Exhibit 10.1
EXECUTION COPY
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ASSET PURCHASE AGREEMENT
among
DYNEX CAPITAL, INC.
a Virginia corporation,
GLS CAPITAL - CUYAHOGA, INC.
a Virginia corporation,
GLS - CUYAHOGA LIEN POOL ONE, INC.
a Virginia corporation,
and
PLYMOUTH PARK TAX SERVICES, LLC
a Delaware limited liability company
Dated as of September 13, 2004
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS..............................................1
Section 1.01. Definitions..............................................1
Section 1.02. Other Definitional Provisions............................4
ARTICLE II TERMS OF ACQUISITION.....................................5
Section 2.01. Purchase and Sale of Tax Liens...........................5
Section 2.02. Assumed Liabilities......................................6
Section 2.03. Aggregate Purchase Price.................................6
Section 2.04. Additional Tax Liens Adjustment Amount...................7
Section 2.05. Closings.................................................7
Section 2.06. Acquisition of Additional Tax Liens......................7
ARTICLE III. THE TAX LIENS............................................8
Section 3.01. Representations and Warranties of Sellers with
Respect to the Tax Liens.................................8
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF SELLERS................9
Section 4.01. Representations and Warranties of Sellers................9
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF PPTS..................10
Section 5.01. Representations and Warranties of PPTS..................10
ARTICLE VI. COVENANTS...............................................11
Section 6.01. Covenants...............................................11
Section 6.02. Carry on in Ordinary Course.............................11
Section 6.03. Other Transactions......................................12
Section 6.04. Consents................................................12
Section 6.05. Public Announcements....................................12
Section 6.06. Best Efforts to Close...................................12
ARTICLE VII. CONDITIONS TO CLOSING...................................12
Section 7.01. Conditions of PPTS's Oblication to Close................12
Section 7.02. Conditions of GLS's and Dynex's Obligations to
Close...................................................13
ARTICLE VIII. FURTHER ASSURANCES......................................14
Section 8.01. Further Assurances......................................14
ARTICLE IX. INDEMNIFICATION.........................................14
Section 9.01. Survival of Representations.............................14
Section 9.02. Indemnitors; Indemnified Persons........................15
Section 9.03. Indemnity of PPTS.......................................15
Section 9.04. Indemnity of GLS and Dynex..............................15
Section 9.05. Procedures for Indemnification; Defense.................16
Section 9.06. Limitation on Indemnification...........................16
Section 9.07. Method of Indemnification...............................16
Section 9.08. Defective Tax Liens.....................................17
ARTICLE X. NON-COMPETITION; CONFIDENTIALITY........................18
Section 10.01. Non-Competition.........................................18
Section 10.02. Non-Solicitation........................................18
Section 10.03. Non-Disruption..........................................18
Section 10.04. Confidentiality.........................................18
Section 10.05. Remedies upon Breach....................................19
ARTICLE XI. TERMINATION.............................................19
Section 11.01. Termination.............................................19
Section 11.02. Effects of Termination..................................20
ARTICLE XII. MISCELLANEOUS...........................................20
Section 12.01. Amendment...............................................20
Section 12.02. Protection of Title; Misdirected Payments...............20
Section 12.03. Notices.................................................20
Section 12.04. Fees and Expenses.......................................21
Section 12.05. Assignment..............................................21
Section 12.06. Limitations on Rights of Others.........................21
Section 12.07. Severability............................................22
Section 12.08. Separate Counterparts...................................22
Section 12.09. Headings................................................22
Section 12.10. Governing Law...........................................22
Section 12.11. Sophisticated Parties...................................22
__________________________
SCHEDULES
Schedule A Existing Tax Liens
Schedule B County Credits
EXHIBITS
Exhibit A Escrow Agreement
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT, dated as of September 13, 2004 (this
"Agreement"), among DYNEX CAPITAL, INC., a Virginia corporation ("Dynex"), GLS
CAPITAL - CUYAHOGA, INC., a Virginia corporation ("GLS Capital"), GLS - CUYAHOGA
LIEN POOL ONE, INC., a Virginia corporation ("GLS Lien Pool One", together with
GLS Capital, "GLS"; and GLS together with Dynex, the "Sellers") and PLYMOUTH
PARK TAX SERVICES, LLC, a Delaware limited liability company ("PPTS").
WHEREAS, PPTS desires to purchase from GLS, and GLS desires to sell,
transfer, assign, set over and convey to PPTS, certain Tax Liens (as defined
below) and all of the right, title and interest of GLS in and to the County
Agreement 1998 and the County Agreement 2004 (as defined below);
WHEREAS, concurrently with the execution of this Agreement, Cuyahoga
County, Ohio will consent to the assignment by GLS Capital to PPTS of all of its
right, title and interest in and to the County Agreement 1998 and the County
Agreement 2004 pursuant to the County Amendment and Consent (as defined below);
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"Additional Tax Liens" means those Tax Liens to be purchased by PPTS
from the County pursuant to the County Agreement 2004 in 2004.
"Additional Tax Liens Adjustment Amount" has the meaning set forth in
Section 2.04(a) hereof.
"Aggregate Purchase Price" has the meaning set forth in Section 2.01(a)
hereof.
"Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C.
Section 101 et seq.
"Bankruptcy Tax Lien" means a Tax Lien with respect to which the
related Property Owner, as of the Purchase Date, (i) had filed a voluntary
petition for relief under the Bankruptcy Code, or (ii) had instituted against it
an involuntary proceeding under the Bankruptcy Code which shall have resulted in
an order for relief having been issued or which remained undismissed for a
period of 30 days.
"Business Day" means any day other than a Saturday, Sunday and any day
on which banks located in the State of New York are authorized or required to
close for business.
"Closing Date" has the meaning set forth in Section 2.05 hereof.
"County" means Cuyahoga County, Ohio.
"County Agreement 1998" means the Tax Certificate Sale/Purchase
Agreement, dated as of September 1, 1998, between the County Treasurer and GLS
Capital (formerly GLS Capital Services - Cuyahoga, Inc.), as amended by the
Amended Tax Certificate Sale/Purchase Agreement, dated as of November 18, 1998,
the Third Amendment to Tax Certificate Sale/Purchase Agreement, dated as of
August 31, 1999, the Fourth Amendment to Tax Certificate Sale/Purchase
Agreement, dated as of August 10, 2000, and the Fifth Amendment to Tax
Certificate Sale/Purchase Agreement, dated as of May 1, 2001, and as assigned to
GLS Lien Pool One pursuant to the Assignment and Assumption Agreement, dated
September 27, 2001, among GLS Capital, GLS Lien Pool One and the County
Treasurer. The proposed Second Amendment to Tax Certificate Sale/Purchase
Agreement, proposed to be dated as of May 31, 1999, was never executed.
"Collections" means, with respect to any Existing Tax Lien, all cash
collections, cash equivalents and other proceeds of such Existing Tax Lien.
"County Agreement 2004" means the Tax Certificate Sale/Purchase
Agreement, dated as of March 9, 2004, between the County Treasurer and GLS
Capital.
"County Amendment and Consent" means the letter agreement, dated
September 9, 2004, between the County and PPTS, in which the County consents to,
among other things, GLS Capital's assignment of its right, title and interest in
and to the County Agreement 2004 to PPTS.
"Dynex" means Dynex Capital, Inc., a Virginia corporation.
"Existing Tax Liens" means the Pre-2004 Tax Liens and the July 2004 Tax
Liens.
"Escrow Agent" means Wachovia Bank, National Association, and its
successors and assigns.
"Escrow Agreement" means the Escrow Agreement, to be dated as of the
First Closing Date, among the Escrow Agent, PPTS and GLS Capital, substantially
in the form of Exhibit A hereto.
"Face Amount" means the amount identified as "Delq Tax:" on the face of
a Tax Lien Certificate, which is the amount of delinquent taxes secured by the
related Tax Lien, reduced by any partial payments of such amount.
"Final Escrow Disbursement Date" has the meaning set forth in Section
2.03(b)(iv) hereof.
"First Closing" and "First Closing Date" has the meanings set forth in
Section 2.05 hereof.
"GLS" has the meaning set forth in the preamble hereof.
"GLS Capital" means GLS Capital - Cuyahoga, Inc., a Virginia
corporation.
"GLS Lien Pool One" means GLS - Cuyahoga Lien Pool One, Inc., a
Virginia corporation.
"Holdback Amount" has the meaning set forth in Section 2.03(b)(iii)
hereof.
"July 2004 Tax Liens" means the Tax Liens listed on Schedule A hereto
levied by the County and sold to GLS on July 30, 2004.
"July 2004 Cut-off Date" means July 30, 2004.
"Officer's Certificate" means a certificate signed by a Responsible
Officer.
"Person" means any individual, corporation, partnership, limited
partnership, limited liability partnership, limited liability company, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof.
"Pre-2004 Tax Liens" means the Tax Liens listed on Schedule A hereto
levied by the County and sold to GLS prior to 2004.
"Pre-2004 Cut-off Date" means May 26, 2004.
"Property" means, with respect to a Tax Lien, the real estate
encumbered by the Tax Lien.
"Property Owner" means, as to each Property, the owner of record
thereof; provided, however, that where the context makes reference to redemption
of a Tax Lien related to a Property, the term "Property Owner" shall also
include any Person who has a statutory right to redeem such Tax Lien.
"Purchase Date" means, with respect to a particular Existing Tax Lien,
the date on which the Existing Tax Lien was first acquired by GLS.
"PPTS" means Plymouth Park Tax Services, LLC, a Delaware limited
liability company.
"Redemptive Value" means, with respect to any Tax Lien at any given
time, the amount (consisting of principal, interest, penalties, costs and any
other amounts) required to redeem such Tax Lien at such time, which amount is at
least equal to the applicable amount set forth on Exhibit A hereto with respect
to the Existing Tax Liens.
"Responsible Officer" means, with respect to Dynex or GLS, the officer
of such party assigned the responsibility for the performance of its duties in
connection with the transactions contemplated herein.
"Second Closing" and "Second Closing Date" has the meanings set forth
in Section 2.05 hereof.
"Tax Lien" means any real property tax lien, including but not limited
to any Existing Tax Lien and any Additional Tax Lien.
"Tax Lien Documents" means, for each Existing Tax Lien, the related Tax
Certificate and all other documents relating to the Existing Tax Lien affecting
the value of the Existing Tax Lien or otherwise contained in the records of GLS
relating to the Existing Tax Lien.
"Tax Lien Interest Rate" means, with respect to any Tax Lien, the
annual rate at which interest accrues on the Tax Lien Principal Balance of such
Tax Lien.
"Tax Lien Principal Balance" means, with respect to any Tax Lien at the
time of any determination, the principal amount upon which interest at the Tax
Lien Interest Rate accrues.
"Tax Certificate" means an instrument issued by the County pursuant to
Ohio Revised Code 5721.33 evidencing a Tax Lien sold by the County to the
purchaser thereof.
"Tax Sale Certificate Number" means, with respect to any Tax
Certificate, the number, if any, of each Tax Certificate and by which such Tax
Certificate is to be identified on the books and records of GLS, as set forth in
the applicable Tax Lien Schedule.
"Transaction Documents" means, collectively, this Agreement, the County
Agreement 1998, the County Agreement 2004, the Escrow Agreement and the County
Amendment and Consent.
"Transferred Assets" has the meaning set forth in Section 2.01(a)
hereof.
Section 1.02. Other Definitional Provisions. (a) All terms defined in
this Agreement shall have the defined meanings when used in any certificate or
other document made or delivered pursuant hereto unless otherwise defined
therein.
(b) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Article, Section, Schedule
and Exhibit references contained in this Agreement are references to Articles,
Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified; and the term "including" shall mean "including without limitation".
(c) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
(d) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
ARTICLE II
TERMS OF ACQUISITION
Section 2.01. Purchase and Sale of Tax Liens. (a) Subject to the terms
and conditions of this Agreement, GLS hereby sells, transfers, assigns, sets
over and otherwise conveys to PPTS all right, title and interest of GLS, whether
now owned or hereinafter acquired, in and to the following (collectively, the
"Transferred Assets"):
(i) all Pre-2004 Tax Liens, which as of the Pre-2004 Cut-off
Date had an aggregate Redemptive Value of $18,438,441.03;
(ii) the County Agreement 1998, pursuant to which the County
sold the Pre-2004 Tax Liens to GLS;
(iii) all July 2004 Tax Liens, which as of the July 2004
Cut-off Date had an aggregate Redemptive Value of $4,308,037.80;
(iv) the County Agreement 2004, pursuant to which the County
sold the July 2004 Tax Liens to GLS and pursuant to which GLS Capital
has the right to purchase Subsequent Liens (as defined in the County
Agreement 2004) for the tax years 2004, 2005 and future tax years;
(v) the contractual right, pursuant to the County Agreement
2004, of GLS Capital to purchase the Additional Tax Liens, which, as of
July 9, 2004, had an aggregate face amount of $15,994,103.84;
(vi) the remaining balance of credits, pursuant to the County
Agreement 2004, set forth on Schedule B hereto as of August 30, 2004
against certain Tax Liens returned by GLS Capital to the County
pursuant to which the County is obligated to deliver substitute Tax
Liens to GLS Capital;
(vii) all installment payment or similar agreements, if any,
entered into between GLS and the Property Owners;
(viii) all payments representing Collections in respect of the
Pre-2004 Tax Liens and the July 2004 Tax Liens received by GLS since
the close of business on September 10, 2004, which payments shall be
netted against the Aggregate Purchase Price as provided in Section
2.03(b)(i) hereof;
(ix) the proceeds of any and all of the foregoing; and
(x) the Tax Lien Documents and all other books, records, files
and information (including electronic information whether in hard copy
of electronic format) relating to any of the foregoing.
(b) All assets of GLS that are not enumerated in Section 2.01(a) above,
including all payments representing Collections received by GLS prior to the
close of business on September 10, 2004 shall be retained by GLS.
Section 2.02. Assumed Liabilities. Subject to the terms and conditions
of this Agreement, on the First Closing Date, PPTS shall assume and agree to
pay, perform and discharge when due any and all of GLS Capital's obligations to
the County under the County Agreement 1998 and the County Agreement 2004.
Section 2.03. Aggregate Purchase Price. (a) As full payment for the
Transferred Assets, PPTS shall pay to GLS an aggregate amount of $19,075,129.13
(the "Aggregate Purchase Price"), subject to the increase, if any, set forth in
Section 2.04 below.
(b) The Aggregate Purchase Price shall be paid as follows:
(i) First, at the First Closing an amount in cash equal to
$18,375,129.13, less any Collections received by GLS since the close of
business on September 10, 2004, shall be paid by wire transfer of
immediately available funds to or upon the order of GLS Capital;
(ii) Second, at the First Closing an amount in cash equal to
$700,000 shall be paid to the Escrow Agent, with such amount to be held
and disbursed pursuant to the terms of the Escrow Agreement;
(iii) Third, at the Second Closing an amount in cash equal to
the Additional Tax Liens Adjustment Amount, if any, shall be paid to
the Escrow Agent, with such amount to be held and disbursed pursuant to
the terms of the Escrow Agreement (the aggregate amount paid to the
Escrow Agent pursuant to Section 2.03(b)(ii) and this Section
2.03(b)(iii) shall collectively be referred to as the "Holdback
Amount"); and
(iv) Fourth, subject to any claims made pursuant to Article IX
hereof, the remaining balance of the Holdback Amount, if any, shall be
released by the Escrow Agent to or upon the order of GLS Capital
pursuant to the provisions of the Escrow Agreement on the first
anniversary of the First Closing Date (the "Final Escrow Disbursement
Date").
Section 2.04. Additional Tax Liens Adjustment Amount. (a) The
"Additional Tax Liens Adjustment Amount" shall be calculated as follows: in the
event that the Additional Tax Liens are in excess of Five Million Dollars
($5,000,000) in aggregate Face Amount (the "Excess Additional Tax Liens"), the
Additional Tax Liens Adjustment Amount shall be equal to the lesser of (I)
$750,000, and (II) the product of (A) the Face Amount of the Excess Additional
Tax Liens and (B) one minus the quotient of (i) the purchase price paid to the
County for the Additional Tax Liens divided by (ii) the Face Amount of the
Additional Tax Liens.
(b) Not less than five Business Days prior to PPTS purchasing the
Additional Tax Liens, PPTS shall deliver to Dynex a certificate (the "Adjustment
Certificate") setting forth, in reasonable detail, (A) an itemized list showing
the individual and aggregate Face Amounts of the Additional Tax Liens to be
purchased by PPTS from the County and (B) the individual and aggregate Face
Amounts of the Excess Additional Tax Liens, (C) the purchase price paid by PPTS
to the County for the Excess Additional Tax Liens, and (D) the resulting
Additional Tax Liens Adjustment Amount. If Dynex has any objections to the
Adjustment Certificate, PPTS and Dynex shall promptly, in good faith, use their
best efforts to resolve the objections in order the consummate the Second
Closing on the scheduled Second Closing Date.
Section 2.05. Closings. The closing of the sale of the Transferred
Assets (other than the Additional Tax Liens) (the "First Closing") shall take
place at a location, time and date as shall be agreed upon by Dynex, GLS and
PPTS, on or prior to September 20, 2004, such closing to commence at 10 a.m.,
New York time (the "First Closing Date"). The closing of the sale of the
Additional Tax Liens (the "Second Closing") shall take place at a location, time
and date as shall be agreed upon by Dynex, GLS and PPTS (the "Second Closing
Date"; each of the First Closing Date and the Second Closing Date shall be
deemed a "Closing Date"), promptly after the consummation of the purchase of the
Additional Tax Liens by PPTS from the County. PPTS shall use its best reasonable
efforts to cause the consummation of the purchase of the Additional Tax Liens at
the earliest possible date.
Section 2.06. Acquisition of Additional Tax Liens. GLS, Dynex and PPTS
acknowledge that certain cooperation has existed between the parties and will
continue to exist between the parties both before and after the execution of
this Agreement as it relates to the purchase of the Additional Tax Liens. PPTS
agrees to reimburse GLS and Dynex for all third-party fees, costs and expenses
incurred in connection with the contemplated acquisition of the Additional Tax
Liens; provided, however, GLS and Dynex will not incur such fees, costs or
expenses without PPTS's prior approval. PPTS shall deliver to Dynex the schedule
of the Additional Tax Liens that PPTS proposes to purchase from the County
within one Business Day after the date PPTS submits such schedule to the County.
ARTICLE III
THE TAX LIENS
Section 3.01. Representations and Warranties of Sellers with Respect to
the Tax Liens. (a) The Sellers, jointly and severally, hereby represent and
warrant that, as of the First Closing Date, (1) the information set forth in
Schedule A and in Schedule B will be correct in all material respects and (2) as
to the Existing Tax Liens transferred hereunder:
(i) GLS was the sole owner and holder of the Tax Lien;
(ii) GLS had full power and authority to sell the Tax Lien to
PPTS;
(iii) GLS sold the Tax Lien to PPTS free and clear of any and
all liens, pledges, charges, security interests or any other statutory
impediments to transfer of any nature encumbering the Tax Lien (but
subject to the right of redemption by the related Property Owner);
(iv) the sale of the Tax Lien by GLS to PPTS did not
contravene or conflict with any laws, rules or regulations or any
material contractual or other restriction, limitation or encumbrance
applicable to GLS;
(v) the Tax Lien was a legal, valid, binding and enforceable
lien on the related Property and an enforceable obligation of the
related Property Owner to pay the Redemptive Value thereof, and all
extensions required to be filed, if any, have been filed in order to
preserve the lien of the Tax Lien on the related Property;
(vi) the Tax Lien represented a first priority lien on the
underlying Property, subject only to other Tax Liens on the Property
being sold hereunder, and except, with respect to a Bankruptcy Tax
Lien, the Bankruptcy Tax Lien may have been subordinated to the liens
of other creditors under the provisions of the Bankruptcy Code,
including but not limited to Section 724(b) thereof;
(vii) the Tax Lien was not subject to a foreign government's
diplomatic immunity from enforcement or bilateral treaty with the
United States of America;
(viii) to the knowledge of Dynex and GLS, (A) no right of
rescission, setoff, counterclaim or defense had been asserted by any
Property Owner with respect to the Tax Lien, and (B) GLS had not taken
any action that would cause any Property Owner to assert a claim (I)
against PPTS relating to the Tax Lien or (II) that would adversely
affect the value of the Tax Lien as set forth on Schedule A hereto;
(ix) the Tax Lien had not been compromised, adjusted or
modified (including by extension of time or payment or the granting of
any discounts, allowances or credits).
(x) if the Tax Lien was a Bankruptcy Tax Lien, appropriate and
timely proofs of claim had been filed and all other necessary actions
to preserve and maintain the claim of the Tax Lien had been taken;
(xi) the Tax Lien did not relate to a Property owned by a
Property Owner that was subject to any proceeding under the Bankruptcy
Code commenced prior to October 22, 1994; and
(xii) the Tax Lien had not been discharged (in whole or in
part) in proceeding under the Bankruptcy Code.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS
Section 4.01. Representations and Warranties of Sellers. The Sellers,
jointly and severally, make the following representations and warranties on
which PPTS is deemed to have relied in acquiring the Transferred Assets. The
representations and warranties speak as of the First Closing Date, and shall
survive the sale of the Transferred Assets to PPTS.
(a) Power and Authority. Each of Dynex, GLS Capital and GLS Lien Pool
One is validly existing as a Virginia corporation under the laws of the
Commonwealth of Virginia, with full power and authority to execute and deliver
this Agreement and to carry out its terms. Each of GLS Capital and GLS Lien Pool
One has full power, authority and legal right to sell and assign the Transferred
Assets to PPTS. Each of Dynex, GLS Capital and GLS Lien Pool One shall have duly
authorized such sale and assignment to PPTS by all necessary action; and the
execution, delivery and performance of this Agreement has been duly authorized
by GLS by all necessary action.
(b) Binding Obligation. This Agreement constitutes a legal, valid and
binding obligations of Dynex and GLS enforceable in accordance with its terms.
(c) No Violation. The consummation by Dynex and GLS of the transactions
contemplated by the Transaction Documents and the fulfillment of the terms
hereof and thereof do not in any material way conflict with, result in any
material breach of any of the material terms and provisions of, nor constitute
(with or without notice or lapse of time) a material default under any material
indenture, agreement or other instrument to which Dynex and/or GLS is a party or
by which it shall be bound; nor violate any law or any order, rule or regulation
applicable to Dynex and/or GLS of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over Dynex and GLS, the violation of which would be material
to Dynex and/or GLS.
(d) No Proceedings. There are no material proceedings or investigations
pending against Dynex and/or GLS, before any court, regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over Dynex and/or GLS: (i) asserting the invalidity of any of the Transaction
Documents, (ii) seeking to prevent the consummation of any of the transactions
contemplated by any of the Transaction Documents or (iii) seeking any
determination or ruling that would materially and adversely affect the validity
or enforceability of any of the Transaction Documents.
(e) Consents. Other than the County Amendment and Consent, no material
consent, license approval, order, authorization of, or registration, filing with
or declaration with any governmental authority is required to be obtained or
made by Dynex or GLS and no material consent, license, approval or authorization
of any third party is required to be obtained by Dynex or GLS in connection with
Dynex's and GLS's execution, delivery and performance of this Agreement or any
other Transaction Documents or the consummation of the transactions contemplated
hereby and thereby.
(f) Liability under County Agreements. There is no basis for the County
to make any claim against GLS for the payment of damages to the County by GLS
arising out of any breach by GLS prior to the First Closing Date of its
obligations to the County under either the County Agreement 1998 or the County
Agreement 2004.
(g) GLS Employees. Neither GLS Capital nor GLS Lien Pool One has, nor
has ever had, any employees.
(h) Tax Lien Related Agreements. There are no agreements between GLS
Capital or GLS Lien Pool One and any third party relating to the Tax Liens other
than the County Agreement 1998, the County Agreement 2004, the Servicing
Agreement between GLS Capital and GLS Capital Services, Inc. pursuant to which
GLS Capital Services, Inc. services the July 2004 Tax Liens and the oral
servicing agreement between GLS Capital and GLS Capital Services, Inc. pursuant
to which GLS Capital Services, Inc. services the Pre-2004 Tax Liens.
(i) County Agreements. The County Agreement 1998 and the County
Agreement 2004 have not been modified, supplemented or rescinded and are in full
force and effect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PPTS
Section 5.01. Representations and Warranties of PPTS. PPTS makes the
following representations and warranties on which Dynex and GLS are deemed to
have relied in selling the Transferred Assets. The representations and
warranties speak as of the First Closing Date, and shall survive the purchase of
the Transferred Assets from GLS.
(a) Power and Authority. PPTS is validly existing as a limited
liability company under the laws of the State of Delaware, with full power and
authority to execute and deliver this Agreement and to carry out its terms. PPTS
has full power, authority and legal right to purchase the Transferred Assets
from GLS. PPTS shall have duly authorized such purchase from GLS by all
necessary action. The execution, delivery and performance of this Agreement has
been duly authorized by PPTS by all necessary action.
(b) Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of PPTS enforceable in accordance with its terms.
(c) No Violation. The consummation by PPTS of the transactions
contemplated by the Transaction Documents and the fulfillment of the terms
hereof and thereof do not, to PPTS's knowledge, in any material way, conflict
with, result in any material breach of any of the material terms and provisions
of, nor constitute (with or without notice or lapse of time) a material default
under any indenture, agreement or other instrument to which PPTS is a party or
by which it shall be bound; nor violate any law or any order, rule or regulation
applicable to PPTS of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over PPTS.
(d) No Proceedings. To PPTS's knowledge, there are no material
proceedings or investigations pending against PPTS, before any court, regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over PPTS: (i) asserting the invalidity of any of the Transaction
Documents, (ii) seeking to prevent the consummation of any of the transactions
contemplated by any of the Transaction Documents or (iii) seeking any
determination or ruling that would materially and adversely affect the validity
or enforceability of any of the Transaction Documents.
(e) Consents. No consent, license approval, order, authorization of, or
registration, filing with or declaration with any governmental authority is
required to be obtained or made by PPTS and no consent, license, approval or
authorization of any third party is required to be obtained by PPTS in
connection with PPTS's execution, delivery and performance of this Agreement or
any other Transaction Documents or the consummation of the transactions
contemplated hereby and thereby.
ARTICLE VI
COVENANTS
Section 6.01. Covenants. Dynex, GLS Capital and GLS Lien Pool One,
jointly and severally, covenant and agree, and PPTS covenants and agrees, to
perform or take any and all such actions to effectuate the following from the
date hereof until the First Closing Date:
Section 6.02. Carry on in Ordinary Course. Each GLS entity shall carry
on its respective business and operations diligently and substantially in the
same manner as heretofore conducted, and shall not, except with PPTS's prior
written consent: (a) take any action, or suffer any action to be taken, that
could cause any of the representations or warranties of Dynex contained herein
not to be true and correct in all material respects on and as of the First
Closing Date; (b) settle or compromise any lawsuit or claim relating to the
Transferred Assets; (c) waive or compromise any of its rights relating to the
Transferred Assets; or (d) enter into any agreement to take any of the foregoing
actions.
Section 6.03. Other Transactions. Prior to the First Closing, Dynex and
GLS shall not, and shall cause Dynex's and/or GLS's managers, officers,
stockholders, employees, agents and affiliates not to, directly or indirectly,
solicit or initiate the submission of proposals from, or solicit, encourage,
entertain or enter into any arrangement, agreement or understanding with, or
engage in any negotiations with, or furnish any information to, any Person,
other than PPTS or a representative thereof, with respect to the acquisition of
all or any part of the business, operations or assets of GLS or any of its
securities. Should Dynex, GLS or any of its/their affiliates, during such
period, receive any offer or inquiry relating to such acquisition, or obtain
information that such an offer is likely to be made, they will provide PPTS with
immediate written notice thereof.
Section 6.04. Consents. Dynex and GLS shall use their best efforts to
obtain in writing, prior to the First Closing Date, all consents, approvals,
waivers, authorizations and orders necessary or reasonably required in order to
permit Dynex and GLS to effectuate this Agreement and to consummate the
transactions contemplated hereby ("GLS Consents"). All GLS Consents will be in
writing and copies thereof will be delivered to PPTS promptly after Dynex's or
GLS's receipt thereof but no later than immediately prior to First Closing Date.
PPTS shall use its best efforts to obtain in writing, prior to the First Closing
Date, all consents, approvals, waivers, authorizations and orders necessary or
reasonably required in order to permit PPTS to effectuate this Agreement and to
consummate the transactions contemplated hereby ("PPTS Consents"). All PPTS
Consents will be in writing and copies thereof will be delivered to Dynex and
GLS promptly after PPTS's receipt thereof but no later than immediately prior to
First Closing Date.
Section 6.05. Public Announcements. PPTS, Dynex and GLS agree that they
will consult with each other before issuing any press releases or otherwise
making any public statements with respect to this Agreement or the transactions
contemplated hereby and any press release or any public statement shall be
subject to mutual agreement of the parties, except as may be required by the
disclosure obligations of PPTS, Dynex and/or GLS under applicable securities
laws.
Section 6.06. Best Efforts to Close. Each of the parties hereto shall
use its best efforts to satisfy, to cause to be satisfied, all conditions to its
obligations to close the transactions contemplated hereby that are within the
control of such party. If all of the conditions to a party's obligation to close
hereunder shall have been satisfied, such party shall diligently proceed to
close.
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.01. Conditions of PPTS's Obligation to Close. The obligation
of PPTS to close under this Agreement is subject to the satisfaction of the
following conditions any of which may be waived by PPTS in writing at or prior
to the First Closing Date:
(a) Agreements and Conditions. On or before the First Closing Date, GLS
and Dynex shall have complied with and duly performed in all material respects
all agreements, covenants and conditions on their part to be complied with and
performed pursuant to or in connection with this Agreement on or before the
First Closing Date.
(b) Representations and Warranties. The representations and warranties
of Dynex and GLS contained in this Agreement, or otherwise made in connection
with the transactions contemplated hereby, shall be true and correct in all
material respects on and as of the First Closing Date (as modified, amended or
supplemented or deemed to be modified, amended or supplemented, if at all) with
the same force and effect as though such representations and warranties had been
made on and as of the First Closing Date.
(c) Certificate. PPTS shall have received a certificate dated the First
Closing Date and executed by an authorized officer of Dynex to the effect that
the conditions expressed in Sections 7.01(a) and (b) have been fulfilled.
(d) County Amendment and Consent. The County Amendment and Consent
shall have been duly authorized, executed and delivered to PPTS by the County.
(e) Termination of Servicing Agreement. GLS shall have taken all
actions necessary to terminate the oral servicing agreement between GLS Capital
and GLS Capital Services, Inc. pursuant to which GLS Capital Services, Inc.
services the Pre-2004 Tax Liens.
(f) Transfer Documents. PPTS shall have received such bills of sale,
deeds of transfer, assignments and other documents in form and substance
satisfactory to PPTS conveying the Transferred Assets to PPTS.
(g) Opinion of Counsel. Dynex and GLS shall have furnished PPTS with a
favorable opinion of Xxxxxxxx Xxxxxx, counsel for Dynex and GLS, dated as of the
First Closing Date, in form and substance satisfactory to PPTS.
(h) Closing Deliveries. PPTS shall have received at or prior to the
First Closing Date all documents set forth in this Section 7.01 and such other
documents, instruments, or certificates as PPTS may reasonably request,
including, without limitation, a certificate signed by the Secretary of Dynex
certifying, among other things, as to the authenticity of the resolutions
authorizing the transactions contemplated by this Agreement and the incumbency
and signatories of the officers of Dynex authorized to act on behalf of Dynex in
connection with the transactions contemplated hereby.
Section 7.02. Conditions of GLS's and Dynex's Obligations to Close. The
obligations of GLS and Dynex to close under this Agreement are subject to the
following conditions any of which may be waived by GLS and Dynex in writing at
or prior to First Closing Date:
(a) Agreements and Conditions. On or before the First Closing Date,
PPTS shall have complied with and duly performed in all material respects all
agreements, covenants and conditions on their respective parts to be complied
with and performed pursuant to or in connection with this Agreement on or before
the First Closing Date.
(b) Representations and Warranties. The representations and warranties
of PPTS contained in this Agreement, shall be true and correct in all material
respects on and as of the First Closing Date (as modified, amended or
supplemented or deemed to be modified, amended or supplemented, if at all) with
the same force and effect as though such representations and warranties had been
made on and as of the First Closing Date.
(c) Closing Certificate. Dynex shall have received a certificate, dated
the First Closing Date and executed by an authorized officer of PPTS, to the
effect that the conditions contained in Sections 7.02(a) and 7.02(b) have been
fulfilled.
(d) Closing Deliveries. Dynex and GLS shall have received at or prior
to the First Closing Date all documents set forth in this Section 7.02 and such
other documents, instruments, or certificates as Dynex and GLS may reasonably
request, including, without limitation, a certificate signed by an authorized
representative of PPTS attesting to the authenticity of the resolutions
authorizing the transactions contemplated by this Agreement.
(e) Opinion of Counsel. PPTS shall have furnished Dynex with a
favorable opinion of Xxxxxxxxxxx & Xxxxxxxx LLP, counsel for PPTS, dated as of
the First Closing Date, in form and substance satisfactory to Dynex.
ARTICLE VIII
FURTHER ASSURANCES
Section 8.01. Further Assurances. From time to time after the First
Closing Date, and without further consideration, GLS and/or Dynex shall execute
and deliver such other instruments of conveyance, assignment, transfer and
delivery and take such other actions as PPTS may reasonably request in order
more effectively to transfer to PPTS and to place PPTS in possession or control
of all of the rights, properties, assets and businesses intended to be
transferred hereunder, to assist in the collection of any and all such rights,
properties and assets, and to enable PPTS to exercise and to enjoy all of the
rights and benefits of GLS and Dynex with respect thereto.
ARTICLE IX
INDEMNIFICATION
Section 9.01. Survival of Representations. The representations and
warranties of PPTS and the Sellers in this Agreement or in any document
delivered pursuant hereto shall survive the First Closing Date for a period of
twelve months and shall then terminate under this Agreement; provided, however,
that any such representation and warranty shall survive the time it would
otherwise terminate if it was fraudulent or made in bad faith, in which case
they shall survive until the applicable statute of limitations.
Section 9.02. Indemnitors; Indemnified Persons. For purposes of this
Section 9, each party that, pursuant to this Section 9, shall agree to indemnify
any other person or entity shall be referred to, as applicable, as the
"Indemnitor," and each such person and entity who is entitled to be indemnified
by any Indemnitor shall be referred to as the "Indemnified Person" with respect
to such Indemnitor.
Section 9.03. Indemnity of PPTS. During the period in which any
representation and warranty shall survive, the Sellers, jointly and severally,
hereby agree to defend, indemnify, hold harmless and reimburse PPTS and its
directors, members, officers, agents and employees from and against any and all
claims, liabilities, losses, damages and expenses incurred by such Indemnified
Persons (including reasonable attorneys' fees and disbursements) that shall be
caused by or related to or shall arise out of: (a) any material breach (or
alleged breach in connection with a claim asserted by a third party) of any
representation or warranty of Dynex and/or GLS contained in this Agreement or in
any certificate delivered by Dynex and/or GLS pursuant hereto; and (b) any
material breach of any covenant or agreement of Dynex and/or GLS contained in
this Agreement; and shall reimburse such Indemnified Persons for all costs and
expenses (including reasonable attorneys' fees and disbursements), as they shall
be incurred in connection with paying, investigating, preparing for or defending
any action, claim, investigation, inquiry or other proceeding, whether or not in
connection with pending or threatened litigation, that shall be caused by or
related to or shall arise out of such breach (or alleged breach in connection
with a claim asserted by a third party), whether or not any such Indemnified
Person shall be named as a party thereto and whether or not any liability shall
result therefrom. The Sellers further agree that it shall not, without the prior
written consent of PPTS, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder unless such settlement,
compromise or consent shall include an unconditional release of each Indemnified
Person under this Section 9.03 from all liability arising out of such claim,
action, suit or proceeding.
Section 9.04. Indemnity of GLS and Dynex. During the period in which
any representation and warranty shall survive, PPTS hereby agree to defend,
indemnify, hold harmless and reimburse GLS and Dynex and their respective
directors, officers, agents and employees from and against any and all claims,
liabilities, losses, damages and expenses incurred by them (including reasonable
attorneys' fees and disbursements) that shall be caused by or related to or
shall arise out of any material breach (or alleged breach in connection with a
claim asserted by a third party) of any representation or warranty of PPTS
contained in this Agreement or in any certificate delivered by PPTS pursuant
hereto; and shall reimburse such Indemnified Persons for all costs and expenses
(including reasonable attorneys' fees and disbursements), as they shall be
incurred, in connection with paying, investigating, preparing for or defending
any action, claim, investigation, inquiry or other proceeding, whether or not in
connection with pending or threatened litigation, that shall be caused by or
related to or shall arise out of such breach (or alleged breach in connection
with a claim asserted by a third party), whether or not such Indemnified Persons
shall be named as a party thereto and whether or not any liability shall result
therefrom. PPTS further agrees that it shall not, without the prior written
consent of Dynex, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action, suit or proceeding in respect of
which indemnification may be sought hereunder unless such settlement, compromise
or consent shall include an unconditional release of each Indemnified Person
under this Section 9.04 from all liability arising out of such claim, action,
suit or proceeding.
Section 9.05. Procedures for Indemnification; Defense. Promptly after
receipt by an Indemnified Person of notice of the commencement of any action or
proceeding with respect to which indemnification may be sought hereunder (a
"Claim"), such Indemnified Person shall notify the Indemnitor of the
commencement of such Claim (a "Claim Notice") and supply any other information
in the control of the Indemnified Person regarding the Claim to the Indemnitor,
but failure to so notify and supply the Indemnitor shall not relieve the
Indemnitor from any liability that the Indemnitor may have hereunder or
otherwise, unless the Indemnitor shall be materially prejudiced by such failure.
If the Indemnitor shall so elect, the Indemnitor shall assume the defense of
such Claim, including the employment of counsel reasonably satisfactory to such
Indemnified Person, and shall pay the fees and disbursements of such counsel. In
the event, however, that such Indemnified Person shall reasonably determine in
its judgment that having common counsel would present such counsel with a
conflict of interest or alternative defenses shall be available to an
Indemnified Person or if the Indemnitor shall fail to assume the defense of the
action or proceeding in a timely manner, then such Indemnified Person may employ
separate counsel to represent or defend it in any such Claim and the Indemnitor
shall pay the reasonable fees and disbursements of such counsel; provided,
however, that the Indemnitor shall not be required to pay the fees and
disbursements of more than one separate counsel for all Indemnified Persons in
any jurisdiction in any single Claim. In any Claim the defense of which the
Indemnitor shall assume, the Indemnified Person shall have the right to
participate in (but not control) such litigation and to retain its own counsel
at such Indemnified Person's own expense except as otherwise provided above in
this Section 9.05, so long as such participation does not interfere with the
Indemnitor's control of such litigation.
Section 9.06. Limitation on Indemnification. Notwithstanding any
provision of this Section 9 to the contrary, no Indemnified Person shall be
entitled to assert any claim for indemnification in respect of claims for any
breach covered under each of Sections 9.03 and 9.04 hereof until such time as
claims for indemnification thereunder shall exceed $100,000 in the aggregate
(the "Deductible"), in which case the entire amount of such claims, including
the amount of the Deductible, shall be subject to indemnification hereunder;
provided, however, that the dollar amount of such indemnification obligations
shall not exceed $10,000,000 in the aggregate (the "Claims Limitation"), except
to the extent of claims arising from an Indemnitor's providing information to
PPTS, Dynex or GLS, as the case may be, in connection herewith, or making
representations or warranties hereunder, that, in either case, were fraudulent
or made in bad faith, in which event the Deductible shall not apply and the
Claims Limitation shall be the Aggregate Purchase Price. In addition, the
indemnification amount applicable to a breach of a representation and warranty
set forth in Article III hereto shall be limited to the effective purchase price
paid by PPTS for the Tax Liens affected by such breach.
Section 9.07. Method of Indemnification. (a) If the Indemnitor fails to
give a notice disputing the validity or amount of a Claim (a "Claim Response")
within twenty (20) Business Days following receipt of a Claim Notice, then the
Claim shall be deemed to be accepted and the Indemnified Person may pursue
whatever legal remedies may be available to recover the losses as to which the
Indemnified Person is seeking indemnification, including without limitation, by
recovering the amounts of such Claims from any amounts in the Escrow Account. In
the event that the Indemnified Person submits one or more Claims and the amount
and payment of any such Claim is agreed to by the parties (or deemed to be
accepted pursuant to the immediately preceding sentence) prior to the Final
Escrow Disbursement Date, the Parties shall instruct the Escrow Agent from time
to time to disburse the amount of such Claims from the Escrow Account to the
Indemnified Person.
(b) In the event that any Claim submitted prior to the Final Escrow
Disbursement Date is subject to a Claim Response, such Claim shall become an
"Unresolved Claim." The Parties shall immediately notify the Escrow Agent of the
amount of such Unresolved Claim and shall instruct the Escrow Agent to reserve
in the Escrow Account the amount of such Unresolved Claim and to retain such
amount in the Escrow Account until such Unresolved Claim is resolved. The
parties shall attempt in good faith to mutually agree upon the validity and
amount of any Claim subject to a Dispute Notice pursuant to discussions between
senior representatives of the parties who have authority to settle the same.
Such discussions shall commence between the parties not more than ten (10)
Business Days following delivery of the Claim Response and shall not last for
more than ten (10) Business Days following the date of commencement of such
discussions. In the event that the parties mutually agree upon the amount of the
Claim pursuant to such discussions, the Indemnitor shall promptly pay the
Indemnified Person the agreed amount, which may be effected by the parties
delivering instructions to the Escrow Agent to disburse to the Indemnified
Person an appropriate amount from the Escrow Account. If the matter is not
resolved directly through negotiation within thirty (30) calendar days after the
commencement of the negotiations, the parties shall be free to resort to such
other procedures or remedies as may be available at law or in equity. In the
event that the court or arbitration tribunal, pursuant to a final non-appealable
order, upholds all or a portion of the Claim, the Indemnitor shall be obliged to
pay the amount of such Claim as is directed by the Court or arbitration tribunal
which may be effected, if applicable, by the parties delivering instructions to
the Escrow Agent to disburse to the Indemnified Person the applicable amount
from the Escrow Account. In the event that the parties agree that a portion of a
Claim is invalid or the court makes such a finding, the parties shall so notify
the Escrow Agent and shall direct the Escrow Agent to unreserve an appropriate
amount from the Escrow Account, and, if the Final Escrow Disbursement Date has
passed, to release such amount to GLS Capital, provided, however, that if any
Claim that has been agreed to by the parties or otherwise accepted, remains
unsatisfied, such amount shall, to the extent necessary, be disbursed to the
Indemnified Person. In the event that the validity of a Claim is referred to a
court or arbitration tribunal, the losing party in such litigation shall pay all
expenses connected with such litigation.
Section 9.08. Defective Tax Liens. Notwithstanding the foregoing, PPTS
first shall pursue all procedures and remedies as may be available at law or in
equity against the County to recover any unrealized value of a Tax Lien
purchased hereunder (the "Defective Tax Lien Loss"), whether or not there has
been a breach of any representation or warranty set forth in Article III hereof;
and then, to the extent such Defective Tax Lien Loss is not recovered from the
County, PPTS may seek indemnification from Dynex pursuant to Section 9.03
hereof. The survival of the applicable representations and warranties in Article
III hereof shall be tolled for any particular Defective Tax Lien Loss during the
period in which PPTS seeks recovery from the County for such loss.
ARTICLE X
NON-COMPETITION; CONFIDENTIALITY
Section 10.01. Non-Competition. During the two (2) year period
following the First Closing Date, GLS and Dynex shall not, except for the
ownership of tax liens and the tax lien operations currently existing in the
Commonwealth of Pennsylvania and the States of Massachusetts and New Jersey,
directly or indirectly: (a) engage in any business or activity that competes
with PPTS in the tax lien business in the United States; (b) enter the employ of
any person or entity engaged in any business or activity that competes with the
PPTS in the tax lien business or render any consulting or other services to any
person or entity for use in or with the effect of competing with PPTS in the tax
lien business; or (c) have an interest in any business or activity that competes
with PPTS in the tax lien business, in any capacity, including, without
limitation, as an investor, partner, stockholder, officer, director, principal,
agent, employee, or creditor.
Section 10.02. Non-Solicitation. During the five (5) year period
following the First Closing Date, Dynex and GLS shall not, directly or
indirectly, hire, offer to hire, divert, entice away, solicit or in any other
manner persuade or attempt to persuade (a "Solicitation") any person who is, or
was, at any time within the twelve (12) months prior to such Solicitation, an
officer, director, employee, agent, licensor, licensee, customer, or supplier of
PPTS's tax lien business to discontinue, cease or alter his, her or its
relationship therewith.
Section 10.03. Non-Disruption. During the five (5) year period
following the First Closing Date, Dynex and GLS shall not, directly or
indirectly, interfere with, disrupt or attempt to disrupt any present or
prospective relationship, contractual or otherwise, between PPTS or any of its
affiliates, on the one hand, and any of its employees, on the other hand.
Section 10.04. Confidentiality. (a) "Confidential Information" means
any and all information (oral or written) relating to the business, including,
but not limited to, information relating to trade secrets, proprietary
information, software, software codes and other materials, data processing
reports, analyses, except such information that is (i) generally known in the
industry or in the public domain (such information not being deemed to be in the
public domain merely because it is embraced by more general information that is
in the public domain), other than as a result of a breach of the provisions
hereof or (ii) obtained through a lawful disclosure from an unrelated third
party.
(b) PPTS shall not (until after the First Closing Date) directly or
indirectly use, communicate, disclose or disseminate any Confidential
Information (other than information that is known to PPTS prior to disclosure
and that is not subject to confidentiality) in any manner whatsoever (except to
their financial or legal advisors and as may be required under legal process by
subpoena or other court order; provided, however, that PPTS will take reasonable
steps to give Dynex and GLS sufficient prior written notice in order to contest
such requirement or order).
(c) Dynex and GLS acknowledge and agree that all Confidential
Information is the exclusive property of Dynex and GLS and, after the First
Closing Date, of PPTS. Dynex and GLS shall not at any time, directly or
indirectly, use, communicate, disclose or disseminate any Confidential
Information in any manner whatsoever (except to its or their financial or legal
advisors and as may be required under legal process by subpoena or other court
order; provided, however, that Dynex or GLS will take reasonable steps to give
PPTS sufficient prior written notice in order to contest such requirement or
order).
Section 10.05. Remedies upon Breach. (a) Dynex and GLS acknowledge and
agree that: (i) PPTS shall be irreparably injured in the event of a breach by
Dynex or GLS of any of the obligations under this Section 10; (ii) monetary
damages shall not be an adequate remedy for such breach; (iii) PPTS shall be
entitled to injunctive relief, in addition to any other remedy that it may have,
in the event of any such breach; and (iv) the existence of any claims that Dynex
or GLS may have against PPTS, whether under this Agreement or otherwise, shall
not be a defense to the enforcement by PPTS of any of its rights under this
Agreement.
(b) PPTS acknowledges and agrees that: (i) Dynex and GLS shall be
irreparably injured in the event of a breach by PPTS of any of the obligations
under Section 10; (ii) monetary damages shall not be an adequate remedy for any
such breach; (iii) Dynex and GLS shall be entitled to injunctive relief, in
addition to any other remedy which it may have, in the event of any such breach;
and (iv) the existence of any claims which PPTS may have against Dynex and GLS,
whether under this Agreement or otherwise, shall not be a defense to the
enforcement by Dynex and GLS of any of its rights under this Agreement.
ARTICLE XI
TERMINATION
Section 11.01. Termination. Subject to the provisions of Section
11.02 hereof, this Agreement may be terminated at any time prior to the First
Closing Date by any of the following:
(a) By the mutual written agreement of PPTS, Dynex and GLS; or
(b) By either PPTS, Dynex and/or GLS, if the First Closing
shall not have occurred by October 31, 2004, upon written notice by
such terminating party;
Section 11.02. Effects of Termination. If this Agreement shall be
terminated as provided in Section 11.01 hereof, then this Agreement shall
forthwith become void and there shall be no liability or obligation on the part
of the parties hereto (or any of their respective stockholders, officers,
directors, employees, legal beneficiaries, successors or affiliates); provided,
that no party shall be relieved of any losses occurring or sustained as a result
of a breach of any of such party's representations, warranties, covenants or
agreements contained herein. Notwithstanding any termination of this Agreement,
the provisions of Section 6.05 (Public Announcements) and this Section 11 shall
survive.
ARTICLE XII
MISCELLANEOUS
Section 12.01. Amendment. This Agreement may be amended only by a
writing executed by Dynex, GLS and PPTS.
Section 12.02. Protection of Title; Misdirected Payments. (a) GLS shall
take all reasonable actions as may be required by law fully to preserve,
maintain, defend, protect and confirm the interest of PPTS in the Existing Tax
Liens transferred hereunder and in the proceeds thereof.
(b) On or before the First Closing Date, GLS shall xxxx its appropriate
records so that, from and after the time of sale under this Agreement of the Tax
Liens transferred on the First Closing Date, records of GLS shall indicate that
such Tax Liens have been sold. Such records of GLS may be in the form of a
computer tape, microfiche or other electronic or computer device.
(c) All Collections received by GLS on or after the First Closing Date,
after being identified as such by GLS, shall be transferred to PPTS. PPTS will
promptly remit or cause to be remitted to GLS any amounts received by PPTS which
do not constitute Collections.
Section 12.03. Notices. All demands, notices and communications upon or
to Dynex, GLS or PPTS, under this Agreement shall be in writing, personally
delivered or mailed by certified or registered mail, return receipt requested,
and shall be deemed to have been duly given upon receipt:
If to Dynex, GLS Capital and/or GLS Lien Pool One, to
c/o Dynex Capital, Inc.
0000 Xxx Xxxx, Xxxxx 000
Xxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx, Executive Vice President and CFO
(Tel) (000) 000-0000
(Fax) (000) 000-0000
With a copy (which shall not constitute notice) to:
Xxxxxxxx Xxxxxx
0000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx Xxxx, Esq.
(Tel) (000) 000-0000
(Fax) (000) 000-0000
If to PPTS, to
Plymouth Park Tax Services, LLC
c/o Bear Xxxxxxx Mortgage & Co. Inc.
000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxx, President
(Tel) 000-000-0000 (Fax) 000-000-0000
With a copy (which shall not constitute notice) to:
Xspand, Inc.
00 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx, Executive Vice President
(Tel) 000-000-0000
(Fax) 000-000-0000
or to such other Person or address as any party shall specify by notice in
writing to the other parties.
Section 12.04. Fees and Expenses. Each of Dynex, GLS Capital, GLS Lien
Pool One and PPTS shall respectively pay all fees and expenses incurred by it or
on its behalf, in connection with the negotiation, execution and delivery of
this Agreement (and the agreements contemplated hereby) and the consummation of
the transactions contemplated hereby and thereby.
Section 12.05. Assignment. Notwithstanding anything to the contrary
contained herein, this Agreement or any of the rights, interests or obligations
hereunder may not be assigned by any of the parties hereto by operation of law
or otherwise, without the prior written consent of the other parties hereto, and
any such purported assignment without such consent shall be null and void.
Section 12.06. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of Dynex, GLS and PPTS and nothing in this
Agreement, whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in PPTS or under or in
respect of this Agreement or any covenants, conditions or provisions contained
herein.
Section 12.07. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 12.08. Separate Counterparts. This Agreement may be executed by
the parties hereto by facsimile signature and in separate counterparts, each of
which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same instrument.
Section 12.09. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
Section 12.10. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
Section 12.11. Sophisticated Parties. This Agreement is between
financially sophisticated and knowledgeable parties and is entered into by such
parties in reliance upon the economic and legal bargains contained herein, the
language used in this Agreement has been negotiated by the parties hereto and
their representatives and shall be interpreted and construed in a fair and
impartial manner without regard to such facts as the party who prepared, or
caused the preparation of, this Agreement or the relative bargaining power of
the parties.
[Signature page follows]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
DYNEX CAPITAL, INC.
By: __________________________________
Name:
Title:
GLS CAPITAL - CUYAHOGA, INC.
By: __________________________________
Name:
Title:
GLS - CUYAHOGA LIEN POOL ONE, INC.
By: __________________________________
Name:
Title:
PLYMOUTH PARK TAX SERVICES, LLC
By: __________________________________
Name: Xxxx X. Xxxxxxx
Title: President
SCHEDULE A
EXISTING TAX LIENS
[TO BE UPDATED PRIOR TO FIRST CLOSING DATE]
SCHEDULE B
COUNTY CREDITS
(as of August 30, 2004)
EXHIBIT A
ESCROW AGREEMENT
