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EXHIBIT 4.12
CONTRIBUTION AGREEMENT
CONTRIBUTION AGREEMENT (the "Contribution Agreement") is entered into
this 1st day of April, 1998 by and between the undersigned shareholders (the
"Contributors") of CMG Funding Corp., a Delaware corporation ("CMG"), and
RealTrust Asset Corporation, a Maryland corporation ("RealTrust").
RECITALS
WHEREAS, the Contributors desire to contribute their certain shares of
CMG to RealTrust in exchange for shares of capital stock of RealTrust (the
"Contribution") subject to the terms and conditions set forth herein;
WHEREAS, it is the intent of the Contributors that the Contribution of
capital stock of CMG for shares of capital stock of RealTrust qualify as a
contribution under Section 351 of the Internal Revenue Code of 1986, as amended;
NOW, THEREFORE, in consideration of the premises and the warranties,
representations, mutual covenants, and agreements set forth herein and for the
purpose of setting forth certain terms and conditions of the Contribution and
the mode of carrying the same into effect and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Contribution Agreement, unless the context
requires a different meaning, the following terms shall have the following
meanings.
1.1 "CMG" means CMG Funding Corp., a Delaware corporation.
1.2 "Code" means the Internal Revenue Code of 1986, as amended.
1.3 "Contributed Shares" means the shares of capital stock of CMG
contributed by the Contributors as specifically set forth on Schedule A hereto
in exchange for the RealTrust Shares.
1.4 "Contribution" means the contribution by the Contributors of
the Contributed Shares in exchange for RealTrust Shares in a contribution under
Section 351 of the Code.
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1.5 "Contribution Agreement" means this Agreement and the
Schedules and Exhibits hereto, as the same may be amended, supplemented or
modified from time to time.
1.6 "Contributors" means each of the shareholders of CMG
contributing the Contributed Shares as identified on Schedule A hereto.
1.7 "Effective Date" means the day and time on which CMG and
RealTrust take all steps necessary to reflect the change in stock ownership on
both their internal records, which shall be April 23, 1998.
1.8 "Party" means RealTrust and/or the Contributors.
1.9 "Person" means any individual, limited partnership,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
1.10 "RealTrust" means RealTrust Asset Corporation, a Maryland
corporation.
1.11 "State" means each of the states of the United States, the
District of Columbia and the Commonwealth of Puerto Rico.
1.12 "State Commission" means any agency of any State having
jurisdiction to enforce such State's securities laws.
For the purposes of interpreting this Contribution Agreement: (a) a
term has the meaning assigned to it; (b) an accounting term not otherwise
defined has the meaning assigned to it in accordance with generally accepted
accounting principles in effect on the date hereof, and any other reference in
this Contribution Agreement to "generally accepted accounting principles" refers
to generally accepted accounting principles on the date hereof; (c) "or" is not
exclusive; (d) words in the singular include the plural, and words in the plural
include the singular; (e) "herein", "hereof" and other words of similar import
refer to this Contribution Agreement as a whole and not to any particular
Article, Section or other subdivision; (f) words in the masculine gender include
the feminine gender and words in the feminine gender include the masculine
gender; and (g) the Article and Section headings used or contained in this
Agreement are for convenience of reference only and shall not affect the
construction of this Contribution Agreement.
ARTICLE 2
PLAN OF CONTRIBUTION
2.1 Contribution. Subject to the terms and conditions of this
Contribution Agreement, (a) on the Effective Date, the Contributors shall
transfer the Contributed Shares to RealTrust and
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(b) RealTrust shall issue, in exchange for the Contributed Shares, the RealTrust
Shares set forth on Schedule A hereto.
2.2 Effect of Contribution. Subject to the terms and conditions of this
Contribution Agreement, from and after the Effective Date, the following effects
of the Contribution shall occur:
2.2.1 Certificate of Incorporation of CMG. The Certificate of
Incorporation of CMG as in effect immediately prior to the Effective Date and
Bylaws in effect immediately prior to the Effective Date shall remain in full
force and effect and shall not be affected.
2.2.2 Capitalization. After the Effective Date, the
capitalization of CMG shall remain as reflected on the financial statements of
CMG immediately prior to the Effective Date.
2.2.3 Registered and Principal Business Office. As of the
Effective Date, the registered business office and the principal place of
business of CMG shall continue to be at 0000 Xxxx Xxxxxxxxxx Xxxxxxx, Xxxxx 000,
Xxxx Xxxx Xxxx, Xxxx 00000.
2.3 Delivery of the RealTrust Shares. On the Effective Date, RealTrust
shall revise its stock ledger to reflect the RealTrust Shares issued to
Contributors and shall issue to the Contributors stock certificates representing
the RealTrust Shares.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTORS
The Contributors (except ContiFinancial Corporation, ContiTrade
Services L.L.C. and Xxxxx and Xxxx Xxxxxxxxx Investments which make no
representations or warranties under Sections 3.1, 3.2 and 3.4.2) severally, but
not jointly, hereby represent and warrant to RealTrust as of the Effective Date
of the Contribution, as follows:
3.1 Organization, Standing and Authority of CMG. CMG is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. CMG is duly qualified or licensed to do business and in good
standing in the States of the United States of America and in each foreign
jurisdiction where its ownership or leasing of property or the
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conduct of its business as now conducted requires it to be so qualified or
licensed and in which the failure to be duly qualified or licensed and in good
standing could have a material effect on the financial condition of CMG taken as
a whole. CMG has the power and authority to carry on its business as now
conducted and to own, lease and operate its assets, properties, and business.
CMG has in effect all federal, state, local and foreign governmental
authorizations, permits and licenses necessary for it to own or lease its
properties and assets and to carry on its business as is now being conducted
except where the failure to have such authorizations, permits and licenses would
not have a material adverse effect on the financial condition of CMG taken as a
whole.
3.2 Valid Issuance. All of the Contributed Shares are duly authorized,
validly issued, and fully paid.
3.3 Ownership of Contributed Shares. With respect to Schedule A
attached hereto, the number of Contributed Shares to be contributed by such
Contributor is accurately set forth. Except as set forth on the attached
Disclosure Schedule, there are no (nor will there be at the Effective Date of
the Contribution any) contracts, commitments, understandings, or arrangements by
which such Contributor is or may be bound to transfer or issue to any third
party any of the related Contributed Shares, and there are no (nor will there be
at the Effective Date of the Contribution any) contracts, agreements,
understandings or commitments relating to the right of such Contributor to vote
or to dispose of any of the related Contributed Shares. The related Contributed
Shares are owned by such Contributor free and clear of any and all liens, claims
and encumbrances.
3.4 Authority.
3.4.1 The execution and delivery of this Contribution
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary action in respect thereof on the part of such
Contributor. Upon the execution and delivery of this Contribution Agreement by
the Parties, this Contribution Agreement shall represent a legal, valid, and
binding obligation of such Contributor, enforceable against such Contributor in
accordance with its terms, except as such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws
affecting the enforcement of creditors' rights generally, (ii) the fact that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding may
be pending and (iii) the fact that rights to indemnity hereunder may be limited
by federal or state securities laws.
3.4.2 Neither the execution and delivery of this Contribution
Agreement by such Contributor, nor the consummation by the transactions
contemplated herein, nor compliance by such Contributor with any of the
provisions hereof will (i) conflict with or result in a breach of any provision
of CMG's Certificate of Incorporation or Bylaws; (ii) hereto, constitute or
result in the breach of any material term, condition or provision of, or
constitute a default under, or give rise to any right of termination,
cancellation, or acceleration with respect to any note, bond,
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mortgage, indenture, license, contract, agreement, lease or other instrument or
obligation to which such Contributor is a party or by which it or any of its
properties or assets may be subject; (iii) result in the creation of any lien,
charge, or encumbrance upon any of the related Contributed Shares, or (iv) to
the knowledge of such Contributor, violate any order, writ, injunction, decree,
statute, rule, or regulation applicable to such Contributor or the related
Contributed Shares.
3.4.3 No notice to, filing with, authorization of, or
exemption by, or consent or approval of any public body or authority is
necessary for the consummation by such Contributor of the Contribution, or any
other transaction contemplated by this Contribution Agreement with respect to
such Contributor.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF REALTRUST
RealTrust hereby represents and warrants to the Contributors as of the
Effective Date of the Contribution, as follows:
4.1 Organization and Standing. RealTrust is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Maryland.
4.2 Authority.
4.2.1 The execution and delivery of this Contribution
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary action in respect thereof on the part of
RealTrust, and RealTrust has taken all necessary action to approve the execution
and delivery of this Contribution Agreement and the related transaction. This
Contribution Agreement represents a legal, valid, and binding obligation of
RealTrust, enforceable against RealTrust in accordance with its terms, except as
(i) such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the enforcement of
creditors' rights generally, (ii) the fact that the availability of the
equitable remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding may be pending and (iii) the
fact that rights to indemnity hereunder may be limited by federal or state
securities laws.
4.2.2 Neither the execution and delivery of this Contribution
Agreement by RealTrust, nor the consummation by RealTrust of the transactions
contemplated herein as appropriate, nor compliance by RealTrust with any of the
provisions hereof, will (i) conflict with or result in a breach of any provision
of RealTrust's Articles of Incorporation and Bylaws; (ii) constitute or result
in the breach of any term, condition, or provision of, or constitute a default
under, or give rise to any right of termination, cancellation, or acceleration
with respect to any note, bond, mortgage, indenture, license, contract,
agreement, lease, or other instrument or
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obligation to which RealTrust is a party or by which it or any of its properties
or assets may be subject that would, in any such event, have a material adverse
effect on RealTrust or be reasonably expected to prevent or materially delay the
consummation of any of the transactions contemplated hereby; (iii) result in the
creation of any lien, charge, encumbrance upon any property or assets of
RealTrust which would have a material adverse effect on the consolidated
financial condition of RealTrust; or (iv) subject to receipt of the requisite
approvals of this Contribution Agreement, to the knowledge of RealTrust's
management, violate any order, writ, injunction, decree, statute, rule, or
regulation applicable to RealTrust or any of its subsidiaries or any of their
properties of assets.
4.2.3 No notice to, filing with, authorization of, or
exemption by, or consent or approval of any public body or authority is
necessary for the consummation by RealTrust of the transactions contemplated in
this Contribution Agreement.
4.3 RealTrust Shares. RealTrust Shares to be issued upon the
consummation of the Contribution have been duly authorized and, upon issuance in
accordance with the provisions hereof, will be validly issued, fully paid and
nonassessable. Upon issuance of RealTrust Shares pursuant to this Contribution
Agreement, the Contributors will be the owners of the RealTrust Shares, free and
clear of any encumbrances, liens or adverse claims. On the Effective Date, the
only shares of capital stock of RealTrust issued and outstanding shall be the
RealTrust Shares issued to the Contributors.
4.4 Compliance with Laws. Each of RealTrust and its subsidiaries:
4.4.1 Is in compliance with all laws, regulations, rules,
reporting and licensing requirements, and orders applicable to its business or
employees conducting its business, the breach of violation of which could
reasonably be expected to impede the transactions contemplated by this
Contribution Agreement or have a material adverse effect on the consolidated
financial condition of RealTrust; and
4.4.2 Has received no written notification or communication
from any agency or department of federal, state, or local government, or any
self-regulatory organization for the real estate industry (i) asserting that
RealTrust or any of its subsidiaries is not in compliance with or has violated
any of the statutes, regulations, or ordinances that such governmental authority
or self-regulatory organization enforces, that, as a result of such
noncompliance, would materially adversely affect the consolidated financial
condition of RealTrust or otherwise impede the consummation of the transactions
contemplated by this Contribution Agreement, or (ii) threatening to revoke any
license, franchise, permit, or governmental authorization that is material to
the consummation of the transactions contemplated by this Contribution
Agreement.
4.5 Statements True and Correct. None of the information prepared by or
on behalf of RealTrust regarding RealTrust or any RealTrust subsidiary for
inclusion in any documents will, at the respective time such documents become
effective or are distributed, be false or misleading
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with respect to any material fact, or omit to state any material fact necessary
to make the statements therein in light of the circumstances under which they
were made, not misleading.
ARTICLE 5
CONDITIONS PRECEDENT TO CONTRIBUTION
5.1 Conditions to Obligations of RealTrust. The obligations of
RealTrust hereunder are subject to the satisfaction or waiver at or prior to the
Effective Date of the following conditions:
5.1.1 Performance. The Contributors shall have performed in
all material respects each of the acts and undertakings of the Contributors to
be performed at or before the Effective Date pursuant to this Contribution
Agreement;
5.1.2 Representations and Warranties True. Each of the
representations and warranties of the Contributors contained herein and in any
certificate or other writing delivered by the Contributors pursuant hereto or in
connection herewith shall be true in all material respects on and as of the
Effective Date with the same effect as though made on and as of such date;
5.2 Conditions to Obligations of the Contributors. The obligations of
the Contributors hereunder are subject to the satisfaction at or prior to the
Effective Date of the following conditions:
5.2.1 Performance. RealTrust shall have performed in all
material respects each of the acts and undertakings of RealTrust to be performed
at or before the Effective Date pursuant hereto;
5.2.2 Representations and Warranties True. Each of the
representations and warranties of RealTrust contained in this Contribution
Agreement and in any certificate or other writing delivered pursuant hereto or
in connection with the transactions contemplated hereby shall be true in all
material respects on and as of the Effective Date with the same effect as though
made on and as of such date;
5.2.3 Deliveries. RealTrust shall have complied with its
obligation to deliver the RealTrust Shares as provided in Section 2.4 hereof.
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ARTICLE 6
TERMINATION
6.1 Termination Prior to Effective Date. Notwithstanding any other
provision of this Contribution Agreement, this Contribution Agreement may be
terminated and each of the transactions contemplated by this Contribution
Agreement may be abandoned at any time prior to the Effective Date of the
Contribution:
6.1.1 By mutual agreement of the Parties;
6.1.2 By either Party in the event of a material breach by the
other Party of any representation, warranty, covenant, or agreement contained
herein which cannot be or has not been cured within five (5) business days after
the giving of written notice to the breaching Party of such breach; and
6.1.3 By either Party in the event that any of the conditions
precedent to the obligations of such Party to consummate the Contribution shall
not have been satisfied or fulfilled or waived by said Party on or before the
Effective Date, provided that neither Party shall be entitled to terminate this
Contribution Agreement pursuant to this subparagraph 6.1.3 if the condition
precedent or conditions precedent which provided the basis for termination can
reasonably be and are satisfied within a reasonable period of time, in which
case the Effective Date shall be appropriately postponed.
6.2 Effect of Termination Prior to Effective Date. In the event of the
termination and abandonment of this Contribution Agreement pursuant to Section
6.1 of this Contribution Agreement, written notice thereof shall forthwith be
given to the other Parties specifying the provision hereof pursuant to which
such termination is made, and this Contribution Agreement shall become void and
have no effect, and there shall be no liability hereunder on the part of the
Parties or to any of their unit holders, partners, employees, agents,
consultants or representatives provided that Section 7.1 hereof shall survive
any termination of this Agreement. Nothing in this Section 6.2 shall relieve any
of the Parties of liability for breach of this Agreement.
6.3 Termination After Effective Date. In the event that RealTrust does
not consummate a public or private offering of equity securities on or before
January 1, 1999, then any Party may request that the Contribution be terminated.
Such termination shall be accomplished in a manner that the Parties will, after
the termination, be returned to the ownership of the same number and class of
securities of CMG as each Party held immediately prior to the Contribution. The
Parties agree that they shall use their best efforts to ensure that such
termination is effectuated in a tax-free manner, whether through
re-contribution, merger, reorganization, dissolution or otherwise. Each Party
hereby agrees to affirmatively vote its shares of RealTrust and CMG in favor of
such re-contribution, merger, reorganization, dissolution or other termination
as may be requested by RealTrust.
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6.4 Survival of Representations, Warranties and Covenants. The
representations and warranties of the Parties set forth in Articles 3 and 4
hereof shall survive the Effective Date of the Contribution until the earlier of
(i) one (1) year from the Effective Date or (ii) the date on which audited
financial statements of CMG are included in audited financial statements of
RealTrust which are filed with the Securities and Exchange Commission pursuant
to the Securities and Exchange Act of 1934.
6.5 Limitation of Liability. Notwithstanding the provision of Section
6.4 or any other provision herein, to the extent that any Contributor is subject
to any liability by virtue of its obligations under this Agreement, each
Contributor's maximum liability for any claim related to this Contribution
Agreement made by RealTrust shall be limited to the fair market value of the
RealTrust Shares delivered to such Contributor on the Effective Date.
ARTICLE 7
MISCELLANEOUS
7.1 Expenses. Each of the Parties shall bear and pay all costs and
expenses incurred by it or on its behalf in connection with the transactions
contemplated hereunder, including fees and expenses of its own financial or
other consultants, printing costs, investment bankers, accountants, and counsel.
7.2 Entire Contribution Agreement. Except as otherwise expressly
provided herein, this Contribution Agreement contains the entire agreement
between the Parties with respect to the transactions contemplated hereunder, and
such Agreement supersedes any and all prior agreements, letters of intent,
arrangements or understandings with respect thereto, written or oral. The terms
and conditions of this Contribution Agreement shall inure to the benefit of and
be binding upon the Parties and their respective successors. Nothing in this
Contribution Agreement, expressed or implied, is intended to confer upon any
party, other than the Parties or their respective successors, any rights,
remedies, obligations, or liabilities under or by reason of this Contribution
Agreement.
7.3 Amendments. To the extent permitted by law, this Contribution
Agreement may be amended by a subsequent writing signed by authorized officers
of RealTrust and CMG; provided, however, that if any Party shall request, all
other Parties shall agree to amend this Contribution Agreement to meet
applicable legal and regulatory requirements and obstacles, to effect tax
savings, to minimize or insulate against liabilities or to serve some other
meritorious purpose so long as the consideration to be received by the
Contributors shall not be reduced.
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7.4 Waivers. Prior to or at the Effective Date of the Contribution, any
Party shall have the right to waive in writing any breach of or default in the
performance of any term of this Contribution Agreement by any other Party, to
waive in writing or extend the time for the compliance or fulfillment by any
other Party of any and all of its obligations under this Contribution Agreement,
and to waive in writing any or all of the conditions precedent to the
obligations of this Party pursuant to this Contribution Agreement, except any
condition which, if not satisfied, would result in the violation of any law or
applicable governmental regulation.
7.5 No Assignment. No Party may assign any of its rights or obligations
under this Contribution Agreement to any other person; provided that
ContiFinancial Corporation and ContiTrade Services L.L.C. may assign the rights
and obligations under this Agreement to any of its affiliates.
7.6 Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered by hand, by
facsimile transmission, or by registered or certified mail, postage pre-paid to
the persons at the addresses set forth below (or at such other address as may be
provided hereunder), and shall be deemed to have been delivered as of the date
so delivered.
RealTrust: RealTrust Asset Corporation
0000 Xxxx Xxxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
The Contributors: The addresses set forth on the stockholder
records of RealTrust.
7.7 Governing Law. This Contribution Agreement shall be governed by and
construed in accordance with the laws of the State of Maryland except to the
extent that federal law shall be controlling.
7.8 Counterparts. This Contribution Agreement may be executed in one or
more counterparts, including electronically transmitted counterparts, each of
which shall constitute one and the same instrument.
7.9 Third Parties. Each Party hereto intends that this Contribution
Agreement shall not benefit or create any right or cause of action for the
benefit of any person other than the Parties hereto.
7.10 Attorneys Fees. If any action at law or in equity, including an
action for declaratory relief, is brought to enforce or interpret the provisions
of this Contribution Agreement, the prevailing Party shall be entitled to
recover reasonable attorneys fees from the other Party, which fees may be set by
the Court in the trial of such action or may be enforced in a separate action
brought for the purpose, and which fees shall be in addition to any other relief
which may be awarded.
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7.11 Knowledge of the Parties. Where any representative or warranty
contained in this Agreement is expressly qualified by reference to the knowledge
or belief of any Party, such Party hereby confirms that no information has come
to the attention to such Party (or the officers of such Party if the Party is a
corporation) which could give such Party actual knowledge of the existence of
the documents or facts so qualified. However, except as set forth herein, no
Party has undertaken any investigation to determine the existence of such
documents or facts.
7.12 Exhibits. Each and all of the Schedules and Exhibits referred to
herein and attached hereto are hereby incorporated into this Agreement for all
purposes as fully as if set forth herein.
7.13 Severability. If any portion of this Contribution Agreement is
declared by a court of competent jurisdiction to be invalid or unenforceable,
such declaration shall not affect the validity of the remaining provisions.
7.14 Time of Essence. Time is of the essence in the performance of the
obligations stated herein.
IN WITNESS WHEREOF, each of the Parties has caused this Contribution
Agreement to be executed, attested and delivered on its behalf by its duly
appointed and authorized officers as of the day and year first above written.
"RealTrust"
REALTRUST ASSET CORPORATION
a Maryland corporation
By:_____________________________________
Xxxx X. Xxx, Chief Executive Officer
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"Contributors"
________________________________ ________________________________
Xxxx X. Xxx Xxxx Xxxx
________________________________ ________________________________
Xxxxx X. Xxxx Xxxxxx Xxxxxx
________________________________ ________________________________
Xxxxxxx Xxxxxxx Xxxx Xxxxx
________________________________ ContiTrade Services L.L.C.
Xxxxxx Xxxxxxx
By:_____________________________
Authorized Signatory
________________________________ By:_____________________________
Xxxxx and Xxxx Xxxxxxxxx Investments Authorized Signatory
ContiFinancial Corporation
By:_____________________________
Authorized Signatory
By:_____________________________
Authorized Signatory
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SCHEDULE A
Contributed Shares
Number of Class of Number of
Class of Contributed RealTrust RealTrust
Contributor Contributed Shares Shares Shares Shares
----------- ------------------ ------ ------ ------
Xxxx X. Xxx Class A Preferred 550,774 Class A Preferred 550,774
Common 140,326 Common 140,326
Xxxxx X. Xxxx Class A Preferred 50,000 Class A Preferred 50,000
Common 165,365 Common 165,365
Xxxxxxx Xxxxxxx Common 167,865 Common 167,865
Xxxxxx Xxxxxxx Common 167,865 Common 167,865
Xxxx Xxxx Common 111,910 Common 111,910
Xxxxxx Xxxxxx Common 33,535 Common 33,535
Xxxx Xxxxx Common 33,535 Common 33,535
Xxxxxxxxx Investments Common 99,655 Common 99,655
ContiTrade Services LLC Common 506,933 Common 506,933
ContiFinancial Corporation Class A Preferred 252,117 Class A Preferred 252,117
ContiFinancial Corporation Class A Preferred 410,581 Class B Preferred 410,581
