to the
business of making and servicing consumer loans and mortgages, issuing credit
cards and financing sales of consumer products (the "CCC Business") were
contributed to Holdings. Xxxxxxx is a shareholder of Consumer Credit Corp., a
Michigan corporation, which prior to the contribution to Holdings held all of
the membership interests in CC LLC. Following the Closing, Xxxxxxx was employed
as the Chief Executive Officer of Holdings.
Holdings and Xxxxxxx desire to set forth herein the terms and
conditions under which Xxxxxxx or such entity that is controlled by him and in
which he owns more than a majority of the equity interests shall have a limited
option to purchase the CCC Business in the event of termination of his
employment with Holdings.
NOW, THEREFORE, in consideration of the foregoing and the agreements
herein contained, the parties hereto agree as follows:
1. Option. Subject to the terms and conditions set forth herein, for a
period of ninety (90) days following the effective date of termination (the
"Termination Date") of his employment with Holdings and its subsidiaries for any
reason or by Xxxxxxx for Substantial Breach (as defined in the employment
agreement, if any, between Xxxxxxx and Holdings, or in the absence of an
employment agreement, in Holdings' operating agreement), Xxxxxxx shall have the
option on the terms and conditions set forth in this Agreement to purchase the
CCC Business (the "Option").
2. Exercise. Xxxxxxx'x entitlement to exercise the Option shall be
subject to obtaining the consent of the lenders under the Company's senior
credit facility. In order to exercise the Option, Xxxxxxx must give written
notice to Holdings no later than 5:00 p.m. Detroit time on the 90th day
following the Termination Date (the "Exercise Period") of his exercise of the
option and setting the date for closing of the purchase which shall be no later
than the earlier of (i) 150 days after the date notice of exercise is given and
(ii) 90 days after the Termination Date (the "Expiration Date"). If Holdings
does not receive notice of exercise during the Exercise Period or the purchase
does not close, other than by reason of action or inaction on the part of
Holdings, on or before the Expiration Date, the Option shall expire and be of no
further force or effect; provided that if notice of exercise is timely given,
the period during which the purchase must close will be extended up to thirty
(30) days if the parties are proceeding in good faith toward closing.
3. Form. The purchase of the CCC Business shall be effected by either
sale of all the membership interests in CC LLC or assignment of the assets
comprising the CCC Business to Xxxxxxx or such entity that is controlled by him
and in which he owns more than a majority of the equity interests. The documents
and instruments to effect the transaction shall contain such representations,
warranties, covenants and indemnities as shall be negotiated by the parties
giving effect to the relative relationships of Holdings and Xxxxxxx with respect
to the operations of the CCC Business at such time.
4. Purchase Price. The purchase price shall be the greater of (i) the
Gross Collections of the CCC Business during the twelve months ended on the last
day of the calendar month concurring with or immediately preceding the
Termination Date and (ii) two times the Tangible Book Value of the CCC Business
as of the last day of the calendar month concurring with or immediately
preceding the Termination Date. Gross Collections means total net payments
received on Consumer Credit Accounts (as that term is defined in the
Contribution Agreement) collected by CCC. Tangible Book Value means all of the
assets (other than goodwill resulting from the transactions consumated at the
Closing under the Contribution Agreement) minus all liabilities of the CCC
Business.
5. Payment. At the closing of the purchase, Xxxxxxx shall pay the
purchase price by wire transfer of immediately available funds.
6. Termination. This Agreement shall terminate upon foreclosure on the
business or assets of CCC by the banks under the Senior Credit Facility as that
term is defined in the Amended and Restated Limited Liability Company Agreement
of Asset Acceptance Holdings LLC dated as of September 30, 2002.
7. Entire Agreement. This Agreement contains the entire agreement among
the parties with respect to the subject matter hereof and there are no
agreements, understandings, representations or warranties between the parties
other than those set forth or referred to herein.
8. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns; provided that no party hereto will assign its rights or delegate its
obligations under this Agreement without the express prior written consent of
each other party hereto.
9. Notice. All notices required to be given hereunder shall be in
writing and shall be deemed to have been given if (i) delivered personally or by
nationally recognized overnight delivery service, (ii) transmitted by facsimile
or (iii) mailed by registered or certified mail (return receipt requested and
postage prepaid) to the following listed persons at the addresses and facsimile
numbers specified below, or to such other persons, addresses or facsimile
numbers as a party entitled to notice shall give, in the manner hereinabove
described, to the others entitled to notice:
(a) If to Holdings, to:
Asset Acceptance Holdings LLC
c/o Quad-C Management, Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Facsimile No.: 000-000-0000
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with a copy to:
McGuireWoods LLP
Xxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile No.: 000-000-0000
(b) If to Xxxxxxx, to:
Xxxxx X. Xxxxxxx, Xx.
00 Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Xx.
Facsimile No.: 000-000-0000
with a copy to:
Xxxxxx Xxxxxxx PLLC
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: J. Xxxxxxx Xxxxxxx, Esq.
Facsimile No.: 000-000-0000
Notice pursuant hereto shall be deemed given (i) if delivered
personally, when so delivered, (ii) if given by nationally recognized overnight
delivery, one business day after delivery to the delivery service for next
business day delivery, (iii) if given by facsimile, when transmitted to the
facsimile number set forth above, when so transmitted if transmitted during
normal business hours at the location to which it is transmitted or upon the
opening of business on the next Business Day if transmitted other than during
normal business hours at the location to which it is transmitted and (iv) if
given by mail, on the third business day following the day on which it was
posted.
9. Amendment. This Agreement may be amended, modified or supplemented
at any time by the parties hereto. This Agreement may be amended only by an
instrument in writing signed by each of the parties hereto.
10. Extension; Waiver. At any time either party to this Agreement may
extend the time for the performance of any of the obligations of the other party
hereto or waive compliance by the other party hereto with any of the agreements
or conditions contained herein. Any such extension or waiver shall be valid if
set forth in a written instrument signed by the party giving the extension or
waiver. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision hereof (whether or not
similar), nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided.
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11. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, and
delivered by means of facsimile transmission or otherwise, each of which when so
executed and delivered shall be deemed to be an original and all of which when
taken together shall constitute but one and the same agreement.
12. Governing Law. This Agreement shall be governed in all respects by
the laws of the State of Michigan without regard to any laws or regulations
relating to choice of laws (whether of the State of Michigan or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Michigan.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed.
ASSET ACCEPTANCE HOLDINGS LLC
By: _______________________________
Name: Xxxxxxxxx X. Xxxxxxx XX
Title: President
____________________________________
Xxxxx X. Xxxxxxx, Xx.
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