EXHIBIT 2.7
MERGER AGREEMENT
This Merger Agreement (the "Agreement") is made and entered into as of the
17th day of December, 2001 by and among Origen Financial, Inc., a Virginia
corporation ("Origen"), Origen Manufactured Home Financial, Inc., a Virginia
corporation ("Origen MHF"), Dynex Insurance Agency, Inc., a Virginia corporation
("Origen Insurance," and together with Origen MHF, the "Origen Subsidiaries"),
Xxxxxxx Financial Services Corporation, a Michigan corporation ("Xxxxxxx"),
Origen Financial L.L.C., a Delaware limited liability company (the "Company"),
Origen Manufactured Home Financial, L.L.C., a Delaware limited liability company
("Company MHF"), and Origen Insurance Agency, L.L.C., a Virginia limited
liability company ("Company Insurance," and together with Company MHF, the
"Company Subsidiaries").
RECITALS
A. Origen originates and services MH Loans, Land/Home loans and Floorplan
Loans (the "Origen Business", and together with the Origen MHF Business and the
Origen Insurance Business, the "Business").
X. Xxxxxxx is the owner of all of the issued and outstanding shares of the
capital stock (the "Origen Stock") of Origen.
C. Origen is the owner of all of the issued and outstanding shares of the
capital stock (the "Origen MHF Stock") of Origen MHF and all of the issued and
outstanding shares of the capital stock (the "Origen Insurance Stock") of Origen
Insurance.
D. The Parties wish to cause the following mergers to occur upon
compliance with the applicable provision (the "Delaware Statute") of the laws of
the State of Delaware and the applicable provisions (the "Virginia Statute") of
the laws of the State of Virginia: (i) the merger of Origen into the Company
with the Company being the surviving entity (the "Company Merger"); (ii) the
merger of Origen MHF into Company MHF with Company MHF being the surviving
entity (the "MHF Merger"); and (iii) the merger of Origen Insurance into Company
Insurance with Company Insurance being the surviving entity (the "Insurance
Merger," and together with the Company Merger and the MHF Merger, the
"Mergers").
E. The Mergers are all subject to the terms and conditions of this
Agreement and the Limited Liability Company Agreement.
NOW, THEREFORE, for and in consideration of the foregoing Recitals, the
mutual covenants and undertakings set forth below and other good and valuable
consideration, the receipt and adequacy of which are acknowledged, the Parties
agree as follows:
1. CERTAIN DEFINITIONS. For purposes of this Agreement, the following
capitalized terms shall have the following meanings (other capitalized
terms may be defined elsewhere in this Agreement):
1.1. Affiliate of a person or entity means a person or entity that
directly or indirectly through one or more intermediaries, controls,
is controlled by, or is under common control with, the first person
or entity.
1.2. Assets means all of the assets and properties used in connection
with or related to the Business, whether known or unknown, tangible
or intangible, real or personal,
wherever situated, owned by Xxxxxxx or any of the Origen Entities or
in which any of the Origen Entities has any right, title or
interest. The Assets include, without limitation, the following:
(a) All cash and cash equivalents of the Business;
(b) All furniture, fixtures and other fixed assets used in
connection with or related to the Business, including, without
limitation, the assets listed on the attached Schedule 1.2(b);
(c) All goodwill and all other intangible assets associated with
the Business;
(d) All patents, patent applications, trademarks, trademark
applications and registrations, trade names, service marks,
service names, copyrights, copyright applications and
registrations, commercial and technical trade secrets,
engineering, production and other designs, drawings,
specifications, formulae, technology, computer and electronic
data processing programs and software, inventions, processes,
know-how, confidential information, corporate and assumed
names, and other proprietary property rights and interests
used in connection with the operation of or related to the
Business, including, without limitation, the items set forth
on the attached Schedule 1.2(d) (collectively, the
"Intellectual Property");
(e) All sales and business records, all corporate records,
personnel records of the Origen Entities' employees, credit
records of Origen's customers, customer lists, advertising and
promotional materials and all other books and records of every
kind and nature used in connection with or related to the
Business;
(f) All equipment, machinery, office equipment and vehicles used
in connection with the Business, including, without
limitation, the assets listed on the attached Schedule 1.2(f);
(g) All written personal property leases entered into by any of
the Origen Entities (the "Personal Property Leases"), a
complete list of which, together with a list of the assets
subject to such leases, is set forth on the attached Schedule
1.2(g);
(h) All oral or written contracts and agreements, other than the
Personal Property Leases, entered into by any of the Origen
Entities, including, without limitation, all contracts with
dealers from whom MH Loans and Land/Home Loans have been or
may hereafter be purchased by any of the Origen Entities, as
well as all servicing agreements and all license agreements,
sublicense agreements, extended warranty service agreements
and other contracts relating to software licensed by any of
the Origen Entities (the "General Contracts"). The attached
Schedule 1.2(h) contains a complete list of General Contracts,
other than (i) dealer contracts that do not have terms
materially different from the terms set forth in the form
dealer contracts Origen has previously provided the Company,
and (ii) contracts terminable by an Origen Entity upon 30 days
or less notice,
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with a current maturity of less than one year and requiring
payments of less than $10,000 per year.
(i) All transferable licenses, permits and authorizations held by
any of the Origen Entities in connection with, or issued for
the benefit of, the Business or the Assets, including, without
limitation, those described on the attached Schedule 1.2(i)
which are identified as transferable with an asterisk;
(j) All third party warranties and claims for warranties relating
to Business, the Assets or the Leased Personal Property,
including, without limitation, those set forth on the attached
Schedule 1.2(j);
(k) All leases and subleases for all land, buildings and
improvements leased by any of the Origen Entities in
connection with the Business, as described on the attached
Schedule 1.2(k) (the "Real Property Leases");
(l) All options any of the Origen Entities may have to purchase
any real property, as described on the attached Schedule
1.2(l);
(m) All of the accounts receivable of the Origen Entities;
(n) All claims and rights concerning any litigation in which any
of the Origen Entities is a claimant;
(o) All right, title and interest of any of the Origen Entities in
the Loans and the Loan Documents.
1.3. Assumed Liabilities means all of the debts, liabilities and
obligations of the Origen Entities and the Business, including any
liability of Xxxxxxx related to the Business and all intercompany
debt and obligations owing from any of the Origen Entities to
Xxxxxxx or any of its Affiliates, other than the Excluded
Liabilities.
1.4. Attendant Documents has the meaning set forth in Section 4.1 below.
1.5. Xxxxxxx Parties has the meaning set forth in Section 9.2 below.
1.6. Board of Managers means the Company's Board of Managers as
constituted pursuant to the Limited Liability Company Agreement.
1.7. Business has the meaning set forth in the Recitals to this
Agreement.
1.8. Closing has the meaning set forth in Section 8.1 below.
1.9. Closing Date has the meaning set forth in Section 8.1 below.
1.10. Closing Deadline the meaning set forth in Section 8.1 below.
1.11. COBRA means the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended.
1.12. Code has the meaning set forth in Section 4.16 below.
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1.13. Company has the meaning set forth in the preamble to this Agreement.
1.14. Company Effective Date means the date that the Company Merger
becomes effective which will be the later of (a) the date that a
certificate of merger covering the Company Merger is filed with the
Secretary of State of Delaware and (b) the date a certificate of
merger covering the Company Merger is filed with the Virginia State
Corporation Commission.
1.15. Company Entities means the Company and the Company Subsidiaries
collectively, and Company Entity means any one of the Company
Entities.
1.16. Company Merger has the meaning set forth in the Recitals to this
Agreement.
1.17. Company Parties has the meaning set forth in Section 9.1 below.
1.18. Company Subsidiaries has the meaning set forth in the preamble to
this Agreement.
1.19. Continued Employees has the meaning set forth in Section 6.9(a)
below.
1.20. Contracts means all of the General Contracts and the Personal
Property Leases.
1.21. Covenant has the meaning set forth in Section 8.2(b) below.
1.22. Customary Loan Origination Practices means those practices,
policies, requirements and standards generally and customarily
applied and followed by each of Origen and Origen MHF as a prudent
lender in connection with the origination of Loans conforming to the
Underwriting Guidelines, and which are in all material respects
legal and proper in the consumer loan origination business and in
material compliance with the requirements of federal and state laws,
rules and regulations applicable to each Loan, including without
limitation and as applicable, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit
opportunity and disclosure laws.
1.23. Delaware Statute has the meaning set forth in the Recitals to this
Agreement.
1.24. Effective Dates means collectively the Company Effective Date, the
MHF Effective Date and the Insurance Effective Date, and the
Effective Date means the last of the Effective Dates to occur.
1.25. Employee Benefit Plan has the meaning set forth in Section 4.16(c)
below.
1.26. Employees has the meaning set forth in Section 4.14 below.
1.27. Employment Agreements has the meaning set forth in Section 7.1(n)
below.
1.28. Environmental Laws has the meaning set forth in Section 4.20(b)
below.
1.29. ERISA has the meaning set forth in Section 4.16 below.
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1.30. Excluded Assets means those assets of Origen which after the Closing
Origen must continue to own in order to originate Loans, service
Loans, and retain its right to service Loans that are being serviced
prior to the Closing.
1.31. Excluded Liabilities means:
(a) any liability or obligation of any Origen Entity or Xxxxxxx
for any violation of the Environmental Laws arising from the
operation of the Business prior to the Closing Date,
including, without limitation, any fine or penalty arising
from any permit violations;
(b) any liability or obligation relating, in any way, to any
action, suit, investigation or proceeding pending or
threatened prior to the Closing Date (and in the case of
Xxxxxxx and Origen pending or threatened prior to the
Effective Date) against any of Xxxxxxx, the Origen Entities,
the Business, the Assets or the Leased Personal Property, at
law or in equity, before any federal, state, municipal or
other governmental department, commission, board, agency,
court or instrumentality, including, without limitation, those
identified on the attached Schedule 4.12;
(c) any liability or obligation of any of the Origen Entities or
Xxxxxxx relating, in any way, to Taxes arising from income
generated or events occurring prior to the Closing, or in the
case of Xxxxxxx and Origen, prior to the Closing Date;
(d) any and all brokerage fees payable by Origen or Xxxxxxx in
connection with this Agreement and the transactions it
contemplates; and
(e) The obligations and liabilities of any Origen Entity and/or
Xxxxxxx arising under this Agreement.
1.32. Financial Statements has the meaning set forth in Section 4.17
below.
1.33. Floorplan Loans means the floorplan loans which have been originated
by Origen or Origen MHF, as specifically identified on the attached
Schedule 1.33.
1.34. Former Employees has the meaning set forth in Section 4.15(a) below.
1.35. GAAP means generally accepted accounting principles, consistently
applied.
1.36. General Contracts has the meaning set forth in Section 1.2(h) above.
1.37. Hazardous Materials has the meaning set forth in Section 4.20(a)(ii)
below.
1.38. Insurance Effective Date means the date that the Insurance Merger
becomes effective which will be the date a certificate of merger
covering the Insurance Merger is filed with the Virginia State
Corporation Commission.
1.39. Insurance Merger has the meaning set forth in the Recitals to this
Agreement.
1.40. Intellectual Property has the meaning set forth in Section 1.2(d)
above.
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1.41. Investment Agreement means that Investment Agreement dated July 20,
2001 by and among Xxxxxxx, XXX TRS, Inc., the Xxxxxxxx Family LLC
and Xxxxxxxx Holding, LLC, as the same has been and may be amended.
1.42. Knowledge, as it relates to Origen, Xxxxxxx or any of their
Affiliates, means the actual knowledge of each of the individuals on
the attached Schedule 1.42.
1.43. Land/Home Contract means a fully amortizing installment loan
agreement, retail installment sales contract or secured promissory
note, and the related mortgage, deed of trust or security agreement,
as may be applicable in the relevant jurisdiction and customarily
used in that context, executed by an obligor and evidencing
indebtedness originated in connection with Land/Home Loan financing.
1.44. Land/Home Loan means an MH Loan made under a Land/Home Contract,
secured by a mortgage on the obligor's real property and the
Manufactured Home permanently affixed to it.
1.45. Leased Personal Property has the meaning set forth in Section 4.5
below.
1.46. Leased Property has the meaning set forth in Section 4.5 below.
1.47. Leased Real Property has the meaning set forth in Section 4.8 below.
1.48. Licenses has the meaning set forth in Section 4.6(a) below.
1.49. Liens has the meaning set forth in Section 4.10 below.
1.50. Limited Liability Company Agreement means the Limited Liability
Company Agreement of the Company as it may be amended from time to
time.
1.51. Loan Documents means the documents required for each Loan in
accordance with the Underwriting Guidelines and the Customary Loan
Origination Practices, together with any additional documents and
information delivered to Origen or Origen MHF in connection with the
origination of a Loan.
1.52. Loans means any one or more of the MH Loans, the Floorplan Loans,
the Land/Home Loans originated by Origen or Origen MHF, or the Home
Equity Loans.
1.53. Manufactured Home means a unit of new or used manufactured
residential housing consisting of a pre-fabricated manufactured unit
affixed to a permanent foundation, or a mobile home (including all
add-ons, attachments, improvements and accessions) which meets the
requirements of Section 25(e)(10) of the Code, as amended. The term
Manufactured Home includes each borrower's interest in each
Manufactured Home and all improvements thereon, accessions and
additions thereto, including all personal property used or useable
in connection therewith, together with all rights pertaining thereto
1.54. Material Adverse Effect means a material adverse effect on the
Origen Entities, the Business, the Assets, the Leased Property and
the Loans, taken as a whole.
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1.55. Mergers has the meaning set forth in the Recitals to this Agreement.
1.56. Merger Certificates has the meaning set forth in Section 8.2(a)
below.
1.57. MH Contract means a fully amortizing installment loan agreement,
retail installment sales contract or secured promissory note and
security agreement, as may be applicable in the relevant
jurisdiction and customarily used in that context, executed by an
obligor and evidencing indebtedness originated in connection with
the financing of a Manufactured Home.
1.58. MH Loan means a loan originated under an MH Contract, secured by a
first lien on the obligor's Manufactured Home, but not by real
property.
1.59. MHF Effective Date means the date that the MHF Merger becomes
effective which will be the later of (a) the date that a certificate
of merger covering the MHF Merger is filed with the Secretary of
State of Delaware and (b) the date a certificate of merger covering
the MHF Merger is filed with the Virginia State Corporation
Commission.
1.60. MHF Merger has the meaning set forth in the Recitals to this
Agreement.
1.61. Missing Adjustments/Footnotes has the meaning set forth in Section
4.7 below.
1.62. Most Recent Balance Sheet has the meaning set forth in Section 4.17
below.
1.63. Origen has the meaning set forth in the preamble to this Agreement.
1.64. Origen Business has the meaning set forth in the Recitals to this
Agreement.
1.65. Origen Entities means Origen and the Origen Subsidiaries,
collectively and Origen Entity means any one of the Origen Entities.
1.66. Origen Insurance has the meaning set forth in the Recitals to this
Agreement.
1.67. Origen Insurance Business means Origen Insurance's Business of
providing, as agent, various insurance products to customers of
Origen and Origen MHF.
1.68. Origen Insurance Stock has the meaning set forth in the Recitals to
this Agreement.
1.69. Origen MHF has the meaning set forth in the Recitals to this
Agreement.
1.70. Origen MHF Business means Origen MHF's business of originating MH
Loans, Land/Home Loans and Floorplan Loans to Alabama and Texas
residents.
1.71. Origen MHF Stock has the meaning set forth in the Recitals to this
Agreement.
1.72. Origen Properties has the meaning set forth in Section 4.20(a)
below.
1.73. Origen Stock has the meaning set forth in the Recitals to this
Agreement.
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1.74. Parties means Xxxxxxx, the Origen Entities and the Company Entities
collectively, and Party means any one of the Parties.
1.75. Permitted Liens mean all Liens that are (a) disclosed in any title
reports, opinions, or insurance binders delivered or made available
to the Company prior to the execution of this Agreement, (b) for
taxes not delinquent, or being contested in good faith; (c) not
delinquent and are created by statute in connection with workers'
compensation, unemployment insurance, social security and similar
statutory obligations; (d) rights of parties lawfully in possession
of the applicable party, and (e) any other defect, exception to
title, or easement or claim of easement which in all cases does not
materially impair the use, operation or value of the property to
which it relates, in each case as are set forth on the attached
Schedule 1.75.
1.76. Personal Property Leases has the meaning set forth in Section 1.2(g)
above.
1.77. Pledge Agreement has the meaning set forth in Section 9.9 below.
1.78. Post Closing Agreement has the meaning set forth in Section 7.1(f)
below.
1.79. Related Expenses has the meaning set forth in Section 9.1(e) below.
1.80. Subsequent Financial Statements has the meaning set forth in Section
4.17 below.
1.81. Tax means any federal, state, province, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental, customs
duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property,
personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty, or addition thereto,
whether disputed or not.
1.82. Tax Return means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
1.83. Third Party Claim has the meaning set forth in Section 9.1(d) below.
1.84. 2000 Financial Statements has the meaning set forth in Section 4.17
below.
1.85. Underwriting Guidelines means the Origen Financial, Inc. Guidelines
for Underwriting Loans in effect at the time each of the applicable
Loans were underwritten. For purposes of this Agreement, the term
"Underwriting Guidelines" shall include Portal, Origen's credit
scoring model.
1.86. Virginia Statute has the meaning set forth in the Recitals to this
Agreement.
2. MERGERS.
2.1. Company Merger. Upon compliance with the applicable provisions of
the Delaware Statute and the Virginia Statute, on the Company
Effective Date, Origen will be merged with and into the Company.
Upon the Company Merger, the separate existence of Origen will cease
and the Company will continue to exist as
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the surviving entity. The Company will succeed to and possess all of
the property (real, personal and mixed), rights, privileges,
immunities, powers, purposes and franchises, and will be subject to
all the obligations, restrictions and liabilities, of Origen, all
without further act or deed and all as more fully set forth in the
Delaware Statute and the Virginia Statute.
2.2. MHF Merger. Upon compliance with applicable provisions of the
Delaware Statute and the Virginia Statute, on the MHF Effective
Date, Origen MHF will be merged with and into Company MHF. Upon the
MHF Merger, the separate existence of Origen MHF will cease and
Company MHF will continue to exist as the surviving entity. Company
MHF will succeed to and possess all the property (real, personal and
mixed), rights, privileges, immunities, powers, purposes and
franchises, and will be subject to all the obligations, restrictions
and liabilities, of Origen MHF, all without further act or deed, and
all as more fully set forth under the Delaware Statute and the
Virginia Statute.
2.3. Insurance Merger. Upon compliance with applicable provisions of the
Virginia Statute, on the Insurance Effective Date, Origen Insurance
will be merged with and into Company Insurance. Upon the Insurance
Merger, the separate existence of Origen Insurance will cease and
Company Insurance will continue to exist as the surviving entity.
Company Insurance will succeed to and possess all the property
(real, personal and mixed), rights, privileges, immunities, powers,
purposes and franchises, and will be subject to all the obligations,
restrictions and liabilities, of Origen Insurance, all without
further act or deed, and all as more fully set forth under the
Virginia Statute.
3. PROVISIONS OF PLANS OF MERGER.
3.1. Governing Documents. The certificates of formation, articles of
organization, limited liability company agreements and operating
agreements, as applicable, of the Company, Company MHF and Company
Insurance, in effect immediately before the Mergers, will continue
in full force and effect after the Mergers until amended as provided
by law or in accordance with their respective terms.
3.2. Conversion of Security on Mergers.
(a) On the Company Effective Date, all of the outstanding Origen
Stock, including treasury stock, will be cancelled and all of
the outstanding Origen Stock will be exchanged for 200,000
Series A Units of membership interest in the Company.
Immediately upon the Company Merger becoming effective, the
equity interest of the shareholder of Origen, as shareholder
of Origen, will be extinguished and the shareholder's sole
right will be to receive the consideration described in this
section.
(b) On the MHF Effective Date, all of the outstanding Origen MHF
Stock, including treasury stock, will be cancelled all of and
the outstanding Origen MHF Stock will be exchanged for a 100%
membership interest in Company MHF. Immediately upon the MHF
Merger becoming effective, the equity interest of the
shareholder of Origen MHF, as shareholder of Origen MHF, will
be extinguished and the shareholder's sole right will be to
receive the consideration described in this section.
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(c) On the Insurance Effective Date, all of the outstanding Origen
Insurance Stock, including treasury stock, will be cancelled
and all of the outstanding Origen Insurance Stock will be
exchanged for a 100% membership interest in Company Insurance.
Immediately upon the Insurance Merger becoming effective, the
equity interest of the shareholder of Origen Insurance, as
shareholder of Origen Insurance, will be extinguished and the
shareholder's sole right will be to receive the consideration
described in this section.
3.3. MANAGEMENT.
(a) The officers and the Board of Managers of the Company
immediately before the Company Merger will be the initial
officers and Board of Managers of the Company after the
Merger, in each case until their successors are duly elected
or appointed and qualified pursuant to the Limited Liability
Company Agreement.
(b) The manager of Company MHF immediately before the MHF Merger
will be the initial manager of Company MHF after the MHF
Merger until his successor is duly elected or appointed and
qualified pursuant to the limited liability company agreement
governing Company MHF.
(c) The manager of Company Insurance immediately before the
Insurance Merger will be the initial manager of Company
Insurance after the Insurance Merger until his successor is
duly elected or appointed and qualified pursuant to the
limited liability company agreement or operating agreement
governing Company Insurance.
4. REPRESENTATIONS AND WARRANTIES OF ORIGEN AND XXXXXXX. Origen and Xxxxxxx,
jointly and severally, represent, warrant and covenant the following to
the Company, as of the date of this Agreement, as of the Closing Date,
and, where applicable, in the case of Xxxxxxx and Origen, as of the
Effective Date, with the knowledge and expectation that, in agreeing to
enter into this Agreement, the Company is completely relying on, and in
connection with the consummation of the transactions contemplated in this
Agreement, will completely rely on, such representations, warranties and
covenants:
4.1. Good Standing and Authority.
(a) Each of Origen, Origen MHF and Origen Insurance is a
corporation duly organized, validly existing and in good
standing under the laws of the Commonwealth of Virginia. Each
Origen Entity is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in
which it is required to be so qualified, except where the
failure to be so qualified would not have a Material Adverse
Effect. Each of Origen and Origen MHF is and has at all times
it held Loans been duly licensed and qualified in any state
where the related collateral is or was located if the laws of
that state require licensing or qualification in order to
conduct business of the type conducted therein by Origen or
Origen MHF, as the case may be, except where the failure to be
so licensed or qualified would not have a Material Adverse
Effect. Each such jurisdiction is listed on the attached
Schedule 4.1. Each Origen Entity has all requisite corporate
power and authority to enter into this Agreement and any and
all documents contemplated in this Agreement (the "Attendant
Documents")
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to which it is a party and to consummate the transactions
contemplated in this Agreement and the Attendant Documents.
This Agreement and all of the Attendant Documents to which an
Origen Entity is or will be a party, and the consummation of
the transactions contemplated in this Agreement and the
Attendant Documents, have been, or before the Closing Date
will be, duly authorized and approved by each Origen Entity's
board of directors and sole shareholder and all other
necessary and proper corporate action on the part of each
Origen Entity, in accordance with applicable law and its
charter and bylaws. This Agreement, and all of the Attendant
Documents to which an Origen Entity is a party, when executed
and delivered, will constitute legal, valid and binding
obligations of such Origen Entity enforceable against it in
accordance with their respective terms.
(b) Xxxxxxx is a corporation duly organized, validly existing and
in good standing under the laws of the State of Michigan.
Xxxxxxx has all requisite power and authority to enter into
this Agreement and the Attendant Documents to which it is a
party and to consummate the transactions contemplated in this
Agreement and the Attendant Documents to which it is a party.
This Agreement and all of the Attendant Documents to which
Xxxxxxx is or will be a party, and the consummation of the
transactions contemplated in this Agreement, have been, or
before the Closing Date will be, duly authorized and approved
by Xxxxxxx'x board of directors and shareholders and all other
necessary and proper corporate action on the part of Xxxxxxx,
in accordance with applicable law and Xxxxxxx'x charter and
bylaws. This Agreement, and all of the Attendant Documents to
which Xxxxxxx is or will be a party, when executed and
delivered, will constitute legal, valid and binding
obligations of Xxxxxxx enforceable against it in accordance
with their respective terms.
4.2. Assets. The Assets, together with the Leased Property, constitute
all of the assets used in connection with, and are all of the assets
that are necessary for, the operation of the Business. The attached
Schedule 1.2(b) contains a true and complete list of all material
furniture, fixtures and fixed assets used in connection with the
operation of the Business, other than the Leased Personal Property.
The attached Schedule 1.2(f) contains a true and complete list of
all material equipment used in connection with the operation of the
Business, other than the Leased Personal Property.
4.3. Intellectual Property. The attached Schedule 1.2(d) contains a true
and complete list of all Intellectual Property that is used in any
material manner or held for use in connection with the operation of,
or which is related in any material manner to, the Business. Except
as set forth on the attached Schedule 4.3, Origen and the Origen
Subsidiaries have the complete and unrestricted right to use and
own, has good and marketable title to and has the exclusive right to
assign its entire right, title and interest in and to all of the
Intellectual Property, and each item of the Intellectual Property is
in full force and effect. The items comprising the Intellectual
Property are the only proprietary property used or necessary in
connection with the Business as presently or historically conducted.
Except as set forth on the attached Schedule 4.3, there has been no
infringement, misappropriation or misuse of any of the Intellectual
Property or any other proprietary information related to the
Business. To the Knowledge of Xxxxxxx and Origen, there is no claim
(or basis for a claim) against any Origen Entity or
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Xxxxxxx that any of such companies has infringed or is infringing on
any patent, trademark, trade name, copyright or other proprietary or
intellectual property right of any third party or that any of such
companies is illegally using the trade secrets or property rights of
any third party.
4.4. Contracts. The attached Schedules 1.2(g) and 1.2(h) identifies all
of the Contracts, true and complete copies of all of which have been
delivered to the Company. Except as set forth on the attached
Schedule 4.4, all of the Contracts were entered into in the ordinary
course of business. Except as set forth on the attached Schedule
4.4, (a) each applicable Origen Entity has complied in all material
respects with the provisions of each Contract and is not in default
under any Contract, and (b) to the Knowledge of Origen and Xxxxxxx,
no party to any Contract has failed to comply in any material
respect with, or is in default under, the provisions of any
Contract.
4.5. Leased Assets. The attached Schedule 1.2(g) contains a true and
complete list of all personal property covered under the Personal
Property Leases (collectively, "Leased Personal Property", and
together with the Leased Real Property, "Leased Property"). The
Origen Entities are the exclusive users of all of the Leased
Personal Property and all of the Leased Personal Property is located
at the Leased Real Property. Except for the Leased Personal
Property, there is no personal property which is leased and which is
used in connection with the operation of the Business.
4.6. Permits and Licenses.
(a) The attached Schedule 1.2(i) lists all governmental
franchises, permits, licenses or other authorizations held by
the Origen Entities in connection with the Business, the
Assets or the Leased Property ("Licenses"), true and complete
copies of all of which have been delivered to the Company.
Except as set forth on the attached Schedule 4.6(a), all of
the Licenses are in full force and effect. Except as set forth
on the attached Schedule 4.6(a), and except where the failure
to obtain any such permit, license, franchise or other
authorization would not have a Material Adverse Effect, the
Origen Entities have obtained all permits, licenses,
franchises and other authorizations necessary or desirable
with respect to, and have complied in all material respects
with all laws applicable to, the operation of the Business,
the ownership of the Assets or the lease of the Leased
Property, and none of the Origen Entities has engaged in any
activity which would cause revocation or suspension of any
such permit, license, franchise or authorization. Except as
set forth on the attached Schedule 4.6(a), no action or
proceeding looking to or contemplating the revocation or
suspension of any such permits, licenses, franchises or
authorizations is pending or, to the Knowledge of Origen or
Xxxxxxx, threatened.
(b) Each of Origen and Origen MHF is licensed for the conduct of
its respective business of mortgage lending, indirect consumer
lending, direct (retail) consumer lending and loan servicing
in each of those states listed in the attached Schedule
4.6(b), subject to the limitations or comments contained in
Schedule 4.6(b). Origen is an approved FNMA
Originator/Servicer, under FNMA license number 00000-000-0.
Origen has been approved as an Investing Mortgagee by the
Federal Housing Administration of the U.S. Department of
Housing and Urban
12
Development. Neither Origen nor Origen MHF (i) is in breach of
any contract for the sale or servicing of mortgage loans or
mortgage loan servicing rights or for the servicing of
mortgage loans to which it is a party; or (ii) is a party to
or has received notice that it is to be made a party to any
legal or regulatory action by any state or federal agency or
any private party, the adverse outcome of which might have a
Material Adverse Effect.
4.7. Real Property Owned. No Origen Entity owns any real property, nor
has any Origen Entity ever owned any real property. No Origen Entity
is a party to any agreement pursuant to which it is obligated to
purchase any real property.
4.8. Real Property Leased. The attached Schedule 1.2(k) lists and briefly
describes all real properties leased or subleased to an Origen
Entity or Xxxxxxx for use in connection with the operation of the
Business (the "Leased Real Property"). Origen has delivered to the
Company true, correct and complete copies of the leases and
subleases listed on the attached Schedule 1.2(k). Except as set
forth on the attached Schedule 4.8, with respect to each such lease
or sublease:
(a) the lease or sublease is legal, valid, binding, enforceable
and in full force and effect;
(b) the lease or sublease will continue to be legal, valid,
binding, enforceable and in full force and effect on identical
terms following the Closing;
(c) no Origen Entity nor, to the Knowledge of Origen and Xxxxxxx,
no other party to the lease or sublease is in breach or
default, and with respect to Xxxxxxx and any Origen Entity, no
event has occurred, and with respect to any other party
thereto, to the Knowledge of Origen and Xxxxxxx, no event has
occurred which, with notice or lapse of time, would constitute
such a breach or default or permit termination, modification
or acceleration under the lease or sublease;
(d) no party to the lease or sublease has repudiated any of its
provisions;
(e) there are no disputes, oral agreements or forbearance programs
in effect as to the lease or sublease;
(f) Neither Xxxxxxx nor any Origen Entity, as the case may be, has
assigned, transferred, conveyed, mortgaged, deeded in trust or
encumbered all or any portion of its interest in the leasehold
or subleasehold;
(g) all facilities leased or subleased under the lease or sublease
have been operated and maintained in material compliance with
applicable laws, rules and regulations;
(h) all facilities leased or subleased under the lease or sublease
are supplied with utilities and other services necessary for
the operation of such facilities; and
13
(i) all facilities leased or subleased under the lease or sublease
are in good operating condition, and would not, with ordinary
wear and tear, require major repair or replacement during the
remainder of the lease term.
Except as set forth on the attached Schedule 4.8, no property
insurer or similar body has made any recommendations with respect to
any parcel of Leased Real Property which have not been complied with
in all material respects, and all structures on the Leased Real
Property meet all qualifications for "highly protected risk"
classification for fire insurance purposes.
4.9. Loans, Notes and Accounts Receivable. The attached Schedule 4.9
contains a true and complete list of all Loans and any other notes
and accounts receivable of the Origen Entities as of November 29,
2001. At the Closing, Origen shall deliver to the Company a true and
complete list of all Loans and other notes and accounts receivable
of the Origen Entities as of five business days prior to the Closing
Date. Except as set forth on the attached Schedule 4.9, all Loans
and other notes and accounts receivable of the Origen Entities are
reflected properly on its books and records, arose from bona fide
transactions in the ordinary course of business, are valid
receivables subject to no setoffs or counterclaims, are current and
collectible and will be collected in substantial accordance with
their terms and at their recorded amounts, subject only to the
reserve for bad debts set forth on the face of the Most Recent
Balance Sheet as adjusted for the passage of time through the
Closing Date in accordance with GAAP.
4.10. Liens. Except as set forth on the attached Schedule 4.10 and except
for Permitted Liens, an Origen Entity or Xxxxxxx owns and has good,
marketable and unencumbered title to, or an unencumbered interest
in, each item comprising the Assets, free and clear of any and all
title defects, judgments, objections, security interests, liens,
charges, liabilities, rights of redemption, options, mortgages,
easements, restrictions, reservations, tenancies, agreements or
other obligations or encumbrances of any nature whatsoever
(collectively, "Liens").
4.11. Good Condition. Except as set forth in the attached Schedule 4.11,
all facilities used in connection with the operation of the
Business, all of the Assets and all of the Leased Personal Property
are currently operating for their respective intended uses and need
no major repairs.
4.12. Litigation. Except as set forth on the attached Schedule 4.12, there
are no actions, suits or proceedings pending and, to the Knowledge
of Origen and Xxxxxxx, there are no actions, suits, investigations
or proceedings threatened against any of the Origen Entities, the
Business, the Assets or the Leased Property, at law or in equity,
before any federal, state, municipal or other governmental
department, commission, board, agency, court or instrumentality
which could affect any of the Origen Entities, the Business, the
Assets or the Leased Property in any way. Except as set forth on the
attached Schedule 4.12, no Origen Entity is in default with respect
to or in violation of any order, writ, injunction or decree of any
court or other governmental department, commission, board, agency or
instrumentality affecting the Origen Entities, the Business, the
Assets or the Leased Property.
4.13. Business Practices and Compliance with Applicable Laws and
Regulations. Except as set forth on the attached Schedule 4.13:
14
(a) The Origen Entities have complied in all material respects
with all laws, regulations, rules, orders, judgments, decrees
and other requirements imposed by any governmental authority
applicable to them, including without limitation,
truth-in-lending, real estate settlement procedures, consumer
credit protection, equal credit opportunity and disclosure
laws, in connection with the operation the Business, the
ownership of the Assets or the lease of the Leased Property.
(b) The servicing and collection practices of Origen and Origen
MHF have been in all material respects legal, proper and
prudent and have met customary industry standards applicable
to similar loans.
(c) The Loans were originated by Origen and Origen MHF in the
regular course of business in accordance with Customary Loan
Origination Practices, and comply and conform in all material
respects with the Underwriting Guidelines.
(d) No fraudulent acts were committed by Origen, Origen MHF or
their Affiliates in connection with the origination of any
Loan.
4.14. Employees. The attached Schedule 4.14 contains a complete and
accurate list of the Origen Entities' current employees as of
October 15, 2001 (the "Employees") and, with respect to each
Employee, his or her salary or hourly rate currently in effect,
annual bonuses (last paid or payable), if any, any other fringe
benefits or incentive paid or payable to him or her, including
vacation accruals. Except as set forth on the attached Schedule
4.14, all such Employees are actively at work, and no such Employee
is currently on leave of absence, layoff, military leave,
suspension, sick leave, workers' compensation, salary continuance or
short or long term disability or otherwise not actively performing
his or her work during all normally scheduled business hours.
4.15. Employee Relations.
(a) Except as set forth on the attached Schedule 4.15, there are
no written or oral collective bargaining or other employment
agreements or understandings with or affecting any Employee.
Except as set forth on the attached Schedule 4.15, hours
worked by, and payments made to, all Employees and, to the
Knowledge of Origen and Xxxxxxx, former employees of the
Origen Entities ("Former Employees"), have been in material
compliance with the Fair Labor Standards Act and other
applicable federal, state and local laws.
(b) Except as set forth on the attached Schedule 4.15, as of the
Closing Date and the Effective Date, all payments determined
to be due from the Origen Entities on account of any
Employee's or Former Employees' work, health or welfare
insurance, under any agreement, whether oral or written, will
have been paid or properly accrued on the Financial Statements
(or incurred in the ordinary course of the Origen Entities'
business since the date of the Most Recent Balance Sheet).
(c) Except as set forth on the attached Schedule 4.15, there are
no vacation monies or rights to time off which have been
earned by any Employee or Former Employee under any agreement,
whether oral or written, that have
15
not been paid or properly accrued on the Financial Statements
(or incurred in the ordinary course of the Origen Entities'
business since the date of the Most Recent Balance Sheet), nor
are there any severance payments which could become payable by
the Origen Entities under the terms of any oral or written
agreement or commitment.
(d) Except as disclosed pursuant to Section 4.16 below, the Origen
Entities have no liability with respect to any pension, profit
sharing, retirement or similar plan, or other employee benefit
plan.
(e) Except as set forth on the attached Schedule 4.15:
(i) there is no unfair labor practice charge or complaint
concerning the Origen Entities or any Employee or Former
Employee pending before any governmental agency in any
jurisdiction in which the Origen Entities conduct
business;
(ii) there is no labor strike or slowdown, work stoppage,
lockout or other collective labor action actually
pending or, to the Knowledge of Origen and Xxxxxxx,
threatened against or affecting the Business, and the
Origen Entities have not experienced any strike or
slowdown, work stoppage, lockout or other collective
labor action in connection with their business by or
with respect to any Employees or Former Employees;
(iii) there is no representation claim or petition concerning
Business or any Employee or Former Employee pending
before any governmental agency in any jurisdiction in
which the Origen Entities conduct business, and no
question concerning representation exists relating to
the Employees;
(iv) there are no charges with respect to or relating to the
Business pending before the Equal Employment Opportunity
Commission or any agency in any jurisdiction in which
the Origen Entities conduct business responsible for the
prevention of unlawful employment practices;
(v) none of the Origen Entities has received formal notice
from any governmental agency responsible for the
enforcement of labor or employment laws of an intention
to conduct an investigation of the Origen Entities and
no such investigation is currently in progress; and
(vi) to the Knowledge of Origen and Xxxxxxx, no key Employee
or group of Employees has any plans to terminate
employment with the Origen Entities prior to or after
the Effective Date.
4.16. Employee Benefits. Except as disclosed on the attached Schedule
4.16, none of the Origen Entities maintains or is a party to, bound
by or a contributor to, or required to contribute to, (a) any
employee pension benefit plans whether or not qualified under
Section 401(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), (b) any employee welfare benefit plans, or (c) any other
compensation, fringe or welfare plan or program, policy,
understanding or
16
arrangement providing plan benefits or welfare, with respect to its
employees or employees of others (collectively, the "Employee
Benefit Plans"). As used in this Section 4.16, the terms "employee
pension benefit plan" and "employee welfare benefit plan" have the
respective meanings assigned to such terms in Section 3 of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA"). No Employee Benefit Plan is (and none of the Origen
Entities has any liability with respect to any plan that is) (i)
subject to the minimum funding requirements of ERISA or the Code,
(ii) a "multiemployer plan" (as defined in Section 3(37) of ERISA),
(iii) a multiple-employer plan within the meaning of Section 413 of
the Code, or (iv) an employee welfare benefit plan or plan providing
welfare-type benefits to current or future retirees or current or
future former employees (or their spouses or dependents) other than
as required by COBRA or any other state continuation coverage law.
Each Employee Benefit Plan that is an employee pension benefit plan
now meets, and since its inception has met, in form and operation,
the requirements of a tax-qualified plan under Section 401(a) of the
Code, and the Internal Revenue Service has issued a favorable
determination letter with respect to the tax-qualified status of
such plan. Each Employee Benefit Plan has been maintained,
administered and funded in material compliance with all applicable
laws and regulations, including, without limitation, the Code and
ERISA. There are no actions, suits, or claims (other than routine
undisputed claims for benefits) pending or, to the Knowledge of
Origen and Xxxxxxx, threatened against or with respect to any
Employee Benefit Plan. With respect to each Employee Benefit Plan,
all required government filings and disclosures have been timely
made and are true, correct and complete in all material respects,
and no prohibited transaction or other act or omission has occurred
which has resulted in, or could reasonably be expected to result in,
the imposition of an excise tax or other penalty, including, without
limitation, any penalties under ERISA or the Code. No Origen Entity
is now or has been a member of: (i) a controlled group of
corporations as defined in Section 414(b) of the Code; (ii) a group
of trades or businesses under common control as defined in Section
414(c) of the Code; (iii) an affiliated service group as defined in
Section 414(m) of the Code; (iv) a group of businesses referred to
in Section 414(o) of the Code; (v) a group of trades or businesses
under common control as defined in Section 4001(b) of ERISA; or (vi)
any other group under the law, rules or regulations of a foreign
country similar to (i) through (v). Origen has provided to the
Company true and correct copies of all current and prior material
documents pursuant to which the Employee Benefit Plans are
maintained, administered and funded, as well as the most recent
Internal Revenue Service determination letters.
4.17. Financial Information. Set forth on the attached Schedule 4.17 are:
(a) the audited consolidated balance sheets of Xxxxxxx and the
Origen Entities as of December 31, 2000 (collectively, the "Most
Recent Balance Sheet") and the related unaudited statements of
income cash flow, and notes thereto, for the year then ended
(collectively, the "2000 Financial Statements"); and (b) the
unaudited consolidated balance sheets of Xxxxxxx and the Origen
Entities as of September 30, 2001 and the related unaudited
statements of income cash flow, and notes thereto, for the
three-month period then ended (collectively, the "Subsequent
Financial Statements", and together with the 2000 Statements, the
"Financial Statements"). All of the Financial Statements (i) are
true, correct and complete in all material respects; (ii) have been
prepared in accordance with GAAP; and (iii) present fairly the
financial condition, results of operation and cash flows of the
Origen Entities as of the dates and for the periods indicated;
subject, in the case of the Subsequent Financial Statements only, to
normal year-end adjustments
17
consistent with past practices and the absence of footnotes (the
"Missing Adjustments/Footnotes"). Except to the extent disclosed on
the attached Schedule 4.17, the Missing Adjustments/Footnotes, if
presented in the Subsequent Financial Statements, would not differ
materially from those included in the 2000 Financial Statements. The
Financial Statements and the attached Schedule 4.18 make
substantially full and adequate provision for all obligations,
liabilities or commitments, whether fixed or contingent, and
doubtful accounts receivable of the Origen Entities.
4.18. No Undisclosed Liabilities. Except as and to the extent set forth on
the attached Schedule 4.18 or reflected in the Financial Statements,
and except for current liabilities incurred by the Origen Entities
in connection with the operation of or with respect to the Business
in the ordinary course since the date of the Most Recent Balance
Sheet, Xxxxxxx and the Origen Entities have no debts, liabilities or
obligations of any nature or kind (whether absolute, accrued,
contingent, unliquidated or otherwise, whether Origen or Xxxxxxx
have any Knowledge thereof, whether due or to become due and
regardless of when asserted) arising out of transactions entered
into, at or prior to the Closing or the Effective Date, or any
action or inaction at or prior to the Closing or the Effective Date,
or any state of facts existing at or prior to the Closing or the
Effective Date that could result in a Material Adverse Effect.
4.19. Tax Matters. Except as set forth on the attached Schedule 4.19,
proper and accurate amounts have been and will be withheld by the
Origen Entities from the Employees for federal and state tax
purposes and properly deposited in appropriate accounts, for all
periods up to and through the Effective Date in full and complete
compliance with the tax withholding, deposit and payment provisions
of applicable federal, state and local laws. Except as set forth on
the attached Schedule 4.19, the Origen Entities or Xxxxxxx have
filed all federal, state and local, as well as other Tax Returns
that were required to be filed for all periods for which returns
were due up to and through the Effective Date, and the Origen
Entities or Xxxxxxx have made timely payments of all Taxes shown to
be due and payable in respect of such Tax Returns. To the Knowledge
of Origen and Xxxxxxx, all such Tax Returns are true, correct and
complete in all material respects and no penalties or interest will
be asserted by any taxing authority arising out of a late payment of
Taxes. Except as set forth on the attached Schedule 4.19, none of
the Origen Entities owes any deficiency for any Taxes, and no Tax
Returns are presently under audit or examination by any federal,
state or local tax authority, and no adjustments have been proposed
or asserted by the Internal Revenue Service or any other agency in
respect of any liability for Taxes arising out of or relating to
such Tax Returns.
4.20. Environmental Matters.
(a) There is not now, nor has there ever been, any disposal,
release or threatened release of Hazardous Materials by any of
the Origen Entities (or, to the Knowledge of Origen and
Xxxxxxx, by any other party) on, from or under properties now
or ever owned, leased or operated by any of the Origen
Entities or any subsidiary, Affiliate or predecessor in
interest of the Origen Entities (the "Origen Properties").
There has not been generated by or on behalf of any of the
Origen Entities any Hazardous Material. No Hazardous Material
has been disposed of or allowed to be disposed of, from, on or
off any of the Origen Properties during the period
18
that any of the Origen Entities owned, leased or operated the
Origen Properties which may, to the Knowledge of Origen and
Xxxxxxx, give rise to a clean-up responsibility, personal
injury liability or property damage claim against any of the
Origen Entities or any of them being named a potentially
responsible party for any such clean-up costs, personal
injuries or property damage or create any cause of action by
any third party against any of the Origen Entities. For
purposes of this subsection:
(i) the terms "disposal," "release," and "threatened
release" shall have the definitions assigned thereto by
the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended ("CERCLA"), and
(ii) the term "Hazardous Material" means any hazardous or
toxic substance, material or waste or pollutants,
contaminants, gasoline, oil, diesel fuel, petroleum
products or fractions thereof, or asbestos containing
material which is or becomes regulated by any
governmental authority in any jurisdiction in which any
of the Origen Properties are located. The term
"Hazardous Material" also includes without limitation
any material or substance which is (A) defined as a
"hazardous waste" or a "hazardous substance" under
applicable law; (B) designated as a "hazardous
substance" pursuant to Section 311 of the Federal Water
Pollution Control Act, as amended, (C) defined as a
"hazardous waste" pursuant to Section 1004 of the
Federal Resource Conservation and Recovery Act, as
amended, or (D) defined as a "hazardous substance"
pursuant to Section 101 of CERCLA.
(b) None of the Origen Properties is (or with respect to
previously-owned Origen Properties was at the time of
disposition) in violation of any law (or with respect to
previously-owned Origen Properties, laws in effect at the time
of disposition) relating to the environmental conditions on,
under or about Origen Properties ("Environmental Laws"),
including without limitation soil and ground water condition,
and there are (or at the time of disposition were) no
underground tanks or relating piping, conduits or related
structures. During the period that any of the Origen Entities
owned, leased or operated the Origen Properties, none of the
Origen Entities has, and to the Knowledge of Origen and
Xxxxxxx, no third party has, used, generated, manufactured or
stored on, under or about Origen Properties or transported to
or from Origen Properties any Hazardous Materials except in
compliance with applicable law, and there has been no
litigation brought, or to the Knowledge of Origen and Xxxxxxx,
threatened against any of the Origen Entities or any
settlement reached by any of the Origen Entities with any
third party or third parties alleging the presence, disposal,
release or threatened release of any Hazardous Materials on,
from or under any of Origen Properties.
4.21. Consents, Approvals and Authorizations.
(a) Except as set forth on the attached Schedule 4.21(a), no
consent, approval or authorization of, or designation,
declaration or filing with, or notice to, any governmental
authority, or any lenders, lessors, creditors, shareholders or
others, is required on the part of the Origen Entities or
Xxxxxxx in
19
connection with the valid execution and delivery of this
Agreement and the Attendant Documents or the consummation of
the transactions contemplated in this Agreement and the
Attendant Documents that, if not obtained, performed or given,
would cause a Material Adverse Effect.
(b) The attached Schedule 4.21(b) sets forth those consents,
approvals, authorizations, designations, declarations, filings
and notices that, if not obtained, performed or given before
the Closing or the Effective Date, would cause a Material
Adverse Effect. Prior to the Closing or, at the election of
the Company, prior to the Effective Date, Origen and Xxxxxxx
shall properly obtain, perform or give all of the consents,
approvals, authorizations, designations, declarations, filings
and notices set forth on the attached Schedule 4.21(b), and as
of the Closing, or, at the election of the Company, as of the
Effective Date, Origen and Xxxxxxx shall have given the
Company adequate evidence of all such consents, approvals,
authorizations, designations, declarations, filings and
notices.
4.22. Insurance. Except as set forth on the attached Schedule 4.22, the
Origen Entities, through Xxxxxxx, have maintained and now maintain
insurance with respect to the Assets, Leased Property and the
Business, covering property damage by fire or other casualty, and
against such liabilities, claims and risks, including, without
limitation, workers compensation, and in such amounts as is
customary or appropriate in the industry. The attached Schedule 4.22
contains a true and correct summary of all such insurance policies
maintained by the Origen Entities, presently or at any point during
the last five years, setting forth the names of the insured and the
insurer, policy numbers, the types of coverage, premium payments or
basis of payment, deductible amounts and limits of coverage. Except
as set forth on the attached Schedule 4.22, no such policy of
insurance is subject to any deductible, self-insured retention,
retrospective rating agreement, indemnification agreement or any
other method or device by which the insured person is subject to all
or any part of the liability for any or all claims. Prior to the
execution of this Agreement, the Origen Entities have delivered to
the Company true, correct and complete copies of all such insurance
policies. Except as set forth in the attached Schedule 4.22, all
such insurance policies will be in full force and effect through the
Closing and the Effective Date. Except as set forth on the attached
Schedule 4.22, there is no state of facts and no event has occurred
forming the basis for any present property, casualty or fidelity
claim against the Origen Entities which is not fully covered by
insurance. The attached Schedule 4.22 contains loss runs for the
last five years setting forth all property, general and products
liability and workers compensation claim activity against the
Business, including the date and place of the occurrence, the
claimant's name, reserves, amounts paid, a brief description of the
incident and whether the claim is open or closed. Except as set
forth on the attached Schedule 4.22, neither Origen nor Xxxxxxx has
any Knowledge of any occurrence, circumstance, or event which could
reasonably be expected to result in any such claim.
4.23. Recent Conduct of Business; Interim Operations. Except as set forth
on the attached Schedule 4.23, since the date of the Most Recent
Balance Sheet, there has not been a Material Adverse Effect. Except
as set forth on the attached Schedule 4.23, since the date of the
Most Recent Balance Sheet, Xxxxxxx and Origen have caused the
Business to be conducted only in the ordinary course.
20
Except as set forth on the attached Schedule 4.23, since the date of
the Most Recent Balance Sheet, neither Xxxxxxx nor any Origen Entity
has:
(a) made or incurred any capital expenditures with respect to the
Business in excess of $50,000 in any one transaction or series
of similar transactions;
(b) entered into any purchase order in excess of $10,000;
(c) paid or declared any dividends or other distributions (except
for payment of indebtedness) to any of their shareholders;
(d) sold or transferred any of the Assets, other than inventories
in the ordinary course of business;
(e) terminated or amended any material General Contract;
(f) issued or redeemed, or agreed to issue or redeem any shares of
their capital stock, or granted any other options, rights or
other entitlements in respect of shares of their capital
stock;
(g) subjected any of the Assets or any of the Leased Personal
Property to, or permitted any of the Assets or any of the
Leased Personal Property to become subject to, any Lien other
than in the ordinary course; or
(h) entered into any agreement or commitment, whether written or
oral (other than this Agreement or any arrangement provided
for or contemplated in this Agreement), to take any of the
types of action described in subsection (a) through (g) of
this Section 4.23.
4.24. Non-Violative Agreement. Neither the execution and delivery of this
Agreement and the Attendant Documents to which the Origen or Xxxxxxx
is a party nor the consummation of the transactions contemplated in
this Agreement and the Attendant Documents will conflict with,
result in the breach or violation of or constitute a default under
the terms, conditions or provisions of any the charter or bylaws of
any of the Origen Entities or Xxxxxxx, or, subject to obtaining the
consents set forth in Schedule 4.21(b), any other agreement or
instrument to which any of the Origen Entities or Xxxxxxx is a
party, or by which any of the Origen Entities or Xxxxxxx may be
bound or to which any of the Origen Entities or Xxxxxxx may be
subject.
4.25. Brokerage or Finder's Fee. No broker, finder, agent or similar
intermediary has acted for or on behalf of Origen or Xxxxxxx in
connection with this Agreement or the transactions contemplated
hereby and no broker, finder, agent or similar intermediary is
entitled to any broker's, finder's or similar fee or other
commission in connection therewith based on any agreement,
arrangement or understanding with Origen or Xxxxxxx or any action
taken by Origen or Xxxxxxx.
4.26. Disclosure. No representation or warranty by Origen or Xxxxxxx
contained in this Agreement and no statement by Origen or Xxxxxxx
contained in any of the Attendant Documents or any other certificate
or instrument to be furnished at Closing, either pursuant to this
Agreement or in connection with the transactions
21
contemplated in this Agreement contains or will contain any untrue
statement of a material fact, or omits or will omit to state a
material fact.
4.27. Capitalization. Origen has one class of capital stock, common stock,
no par value per share. Each of Origen MHF and Origen Insurance has
one class of capital stock, common stock, $0.01 par value per share.
The attached Schedule 4.27 sets forth the number of authorized and
the number of issued and outstanding shares of common stock of each
of the Origen Entities. Schedule 4.27 also identifies all of the
Origen Entities' shareholders, and with respect to each such
shareholder, identifies the number of issued and outstanding shares
of stock of such Origen Entity owned by such shareholder. All of the
issued and outstanding shares of Origen Stock, all of the issued and
outstanding shares of Origen MHF Stock and all of the issued and
outstanding shares of Origen Insurance Stock have been duly
authorized and validly issued, are fully paid and non-assessable and
were issued by Origen, Origen MHF and Origen Insurance,
respectively, without violating any requirements of law. Except as
set forth on the attached Schedule 4.27, there are no preemptive or
first refusal rights to purchase or otherwise acquire shares of the
Origen Stock, Origen MHF Stock or Origen Insurance Stock pursuant to
their respective charters or bylaws or by agreement or otherwise.
There are no outstanding agreements, commitments, rights, options,
warrants or claims of any nature whatsoever for the issuance, sale,
purchase or redemption of any shares of capital stock of any Origen
Entity or any securities convertible into or exchangeable for such
shares.
4.28. Subsidiaries. Except for the fact that Origen MHF, Origen Insurance
and Origen Special Holdings Corporation, a Delaware corporation and
a special purpose subsidiary of Origen, are subsidiaries of Origen,
and except for the fact that Origen has or will establish a wholly
owned limited liability company to effectuate the transaction
described in Section 7.1(l) below, no Origen Entity has any
subsidiaries, and no Origen Entity has any equity interest in, or
any right to acquire any equity interest in, any other entity.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents,
warrants and covenants the following to each of Origen and Xxxxxxx, both
as of the date of this Agreement and as of the Closing Date, with the
knowledge and expectation that, in agreeing to enter into this Agreement,
each of Origen and Xxxxxxx are completely relying on, and in connection
with the consummation of the transactions contemplated in this Agreement,
will completely rely on, such representations, warranties and covenants:
5.1. Good Standing and Authority. The Company and Company MHF are each a
limited liability company duly organized, validly existing and in
good standing under the laws of the State of Delaware. Company
Insurance is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of
Virginia. Each of the Company Entities has all requisite power and
authority to enter into this Agreement and the Attendant Documents
to which it is a party and to consummate the transactions
contemplated in this Agreement and such Attendant Documents. This
Agreement and all of the Attendant Documents to which a Company
Entity is a party, and the consummation of the transactions
contemplated in this Agreement, have been or will be duly authorized
and approved by the Company Entity's board of managers or manager,
as applicable, and all other necessary and proper action on the part
of the Company Entity. This Agreement, and all of the Attendant
Documents to which a Company Entity is or
22
will be a party, when executed and delivered, will constitute legal,
valid and binding obligations of that Company Entity enforceable
against it in accordance with their respective terms.
5.2. Non-Violative Agreement. Neither the execution and delivery of this
Agreement and the Attendant Documents to which a Company Entity is a
party nor the consummation of the transactions contemplated in this
Agreement and the Attendant Documents will conflict with, result in
the breach or violation of or constitute a default under the terms,
conditions or provisions of that Company Entity's certificate of
formation, articles of organization, limited liability company
agreement or operating agreement, or any other agreement or
instrument to which that Company Entity is a party, or by which that
Company Entity is bound or to which it may be subject.
5.3. Disclosure. No representation or warranty by the Company contained
in this Agreement and no statement contained in any of the Attendant
Documents or any other certificate or instrument to be furnished at
Closing, either pursuant to this Agreement or in connection with the
transactions contemplated in this Agreement contains or will contain
any untrue statement of a material fact, or omits or will omit to
state a material fact, necessary in order to make any of the
statements not misleading.
5.4. Brokerage or Finder's Fee. No broker, finder, agent or similar
intermediary has acted for or on behalf of the Company in connection
with this Agreement or the transactions contemplated hereby and no
broker, finder, agent or similar intermediary is entitled to any
broker's, finder's or similar fee or other commission in connection
therewith based on any agreement, arrangement or understanding with
the Company or any action taken by the Company.
5.5. Consents, Approvals and Authorization. No consent, approval or
authorization of, or designation, declaration or filing with, or
notice to any governmental authority, or any lenders, lessors,
creditors shareholders or others, is required on the part of any
Company Entity in connection with the valid execution and delivery
of this Agreement and the Attendant Documents or the transactions
contemplated in this Agreement and the Attendant Documents.
6. ADDITIONAL AGREEMENTS; SURVIVAL.
6.1. Survival. The representations and warranties set forth in Sections 4
and 5 of this Agreement shall survive for a period of three (3)
years after the Effective Date; provided, however, that the
representations and warranties set forth in Sections 4.1, 4.15,
4.16, 4.17, 4.18, 4.19 and 5.1 above shall survive for the
applicable statute of limitations period and that the
representations and warranties set forth in Section 4.20 above shall
survive indefinitely.
6.2. Further Assurances. From time to time after the Closing Date, at a
Company Entity's reasonable request and without further
consideration, each Origen Entity and Xxxxxxx shall execute and
deliver, or cause to be executed and delivered, such further
instruments of conveyance, assignment and transfer and shall take
such other action as the Company may reasonably request in order to
effectuate the Mergers and to more effectively convey and transfer
the Assets to the Company Entities, to record title to the Assets in
the names of the Company Entities and to permit the Company Entities
to take possession of any of the
23
Assets. At a Company Entity's reasonable request, each Origen Entity
and Xxxxxxx shall cooperate and use its best efforts to have its
officers, directors, employees and agents cooperate with the Company
Entities on or after the Closing Date by furnishing information,
evidence, testimony and other assistance in connection with any
actions, proceedings, arrangements or disputes involving any Company
Entity and which are based on contracts, leases, arrangements or
acts of an Origen Entity which were in effect or occurred on or
prior to the Closing Date.
6.3. Operation of the Business Pending the Effective Date. Through the
Effective Date, each Origen Entity and Xxxxxxx shall cause the
Business to be conducted only in the ordinary course, consistent
with past practice. Through the Effective Date, no Origen Entity nor
Xxxxxxx shall, without the prior written consent of the Company:
(a) make or incur any capital expenditures with respect to the
Business;
(b) enter into any purchase order;
(c) pay or declare any dividends or other distributions (other
than payment of indebtedness) to any of their shareholders;
(d) sell or transfer any of the Assets, other than in the ordinary
course of business;
(e) terminate or amend any material General Contract;
(f) issue or redeem, or agree to issue or redeem any shares of the
capital stock, or grant any other options, rights or other
entitlements in respect of shares of their capital stock;
(g) subject any of the Assets or any of the Leased Personal
Property to, or permit any of the Assets or any of the Leased
Personal Property to become subject to, any Lien other than in
the ordinary course;
(h) incur any debt other than Origen's debt to Sun Communities
Operating Limited Partnership and Michigan National Bank; or
(i) enter into any agreement or commitment, whether written or
oral (other than this Agreement or any arrangement provided
for or contemplated in this Agreement), to take any of the
types of action described in subsection (a) through (h) of
this Section 6.3.
6.4. Access to Books and Records. After execution of this Agreement, each
Origen Entity and Xxxxxxx shall, on the reasonable request of a
Company Entity, make the minute books, stock books, corporate seals
and other corporate records of each Origen Entity relating to its
organization and existence and other corporate materials and
information available to the Company Entities for inspection and
copying at all times during normal business hours.
6.5. Proxy Statement. Xxxxxxx shall file with the Securities Exchange
Commission as soon as is reasonably practicable after the date
hereof a proxy statement, and any amendments thereto, to be
distributed in connection with the meeting of its shareholders to
vote upon this Agreement and the transactions it contemplates.
24
Each Party shall promptly furnish to each other all information, and
take such other actions, as may reasonably be requested in
connection with any action by Xxxxxxx in connection with the
foregoing sentence. The information to be provided by each Party for
use in the proxy statement shall not contain any untrue statement of
a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading. Subject to the fiduciary duties of its board of
directors under applicable law, Xxxxxxx shall, as promptly as
practicable, submit this Agreement and the transactions it
contemplates for the approval of its shareholders at a meeting of
shareholders and shall use its best efforts to obtain shareholder
approval of this Agreement and the transactions it contemplates and
shall through its board of directors, recommend to its shareholders
approval of this Agreement and the transactions it contemplates.
6.6. Employee Matters. After the Closing or the Effective Date, the
Company Entities may evaluate its employment needs with respect to
the Business, and no provision of this Agreement is intended to or
shall confer on any of the Employees any right to continued
employment after the Closing Date or the Effective Date. Nothing in
this Agreement shall be construed to amend or modify in any way any
at-will employment policy of any Company Entity.
7. CONDITIONS TO CLOSING.
7.1. Conditions Precedent to the Company's Obligation. The obligation of
the Company Entities to consummate the transactions contemplated in
this Agreement at the Closing is subject to the satisfaction of all
of the following conditions, any of which may be waived (but only in
writing) by the Company:
(a) Origen's and Xxxxxxx'x Representations and Warranties. All
representations and warranties made by Origen and Xxxxxxx in
this Agreement shall have been true and correct in all
material respects on the date of this Agreement and shall be
true and correct in all material respects as of the Closing
Date with the same force and effect as if they had been made
on and as of such date.
(b) Performance of Agreement. Each Origen Entity and Xxxxxxx shall
have performed and complied in all material respects with all
of their obligations under this Agreement which are to have
been performed or complied with on or prior to the Closing
Date.
(c) Approvals. Origen and Xxxxxxx shall have obtained, performed
or given all of the consents, approvals, authorizations,
designations, declarations, filings and notices set forth on
the attached Schedule 4.21(b), including, without limitation,
the approval of Xxxxxxx'x shareholders.
(d) Due Diligence. The Company shall have completed its due
diligence investigation of, and shall in its reasonable
discretion be satisfied with, the Origen Entities, the Origen
Business, the Assets, liabilities, prospects, financial
condition and other matters of or affecting each of the Origen
Entities (including, without limitation, the status and
post-closing continuation of the Licenses).
25
(e) Litigation. There shall not be any litigation, action, suit,
claim, proceeding, order, investigation or inquiry pending or
threatened before any court or quasi-judicial or
administrative agency to, or pursuant to which a judgment,
order, decree, stipulation, injunction or charge could be
entered, which could: (i) enjoin or prevent the consummation
of the transactions contemplated in this Agreement or the
Attendant Documents, (ii) cause any of the transactions
contemplated in this Agreement or the Attendant Documents to
be rescinded following consummation thereof, (iii) adversely
affect the right of the Company to own, operate or control any
of the Company Subsidiaries, the Assets, and the Leased
Property, or (iv) otherwise have a Material Adverse Effect.
(f) Post Closing Agreement. In the event that at the time of the
Closing, the condition set forth in Section 7.1(m) has not
been satisfied, Xxxxxxx and Origen shall have executed and
delivered to the Company an Assignment and Post Closing
Agreement (the "Post Closing Agreement") in the form of
Exhibit A attached hereto and made a part hereof which shall
provide, among other things, for the following: (i) all of
Origen's Assets except the Excluded Assets, all of the capital
stock of the Origen Subsidiaries and the membership interest
owned by Origen in Origen Special Purpose II, L.L.C., a
Delaware limited company, shall be assigned to the Company;
(ii) Origen shall receive the sum of $40,000,000 from the
Company in consideration of the transfer described in clause
(i) hereof; (iii) Origen shall agree that all Loans originated
after the Closing will be sold to the Company or Origen
Special Purpose, L.L.C., a Delaware limited liability company
and a subsidiary of Origen, in exchange for an amount equal to
the amount which Credit Suisse First Boston Mortgage Capital
LLC will pay for such Loans; (iv) Origen shall agree that it
will not transfer any assets to any entity other than the
Company and it will otherwise abide by all of the provisions
set forth in Section 6.3 hereof (and Origen agrees that a
financing statement to secure its obligations under this
clause (iv) shall be filed with the appropriate government
authorities); and (v) Xxxxxxx shall agree to abide by all of
the provisions of Section 6.3 hereof and to guarantee all of
the obligations of Origen under the Post Closing Agreement.
(g) Termination. This Agreement shall not have been terminated
pursuant to Section 10.1 below.
(h) Delivery of Closing Documents. Xxxxxxx and each Origen Entity
shall have executed and delivered, or caused to be executed
and delivered, all of the documents described in Section 8.2
below. All documents relating to the transactions contemplated
in this Agreement shall be reasonably satisfactory in form and
content to the Company and its legal counsel.
(i) No Encumbrances. All of the Assets shall be owned by an Origen
Entity free and clear of all Liens, other than Permitted
Liens.
(j) Operation of Business and Material Adverse Change. The Origen
Entities and Xxxxxxx shall have continued the active operation
of the Business in the ordinary course through the Closing.
Since the date of this Agreement,
26
no change shall have occurred which could have a Material
Adverse Effect.
(k) Xxxxxxx'x Assets. All assets and employees related to the
Business which are owned or employed by Xxxxxxx shall have
been transferred to Origin.
(l) Origin Special Purpose Subsidiary. Origin will have
established a wholly-owned limited liability company
subsidiary to which Origin SHC shall have transferred all
Class X (Subordinate) Origin Manufactured Housing Contract
Senior/Subordinate Asset-Backed Certificates, Series 2001 and
all Class R (Subordinate) Origin Manufactured Housing Contract
Senior/Subordinate Asset-Backed Certificates, Series 2001.
(m) Licenses and Permits. The Company Entities will have obtained
all material licenses and permits necessary to permit the
Company Entities to carry on the Business from and after the
Effective Date.
(n) Employment Agreements. The Company will have entered into, or
received assignments of, Employment Agreements (collectively,
the Employment Agreements") which have been approved by the
Board of Managers with each of Xxxxxx X. Xxxxx, Xxxxx X.
Xxxxx, Xxxx Xxxxxxxxxx, Xxxx Xxxxxxxx, and each of the
Employment Agreements shall contain a covenant not to compete
which is satisfactory to the Board of Managers.
(o) Conditions Precedent. The Conditions Precedent (As defined in
the Investment Agreement) set forth in the Investment
Agreement have all been satisfied.
7.2. Conditions Precedent to Origen's and Xxxxxxx'x Obligation. The
obligation of the Origen Entities and Xxxxxxx to consummate the
transactions contemplated in this Agreement at the Closing is
subject to the satisfaction of all of the following conditions, any
of which may be waived (but only in writing) by Xxxxxxx:
(a) The Company's Representations and Warranties. All
representations, warranties and covenants made by the Company
in this Agreement shall have been true and correct in all
material respects on the date of this Agreement and shall be
true and correct in all material respects as of the Closing
Date with the same force and effect as if they had been made
on and as of such date.
(b) Performance of Agreement. Each Company Entity shall have
performed and complied in all material respects with all of
its obligations under this Agreement which are to have been
performed or complied with on or prior to the Closing Date.
(c) Termination. This Agreement shall not have been terminated
pursuant to Section 10.1 below.
(d) Delivery of Closing Documents. Each Company Entity shall have
executed and delivered, or caused to be executed and
delivered, all of the documents described in Section 8.3
below. All documents relating to the
27
transactions contemplated in this Agreement shall be
reasonably satisfactory in form and content to Origen, Xxxxxxx
and their legal counsel.
(e) Litigation. There shall not be any litigation, action, suit,
claim, proceeding, order, investigation or inquiry pending or
threatened before any court or quasi-judicial or
administrative agency to, or pursuant to which a judgment,
order, decree, stipulation, injunction or charge could be
entered which could: (i) enjoin or prevent the consummation of
the transactions contemplated in this Agreement or the
Attendant Documents, or (ii) cause any of the transactions
contemplated in this Agreement or the Attendant Documents to
be rescinded following consummation thereof.
8. CLOSING
8.1. Closing. The closing (the "Closing") of the transactions
contemplated in this Agreement shall be held at the offices of
Jaffe, Raitt, Heuer & Xxxxx, Professional Corporation, Xxx Xxxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx, as soon as reasonably
possible following execution of the Agreement and upon satisfaction
of each of the conditions precedent set forth in Sections 7.1
(except for the condition set forth in Section 7.1(m)) and 7.2
above, but in no event later than December 18, 2001 (the "Closing
Deadline"), or at such other location and time as the Parties may
mutually agree. As used in this Agreement, the term "Closing Date"
means the date on which the Closing actually occurs.
8.2. Documents to Be Delivered at Closing by the Origen Entities and
Xxxxxxx. At the Closing, the Origen Entities and Xxxxxxx shall
properly execute (if necessary) and deliver to the Company, or cause
to be executed and delivered to the Company, the following:
(a) Such certificates and documents ("Merger Certificates") which
are required by the State of Virginia and the State of
Delaware to effect any of the Mergers.
(b) A Covenant Not to Compete and Confidentiality Agreement
executed by Xxxxxxx (the "Covenant"), the form of which is
attached to this Agreement as Exhibit B.
(c) The Employment Agreements or, as applicable, assignments of
Employment Agreements.
(d) The Pledge Agreement.
(e) An opinion of Williams, Williams, Ruby & Xxxxxxxx, counsel to
Origen and Xxxxxxx, addressed to the Company, the form of
which is attached to this Agreement as Exhibit C.
(f) A Closing Certificate, executed by an officer of each of
Origen and Xxxxxxx, to the effect that (i) all of the
representations and warranties made by such Party in this
Agreement are true and correct in all material respects on the
Closing Date with the same force and effect as though made on
and as of the Closing Date, (ii) such Party and each Origen
Entity has performed and complied in all material respects
with all of its
28
obligations under this Agreement which are to have been
performed or complied with on or prior to the Closing Date,
(iii) since the date of this Agreement, each Origen Entity and
Xxxxxxx have operated the Business only in the ordinary
course, and (iv) there has been no Material Adverse Effect
from the date of this Agreement to the Closing Date.
(g) A Secretary's Certificate, executed by the Secretary or
Assistant Secretary of each of the Origen Entities and
Xxxxxxx, attaching a copy of the charter or articles of
incorporation and bylaws of such Party and each Origen Entity
and a copy of the resolutions of such Party's and each Origen
Entity's board of directors and shareholders approving the
transactions contemplated in this Agreement, and the officer
executing such certificate shall certify that, as of the
Closing Date, such charters, articles of incorporation, bylaws
and resolutions are true, complete and correct, have not be
altered or repealed and are in full force and effect.
(h) All of the Assets and all of the Leased Personal Property.
(i) A signature page to the Limited Liability Company Agreement
duly executed by an authorized officer of Xxxxxxx.
(j) If required pursuant to Section 7.1(f), the Post Closing
Agreement.
(k) Such other documents and instruments as are contemplated in
this Agreement or as the Company or the Company's counsel may
reasonably request in order to evidence or consummate the
transactions contemplated in this Agreement or to effectuate
the purpose or intent of this Agreement.
8.3. Documents to be Delivered at Closing by the Company. At the Closing,
the Company shall properly execute (if necessary) and deliver to the
Seller, or cause to be executed and delivered to the Seller, as the
case may be, the following:
(a) The Merger Certificates.
(b) The Covenant.
(c) The Employment Agreements or, as applicable, assumptions of
assigned Employment Agreements.
(d) An opinion of Jaffe, Raitt, Heuer & Xxxxx, Professional
Corporation, counsel to the Company, addressed to Origen and
Xxxxxxx, the form of which is attached to this Agreement as
Exhibit D.
(e) A Closing Certificate, executed by an officer of the Company,
to the effect that (i) all of the representations and
warranties made by the Company in this Agreement are true and
correct in all material respects on the Closing Date with the
same force and effect as though made on and as of the Closing
Date, and (ii) each Company Entity has performed and complied
in all material respects with all of its obligations under
this Agreement which are to have been performed or complied
with on or prior to the Closing Date.
29
(f) A Certificate, executed by the Secretary or Assistant
Secretary of the Company and the manager of each other Company
Entity, attaching a copy of the articles of organization or
certificate of formation and limited liability company
agreement or operating agreement of each Company Entity and a
copy of the resolutions of the Company's board of managers
approving the transactions contemplated in this Agreement, and
the officer or manager executing such certificate shall
certify that, as of the Closing Date, such articles of
organization, certificate of formation, limited liability
company agreement, operating agreement and resolutions are
true, complete and correct, have not be altered or repealed
and are in full force and effect.
(g) If required pursuant to Section 7.1(f), the Post Closing
Agreement.
(h) Such other documents and instruments as are contemplated in
this Agreement or as Origen, Xxxxxxx or their counsel may
reasonably request in order to evidence or consummate the
transactions contemplated in this Agreement or to effectuate
the purpose or intent of this Agreement.
8.4. Filings. If the condition set forth in Section 7.1(m) is not
fulfilled at the time of the Closing, at such time thereafter as
such condition is fulfilled, or at any time prior thereto, at the
election of the Company, the Parties (or the Company at its election
unilaterally) will cause the Merger Certificates to be filed with
the Secretary of State of Delaware and the Virginia State
Corporation Commission, as appropriate, and shall do all other
things which may be necessary and proper to cause the Mergers to
become immediately effective.
9. INDEMNIFICATION
9.1. Indemnification of the Company Entities. Xxxxxxx shall indemnify,
defend and hold harmless the Company Entities and their officers,
directors, managers, members, shareholders, employees, independent
contractors, agents, successors and assigns (collectively, the
"Company Parties") from and against any and all liabilities, losses,
costs or expenses which any of the Company Parties may suffer or for
which any of the Company Parties may become liable and which are
based on, the result of, arise out of or are otherwise related to
any of the following:
(a) any inaccuracy or misrepresentation in, or breach of any
representation or warranty of Origen or Xxxxxxx in this
Agreement, any of the Attendant Documents or any certificate,
schedule, list or other instrument to be furnished by an
Origen Entity or Xxxxxxx to the Company pursuant to this
Agreement or any of the Attendant Documents;
(b) any breach or failure of an Origen Entity or Xxxxxxx to
perform any covenant or agreement required to be performed by
an Origen Entity or Xxxxxxx pursuant to this Agreement or any
of the Attendant Documents (including, without limitation
thereto, the Post Closing Agreement);
(c) Any Origen Entity's non-compliance with the provisions of any
bulk transfer law applicable to the transactions contemplated
in this Agreement;
(d) any claim, demand, suit, action or legal, administrative or
other proceeding by any person (other than a Party) or any
federal, state or local department,
30
agency or other governmental body (a "Third Party Claim")
against any of the Company Parties resulting from, arising out
of or in any way related to the failure of Xxxxxxx or an
Origen Entity to perform, pay or discharge any Excluded
Liability; and
(e) any and all actions, suits, proceedings, demands, assessments,
judgments, costs and expenses, including reasonable attorneys'
and consultants' fees (collectively, "Related Expenses"),
incident to any of the foregoing.
9.2. Indemnification of Xxxxxxx. The Company shall indemnify, defend and
hold harmless Xxxxxxx and its officers, directors, shareholders,
employees, independent contractors, agents, successors and assigns
(collectively, the "Xxxxxxx Parties") from and against any and all
liabilities, losses, costs or expenses which any of the Xxxxxxx
Parties may suffer or for which any of the Xxxxxxx Parties may
become liable and which are based on, the result of, arise out of or
are otherwise related to any of the following:
(a) any inaccuracy or misrepresentation in, or breach of any
representation or warranty of the Company contained in, this
Agreement, any of the Attendant Documents or any certificate,
schedule, list or other instrument to be furnished by the
Company pursuant to this Agreement or any of the Attendant
Documents;
(b) any breach or failure of a Company Entity to perform any
covenant or agreement required to be performed by it pursuant
to this Agreement or any of the Attendant Documents
(including, without limitation thereto, the Post Closing
Agreement);
(c) any Third Party Claim against any of the Xxxxxxx Parties
resulting from, arising out of or in any way related to the
failure of a Company Entity to perform, pay or discharge any
Assumed Liability; and
(d) any and all Related Expenses incident to any of the foregoing.
9.3. Claims for Indemnification. Whenever any claim shall arise for
indemnification under this Section 9, even if no payment is then due
on account thereof, the Party seeking indemnification (the
"Indemnified Party") shall notify (the "Notice") the Party against
whom indemnification is sought (the "Indemnifying Party") of the
claim. In the event of any Third Party Claim, the Indemnified Party
shall provide the Notice within thirty (30) days after the
Indemnified Party has actual knowledge of its existence and, when
known, the facts constituting the basis for such claim, but the
failure to so notify the Indemnifying Party shall not relieve the
Indemnifying Party of any liability that it may have to the
Indemnified Party, except to the extent that the Indemnifying Party
demonstrates that the defense of such Third Party Claim is
materially prejudiced by the Indemnified Party's failure to give
such notice. In the event of any Third Party Claim, the Notice shall
specify, if known, the amount or an estimate of the amount of the
liability arising therefrom. The Indemnified Party shall not settle
or compromise any Third Party Claim without the prior written
consent of the Indemnifying Party, which consent shall not be
unreasonably withheld, conditioned or delayed, unless suit shall
have been instituted against the Indemnified Party and the
Indemnifying Party shall not have taken control of such suit in
accordance with Section 9.4 below.
31
9.4. Defense by the Indemnifying Party. Within fifteen (15) days after
receipt of the Notice, the Indemnifying Party, at its sole cost and
expense, may, upon written notice to the Indemnified Party, assume
the defense of any Third Party Claim. If the Indemnifying Party
timely assumes the defense of any Third Party Claim, the
Indemnifying Party shall select counsel reasonably acceptable to the
Indemnified Party to conduct the defense of such Third Party Claim
and, at the sole cost and expense of the Indemnifying Party, the
Indemnifying Party shall take all steps necessary in the defense or
settlement thereof. The Indemnified Party shall be entitled to
participate in (but not control) the defense of any Third Party
Claim, with its own counsel and at its own expense; provided,
however, that if the named parties to any such action (including any
impleaded parties) include both the Indemnifying Party and the
Indemnified Party, and the Indemnified Party has been advised by
counsel that there may be one or more legal defenses available to it
that are different from or additional to those available to the
Indemnifying Party, then the Indemnified Party may employ separate
counsel at the expense of the Indemnifying Party. The Indemnifying
Party shall not consent to a settlement of, or the entry of any
judgment arising from, any Third Party Claim without the prior
written consent of the Indemnified Party, which consent shall not be
unreasonably withheld, conditioned or delayed. If the Indemnifying
Party fails to give the Indemnified Party written notice within
fifteen (15) days after the Indemnifying Party's receipt of the
Notice that the Indemnifying Party is assuming the defense of such
Third Party Claim or if the Indemnifying Party fails to assume and
continually maintain the defense of the Third Party Claim within
fifteen (15) days after the Indemnifying Party's receipt of the
Notice, the Indemnified Party may assume sole control of defense or
settlement of such claim at the sole cost and expense of the
Indemnifying Party. If the Indemnifying Party thereafter seeks to
question the manner in which the Indemnified Party defended such
Third Party Claim or the amount or nature of any such settlement,
the Indemnifying Party shall have the burden to prove by a
preponderance of the evidence that the Indemnified Party did not
defend or settle such Third Party Claim in a reasonably prudent
manner.
9.5. Minimization of Indemnities. Each Party shall use reasonable efforts
to minimize the indemnification obligations of the other Parties
under this Section 9 by, among other reasonable things and without
limiting the generality of the foregoing, taking such reasonable
remedial action as it believes may minimize such obligation and
seeking to the maximum extent possible reimbursement from insurance
carriers under applicable insurance policies covering any such
liability.
9.6. Assignment of Claims. Each Party agrees that on satisfaction of the
obligation to indemnify under this Section 9, and in consideration
of such obligation, it will assign to the Party or Parties making
such payment or giving such credit any and all claims, causes of
action and demands of whatever kind and nature which such
indemnified Party may have against any person, firm or other entity
giving rise to such indemnified loss, and to reasonably cooperate in
any efforts to recover therefrom.
9.7. Remedies Not Exclusive. Each Party shall be entitled to exercise and
resort to all rights and remedies for misrepresentation or breach as
are afforded to such Party at law or in equity, including, without
limitation, rescission, specific performance, action for damages or
such other remedies and relief as may be afforded to such Party,
under this Agreement or by a court of competent jurisdiction.
Neither the existence or exercise of any specific remedies is
intended to be exclusive of or
32
impair or otherwise adversely affect in any manner whatsoever any
rights, remedies or relief otherwise available to any Party, and
each and every right and remedy shall be cumulative and in addition
to every other right and remedy provided in this Agreement or by
law.
9.8. Limitation on Indemnities. Any provision of this Agreement to the
contrary notwithstanding, no claim for indemnification by any Party
against another Party shall be valid and assertable unless and until
the aggregate amount of all claims exceeds $250,000 (the "Basket
Amount"), but then such Party may seek indemnification for the full
amount of all such claims. Notwithstanding any provision of this
Agreement to the contrary notwithstanding, the Basket Amount shall
not apply to: (i) the failure of the Company to perform, pay or
discharge any Assumed Liability, (ii) the failure of any Origen
Entity to perform, pay or discharge any Excluded Liability, (iii)
any claim relating to an Origen Entity's non-compliance with the
provisions of any bulk transfer law, or (iv) any Related Expenses
incident to any of the foregoing.
9.9. Setoff and Pledge. Xxxxxxx hereby grants the Company the right to
offset against any amounts owing from the Company to Xxxxxxx,
including any distributions to be made by the Company to Xxxxxxx
pursuant to the Limited Liability Company Agreement, or otherwise,
an amount equal to any obligations which Xxxxxxx may have to any of
the Company Entities pursuant to Section 9.1 above. Further, Xxxxxxx
agrees to execute and deliver to the Company at the Closing, a
pledge agreement (the "Pledge Agreement"), which in form and
substance is satisfactory to the Board of Managers, pursuant to
which Xxxxxxx shall pledge to the Company its entire membership
interest in the Company in order to secure its obligations set forth
in Section 9.1 above.
10. TERMINATION
10.1. Termination. This Agreement may be terminated at any time before the
Closing:
(a) by the mutual consent of the Parties; or
(b) by Xxxxxxx if any of the conditions set forth in Section 7.2
above have not been fulfilled, satisfied or waived by the
Closing Deadline or a the Company Entity breaches any covenant
or agreement set forth in this Agreement at a time when no
Origen Entity nor Xxxxxxx are in default of this Agreement; or
(c) by the Company if any of the conditions set forth in Section
7.1 above have not been fulfilled, satisfied or waived by
Closing Deadline or an Origen Entity or Xxxxxxx breaches any
covenant or agreement set forth in this Agreement at a time
when no Company Entity is in default of this Agreement.
10.2. Effect of Termination. If terminated in accordance with Section 10.1
above, this Agreement shall be null and void and have no further
force or effect, except as provided in the remaining provisions of
this Section 10.2. Subject to the last sentence of this Section
10.2, in the event a Party terminates this Agreement as a result of
a material breach by another Party, then, as its sole and exclusive
remedy under this Agreement, such non-breaching Party shall be
entitled to recover from the defaulting Party all out-of-pocket
expenses incurred by it and any of its
33
affiliates (including, without limitation, legal and accounting fees
and expenses) in connection with (a) the preparation, drafting and
negotiation of this Agreement and any other document related to the
transactions contemplated in this Agreement, and (b) the due
diligence review by the Company of the Origen Entities and the
Business, together with appropriate damages in connection therewith.
For purposes of this Section 10.2 and 10.1, a breach by any Company
Entity shall be deemed to be a breach by all Company Entities and a
breach by any Origen Entity or Xxxxxxx shall be deemed to be a
breach by Xxxxxxx and all Origen Entities. Notwithstanding anything
to the contrary set forth in this Section 10.2, or this Agreement,
no provision of this Agreement, including this Section 10.2, shall
in any way affect or diminish the right of a Party to receive any
sums due that Party pursuant to Section 8(b) of the Investment
Agreement.
11. MISCELLANEOUS.
11.1. Notices. Any notice, request, waiver, information or other document
to be given hereunder to any of the Parties by any other Party shall
be in writing and shall be deemed to have been duly given if
delivered personally, sent by certified mail, postage prepaid, or
sent by next day or overnight mail or delivery, as follows:
If to an Origen Entity or Xxxxxxx: With a required copy to:
Xxxxxxx Financial Services Williams, Williams, Ruby & Xxxxxxxx
Corporation 000 X. Xxx Xxxxxxxx, Xxxxx 000
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000 Xxxxxxxxxx, XX 00000
Xxxxxxxxxx, XX 00000 Attn: Xxxxx X. Xxxxxxxx
Attn: Xxxxxx X. Xxxxx Fax: 000-000-0000
Fax: 000-000-0000
If to a Company Entity: With a required copies to:
Origen Financial, L.L.C. Jaffe, Raitt, Heuer & Xxxxx, P.C.
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000 Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000 Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx Attn: Xxxxx X. Xxxxx
Fax: 000-000-0000 Fax: 000-000-0000
And
Xxxxxxxx Family LLC
c/o Sun Communities, Inc.
00000 Xxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx
Fax: (000) 000-0000
Any Party may change the address to which notices hereunder are to
be sent to it by giving written notice of such change of address in
the manner herein provided for giving notice. Any notice delivered
personally shall be deemed to have been given on the date it is so
delivered, any notice delivered by registered or certified mail
shall be deemed to have been given on the date it is received and
any notice
34
sent by next day or overnight mail or delivery shall be deemed to
have been delivered on the next business day.
11.2. Headings. The headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
11.3. Governing Law. Except for matters applicable to the Mergers, which
shall be governed by the Delaware Statute and the Virginia Statute,
this Agreement shall be governed by and construed in accordance with
the laws of the State of Michigan applicable to contracts made and
to be performed therein. The Parties hereto hereby irrevocably
submit to the jurisdiction of the courts of the State of Michigan
and the Federal courts of the United States located in the State of
Michigan in respect of the interpretation and enforcement of the
provisions of this Agreement and of the documents referred to in
this Agreement.
11.4. No Assignment; Benefit. This Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their respective
successors, assigns, heirs and legal representatives.
11.5. Entire Agreement. This Agreement and the exhibits and schedules
attached hereto and the Limited Liability Company Agreement contain
the entire agreement of the Parties hereto with respect to the
Mergers and the other transactions contemplated herein, and
supercede all prior understandings and agreements of the Parties
with respect to the subject matter hereof. Any reference herein to
this Agreement shall be deemed to include the schedules and exhibits
attached hereto.
11.6. Tax Matters.
(a) The Company shall pay all state and local transaction
privilege, business privilege, sales, use and transfer taxes
(including taxes, if any, imposed on the transfer of real and
personal property) and similar taxes, and all filing,
recording and registration fees, if any, payable in connection
with the transactions contemplated in this Agreement.
(b) Xxxxxxx shall be responsible for the preparation and filing of
all Tax Returns for the Business for all periods ending on or
before the Closing Date as to which Tax Returns are due after
the Closing Date. Xxxxxxx shall make all payments required
with respect to any such Tax Returns.
(c) The Company shall be responsible for the preparation and
filing of all Tax Returns for the Business for all periods
ending after the Closing Date as to which Tax Returns are due
after the Closing Date. The Company will make all payments
required with respect to any such Tax Returns; provided,
however, that Xxxxxxx shall reimburse the Company concurrently
with the filing of such Tax Returns to the extent any payment
the Company makes relates to the operation of the Business by
any Origen Entity for any period ending on or before the
Closing Date.
11.7. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original and all of which together shall
be considered one and
35
the same agreement. Photostatic or facsimile reproductions of this
Agreement may be made and relied upon to the same extent as
originals.
11.8. Waiver. The waiver by any Party of any breach of any provision of
this Agreement shall not operate or be construed as a waiver of any
subsequent or similar breach.
11.9. Amendment. This Agreement may only be amended by written agreement
executed by all of the Parties.
11.10. Brokerage or Finder's Fee. Any and all brokerage fees due and
payable to any broker, finder, agent or similar intermediary in
connection with this Agreement or the transactions contemplated
hereby shall be borne by the Party responsible for retaining, or
claimed to be responsible for retaining, such broker, finder, agent
or similar intermediary.
11.11. Publicity. No press release or other public announcement related to
this Agreement or the transactions contemplated hereby will be
issued by any Party hereto without the prior approval of the other
Parties, except that any Party may make such public disclosure
which it believes in good faith to be required by law or by the
terms of any listing agreement with a securities exchange (in which
case such Party will consult with the other Parties prior to making
such disclosure).
11.12. No Third Party Beneficiaries. The rights and obligations of the
Parties under this Agreement are for the benefit of the Parties,
the Company Parties and the Xxxxxxx Parties only, and neither any
creditor of any of the Parties, the Company Parties or the Xxxxxxx
Parties, nor any other person or entity (other than a successor in
interest to the any of the Parties, the Company Parties or the
Xxxxxxx Parties), shall have the right to rely on or enforce the
provisions of this Agreement as a third-party beneficiary or
otherwise. Without limiting the generality of the foregoing, the
discretions granted to any of the Parties, the Company Parties or
the Xxxxxxx Parties in this Agreement are personal to them, and no
receiver, trustee or liquidator of the any of them, or any other
person or entity, shall the right or power to exercise any such
discretions.
[the remainder of this page intentionally left blank -
the next page is the signature page]
36
IN WITNESS WHEREOF, the Parties have executed this Merger Agreement as of
the date first written above.
ORIGEN FINANCIAL, INC.,
a Virginia corporation
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Its: Chairman
-------------------------------------
XXXXXXX FINANCIAL SERVICES CORPORATION,
a Michigan corporation
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Its: President and Chief Executive Officer
-------------------------------------
ORIGEN MANUFACTURED HOME FINANCIAL, INC.,
a Virginia corporation
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Its: Chief Executive Officer
-------------------------------------
DYNEX INSURANCE AGENCY, INC.,
a Virginia corporation
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Its: Chief Executive Officer
-------------------------------------
37
ORIGEN FINANCIAL L.L.C.,
a Delaware limited liability company
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Its: Manager
-------------------------------------
ORIGEN MANUFACTURED HOME FINANCIAL, L.L.C.,
a Virginia corporation
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Its: Manager
-------------------------------------
ORIGEN INSURANCE AGENCY, L.L.C.,
a Virginia corporation
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Its: Manager
-------------------------------------
38
LIST OF SCHEDULES
1.2.(b) Furniture, Fixtures and Other Fixed Assets
1.2.(d) Intellectual Property
1.2.(f) Equipment, Machinery and Vehicles
1.2.(g) Personal Property Leases
1.2.(h) General Contracts
1.2.(i) Licenses and Permits
1.2.(j) Warranties
1.2.(k) Leased Real Property
1.2.(l) Owned Real Property
1.33 Floorplan Loans
1.42 Knowledge
1.75 Permitted Liens
4.1 Foreign Jurisdictions
4.3 Intellectual Property Exceptions
4.4 Contracts
4.6(a) Permit and License Exceptions
4.6(b) Mortgage Licenses
4.7 Owned Real Property Exceptions
4.8 Leased Real Property Exceptions
4.9 Accounts Receivable Exceptions
4.10 Liens/Permitted Liens
4.11 Condition of Assets Exceptions
4.12 Litigation Exceptions
4.13 Compliance with Applicable Laws and Regulations Exceptions
4.14 Employees
4.15 Employee Relations Exceptions
4.16 Employee Benefit Plan Exceptions
4.17 Financial Statements
4.18 Undisclosed Liabilities
4.19 Tax Matter Exceptions
4.20 Environmental Exceptions
4.21(a) All Consents, Approvals and Authorizations
4.21(b) Pre-Closing Consents, Approvals and Authorizations
4.22 Insurance Exceptions
4.23 Interim Operations Exceptions
4.27 Capitalization
