Purchase Agreement
Charge-Off Partners #4, L.P.
9611 Bell Mountain Dr.
Austin, Texas 78730
Phone (512) 502-0300
THIS AGREEMENT, made this _____________, 200_, by and between the Charge-Off Partners #4, L.P., a Texas Limited Partnership, on behalf of itself and all of its affiliates (hereinafter referred to as “Seller”), and _______________ at ______________ (hereinafter referred to as “Buyer”).
1. In consideration of $____.00 with consideration to be made by cashier’s check or by wire transfer, the Seller hereby sells, assigns, transfers and conveys to Buyer without recourse, warranty, either expressed or implied, or liability except as herein expressly set forth, all the obligations and any instruments securing same (hereinafter referred to as “Receivables”) referenced in Schedule A (“Closing Statement and Invoice”) attached hereto and made a part hereof, except any thereof which shall have been paid to the Seller in full on or before the closing date of this sale. The above purchase shall include transfer to Buyer of an electronic spreadsheet of accounts relating to the Receivables.
2. With respect to the Receivables, the Seller warrants that in reliance upon documents and information furnished to it by Issuer or Owner immediately preceding Seller, to the best of Seller’s knowledge and belief:
A. It has complied, to the best of its knowledge and belief, with applicable federal, state and local laws, and regulations relating to the making and collection of the Receivables up to the date of the sale contemplated herein.
B. It owns good and marketable title to all of the Receivables, free and clear of all liens and pledges, except as described in this agreement.
C. It has full power and authority to sell, assign, transfer and convey the Receivables to the Buyer, and all other necessary proceedings required by state or federal statute on the part of the Seller have been duly taken to authorize the sale.
D. All of the Receivables were made for valuable considerations and are now legally enforceable obligations of the respective persons shown as indebted thereon, except as may be limited by statutes of limitations, bankruptcy, insolvency, moratorium, receivership, conservatorship, reorganization, death, or similar laws affecting the rights of creditors generally or equitable principles limiting the right to obtain specific performance or other similar relief.
E. The persons shown as indebted on the Receivables have not initiated any lawsuits against Seller, and such persons have not asserted against Seller any legally enforceable rights to set-off, counterclaim, cancellation, or legally enforceable claim that the Receivables suffer from lack of consideration, forgery or alteration of such person’s signature, except as may be disclosed or contained in the relevant file or documents.
F. The amounts shown on the hard copy and/or spreadsheet to be owing and unpaid on the respective Receivables represent the amount that was represented to Seller by Issuer or Owner immediately preceding Seller, to be due.
G. There are no judgments against the Seller that could become a lien against the Receivables.
3. Seller agrees that if, as to any of the Receivables, any of its warranties herein are breached or any claim or defense exists against Buyer arising out of a breach of any warranty herein, Seller will repurchase such Receivables on written demand from Buyer containing proof of the breach for the same percentage of the net outstanding balance that Buyer paid for such Receivables. Such repurchase shall be Buyer’s exclusive remedy for any such breach.
4. Buyer shall not assume or incur liability for any debt or other obligation on behalf of Seller. Buyer shall not use Seller’s name nor the name of any of Seller’s predecessors-in-interest, except for the limited purpose of describing the account history or providing the name of the original creditor. Buyer shall not claim connection or affiliation with Seller or any of its predecessors-in-interest.
5. Buyer may advise debtors who are obligated on the Receivables that it has purchased such Receivables and that all payments thereon shall be made to the Buyer and all legal and other action respecting the Receivables shall be taken to the Buyer in its own name and not the name of Seller. However, Buyer shall not own and may not collect any of the receivables until it has paid the full purchase price for the Receivables. Buyer and Buyer’s officers, directors, and shareholders agree that until the full purchase price has been paid, any sums that they collect on the Receivables shall be held in trust for Seller’s benefit and Buyer and Buyer’s officers, directors, and shareholders shall be Seller’s fiduciaries with respect to such collected funds.
6. Seller hereby constitutes and appoints Buyer the true and lawful special attorney-in-fact of Seller in the name and stead of Seller, on behalf of and for the benefit of Buyer, for the sole and limited purpose of endorsing the name of the Seller without recourse upon all checks, drafts, notes powers and other forms of exchange received as payment on any of the affected Receivables, for a period not to exceed 90 days from the closing date of this Agreement.
7. Seller further agrees that any payments made by any account purchased herein, on or after the Closing Date of this Agreement, and received by the Seller, shall be turned over and delivered to Buyer. Seller may charge a service fee of twenty percent of the funds received to cover administrative costs.
8. The purchase and sale contemplated by this Agreement may be subject to the approval of certain regulatory authorities, and if so the parties agree to obtain such approval prior to the Closing Date; otherwise, this Agreement shall be void at the other party’s sole option. With respect to any of the Receivables, Buyer and any subsequent owner shall have the right, at any time after the Closing Date, after obtaining written consent from Seller and Original Seller, which will not be unreasonably withheld, to assign its rights in and/or to any of the Receivables to any subsequent transferee of such asset provided, however, that such transferee shall be bound by all of the terms and provisions of this Agreement, and Buyer shall remain liable for all of its obligations to Seller hereunder, notwithstanding such assignment. As may be reasonably required by the Seller, Buyer shall provide Seller with the request for consent to transfer the name, address, and telephone number of proposed transferee(s) and a listing of the related Assets transferred to such transferee(s) .
9. The parties acknowledge that Seller and Seller’s predecessors-in-interest may recall or compel repurchase of a Receivable. Therefore, Seller may recall any Receivable for any commercially reasonable reason, upon notice to Buyer at any time after the Closing Date. (It shall not be commercially reasonable to recall an account solely because the Account Debtor or any third party is making payments on the Account.) Upon receipt of such notice, Buyer shall immediately cease all communications with the Debtor and other collection activity, and shall promptly cause its tradeline to be deleted from any Credit Reporting Agencies as may be applicable, or cause such tradeline to reflect the Account as having been recalled. Within five (5) business days of said recall notice, Buyer shall return said Receivable to Seller. Within thirty (30) business days of said recall notification, Buyer shall re-sell the Receivable(s) back to Seller for the same percentage of the net outstanding balance that Buyer paid for such Receivables. Any such repurchase may be compelled by a suit for specific performance and shall not be subject to the mandatory mediation requirement in Section 11(J) below.
10. This Agreement and any disputes arising under or as a result of the negotiations or execution of this Agreement shall be governed by and its provisions construed under the laws of the State of Texas, and Federal laws where applicable. Any disputes between the parties, of any kind or nature, shall be determined in the state or federal courts of Travis County, Texas, and the parties hereby consent to the personal jurisdiction of such courts. In any litigation between the parties to this Agreement, the maximum recovery to the prevailing party shall be limited to the consideration given by that party under this contract, together with the prevailing party’s reasonable and necessary attorney’s fees, and in no event shall Seller be liable for incidental, consequential, punitive, or special damages of any kind, lost profits, lost revenues, cost of capital, use of capital and/or lost services. In no event shall Seller be obligated to return any funds to Buyer unless Seller receives from Buyer all physical and electronic receivables to which such funds is attributable together with any sums collected by Buyer on such receivables.
11. Buyer represents and warrants to Seller that:
A. It is qualified to transact business and duly licensed in all jurisdictions where necessary to purchase, hold, collect or enforce the Receivables or any amounts due thereon.
B. That it has full power and authority to purchase the Receivables from Seller and that all necessary proceedings on its part have been duly taken to authorize this purchase.
C. It will comply with all applicable laws, rules, regulations, ordinances and judgments relating to or in any way affecting the purchase of the Receivables by Buyer, the ownership thereof by Buyer or the collection or enforcement thereof by Buyer.
D. It will comply with all applicable laws, rules, regulations, ordinances and judgments relating to or in any way affecting its collection procedures.
E. Except as provided in paragraph 5 hereof, the relationship of the parties is solely that of seller and buyer and Buyer shall have no authority or capacity otherwise to bind or commit Seller to any act, obligation or liability, nor shall Buyer have any authority to bind Seller contractually.
F. Buyer or its assignees will not contact or in any way communicate with the Originator or as may be applicable, Seller’s predecessor(s) in interest without Seller’s prior written authorization.
G. Buyer expressly agrees and warrants that the accounts that it has purchased pursuant to this agreement are not “securities” as defined in any state or federal law, and that it will not ever assert that the Receivables are securities.
H. As an express condition of this sale, Buyer expressly warrants that it is knowledgeable and sophisticated in the field of debt buying, that it has conducted its own investigation of and due diligence concerning the receivables, and that it is relying solely upon such investigation and not on any statement or representation of Seller concerning the Receivables.
I. Buyer will indemnify and hold Seller harmless from any and all claims, demands, actions, causes of actions, suits, judgements actual or punitive damages, statutory penalties, costs, fees and expenses arising from or in any way connected with Buyer’s attempt(s) to collect on any Receivables or concerning the failure of Buyer to keep or comply with any term, condition, representation, warranty or agreement contained herein or the incorrectness or falsity of any representation or warranty, which is or becomes untrue in any material respect. The Seller will extend all of its rights to indemnification against the original creditor and/or prior owners of these receivables. The Seller agrees that the Buyer will have no responsibility and will be fully indemnified for all losses, judgements, expenses, and/or other costs (including all fees and costs of legal counsel), for any acts or claims created by Seller.
J. All notices and other communications between the parties shall be in writing and will be deemed given on the date when delivered or the day received by facsimile transmission or five days after mailed by registered or certified mail, return receipt requested, to a party at the address shown on the signature page thereto. The parties will negotiate in good faith in any effort to resolve any dispute. Any controversy concerning this Agreement, which the parties cannot resolve within thirty days, will first be directed to mediation in Austin, Travis County, Texas, at the Austin Dispute Resolution Center or any private mediator upon whom the parties agree, with all expenses being shared equally by the parties. The mediation shall be conducted pursuant to the rules of the Texas Alternative Dispute Resolution Procedure Act (the “Act”) and Chapter 154 of the Texas Civil Practice and Remedies Code (the “Code”). In the event the dispute is still not resolved through mediation then the dispute shall be settled by a bench trial in State Court in Austin, Texas. Buyer waives the right to trial by jury.
12. For a period of 12 months after the Closing Date, Seller agrees to use reasonable efforts to deliver to Buyer copies of available Evidence of Indebtedness for the same terms and for the costs as charged or listed in Exhibit E. The terms and costs charged or listed in Exhibit E are subject to changes imposed on Seller by its predecessor-in-interest. Seller shall notify Buyer of any change upon receipt of a request from Buyer for copies of available Evidences of Indebtedness, after which time Buyer will remit to Seller any additional funds. Buyer may request that Seller sign and notarize affidavits using Seller’s form (or one approved by Seller) and prepared by Buyer at a prepaid cost of $10.00 per account.
13. This Agreement represents the entire agreement between the parties. There are no promises, inducements, representations, or warranties not expressly stated herein. This Agreement may not be modified except by written instrument signed by all of the parties hereto. This Agreement supersedes any prior understandings or written or oral agreements between the parties respecting the Receivables, or the rights and obligations of the parties hereto. No waiver of any single breach or default will be deemed a waiver of any other breach or default of this Agreement. All rights and remedies, either under this Agreement or by law or otherwise afforded to a party, will be cumulative and not taken in the alternative.
ANY ADDENDUM OR EXHIBITS ATTACHED HERETO BECOME A PART OF AND ARE INCORPORATED INTO THIS AGREEMENT. THIS AGREEMENT MAY BE EXECUTED IN MULTIPLE IDENTICAL COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED TO BE AN ORIGINAL.
Seller: Charge-Off Partners #4, L.P.
___________________________
By: Louise Epstein, President,
Charge-Off General, G.P.
Charge-Off Partners #4, L.P.
Date:
Buyer:
________________________________
By:
Date:
EXHIBIT A
RECOURSE PROCEDURES
1. All accounts submitted for recourse must meet qualifications as outlined in Addendum to Purchase Agreement, Exhibit B.
2. Buyer agrees to provide Seller hard copy verification of collection activity on each account submitted for recourse, and with such backup documentation as Seller may reasonably require.
3. Buyer agrees to provide verification of Bankruptcy Discharge and Deceased as outlined in Addendum to Purchase Agreement, Exhibit B.
4. Seller agrees to refund qualifying recourse accounts with the amount equal to the purchase price of that particular account.
5. Buyer must submit to Seller all qualifying recourse accounts no later than _________.
6. Buyer agrees to forward to Seller all files and documentation on qualifying recourse accounts as outlined in Addendum to Purchase Agreement, Exhibit B, at Buyers expense, to:
Louise Epstein
9611 Bell Mountain Dr.,
Austin, Texas 78730
________________________ ____________________________
By: Louise Epstein, President By:
Charge-Off General, G.P.
Charge-Off Partners #4, L.P.
EXHIBIT B
ADDENDUM TO PURCHASE AGREEMENT
RECOURSE QUALIFICATIONS
Bankruptcy
1. Account must have filed for bankruptcy (and the case must have not been dismissed) prior to the Closing date of this Agreement.
2. If there are two or more debtors or obligors on the same account, all debtors must have filed.
3. Bankruptcy must be verified by providing a copy of the filing or a letter from the attorney specifying the date of filing and the present status of the case; or a copy of a PACER Report specifying the filing date and present status.
Deceased
1. Debtor must have been deceased prior to the Closing date of this Agreement.
2. If there are two or more debtors on the same account or the debtor is in a non-community property state, all debtors must be deceased prior to the Closing Date.
Paid in Full / Settled in Full
Verification must be provided.
Forgery / Fraud
Verification must be provided by forgery or fraud affidavit consisting of a signed, sworn statement saying that the alleged account holder had no involvement in or with the account and that he or she will participate in any criminal or civil proceeding related to the matter, accompanied by a copy of a drivers license or social security card and/or police reports or any other documentation which supports the claim for repurchase. The affidavit must be witnessed by a Notary Public or similarly appointed authority.
________________________ ____________________________
By: Louise Epstein, President By:
Charge-Off General, G.P.
Charge-Off Partners #4, L.P.
EXHIBIT C
Charge-Off Partners #4, L.P.
9611 Bell Mountain Dr.
Austin, Texas 78730
Phone (512) 502-0300
Charge-Off Partners #4, L.P. (“Seller”) has entered into a Purchase Agreement dated (“Agreement”) for the sale of Receivables described in Schedule A thereof to ____ (“Buyer”), upon the terms and conditions set forth in that Agreement.
NOW, THEREFORE, for good and valuable consideration, Seller hereby sells, assigns, and transfers to Buyer all of Seller’s rights, title and interest in each and every one of the Receivables described in the Agreement, provided however that such transfer is made without any representations, warranties or recourse, except as provided in the Agreement.
Buyer and Seller agree that the Purchase Price shall be as stated in Exhibit D attached to the Agreement.
IN WITNESS WHEREOF, Seller has signed and delivered this instrument on the ___ day of ____________, 200_.
Louise Epstein, President
Charge-Off General, G.P.
Charge-Off Partners #4, L.P.
EXHIBIT D
Charge-Off Partners #4, L.P.
9611 Bell Mountain Dr.
Austin, Texas 78730
Phone (512) 502-0300
States
Number of Accounts
Outstanding Balance $
Purchase Rate $0.0
Shipping/Handling Included in Portfolio Price
On or before the Closing Date of _______________, Buyer shall pay to Seller by cashier’s check or by wire transfer or by otherwise immediately available funds, the amount of _______________.
Funds must be wired as follows:
Bank Name
ABA (Routing) Number
Credit Bank Account Name
Credit Bank Account Number
Signatory
Bank Address:
Bank Telephone:
