Exhibit 2.6
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AMENDED AND RESTATED ASSET PURCHASE AGREEMENT
by and among
CONSECO FINANCE CORP.
THE SELLING SUBSIDIARIES NAMED HEREIN
and
CFN Investment Holdings LLC
Dated as of
March 14, 2003
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TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS............................................................................................1
1.1. Definitions................................................................................1
ARTICLE II. PURCHASE AND SALE OF ASSETS..........................................................................27
2.1. Purchased Assets..........................................................................27
2.2. Liabilities...............................................................................31
2.3. Closing Transactions......................................................................34
2.4. Purchase Price............................................................................37
2.5. Post-Effective Time Amounts Received and Paid.............................................37
2.6. True Sale.................................................................................37
2.7. Assumption of Certain Leases and Contracts................................................37
2.8. Consents to Certain Assignments...........................................................38
2.9. Real Estate Apportionments and Payments...................................................39
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE SELLERS.......................................................39
3.1. Organization and Power....................................................................39
3.2. Authorization of Transactions.............................................................40
3.3. Absence of Conflicts; Required Consents, Approvals and Filings............................40
3.4. Company Subsidiaries......................................................................41
3.5. Good Title................................................................................41
3.6. Compliance with Laws; Permits.............................................................41
3.7. Assets Necessary to Conduct Businesses....................................................42
3.8. Facilities; Real Property.................................................................42
3.9. Personal Property.........................................................................44
3.10. Receivables...............................................................................44
3.11. Material Agreements.......................................................................45
3.12. Intellectual Property.....................................................................46
3.13. Brokerage.................................................................................47
3.14. Employees.................................................................................47
3.15. Affiliate Transactions....................................................................47
3.16. ERISA; Employee Benefits..................................................................48
3.17. Depository Institutions...................................................................48
3.18. Litigation................................................................................48
3.19. Financial Statements......................................................................49
3.20. Indebtedness; Guarantees; Absence of Undisclosed Liabilities..............................49
3.21. Residual Assets...........................................................................50
3.22. Tax Matters...............................................................................50
3.23. Insurance.................................................................................55
3.24. Environment, Health and Safety............................................................56
3.25. Accounting Controls.......................................................................56
3.26. Summary of Securitizations................................................................56
3.27. Representations as to Certain Purchased Assets............................................56
3.28. Securities Offerings......................................................................56
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3.29. No Powers of Attorney.....................................................................56
3.30. Securities Laws Matters; No Registration..................................................56
3.31. Green Tree RECS II Guaranty Corporation...................................................57
3.32. Conseco HE/HI 2001-B-2, Inc...............................................................57
3.33. Conseco Finance Securitizations Corp......................................................57
3.34. Green Tree First GP Inc...................................................................57
3.35. Green Tree Second GP Inc..................................................................57
3.36. Conseco Finance Advance Receivables Corp..................................................58
3.37. Conseco Finance Liquidation Expense Advance Receivables 2002-B Corp.......................58
3.38. Convergent Lending Services, LLC..........................................................58
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE BUYER..........................................................59
4.1. Organization and Corporate Power..........................................................59
4.2. Authorization of Transaction..............................................................59
4.3. No Violation..............................................................................59
4.4. Governmental Authorities and Consents.....................................................59
4.5. Litigation................................................................................59
4.6. Brokerage.................................................................................60
4.7. Availability of Funds.....................................................................60
4.8. Stock Purchase............................................................................60
4.9. Knowledge.................................................................................60
ARTICLE V. ADDITIONAL AGREEMENTS.................................................................................60
5.1. Tax Matters...............................................................................60
5.2. Access to Information and Facilities......................................................66
5.3. Confidentiality...........................................................................66
5.4. Conduct of the Businesses Prior to Closing................................................67
5.5. Restrictions on Certain Actions...........................................................67
5.6. Press Releases and Announcements..........................................................69
5.7. Approvals of Third Parties; Satisfaction of Conditions to Closing.........................70
5.8. Bankruptcy Actions........................................................................70
5.9. Exclusivity; No Solicitation of Transactions..............................................71
5.10. Employees.................................................................................72
5.11. Transition................................................................................76
5.12. Seller's Trademarks.......................................................................76
5.13. Notices to Obligors.......................................................................77
5.14. Non-Solicitation and Non-Competition......................................................77
5.15. Further Actions...........................................................................78
5.16. Further Assurances........................................................................78
5.17. Mail Forwarding...........................................................................78
5.18. DIP Loan..................................................................................78
5.19. REMIC Items Reflected on Tax Returns; Bring Down on Certain Information...................78
5.20. Title Insurance...........................................................................79
5.21. Preparation of License Applications.......................................................79
5.22. Provision of Bank Information.............................................................80
5.23. Access to Records After the Closing.......................................................80
5.24. Liens.....................................................................................81
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5.25. Exclusion of Certain Purchased Assets.....................................................81
5.26. Certain Insurance Matters.................................................................81
5.27. Financial Information.....................................................................83
5.28. GE Loan Services; Transition Services.....................................................84
5.29. Intellectual Property Licenses............................................................84
5.30. GE Leases.................................................................................85
5.31. Waiver of B-2 Guarantee Rights............................................................85
5.32. Termination of HE Origination Business....................................................85
5.33. Seller Transition Services................................................................86
ARTICLE VI. CONDITIONS PRECEDENT TO THE BUYER'S OBLIGATIONS......................................................86
6.1. Representations and Warranties; Covenants; Certificates...................................86
6.2. Bankruptcy Condition......................................................................87
6.3. Litigation................................................................................87
6.4. Approvals.................................................................................87
6.5. Instruments of Conveyance and Transfer; Title.............................................87
6.6. Transition Services Agreement.............................................................88
6.7. Resignation or Removal of Officers and Directors of Subject Subsidiaries..................88
6.8. Xxxxxx Facility...........................................................................88
6.9. No Material Adverse Effect................................................................88
6.10. Reserved..................................................................................88
6.11. Servicing Rights..........................................................................89
6.12. Tax Opinion...............................................................................89
6.13. Data Service Contracts....................................................................90
6.14. Acceptance of Employment Offers...........................................................90
6.15. Parent Guarantee..........................................................................90
6.16. Xxxxxxx...................................................................................91
ARTICLE VII. CONDITIONS PRECEDENT TO THE SELLERS' OBLIGATIONS....................................................91
7.1. Representations and Warranties; Covenants; Certificates...................................91
7.2. Bankruptcy Condition......................................................................91
7.3. Litigation................................................................................91
7.4. Approvals.................................................................................92
7.5. Reserved..................................................................................92
7.6. Other Documents...........................................................................92
ARTICLE VIII. TERMINATION........................................................................................92
8.1. Termination Prior to Closing..............................................................92
8.2. Break-Up Fee and Expense Reimbursement....................................................93
8.3. Termination by Reason of Buyer Default....................................................94
8.4. Effect of Termination.....................................................................95
ARTICLE IX. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION.........................................................95
9.1. Survival of Representations...............................................................95
9.2. Indemnification...........................................................................96
9.3. Qualifications on Indemnification.........................................................96
9.4. Notice and Defense of Claims..............................................................97
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9.5. Tax Treatment.............................................................................98
9.6. Remedy....................................................................................98
9.7. Administrative Expense; Administrative Priority...........................................98
ARTICLE X. MISCELLANEOUS.........................................................................................99
10.1. Expenses..................................................................................99
10.2. Amendment and Waiver......................................................................99
10.3. Notices...................................................................................99
10.4. Binding Agreement; Assignment............................................................100
10.5. Severability.............................................................................101
10.6. Construction.............................................................................101
10.7. Captions.................................................................................101
10.8. Entire Agreement.........................................................................101
10.9. Counterparts.............................................................................102
10.10. Governing Law............................................................................102
10.11. Parties in Interest......................................................................102
10.12. Consent to Jurisdiction..................................................................102
10.13. Delivery by Facsimile....................................................................102
10.14. Disclosure Schedules.....................................................................103
10.15. Specific Performance.....................................................................103
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ASSET PURCHASE AGREEMENT
THIS AMENDED AND RESTATED ASSET PURCHASE AGREEMENT (this
"Agreement") is made as of March 14, 2003, by and among Conseco Finance Corp., a
Delaware corporation (the "Company"), the Subsidiaries of the Company owning
Purchased Assets, which are named on the signature pages hereof or become
parties hereto in accordance with this Agreement (the "Selling Subsidiaries"),
and CFN Investment Holdings LLC, a Delaware limited liability company (the
"Buyer") and amends and restates the Asset Purchase Agreement, dated as of
December 19, 2002, by and among the Company, the Selling Subsidiaries and the
Buyer, as amended (the "Original Agreement"). The Company and the Selling
Subsidiaries are collectively referred to herein as the "Sellers" and,
individually, as a "Seller". The Sellers, the Parent and the Buyer are
collectively referred to herein as the "Parties" and, individually, as a
"Party".
WHEREAS, on the terms and subject to the conditions set forth
in this Agreement, the Buyer desires to purchase from the Sellers, and the
Sellers desire to sell to the Buyer, the Purchased Assets, in a sale authorized
by the Bankruptcy Court pursuant to, inter alia, sections 105, 363, 365 and
1146(c) of the Bankruptcy Code;
WHEREAS, it is intended that the acquisition of the Purchased
Assets would be accomplished through the sale, transfer and assignment of assets
of the Company and the Selling Subsidiaries owning, leasing or having the right
to use the Purchased Assets and/or, as provided herein, through the sale of
capital stock of one or more direct or indirect Subsidiaries of the Company;
WHEREAS, the Buyer also desires to assume, and the Sellers
desire to assign and transfer, the Assumed Liabilities; and
WHEREAS, the Company and the Filing Company Subsidiaries
either have filed or will file a Chapter 11 Case and have obtained
debtor-in-possession financing from FPS DIP LLC.
NOW, THEREFORE, in consideration of the premises and mutual
promises herein made, and in consideration of the representations, warranties
and covenants herein contained, the Parties hereby agree as follows:
ARTICLE I.
DEFINITIONS
1.1. Definitions. For purposes of this Agreement, the following
terms shall have the meanings set forth below:
"Accrued and Unpaid Interest" means, with respect to any Loan,
as of any date, the interest, fees, premiums, consignment fees, costs, advances
and other charges that have accrued on such Loan (whether or not such fees,
costs or charges have been billed) but have not been paid by the Obligor on such
Loan or otherwise collected by offset, recourse to collateral or otherwise.
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"Acquisition Proposal" means a written proposal(s) relating to
(a) any merger, consolidation, business combination, sale, reorganization or
other direct or indirect disposition of one or more of the Purchased Businesses
or of all or a portion of the Purchased Assets, pursuant to one or more
transactions, to one or more affiliated or unaffiliated parties (other than
transactions in the ordinary course of business or transactions permitted or
approved pursuant to Section 5.5), (b) the sale of 20% or more of the
outstanding shares of capital stock of the Company (including, without
limitation, by way of foreclosure or plan of reorganization or liquidation) to
one or more affiliated or unaffiliated parties or a similar transaction
involving one or more affiliated or unaffiliated parties, or (c) any transaction
or series of transactions in which a Person or group provides or commits to
provide $50 million or more of capital to the Company or its Subsidiaries
(whether as debt or equity or a combination thereof) (other than (i) debt
financing in which none of the Purchased Assets is pledged as collateral or
subjected to any Lien other than Permitted Liens, (ii) the DIP Loan, (iii) the
Additional Xxxxxx Debt and (iv) transactions specifically contemplated by the GE
Approved Agreement).
"Additional Xxxxxx Debt" means an additional warehouse
financing facility (or an amendment of an existing Xxxxxx Facility) in an amount
not to exceed $250 million to finance the origination of Loans by the Company
and its Subsidiaries, which, subject to Section 5.5(b), would be included in the
Purchased Assets, on terms and conditions reasonably satisfactory to the Buyer.
"Affiliate" of any particular Person means any other Person
controlling, controlled by or under common control with such particular Person,
where "control" means the possession, directly or indirectly, of the power to
direct the management and policies of a Person whether through the ownership of
voting securities or otherwise.
"Affiliated Group" means any affiliated group of corporations
within the meaning of Section 1504(a) of the Tax Code as well as any other group
of corporations filing a consolidated, combined, or unitary Income Tax Return
under federal, state, local or foreign Law.
"Agreement" shall have the meaning set forth in the Recitals.
"ALTA" means the American Land Title Association. ----
"Assigned Receivables" means those Receivables identified in
Section 3.10(a) of the applicable Business Schedules with respect to a
particular Purchased Business, and any Receivables generated by the applicable
Purchased Business in the ordinary course from and including the last date as of
which the Business Schedules identifying such Receivables are updated under this
Agreement through the Closing Date, and including all obligations to make
additional extensions of credit under the Assumed Receivables Contracts.
"Assumed Agreements" means, collectively, the Assumed Leases,
the Assumed Contracts, the Assumed Retention Agreements and the Assumed
Receivables Contracts.
"Assumed Contracts" means those Contracts identified in
Section 2.1(a) of the applicable Business Schedules under the heading "Assumed
Contracts", but excluding (i) Assumed Leases, Assumed Receivables Contracts and
those Contracts that expire or are
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terminated in the ordinary course of business prior to the Closing Date and (ii)
all Employee Agreements (other than the Assumed Retention Agreements).
"Assumed Leases" means real property leases, subleases,
licenses or other Contracts set forth in Section 3.8(b) of the applicable
Business Schedules pursuant to which a Seller or Mill Creek Bank leases the
Leased Premises as a tenant thereof or leases all or any part of the Owned Real
Premises as the landlord thereunder.
"Assumed Liabilities" shall have the meaning set forth in
Section 2.2(a) hereof.
"Assumed Receivables Contracts" means Contracts of the
Purchased Businesses evidencing or executed and delivered in connection with the
Assigned Receivables.
"Assumed Retention Agreements" means the agreement, dated as
of December 19, 2002, by and between the Company and Xxx Xxxx, the agreement,
dated as of December 19, 2002, by and between the Company and Xxxxxx Xxxxxx and,
if the GE condition is not satisfied, the agreement, dated as of December 19,
2002, by and between the Company and Xxxx Xxxxxxx.
"Auction" means the auction conducted by the Sellers pursuant
to the Bidding Procedures Order.
"B-2 Certificates" means the certificates identified as such
on the Residuals Schedule under the captions "Junior P&I Regular Interests -
Manufactured Housing" and all other interests (whether certificated or
uncertificated) of a substantially similar nature owned by a Seller.
"B-2 Guarantee Rights" shall have the meaning set forth in
Section 2.1(c) hereof.
"Backup Agreements" shall mean the purchase agreement between
the Sellers and EMC Mortgage Corporation (or any of its Affiliates) and the
purchase agreement between the Sellers and Charlesbank Capital Partners, LLC (or
any of its Affiliates) to acquire the assets of the Sellers and which is entered
into pursuant to the Auction and contingent upon the termination of this
Agreement and Bankruptcy Court approval.
"Bank Information" shall have the meaning set forth in Section
5.22 hereof.
"Banks" means (a) Mill Creek Bank and (b) Green Tree Retail
Services Bank.
"Bankruptcy Code" means title 11 of the United States Code.
"Bankruptcy Court" means the United States Bankruptcy Court
for the Northern District of Illinois or such other court having jurisdiction
over the Chapter 11 Case originally administered in the United States Bankruptcy
Court for the Northern District of Illinois.
"Bidding Procedures Order" means the order of the Bankruptcy
Court: (a) establishing procedures for the submission of higher and better
offers for the Purchased Assets; (b) prescribing the form and manner of notice
of the proposed sale of the Purchased
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Assets to creditors and other interested parties, including but not limited to
publication notice; (c) authorizing and approving the payment of the Break-Up
Fee and Expense Reimbursement to the Buyer in the event they become due under
the Original Agreement, without the need for any further order; and (d)
otherwise approving and implementing the provisions of Sections 5.9, 5.10 and
5.11 of the Original Agreement, such Bidding Procedures Order to be satisfactory
to the Buyer in its sole and absolute discretion.
"Break-Up Fee" shall have the meaning set forth in Section
8.2(a) hereof.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banking institutions in the State of New York are
authorized or obligated by law or executive order to be closed.
"Business Employees" shall have the meaning set forth in
Section 5.10(a) hereof.
"Business Schedules" means the Residuals Schedule and the
Purchased Businesses Schedule.
"Buyer" shall have the meaning set forth in the Recitals.
"Buyer Indemnified Parties" shall have the meaning set forth
in Section 9.2(a) hereof.
"Buyer Information" shall have the meaning set forth in
Section 5.3(b) hereof.
"Buyer IT Employees" shall have the meaning set forth in
Section 5.10(a)(iv) hereof.
"Cap" shall have the meaning set forth in Section 9.3(a)
hereof.
"CFARC Contracts" shall have the meaning set forth in Section
3.36 hereof.
"CFC Parties" means, collectively, the Company and the
Company's Subsidiaries.
"CFC Party" means, individually, the Company or any of the
Company's Subsidiaries, as applicable.
"CFLEAR 2002-B C Contracts" shall have the meaning set forth
in Section 3.37 hereof.
"CFSC Contracts" shall have the meaning set forth in Section
3.33 hereof.
"Chapter 11 Case" means, collectively, the cases commenced or
to be commenced by the Company and the Filing Company Subsidiaries under chapter
11 of the Bankruptcy Code in the Bankruptcy Court.
"CL Business" means the consumer installment loan business of
the CFC Parties, excluding securities taken back or retained by any CFC Party.
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"CL Origination Business" means the consumer installment loan
origination business of the CFC Parties, excluding Securities taken back or
retained by any CFC Party.
"Cleanup Calls" means the rights of the Sellers, servicers,
holders of residuals or other securities or assignees thereof, exercisable by
such Persons in any capacity, to purchase Securitized Loans under the terms of
any Securitization Documents and to retire the securities issued to other
parties pursuant to such Securitizations, listed on the Residuals Schedule under
the caption, "Cleanup Calls".
"Clear Facility" means the Indenture, dated as of April 1,
2002, by and among Conseco Finance Liquidation Expense Advance Receivables
2002-B Corp., as issuer, U.S. Bank, as trustee, as calculation agent and as
paying agent, and the Company, together with any successor entity, individually
and as servicer of the qualified trusts pursuant to which the Clear Facility
Notes were issued.
"Clear Facility Notes" means the Conseco Finance Liquidation
Expense Advance Receivables Backed Notes, dated as of April 1, 2002.
"Closing" shall have the meaning set forth in Section 2.3(a)
hereof.
"Closing Date" shall have the meaning set forth in Section
2.3(a) hereof.
"Closing Transactions" shall have the meaning set forth in
Section 2.3(b) hereof.
"Company" shall have the meaning set forth in the Recitals.
"Confidential Information" shall have the meaning set forth in
Section 5.3 hereof.
"Confidentiality Agreement" means that Confidentiality
Agreement, dated as of November 8, 2002, between Parent, Fortress Investment
Group LLC and X.X. Xxxxxxx & Co., LLC and the Confidentiality Agreement, dated
as of October 28, 2002, between Parent and AEGIS Mortgage Corporation.
"Consent Agreement" means a fully executed agreement among the
Buyer, the Company, the trustees with respect to each of the securitization
transactions for which an MH Servicing Contract has been entered into (the
"Trustees"), the Official Committee of Unsecured Creditors of the Company (the
"Unsecured Creditors Committee"), the Ad Hoc Committee of Certificateholders
(the "Ad Hoc Committee") and Federal National Mortgage Association ("Xxxxxx
Xxx"), evidencing the consent of the Trustees, the Unsecured Creditors
Committee, the Ad Hoc Committee and Xxxxxx Mae to the matters covered by Section
6.11(b) and (c), which agreement is in form and substance reasonably acceptable
to the Buyer.
"Consumer Loan" means the retail installment contracts and
direct consumer loans of the Purchased Businesses secured by a purchase money or
other security interest creating a first lien in favor of the Company or one of
its Subsidiaries on personal property such as recreational vehicles,
motorcycles, watercraft, trailers and snowmobiles, and the related promissory
notes or other evidences of indebtedness, together with any and all rights,
benefits,
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collateral, payments, recoveries and proceeds arising therefrom or in connection
therewith including the Servicing Rights related to such loans.
"Contract" means any contract, license, sublicense, franchise,
permit, mortgage, deed to secured debt or deed of trust, purchase order,
indenture, loan agreement, note, lease, sublease, agreement, obligation,
commitment, understanding, instrument or other binding arrangement or any
commitment to enter into any of the foregoing (in each case, whether written or
oral).
"Convergent Contracts" shall have the meaning set forth in
Section 3.38 hereof.
"Credit Facilities" means the Xxxxxx Facilities; the Credit
Agreement, dated as of December 27, 2000, as amended on January 9, 2002, July 9,
2002, August 29, 2002, September 6, 2002 and November 27, 2002, between the
Company and U.S. Bank (the "U.S. Bank Credit Agreement"); and the Master
Repurchase Agreement dated April 16, 1999 between Credit Suisse First Boston
Mortgage Capital LLC and Green Tree Financial Corporation (the Company), as
amended by Annex I--Amended and Restated Supplemental Terms to Master Repurchase
Agreement, dated as of March 26, 1999, and as each of the same may be further
amended in accordance with the terms thereof and of this Agreement.
"Deferred Recognition Amounts" shall have the meaning set
forth in Section 3.22(d) hereof.
"Deutsche Bank" means Deutsche Bank National Trust Company.
"DIP Loan" shall have the meaning set forth in Section 5.18
hereof.
"Direct Claim" means any claim by an Indemnified Party on
account of a Loss which does not result from a Third Party Claim.
"Employee Agreements" shall have the meaning set forth in
Section 5.10(j) hereof.
"Employee Benefit Plans" shall have the meaning set forth in
Section 3.16 hereof.
"Employees" shall have the meaning set forth in Section 3.14
hereof.
"Environmental Law" means any Law relating to (a) the release
or threatened release of Hazardous Substances, (b) pollution or the protection
of human health, safety or the environment, including ambient air (including air
inside buildings), surface water, ground water, land surface or subsurface
strata and natural resources or (c) the manufacture, handling, transport, use,
treatment, storage or disposal of Hazardous Substances.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Excess Cash" shall have the meaning set forth in the credit
agreement for the DIP Loan.
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"Excluded Assets" shall have the meaning set forth in Section
2.1(c) hereof.
"Excluded Business" means any Purchased Business or portion
thereof that is excluded pursuant to Section 2.1(a).
"Excluded Contracts" means (a) each of the Non-MH Servicing
Contracts, except with respect to the Non-MH Servicing Rights, Guarantee Fees
and Cleanup Calls thereunder or any Residual Assets related thereto, (b) each of
the MH Servicing Contracts, except with respect to the MH Servicing Rights,
Guarantee Fees and Cleanup Calls thereunder or any Residual Assets related
thereto and (c) the other Contracts set forth in Section 2.1(c) of the Purchased
Businesses Schedule under the caption, "Excluded Contracts".
"Excluded Covenants" has the meaning set forth in Section 5.5
hereof.
"Excluded Liabilities" has the meaning set forth in Section
2.2(b) hereof.
"Excluded Servicing Liabilities" means all Liabilities under
the Servicing Contracts other than the duty to perform the obligations solely of
a servicer or successor servicer thereunder first arising after the Closing
Date.
"Expense Reimbursement" shall have the meaning set forth in
Section 8.2(b) hereof.
"Facilities" means the Owned Real Premises and Leased
Premises.
"FDIC" shall have the meaning set forth in Section 3.3 hereof.
"Files" means, whether in paper or electronic form, books;
records; customer and vendor lists; correspondence; files; advertising,
marketing and sales materials; personnel files of employees; financial records
and statements; correspondence, reports and examinations of Governmental
Authorities other than those with respect to Mill Creek Bank; and legal
proceedings materials.
"Filing Company Subsidiaries" means those Selling Subsidiaries
that have commenced a Chapter 11 Case on or before February 3, 2003 and the
SPEs.
"Final Order" means an Order as to which the time to file an
appeal, a motion for rehearing or reconsideration (excluding any motion under
F.R.C.P. 60(b)) or a petition for writ of certiorari has expired and no such
appeal, motion or petition is pending.
"Finance Laws" shall have the meaning set forth in Section 3.3
hereof.
"Financial Statements" shall have the meaning set forth in
Section 3.19 hereof.
"FIRPTA" shall have the meaning set forth in Section 3.22(c)
hereof.
"Floorplan Certificates" means Receivables from Loans made for
the floorplan of manufactured homes and vehicle inventory at manufactured home
dealerships.
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"GAAP" means United States generally accepted accounting
principles consistently applied.
"GE" shall have the meaning set forth in Section 2.1(a)(iv)
hereof.
"GE Approved Agreement" shall have the meaning set forth in
Section 2.1(a)(iv) hereof.
"GE Assumed Liabilities" means the "Assumed Liabilities" as
defined in the GE Approved Agreement.
"GE Condition" shall have the meaning set forth in Section
2.1(a)(iv) hereof.
"GE IT Employees" shall have the meaning set forth in Section
5.10(a)(iv) hereof.
"GE Purchased Assets" means the "Purchased Assets" as defined
in the GE Approved Agreement.
"GE Sale Order" means the "Sale Order" as in the GE Approved
Agreement.
"Goldman" means Xxxxxxx Sachs Credit Partners, L.P.
"Goldman Commitment Letter" means the Commitment Letter, dated
February 26, 2003, between Goldman and the Company.
"Goldman Credit Agreement" means the Secured Super-Priority
Debtor in Possession Credit Agreement, among the Company, as debtor and debtor
in possession, as borrower, and the subsidiaries of the borrower party thereto,
in certain cases as debtors and debtors in possession, as subsidiary guarantors,
and Conseco Finance Credit Corp, as debtor and debtor in possession, and the
lenders from time to time party thereto and Goldman, as administrative agent and
loan agent attached as an exhibit to the Motion For Entry of a Final Order: (I)
Authorizing CFC Debtors In Possession to Enter Into Post-Petition Credit
Agreement Pursuant to Section 364 of the Bankruptcy Code, (II) Authorizing Use
of Cash Collateral Pursuant to Section 363 of the Bankruptcy Code, (III)
Granting Adequate Protection Pursuant to Sections 363 and 364 of the Bankruptcy
Code, and (IV) Approving the Tax Indemnity Obligations of Conseco, Inc.
hereunder filed with the Bankruptcy Court on March 4, 2003.
"Goldman Expense Reimbursement" means the payment of $5
million for expenses incurred prior to February 26, 2003 to the post-petition
agent and post-petition lenders associated with the Goldman Credit Agreement.
"Goldman Final DIP Order" means the Final DIP Order as defined
in the Goldman Credit Agreement.
"Goldman Interim Commitment Fee" means the payment, pursuant
to the terms of the Goldman Commitment Letter, of $3.75 million to the
post-petition agent and post-petition lenders as provided for in Section
2.10(b)(i) of the Goldman Credit Agreement.
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"Goldman Interim Order" means the order of the Bankruptcy
Court entered on February 26, 2003 (a) authorizing the Goldman Commitment
Letter, the Goldman Expense Reimbursement and the Goldman Interim Commitment
Fee; (b) declaring that the Expense Reimbursement shall not be subject to the
approval of the Bankruptcy Court and that no recipient thereof shall be required
to file any fee application associated therewith; and (c) approving the payment,
as an administrative expense, and seniority of the Goldman Expense Reimbursement
and Goldman Interim Commitment Fee with respect to any and all other
administrative expenses, except with respect to those similar claims previously
granted by the Bankruptcy Court.
"Governmental Authority" means any United States federal,
state or local or any foreign government, governmental regulatory or
administrative authority, agency or commission or any court, tribunal or
judicial or arbitral body.
"Grantor Trust" means a fixed investment trust, as defined in
Section 301.7701-4(c) of the Treasury Regulations or any entity or arrangement
that has purported to be such a fixed investment trust, irrespective of whether
such entity or arrangement qualifies as a fixed investment trust under Section
301.7701-4(c) of the Treasury Regulations.
"Green Tree Retail Services Bank" means Green Tree Retail
Services Bank, Inc., a South Dakota chartered limited purpose credit card bank,
and its wholly-owned subsidiaries.
"GTF Contracts" shall have the meaning set forth in Section
3.34 hereof.
"GTS Contracts" shall have the meaning set forth in Section
3.35 hereof.
"Guarantee Fees" means the rights of a Seller to receive
payments from any REMIC or other entity created to effect a Securitization on
account of a guarantee given by the Seller with respect to one or more classes
of securities issued in such Securitization.
"Guarantee Reimbursement Rights" means any and all claims the
Sellers may have to be reimbursed for payments made by any of them pursuant to
guarantees given by the Sellers with respect to any classes of securities issued
in a Securitization.
"Guarantees" means any and all obligations relating to
guarantees, letters of credit, support agreements, bonds and other credit
assurances or supports of a comparable nature of any CFC Party.
"Hazardous Substances" means any substance whether solid,
liquid, gaseous or any combination of the foregoing which is listed, defined or
regulated pursuant to any Environmental Law.
"HE Business" means the home equity loan business of the CFC
Parties, excluding securities taken back or retained by the Company or any
Subsidiary in a Securitization.
"HELOC" means all revolving, variable rate mortgage loans
secured by first or second liens on single family residential real property
(including, without limitation, condominiums and planned unit developments), and
the related promissory notes or other
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evidences of indebtedness, together with any and all rights, benefits,
collateral, payments, recoveries and proceeds arising therefrom or in connection
therewith.
"HI Business" means the home improvement business of the CFC
Parties, excluding securities taken back or retained by the Company or any
Subsidiary in a Securitization.
"HI Origination Business" means the home improvement
origination business of the CFC Parties, excluding securities taken back or
retained by the Company or any Subsidiary in a Securitization.
"Home Equity Loans" means all fixed rate mortgage loans
secured by first, second or third liens on single family residential real
property (including, without limitation, condominiums and planned unit
developments), including, without limitation, any such high loan-to-value
mortgage loans, and the related promissory notes or other evidences of
indebtedness, together with any and all rights, benefits, collateral, payments,
recoveries and proceeds arising therefrom or in connection therewith.
"Home Improvement Loans" means all first, second or third lien
or unsecured home improvement retail installment contracts, and the related
promissory notes or other evidences of indebtedness, whether insured or
uninsured, and the related promissory notes or other evidences of indebtedness,
together with any and all rights, benefits, collateral, payments, recoveries and
proceeds arising therefrom or in connection therewith.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended, and the regulations related thereto.
"Income Tax" means all federal, state, local, or foreign Taxes
based upon, measured by, or calculated with respect to (i) gross or net income
or gross or net receipts or profits (including, but not limited to, any capital
gains, minimum taxes and any Taxes on items of tax preference, but not including
sales, use, goods and services, real or personal property transfer or other
similar Taxes); (ii) multiple bases (including, but not limited to, corporate
franchise, doing business or occupation Taxes) if one or more of the bases upon
which such Tax may be based upon, measured, or calculated with respect to, is
described in clause (i); or (iii) withholding taxes, measured by, or calculated
with respect to, any payments or distributions (other than wages).
"Income Tax Return" means any return, declaration, report,
claim for refund, or information return, amended return or statement relating to
Income Taxes, including any schedule or attachment thereto.
"Incremental Liabilities" shall have the meaning set forth in
Section 2.1(b) hereof.
"Indemnified Parties" shall have the meaning set forth in
Section 9.2(b) hereof.
"Indemnifying Party" means a party from whom indemnification
is sought.
"Indemnity Deductible" shall have the meaning set forth in
Section 9.3(a) hereof.
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"Insurance Approvals" shall have the meaning set forth in
Section 5.26(a) hereof.
"Insurance Assets" means the assets, properties, Contracts
(other than Excluded Contracts) and rights owned or primarily used or held for
use in the operation of the Insurance Business, including, without limitation,
all expirations, receivables and prepaid amounts relating thereto.
"Insurance Budget" shall have the meaning set forth in Section
5.26(c) hereof.
"Insurance Business" means the insurance agency assets and
businesses referred to in Section 2.1(a) of the applicable Business Schedules.
"Insurance Profits" shall have the meaning set forth in
Section 5.26(d) hereof.
"Insurance Subsidiaries" means Conseco Agency of Alabama,
Inc., Conseco Agency of Kentucky, Inc., Xxxx-Xxxx General Agency, Inc., Conseco
Agency, Inc., Conseco Agency of New York, Inc., Conseco Agency of Nevada, Inc.,
Conseco Agency Reinsurance Limited and Convergent Lending Services, LLC.
"Insurance Policies" means those policies of insurance which
the CFC Parties maintain with respect to their assets and operations.
"Intellectual Property" means all of the following in any
jurisdiction throughout the world: (a) patents, patent applications and patent
disclosures including re-issues, continuations, divisions,
continuations-in-part, renewals and extensions; (b) trademarks, service marks,
trade dress, trade names, corporate names, logos and slogans (and all
translations, adaptations, derivations and combinations of the foregoing) and
Internet domain names, together with all goodwill associated with each of the
foregoing; (c) copyrights and copyrightable works; (d) registrations and
applications for any of the foregoing; (e) trade secrets, confidential
information, know-how, processes, technology and inventions; (f) computer
software, hardware and systems (including, without limitation, source code,
executable code, data, databases and documentation); and (g) all other
intellectual property.
"Intellectual Property Assignment Agreements" means the
Trademark Assignment Agreement and Domain Name Transfer Agreement in customary
form as reasonably agreed by the Parties.
"Interim 9019 Order" means an order of the Bankruptcy Court
authorizing and approving, on an interim basis pending a final hearing on notice
to interested parties, a settlement pursuant to which the MH Servicing Fees are
increased to 1.25% and accorded the level of priority that would be accorded to
a third party successor servicer under the cash flow waterfall provisions of the
MH Servicing Contracts (except, in the case of securitization trusts for which
principal and interest insurance is in force, in which cases the MH Servicing
Fees will be paid in the highest priority that will not adversely affect the
continuation in force of such insurance), such order to be satisfactory in form
and substance to the Buyer.
"Investors" means X.X. Xxxxxxx I L.P., a Delaware limited
liability company, together with its Affiliates, and Fortress Investment Trust
II, a Delaware limited liability
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company, together with its Affiliates, Cerberus Capital Management, L.P., a
limited partnership, together with its Affiliates, and such co-investors, if
any, as may invest in the Buyer.
"IO Regular Interests" means the REMIC Regular Interests
listed on the Residuals Schedule under the caption, "IO Regular Interests".
"Junior P&I Regular Interests" means the REMIC Regular
Interests listed on the Residuals Schedule under the caption "Junior P&I Regular
Interests".
"JV Arrangements" shall have the meaning set forth in Section
5.10(a)(ii) hereof.
"Knowledge" means, with respect to the Sellers, the knowledge
of Xxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxx, Xxxxx X. Xxxxx,
Xxxxxxx X. Xxxxxxx, Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxxxxx, Xxxxxx Xxxxxxx and Xxxx
Xxxxxxx.
"Laws" means all statutes, rules, regulations, codes,
injunctions, judgments, writs, orders, decrees, rulings, constitutions,
ordinances, common laws, standards, limitations, compliance schedules, written
directions, requests or treaties, whether legislatively, judicially,
administratively or otherwise promulgated, of any Governmental Authority.
"Leased Premises" means real property leased by the Sellers as
the tenant thereof pursuant to the Assumed Leases.
"Xxxxxx Back-Up Security Agreement" means the Back-Up Security
Agreement, dated as of January 30, 2002, among the Company, Conseco Finance
Vendor Services Corporation, Green Tree Titling Limited Partnership I, Green
Tree Titling Limited Partnership II, Green Tree Finance Corp.-Five, Conseco
Finance Leasing Trust, Xxxxxx Commercial Paper Inc. and U.S. Bank, as custodian.
"Xxxxxx Debt Amount" means, as of any date, the sum, without
duplication, of (a) the Indebtedness (as defined in the Xxxxxx Residuals
Facility), plus, (b) the Additional Xxxxxx Debt, plus, (c) an amount equal to
the unreimbursed out-of-pocket expenses incurred by Xxxxxx Brothers Holdings
Inc. and its Affiliates in connection with the transactions contemplated by this
Agreement and the Xxxxxx Facilities, but not in excess of $3 million, in each
case as of such date. Section 3.20(c) sets forth the Xxxxxx Debt Amount as of
the close of business on March 6, 2003.
"Xxxxxx Documents" means the Xxxxxx Facilities, the Xxxxxx
Back-Up Security Agreement, the Xxxxxx Forbearance Agreement, the Xxxxxx
Umbrella Agreement and the Contract evidencing the Additional Xxxxxx Debt.
"Xxxxxx Facilities" means, collectively, the Xxxxxx Residuals
Facility and the Xxxxxx Warehouse Facility.
"Xxxxxx Forbearance Agreement" means the Amended and Restated
Forbearance Agreement, dated as of October 9, 2002, among the Company, Green
Tree Finance Corp.-Five, Green Tree Residual Finance Corp. I, Xxxxxx Commercial
Paper, Inc. and Xxxxxx Brothers Inc., as amended by the First Amendment to
Amended and Restated Forbearance Agreement,
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dated as of November 29, 2002, as the same may be amended in accordance with the
terms thereof and of this Agreement.
"Xxxxxx Residuals Facility" means (a) the Master Repurchase
Agreement and Annex to Master Repurchase Agreement Supplemental Terms and
Conditions, each dated as of September 29, 1999, between Green Tree Residual
Finance Corp. I and Xxxxxx Brothers, Inc., and as amended by the amendments
thereto dated as of September 22, 2000, January 30, 2002 and April 30, 2002 and
(b) the Asset Assignment Agreement, dated as of February 13, 1998, between Green
Tree Residual Finance Corp. I and Xxxxxx XXX Inc., as assignee of Xxxxxx
Commercial Paper Inc., and as amended by the amendments thereto dated as of June
23, 1998, February 23, 2000, May 10, 2000, August 1, 2000, September 22, 2000,
September 28, 2001, January 30, 2002, April 30, 2002 and October 9, 2002, and as
each of the same may be further amended in accordance with the terms thereof and
of this Agreement.
"Xxxxxx Umbrella Agreement" means the Amended and Restated
Agreement, dated as of January 30, 2002, among the Company, the Parent, CIHC,
Incorporated, Green Tree Residual Finance Corp. I, Green Tree Finance Corp.-Five
and Xxxxxx Brothers Holdings Inc., as the same may be further amended in
accordance with the terms thereof and of this Agreement.
"Xxxxxx Warehouse Facility" means the Second Amended and
Restated Master Repurchase Agreement, dated as of January 30, 2002, between
Xxxxxx Commercial Paper, Inc. and Green Tree Finance Corp.-Five, as amended by
the amendments thereto dated as of April 30, 2002, August 12, 2002 and October
9, 2002, and as the same may be further amended in accordance with the terms
thereof and of this Agreement.
"Liability" means any liability or obligation whether known or
unknown, whether asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether matured or unmatured, whether liquidated or
unliquidated, whether incurred or consequential and whether due or to become
due, including any liability for Taxes or any other liability arising out of
applicable Law.
"Lien" means any mortgage, deed to secured debt or deed of
trust, pledge, security interest, encumbrance, claim, Tax, equitable interest,
negative pledge, lien or charge of any kind (including, without limitation, any
conditional sale or other title retention agreement or lease in the nature
thereof) or any agreement to file any of the foregoing, any sale of receivables
with recourse against the Sellers or any of their Affiliates, any filing or
agreement to file a financing statement as debtor under the Uniform Commercial
Code or any similar statute and all claims (including, but not limited to, all
"claims" within the meaning of section 101(5) of the Bankruptcy Code).
"Loan and IT Services" shall have the meaning set forth in
Section 5.33 hereof.
"Loans" shall mean all loans, or other extensions of credit,
either purchased by a CFC Party from Third Parties or pursuant to which the CFC
Parties have lent money, in each case, which are owned by the CFC Parties or
subject to repurchase by or similar Contract of a CFC Party, including, but not
limited to, (a) loans which have been partially or fully charged off, (b)
interests in loan participations and assignments, (c) legally binding
commitments and
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obligations to extend credit (including any unfunded or partially funded
revolving loans, lines of credit or similar arrangements), (d) retail
installment contracts, (e) Home Equity Loans and HELOCs, (f) Home Improvement
Loans, (g) MH Contracts and (h) Other Loans, in each case, which are owned by
the CFC Parties or subject to repurchase by or similar Contract of a CFC Party;
provided that for purposes of this Agreement, a Securitized Loan shall not be
deemed a "Loan".
"Loss" means any loss, Liability, demand, claim, action, cause
of action, cost, damage, deficiency, Tax, penalty, fine or expense, whether or
not arising out of third party claims (including, without limitation, interest,
penalties, reasonable attorneys' fees and expenses, court costs and all amounts
paid in investigation, defense or settlement of any of the foregoing); provided
however that Losses shall not include consequential (such as loss of business or
profits), incidental, special or punitive losses, damages, costs, expenses or
Liabilities.
"Material Adverse Effect" means (a) any change or effect that
is materially adverse to the business, financial condition, property,
operations, net income or assets of the Purchased Businesses (excluding the
Excluded Assets and Excluded Liabilities) taken as a whole; or (b) any material
adverse effect that would prevent or materially impair the ability of the
Sellers to consummate the transactions contemplated by this Agreement or the
Transaction Documents; provided that none of the following shall be deemed to
constitute, and none of the following shall be taken into account in determining
whether there has been, a Material Adverse Effect: (i) any adverse change,
event, development or effect arising from or relating to (A) general business or
economic conditions, including such conditions related to the businesses of the
Sellers and their Subsidiaries, except for such changes, events, developments or
effects which disproportionately impact the Purchased Businesses, or (B)
national or international political or social conditions, including the
engagement by the United States in hostilities, whether or not pursuant to the
declaration of a national emergency or war, or the occurrence of any military or
terrorist attack upon the United States, except for such changes, events,
developments or effects which disproportionately impact the Purchased
Businesses, (ii) the filing of the Chapter 11 Case and the Parent's filing of
its case under chapter 11 of the Bankruptcy Code, (iii) adverse changes in the
value of the Residual Assets related to the MH Business as a result of a
restructuring of the MH Servicing Business or the inability to consummate such a
restructuring and (iv) an Amortization Event under the Private Label Credit Card
Master Note Trust Documents unless it results in the occurrence of an event of
default under the DIP Loan.
"Material Agreement" shall have the meaning set forth in
Section 3.11 hereof.
"MESA Collateral" means the certificates representing
beneficial ownership of a Grantor Trust that holds certain REMIC regular
interests and certain other debt obligations and related assets.
"MESA Equity" means the ownership interest in the Mesa
Issuers.
"MESA Issuers" means the MESA 2001-4, 2002-1, 2002-3 and
2002-4 Global Issuance Company entities (exempted companies) created under the
laws of the Cayman Islands that are the issuers of the MESA Notes and the owners
of the MESA Collateral.
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"MESA Notes" means the debt instruments issued by the MESA
Issuers in the four transactions designated and identified as the issuance of
(a) US $73,866,000 Home Loan-Backed Notes, Series 2001-4 notes by MESA 2001-4
Global Issuance Company, pursuant to the Indenture, dated as of July 1, 2001,
with Xxxxx Fargo, Indenture Trustee; (b) US $344,864,000 Home Loan Asset-Backed
Notes Series 2002-1 notes by MESA 2002-1 Global Issuance Company, pursuant to
the Indenture, dated as of February 1, 2002, with Xxxxx Fargo, Indenture
Trustee; (c) US $180,000,000 Home Loan Asset-Backed Notes Series 2002-2 notes by
MESA 2002-2 Global Issuance Company, pursuant to the Indenture, dated as of
September 1, 2002, with Deutsche Bank, Indenture Trustee; and (d) US
$145,252,000 Home Loan Asset-Backed Notes Series 2002-3 notes by MESA 2002-3
Global Issuance Company, dated as of October 1, 2002, with Deutsche Bank,
Indenture Trustee.
"MH Business" means the manufactured housing business of the
CFC Parties, excluding securities taken back or retained by the Company or any
Subsidiary in a Securitization.
"MH Community Loans" means Loans made by the CFC Parties to
finance the construction of manufactured homes, parks and communities.
"MH Contracts" means all retail installment sales contracts
and Loan agreements for manufactured housing, including, without limitation,
retail installment sales contracts and Loan agreements for manufactured housing
that has been repossessed and refinanced.
"MH Servicing Assets" means (a) the rights of the servicer
under the MH Servicing Contracts; (b) with respect to each Loan and Securitized
Loan subject to a MH Servicing Contract, the escrow payments (including, without
limitation, tax and insurance escrows) or other similar payments with respect to
such Loan and any amounts actually collected and held by the CFC Parties with
respect thereto; (c) all accounts and other rights to payment related to any of
the MH Servicing Rights or MH Servicing Contracts; and (d) any and all
documents, files, records, servicing files, servicing documents, servicing
records, data tapes, computer records or other information pertaining to the
servicing of each Loan or pertaining to the past, present or prospective
servicing of such Loan, in each case that is subject to a MH Servicing Contract.
"MH Servicing Business" means all Servicing Rights of a CFC
Party relating to the MH Business and all assets of the CFC Parties used in the
conduct of such business, including, without limitation, all cash, deposits,
receivables and Prepaid Expenses relating thereto.
"MH Servicing Business Schedule" means the disclosure schedule
attached hereto containing information relating to the MH Servicing Business.
"MH Servicing Contracts" means collectively, (a) each of the
Contracts providing for loan servicing in connection with a Securitization or
other transaction that is identified in the MH Servicing Business Schedule under
the caption, "List of MH Servicing Contracts", and (b) all other Contracts or
documents creating, defining or evidencing the right of any CFC Party
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to service loans including any pooling and servicing agreement and purchase or
sale agreement pertaining to any Loan or Securitized Loan.
"MH Servicing Fees" means all servicing fees payable from time
to time to the Company and any of the Selling Subsidiaries with respect to the
MH Servicing Business.
"MH Servicing Rights" means the right to act as servicer or
successor servicer under each of the MH Servicing Contracts and all rights,
privileges and benefits of being servicer or successor servicer under each MH
Servicing Contract or that are incidental thereto (but not including any rights
included in the Insurance Business) including without limitation any and all of
the following: (a) any and all rights to service such Loan or any Securitized
Loan; (b) all servicing fees and other fees, compensation or moneys payable to
the servicer under the MH Servicing Contracts and (c) any late fees, investment
income or similar payments or penalties (including, without limitation,
prepayment penalties) with respect to such Loan or Securitized Loan payable to
the servicer under the MH Servicing Contracts.
"Mill Creek Bank" means Mill Creek Bank, Inc., a Utah
industrial loan corporation, and its wholly-owned Subsidiaries.
"Mill Creek Transition Obligations" shall have the meaning set
forth in the definition of "Sale Order" contained herein.
"NIMS Collateral" means any Guaranty Fees, REMIC Regular
Interests and REMIC Residual Interests, and any other related assets, pledged by
the NIMS Issuer to secure the NIMS Notes.
"NIMS Equity" means the ownership interest in the NIMS Issuer.
"NIMS I" shall have the meaning set forth in Section
2.3(b)(viii) hereof.
"NIMS II" shall have the meaning set forth in Section
2.3(b)(viii) hereof.
"NIMS Issuer" means the NIMS Trust.
"NIMS Notes" means the Floating Rate Variable Funding Notes
dated September 28, 2001 issued by the NIMS Trust.
"NIMS Trust" means the trust created by the Trust Agreement,
dated as of September 1, 2001, among NIMS I, NIMS II and Wilmington Trust
Company as trustee, as the same may be amended in accordance with the terms
thereof and of this Agreement.
"9019 Order" means an order of the Bankruptcy Court
authorizing and approving a settlement pursuant to which the MH Servicing Fees
are increased to 1.25%, and accorded the level of priority that would be
accorded to a third party successor servicer under the cash flow waterfall
provisions of the MH Servicing Contracts (except, in the case of securitization
trusts for which principal and interest insurance is in force, in which cases
the MH Servicing Fees will be paid in the highest priority that will not
adversely affect the continuation in force of such insurance), such order to be
reasonably satisfactory in form and substance to the Buyer.
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"Non-MH Servicing Assets" means (a) the rights of the servicer
under the Non-MH Servicing Contracts; (b) with respect to each Loan and
Securitized Loan subject to a Non-MH Servicing Contract, the escrow payments
(including, without limitation, tax and insurance escrows) or other similar
payments with respect to such Loan and any amounts actually collected and held
by the CFC Parties with respect thereto; (c) all accounts and other rights to
payment related to any of the Non-MH Servicing Rights or Non-MH Servicing
Contracts; and (d) any and all documents, files, records, servicing files,
servicing documents, servicing records, data tapes, computer records or other
information pertaining to the servicing of each Loan or pertaining to the past,
present or prospective servicing of such Loan, in each case that is subject to a
Non-MH Servicing Contract.
"Non-MH Servicing Business" means all Servicing Rights of a
CFC Party relating to any business of the Company other than the MH Servicing
Business and all assets of the CFC Parties primarily used in the conduct of such
business, including, without limitation, all cash, deposits, receivables and
Prepaid Expenses relating thereto.
"Non-MH Servicing Contracts" means, collectively, (a) each of
the Contracts providing for loan servicing in connection with a Securitization
or other transaction which has been identified in Section 2.1(a) of the
applicable Business Schedules under the Caption, "List of Non-MH Servicing
Contracts" and (b) all other Contracts or documents creating, defining or
evidencing the right of any CFC Party to service loans including any pooling and
servicing agreement and purchase or sale agreement pertaining to any Loan or
Securitized Loan.
"Non-MH Servicing Fees" means all servicing fees payable from
time to time to the Company and any of the Selling Subsidiaries with respect to
the Non-MH Servicing Business.
"Non-MH Servicing Rights" means the right to act as servicer
or successor servicer under each of the Non-MH Servicing Contracts and all
rights, privileges and benefits of being servicer or successor servicer under
each Non-MH Servicing Contract or that are incidental thereto including without
limitation any and all of the following: (a) any and all rights to service such
Loan or any Securitized Loan; (b) all servicing fees and other fees,
compensation or moneys payable to the servicer under the Non-MH Servicing
Contracts; and (c) any late fees, investment income or similar payments or
penalties (including, without limitation, prepayment penalties) with respect to
such Loan or Securitized Loan payable to the servicer under the Non-MH Servicing
Contracts.
"Non-Transferred Insurance Asset" shall have the meaning set
forth in Section 5.26(a) hereof.
"Non-Transferred Insurance Business" shall have the meaning
set forth in Section 5.26(a) hereof.
"November 30 Balance Sheet" means the Company's consolidated
balance sheets as of November 30, 2002 set forth in Section 2.1(a) of the
Purchased Businesses Schedule.
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"Obligor" means, with respect to any Loan, the Person(s)
obligated to make payments with respect to such Loan, including, without
limitation, the applicable borrower, or any guarantor, co-signer, surety or
other obligor therefor.
"Order" means any decree, order, injunction, rule, judgment,
consent of or by any Governmental Authority.
"Organizational Documents" means certificates of
incorporation, by-laws, certificates of formation, limited liability company
operating agreements, limited liability partnership agreements, partnership or
limited partnership agreements or other formation or governing documents of a
particular entity.
"Original Agreement" shall have the meaning set forth in the
Recitals.
"Other Assets" means assets of Green Tree Retail Services Bank
specified in Section 2.1(a) of the Business Schedules.
"Other Loans" means, collectively, all (a) Vehicle Leases, (b)
Consumer Loans, and (c) other consumer loans, and (in each case) the related
promissory notes or other evidences of indebtedness, together with any and all
rights, benefits, collateral, payments, recoveries and proceeds arising
therefrom or in connection therewith, including the Servicing Rights related to
such loans.
"Other Securitization Entity" shall have the meaning set forth
in Section 3.22(l)(i) hereof.
"Other Transferred Intellectual Property" means, other than
the Transferred Trademarks and the Transferred Intellectual Property Agreements,
all Intellectual Property owned by the Sellers and primarily used or held for
use in the Purchased Businesses.
"Owned Real Premises" means real property used in the
Purchased Businesses as set forth in Section 3.8(a) of the applicable Business
Schedules, title to which is held by the Sellers.
"Owned Real Premises Leases" means real property leases,
subleases, licenses or other Contracts set forth in Section 3.8(a) of the
applicable Business Schedules pursuant to which a Seller leases all or any part
of the Owned Real Premises as the landlord thereunder.
"Parent" means Conseco, Inc., an Indiana corporation.
"Parties" shall have the meaning set forth in the Recitals.
"Party" shall have the meaning set forth in the Recitals.
"Permitted Liens" shall mean: (a) statutory liens for current
Taxes or other governmental charges with respect to the assets of a CFC Party
not yet due and payable or which may thereafter be paid without penalty or the
amount or validity of which is being contested in good faith by appropriate
proceedings by the CFC Party and for which appropriate reserves have
-18-
been established on the CFC Party's books and records in accordance with GAAP,
(b) mechanic's, carrier's, worker's, repairer's and similar statutory liens
arising or incurred in the ordinary course of business with respect to a
Liability which is not yet due or delinquent; (c) zoning, entitlement, building
and other land use regulations imposed by Governmental Authority having
jurisdiction over the Owned Real Premises and Leased Premises which are not
violated by the current use and operation of the Owned Real Premises and Leased
Premises; (d) covenants, conditions, restrictions, easements and other similar
matters of record affecting title and other irregularities of title to the
Purchased Assets which do not, individually or in the aggregate, materially
impair the present value, occupancy or continued use of the Purchased Assets for
the purposes for which each is currently used in the respective Purchased
Business; and (e) the Owned Real Premises Leases.
"Person" means an individual, a partnership, a limited
liability company, a corporation, a cooperative, an association, a joint stock
company, a trust, a joint venture, an unincorporated organization or a
Governmental Authority.
"Petition Date" shall have the meaning set forth in Section
5.8 hereof.
"PL Business" means the Company's private label credit card
business, including all business conducted by the Banks, excluding securities
taken back or retained by the Company or any Subsidiary in a Securitization.
"Post-Closing Tax Period" means (a) any taxable year or period
beginning after the Closing Date, and (b) for any Straddle Period, the portion
of such period beginning after the Closing Date.
"Post-Signing Balance Sheets" shall have the meaning set forth
in Section 5.27 hereof.
"Pre-Closing Period" shall have the meaning set forth in
Section 2.1(a) hereof.
"Pre-Closing Tax Period" means (a) any taxable year or period
ending on or before the Closing Date and (b) for any Straddle Period, the
portion of such period ending on and including the Closing Date.
"Prepaid Expenses" means operating costs or other expenses
incurred by the CFC Parties with respect to the Purchased Businesses and
Purchased Assets after the Closing Date which were paid by the Sellers, any
Subsidiary of Sellers or Mill Creek Bank on or prior to the Closing Date,
including any real or personal property, use or other Taxes (other than Income
Taxes, to the extent attributable to periods or portions thereof beginning after
the Closing Date).
"Private Label Credit Card Master Trust Certificates" means,
to the extent outstanding on the Closing Date, (a) the Conseco Private Label
Credit Card Master Note Trust 2001-A certificate and (b) the Conseco Private
Label Credit Card Master Note Trust 2001-B certificate.
"Private Label Credit Card Master Note Trust Documents" means
the (a) Conseco Private Label Credit Card Master Note Trust Amended and Restated
Trust Agreement, dated as
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of May 1, 2001, between Mill Creek Bank, as transferor, Conseco Finance Credit
Card Funding Corp., as transferor, and Wilmington Trust Company, as owner
trustee; (b) Master Indenture, dated as of May 1, 2001, by and among Conseco
Private Label Credit Card Master Note Trust, U.S. Bank, as indenture trustee and
securities intermediary, and Mill Creek Bank, as servicer; (c) Series 2001-A
Indenture Supplement, dated as of May 1, 2001, by and among Conseco Private
Label Credit Card Master Note Trust, U.S. Bank, as indenture trustee and
securities intermediary, and Mill Creek Bank, as servicer; (d) Series 2001-B
Indenture Supplement, dated as of May 1, 2001, by and among Conseco Private
Label Credit Card Master Note Trust, U.S. Bank, as indenture trustee and
securities intermediary, and Mill Creek Bank, as servicer; and (e) Class A Note
Purchase Agreement, dated as of May 31, 2001, by and among Conseco Private Label
Credit Card Master Note Trust, issuer, Mill Creek Bank, transferor and servicer,
Conseco Finance Credit Funding Corp., individually and as a transferor, Green
Tree Retail Services Bank, individually and as an account owner, the Class A
Purchasers, the agents for the Purchaser Groups, from time to time parties
thereto, and Credit Suisse First Boston, administrative agent for the Class A
Purchasers, and as amended by the amendments thereto dated as of May 30, 2002
and September 30, 2002.
"Purchase Price" shall have the meaning set forth in Section
2.4(a) hereof.
"Purchased Assets" means assets, properties, Contracts (other
than Excluded Contracts) and rights owned or primarily used or held for use in
the operation of the Purchased Businesses of whatever kind and nature, real or
personal, tangible or intangible, owned, leased, licensed, used or held for use
or license, wherever located, including, without limitation, (a) all Servicing
Rights (b) all of the outstanding capital stock of Mill Creek Bank, (c) the
Other Assets, (d) the Residual Assets, (e) the Assumed Agreements, (f) the
Assigned Receivables and related Loans, (g) the Servicing Assets, (h) the
Servicing Contracts to the limited extent the Buyer will act as servicer or
successor servicer thereunder, (i) all collateral securing the Xxxxxx
Facilities, (j) those other assets, properties, Contracts and rights set forth
on Section 2.1(a) of the applicable Business Schedules, (k) the Floorplan
Certificates, (l) the MH Community Loans, (m) the Insurance Assets, and (n) the
Private Label Credit Card Master Trust Certificates, excluding, in each case,
Excluded Assets. The foregoing is subject to the provisions of Section 2.1(a).
"Purchased Businesses" means the HE Business, the CL Business,
the HI Business, the PL Business, the Non-MH Servicing Business, the MH
Servicing Business and the Insurance Business, but not including any Excluded
Business. The foregoing is subject to the provisions of Section 2.1(a).
"Purchased Businesses Schedule" means the schedule by that
name annexed to this Agreement.
"Receivables" means all financial obligations arising under
the Loans, including, but not limited to, any amounts owing for the payment of
goods and services, periodic finance charges (including unearned and billed),
Accrued and Unpaid Interest, late charges, bank advances and any other fee,
expense or charge of every nature, kind and description whatsoever, including
any amount owed by the Sellers to the holder of the account thereon as a credit
balance.
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"Records" means books and records relating to the Purchased
Businesses which are in the possession of a CFC Party, including (a) customer
and vendor lists, correspondence and files, (b) advertising, marketing and sales
materials, (c) personnel files of the Transferred Employees, and (d) financial
records and statements, but specifically excluding any such other property which
is listed as an Excluded Asset.
"RECS" shall have the meaning set forth in Section 3.31
hereof.
"RECS Contracts" shall have the meaning set forth in Section
3.31 hereof.
"Regulators" shall have the meaning set forth in Section 5.22
hereof.
"REMIC" means a real estate mortgage investment conduit under
Section 860D(a) of the Tax Code or any other entity or arrangement that has
purported to be a real estate mortgage investment conduit that is a REMIC under
Section 860D(a) of the Tax Code irrespective of whether such entity or
arrangement qualifies as a REMIC under Section 860D(a) of the Tax Code.
"REMIC Regular Interest" means a regular interest, as defined
in Section 860G(a)(1) of the Tax Code, in a REMIC or any interest that has been
represented or otherwise held out to be a regular interest in a REMIC
irrespective of whether such interest qualifies as a regular interest in a REMIC
as defined in Section 860G(a)(1) of the Tax Code.
"REMIC Residual Interest" means a residual interest, as
defined in Section 860G(a)(2) of the Tax Code, in a REMIC or any interest that
has been represented or otherwise held out to be a residual interest in a REMIC
irrespective of whether such interest qualifies as a residual interest in a
REMIC as defined in Section 860G(a)(2) of the Tax Code.
"Residual Assets" means the Junior P&I Regular Interests, the
IO Regular Interests, the REMIC Residual Interests listed on the Residuals
Schedule under the caption, "Residual Interests", the residuals and retained
interests listed on the Residuals Schedule under the caption, "Credit Cards",
all other assets listed on the Residuals Schedule including the Cleanup Calls,
the Guarantee Fees, the Non-MH Servicing Fees, the Guarantee Reimbursement
Rights, the Servicer Advance Reimbursement Rights and any other interest,
including equity, retained or residual interests, (whether certificated or
uncertificated) issued or created by or in connection with a Securitization or
similar transaction that the Company or any other CFC Party may hold or own
(whether or not pledged to another party or sold under a repurchase agreement),
including, without limitation, the NIMS Equity or NIMS Collateral and the MESA
Equity or the MESA Collateral, and all other cash or other proceeds and all
other rights arising from certificated or uncertificated securities, interests
or rights purchased or retained by a CFC Party, including, without limitation,
rights to prepayment penalties or charges, late fees, investment income and
other charges not required to be paid to the servicer, any servicing,
interest-only or other payment right (whether certificated or uncertificated)
arising in connection with a Xxxxxx Xxx Pool, including, without limitation, the
pools identified on the Xxxxxx Mae Pool List included in Attachment A to Section
3.26 of the Purchased Businesses Schedule and repurchase options or similar
rights arising in connection with a Securitization.
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"Residuals Schedule" means the disclosure schedule attached
hereto containing information relating to the Residual Assets.
"Rule" or "Rules" means the Federal Rules of Bankruptcy
Procedure.
"Sale Order" means the order of the Bankruptcy Court: (a)
finding that the results of the auction conducted by the Sellers are authorized
and approved; (b) authorizing and approving the sale of the Purchased Assets to
the Buyer under the terms of this Agreement free and clear of any Liens, claims,
or other encumbrances of any kind or nature pursuant to sections 363 and 365 of
the Bankruptcy Code (other than Permitted Liens and Assumed Liabilities); (c)
providing that the transfers of the Purchased Assets to the Buyer are legal,
valid and effective transfers that will vest the Buyer with good and marketable
title to the Purchased Assets; (d) finding that the Buyer is entitled to the
protections provided to a good faith purchaser under section 363(m) of the
Bankruptcy Code; (e) finding that the consideration provided by the Buyer for
the Purchased Assets constitutes reasonably equivalent value and fair
consideration under the Bankruptcy Code and applicable non-bankruptcy law; (f)
finding that the form and manner of notice of the sale of the Purchased Assets
and the opportunity to submit higher and better bids for the Purchased Assets
was adequate and appropriate; (g) providing that except as expressly permitted
by this Agreement, all Persons and entities holding interests or claims of any
kind and nature with respect to the Purchased Assets shall be enjoined from
asserting, prosecuting or otherwise pursuing such interests and claims of any
kind and nature against the Buyer, its successors or assigns, or the Purchased
Assets; (h) providing that, with respect to any agreements assumed by the
Sellers and assigned to the Buyer pursuant to section 365 of the Bankruptcy
Code, that the Buyer shall have no liability for any obligations first arising
prior to the date of such assignment; (i) providing that neither the Buyer nor
its Affiliates, successors or assigns will be deemed, as a result of any action
taken in connection with the purchase of the Purchased Assets, to: (i) be a
successor to any of the Sellers; (ii) have, de facto or otherwise, merged with
or into all or any of the Sellers; or (iii) be a continuation or substantial
continuation of any of the Sellers or any enterprise of any of the Sellers; (j)
finding that the Buyer and the Sellers did not engage in any conduct that would
allow the transactions contemplated by this Agreement to be set aside pursuant
to section 363(n) of the Bankruptcy Code; (k) providing that the Sellers shall
execute, deliver, perform under, consummate and implement this Agreement, the
Transaction Documents and all additional instruments and documents that may be
reasonably necessary or desirable to implement the foregoing; (l) providing that
the notice provided in connection with the sale motion and the assignment and
transfer of Purchased Assets free and clear of all Liens and Excluded
Liabilities (other than Permitted Liens) pursuant to this Agreement, complied
with sections 363 and 365 of the Bankruptcy Code, Rules 2002, 6004, 6006, 9014
of the Federal Rules of Bankruptcy Procedure and all other provisions of the
Federal Rules of Bankruptcy or the Local Bankruptcy Rules governing the
transactions that are the subject of the sale motion; (m) providing that the
provisions of Rules 6004(g) and 6006(d) of the Federal Rules of Bankruptcy
Procedure are waived and there will be no stay of the Sale Order under Rule
62(a) of the Federal Rules of Civil Procedure; (n) providing that the provisions
of the Sale Order are nonseverable and mutually dependent; (o) providing that
the Bankruptcy Court shall retain jurisdiction to interpret and enforce the
terms and provisions of this Agreement; (p) exempting the sale of the Purchased
Assets from the imposition and payment of any and all recording taxes, stamp
taxes, transfer taxes, or similar taxes pursuant to section 1146(c) of the
Bankruptcy Code; (q) providing that no Liability shall attach to or remain with
the Purchased Businesses on
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account of any Liability, including without limitation, a Tax Liability,
existing as of the Closing Date for which the Sellers are jointly and/or
severally liable with any of the CFC Parties; (r) providing that any Subject
Subsidiary or Subsidiary of a Subject Subsidiary acquired by the Buyer shall
have no Liability for any Tax of Parent or any present or former Subsidiary of
Parent by virtue of Treasury Regulation Section 1.1502-6 or any comparable
provision of state, local or foreign Law; (s) authorizing and approving that
certain letter agreement dated as of December 19, 2002, pursuant to which, among
other things, Parent has agreed to indemnify the Buyer and certain other parties
for tax obligations of Parent's Affiliated Group under Treasury Regulation
Section 1.1502-6 and certain other obligations; (t) providing that CIHC,
Incorporated shall be released from its guaranty obligations related to the
Xxxxxx Facilities; (u) confirming the installation of the Buyer (or its
appropriate Affiliate) as a successor servicer being distinct from and
independent of any CFC Party under, and in conformity with, all of the Servicing
Contracts included among the Purchased Assets and confirming the senior priority
of payment of the servicing fees payable thereunder to the Buyer or such
Affiliate as such successor servicer; (v) providing that the increase in the
servicing fees contemplated by Section 6.11(c) shall be effective; (w)
authorizing the arrangements described in Section 5.26; (x) authorizing and
directing the Sellers to pay any amounts owed by Sellers pursuant to Section
5.10(a)(ii) and Section 5.33 (the "Mill Creek Transition Obligations"), as and
when the Mill Creek Transition Obligations become due; and (y) providing that
the Mill Creek Transition Obligations shall constitute administrative expenses
of the Sellers' estates pursuant to Section 503(b)(1) of the Bankruptcy Code;
such Sale Order to be satisfactory to the Buyer in its sole and absolute
discretion.
"Section 338 Election" shall have the meaning set forth in
Section 5.1(i) hereof.
"Securitization" means any transaction in which the Company or
any of its Subsidiaries: (a) was the "sponsor", as defined in Section
1.860F-2(b)(1) of the Treasury Regulations, of a REMIC or has held itself out to
be the sponsor of a REMIC irrespective of whether it has met the requirements to
be a sponsor in a REMIC; (b) transferred Loans, other debt instruments or
interests therein to a Grantor Trust, either taking back or selling pass-through
certificates or other similar interests evidencing the ownership of such Grantor
Trust; (c) transferred Loans, REMIC Regular Interests, REMIC Residual Interests,
interests in a Grantor Trust or other assets to a NIMS Issuer or a MESA Issuer
or (d) transferred or pledged Loans either to secure an indebtedness of the
Company or any Selling Subsidiary or by way of a repurchase transaction.
"Securitization Documents" means all of the documents
governing the rights and obligations of the Company, the applicable Selling
Subsidiary, the issuer and the holders of securities issued in any
Securitization.
"Securitized Loan" shall mean all loans, or other extensions
of credit, either purchased by a CFC Party from Third Parties or pursuant to
which the CFC Parties have lent money, in each case, which are owned by the CFC
Parties or subject to repurchase by or similar Contract of a CFC Party,
including, but not limited to, (a) loans which have been partially or fully
charged off, (b) interests in loan participations and assignments, (c) legally
binding commitments and obligations to extend credit (including any unfunded or
partially funded revolving loans, lines of credit or similar arrangements), (d)
retail installment contracts, (e)
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Home Equity Loans and HELOCs, (f) Home Improvement Loans, (g) MH Contracts and
(h) Other Loans, in each case, which are owned by the CFC Parties or subject to
repurchase by or similar Contract of a CFC Party, in each case which are (I)
pledged by an entity or arrangement as collateral for a debt instrument issued
by such entity, (II) treated as sold by or through an entity or arrangement in
the form of pass-through certificates in a Grantor Trust or a REMIC or (III)
otherwise pledged, transferred or sold in a Securitization.
"Seller" shall have the meaning set forth in the Recitals.
"Seller Indemnified Parties" shall have the meaning set forth
in Section 9.2(b) hereof.
"Seller Liquidated Damages" shall have the meaning set forth
in Section 8.3 hereof.
"Sellers" shall have the meaning set forth in the Recitals.
"Selling Subsidiaries" shall have the meaning set forth in the
Recitals.
"Servicer Advance Facility" means the Indenture, dated as of
February 1, 2002, by and among Conseco Finance Advance Receivables Corp., as
issuer, U.S. Bank, as trustee, as verification agent and as paying agent, and
the Company, together with any successor entity, individually and as servicer of
the qualified trusts pursuant to which the Servicer Advance Facility Notes were
issued.
"Servicer Advance Facility Notes" means the Conseco Finance
Advance Receivables Backed Notes, Series 2002-A, dated as of February 1, 2002.
"Servicer Advance Reimbursement Rights" means any and all
claims any CFC Party may have to be reimbursed for advances made as servicer in
accordance with the Securitization Documents governing any Securitization.
"Servicing Assets" means, collectively, the MH Servicing
Assets and the Non-MH Servicing Assets.
"Servicing Contracts" means, collectively, the MH Servicing
Contracts and the Non-MH Servicing Contracts.
"Servicing Fees" means, collectively, the MH Servicing Fees
and the Non-MH Servicing Fees.
"Servicing Rights" means, collectively, the MH Servicing
Rights and the Non-MH Servicing Rights.
"Shares" shall have the meaning set forth in Section 2.1(b)
hereof.
"Specified Cure Payment" shall have the meaning set forth in
Section 2.7(b)(i) hereof.
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"SPEs" shall mean, collectively, Green Tree Residual Finance
Corp. I and Green Tree Finance Corp.-Five.
"State Banking Authority" shall have the meaning set forth in
Section 3.3 hereof.
"Statement" shall have the meaning set forth in Section 5.1(c)
hereof.
"Stock Sale" shall have the meaning set forth in Section
2.1(b) hereof.
"Straddle Period" shall mean any taxable year or period
beginning on or before and ending after the Closing Date.
"Subject Subsidiary" shall have the meaning set forth in
Section 2.1(b) hereof.
"Subject Subsidiary Owner" shall have the meaning set forth in
Section 2.1(b) hereof.
"Subsidiary" means, with respect to any Person, any
corporation, partnership, limited liability company, association or other
business entity of which (a) if a corporation, a majority of the total voting
power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a combination thereof,
or (b) if a partnership, limited liability company, association or other
business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination thereof.
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a partnership, limited liability company, association or
other business entity if such Person or Persons shall be allocated a majority of
partnership, limited liability company, association or other business entity
gains or losses or shall be or control the managing director or general partner
of such partnership, limited liability company, association or other business
entity.
"Support Employees" shall have the meaning set forth in
Section 5.10(a) hereof.
"Surveyors" shall have the meaning set forth in Section 5.20
hereof.
"Surveys" shall have the meaning set forth in Section 5.20
hereof.
"Tax" or "Taxes" means (a) any federal, state, local or
foreign income, gross receipts, capital gains, franchise, alternative or add-on
minimum, excess inclusion income, estimated, sales, use, goods and services,
transfer, registration, value added, excise, natural resources, severance,
stamp, occupation, premium, windfall profit, environmental, customs, duties,
real property, personal property, capital stock, social security, unemployment,
employment, disability, payroll, license, employee or other withholding,
contribution or other tax, of any kind whatsoever, including any interest,
penalties or additions to tax or additional amounts in respect of the foregoing;
(b) any Liability for Taxes as a transferee under a Contract indemnity; (c) any
Liability for Taxes under Treasury Regulation ss. 1.1502-6 or similar Law
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applicable in the case of a group that files on a consolidated, combined or
unitary basis; and (d) any applicable Liability for Taxes due to application of
bulk sale laws.
"Tax Code" means the Internal Revenue Code of 1986 as amended
from time to time.
"Tax Proceeding" shall mean any claim, examination, suit,
action, negotiation or proceeding, or other proposed change or adjustment by any
Tax authority involving Liability for Taxes.
"Tax Return" means any return, declaration, report, claim for
refund, information return, amended return or other documents (including any
related or supporting schedules, statements or information) filed or required to
be filed in connection with the determination, assessment or collection of Taxes
of any Person or the administration of any laws, regulations or administrative
requirements relating to any Taxes.
"Taxable Period" shall have the meaning set forth in Section
5.1(b) hereof.
"Terminated Employees" shall have the meaning set forth in
Section 5.32 hereof.
"Third Party" means any Person other than (a) the Parent, the
CFC Parties or any of their Affiliates and (b) the Buyer, the Investors and
their Affiliates.
"Third Party Claim" means any claim or the commencement of any
claim, action or proceeding made or brought by a Third Party.
"Title Commitments" shall have the meaning set forth in
Section 5.20 hereof.
"Title Company" shall have the meaning set forth in Section
5.20 hereof.
"Title Insurance Policies" shall have the meaning set forth in
Section 5.20 hereof.
"Transaction Documents" means this Agreement and any other
agreement, certificate, consent, waiver, document or instrument to be executed
and/or delivered at Closing, including, but not limited to, those agreements,
certificates, consents, waivers, documents and other instruments required to be
delivered by or on behalf of a Person under ARTICLE VI and ARTICLE VII herein,
as applicable.
"Transfer Date" shall have the meaning set forth in Section
5.26(b) hereof.
"Transferred Employees" shall have the meaning set forth in
Section 5.10(b) hereof.
"Transferred Intellectual Property" means the Transferred
Trademarks, Other Transferred Intellectual Property, and the Transferred
Intellectual Property Agreements, together with all income, royalties, damages,
and payments due or payable at the Closing or thereafter (including, without
limitation, damages and payments for past or future infringements or
misappropriations thereof), the right to xxx and recover for past infringements
or
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misappropriations thereof, any and all corresponding rights that, now or
hereafter, may be secured throughout the world.
"Transferred Intellectual Property Agreements" means all
licenses and other Intellectual Property agreements to which a Seller or Mill
Creek Bank is a party that are primarily used or held for use in the operation
or conduct of the Purchased Businesses, including the agreements set forth in
Section 3.12 of the Business Schedules.
"Transferred Trademarks" means all trademarks, service marks,
trade names, corporate names, logos and slogans and all registrations and
applications of the foregoing, owned by a Seller or Mill Creek Bank and
primarily for use in the operation or conduct of the Purchased Businesses
together with the goodwill associated therewith.
"Transition Services Agreement" shall have the meaning set
forth in Section 6.6 hereof.
"Treasury Regulation" means a regulation promulgated by the
Treasury Department under the Tax Code, including a temporary regulation and a
proposed regulation to the extent that, by reason of their actual or proposed
effective date, would or could, as of the date of any determination or opinion
as to the Tax consequences of any action or proposed action or transaction, be
applied to the Purchased Businesses and Purchased Assets.
"URM Employees" shall have the meaning set forth in Section
5.10(a)(ii) hereof.
"U.S. Bank" means U.S. Bank National Association, a national
banking association, and its successors.
"Vehicle Leases" means all open-ended leases of trucks or
other commercial vehicles entered into by a CFC Party as lessor.
"WARN Act" shall have the meaning set forth in Section 5.10(a)
hereof.
"Welfare Benefits" shall have the meaning set forth in Section
5.10(h) hereof.
"Xxxxx Fargo" means Xxxxx Fargo Bank Minnesota, National
Association.
ARTICLE II.
PURCHASE AND SALE OF ASSETS
2.1. Purchased Assets.
(a) Purchase and Sale of Assets. On the terms and subject to
the conditions contained in this Agreement, on the Closing Date, the Company
will sell, convey, transfer, assign and deliver to (or cause to be sold,
conveyed, transferred, assigned and delivered by the relevant Selling
Subsidiaries owning, leasing or having the right to use the Purchased Assets to)
the Buyer, and the Buyer will purchase and take assignment and delivery from the
Sellers of all of the legal and beneficial right, title and interest of the
Sellers in and to the Purchased Assets,
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free and clear of any Lien of any kind whatsoever other than a Permitted Lien
and the Lien identified in Section 3.8(a) of the applicable Business Schedules
with respect to the Owned Real Premises located in Rapid City, South Dakota;
provided, however, that if the GE Condition is satisfied, then the Owned Real
Premises located in Rapid City, South Dakota shall be transferred free and clear
of such Lien identified in Section 3.8(a) of the applicable Business Schedules.
The Buyer will acquire such Purchased Assets in exchange for the Buyer's payment
of the cash portion of the Purchase Price (as set forth in Section 2.4 hereof)
and the assumption of the Assumed Liabilities (as set forth in Section 2.2(a)
hereof).
(i) The Purchased Assets will include any additions to
such assets, properties, Contracts and rights in the ordinary
course of business between December 19, 2002 and the Closing
Date (such period of time, the "Pre-Closing Period"), but
specifically excluding (x) the Excluded Assets, (y) any
deletions, dispositions or expirations of such assets,
properties, Contracts and rights pursuant to Section 5.4 and
(z) subject to compliance with Section 5.5(b), any deletions,
dispositions or expirations of such assets, properties,
contracts and rights in the ordinary course of business
consistent with past practice during the Pre-Closing Period.
(ii) Upon written notice to the Company during the
Pre-Closing Period and at the Buyer's option, in its sole
discretion, the Buyer may determine to exclude any assets,
properties, Contracts and rights from the Purchased Assets
(including, without limitation, any "asset" having a negative
value and the capital stock of Mill Creek Bank) which shall
then be deemed Excluded Assets hereunder; provided that such
exclusion shall not reduce the Purchase Price, except as
provided in Section 2.1(a)(iv) and Section 2.4 hereof. The
Buyer may not determine to exclude any Purchased Businesses
pursuant to this Section 2.1(a)(ii). In the event the Buyer
elects to exclude any Residual Assets from the Purchased
Assets pursuant to this Section 2.1(a)(ii), the Purchased
Assets shall include all related Cleanup Calls, to the extent
such Cleanup Calls are separately transferable, unless the
Buyer elects otherwise. In the event the Buyer elects to
exclude the capital stock of Mill Creek Bank, pursuant to this
Section 2.1(a)(ii), then as of the Closing (x) the Buyer
agrees to lease on commercially reasonable terms consistent
with a lease for a similar type of property in the same
geographic region with similar mortgage debt on such property
to the Sellers the Owned Real Premises located in Rapid City,
South Dakota (as listed on Section 3.8(a) of the applicable
Business Schedules), which Owned Real Premises shall not be
deemed an Excluded Asset, but shall be transferred subject to
the mortgage in favor of Mill Creek Bank, as in effect on the
date hereof and (y) at the option of the Buyer, Mill Creek
Bank shall continue to service the portion of the PL Business
conducted outside of Mill Creek Bank on terms and conditions
substantially the same as in effect on the date hereof.
(iii) Nothing contained in this Agreement, shall be
construed to imply that the Buyer will assume the Excluded
Servicing Liabilities or any Guarantees given to any holders
of interests in a Securitization.
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(iv) The Company and General Electric Capital
Corporation or one or more of its affiliates ("GE") shall not
enter into an asset purchase agreement for the purchase and
sale of assets of the PL Business, CL Origination Business
and/or HI Origination Business without the prior written
approval of the Buyer. If the Company and GE enter into an
asset purchase agreement in form and substance reasonably
satisfactory to the Buyer and which is also approved on the
Bankruptcy Court's docket pursuant to the GE Sale Order (the
"GE Approved Agreement"), then (x) the Purchase Price shall be
computed in accordance with Section 2.4 hereof, (y) the stock
of Mill Creek Bank and the GE Purchased Assets shall be
Excluded Assets and the PL Business, CL Origination Business
and HI Origination Business shall be Excluded Businesses and
(z) all GE Assumed Liabilities and other Liabilities arising
from, related to, in connection with or with respect to Mill
Creek Bank, the PL Business, the HI Origination Business, the
CL Origination Business shall be Excluded Liabilities. The
entry by the Company and GE into the GE Approved Agreement and
the entry on the Bankruptcy Court's docket of the GE Sale
Order shall be referred to herein as the "GE Condition." If
the GE Sale Order is not entered by March 14, 2003, then this
Section 2.1(a)(iv) shall thereafter be of no force and effect.
(b) Stock Sale. At any time prior to the Closing, the Buyer
may, with the consent of the Company (not to be unreasonably withheld), elect to
acquire the Purchased Assets, in part, through the purchase of all of the
outstanding capital stock or other equity interests (the "Shares") of one or
more of the Selling Subsidiaries (a "Subject Subsidiary") which own, lease or
have the right to use Purchased Assets ("Stock Sale"), it being agreed that,
with respect to any Subject Subsidiary, such consent of the Company may not be
withheld if (i) the sale of the Shares of such Subject Subsidiary would not
result in the CFC Parties incurring any net incremental Liabilities (which are
not Assumed Liabilities and other than reasonable attorneys' fees and
disbursements and similar transaction costs associated with the implementation
of such Stock Sale), as compared to a sale of the Purchased Assets owned by such
Subject Subsidiary, as determined in good faith by the Parties ("Incremental
Liabilities"), or (ii) the Buyer, at its option, elects to pay or hold the
Company harmless (under arrangements reasonably satisfactory to the Company)
from such Incremental Liabilities. Upon the request of the Buyer, the Company
shall use commercially reasonable efforts to cause the conversion prior to the
Closing of the Subject Subsidiaries specified by the Buyer into limited
liability companies properly organized in the same jurisdiction as the Subject
Subsidiary whether by way of amendments to the Organizational Documents of the
Subject Subsidiaries or by merger or otherwise. If the Company reasonably
determines that the Buyer is not likely to be able to obtain the licenses
required for the operation of the Purchased Businesses from Governmental
Authorities prior to August 1, 2003, the Company may elect to sell the Purchased
Assets, in part, through a Stock Sale of the Subject Subsidiaries set forth in
Section 2.1(b) of the Business Schedules that own such licenses, provided that,
with respect to any such Subject Subsidiary, such election may not be made (x)
if it results in any Incremental Liabilities to the Buyer, unless the Company
elects to pay or hold the Buyer harmless (under arrangements reasonably
satisfactory to the Buyer) from such Incremental Liabilities or (y) if the
purchase of the Shares otherwise adversely affects, in any material manner, the
value of the Purchased Assets transferred to the Buyer thereby because of the
tax or other attributes of such Subject Subsidiary (unless arrangements
reasonably satisfactory to the Buyer are made with respect thereto). In
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connection with any Stock Sale (whether at the election of the Buyer or the
Company as provided herein), the Company shall cause any such Subject Subsidiary
to become a Filing Company Subsidiary and shall take all reasonable actions to
obtain an order from the Bankruptcy Court pursuant to Federal Rule of Bankruptcy
Procedure 3003(c) establishing a bar date for prepetition claims and shall
diligently prosecute objections to such claims, as appropriate, in order to
ensure that the Liabilities of such Subject Subsidiary consist only of those
Liabilities that would be Assumed Liabilities if the Buyer would have acquired
the Purchased Assets of such Subject Subsidiary free and clear of all Liens
other than Permitted Liens. In the event the Buyer elects to acquire or the
Company elects to sell a portion of the Purchased Assets through a Stock Sale,
then the Shares which are the subject of the Stock Sale shall be deemed
Purchased Assets hereunder. If the Buyer and/or the Company elect one or more
Stock Sales:
(i) prior to the Closing Date, the Company shall
unconditionally assume, or shall cause one of its Affiliates
(other than another Subject Subsidiary) to unconditionally
assume all Liabilities of the Subject Subsidiary (other than
the Assumed Liabilities) in a manner and in form and substance
reasonably satisfactory to the Buyer and the Company;
(ii) prior to the Closing Date, the Company shall, or
shall cause the Subject Subsidiary to, transfer any Excluded
Assets of the Subject Subsidiary to the Company or one of its
Affiliates (other than another Subject Subsidiary) in a manner
and in form and substance reasonably satisfactory to the Buyer
and the Company; and
(iii) the Company shall, or shall cause its Subsidiary
which directly owns the Shares (the "Subject Subsidiary
Owner") to, sell, assign, transfer, convey and deliver the
Shares, free and clear of all Liens (other than Permitted
Liens), to the Buyer, and the Buyer shall purchase and accept
the Shares, at the Closing (in which case, the Subject
Subsidiary Owner shall be deemed a Selling Subsidiary
hereunder, and the Company shall cause such Subject Subsidiary
Owner to execute a counterpart signature page hereto).
Notwithstanding the foregoing, this Section 2.1(b) shall not
apply to Mill Creek Bank or Green Tree Retail Services Bank.
(c) Excluded Assets. (i) The Excluded Contracts; (ii) the
assets, properties, Contracts and rights, if any, set forth in Section 2.1(c) of
the applicable Business Schedules; (iii) the outstanding capital stock of Green
Tree Retail Services Bank; (iv) cash of an Excluded Business or representing the
proceeds of the disposition of an Excluded Asset, provided that all required
payments under the DIP Loan shall have been made; (v) up to $4.5 million of cash
and cash equivalents owned by Green Tree Retail Services Bank; (vi) if the GE
Condition is satisfied, the stock of Mill Creek Bank and the GE Purchased
Assets; (vii) all rights and claims as holders of B-2 Certificates, or rights
derivative of B-2 Certificates, solely to the extent arising from Guarantees by
the CFC Parties pursuant to the MH Servicing Contracts (the "B-2 Guarantee
Rights"), notwithstanding the fact B-2 Certificates constitute Purchased Assets
(it being agreed that if and to the extent such separation of the B-2 Guarantee
Rights from the B-2 Certificates is not permitted under the relevant Contract or
applicable law or is not ordered by the
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Xxxxxxxxxx Xxxxx by a Final Order, the provisions of Section 5.31 shall apply),
(viii) the Sellers' rights under this Agreement; (ix) if the GE Condition is
satisfied, all Loans and Receivables with respect to the HE Business on the
balance sheet of Mill Creek Bank as of January 31, 2003 valued at $35.5 million
and all Loans and Receivables originated by Mill Creek Bank after January 31,
2003; (x) if the GE Condition is satisfied, all Community Reinvestment Act
assets, (xi) if the GE Condition is satisfied, all reaffirmed accounts; (xii) if
the GE Condition is satisfied, all Excluded Receivables as defined in the GE
Approved Agreement; (xiii) the Excluded Contracts; (xiv) rights in and with
respect to tax refunds, credits and claims for periods prior to the Closing;
(xv) all defenses, claims, counter-claims, rights of offset and other actions
against any person asserting or seeking to enforce any Excluded Liability
against any of the Sellers or any rights with respect to Excluded Assets, solely
to the extent such defense, claim, counter-claim, right of offset or other
action relates to such Excluded Liability or Excluded Asset; (xvi) any avoidance
or similar actions, including, but not limited to actions under sections 544,
545, 547, 548, 550 and 553 of the Bankruptcy Code, including without limitation
any avoidance or similar action with respect to the stock of Mill Creek Bank;
and (xvii) those other assets, properties, contracts and rights, if any, that
become Excluded Assets (the "Excluded Assets") shall be excluded from the
Purchased Assets to be sold, assigned, transferred, conveyed and delivered to
the Buyer hereunder and, to the extent in existence on the Closing Date, shall
be retained by the Sellers (as applicable).
2.2. Liabilities.
(a) Assumed Liabilities. Subject to the conditions set forth
herein, the Buyer will assume, effective as of the Closing Date, and thereafter
will pay, perform and discharge in accordance with their terms, as and when due,
only those liabilities specifically identified in Section 2.2(a) of the
applicable Business Schedules and the Liabilities with respect to the Permitted
Liens (the "Assumed Liabilities"); provided, however, that Liabilities
associated with assets, properties, Contracts and rights excluded from the
Purchased Assets or any Liabilities associated with any Excluded Business in
accordance with Section 2.1(a)(i) and 2.1(a)(iv) shall not be Assumed
Liabilities.
(b) Excluded Liabilities. Except for the Assumed Liabilities,
the Buyer shall not assume, perform or be liable for, and the Sellers shall
retain and pay, perform and discharge in accordance with their terms (as the
same may be modified in connection with the Chapter 11 Case or otherwise), as
and when due, all Liabilities of the CFC Parties that are not expressly Assumed
Liabilities (the "Excluded Liabilities") which include, but are not limited to,
any Liability of the CFC Parties or the Parent or any Subsidiary of the Parent
or Affiliate thereof:
(i) arising from, related to or in connection with any
of the Parent's or the Sellers' transaction expenses;
(ii) except for the Liabilities specifically assumed
pursuant to Section 2.2(a)-(iv) of the applicable Business
Schedules, for (A) any indebtedness or other Liability arising
under or with respect to any indebtedness of the CFC Parties
or the Parent including intercompany indebtedness between
Affiliates or (B) any Guarantees of the CFC Parties or the
Parent, including intercompany Guarantees
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between Affiliates and any Guarantees given to any holders of
interests in a Securitization;
(iii) for any Taxes, whether or not relating to the
Purchased Businesses, the Purchased Assets or the transactions
contemplated hereby other than Taxes of any Subject Subsidiary
(or a Subsidiary of a Subject Subsidiary after the Closing
Date) for any Post-Closing Tax Period, provided, that Taxes of
a Subject Subsidiary (or Subsidiary thereof) for a
Post-Closing Tax Period shall not include any Liability of
Parent or any Affiliate that a Subject Subsidiary or
Subsidiary thereof is required to pay by virtue of Treasury
Regulation Section 1.1502-6 or comparable provision of state,
local or foreign law;
(iv) attributable to the Purchased Assets or the
operation of the Purchased Businesses for all periods up to
and including the Closing including, without limitation, any
Liabilities for any default or breach, or for any event,
occurrence, condition or act which, with the giving of notice,
the passage of time or both, would result in a default or
breach, of any of the Assumed Agreements to the extent such
default or breach or event, occurrence, condition or act
existed on or prior to the Closing Date;
(v) to indemnify any Person by reason of the fact that
such Person was a director or officer of any of the CFC
Parties or the Parent or was serving at the request of the CFC
Parties or the Parent as a partner, trustee, director,
officer, employee or agent of another Person;
(vi) with respect to any principal, partner, employee,
officer, director, consultant, independent contractor, agent
or Affiliate of the CFC Parties or the Parent (other than
Liabilities with respect to the Transferred Employees and
Business Employees specifically assumed pursuant to Section
5.10 and the Assumed Retention Agreements) arising out of
employment, compensation, severance, change of control,
stay-pay, sale bonus, retention bonus or other special
compensation or golden parachute agreements, plans or
arrangements, including any such Liability incurred in
connection with the execution and performance of this
Agreement and the consummation of the transactions
contemplated hereby and not expressly assumed herein;
(vii) arising under, out of, with respect to or in
connection with any Employee Benefit Plan and not expressly
assumed by the Buyer herein;
(viii) arising out of or resulting from any
noncompliance with or violation of any Laws (including,
without limitation, any securities Laws or Environmental Laws)
occurring prior to the Closing;
(ix) arising out of any occurrences of bodily injury,
property damage or personal injury which take place on or
prior to the Closing Date;
(x) arising out of, related to, in connection with or
with respect to any deferred purchase price payment
obligations or non-competition payment
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obligations associated with (A) any acquisition prior to the
Closing of any business, Subsidiary, security or assets of any
Person or (B) any disposition of any business, Subsidiary,
security or assets of any Person;
(xi) to indemnify any Third Party in connection with the
disposition of any subsidiary, business, properties or assets
or operations of any Person;
(xii) arising from, in connection with or with respect
to such Person's direct or indirect ownership (beneficial or
otherwise) at any time of any capital stock of or other
beneficial interest in (or any right to acquire such stock of
or interest in) any of the CFC Parties or the Parent;
(xiii) arising from, related to or in connection with
any cure or other amount payable with respect to the
assignment of any contractual obligation to the Buyer
hereunder;
(xiv) arising from, related to, in connection with or
with respect to any Excluded Asset;
(xv) under this Agreement;
(xvi) for infringement or misappropriation arising from
the development, modification or use of intellectual property
on or before the Closing Date;
(xvii) relating to any claim, dispute or litigation
asserted or threatened or governmental proceeding or
investigation instituted or threatened, arising out of any act
or omission of the CFC Parties or the Parent or any of their
Affiliates on or prior to the Closing Date, or arising out of
the conduct, on or prior to the Closing Date, of the Purchased
Businesses;
(xviii) arising out of (A) any noncompliance with or
violation of any Environmental Law on or before the Closing
Date, (B) any existing environmental condition (whether or not
relating to any noncompliance) of the Purchased Assets, or (C)
any release of Hazardous Substances on or before the Closing
Date, in each case, regardless of whether any of the foregoing
was known to or disclosed to the Parties or any of their
Affiliates;
(xix) under any insurance coverage, self-insurance or
retention program provided to customers in connection with the
Purchased Businesses;
(xx) arising from, related to or in connection with any
Owned Real Premises or Assumed Leases arising or accruing
prior to the Closing Date and/or due to a breach by the
Sellers or any of their Subsidiaries under any contractual
obligation due to the consummation of the transactions
contemplated hereby, except to the extent relating to any
Permitted Lien;
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(xxi) to any equity holder or former equity holder of
the CFC Parties or the Parent;
(xxii) relating to any repurchase, assumption or similar
Liability under any Contract pursuant to which loans were sold
to a Third Party;
(xxiii) which are Excluded Servicing Liabilities;
(xxiv) if the GE Condition is satisfied, all of the
Liabilities arising from, relating to, in connection with or
with respect to Mill Creek Bank, the HI Origination Business,
the PL Business and the CL Origination Business, except as
specifically set forth in Section 2.2(a) of the applicable
Business Schedules;
(xxv) if the GE Condition is satisfied, all of the
Liabilities arising from, relating to, in connection with or
with respect to the GE Purchased Assets and all of the GE
Assumed Liabilities; or
(xxvi) assumed by the Company or one if its Affiliates
pursuant to Section 2.1(b)(i).
2.3. Closing Transactions.
(a) Closing. Subject to the satisfaction or waiver of the
conditions contained in this Agreement, the closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Xxxxxxxx & Xxxxx, 000 Xxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, at 10:00
a.m. on the second Business Day following the satisfaction or waiver of the
conditions to the Buyer's and the Sellers' obligations set forth in ARTICLE VI
and ARTICLE VII, respectively, or at such other place or time and on such other
date as the Parties may agree to in writing; provided that the Company may in
its sole discretion delay the Closing until any Business Day prior to or on the
calendar month-end next following the second Business Day following the
satisfaction or waiver of the conditions to the Buyer's and the Sellers'
obligations set forth in ARTICLE VI and ARTICLE VII, respectively provided the
Buyer receives at least 11 Business Days advance notice of the Closing. The date
and time of the Closing are herein referred to as the "Closing Date".
(b) Closing Transactions. Subject to the conditions set forth
in this Agreement, the Parties shall consummate the following "Closing
Transactions" on the Closing Date:
(i) The Sellers shall convey all of the Purchased Assets
to the Buyer in accordance with Section 2.1 and shall deliver
to the Buyer such appropriately executed instruments of sale,
transfer, assignment, conveyance and delivery, warranty deeds,
warranty assignments of leases, assignments, stock
certificates or evidence of limited liability company equity
interests (in the event of a Stock Sale), certificates duly
registered in the Buyer's name representing the Residual
Assets (to the extent such Residual Assets are certificated),
vehicle titles, transfer Tax declarations, title policies (if
required pursuant to Section 5.20 hereof) and all other
instruments of conveyance which are necessary or desirable to
effect
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transfer to the Buyer of good and marketable title to the
Purchased Assets (subject however to any Permitted Liens).
(ii) On and prior to the Closing Date, the Sellers
shall, with respect to all Purchased Assets that are owned of
record by any Person other than the Company or a Selling
Subsidiary (including, without limitation, the Residual
Assets, Assigned Receivables or other Purchased Assets subject
to a repurchase agreement or otherwise transferred to Xxxxxx
Brothers Holdings Inc. or any of its Affiliates under the
Xxxxxx Forbearance Agreement or any of the other Xxxxxx
Facilities and, to the extent the Buyer elects to acquire the
NIMS Collateral directly rather than the NIMS Equity, the NIMS
Collateral, and to the extent the Buyer elects to acquire the
MESA Collateral directly rather than the MESA Equity, the MESA
Collateral), exercise all rights, and take all such other
actions, as may be necessary to effect the conveyance of the
Purchased Assets to the Buyer on the Closing Date (subject to
the receipt on the Closing Date of the Purchase Price). The
Sellers shall reasonably cooperate with the Buyer, at Buyer's
expense, in completion of any financing arrangements arranged
by the Buyer with respect to the purchase of the Purchased
Assets, including, without limitation, any such arrangements
with Xxxxxx Brothers Holdings Inc. or its Affiliates under
which the Residual Assets or the Assigned Receivables are to
be held or financed. If any Purchased Assets are owned of
record by any CFC Party other than the Company or a Selling
Subsidiary, then the Company shall cause such CFC Party to
become a party to this Agreement and execute a counterpart
signature page to this Agreement as a Selling Subsidiary
hereunder.
(iii) The Buyer shall deliver to the Company or its
designee, by wire transfer of immediately available funds to
an account or accounts designated not less than three Business
Days before the Closing Date by the Sellers, the cash portion
of the Purchase Price as set forth in Section 2.4 hereof;
provided, however, that cash at least equal to the portion of
the Xxxxxx Debt Amount that is owed by the SPEs shall be paid
directly to the applicable SPEs to enable such SPE to repay
such portion of the Xxxxxx Debt Amount at Closing.
(iv) The Buyer shall assume the Assumed Liabilities and
shall deliver to the Sellers such appropriately executed
assumption agreements and all other instruments which are
necessary or desirable to effect the assumption by the Buyer
of the Assumed Liabilities.
(v) The Sellers and the Buyer shall deliver all other
Transaction Documents required to be delivered by or on behalf
of such Person, as applicable.
(vi) The Company shall deliver, or cause to be
delivered, at the Closing, to the Buyer or to such Person as
the Buyer may designate (including, without limitation, any
custodian appointed by the Buyer to hold such items) all
documentation and other items pertaining to the Assigned
Receivables, including, without limitation, original notes
(with appropriate endorsements), installment contracts,
guarantees, mortgages and other security agreements and all
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assignments, assumptions, modifications, consolidations and
extensions thereof, UCC financing statements or such other
evidence of perfection of a security interest in the
applicable collateral in the relevant jurisdictions, powers of
attorney, certificates of title, all evidence of title
insurance policies, hazard or flood insurance policies, loan
applications, closing statements, credit reports, appraisals,
surveys, disclosure statements, sales contracts, tax and
insurance receipts, verification statements delivered by the
borrowers, and all other documentation related to the loan
files associated with the applicable Assigned Receivables. If,
after the Closing Date, a CFC Party (or any other Person
acting on its behalf) comes into possession of any additional
documentation, books and records relating to the Assigned
Receivables, such additional documentation shall be deemed to
have been received and held in trust for the benefit of the
Buyer and promptly shall be delivered to the Buyer or such
other Person as the Buyer may direct. Effective as of the
Closing, the Company shall (i) have caused to be terminated
any existing custodial or other similar arrangement under
which any of the documentation relating to the Assigned
Receivables is held and shall obtain and deliver to the Buyer
appropriate releases in connection therewith and (ii) execute
and deliver to the Buyer (or its designees) on the Closing
Date powers of attorney in form and substance reasonably
satisfactory to the Buyer giving the Buyer or such designees
full power and authority to execute any further agreements,
assignments, endorsements or other documentation as may be
deemed necessary by the Buyer to allow the Buyer (and its
designees) to exercise full rights of ownership with respect
to the Assigned Receivables. The Company shall fully cooperate
with the Buyer from and after the Closing to take all other
actions necessary or appropriate to effect the transfer of,
and vest in the Buyer, all right, title and interest in and to
the Assigned Receivables.
(vii) The Sellers shall deliver to the Buyer the
Post-Signing Balance Sheets and the Closing Date Balance Sheet
within the time periods specified in Section 5.27 hereof.
(viii) Upon the request of the Buyer prior to the
Closing, the Sellers shall cause each of (x) the limited
recourse note, dated September 28, 2001, in the amount of
$192,921,000 issued by Conseco Finance Net Interest Margin
Finance Corp. I ("NIMS I") to Conseco Finance Net Interest
Margin Finance Corp. II ("NIMS II"), (y) the Security
Agreement, dated as of September 1, 2002, between NIMS I and
NIMS II and (z) the Participation Agreement, dated as of
September 1, 2002 by and between NIMS II and the NIMS Issuer
to be cancelled immediately prior to the Closing and shall
deliver to the Buyer evidence of such cancellation in form and
substance satisfactory to the Buyer.
Notwithstanding anything to the contrary in the foregoing in this Section
2.3(b)(vi), no Seller shall be in breach of this Section 2.3 for failure to
deliver any item set forth herein which is not within its control to deliver;
provided that the foregoing shall not limit any of Seller's obligations under
Section 5.7 hereof; provided further, however, that the condition contained in
Section 6.5 shall not be satisfied unless all items set forth herein are
delivered.
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2.4. Purchase Price.
(a) The aggregate purchase price for the Purchased Assets (the
"Purchase Price") shall be equal to (i) the Xxxxxx Debt Amount as of 12:01 A.M.
on the Closing Date, plus (ii) $399 million, minus (iii) $270 million, but such
subtraction shall be made only if the GE Condition is satisfied. The Purchase
Price shall be paid in cash.
(b) The Sellers shall cause all cash proceeds in excess of the
Xxxxxx Debt Amount paid for the Purchased Assets to be used to repay amounts
outstanding under the DIP Loan at the time of the Closing. If a Consent
Agreement is executed by the Buyer, the Company, Trustees, Unsecured Creditors
Committee and the Ad Hoc Committee and is in full force and effect as of the
Closing Date, the Company shall allocate $25 million of the cash portion of the
Purchase Price to a $35 million aggregate reserve account to be established to
resolve claims based on pre-Closing breaches of the MH Servicing Contracts as
shall be provided in such Consent Agreement.
2.5. Post-Effective Time Amounts Received and Paid. All funds
collected on or after the Closing Date from Receivables which constitute
Purchased Assets shall belong to, and if received by the Company or any of its
Affiliates, shall be received for the benefit and the account of the Buyer, and
the Sellers shall, on a weekly basis, transfer by way of wire transfer, and
remit to the Buyer all such amounts received by or paid to the Company or any of
its Affiliates on or after the Closing Date. To the extent that Buyer receives
any funds or other payments on account of any Excluded Assets, then
notwithstanding such receipt, such funds and other payments shall belong to
Sellers and be held in trust for the benefit of Sellers and, as promptly as
practicable, shall be remitted to such account as Sellers may designate in
writing to Buyer from time to time.
2.6. True Sale. Each of the Parties acknowledge and agree that a
true sale of the Purchased Assets is intended pursuant to this Agreement, the
Buyer will have legal and equitable title to all Purchased Assets upon payment
of the Purchase Price, and there is no intent by any Party to create a lending
relationship between the Buyer and the Sellers. Upon the sale of the Purchased
Assets, the Sellers shall have no legal or equitable title or interest
whatsoever in the Purchased Assets or any collections thereunder, and the
Sellers shall have no right to redeem any Purchased Assets.
2.7. Assumption of Certain Leases and Contracts. The Sale Order
shall provide for the assumption by the Sellers and assignment to the Buyer,
effective upon the Closing, of the Assumed Agreements set forth on a pleading
submitted to the Bankruptcy Court on the following terms and conditions:
(a) As of the Closing, the Sellers (as applicable) shall
assign to the Buyer the Assumed Agreements. The Assumed Agreements shall be
identified by the date of the Assumed Agreements (if available), the other party
to the Contract and the address of such party, all included on an exhibit
attached to either the motion filed in connection with the Sale Order or a
motion for authority to assume and assign such Assumed Agreements. Such exhibit
shall set forth the amounts necessary to cure defaults under each of such
Assumed Agreements as determined by the Sellers based on the Sellers' books and
records.
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(b) If there exists on the Closing Date any default related to
an Assumed Agreement, the Sellers shall be responsible for any amounts to be
cured pursuant to section 365(a) of the Bankruptcy Code as a condition to the
assumption and assignment of such Assumed Agreement. At or prior to the Closing
Date, the Sellers shall pay all cure amounts for the Assumed Agreements.
Notwithstanding the foregoing, if
(i) a Seller is required to make a cure payment in
connection with a Non-MH Servicing Contract in respect of
which the Buyer becomes the successor servicer thereunder as
of the Closing Date, which cure payment is attributable to the
failure of such Seller prior to the Closing Date to make a
servicing advance in respect of a delinquent Securitized Loan
and where such advance was not made solely because the Seller
deferred or rescheduled such delinquent payment (a "Specified
Cure Payment");
(ii) the Specified Cure Payment is made with the
proceeds received from the Buyer as part of the Purchase
Price; and
(iii) after the Closing Date, the Buyer, in its capacity
as the Person entitled, under the terms of the relevant Non-MH
Servicing Contract, to the recovery of the servicing advances
deemed to have occurred as a result of such Specified Cure
Payment, actually receives a cash payment directly
attributable to the fact that such Purchase Price proceeds
were applied to the Specified Cure Payment and such cash
payment is not subject to any custody arrangement, claim,
offset or other right in favor of any other person under the
relevant Non-MH Servicing Contract, then
the Buyer shall, within 10 Business Days of receipt of any such cash payment,
reimburse to the Company an amount equal to any such cash payment actually
received in such capacity; provided that the total amount reimbursed hereunder
shall not exceed $57 million. Nothing contained herein shall be deemed an
admission by any Seller that any cure payment is required in respect of the
foregoing.
(c) Except as set forth in Section 2.7(b), the Buyer shall be
responsible for all costs and expenses, incurred after the Closing Date, that
are necessary in connection with providing adequate assurance of future
performance with respect to the Assumed Agreements.
2.8. Consents to Certain Assignments. Without limiting the effect
of Section 6.4 or Section 6.13, the Buyer and the Sellers agree that there shall
be excluded from the Purchased Assets any Assumed Agreements that are not
assignable or transferable pursuant to the Bankruptcy Code or otherwise without
the consent of any Person other than the Sellers or any Affiliate of the
Sellers, to the extent that such consent shall not have been given prior to the
Closing; provided, however, that the Sellers shall have the continuing
obligation (both before and after the Closing) to use all commercially
reasonable efforts (including, without limitation, prosecution of appropriate
motions pursuant to Section 365 of the Bankruptcy Code) to endeavor to obtain
all necessary consents to the assignment thereof and, upon obtaining the
requisite Third Party consents thereto, such Assumed Agreement shall be assigned
to the Buyer at no cost free and clear of all Liens other than the Permitted
Liens; provided, that, the Sellers shall not be
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required to incur any unreasonable costs or make any material payment to any
Third Party (other than cure costs) to obtain any consent. With respect to any
Assumed Agreement which is not transferred at the Closing as contemplated by the
immediately preceding sentence, effective as of the Closing, the Sellers shall
enter into arrangements reasonably requested by the Buyer designed to provide
the Buyer the full and exclusive benefits of such asset (as between the Buyer
and the Sellers) provided the Buyer assumes the duty to perform the obligations
relating to such Assumed Agreements accruing on and after the Closing (and
provides indemnification to the Sellers with respect thereto). If and to the
extent such arrangements cannot be made, the Buyer shall have no obligation with
respect to such Assumed Agreement. For the avoidance of doubt, this Section 2.8
shall not be applicable to Servicing Rights.
2.9. Real Estate Apportionments and Payments. With respect to the
Facilities, all income from and expenses relating to the Facilities of every
type and nature as is customary with a closing of this type (including, without
limitation, accrued expenses not yet due and payable and income collected prior
to the Closing) shall be apportioned and prorated over the appropriate period in
a manner that fairly apportions such income and expenses among the Buyer and the
Sellers at the Closing as of the close of business on the day immediately
preceding the Closing Date. The prorations and apportionments hereunder shall be
jointly prepared by the Buyer and the Sellers before the Closing on the basis of
actual and estimated amounts as provided. Notwithstanding anything to the
contrary herein, the Sellers shall be responsible for payment of all real
property Taxes for all years prior to the year the Closing takes place. The
obligations of the Parties under this Section 2.9 shall survive the Closing;
provided, however, with respect to Owned Real Premises Leases, the Sellers shall
be responsible for only that portion of the real property Taxes that are not
required to be paid by the tenants under the Owned Real Premises Leases.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Except as set forth in the Business Schedules, which schedules
will be arranged in sections corresponding to the sections contained in this
ARTICLE III (provided that each section of which qualifies the correspondingly
numbered representation and warranty in this ARTICLE III to the extent specified
therein and such other representations and warranties in this ARTICLE III to the
extent a matter in such section is disclosed in such a way as to make its
relevance to the information called for by such other representation and
warranty in this ARTICLE III reasonably apparent), as a material inducement to
the Buyer to enter into this Agreement, the Sellers hereby represent and warrant
to the Buyer the following:
3.1. Organization and Power.
(a) The Company is a Delaware corporation duly organized,
validly existing and in good standing under the laws of Delaware. Mill Creek
Bank is an industrial loan corporation duly organized, validly existing and in
good standing under the laws of Utah. Each of the Selling Subsidiaries is listed
in Section 3.1(a) of the applicable Business Schedules and is duly organized,
validly existing and in good standing under the laws of its state of
incorporation or organization (as applicable). Each of the Sellers and Mill
Creek Bank is qualified to do
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business and is in good standing as a foreign corporation or entity (as
applicable) in each jurisdiction listed in Section 3.1(a) of the applicable
Business Schedules, which jurisdictions are the only jurisdictions where the
nature of the activities conducted by it or the character of the property owned,
leased or operated by it makes such qualification necessary, except for any
failure to be so qualified or in good standing that has not had and could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. The Sellers and Mill Creek Bank have the requisite corporate or
other entity power and authority to own and operate the Purchased Assets and to
carry on the Purchased Businesses as currently conducted. The Company has
delivered or otherwise made available to the Buyer complete and correct copies
of the Organizational Documents of the Sellers and Mill Creek Bank and
represents that such documents are in full force and effect. None of the Sellers
or Mill Creek Bank is in default under or in violation of any provision of its
Organizational Documents.
(b) A complete and correct chart showing the Company and its
direct and indirect Subsidiaries is set forth in Section 3.1(b) of the
applicable Business Schedules.
3.2. Authorization of Transactions. The execution, delivery and
performance of this Agreement and the other Transaction Documents, and the
consummation of the transactions contemplated hereby and thereby to be
consummated by the Sellers and Mill Creek Bank, have been duly and validly
authorized by all necessary corporate or other entity action (as applicable) on
the part of each of the Sellers and Mill Creek Bank. This Agreement has been,
and each of the Transaction Documents after execution and delivery thereof at
the Closing will have been, duly and validly executed and delivered by the
Sellers and Mill Creek Bank, as applicable, and, subject to any necessary
authorization from the Bankruptcy Court, this Agreement constitutes, and each of
the Transactions Documents will constitute, its legal, valid and binding
obligation, enforceable in accordance with its terms.
3.3. Absence of Conflicts; Required Consents, Approvals and
Filings. The execution and delivery of this Agreement and the other Transaction
Documents and the consummation of the transactions contemplated hereby and
thereby by the Sellers and Mill Creek Bank do not and shall not (a) constitute a
material breach or violation of or default under any Law, governmental permit or
license of the CFC Parties or to which any of the foregoing is subject, in each
case relating to the Purchased Businesses, including but not limited to state
usury laws, state laws requiring licenses to engage in consumer lending,
consumer finance, mortgage lending and the other businesses of the Sellers and
Mill Creek Bank, the Truth in Lending Act, the Real Estate Settlement Procedures
Act, the Home Mortgage Disclosure Act, the Consumer Credit Protection Act, the
Right to Financial Privacy Act, the Equal Credit Opportunity Act, the Fair
Credit Reporting Act, the Homeowners Ownership and Equity Protection Act, the
Federal Trade Commission Act, the Fair Debt Collection Practices Act and other
Laws regulating lending (the "Finance Laws"), which breach, violation or default
would prevent or materially delay the Sellers and Mill Creek Bank from being
able to perform their obligations under this Agreement and the other Transaction
Documents to which they are a party, (b) constitute a breach or violation of or
default under the Organizational Documents of the Sellers or Mill Creek Bank,
which breach, violation or default would prevent or materially delay the Sellers
from being able to perform their obligations under this Agreement and the other
Transaction Documents to which they are a party, or (c) with respect to the
Assumed Agreements, require the affirmative consent or approval of any
Governmental Authority or other Third Party, in each case, except for (i) the
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expiration or earlier termination of the waiting period under the HSR Act, (ii)
filings in respect of, and approvals and authorizations of, any Governmental
Authority having jurisdiction over the consumer lending, banking, insurance or
other financial services businesses set forth in Section 3.3 of the applicable
Business Schedules, (iii) filings required as a result of the particular status
of the Buyer, (iv) consents and approvals set forth in Section 3.3 of the
applicable Business Schedules, (v) the approval of the Department of Financial
Institutions of the State of Utah (the "State Banking Authority") and (vi) the
approval of the Federal Deposit Insurance Corporation (the "FDIC") under the
Change in Bank Control Act or the expiration of the waiting period thereunder.
3.4. Company Subsidiaries. All of the outstanding shares of capital
stock of, or other ownership interests in, each Selling Subsidiary and Mill
Creek Bank, are owned by the Company, directly or indirectly. All of the issued
and outstanding shares and interests (as applicable) of the Selling Subsidiaries
and Mill Creek Bank and their Subsidiaries have been duly authorized, are
validly issued, fully paid and assessable, were issued free of pre-emptive or
similar rights and are held of record or beneficially by the Persons indicated
on Section 3.1(b) of the applicable Business Schedules. Other than this
Agreement, there are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights or other
contracts or commitments that could require any of the Selling Subsidiaries and
their Subsidiaries or Mill Creek Bank and its Subsidiaries to issue, sell or
otherwise cause to become outstanding any of its capital stock or rights in
respect thereof. There are no outstanding or authorized stock appreciation,
phantom stock, profit participation or similar rights with respect to the
Selling Subsidiaries and their Subsidiaries.
3.5. Good Title. Other than Owned Real Premises, Assumed Leases and
Transferred Intellectual Property, as to each Purchased Asset (including,
without limitation, the Private Label Credit Card Master Trust Certificates), a
Seller has good and valid title to, or a valid leasehold interest in or other
valid right to use, and, subject to obtaining the consents and approvals and
making the filings set forth in Section 3.3 of the applicable Business Schedules
and Section 3.3 of this Agreement, the power and authority to sell, transfer and
assign to the Buyer the Purchased Assets, free and clear of all Liens (other
than Permitted Liens and Liens which will be discharged by the Bankruptcy Court
prior to the Closing Date).
3.6. Compliance with Laws; Permits.
(a) The Sellers and Mill Creek Bank have conducted and are
conducting the Purchased Businesses in compliance with all applicable Laws,
including, without limitation, the Finance Laws, except to the extent such
failures to comply would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect. Except as set forth in Section
3.6 of the applicable Business Schedules, as of the date hereof, there are no
material proceedings pending or, to the Knowledge of the Sellers, threatened
alleging any violation of any such applicable Laws which would reasonably be
expected to result in a Material Adverse Effect.
(b) The CFC Parties have in effect all material
authorizations, permits, licenses, certificates of authority, consents, orders
and approvals of, and have made all material filings, applications and
registrations with, Governmental Authorities that are necessary in order
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for the CFC Parties to own and operate the Purchased Assets and to conduct the
Purchased Businesses in all material respects as presently conducted, and such
authorizations, permits, licenses, certificates of authority, consents, orders
and approvals (which are set forth on Section 3.6(b) of the applicable Business
Schedules opposite the name of the CFC Party which is the holder thereof) are in
full force and effect and the CFC Parties are in compliance therewith in all
material respects. Except as set forth on Section 3.6(b) of the applicable
Business Schedules, as of the date hereof, there are no material proceedings
pending or, to the Knowledge of the Sellers, threatened seeking to terminate or
suspend or to adversely modify any such authorization, permit, license,
certificate of authority, consent, order or approval.
3.7. Assets Necessary to Conduct Businesses. Except as set forth in
Section 3.7 of the applicable Business Schedules, subject to Section 2.8 above
and satisfaction of the conditions in ARTICLES VI and VII, the Purchased Assets
including any assets, properties, Contracts and rights identified by the Buyer
pursuant to Section 2.1(a)(ii) and the GE Purchased Assets, together with the
Buyer's rights under this Agreement and the Transaction Documents (including the
assets, rights and services to be made available under the Transition Services
Agreement), constitute all of the assets, properties, contracts and rights
primarily used in the Purchased Businesses and which are necessary to carry on
the Purchased Businesses by the CFC Parties as currently conducted on the date
of this Agreement and there are no assets or properties used in or necessary for
the conduct of the Purchased Businesses as presently conducted which are not
owned, leased or licensed by the Sellers or Mill Creek Bank and its
Subsidiaries. Except as set forth on Section 3.15 of the applicable Business
Schedules, no part of the Purchased Businesses is conducted by or through any
Person other than the Sellers.
3.8. Facilities; Real Property.
(a) Owned Real Premises. Section 3.8(a) of the applicable
Business Schedules contains a true and complete list of all Owned Real Premises
included in the Purchased Assets of each Purchased Business. Subject to the
entry of the Sale Order, the Sellers own such Owned Real Premises listed on the
Business Schedules (and all of the improvements located thereon) in good and
marketable fee simple title free and clear of all Liens (including any
restrictions on transfer, restrictions on use or restrictions on leases to third
parties), other than the Permitted Liens and except as set forth on Section
3.8(a) of the Business Schedules. Except for the Owned Real Premises Leases,
matters set forth on Section 3.8(a) of the applicable Business Schedules and
matters that will be satisfied pursuant to the Sale Order, none of the Owned
Real Premises is subject to any right or option of any Person to purchase or
otherwise obtain title to such property. Except for the Owned Real Premises
Leases and as set forth on Section 3.8(a) of the applicable Business Schedules,
no Person other than the Sellers or Mill Creek Bank have any right to use,
occupy or lease all or any portion of the Owned Real Premises. To the Knowledge
of the Sellers, there are no Tax abatements or exemptions specifically affecting
the Owned Real Premises, and neither the Sellers nor their Affiliates have
received any written notice of (and the Sellers do not have any Knowledge of)
any proposed increase in the assessed valuation of the property or of any
proposed public improvement assessments.
(b) Leased Premises. Section 3.8(b) of the applicable Business
Schedules contains a true and complete list of each written Assumed Lease (and
any amendments or modifications thereto) included in the Purchased Assets of
each applicable Business Schedule
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and the GE Purchased Assets and indicates with respect to each Assumed Lease (i)
the current rent (including any additional rent) under each Assumed Lease, (ii)
the expiration date of the Assumed Leases, (iii) the security deposits being
held pursuant to the Owned Real Premises Leases and (iv) any guarantees
thereunder. Except as set forth in Section 3.8(b) of the applicable Business
Schedules and subject to the entry of the Sale Order, all of the Assumed Leases
are in full force and effect and have not been modified, altered or amended in
any material respect. Except in connection with matters that will be cured
pursuant to the Sale Order, neither the Sellers nor their Affiliates have
received written notice of any material default under any Assumed Lease by the
Sellers, Mill Creek Bank or any of their Affiliates a party thereto and, except
as set forth in Section 3.8(b) of the applicable Business Schedules and, to the
Sellers' Knowledge, there has not occurred any material default thereunder by
any other party thereto (other than those breaches that resulted from the filing
of the Chapter 11 Case). True, complete and accurate copies of the Assumed
Leases have been delivered to the Buyer. Except as set forth in Section 3.8(b)
of the of the applicable Business Schedules, neither the Sellers, Mill Creek
Bank nor any of their Affiliates have assigned their interest under any Assumed
Leases, or subleased all or any part of the space demised thereby, to any Third
Party.
(c) Restrictive Covenants. To the Knowledge of the Sellers,
there is no material violation of a condition or agreement contained in any
covenant, easement or any similar agreement affecting the Owned Real Premises
(except for violations that will be remedied in connection with the entry of the
Sale Order that would, individually or in the aggregate, have a Material Adverse
Effect on the use, occupancy or value of the Owned Real Premises). To the
Knowledge of the Sellers, the covenants affecting the Owned Real Premises do not
with respect to each Owned Real Premises materially impair the ability of the
Sellers and Mill Creek Bank to use any such Owned Real Premises in the operation
of the Purchased Businesses as currently conducted.
(d) Insurance Notices. Except as set forth in Section 3.8(d)
of the applicable Business Schedules, neither the Sellers nor any of their
Affiliates have received any notice from any insurance carrier regarding defects
or inadequacies in the Owned Real Premises, which, if not corrected, would
result in the termination of the insurance coverage therefor or a material
increase in the cost thereof.
(e) Eminent Domain. There is no pending or, to the Knowledge
of the Sellers, threatened condemnation of any part of the Owned Real Premises
by any Governmental Authority.
(f) Utilities. Neither the Sellers nor any of their Affiliates
have received any notice from any utility company or municipality of any fact or
condition which could result in the discontinuation of currently available or
otherwise necessary sewer, water, electric, gas, telephone or other utilities or
services for the Owned Real Premises or the Leased Premises.
(g) No Commissions. All brokerage commissions and other
compensation and fees payable by Sellers, Mill Creek Bank or any of their
Affiliates in connection with the Owned Real Premises or the Leased Premises,
have been paid in full.
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(h) Improvements. To the Knowledge of the Sellers, all
improvements on the Owned Real Premises conform in all material respects to all
Laws, zoning, land use and building ordinances and health and safety ordinances
(including, without limitation, the Americans with Disabilities Act), and
neither the Sellers nor any of their Affiliates, have received any notice of any
violation of any such Laws or ordinances that would, individually or in the
aggregate, have a Material Adverse Effect on the use, occupancy or value of the
Owned Real Premises. To the Knowledge of the Sellers, the Owned Real Premises
are zoned for the various purposes for which the real estate and improvements
have been used in connection with the normal operation of the Purchased
Businesses. All improvements on the Owned Real Premises, including the leasehold
improvements, have not suffered any casualty or other material damage that has
not been repaired in all material respects. To the Knowledge of the Sellers,
there is no material structural, mechanical or other significant defect, soil
condition or deficiency in the improvements located on the Owned Real Premises
that would, individually or in the aggregate, have a Material Adverse Effect on
the use, occupancy or value of the Owned Real Premises.
(i) Intentionally Deleted.
(j) Contracts. Except as set forth on Section 3.8(j) of the
applicable Business Schedules, there are no property management agreements
affecting any of the Owned Real Premises and Leased Premises to which the
Sellers, Mill Creek Bank or any of their Affiliates is a party.
(k) Construction Allowances/Reimbursements. To the Knowledge
of the Sellers, Section 3.8(k) of the applicable Business Schedules sets forth a
summary of all construction allowances or reimbursements payable in connection
with the Assumed Leases and the amounts thereof which, as of December 19, 2002,
have not been paid or reimbursed, as applicable, by the Sellers, Mill Creek Bank
or any of their Affiliates.
3.9. Personal Property. Section 3.9 of the applicable Business
Schedules contains a complete and accurate list of all furniture, fixtures and
equipment which the Sellers can identify based on their books and records and
limited review, as of November 30, 2002, located on the Leased Premises or the
Owned Real Premises that is primarily used in connection with the applicable
Purchased Businesses and Excluded Businesses.
3.10. Receivables.
(a) Section 3.10(a) of the applicable Business Schedules
contains the following information regarding the Assigned Receivables with
respect to the Purchased Businesses and the Excluded Businesses identified
thereon as of November 30, 2002: (i) account number; (ii) name of each Obligor;
(iii) secured status; (iv) the outstanding principal balance; and (v) the
outstanding Accrued and Unpaid Interest.
(b) Each Assigned Receivable was made or purchased by a Seller
or its Affiliates (or by a predecessor of such Seller or such Affiliate): (i) in
the ordinary course of business at the time such Assigned Receivable was made or
purchased; (ii) in all material respects in accordance with then existing
applicable Laws; and (iii) in all material respects in
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accordance with such Seller's or such Affiliate's applicable underwriting and
documentation guidelines then in effect at the time of origination or purchase.
(c) Each Assigned Receivable has been originated or purchased
and serviced and administered in all material respects in accordance with (i)
the CFC Parties' standard Loan servicing and operating procedures as in effect
from time to time; (ii) all applicable Laws; and (iii) the respective Loan
documents governing such Assigned Receivable.
(d) Each Assigned Receivable is evidenced by an Assumed
Receivables Contract and constitutes a legal, valid and binding obligation of
the respective Obligor(s), enforceable against such Obligor(s) in accordance
with its terms, subject to bankruptcy, insolvency, moratorium, reorganization or
similar laws in effect which affect the enforcement of creditors' rights
generally, or rules of law governing equitable relief and other equitable
remedies, or public policy.
(e) Each secured Assigned Receivable is secured by a valid,
enforceable and perfected Lien on the secured property described in the
applicable security agreement, mortgage, deed to secured debt or deed of trust,
pledge, collateral assignment or other security agreement. No such Assigned
Receivable which is so secured has been waived or modified in any manner which
would interfere in any material respect with the security interest.
(f) There is no material breach existing under an Assigned
Receivable and the Sellers have not waived any material breach. The Sellers have
performed their obligations in all material respects under the Assigned
Receivables.
3.11. Material Agreements. Section 3.11 of the applicable Business
Schedules collectively contains a complete and accurate list of the Material
Agreements with respect to the applicable Purchased Business and Excluded
Business, except for the Loan files. For purposes hereof, "Material Agreement"
shall mean (a) any Contract which requires payments by, on behalf of, or to the
CFC Parties of $500,000 or more in the aggregate, (b) any Assumed Agreement, (c)
the Credit Facilities (and any forbearance agreements or waivers related
thereto) and (d) the Xxxxxx Documents, in each case including all amendments and
modifications thereto; provided, however, excluding Contracts that are
terminable on 60 days notice or less without penalty. Except to the extent
affected by the Chapter 11 Case, all Material Agreements are valid, in full
force and effect and have not been modified or amended in any material respect.
Except as set forth in Section 3.11 of the applicable Business Schedules, to the
Sellers' Knowledge, there are no material disputes, oral agreements or
forbearance programs in effect as to any of the Material Agreements. None of the
Sellers or any of their Affiliates that is a party to any Material Agreement has
received written notice of any material default by the Sellers or their
Affiliates of any of the Material Agreements to which it is a party and, to the
Knowledge of the Sellers, there has not occurred any material default thereunder
by any other party thereto (except to the extent resulting under the terms of
any such Material Agreement as a result of the Chapter 11 Case). Each such
Material Agreement constitutes the legal, valid and binding obligations of the
Sellers or any of their Affiliates that is a party thereto and, to the Knowledge
of the Sellers, the respective Third Party, and is enforceable in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or similar laws in effect which affect
the enforcement of creditors' rights generally, or rules of law
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governing specific performance, equitable relief and other equitable remedies,
or public policy (including without limitation the Chapter 11 Case). All
Material Agreements, except for the Loan files, Assumed Receivables Contracts
and dealer agreements relating to the PL Business, HI Business and CL Business,
have been made available to the Buyer.
3.12. Intellectual Property.
(a) Section 3.12(a) of the applicable Business Schedules sets
forth a complete and correct list of all: (i) registrations and applications
pertaining to the Transferred Trademarks and Other Transferred Intellectual
Property and the registration or application number, registration or filing
date, jurisdiction and record owner as to each; (ii) material unregistered
Transferred Trademarks; (iii) material unregistered copyrights and material
computer software owned by the Sellers or Mill Creek Bank in the Purchased
Businesses; and (iv) Transferred Intellectual Property Agreements. All
registered Transferred Trademarks and registered Other Transferred Intellectual
Property are unexpired, and all renewal fees and other maintenance fees that
have fallen due on or prior to the effective date of this Agreement have been
paid. Except as set forth in Section 3.12(a) of the applicable Business
Schedules, no registered Transferred Trademarks or registered Other Transferred
Intellectual Property is the subject of any proceedings before any governmental,
registration or other authority in any jurisdiction, including any office action
or other form of preliminary or final refusal of registration. The consummation
of the transactions contemplated hereby will not alter or impair any Transferred
Intellectual Property in any material respect except to the extent any
Transferred Intellectual Property Agreements require a Third Party's consent
prior to transfer.
(b) Except as set forth in Section 3.12(b) of the applicable
Business Schedules and except for any Permitted Liens, the Sellers or Mill Creek
Bank own all right, title and interest in and to, or have a valid and
enforceable right to use the Transferred Intellectual Property. The Transferred
Intellectual Property and the GE Purchased Assets represent all Intellectual
Property rights necessary for the conduct of the Purchased Businesses as now
conducted and presently contemplated. The Sellers and Mill Creek Bank are in
compliance with all material contractual obligations relating to the protection
of the Transferred Intellectual Property Agreements. To the Knowledge of the
Sellers, there are no conflicts with, or infringements of, the Transferred
Trademarks and Other Transferred Intellectual Property by any third party. To
the Knowledge of the Sellers, the Transferred Trademarks and Other Transferred
Intellectual Property do not conflict with or infringe any Intellectual Property
of any Third Party. There is no claim, suit, action or proceeding pending or, to
the Knowledge of the Sellers, threatened against any Seller or Mill Creek Bank:
(i) alleging any such conflict or infringement with any Third Party's
Intellectual Property; or (ii) challenging such Seller's or Mill Creek Bank's
ownership or use of, or the validity or enforceability of, the Transferred
Trademarks and Other Transferred Intellectual Property. Except as set forth in
Section 3.12(b) of the applicable Business Schedules, no written claims of
infringement or misappropriation of Intellectual Property have been received
from Third Parties with respect to the applicable Purchased Business.
(c) Except as set forth in Section 2.8 and in Section 3.12(c)
of the applicable Business Schedules, none of the Sellers or Mill Creek Bank is
under any obligation to pay royalties or other payments in connection with any
agreement, or is restricted from assigning its
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rights respecting any Intellectual Property, nor will any Seller or Mill Creek
Bank otherwise be, as a result of the execution and delivery of this Agreement
or the performance of a Seller's obligations under this Agreement, in breach of
any agreement relating to the Intellectual Property.
(d) To the Knowledge of the Sellers, except as set forth in
Section 3.12(d) of the applicable Business Schedules, no present or former
employee, officer or director of any of the Sellers or Mill Creek Bank, or agent
or outside contractor of any of the Sellers or Mill Creek Bank, holds any right,
title or interest, directly or indirectly, in whole or in part, in or to any
Transferred Intellectual Property (except to the extent that the foregoing would
be a Permitted Lien or would otherwise not be material).
(e) (i) To the Knowledge of the Sellers, none of the Sellers'
trade secrets have been used, disclosed or appropriated to the detriment of any
of the Sellers or Mill Creek Bank for the benefit of any Person other than the
Sellers or Mill Creek Bank; and (ii) to the Knowledge of the Sellers, no
employee, independent contractor or agent of any of the Sellers or Mill Creek
Bank, in each case in any manner which, individually or in the aggregate, could
reasonably be expected to be material, has misappropriated any trade secrets or
other confidential information of any other Person in the course of the
performance of his or her duties as an employee, independent contractor or agent
of such Seller or Mill Creek Bank, in each case in any manner which,
individually or in the aggregate, could reasonably be expected to be material.
3.13. Brokerage. Other than Credit Suisse First Boston, the fees
and disbursements of which will be a prepetition claim against the CFC Parties,
and Lazard Freres & Co. LLC, the fees and disbursements of which are to be paid
by Parent, no Person has any claim for brokerage commissions, finders' fees or
similar compensation in connection with the transactions contemplated by this
Agreement based on any arrangement or agreement made by or on behalf of the
Sellers or Mill Creek Bank.
3.14. Employees. Section 3.14 of each Business Schedule sets forth
the employee identification numbers, names, positions, years of service and
place of employment of all employees of the Sellers and Mill Creek Bank and any
of their Affiliates for each applicable Purchased Business and Excluded Business
who are as of the date hereof working primarily in the applicable Purchased
Business, Excluded Business or Mill Creek Bank (the "Employees"). A separate
corresponding list which sets forth severance and current compensation for the
Employees was provided to the Buyer. None of the Sellers or Mill Creek Bank or
any of their Affiliates is a party to a collective bargaining agreement covering
any of the Employees and, to the Knowledge of the Sellers, no union organizing
activities have occurred with respect to any Employees.
3.15. Affiliate Transactions. Section 3.15 of the applicable
Business Schedules describes all intercompany or affiliated transactions which
are material (individually or in the aggregate) or Contracts under which credits
or services are provided to or on behalf of the applicable Purchased Business
and Excluded Business by the Sellers or Mill Creek Bank (including any
"subsidiary" of Mill Creek Bank, as that term is defined in section 23A of the
Federal Reserve Act) and to or on behalf of the Sellers or Mill Creek Bank
(including any such "subsidiary") by the applicable Purchased Business and
Excluded Business and all intercompany
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transactions or Contracts among the Sellers with respect to the applicable
Purchased Business and Excluded Business (including, in each case, a description
of the costs and expenses charged to the applicable Purchased Business and
Excluded Business in connection therewith). Mill Creek Bank (and any such
"subsidiary") is not, and has not been since January 1, 2000, in violation of
section 23A or section 23B of the Federal Reserve Act, whether or not any such
violation is known by any Governmental Authority.
3.16. ERISA; Employee Benefits. The Sellers have furnished or made
available to the Buyer complete and correct copies of all employee benefit
plans, as defined in Section 3(3) of ERISA, and all other retirement, deferred
compensation, incentive compensation, insurance, bonus, medical, stock option,
severance, retention, vision, dental, vacation policy and other material
employee benefit plans in which the Employees participate ("Employee Benefit
Plans"), the current summary plan description for each Employee Benefit Plan
subject to ERISA and any similar description of any other Employee Benefit Plan.
None of the Employee Benefit Plans are multiemployer plans (as defined in
Section 3(37) of ERISA). Each Employee Benefit Plan which is a defined
contribution pension plan intended to be qualified under Section 401(a) of the
Tax Code is so qualified. None of the Employee Benefit Plans are established
under, or subject to, the laws of any country other than the United States.
3.17. Depository Institutions.
(a) Mill Creek Bank is "well-capitalized" (as that term is
defined at 12 C.F.R. 225.2(r)(2)(i) and 325.103(b)(1)) and "well managed" (as
that term is defined at 12 C.F.R. 225.81(c)) and its examination rating under
the Community Reinvestment Act of 1977 is satisfactory or outstanding. Mill
Creek Bank is not in a "troubled condition" (as that term is defined at 12
C.F.R. 303.101(c)).
(b) Except as set forth in Section 3.17 of the applicable
Business Schedules, Mill Creek Bank is not, and has not been since January 1,
2000, subject to any supervisory or remedial agreement of any kind, including
but not limited to any memorandum of understanding, agreement, cease-and-desist
order, consent order or enforcement order with or from any Governmental
Authority.
(c) Mill Creek Bank is in compliance in all material respects
with all applicable Laws. There are no material investigations or proceedings
pending or, to the Knowledge of the Sellers, threatened, alleging or
contemplating any material violation of any applicable Law.
3.18. Litigation. Except for the Chapter 11 Case, as of the date
hereof, there are no claims, actions, suits, investigations, proceedings or
orders pending, except as set forth in Section 3.18 of the applicable Business
Schedules, or to the Knowledge of the Sellers threatened against or affecting
the CFC Parties at law or in equity, or before or by any Governmental Authority,
that, individually or in the aggregate, are reasonably likely to (a) have a
Material Adverse Effect, (b) materially and adversely affect the Sellers' or
Mill Creek Bank's performance under this Agreement and the other Transaction
Documents to which the Sellers or Mill Creek Bank are a party or (c) materially
delay or impair the consummation of the transactions contemplated hereby or
thereby.
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3.19. Financial Statements. Section 3.19 of the applicable Business
Schedules sets forth the unaudited consolidated balance sheet of the applicable
Purchased Business and Excluded Business as of December 31, 2001, December 31,
2002 and September 30, 2002 and the related unaudited statements of income for
the fiscal years ended December 31, 2001 and December 31, 2002 and the period
ended September 30, 2002, and the unaudited consolidated balance sheets of the
Purchased Businesses and Excluded Businesses as of December 31, 2001, December
31, 2002 and September 30, 2002 and the related unaudited statements of income
for the fiscal years ended December 31, 2001 and December 31, 2002 and the
period ended September 30, 2002 (collectively, including the notes thereto, the
"Financial Statements"). The Financial Statements have been prepared from the
accounting Records of the Purchased Businesses and Excluded Businesses and
fairly present, in all material respects, the financial position as of the dates
thereof and the results of the operations of the Purchased Businesses and
Excluded Businesses for the periods therein described, in each case in
accordance with GAAP, consistently applied, except as otherwise provided in the
Financial Statements and the notes thereto; provided that the Financial
Statements reflect intercompany allocations of overhead and other non-specific
expenses between the Purchased Businesses and Excluded Businesses which the
Sellers believe are reasonable which have been disclosed to the Buyer in
reasonable detail. The November 30 Balance Sheet sets forth the unaudited
consolidated balance sheet of the Company as of November 30, 2002 and was
prepared from the accounting Records of the Company and fairly presents, in all
material respects, the financial position of the Company as of the date thereof,
except with respect to Residual Interests, B-2 Certificates, servicing
liabilities and the net present value of guaranteed liabilities for others. The
Records from which the Financial Statements and the November 30 Balance Sheet
were prepared were complete and accurate in all material respects at the time of
such preparation.
3.20. Indebtedness; Guarantees; Absence of Undisclosed Liabilities.
(a) Except as set forth in the Financial Statements, no CFC
Party has any outstanding indebtedness for borrowed money. Except as set forth
in Section 3.20(a) of each Business Schedule, no CFC Party is a party to any
Loan agreement whereby the CFC Party has borrowed money, structured in the form
of a loan or purchase and sale, has any outstanding Guarantees in favor of any
other Person or is otherwise liable for any indebtedness for borrowed money of
any other Person. Except as set forth in Section 3.20(a) of each Business
Schedule, no CFC Party has any Liabilities, individually or in the aggregate, of
the type required to be reflected on a balance sheet or in the notes thereto
prepared in accordance with GAAP which were not fully reflected or reserved
against in the Financial Statements (other than current Liabilities incurred in
the ordinary course of business), except for those that would not reasonably be
expected to have a Material Adverse Effect.
(b) In the event that a Stock Sale is consummated, as of the
Closing Date, each Subject Subsidiary and its Subsidiaries will have transferred
all Liabilities other than Assumed Liabilities as contemplated by Section
2.1(b).
(c) As of the close of business on March 6, 2003, the
outstanding Xxxxxx Debt Amount was $676,215,802.00.
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3.21. Residual Assets. As of September 30, 2002, the amount of
$198.6 million included in the consolidated balance sheets of the Company under
the heading "Guaranty Liability related to interests in Securitization Trusts
held by Others" reflects amounts due to the holders of the B-2 Certificates from
the CFC Parties and has been determined in accordance with GAAP by the use of
reasonable estimates and assumptions in calculating values. The Residuals
Schedule identifies, among other things, all of the assets within the categories
set forth therein that are owned by the Company or any other CFC Party and the
information contained therein is accurate in all material respects as of
December 19, 2002. The Sellers own all assets identified on the Residuals
Schedule and all servicing, interest-only or other payment rights (whether
certificated or uncertificated) in the nature of a retained or residual interest
arising in connection with a Xxxxxx Mae loan pool identified on the Xxxxxx Xxx
Pool List included in Attachment A to Section 3.26 of the Purchased Businesses
Schedule, which list includes all Xxxxxx Mae loan pools in which the Company or
any other CFC Party holds any interest.
3.22. Tax Matters.
(a) Each of the CFC Parties has filed all Tax Returns that it
was required to file, and each has paid all Taxes, whether or not required to be
paid in connection with the filing of a Tax Return. Such Tax Returns are true,
correct and complete. The reserves for Taxes in the Financial Statements are
adequate. Except as set forth in Section 3.22(a) of the applicable Business
Schedules, none of the CFC Parties has waived any statute of limitations in
respect of any Tax Returns or Taxes or agreed to any extension of time with
respect to a Tax assessment or deficiency.
(b) Section 3.22(b) of the applicable Business Schedules sets
forth (i) all Income Tax Returns filed with respect to the CFC Parties, the
Purchased Businesses and the Excluded Businesses for all open Tax years, (ii)
those Tax Returns that have been audited, (iii) those Tax Returns that currently
are the subject of audit, and (iv) any dispute or claim concerning Tax Liability
relating to the Purchased Businesses, the Excluded Businesses or the CFC
Parties. The Company has made available to the Buyer correct and complete copies
of all federal and state Tax Returns, examination reports, and statements of
deficiencies assessed against or agreed to by the CFC Parties with respect to
the Purchased Businesses and the Excluded Businesses for all open Tax years.
(c) Except as set forth in Section 3.22(c) of the applicable
Business Schedules, (i) for all open Tax years all Taxes required to be
withheld, collected or deposited by each CFC Party have been timely withheld,
collected and deposited and, to the extent required by law, all such Taxes have
been paid when due to the appropriate taxing authority and each CFC Party is in
compliance with respect to all withholding and information and reporting
requirements in the Tax Code; (ii) there are no closing agreements pursuant to
Section 7121 of the Tax Code (or corresponding provision of state, local or
foreign law) or rulings or requests for rulings relating to any CFC Party; (iii)
none of the assets of any CFC Party is "tax-exempt use property" within the
meaning of Section 168(h) of the Tax Code; (iv) none of the CFC Parties have
filed a consent under Section 341(f) of the Tax Code concerning collapsible
corporations; (v) no transaction contemplated by this Agreement is subject to
withholding under Section 1445 of the Tax Code (relating to "FIRPTA"); (vi) none
of the CFC Parties will be required to include any adjustment under Section
481(c) of the Tax Code (or any corresponding provision of state,
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local or foreign law) in taxable income as a result of a change in accounting
method for a Tax period beginning on or before the Closing Date; (vii) no claim
has ever been made by a Taxing authority in a jurisdiction where any CFC Party
has never paid Taxes or filed Tax Returns asserting that such CFC Party is or
may be subject to Taxes assessed by such jurisdiction; (viii) no power of
attorney has been granted with respect to any matter relating to Taxes of any
CFC Party that is currently in effect; (ix) none of the CFC Parties has made,
changed or revoked, or permitted to be made, changed or revoked, any election or
method of accounting with respect to Taxes affecting or relating to any CFC
Party; and (x) no election has been made under Section 754 of the Tax Code for a
partnership or other entity treated as a partnership for U.S. federal income tax
purposes in which any of the CFC Parties is a partner or member or holds a
residual interest.
(d) Except as set forth in Section 3.22(d) of the applicable
Business Schedules, as to each of the entities or arrangements identified as a
REMIC in Section 3.22(d) of the applicable Business Schedules, it:
(i) has at all times since its "startup day" (as defined
in Section 860G(a)(9) of the Tax Code) duly qualified as a
"real estate mortgage investment conduit" under Section
860D(a) of the Tax Code, and will not, by virtue of the
transactions contemplated by this Agreement, including without
limitation changes in the amount of certain servicing fees
provided for by the Securitization Documents, fail to qualify
as a real estate mortgage investment conduit under Section
860D(a) of the Tax Code;
(ii) has engaged in no " prohibited transactions" (as
defined in Section 860F(a)(2) of the Tax Code) and has never
received any contributions after its startup day subject to
the tax imposed by Section 860G(d) of the Tax Code;
(iii) has not held for more than 30 months any assets
intended to be treated as "foreclosure property" under Section
860G(a)(8) of the Tax Code;
(iv) had an aggregate basis in its assets, as of
December 31, 2001 equal to that set forth in Section 3.22(d)
of the applicable Business Schedules;
(v) has reported bad debt losses with respect to
defaults on Loans that it held at the time by writing off the
loans upon liquidation of the underlying collateral;
(vi) has reported cancellation of indebtedness income,
or has reduced interest or original issue discount deductions,
with respect to REMIC Regular Interests it has issued, (A) on
the basis of claiming no deduction for original issue discount
or interest for Regular Interests to which cash distributions
are currently due but remain unpaid and (B) by treating
payments by the guarantor of the Junior P&I Regular Interests
to a REMIC as a result of defaults as gross income to such
REMIC;
(vii) treats Guarantee Fees as an item of expense and
not as an item distributable to the holder of its related
REMIC Residual Interest;
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(viii) has reported deductions for original issue
discount and interest accruals with respect to the REMIC
Regular Interests it issued based on their issue prices
determined in accordance with Section 1273 of the Tax Code and
Section 1.1273-2 of the Treasury Regulations;
(ix) has based original issue discount deductions with
respect to REMIC Regular Interests in each period on (A) the
projected cash flow remaining to be distributed on such REMIC
Regular Interests, taking into account the prepayment
assumption used in pricing, but a zero loss assumption, with
respect to the Loans it holds, (B) making present value
computations with respect to such projected cash flow based on
the original yield to maturity of such REMIC Regular
Interests, and (C) if such computations resulted in negative
original issue discount or positive premium amortization
("Deferred Recognition Amounts") with respect to any REMIC
Regular Interest, suspending the recognition of such Deferred
Recognition Amounts until there is subsequent positive
original issue discount or negative premium amortization with
respect to such REMIC Regular Interest;
(x) has timely filed all Tax Returns required to be
filed by such REMIC;
(xi) has withheld and paid over in a timely fashion all
Taxes or other amounts required to be withheld by such REMIC
and paid over to any governmental taxing authority; and
(xii) has never itself been examined by, or itself
entered into any closing agreement with, the Internal Revenue
Service, and is not bound by any such closing agreement
entered into between the Company or the Selling Subsidiaries
and the Internal Revenue Service.
(e) As to each REMIC Residual Interest included in, or held by
an entity included in, the Purchased Assets:
(i) as of December 31, 2001, such REMIC Residual
Interest had (A) an adjusted basis and remaining unrecognized
gain or loss in the hands of its holder and (B) an adjusted
issue price as set forth in Section 3.22(e) of the applicable
Business Schedules;
(ii) except as set forth in Section 3.22(e) of the
applicable Business Schedules, "excess inclusions", as defined
in Section 860E(c) of the Tax Code, are computed correctly on
the Schedule Qs sent to the holder of such REMIC Residual
Interest;
(iii) Guarantee Fees are not treated as an item of
income that is received with respect to such REMIC Residual
Interest, but as a fee;
(iv) all schedules and projections of taxable income and
distributions furnished by the Company or the Selling
Subsidiaries to the Buyer with respect to
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any such REMIC Residual Interest are correct based on their
assumptions; provided, however, that no representation is made
regarding the accuracy of those assumptions; and
(v) it has been held at all times by the Company or the
Selling Subsidiaries.
(f) As to each REMIC Regular Interest included in, or held by
an entity included in, the Purchased Assets:
(i) as of December 31, 2001, such REMIC Regular Interest
had (A) an adjusted basis and remaining unrecognized gain or
loss in the hands of its holder and (B) an adjusted issue
price as set forth in Section 3.22(f) of the applicable
Business Schedules;
(ii) all schedules and projections of taxable income and
distributions furnished by the Company or the Selling
Subsidiaries to the Buyer with respect to any such REMIC
Regular Interest are correct based on their assumptions;
provided, however, that no representation is made regarding
the accuracy of those assumptions; and
(iii) it has been held at all times by the Company or
the Selling Subsidiaries.
(g) With respect to the NIMS Issuer:
(i) it is not an association taxable as a corporation, a
publicly traded partnership within the meaning of Section 7704
of the Tax Code, or a taxable mortgage pool within the meaning
of Section 7701(i) of the Tax Code;
(ii) the NIMS Notes are indebtedness of the NIMS Issuer
for all purposes of the Tax Code;
(iii) as of December 31, 2001, it had a basis in its
assets and adjusted issue price for the NIMS Notes it issued
in the amounts set forth in Section 3.22(g) of the applicable
Business Schedules;
(iv) it has timely filed all Tax Returns required to be
filed by it;
(v) the 2001 Tax Return of the NIMS Issuer furnished by
the Sellers to the Buyer is true, correct and complete in all
material respects, with the exception that it does not reflect
certain adjustments in the basis of certain Residual Interests
and IO Regular Interests held by the NIMS Issuer that are
intended to be made to reflect a revaluation of such Residual
Interests and IO Regular Interests as of the startup day of
the REMIC that issued them, with such revaluation as of such
date to be consistent with the revaluation of similar REMIC
interests made in the audit of the Sellers' Tax Returns for
the period ended December 31, 1997, and with
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such adjustments to be made in an amended Tax Return of the
NIMS Issuer prepared in accordance with Section 5.19(c); and
(vi) the basis of the NIMS Equity in the hands of its
holder or holders as of December 31, 2001 was the amount set
forth in Section 3.22(g) of the applicable Business Schedules.
(h) Except as set forth in Section 3.22(h) of the applicable
Business Schedules as to each of the MESA Issuers:
(i) it is classified as a corporation for United States
federal income tax purposes;
(ii) it is not subject to taxation in any domestic or
foreign jurisdiction;
(iii) the MESA Notes it has issued are indebtedness of
the MESA Issuers for all purposes of the Tax Code;
(iv) it is not engaged, and has never been engaged, in a
United States trade or business, and will not be so treated
assuming continued compliance with the terms of the
Securitization Documents governing the issuance of the related
MESA Notes by the parties thereto;
(v) it holds no assets, or interests in assets, that
produce income that is subject to withholding under Sections
1441 through 1446 of the Tax Code or are otherwise subject to
withholding by any domestic or foreign jurisdiction;
(vi) it has at all times during its existence been
controlled by the Company and the Selling Subsidiaries;
(vii) any Grantor Trust created to hold the MESA
Collateral in connection with a Securitization qualifies as an
"investment trust" within the meaning of Treasury Regulation
Section 301.7701-4(c)(2) and is classified as a grantor trust
for federal income tax purposes;
(viii) as of December 31, 2001, it had a basis in its
REMIC assets, and an adjusted issue price for the MESA Notes
it issued, equal to those shown in Section 3.22(h) of the
applicable Business Schedules;
(ix) with respect to its REMIC assets, it has determined
its income and deductions in the same manner as the REMICs
listed in Section 3.22(g) of the applicable Business
Schedules; and
(x) the basis of the MESA Equity in the hands of its
holder or holders as of December 31, 2001 was the amount shown
in Section 3.22(g) of the applicable Business Schedules.
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(i) The transactions contemplated, including without
limitation any changes in servicing fees or guarantee arrangements with respect
to any REMIC, by this Agreement will not adversely affect the tax
characterizations of any of the Securitizations as originally represented in
connection with such Securitizations, whether or not such representations were
the subject of confirming legal opinions.
(j) No elections have been made to treat any Securitizations,
or parts thereof, as "financial asset securitization investment trusts" within
the meaning of Section 860L(a) of the Tax Code.
(k) Each CFC Party has filed all material sales and use Tax
Returns that it was required to file, and paid all Taxes shown as due thereon.
Such Tax Returns are true, correct and complete. Except as provided in Section
3.22(k) of the Business Schedules, a CFC Party has collected all but an
immaterial number of resale certificates or other applicable documents as
required for the application of any exemption with respect to any sales or use
Tax applicable to the transfer of a repurchased or repossessed asset by a CFC
Party, including all but an immaterial number of resale certificates for sales
of repossessed manufactured housing.
(l) As to any Securitization, or interest therein, not
described in subsections (d) through (h) of this Section 3.22:
(i) the entity ("Other Securitization Entity") holding
the assets and issuing the securities issued in such
Securitization is either a grantor trust, a partnership or a
disregarded entity, and not an association taxable as a
corporation, a publicly traded partnership or a taxable
mortgage pool, for federal income tax purposes;
(ii) the Other Securitization Entity has filed Tax
Returns throughout its existence that are true, correct and
complete in all material respects;
(iii) to the extent the Other Securitization Entity has
issued instruments designated as notes, bonds, debentures or
other evidences of indebtedness, such instruments will be
characterized as indebtedness for federal income tax purposes;
and
(iv) to the extent the Other Securitization Entity has
issued instruments designated as certificates, units or other
equity instruments, such instruments will be characterized as
either evidencing a beneficial ownership interest in the
assets held by such Other Securitization Entity or as
evidencing ownership of an equity interest in such Other
Securitization Entity itself.
3.23. Insurance. Set forth in Section 3.23 of the applicable
Business Schedules is a list of all Insurance Policies for such Purchased
Business and Excluded Businesses, including summary coverage terms and
expiration dates. All premiums due and payable with respect to the Insurance
Policies have been timely paid. No notice of cancellation of, or indication of
an intention not to renew, any material Insurance Policy has been received by
the Sellers. To the Knowledge of the Sellers, all such Insurance Policies are in
full force and effect and the Sellers and Mill Creek Bank are not in default
under any provisions of the Insurance Policies.
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3.24. Environment, Health and Safety. The CFC Parties are in
compliance in all material respects with all Environmental Laws applicable to
the Purchased Businesses and the Purchased Assets and have not received written
notice from any Governmental Authority or other Person alleging non-compliance
or that they are otherwise liable for the clean-up or other environmental
response costs pursuant to any Environmental Law.
3.25. Accounting Controls. The CFC Parties have devised and
maintained systems of internal accounting controls which they believe are
sufficient to provide reasonable assurances that (a) all material transactions
are executed in accordance with its management's general or specific
authorization; (b) all material transactions are recorded as necessary to permit
the preparation of financial statements in conformity with GAAP or any other
criteria applicable to such statements; (c) access to its material property and
assets is permitted only in accordance with management's general or specific
authorization; and (d) the recorded accountability for items is compared with
the actual levels thereof at reasonable intervals and appropriate action is
taken with respect to any variances.
3.26. Summary of Securitizations. The information set forth in
Section 3.26 of the applicable Business Schedules which identifies, among other
things, all Securitizations, is true, complete and correct as of December 19,
2002.
3.27. Representations as to Certain Purchased Assets. Exhibit A
sets forth certain additional representations and warranties with respect to the
Loans and the Residual Assets.
3.28. Securities Offerings. The offering memoranda, offering
circulars, prospectuses and any other offering documents or registration
statements for the offering of securities, and any amendments or supplements
thereto, distributed, delivered or filed in connection with the Securitizations
of the CFC Parties, including, without limitation, the offering materials
related to the NIMS Trust and the MESA Notes, as of their dates, did not contain
any untrue statement of a 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.
3.29. No Powers of Attorney. Except as set forth in Section 3.29 of
the applicable Business Schedules, no CFC Party has any powers of attorney or
comparable delegations of authority outstanding with respect to the Purchased
Assets.
3.30. Securities Laws Matters; No Registration. No trust,
arrangement, issuer or other entity will be required to register as an
investment company under the Investment Company Act of 1940, as amended, and no
issue of securities or securities transaction will be required to be registered
under the Securities Act of 1933, as amended, as a result of the sale of
Purchased Assets pursuant to this Agreement. The Buyer will be an eligible
transferee of any Residual Assets to be transferred to the Buyer under this
Agreement in accordance with the documents governing each Securitization and any
such transfer will be completed in accordance with such documents. The statutory
or regulatory foundations for exemptions from registration under the Investment
Company Act of 1940, as amended, on which the Securitizations rely include only
Rule 3a-7, Section 3(c)(5)(C) and Section 3(c)(5)(A) of the Investment Company
Act of 1940, as amended.
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3.31. Green Tree RECS II Guaranty Corporation. Except as set forth
in Section 3.31 of the applicable Business Schedules, Green Tree RECS II
Guaranty Corporation ("RECS") has no outstanding indebtedness or other
Liabilities or Guarantees in favor of any other Person. Section 3.31 of the
applicable Business Schedules contains a complete and accurate list of all
Contracts to which RECS is a party, in each case including all amendments and
modifications thereto (the "RECS Contracts"). To the Sellers' Knowledge, there
are no disputes, oral agreements or forbearance programs in effect as to any of
the RECS Contracts. There has not occurred any default by RECS under any of the
RECS Contracts, and to the Knowledge of the Sellers, there has not occurred any
default thereunder by any other party thereto. RECS has complied with all terms
and conditions of its Organizational Documents.
3.32. Conseco HE/HI 2001-B-2, Inc. Conseco HE/HI 2001-B-2, Inc. has
no assets, properties, Contracts or rights which constitute Purchased Assets.
3.33. Conseco Finance Securitizations Corp. Except as set forth in
Section 3.33 of the applicable Business Schedules, Conseco Finance
Securitizations Corp. has no assets, properties or rights which constitute
Purchased Assets. Except as set forth in Section 3.33 of the applicable Business
Schedules, Conseco Finance Securitizations Corp. has no indebtedness or other
Liabilities or Guarantees in favor of any other Person. Section 3.33 of the
applicable Business Schedules contains a complete and accurate list of all
Contracts to which Conseco Finance Securitizations Corp. is a party, in each
case including all amendments and modifications thereto (the "CFSC Contracts").
Except as set forth in Section 3.33 of the applicable Business Schedules, to the
Sellers' Knowledge, there are no disputes, oral agreements or forbearance
programs in effect as to any CFSC Contracts. Except as set forth in Section 3.33
of the applicable Business Schedules, there has not occurred any default by
Conseco Finance Securitizations Corp. under any of the CFSC Contracts. To the
Knowledge of the Sellers, there has not occurred any default thereunder by any
other party thereto. Conseco Finance Securitizations Corp. has complied with all
terms and conditions of its Organizational Documents.
3.34. Green Tree First GP Inc. Except as set forth in Section 3.34
of the applicable Business Schedules, Green Tree First GP Inc. has no
outstanding indebtedness or other Liabilities or Guarantees in favor of any
other Person. Section 3.34 of the applicable Business Schedules contains a
complete and accurate list of all Contracts to which Green Tree First GP Inc. is
a party, in each case including all amendments and modifications thereto (the
"GTF Contracts"). To the Sellers' Knowledge, there are no disputes, oral
agreements or forbearance programs in effect as to any of the GTF Contracts.
There has not occurred any default by Green Tree First GP Inc. under any of the
GTF Contracts, and to the Knowledge of the Sellers, there has not occurred any
default thereunder by any other party thereto. Green Tree First GP Inc. has
complied with all terms and conditions of its Organizational Documents.
3.35. Green Tree Second GP Inc. Except as set forth in Section 3.35
of the applicable Business Schedules, Green Tree Second GP Inc. has no
outstanding indebtedness or other Liabilities or Guarantees in favor of any
other Person. Section 3.35 of the applicable Business Schedules contains a
complete and accurate list of all Contracts to which Green Tree Second GP Inc.
is a party, in each case including all amendments and modifications thereto (the
"GTS Contracts"). To the Sellers' Knowledge, there are no disputes, oral
agreements or forbearance
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programs in effect as to any of the GTS Contracts. There has not occurred any
default by Green Tree Second GP Inc. under any of the GTS Contracts, and to the
Knowledge of the Sellers, there has not occurred any default thereunder by any
other party thereto. Green Tree Second GP Inc. has complied with all terms and
conditions of its Organizational Documents.
3.36. Conseco Finance Advance Receivables Corp. Except for the
Servicer Advance Facility, Conseco Finance Advance Receivables Corp. has no
outstanding indebtedness or other Liabilities or Guarantees in favor of any
other Person. The Contracts executed in connection with the Servicer Advance
Facility, including all amendments and modifications thereto (the "CFARC
Contracts"), are all of the Contracts to which Conseco Finance Advance
Receivables Corp. is a party. The Sellers have delivered all CFARC Contracts to
the Buyer. To the Sellers' Knowledge, there are no disputes, oral agreements or
forbearance programs in effect as to any of the CFARC Contracts. Except as set
forth in Section 3.36 of the applicable Business Schedules, there has not
occurred any default by Conseco Finance Advance Receivables Corp. under any of
the CFARC Contracts, and to the Knowledge of the Sellers, there has not occurred
any default thereunder by any other party thereto. Conseco Finance Advance
Receivables Corp. has complied with all terms and conditions of its
Organizational Documents.
3.37. Conseco Finance Liquidation Expense Advance Receivables
2002-B Corp. Except for the Clear Facility, Conseco Finance Liquidation Expense
Advance Receivables 2002-B Corp. has no outstanding indebtedness or other
Liabilities or Guarantees in favor of any other Person. The Contracts executed
in connection with the Clear Facility, including all amendments and
modifications thereto (the "CFLEAR 2002-B C Contracts"), are all of the
Contracts to which Conseco Finance Liquidation Expense Advance Receivables
2002-B Corp. is a party. The Sellers have delivered all CFLEAR 2002-B C
Contracts to the Buyer. To the Sellers' Knowledge, there are no disputes, oral
agreements or forbearance programs in effect as to any of the CFLEAR 2002-B C
Contracts. Except as set forth in Section 3.37 of the applicable Business
Schedules, there has not occurred any default by Conseco Finance Liquidation
Expense Advance Receivables 2002-B Corp. under any of the CFLEAR 2002-B C
Contracts, and to the Knowledge of the Sellers, there has not occurred any
default thereunder by any other party thereto. Conseco Finance Liquidation
Expense Advance Receivables 2002-B Corp. has complied with all terms and
conditions of its Organizational Documents.
3.38. Convergent Lending Services, LLC. Except as set forth in
Section 3.38 of the applicable Business Schedules, Convergent Lending Services,
LLC has no outstanding indebtedness or other Liabilities or Guarantees in favor
of any other Person. Section 3.38 of the applicable Business Schedules contains
a complete and accurate list of all Contracts to which Convergent Lending
Services, LLC is a party, in each case including all amendments and
modifications thereto (the "Convergent Contracts"). To the Sellers' Knowledge,
there are no disputes, oral agreements or forbearance programs in effect as to
any of the Convergent Contracts. There has not occurred any default by
Convergent Lending Services, LLC under any of the Convergent Contracts, and to
the Knowledge of the Sellers, there has not occurred any default thereunder by
any other party thereto. Convergent Lending Services, LLC has complied with all
terms and conditions of its Organizational Documents.
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ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE BUYER
As a material inducement to the Sellers to enter into this
Agreement, the Buyer hereby represents and warrants to the Sellers the
following:
4.1. Organization and Corporate Power. The Buyer is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware, with the requisite power and authority to
enter into this Agreement and the other Transaction Documents to which the Buyer
is a party and perform its obligations hereunder and thereunder.
4.2. Authorization of Transaction. The execution, delivery and
performance of this Agreement and the other Transaction Documents to which the
Buyer is a party have been duly and validly authorized by all requisite action
on the part of the Buyer, and no other corporate proceedings on its part are
necessary to authorize the execution, delivery or performance of this Agreement.
This Agreement constitutes, and each of the other Transaction Documents to which
the Buyer is a party shall when executed constitute, a valid and binding
obligation of the Buyer, enforceable in accordance with their respective terms,
except as such enforceability may be limited by applicable receivership,
conservatorship and supervisory powers of bank regulatory agencies generally as
well as by bankruptcy, insolvency, moratorium, reorganization or similar laws in
effect which affect the enforcement of creditors' rights generally, or rules of
law governing specific performance, equitable relief and other equitable
remedies.
4.3. No Violation. The Buyer is not subject to or obligated under
its Organizational Documents, any applicable Law or any Contract, or any
license, franchise or permit, which would be breached or violated by its
execution, delivery or performance of this Agreement and the other Transaction
Documents to which the Buyer is a party.
4.4. Governmental Authorities and Consents. Except as required by
(a) the Finance Laws, (b) the Insurance Laws and (c) the Change in Bank Control
Act and Utah banking Laws with respect to the change of control of Mill Creek
Bank, the Buyer is not required to submit any notice, report or other filing
with any Governmental Authority, and no consent, approval or authorization of
any Governmental Authority or any other Person is required to be obtained by the
Buyer, in connection with the execution or delivery by it of this Agreement and
the other Transaction Documents to which the Buyer is a party or the
consummation of the transactions contemplated hereby or thereby, except for the
filing and expiration or termination of the waiting period under the HSR Act.
Except for the consents, approvals and authorizations related to the conditions
set forth in Section 6.11(b) and (c) hereof, the Buyer is not aware of any fact
or circumstance relating to the Buyer which would prohibit or unduly restrict
the Buyer or any of the Sellers from obtaining any consent, approval or
authorization of any Governmental Authority or any other person which is
required to be obtained in connection with the transactions contemplated by this
Agreement.
4.5. Litigation. As of the date hereof, there are no claims,
actions, suits, investigations, proceedings or orders pending or, to the Buyer's
knowledge, threatened against or affecting the Buyer at law or in equity, or
before or by any Governmental Authority, which
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would adversely affect the Buyer's performance under this Agreement and the
other Transaction Documents to which the Buyer is a party or the consummation of
the transactions contemplated hereby or thereby.
4.6. Brokerage. No Person has any claim for brokerage commissions,
finders' fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement made by or
on behalf of the Buyer.
4.7. Availability of Funds. The Buyer has obtained commitment
letters (true and correct copies of which have heretofore been provided to the
Company) from financial institutions to borrow sufficient funds to enable it to
consummate the transactions contemplated by this Agreement. At the Closing, the
Buyer will have sufficient funds to enable it to consummate the transactions
contemplated by this Agreement.
4.8. Stock Purchase. The Shares of any Subject Subsidiary purchased
by the Buyer pursuant to this Agreement, if any, are being purchased for
investment only and not with a view to any public distribution thereof, and the
Buyer will not offer to sell or otherwise dispose of such Shares so purchased by
it in violation of any of the registration requirements of the Securities Act of
1933, as amended, or any applicable state securities laws.
4.9. Knowledge. As of the date hereof, the Buyer has no actual
knowledge of any change, circumstance, breach or event which constitutes or has
resulted in a Material Adverse Effect.
ARTICLE V.
ADDITIONAL AGREEMENTS
5.1. Tax Matters.
(a) Transfer Taxes. All transfer, documentary, sales, use,
stamp, registration and other such Taxes and fees (including any penalties and
interest thereon) incurred in connection with this Agreement shall be paid by
the Sellers when due, and the Sellers shall, at their own expense, file all
necessary Tax Returns and other documentation with respect to all such transfer,
documentary, sales, use, stamp, registration and other Taxes and fees, and if
required by applicable law, the Buyer shall join in the execution of any such
Tax Returns and other documentation; provided, however, the Sellers and the
Buyer hereby waive any requirements under any bulk sale rule arising from any
transaction under this Agreement that relates to the application of any sales or
use Taxes.
(b) Tax Sharing and Indemnification.
(i) The Sellers shall indemnify and hold harmless the
Buyer and its Affiliates, each Subject Subsidiary, each
Subsidiary of any Subject Subsidiary, and their respective
directors, officers, employees, representatives, agents,
successors and assigns with respect to any and all Losses that
may be imposed on the Buyer, any Subject Subsidiary, any
Subsidiary of any Subject Subsidiary, or in respect of the
Purchased Assets resulting from (A) any Taxes of any CFC Party
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for any Pre-Closing Tax Period, (B) any Taxes of any
Affiliated Group that includes Parent or any CFC Party,
including any Liability for Tax under Treasury Regulation
Section 1.1502-6 or any comparable state, local or foreign Tax
provision, except for any Taxes of any Subject Subsidiary (or
a Subsidiary of a Subject Subsidiary after the Closing Date)
for any Post-Closing Tax Period relating to an Affiliated
Group of which the Subject Subsidiary (or such Subsidiary of a
Subject Subsidiary) is a member after the Closing Date, (C)
any breach of any representation or warranty of the Sellers
contained in Section 3.22 or any schedule delivered pursuant
thereto, (D) any Taxes arising ------------ from a Section 338
Election with respect to any CFC Party, or (E) any Taxes
arising out of the application of any bulk sale rule under
federal, state, local or foreign law to any transaction
contemplated by this Agreement including Taxes resulting from
the failure to comply with any such bulk sale rule applicable
in respect of any sales and use taxes.
(ii) For any federal, state, local or foreign Tax
purposes, Taxes, if any, attributable to a Straddle Period of
any Subject Subsidiary or any Subsidiary of a Subject
Subsidiary shall be allocated to (A) the Sellers for the
Pre-Closing Tax Period, and (B) the Buyer for the Post-Closing
Tax Period. For purposes of the preceding sentence, Taxes for
the Pre-Closing Tax Period and for the Post-Closing Tax Period
of each Straddle Period shall be determined on the basis of an
interim closing of the books as of the close of business on
the Closing Date as if such Straddle Period consisted of one
Taxable period ending at the close of business on the Closing
Date followed by a Taxable period beginning on the day
following the Closing Date. For purposes of this subparagraph
(ii), exemptions, allowances or deductions that are calculated
on an annual basis, such as the deduction for depreciation,
shall be apportioned on a daily basis. Real, personal and
intangible property Taxes of any Selling Subsidiary or any
Subsidiary of any Subject Subsidiary or any Subsidiary of a
Subject Subsidiary shall be equal to the amount of such
property Taxes for the entire Straddle Period multiplied by a
fraction, the numerator of which is the number of days during
the Straddle Period that are in the Pre-Closing Tax Period and
the denominator of which is the total number of days in the
Straddle Period. For purposes of this Section 5.1 and the
representation contained in Section 3.22, any Tax that is
based in whole or in part on income earned during a particular
Taxable period shall be deemed to be a Tax attributable to and
imposed in respect of such Taxable period; provided, that for
purposes of this sentence, the term "Taxable period" shall
include any portion of a Taxable period that ends on and
includes the Closing Date.
(iii) Except as otherwise provided in Section 5.1, if a
payment is required under Section 5.1, the Sellers shall
discharge their obligation by paying the amount due not later
than 10 days after notice to the Sellers stating that an
amount is owed under Section 5.1 to the Buyer, the amount
thereof, and that an indemnity payment is requested.
(iv) For the avoidance of doubt, any amount payable by
the Sellers pursuant to Section 5.1(a) shall be reduced by any
estimated tax paid prior to
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Closing with respect to the Tax for which Buyer would
otherwise have been liable under Section 5.1(b)(i).
(c) Tax Returns.
(i) The Sellers shall prepare or cause to be prepared,
and file or cause to be filed, all Tax Returns of each CFC
Party, including consolidated, combined or unitary Tax Returns
which include any CFC Party, for all Taxable periods of each
CFC Party that end on or prior to the Closing Date. All such
Tax Returns shall be prepared on a basis that is consistent
with the manner in which the Sellers prepared or filed such
Tax Returns for prior periods. No later than 30 days prior to
the due date of such Tax Returns, the Sellers shall provide
the Buyer with copies of (A) in the case of consolidated,
combined or unitary Tax Returns that include a Subject
Subsidiary and any Subsidiary of such Subject Subsidiary, pro
forma materials for each Subject Subsidiary to be included in
such consolidated, combined or unitary Tax Returns, (B) all
other Tax Returns prepared by Sellers pursuant to Section
5.1(c), and (C) such work papers and other documents as may be
reasonably necessary to determine the accuracy and
completeness of such materials or Tax Returns. If the Buyer
notifies the Sellers in writing within 10 days after receiving
such materials or a Tax Return of any comments of the Buyer,
the Sellers shall incorporate any such reasonable comments
provided by the Buyer. If Sellers dispute the reasonableness
of any such comment by the Buyer, such dispute shall be
resolved by a "Big Four" accounting firm as selected by the
Buyer in its discretion (other than an accounting firm
regularly and materially used by the Buyer or its Affiliates)
and such Tax Returns (or any amendment to such return) shall
be filed in a manner consistent with resolution of such
dispute. The Sellers shall, upon the Buyer's request, make
reasonably available to the Buyer at a mutually convenient
time and location any personnel involved in the preparation of
any materials or Tax Return subject to this Section
5.1(c)(i)(A) and (B) for the purpose of answering any
questions the Buyer may have regarding any such materials or
Tax Return or the manner in which the same was prepared. The
Buyer shall be responsible for filing all Tax Returns required
to be filed by or on behalf of each Subject Subsidiary and
each Subsidiary of any Subject Subsidiary for Taxable periods
ending after the Closing Date.
(ii) With respect to any Tax Return required to be filed
by the Buyer pursuant to subparagraph (i) above for a Straddle
Period of any Subject Subsidiary or any Subsidiary of a
Subject Subsidiary, the Buyer shall provide the Company with
true copies of each of such completed Tax Returns, such work
papers and other documents as may be reasonably necessary to
determine the accuracy and completeness of such Tax Returns,
and a statement setting forth the amount of Tax shown on such
Tax Return that is allocable to the Sellers pursuant to
subparagraph (ii) of paragraph (b) above (the "Statement") at
least 30 days prior to the due date for the filing of such Tax
Return. If the Company notifies the Buyer in writing within 10
days after receiving the Statement that the Company questions
the information contained therein, then a "Big Four"
accounting firm as selected by the Buyer in its discretion
(other than an
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accounting firm regularly and materially used by the Buyer or
its Affiliates) shall be instructed to review the Statement
and determine its accuracy and reasonableness within 15 days.
If such accounting firm determines that the Statement is
accurate, or if the Company does not provide any such
notification, then not later than five days before the due
date for payment of Taxes with respect to such Tax Return, the
Sellers shall pay to the Buyer an amount equal to the Taxes
shown on the Statement as being allocable to the Sellers
pursuant to subparagraph (ii) of paragraph (a) above. If the
accounting firm appointed to review a Statement pursuant to
the foregoing procedure in this Section 5.1(c)(ii) determines
that the Statement is inaccurate, the Buyer will amend the
Statement and any related Tax Returns in a manner consistent
with removing any such inaccuracy, and the Sellers shall pay
the amount due to the Buyer within five days of the receipt of
the amended Statement.
(iii) After the Closing Date, the Buyer and the Sellers
shall provide each other with reasonable cooperation in
connection with the preparation of Tax Returns of the CFC
Parties and shall make available to the other and to any
Taxing authority, as reasonably requested, all information,
records or documents relating to Tax liabilities or potential
Tax liabilities of the Selling Subsidiaries and their
Subsidiaries for all periods prior to or including the Closing
Date and shall preserve all such information, records and
documents until the expiration of any statute of limitations
or extensions thereof.
(d) Tax Contests. The Buyer shall promptly notify the Company
in writing upon receipt by the Buyer, any Subject Subsidiary or any Subsidiary
thereof of written notice of any Tax Proceeding in respect of any Subject
Subsidiary or any Affiliate of any Subject Subsidiary which, if determined
adversely to the taxpayer, may be grounds for indemnification under this Section
5.1. Notwithstanding the foregoing, the failure of the Buyer to give notice
under the preceding sentence shall not affect the Buyer's right to
indemnification or relieve the Sellers of any other obligations hereunder unless
such failure shall preclude the defense of such claim and the Sellers have been
materially prejudiced by the Buyer's failure to give such notice, in which case
the Sellers shall be relieved from their obligations under Section 5.1 only to
the extent of such material prejudice. After notice to the Buyer, the Sellers
will have the right to elect to assume the defense of any such Tax Proceeding at
the Sellers' own expense. The Buyer and its representatives shall have the right
to observe any such Tax Proceeding with counsel of its choice and at its own
expense and to receive in advance copies of all submissions to be made to any
Tax authority or to any court. The Sellers, in exercising their control of any
such Tax Proceeding, shall consider in good faith all comments and suggestions
of the Buyer in respect of such Tax Proceeding, including but not limited to
comments on submissions and overall strategy. In the event that issues relating
to potential adjustment for which the Sellers may be held liable are required to
be dealt with in the same Tax Proceeding as separate issues relating to a
potential adjustment for which the Buyer, a Subject Subsidiary, a Subsidiary of
a Subject Subsidiary or an Affiliate thereof may be liable, the Buyer shall have
the right, at its own expense, to control the Tax Proceeding with respect to the
latter issues. Under waiver of its right to indemnity hereunder, the Buyer may
take sole control of any Tax Proceeding, at its sole cost and expense, and in
such case the Sellers shall have no right to observe or participate in such Tax
Proceeding. The Sellers shall not enter into any compromise or agreement to
settle any claim in a Tax
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Proceeding involving Liability for Taxes of a Subject Subsidiary, a Subsidiary
of a Subject Subsidiary, or for which the Sellers may otherwise be required to
indemnify the Buyer under this Agreement without the consent of the Buyer, such
consent not to be unreasonably withheld. Any refund received by the Buyer or any
Affiliate thereof of Taxes with respect to which the Sellers have made payment
pursuant to its obligation under Section 5.1(b) shall be for the account of the
Sellers.
(e) Tax Sharing Agreements. Any and all Tax sharing, Tax
indemnity or Tax allocation agreements between any Seller, a Subject Subsidiary
and/or any Affiliate thereof that were in effect at any time on or prior to the
Closing shall terminate not later than the Closing. No further amounts shall be
payable by any the Buyer, any Subject Subsidiary, any Subsidiary of a Subject
Subsidiary or any Affiliate thereof under such agreements following the Closing
and the Buyer, any Subject Subsidiary, any Subsidiary of a Subject Subsidiary,
or any Affiliate thereof shall have no further obligations thereunder following
the Closing. Notwithstanding the foregoing, with respect to the filing of
consolidated income Tax Returns to the extent permitted by law each Subject
Subsidiary shall elect to relinquish any carryback period which would include
any Pre-Closing Tax Period with respect to carrybacks of net operating losses,
net capital losses, unused tax credits and other deductible or creditable tax
attributes.
(f) Claims Adjusted for Tax Benefits. The amount of any
indemnity payment owed by the Sellers to the Buyer under this Section 5.1 shall
be adjusted if such indemnity payment is made in connection with (i) the
purchase of Purchased Businesses or (ii) the purchase of any Subject Subsidiary
or any Subsidiary of any Subject Subsidiary if a Section 338 Election is made
with respect to such purchase. The amount of any such indemnity payment shall be
reduced to take account of any net Tax benefit realized by the Buyer arising
from the item resulting in such indemnity payment, and increased by any net Tax
cost realized by the Buyer as a result of the receipt of such indemnity payment
being treated as income or as a reduction in purchase price. For purposes of
this Section 5.1(f), (x) any net Tax benefit shall be calculated by discounting
(based on semi-annual compounding) the Tax benefit from the date it is expected
to be realized to the date the indemnity payment is made using a discount rate
equal to the overpayment rate contained in Section 6621(a)(1) of the Tax Code
and (y) any net Tax cost shall be calculated by increasing the indemnity payment
by an interest factor (based on semi-annual compounding) equal to the
overpayment rate contained in Section 6621(a)(1) of the Tax Code from the
Closing Date to the date the indemnity payment is made.
(g) Allocation. Prior to the Closing, the Parties shall
endeavor to agree upon an allocation of the Purchase Price and the Assumed
Liabilities among the Purchased Assets. If the Parties agree upon such an
allocation, such allocation shall be used for all purposes, including Tax and
financial accounting purposes and including with respect to any Section 338
Election. The Sellers, their Affiliates and the Buyer will file all Tax Returns
(including amended returns and claims for refund) and information reports in a
manner consistent with such allocation. Without limiting the generality of the
foregoing, the Buyer's allocation of the adjusted grossed-up basis (within the
meaning of Treasury Regulation Section 1.338-5) and the Sellers' allocation of
the aggregate deemed sales price (within the meaning of Treasury Regulation
Section 1.338-4) shall be consistent with such allocation.
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(h) Cooperation on Tax Matters.
(i) The Buyer and the Sellers shall cooperate fully, as
and to the extent reasonably requested by any Party, in
connection with the filing of Tax Returns for the Purchased
Businesses, including without limitation any REMICs listed on
the Business Schedules, and any Tax Proceeding in respect of
the Purchased Businesses. Such cooperation shall include the
retention and (upon any Party's request) the provision of
records and information which are reasonably relevant to any
such Tax Proceeding and making employees available on a
mutually convenient basis to provide additional information
and explanation of any material provided hereunder. The Buyer
and the Sellers agree (A) to retain all books and records with
respect to Tax matters and pertinent to the Purchased
Businesses until the expiration of the statute of limitations
(and, to the extent notified by the other Party, any
extensions thereof) for the respective taxable periods, and to
abide by all record retention agreements entered into with any
taxing authority, and (B) to give the other Party reasonable
written notice prior to transferring, destroying or discarding
any such books and records and, if the other Party so
requests, such Party shall allow the other Party to take
possession of such books and records.
(ii) To facilitate the Buyer's decision on whether to
acquire assets through an election to purchase the Shares of a
Subject Subsidiary under Section 2.1(b), and whether to effect
a Section 338 Election in respect to one or more Subject
Subsidiaries, the Sellers shall deliver to the Buyer as
promptly as practicable following the execution and delivery
of this Agreement any and all information reasonably requested
by the Buyer in connection with determining the expected Tax
consequences of the transactions contemplated by this
Agreement (such information to include, without limitation,
information regarding the Tax attributes of the Sellers
including information regarding the adjusted tax basis of each
asset owned by any Selling Subsidiary). Such information shall
be provided at the Sellers' expense and shall be the most
current information reasonably available; provided, however,
that all such information shall be current as of a date no
earlier than September 30, 2002.
(i) Tax Election. In any case in which the Buyer elects a
Stock Sale, the Sellers will, at the Buyer's request no later than six months
after the Closing Date join in treating the transaction as a purchase of assets
for Tax purposes through an election under Tax Code Section 338(h)(10) and any
analogous provision of state, local or foreign Law (a "Section 338 Election").
The Buyer shall provide to the Sellers (i) a draft Internal Revenue Service Form
8023 no later than eight months after the Closing Date prepared in a manner
consistent with Section 5.1(g) and (ii) any other forms necessary to effect the
Section 338 Election under state, local or foreign Law no later than 30 days
prior to the due date thereof. Any dispute with respect to such forms shall be
resolved in the manner set forth in Section 5.1(c)(i) and such forms shall be
executed on behalf of the Sellers and delivered to the Buyer at least 15 days
prior to the last day for filing such forms when due and in the manner required
under applicable Law. The Buyer may make such requests separately with respect
to a Section 338 Election with respect to any Subject Subsidiary and any
Subsidiary of any Subject Subsidiary. If the Buyer requests that one
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or more Section 338 Elections be made with respect to any Subject Subsidiary
and/or any Subsidiary of any Subject Subsidiary, then Section 5.1(g) shall apply
to determine the allocation of the Purchase Price and other relevant items among
the assets of the Subject Subsidiaries and, if applicable, one or more of its
Subsidiaries. The Sellers shall deliver to the Buyer as promptly as practicable,
and in any event no later than May 1, 2003, any and all information in
connection with determining whether to make any Section 338 Election (such
information to include, without limitation, the adjusted tax basis of each asset
owned by any Selling Subsidiary and the Sellers' (and any Affiliate of the
Sellers') tax basis in the stock of each Selling Subsidiary). Any and all
information provided pursuant to this Section 5.1(i) shall be provided at the
Sellers' expense and shall be the most current information reasonably available;
provided, however, that (x) all such information provided shall be current as of
no earlier than September 30, 2002, (y) the Sellers shall deliver to the Buyer
as promptly as practicable, and in any event within 20 days of receipt of the
Buyer's request therefor, updates of the information provided pursuant to (x) of
this proviso that is current as of no earlier than December 31, 2002.
5.2. Access to Information and Facilities. The Sellers agree that,
during the Pre-Closing Period, the Buyer and its representatives shall, upon
reasonable notice and so long as such access does not unreasonably interfere
with the business operations of any CFC Party, have full access to all
Facilities, officers and management employees (and the Sellers shall use their
commercially reasonable efforts to cause the CFC Parties' independent
accountants to be available to the Buyer on the same basis) and shall be
entitled to make such reasonable investigation of the properties, businesses and
operations of the CFC Parties and such examination of the Records and financial
condition of the CFC Parties as it reasonably requests.
5.3. Confidentiality.
(a) The Buyer acknowledges that all information provided to it
and any of its Affiliates, employees, agents and representatives by the Sellers
and their respective Affiliates, employees, agents and representatives
("Confidential Information") is subject to the terms of the Confidentiality
Agreement, the terms of which are hereby incorporated herein by reference
although, notwithstanding such agreement, the Buyer may disclose Confidential
Information to any nationally recognized securities or statistical rating agency
if and to the extent that the Buyer determines that doing so is desirable.
Effective upon, and only upon, the Closing, the Confidentiality Agreement shall
terminate; provided, however, that Buyer acknowledges that the Confidentiality
Agreement shall terminate only with respect to Confidential Information that
relates solely to the Purchased Businesses.
(b) The Company agrees that, after the Closing Date, the
Company shall, and shall use all reasonable efforts to cause its Affiliates and
its and their directors, officers, employees and advisors to, keep the Buyer
Information (as defined below) confidential following the Closing Date, except
that any such Buyer Information required by law or legal or administrative
process to be disclosed may be disclosed without violating the provisions of
this Section 5.3(b). For purposes of this Agreement, the term "Buyer
Information" shall mean all information concerning the Buyer and its Affiliates
(including information relating to the Purchased Businesses or any client,
customer or supplier of the Purchased Businesses).
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5.4. Conduct of the Businesses Prior to Closing. Subject to the
obligations of a debtor-in-possession and any limitations on operations imposed
by the Bankruptcy Court, except as otherwise expressly contemplated by this
Agreement (including without limitation the filing of the Chapter 11 Case) or
with the prior written consent of the Buyer, during the Pre-Closing Period, the
CFC Parties shall (a) conduct the Purchased Businesses in the ordinary course of
business consistent with past practice; (b) use commercially reasonable efforts
to preserve intact the Purchased Businesses and the value of the Purchased
Assets, to keep available the services of its current employees and agents and
to maintain its relations and good will with its customers, regulators and any
others with whom or with which it has business relations; (c) not take any
action in violation of this Agreement; (d) file all Tax Returns when due (taking
into account all extensions) and pay all Taxes when due; and (e) use all Excess
Cash to repay the DIP Loan in accordance with the terms thereof, to the extent
there is then outstanding indebtedness under the DIP Loan.
5.5. Restrictions on Certain Actions. Without limiting the
generality of Section 5.4, and except as otherwise set forth in Section 5.5 of
the Business Schedules or as otherwise expressly provided in this Agreement,
prior to the Closing, the Company shall not and shall not permit any Subsidiary,
without the prior written consent of the Buyer, to:
(a) mortgage, pledge, assign, grant any participation or
security interest in or otherwise further encumber any of the Purchased Assets;
(b) sell, transfer or liquidate Purchased Assets unless such
sale, transfer or liquidation is in the ordinary course of business consistent
with past practice and all proceeds from such activities are used to (i) reduce
the Xxxxxx Debt Amount, (ii) eliminate, discharge or reduce Assumed Liabilities
or (iii) purchase, originate or acquire additional assets, properties, contracts
and rights of the same type as the assets, properties, contracts and rights
sold, transferred or liquidated and which are acceptable to the Buyer as
Purchased Assets; provided, however, that in no event shall more than $10
million in aggregate outstanding principal balance of Purchased Assets be sold,
transferred or liquidated during the Pre-Closing Period; and provided, further,
that (I) the Company may sell to Xxxxxx Brothers Holdings Inc. or its Affiliates
during the period from December 19, 2002 to the Closing Date (A) up to $318
million in outstanding principal balance of Loans subject to the Xxxxxx
Warehouse Facility and (B) up to $150 million per month in outstanding principal
balance of Loans originated with the proceeds of the Additional Xxxxxx Debt, in
each case provided there is a corresponding reduction in the Xxxxxx Debt Amount
and at a price at not less than such outstanding principal balance, without the
prior written consent of the Buyer and (II) the Company may sell the MH
Community Loans and Floorplan Certificates on economic terms not materially
different than as set forth in Section 5.5 of the applicable Business Schedules
and apply the net proceeds received therefrom (after repayment of related
indebtedness) as required by the DIP Loan;
(c) amend its Organizational Documents; provided that the
Company shall be entitled to convert Conseco Finance Servicing Corp., Conseco
Finance Credit Corp., Conseco Finance Corp.-Alabama, Conseco Finance Advance
Receivables Corp. and Conseco Finance Liquidation Expense Advance Receivables
Corp. to a limited liability company;
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(d) except for the potential sale of Conseco Finance Credit
Card Funding Corp. pursuant to the transactions contemplated by the GE Approved
Agreement, (i) issue, sell or deliver (whether through the issuance or granting
of options, warrants, commitments, subscriptions, rights to purchase, or
otherwise) any shares of its capital stock of any class or any other securities
or equity equivalents; or (ii) amend in any material respect any of the terms of
any such securities outstanding as of the date hereof;
(e) (i) split, combine or reclassify any shares of its capital
stock or any other securities or equity equivalents; (ii) declare, set aside or
pay any dividend or other distribution (whether in cash, stock or property or
any combination thereof) in respect of its capital stock or any other securities
or equity equivalents; (iii) repurchase, redeem or otherwise acquire any of its
securities; (iv) adopt a plan of complete or partial liquidation or resolutions
providing for or authorizing a liquidation, dissolution, merger, consolidation,
restructuring, recapitalization, or other reorganization of any CFC Party; or
(iv) repay intercompany indebtedness owed to Affiliates except in payment of
services rendered;
(f) (i) create, incur, guarantee, or assume any indebtedness
for borrowed money or otherwise become liable or responsible for the obligations
of any other Person; or (ii) other than in the ordinary course of business, make
any loans, advances, or capital contributions to, or investments in, any other
Person (other than to wholly owned Subsidiaries or another CFC Party, except
Mill Creek Bank or Mill Creek Bank Servicing Corp.) other than the DIP Loan or
Additional Xxxxxx Debt;
(g) except as specifically set forth in the GE Approved
Agreement, or as may be required by applicable Laws, enter into, adopt or make
any material amendments to or terminate any collective bargaining agreement,
bonus, profit sharing, compensation, severance, termination, stock option, stock
appreciation right, restricted stock, performance unit, stock equivalent, stock
purchase, pension, retirement, deferred compensation, employment, severance or
other employee benefit agreement, trust, plan, fund or other arrangement for the
benefit or welfare of any director, officer or employee; provided that the
Company and its Subsidiaries shall not be restricted from entering into, making
any amendment to or terminating any agreement with an immaterial number of
individual directors, officers or employees or an immaterial group of employees
in the ordinary course of business;
(h) acquire (by merger, consolidation, or acquisition of stock
or assets or otherwise) any Person, or other business organization or division
thereof which would be included in the Purchased Businesses;
(i) make any capital expenditure or expenditures in the
Purchased Businesses in excess of the aggregate amount set forth in the capital
expenditures budget agreed upon by the Parties or, in the absence of such an
agreement, not consistent with past practices;
(j) enter into, assume, amend, modify, cancel, waive or change
in any respect any Assumed Agreement, any material Contract other than solely
with respect to an Excluded Business or Excluded Asset, the Xxxxxx Documents
(other than any amendment to continue the forbearance period under the Xxxxxx
Forbearance Agreement, provided no such amendment includes any provision which
adversely affects the Purchased Assets, the Assumed Liabilities, or
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the Purchase Price) or the GE Approved Agreement; provided however that the
Company or any of its Subsidiaries may amend the GE Approved Agreement without
the consent of the Buyer if such amendment does not adversely affect the Buyer;
(k) enter into any Contract with an Affiliate other than
Contracts entered into in the ordinary course of business consistent with past
practices, involving no more than $100,000 per Contract or series of related
Contracts and that do not affect or impact the Purchased Assets or the Assumed
Liabilities or interfere with or impede the consummation of the transactions
contemplated hereby;
(l) with respect to the Purchased Businesses, change in any
material respect any of the accounting principles or practices used by it,
except for any change required by reason of a concurrent change in generally
accepted accounting principles, or write-down the value of any assets, revalue
any asset or write-off as uncollectible any receivables except in the ordinary
course of business consistent with past practices;
(m) make any changes in material servicing, billing or
collection operations or policies of the Purchased Businesses;
(n) with respect to the Purchased Businesses, deviate in any
material respect from existing policies and procedures with respect to (i)
classification of assets; (ii) accrual of interest; (iii) underwriting, pricing,
originating, selling and servicing; and (iv) obtaining or extending financing
and credit; or
(o) breach or otherwise fail to perform any of their material
duties under their asset-backed securities transactions and servicing agreements
other than as contemplated by the Parties in connection with the Chapter 11
Case.
If, prior to the Closing, the DIP Loan has been terminated,
the Sellers shall agree to amend this Agreement to incorporate in all material
respects into this Agreement those covenants (or portions thereof) of the
"Borrower" thereunder contained in ARTICLES VI, VII and VIII of the DIP Loan as
may be requested by the Buyer in good faith, other than the Excluded Covenants
(as defined below) and those covenants (or portions thereof) that are not
reasonably applicable to an asset seller (as opposed to a borrower). "Excluded
Covenants" means the covenants contained in Section 7.9, 7.11, 8.1, 8.2, 8.3,
8.4, 8.5, 8.6, 8.9, 8.10 and 8.12 of the DIP Loan.
5.6. Press Releases and Announcements. No press releases or public
disclosure related to this Agreement and the transactions contemplated herein,
or other announcements to the employees, customers or suppliers of any Party
shall be issued without the mutual prior written approval of the Parties, except
for any public disclosure which is required by applicable law or regulation.
Prior to making any public disclosure required by applicable Law or regulation,
the disclosing Party shall give the other Party a copy of the proposed
disclosure and reasonable opportunity to comment on the same to the extent
practicable.
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5.7. Approvals of Third Parties; Satisfaction of Conditions to
Closing.
(a) Subject to the terms of this Agreement, the Parties will
use their reasonable best efforts to cause the Closing to occur, and will
cooperate with one another, to secure all necessary consents, approvals,
authorizations and exemptions from Governmental Authorities and other third
parties, including all consents required by Sections 6.4 and 7.4, as promptly as
possible. The Sellers, with the Buyer's reasonable cooperation, will use their
reasonable best efforts to obtain the satisfaction of the conditions specified
in ARTICLE VI. The Buyer, with the Sellers' reasonable cooperation, will use its
reasonable best efforts to obtain the satisfaction of the conditions specified
in ARTICLE VII.
(b) The Parties shall cooperate in preparing, submitting,
filing, updating and publishing (as applicable), as expeditiously as possible,
all applications, notifications and other filings as may be required by or may
be advisable under applicable Laws with respect to the transactions contemplated
by this Agreement, including, without limitation, those of the FDIC, the State
Banking Authority and any other applicable state or federal regulatory agency
and those under the HSR Act. The Parties shall bear the costs and expenses of
their respective filings; provided, however, that each of the Buyer and the
Company shall pay one-half the filing fees in connection with the filing under
the HSR Act. The Parties shall use their respective reasonable best efforts to
make such filings as promptly as practicable (and in any event within 10
Business Days) following December 19, 2002. The Parties will use their
commercially reasonable best efforts to obtain such approvals and accomplish
such actions as expeditiously as possible (provided, however, that neither Party
shall be required to agree to commercially unreasonable and materially
burdensome conditions, other than any requirement that it be well-capitalized).
(c) The Parties shall respond to any requests for additional
information made by either of such agencies, as expeditiously as possible, and
to cause the waiting periods under applicable laws and regulations, including
the HSR Act, to terminate or expire at the earliest possible date and to resist
in good faith, at each of their respective cost and expense (including the
institution or defense of legal proceedings), any assertion that the
transactions contemplated hereby constitute a violation of the antitrust or
competition Laws, all to the end of expediting consummation of the transactions
contemplated hereby. Each of the Buyer, on the one hand, and the Sellers, on the
other, shall consult with the other prior to any meetings, by telephone or in
person, with the staff of the applicable Governmental Authorities, and each of
Buyer and the Sellers shall have the right to have a representative present at
any such meeting.
(d) Each Party represents, warrants and agrees that any
information furnished by it for inclusion in any regulatory application will be
true and complete as of the date so furnished.
5.8. Bankruptcy Actions.
(a) The Company and Conseco Finance Servicing Corp. filed
their respective Chapter 11 Cases on December 17, 2002. The Filing Company
Subsidiaries except the SPEs commenced their Chapter 11 Cases on or before
February 3, 2003. The Company may defer the commencement of a Chapter 11 Case
with respect to the SPEs until such date prior to the Closing Date as shall be
agreed between the Company and the Buyer, it being expressly
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understood that, (A) such deferred filing date shall not be later than a date as
will allow, in the reasonable judgment of the Buyer and assuming, for this
purpose, that the other conditions set forth in this Agreement would be
satisfied, (I) the Closing to occur on a date not later than the date the
Closing would have occurred but for such delayed filing and (II) the provisions
of the Sale Order to be fully effective as to the SPEs and binding on holders of
claims against, and interests in, the SPEs and (B) the Company and the SPEs
shall take all actions within their power (including, without limitation, giving
notice and taking other actions in connection with the Company's Chapter 11
Case) to allow the transfer of the Purchased Assets owned by the SPEs to take
place on the Closing Date. Except for the SPEs, any other Selling Subsidiary
that has not commenced a Chapter 11 Case shall not be required to file without a
written amendment to this Purchase Agreement signed by the Company, the Selling
Subsidiary, and the Buyer. The Sellers who have commenced a Chapter 11 Case
shall obtain enter of the Sale Order by March 14, 2003 and the entry of a final
9019 Order not later than the date provided in the DIP Loan.
(b) The Buyer covenants and agrees that it shall cooperate
with the Sellers in connection with furnishing information or documents to
Sellers to satisfy the requirements of adequate assurance of future performance
under section 365(f)(2)(B) of the Bankruptcy Code.
(c) In the event an appeal is taken, or a stay pending appeal
is requested from any of the Orders of the Bankruptcy Court in connection with
the sale of the Purchased Assets, the Sellers shall immediately notify the Buyer
of such appeal or stay request and, upon the Buyer's request, shall provide to
the Buyer within three Business Days after the Sellers' receipt thereof a copy
of the related notice of appeal or order of stay. The Sellers shall also provide
the Buyer with written notice of any motion or application filed in connection
with any appeal from any of such Orders.
5.9. Exclusivity; No Solicitation of Transactions. The Sellers
represent that, other than the transactions contemplated by this Agreement, they
are not parties to or bound by any agreement with respect to a possible merger,
sale, restructuring, refinancing or other disposition of all or any material
part of the Purchased Businesses or the Purchased Assets. Prior to the entry of
the Bidding Procedures Order on the Bankruptcy Court's docket, the Sellers shall
not, directly or indirectly, (a) solicit or participate in negotiations or
discussions regarding any Acquisition Proposal, regardless of whether such offer
was unsolicited, or furnish any information with respect to, assist or
participate in or facilitate in any other manner any effort or attempt by any
Person (other than the Buyer and its Affiliates) to do or seek to do any of the
foregoing, (b) execute an agreement with respect to an Acquisition Proposal, or
(c) except as provided in this Agreement, seek or support Bankruptcy Court
approval of a motion or Order inconsistent in any way with the transactions
contemplated in this Agreement. Subsequent to the entry of the Bidding
Procedures Order on the Bankruptcy Court's docket, the Sellers shall not,
directly or indirectly, through any officer, director, employee, agent,
professional or advisor, solicit any Acquisition Proposal (other than as
expressly permitted under the Bidding Procedures Order) or participate in any
negotiations or discussions with respect to any Acquisition Proposal; provided,
however, that after entry of the Bidding Procedures Order on the Bankruptcy
Court's docket, nothing herein shall preclude the Sellers from taking any action
in the Chapter 11 Case seeking to sell, pursuant to a Qualifying Bid (as defined
in the Original Agreement) in connection with the Auction process established in
the Bidding Procedures Order, the Purchased Assets. From the date of the
issuance of the Sale Order and until the Closing Date and provided that the
Buyer
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is proceeding in good faith to consummate the transactions contemplated hereby
in a timely manner, neither the Sellers nor any of their Affiliates shall
discuss, negotiate or consummate any transaction involving (i) the issuance,
redemption, sale or exchange or other disposition of any equity interest in the
Sellers or (ii) the sale, exchange, liquidation, reorganization, or other
disposition of all or any part of the Purchased Assets. Notwithstanding the
foregoing, the Sellers shall not be restricted from entering into the Backup
Agreements.
5.10. Employees.
(a)
(i) Subject to Section 5.10(a)(iii), the Buyer shall
offer employment, effective as of the Closing Date, to those
Employees who are employed primarily in the Purchased
Businesses as identified in Section 5.10(a) of the applicable
Business Schedules (the "Business Employees") as of the
Closing Date (other than any such Employees in respect of whom
a notice of termination of employment has been given by the
Company or one of its Subsidiaries); provided, however, that
the Buyer shall have the option not to offer employment to
some or all of the Business Employees and in lieu thereof pay
severance to any such Business Employee not offered employment
in accordance with the amount of severance set forth on the
list which was provided to the Buyer in accordance with
Section 3.14. To the extent permitted under applicable Law,
the payment of severance to any Business Employee not offered
employment shall be reduced by any liability of the Buyer to
such Business Employee under the Federal Worker Adjustment
Retraining and Notification Act of 1988, as amended (the "WARN
Act"), and the Sellers shall take such actions as are
reasonably required, including the amendment of any severance
plan or agreement covering the Business Employees, to allow
for such reductions. Each Business Employee who is paid
severance by the Buyer shall be required as a condition to the
receipt of such severance to execute a general release in
favor of the Buyer and its Affiliates and the Sellers and
their Affiliates in form and substance satisfactory to the
Buyer. Subject to Section 5.10(a)(iii), Liabilities for paid
time off, sick leave and vacation pay for Business Employees
as set forth under the heading "PTO" in Section 5.10(a) of the
applicable Business Schedules shall be Assumed Liabilities
hereunder.
(ii) Promptly following the execution of this Agreement,
the Sellers shall provide the Buyer with such assistance as
the Buyer may request with respect to identifying employees
who are not Business Employees but who perform significant
support functions for the Purchased Businesses ("Support
Employees"). The Buyer shall have until April 30, 2003 to
determine which Support Employees shall be offered employment.
The Buyer, in its sole discretion, shall have the right to
offer employment to any Support Employee provided, however,
that if the GE Condition is satisfied, the Buyer shall have
the right to offer employment to any Support Employee (A) who
performs significant support functions for the Purchased
Businesses, (unless the Buyer agrees that GE may offer
employment to any such employee), (B) who performs significant
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support functions in the HI Origination Business or the PL
Business, subject to the prior consent of GE unless GE does
not offer employment to such employees, (C) listed under the
"Unallocated" heading on Section 5.10(a) of the Business
Schedules, subject to the fourth sentence of this Section
5.10(a)(ii) and except for Xxxxx Xxxxx and Xxx Xxxxxx and (D)
except Xxxx Xxxx and Xxxxx Xxx Xxxxxx listed on Section
5.10(a) of the Business Schedules. Support Employees listed
under the heading "Unallocated Risk Management Employees" on
Section 5.10(a) of the Business Schedules ("URM Employees")
shall be offered employment by such joint venture as the Buyer
and GE shall establish (the "JV Arrangements") in accordance
with such terms as mutually agreed upon by the parties to the
JV Arrangements, including an allocation of costs within the
joint venture based on the proportion of work done for each
respective joint venture party, and Buyer shall not offer
employment to any URM Employee, except that if the Closing
Date occurs prior to the closing of the transactions
contemplated by the GE Approved Agreement, the Buyer may offer
employment to URM Employees. If the Buyer has offered
employment to URM Employees (pursuant to the above sentence),
any such employees who accept the Buyer's offer shall remain
employees of Buyer until the closing of transactions
contemplated by the GE Approved Agreement, and thereafter
shall be employed pursuant to the JV Arrangements, except that
if the GE Approved Agreement is terminated, such URM Employees
shall continue as employees of the Buyer. During such time as
any URM Employees are employed by the Buyer prior to either
the closing of the transactions contemplated by the GE
Approved Agreement or, in the event of the termination of the
GE Approved Agreement, such time that the Sellers sell or
liquidate the Excluded Businesses (but in no event later than
six months following the Closing Date) such employees shall
continue to provide support services to the Excluded
Businesses, and the Sellers (or GE if appropriate) shall
reimburse the Buyer for the proportionate cost of employing
such URM Employees, based on the percentage of such employees'
time dedicated to the Excluded Businesses, as mutually
determined by the Buyer and the Sellers in good faith. Except
with respect to URM Employees who are employed jointly
pursuant to the JV Arrangements as described herein, the Buyer
shall have no Liability whatsoever for Support Employees who
are not offered employment or who do not accept such offers of
employment. Liabilities for paid time off, sick leave and
vacation pay for Support Employees who are hired pursuant to
this paragraph (ii) as set forth under the heading, "PTO", on
a schedule that was provided to the Buyer shall be Assumed
Liabilities hereunder.
(iii) Promptly following the execution of this
Agreement, the Sellers shall provide the Buyer and its
representatives, advisors and accountants with such assistance
as the Buyer may request with respect to identifying any
Employees who are included in Section 5.10(a) of the
applicable Business Schedules who are corporate-level
Employees whose costs may have been allocated to one or more
of the Purchased Businesses. Any such employees whose salary
and wages have been historically (over the past 12 months)
allocated to, or otherwise treated as, corporate overhead
expense may, at the Buyer's option, be excluded from the
definition of Business Employees (and therefore
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from Section 5.10(a) of the applicable Business Schedules).
The Buyers shall have no Liability whatsoever for Employees
who are so excluded from the definition of Business Employees
(and Section 5.10(a) of the applicable Business Schedules).
(iv) If the GE Condition is satisfied, notwithstanding
anything to the contrary in Section 5.10(a), the Buyer shall
offer employment to all employees listed on the IT Employees
portion of Section 5.10(a) of the applicable Business
Schedules where such employees are listed under the "CFN"
column ("Buyer IT Employees") and the Buyer shall not offer
employment to any employees listed on the IT Employees portion
of Section 5.10(a) of the applicable Business Schedules where
such employees are listed under the "GE PL/HI/CI" column ("GE
IT Employees"). If the GE Condition is satisfied, (A) the
Buyer will assume severance and paid time off, sick leave and
vacation pay obligations (on a basis otherwise consistent with
this Section 5.10 and as set forth on the list provided
pursuant to Section 3.14) with respect to Buyer IT Employees
and will assume no Liabilities for paid time off, sick leave
and vacation pay as set forth under the heading "PTO" on the
schedule that was provided to the Buyer pursuant to Section
3.14 or severance with respect to GE IT Employees and (B) no
GE IT Employees will be Business Employees.
(b) Those Business Employees and Support Employees who are
offered employment and accept such offers of employment and become employees of
the Buyer are referred to herein as the "Transferred Employees". Each such offer
of employment shall be at the same salary or wage level (and on substantially
the same terms and conditions) applicable to each such Transferred Employee
immediately prior to the Closing and the Buyer shall not reduce such salary or
wage level during the 12-month period following the Closing. The Buyer also
agrees to provide the Transferred Employees and their covered dependents with
welfare and retirement benefits that are reasonable and customary for a business
of the type and size of the Buyer. Except with respect to URM Employees who are
employed pursuant to the JV Arrangements as described herein, the Buyer shall
have no obligation to offer employment to, and shall assume no liability with
respect to, any employees other than the Business Employees.
(c) Within 45 days of the Closing Date, the Buyer shall pay
Business Employees the commissions relating to pre-Closing loan originations for
the month in which the Closing occurs, as calculated under the commission
program in effect immediately prior to the Closing, regardless of whether such
program is in effect at any time following the Closing.
(d) As soon as reasonably practicable following the Closing,
the Buyer or one of its Affiliates shall establish a tax-qualified deferred
contribution retirement plan and, to the extent allowable by Law, the Buyer
shall take any and all necessary action to cause the trustee of such plan, if
requested to do so by a Transferred Employee, to accept a direct "rollover" of
all or a portion of such employee's distribution (excluding "employer
securities" as defined in ERISA) from any Employee Benefit Plan which is a
tax-qualified retirement plan, provided that, with respect to each such plan,
the Sellers have provided to the Buyer such information as requested by the
Buyer sufficient to establish that such plan is qualified under Section 401(a)
of the Tax Code.
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(e) The Buyer shall pay to each Transferred Employee whose
employment is terminated by the Buyer or one of its Affiliates within 12 months
of the Closing Date severance equivalent to that set forth on the list which was
provided to the Buyer in accordance with Section 3.14.
(f) The CFC Parties agree to timely perform and discharge all
requirements under the WARN Act to the extent applicable and under applicable
state and local laws and regulations for the notification of its Employees
arising from the sale of the Purchased Assets to the Buyer up to and including
the Closing Date for those employees who will become Transferred Employees
effective as of the Closing Date. After the Closing Date, the Buyer shall be
responsible for performing and discharging all requirements under the WARN Act
and under applicable state and local laws and regulations for the notification
of its employees with respect to the Purchased Assets and the Businesses. The
Parties shall provide one another with all assistance reasonably requested by
each Party to ensure that the Parties can comply with their respective
notification requirements of the WARN Act, including assistance with the
provision of such notices to Employees prior to Closing. The Buyer agrees to
indemnify the Sellers and their Affiliates and their respective directors,
officers, employees, consultants and agents for, and to hold them harmless from
and against, any and all Losses arising or resulting, or alleged to arise or
result from liabilities arising under the WARN Act with respect to any
Transferred Employees or to any Business Employees not offered employment by the
Buyers, provided that the Sellers have complied with the covenants set forth in
Section 5.10(a).
(g) To the extent permitted under the Buyer's welfare benefit
plans, the Buyer shall (i) waive pre-existing condition requirements (except
with respect to any pre-existing condition for which coverage was denied under
any welfare benefit plan of the CFC Parties), evidence of insurability
provisions, waiting period requirements or any similar provisions under any
welfare benefit plans maintained by the Buyer for Transferred Employees after
the Closing Date, and (ii) apply toward any deductible requirements and
out-of-pocket maximum limits under its Employee welfare benefit plans any
amounts paid (or accrued) by each Transferred Employee under the CFC Parties'
welfare benefit plans during the applicable plan year in which the Closing Date
occurs. The Buyer shall recognize for purposes of eligibility and vesting under
its policies and employee benefit plans, the service of any Transferred Employee
with the CFC Parties or any of their Affiliates prior to the Closing Date.
(h) Claims of Transferred Employees and their eligible
beneficiaries and dependents for medical, dental, prescription drug, life
insurance, and/or other welfare benefits ("Welfare Benefits") (other than
disability benefits as described below) that are incurred before the Closing
Date shall be the sole responsibility of the Sellers and the Sellers' welfare
benefit plans. Claims of Transferred Employees and their eligible beneficiaries
and dependents for Welfare Benefits (other than disability benefits) that are
incurred on or after the Closing Date shall be the sole responsibility of the
Buyer and the Buyer's welfare benefit plans. For purposes of the preceding
provisions of this paragraph, a medical/dental claim shall be considered
incurred on the date when the medical/dental services are rendered or
medical/dental supplies are provided, and not when the condition arose or when
the course of treatment began. Claims of individuals receiving long-term
disability benefits under a disability plan of the Sellers or any CFC Party as
of the Closing Date shall be the sole responsibility of the Sellers and such
plan. Claims of Transferred Employees and their eligible beneficiaries and
dependents for short-term
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or long-term disability benefits that are made on or after the Closing Date
shall be the sole responsibility of the Buyer.
(i) The CFC Parties shall be responsible for satisfying
obligations under Section 601 et seq. of ERISA and Section 4980B of the Tax
Code, to provide continuation coverage to or with respect to any of the CFC
Parties' employees and their covered dependents in accordance with law with
respect to any "qualifying event" occurring on or prior to the Closing Date
(including any termination of employment of an Employee which occurs in
connection with the transaction contemplated herein). The Buyer shall be
responsible for satisfying obligations under Section 601 et seq. of ERISA and
Section 4980B of the Tax Code, to provide continuation coverage to or with
respect to any of the Transferred Employees and their covered dependents in
accordance with law with respect to any "qualifying event" which occurs after
the Closing Date.
(j) Section 5.10(j) of the Business Schedules identifies all
employment, retention, severance, change in control and any other similar
agreements between the Sellers or any Affiliate of the Seller and any
Transferred Employee (the "Employee Agreements"). The Buyer shall have no
Liability with respect to any Employee Agreement except for the Assumed
Retention Agreements, copies of which have been provided to the Buyer, and then
only to the extent the Employee who is a party to the Assumed Retention
Agreement is not employed primarily in an Excluded Business.
5.11. Transition. Subject to the obligations of a
debtor-in-possession and any limitations on operations imposed by the Bankruptcy
Court, the Sellers shall operate in good faith in an effort not to take any
action which is designed, intended or might reasonably be anticipated to have
the effect of discouraging customers, suppliers, vendors, service providers,
employees, lessors, licensors and other business relations from maintaining the
same business relationships with the Purchased Businesses after the date of this
Agreement and during the Pre-Closing Period, the Sellers shall use their
commercially reasonable good faith efforts to encourage customers, suppliers,
vendors, service providers, employees, lessors, licensors and other business
relations to maintain the same business relationships with the Purchased
Businesses after the date of this Agreement. On and after the date hereof, the
Sellers shall cooperate with the Buyer to identify and provide all reasonable
information and access with respect to the transition services referred to in
Section 5.28 and Section 6.6.
5.12. Seller's Trademarks. After the Closing, the Buyer may use and
distribute in connection with the ownership or operation of the Purchased
Business shipping materials, stationery, invoices, sales, promotional or other
forms and literature comprising part of the Purchased Assets and which bear the
name "Conseco" or "Conseco Finance" or the Conseco design (except as are
transferred to the Buyer at Closing) only if the Buyer uses all commercially
reasonable efforts to attach a sticker, name plate or other notice previously
approved by the Seller which discloses the acquisition of such Purchased
Asset(s) by the Buyer. Such right shall terminate 180 days following the Closing
Date. Once such right has terminated, the Buyer shall deliver (or cause to be
delivered) to the Sellers, destroy or cause to be destroyed (with a
certification of destruction), all of such items and the Buyer further agrees
that it shall immediately cease to use or display names or materials bearing the
name "Conseco", "Conseco Finance" or the Conseco design trademarks or any
derivative thereof.
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5.13. Notices to Obligors. No later than 15 days prior to the
Closing Date, the Company shall prepare, and transmit to each Obligor on each
Loan that is part of the Purchased Assets, a notice in a form satisfying the
requirements, as applicable, of Regulation X of the Department of Housing and
Urban Development under the Real Estate Settlement Procedures Act, as well as
all other applicable legal requirements, and reasonably acceptable to the Buyer,
to the effect that the Loan and, as applicable, the servicing of the Loan, will
be transferred to the Buyer at Closing and directing that payments be made after
the Closing Date to the Buyer at any address of the Buyer specified by the
Buyer, with the Buyer's name as payee on any checks or other instruments used to
make such payments and the Buyer will notify each Obligor of the effectiveness
of the Closing. The Company and the Buyer shall consult and cooperate with each
other in the preparation of such notices and they each shall bear one-half of
the expenses incurred for the preparation and transmission of such notices. With
respect to all such Loans on which payment notices or coupon books have been
issued, the Buyer shall have the opportunity to prepare new payment notices or
coupon books reflecting the name and address of the Buyer as the Person to whom
and the place at which payments are to be made and to have such new payment
notices or coupon books included with the notices prepared and transmitted by
the Company.
5.14. Non-Solicitation and Non-Competition.
(a) The Sellers acknowledge that the agreements and covenants
contained in this Section 5.14 are essential to protect the value of the
Purchased Assets being acquired by the Buyer.
(b) During the period commencing on the date of the Original
Agreement and ending on the fifth anniversary of the Closing Date, neither the
Sellers nor any of their Subsidiaries shall for themselves or on behalf of or in
conjunction with any Person, directly or indirectly, solicit, endeavor to entice
away from the Buyer, or otherwise directly or indirectly interfere with the
relationship of the Buyer with any Person who within the prior 12 months had
been an employee of the Buyer; provided, however, that the foregoing provision
will not prevent the Sellers from hiring any such Person (i) who responds to a
public advertisement placed by the Sellers or any of their Subsidiaries, or (ii)
who has been terminated by Buyer or any of its Affiliates.
(c) During the period commencing on the date of the Original
Agreement and ending on the fifth anniversary of the Closing Date, neither the
Sellers nor any of their Subsidiaries shall participate or engage, directly or
indirectly, whether as an employee, agent, officer, consultant, director,
stockholder, partner, joint venturer, investor or otherwise, in the businesses
of the Purchased Businesses anywhere in the world.
(d) The Parties agree that a monetary remedy for a breach of
the agreements set forth in this Section 5.14 will be inadequate and
impracticable and further agree that such a breach would cause irreparable harm,
and that the non-breaching party shall be entitled to temporary and permanent
injunctive relief without the necessity of proving actual damages. In the event
of such a breach, the breaching party agrees that the non-breaching party shall
be entitled to such injunctive relief, including temporary restraining orders,
preliminary injunctions and permanent injunctions as a court of competent
jurisdiction shall determine.
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(e) If any of the provisions of this Section 5.14 is invalid
in part, it shall be curtailed, as to time, location or scope, to the minimum
extent required for its validity under the laws of the United States and shall
be binding and enforceable with respect to the Sellers, as applicable, as so
curtailed; it being the intention of the Parties that the provisions of this
Section 5.14 be enforced to the fullest extent permissible under the laws and
policies of each jurisdiction in which enforcement may be sought, and that the
unenforceability (or the modification to conform to such laws and policies of
any provision of this Section 5.14) shall not render unenforceable or impair the
remainder of the provision of this Section 5.14.
5.15. Further Actions. Following the Closing, the Sellers agree not
to take any action in the Chapter 11 Case, including, but not limited to, any
action in connection with proposing or confirming any plan of reorganization
that would limit, impair or adversely alter the Buyer's rights under this
Agreement (but this Section shall not limit the Sellers' rights under this
Agreement or the enforcement thereof).
5.16. Further Assurances. Upon the request of the Buyer or its
successors and assigns at any time after the Closing Date, the Sellers will
forthwith execute and deliver such further instruments of assignment, transfer,
conveyance, endorsement, direction or authorization and other documents as the
requesting party or parties or its or their counsel may request in order to
perfect title of the Buyer and its successors and assigns to the Purchased
Assets (including the Shares purchased in a Stock Sale) or otherwise to
effectuate the purposes of this Agreement and the Transaction Documents. In
particular, the Sellers shall, at the Buyer's request, to the extent permitted
by the documents governing the NIMS Notes and MESA Notes, take all steps
reasonably requested by Buyer to cause the NIMS Notes, the MESA Notes or both to
be retired and the NIMS Collateral, the MESA Collateral or both to be purchased
by the Buyer rather than the NIMS Equity or the MESA Equity.
5.17. Mail Forwarding. For a period of one year after the Closing
Date, the Sellers shall maintain adequate staff or engage an outside service at
their own expense to accept and forward to the Buyer all mail and other
communications received by the CFC Parties relating to the Purchased Assets.
5.18. DIP Loan. Contemporaneously with the execution and delivery
of the Original Agreement, the Sellers entered into a debtor-in-possession
credit facility with FPS DIP LLC and the other lenders party thereto (including
the revolving credit loans and term loans thereunder and as amended from time to
time, the "DIP Loan").
5.19. REMIC Items Reflected on Tax Returns; Bring Down on Certain
Information.
(a) For each entity described as a REMIC on the Business
Schedules, if so requested by the Buyer, the Sellers shall, no later than the
due date (including extensions) of the 2002 Tax Returns of such entity, reflect
on the 2002 Tax Returns of the related REMICs, in a manner reasonably
satisfactory to the Buyer, the adjustments resulting from the revaluation of
certain REMIC Regular Interests and REMIC Residual Interests as a result of the
Sellers' tax audit for the period ended December 31, 1997, with such Tax Returns
reflecting prior years' adjustments. The Buyer shall be provided with a draft of
such Tax Returns at least 30 days prior
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to the date the same is filed. The Sellers shall make all changes to such drafts
as reasonably requested by the Buyer.
(b) The Sellers shall deliver, or cause to be delivered, to
the Buyer by the earlier of the 20th day prior to the Closing Date or April 15,
2003 updated, true, correct and complete information as of December 31, 2002
with respect to the basis, adjusted issue price and remaining unrecognized gain
of various instruments or assets as to which the Sellers are making
representations and warranties as of December 31, 2001 pursuant Sections
3.22(d)(iv), (e)(i), (f)(i), (g)(iii), g(vi), h(vii) and h(ix) hereof.
(c) The Sellers may, with the consent of the Buyer, and shall,
at the request of the Buyer, file an amended 2001 Tax Return for the NIMS Issuer
to reflect certain adjustments in the basis of REMIC Residual Interests and IO
Regular Interests held by the NIMS Issuer in order to reflect a revaluation of
such REMIC Residual Interests and IO Regular Interests as of the startup day of
the REMIC that issued them, consistent with the revaluation as of the startup
day of similar REMIC interests made in the audit of the Sellers' Tax Returns for
the period ended December 31, 1997.
5.20. Title Insurance. Not later than 30 days after the date of
this Agreement, the Sellers shall cause to be delivered to the Buyer a
commitment for a 1992 form ALTA title insurance policy (the "Title Commitments")
for each Owned Real Premises from Chicago Title Insurance Company (the "Title
Company"). At the Buyer's sole discretion, the Buyer may deliver written notice
to the Sellers not later than the later of (i) 30 days prior to the Closing or
(ii) 15 days after receipt by the Buyer of the Title Commitments, whereupon the
Seller shall (x) make an application with the Title Company for the issuance of
title insurance policies (the "Title Insurance Policies") for the Owned Real
Premises in such insured amounts equal to the current fair market value of each
Owned Real Premises, as reasonably agreed to by the Buyer and the Sellers, and
(y) order an ALTA survey or survey update of the Owned Real Premises (the
"Surveys") from surveyors licensed to do business in the States of Minnesota and
South Dakota (the "Surveyors"). The Sellers shall give instructions to the Title
Company and the Surveyors to deliver directly to the Buyer and the Sellers
copies of the Title Company's report, the results of any searches for Uniform
Commercial Code financing statements filed against the Owned Real Premises, the
Tax and departmental searches and the survey reading and the Surveys, and any
updates or continuations thereof and any supplements thereto. Such Title
Insurance Policies and Surveys shall be delivered to the Buyer at Closing. At or
prior to the Closing, the Sellers shall be responsible for clearing all Liens
(other than Permitted Liens and matters shown on Section 3.8(a) of the Business
Schedules) on title to the Owned Real Premises objected to by the Buyer in a
timely manner. Payment of all title and Survey costs in connection with this
Agreement shall be borne equally by the Company and the Buyer.
5.21. Preparation of License Applications. As promptly as possible
after the date hereof, the Sellers shall prepare drafts, which drafts shall be
as complete as possible, of all notifications or other filings or applications
that are advisable or are required to be filed by the Buyer pursuant to the
Finance Laws in order to consummate the transactions contemplated hereby, for
the Buyer's reasonable review, augmentation and filing. The Sellers shall
provide all reasonable assistance and cooperation with respect to the Buyer's
efforts to obtain such licenses.
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5.22. Provision of Bank Information. The Sellers shall use
commercially reasonable efforts to arrange for a meeting between representatives
of the FDIC and state banking authorities (collectively, the "Regulators") and
representatives of the Buyer and their financing sources, at which the
Regulators shall be asked to discuss with them the results of examinations of
Mill Creek Bank and other regulatory issues or concerns. The Company shall seek
to schedule the meeting as soon as reasonably practicable after the date of this
Agreement, but in no event more than 15 Business Days after the date of this
Agreement. In addition, as soon as reasonably practicable after the date of this
Agreement, but in no event more than 10 Business Days after the date of this
Agreement, the Sellers shall provide to the Buyer to the extent permitted by Law
the following information with respect to Mill Creek Bank: (i) copies of all
examination reports issued by the FDIC or state banking authorities since
January 1, 2000; (ii) copies of all supervisory or remedial agreements of any
kind, including, but not limited to, memoranda of understanding, agreements,
cease-and-desist orders, consent orders and enforcement orders outstanding at
any time since January 1, 2000; (iii) copies of all supervisory correspondence,
including, but not limited to, correspondence related to (i) and (ii) above; and
(iv) copies of all internal analyses, including, but not limited to, memoranda,
notes, correspondence and messages, and data, including, but not limited to,
financial reports and reports concerning intercompany balances, regarding
compliance with sections 23A and 23B of the Federal Reserve Act with respect to
intercompany agreements with Mill Creek Bank (together with the discussions
between the Buyer and the Regulators described above, the "Bank Information").
5.23. Access to Records After the Closing.
(a) For a period of eight years after the Closing Date, the
Sellers and their representatives shall have reasonable access to all of the
Files transferred to the Buyer hereunder to the extent that such access may
reasonably be required by the Sellers in connection with matters relating to or
affected by the Excluded Assets, the Excluded Liabilities and other reasonable
requests related to the Company's remaining activities and obligations. Such
access shall be afforded by the Buyer upon receipt of reasonable advance notice
and during normal business hours. The Sellers shall be solely responsible for
any costs or expenses incurred by them pursuant to this Section 5.23(a). If the
Buyer shall desire to dispose of any such Files prior to the expiration of such
eight-year period, the Buyer shall, prior to such disposition, give the Sellers
a reasonable opportunity, at their expense, to segregate and remove such Files
as the Sellers may select. Notwithstanding the foregoing, the Buyer recognizes
and understands that the Sellers are party to litigation, and may become engaged
in future litigation, regarding the Sellers' acquisition, operation and
management of the Company and its Subsidiaries. The Buyer agrees to reasonably
cooperate with the Sellers in the prosecution and defense of any such
litigation. The Buyer also agrees to provide the Sellers with access to its
employees, and to make its employees available for testimony upon reasonable
terms and upon reasonable notice given by the Sellers. The Sellers will pay any
reasonable costs associated with the Buyer's cooperation in such litigation
matters.
(b) For a period of eight years after the Closing Date, the
Buyer and its representatives shall have reasonable access to all of the Files
relating to the Purchased Businesses which the Sellers or any of their
respective Affiliates may retain after the Closing Date. Such access shall be
afforded by the Sellers and their respective Affiliates upon receipt of
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reasonable advance notice and during normal business hours. The Buyer shall be
solely responsible for any costs and expenses incurred by it pursuant to this
Section 5.23(b). If the Sellers or any of their respective Affiliates shall
desire to dispose of any such Files prior to the expiration of such eight-year
period, the Sellers shall, prior to such disposition, give the Buyer a
reasonable opportunity, at the Buyer's expense, to segregate and remove such
Files as the Buyer may select. If the GE Condition is met and in the event any
Records are acquired by GE, the Sellers shall cause GE to provide the Buyer and
its representatives access to Records on terms and conditions substantially
similar to the terms and conditions set forth in this Section 5.23(b).
(c) In the event that the Buyer acquires any Records that
relate to any GE Purchased Assets, the Buyer shall provide GE and its
representatives access to such Records on terms and conditions substantially
similar to the terms and conditions in Section 5.23(b); provided, however, that
GE shall be solely responsible for any costs and expenses incurred by it and the
Buyer pursuant to this Section 5.23(c).
5.24. Liens. The Sellers have provided to the Buyer written notice
of a description of all Liens (except Permitted Liens) on the Purchased Assets.
On or prior to the Closing, the Sellers shall deliver to the Buyer evidence of
the satisfaction, discharge or other termination of all such Liens (except
Permitted Liens) on the Purchased Assets.
5.25. Exclusion of Certain Purchased Assets. If, during the
Pre-Closing Period, the Buyer, pursuant to Section 2.1(a)(ii) hereof, determines
to exclude all of the outstanding capital stock of Mill Creek Bank from the
Purchased Assets, thereby deeming such capital stock or other assets as Excluded
Assets hereunder, the Parties agree to negotiate reasonably in good faith to
modify the terms and conditions of this Agreement, the Transaction Documents and
the Business Schedules to address any separation or transition issues which may
arise upon such determination, including, without limitation, such issues with
respect to Assigned Agreements, Intellectual Property, Facilities, Employees and
the Insurance Business.
5.26. Certain Insurance Matters.
(a) The Sellers acknowledge that, pursuant to Section
2.1(a)(ii), the Buyer may at its option elect not to purchase any Insurance
Assets and that, pursuant to Section 2.1(b), the Buyer may elect to purchase the
Insurance Business through a Stock Sale of one or more of the Insurance
Subsidiaries. To the extent that the Buyer does not elect to purchase the
Insurance Business through a Stock Sale and (ii) the transfer to the Buyer of
any of the Insurance Assets may not be made without (x) the consent or waiver of
any other party to any such asset or of any other Person or (y) the approval of
any Governmental Authority under the laws and regulations of the applicable
jurisdictions in which the Insurance Business operates, or if such transfer
would constitute a breach thereunder or otherwise violate applicable law (such
consents, waivers and approvals, collectively, the "Insurance Approvals"), this
Agreement shall not constitute an actual or attempted transfer of any such asset
unless and until such consent, waiver or approval has been duly obtained or such
transfer otherwise becomes lawful (such Insurance Assets included in the
Purchased Assets and not transferred as a result of this Section 5.26, a
"Non-Transferred Insurance Asset"; and the portion of the Insurance Business to
which such Non-Transferred Insurance Assets relate, the "Non-Transferred
Insurance Business"). Any portion of the Insurance Business that consists of a
reinsurance business shall be transferred to the Buyer
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through a reinsurance arrangement or novation and assumption (subject to the
consent of the ceding insurers), as elected by the Buyer.
(b) If any Insurance Approvals referenced in Section 5.26(a)
are not obtained prior to the Closing Date, and until the impracticalities of
transfer referred to therein are resolved to the Buyer's satisfaction, the
Sellers shall (i) provide or cause to be provided to the Buyer the Insurance
Profits (as defined below) and other benefits earned or received by the Sellers
in respect of the Non-Transferred Insurance Assets, (ii) cooperate in any
arrangement, lawful as to both the Sellers and the Buyer, designed to provide
such Insurance Profits and other benefits to the Buyer and (iii) enforce for the
account of the Buyer any rights of the Sellers arising from the Non-Transferred
Insurance Assets, in each case after consulting with and upon the advice and
direction of the Buyer until the date such transfer may occur in compliance with
Section 5.26(a) (with respect to any portion of the Non-Transferred Insurance
Business, the date on which such transfer to the Buyer may occur is referred to
herein as the "Transfer Date").
(c) Without limiting the generality of the foregoing, until
the Transfer Date, (i) the Sellers shall continue to conduct the Non-Transferred
Insurance Business in the manner in which such business has been conducted prior
to the date hereof, including, without limitation, securing or placing new and
renewal business with respect to the insurance products sold through the
Non-Transferred Insurance Business, and shall maintain adequate staff for such
purpose, (ii) the Sellers shall provide all reasonable assistance to the Buyer
in obtaining all Insurance Approvals necessary or advisable to effect the
transfer of the Non-Transferred Insurance Assets to the Buyer as promptly as
practicable, (iii) the Sellers shall continue to provide all support services
(including referral, billing and collection services) provided by them as of the
date hereof with respect to the Non-Transferred Insurance Business (other than
any such services that are provided by the MH Servicing Business, if the MH
Servicing Business is purchased by the Buyer on the Closing Date), and (iv) the
Sellers shall not amend, terminate or otherwise dispose of any Non-Transferred
Insurance Assets, and shall otherwise use their reasonable best efforts to keep
in place their relationships with the insurance companies providing the
insurance products sold through the Non-Transferred Insurance Business and with
any other Persons through which such insurance products are marketed or sold
(including, without limitation, obtaining any necessary approvals from such
insurance companies or other Persons to the transfer to the Buyer of the
Insurance Business). The Buyer and the Sellers shall, prior to the Closing Date,
develop a budget for the Non-Transferred Insurance Business (such agreed budget,
the "Insurance Budget"). Until the Transfer Date, (x) the Sellers shall grant
the Buyer reasonable access to the books, records, and personnel of the
Non-Transferred Insurance Business, (y) the Sellers shall not, and shall not
permit any Subsidiary to, take any of the actions set forth in Section 5.5 with
respect to the Non-Transferred Insurance Business or incur, without the prior
written consent of the Buyer, any cost, expense or liability not included in the
Insurance Budget, and (z) the Sellers shall advise the Buyer promptly of any
material developments with respect to the Non-Transferred Insurance Business and
the Non-Transferred Insurance Assets.
(d) If the Closing occurs, until the applicable Transfer Date,
the Buyer shall be entitled to receive all "Insurance Profits" earned by the
Sellers in respect of the Non-Transferred Insurance Business and the
Non-Transferred Insurance Assets during the period commencing on the Closing
Date and ending on the applicable Transfer Date. "Insurance Profits" shall mean,
for any period, the difference between (i) all commissions and other
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payments earned by the Sellers pursuant to the Non-Transferred Insurance Assets
during such period, whether in respect of insurance placed before or after the
Closing Date, and (ii) any direct, out-of-pocket costs incurred during such
period in providing the services referred to in clause (c)(iii) above to the
extent included in the Insurance Budget. Insurance Profits shall be computed on
a bi-weekly basis, if possible under the Sellers' existing systems (but in any
event not less frequent than monthly), during the period between the Closing
Date and Transfer Date, and the Sellers shall pay to the Buyer, by wire
transfer, an amount equal to the Insurance Profit for such period within two
Business Days after computation thereof. The Buyer shall have the right to
review and contest all such computations.
(e) Upon the receipt of the applicable Insurance Approvals,
the Sellers shall promptly transfer or cause to be transferred the applicable
Non-Transferred Insurance Assets to the Buyer free and clear of all Liens (other
than Permitted Liens) for no additional consideration.
(f) Reserved.
(g) Any claims by the Buyer for Insurance Profits shall,
pursuant to section 364(c)(1) of the Bankruptcy Code, enjoy super-priority over
administrative expense claims against the Sellers under section 503(b) or 507(b)
of the Bankruptcy Code.
(h) The foregoing provisions shall be binding on all
successors and permitted assigns of the Sellers (including permitted assigns of
all or a portion of the MH Servicing Business) and shall terminate five years
after the Closing. Without limiting the foregoing, the Sellers shall ensure that
any successor servicer or subservicer with respect to all or a portion of the MH
Servicing Business, including, without limitation, any purchaser of all or a
portion of the MH Servicing Business, shall, as a condition to becoming such,
agree in writing to the foregoing terms and the other arrangements contemplated
herein.
5.27. Financial Information.
(a) The Sellers shall prepare and deliver to the Buyer, within
10 Business Days after every calendar month-end between the date hereof and the
Closing Date (the "Post-Signing Balance Sheets") a true, complete and correct
consolidated balance sheet of the Company which shall not be materially
different in form and substance from the items on the November 30 Balance Sheet
other than any change to reflect a transaction contemplated by this Agreement or
otherwise approved by the Buyer or other than in respect of any Excluded Assets
or Excluded Liabilities. The Sellers shall also prepare and deliver to the Buyer
as soon as reasonably practicable after every calendar month-end between the
date hereof and the Closing Date, true, complete and correct ledger information
of the Company which shall be in the form previously delivered to the Buyer.
(b) Five days prior to the Closing Date, the Sellers shall
prepare and deliver to the Buyer a consolidated balance sheet which represents
the Company's good faith and best estimate of the Company's consolidated balance
sheet as of the Closing Date which shall not be materially different in form and
substance from the items on the November 30 Balance Sheet other than any change
to reflect a transaction contemplated by this Agreement or otherwise
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approved by the Buyer or other than in respect of any Excluded Assets or
Excluded Liabilities (the "Closing Date Balance Sheet").
5.28. GE Loan Services; Transition Services. If the GE Condition is
met, the Buyer agrees to negotiate in good faith with GE to provide certain loan
servicing for up to 18 months, relating to the home improvement and consumer
loans originated by the HI Origination Business and the CL Origination Business
and any such loans on the balance sheet of Mill Creek Bank at the time of
closing of the GE Approved Agreement, on terms and conditions reasonably
acceptable to the Buyer. If the GE Condition is met, the Buyer further agrees to
negotiate the provision of certain interim transition services including, but
not limited to, network administration, data center support and system
maintenance on terms and conditions reasonably acceptable to the Buyer and the
Buyer agrees use all commercially reasonable efforts to endeavor to provide all
necessary notices and obtain all necessary consents or approvals in connection
with the provision of such interim transition services. If the GE Closing occurs
before the Closing, then Sellers shall negotiate in good faith one or more
agreements with GE concerning any of the above matters; provided, however, that
the Sellers shall not, prior to the Closing, enter into any such agreements with
GE which may extend to any time after the Closing Date unless the Buyer shall
have approved the terms and conditions thereof. Notwithstanding anything to the
foregoing, if the Sellers shall have entered into one or more agreements with
respect to any of the above matters in a form reasonably acceptable to the Buyer
prior to Closing, the Buyer agrees to assume such agreements from the Sellers;
provided however that the Buyer shall only assume Liabilities thereunder arising
after the Closing Date.
5.29. Intellectual Property Licenses.
(a) In the event the Buyer elects to exclude the capital stock
of Mill Creek Bank pursuant to Section 2.1(a)(ii), the Buyer shall grant to the
Sellers a non-exclusive, royalty-free, worldwide license to use any Intellectual
Property necessary for the conduct of Mill Creek Bank. Such license shall be
perpetual (subject to customary termination provisions) and the Sellers shall
have the right to grant sublicenses with the prior written consent of the Buyer.
(b) If the GE Condition is met, the Buyer agrees to negotiate
in good faith with GE to xxxxx XX a non-exclusive, worldwide, royalty-free
license to use the trademarks "Mill Creek Bank," "Mill Creek Financial
Services," "Mill Creek Mortgage," "Mill Creek Servicing Corporation," "green
tree" and "Speaking of Credit" in connection with servicing loans, which shall
include a right for GE to use any materials that incorporate these trademarks
and that were created by the Sellers prior to the Closing for use with servicing
loans. Notwithstanding anything to the foregoing, if the Sellers shall have
entered into one or more such license agreements in a form reasonably acceptable
to the Buyer prior to Closing, the Buyer agrees to assume such agreements from
the Sellers; provided however that the Buyer shall only assume Liabilities
thereunder arising after the Closing Date.
(c) If the GE Condition is satisfied and if Sellers enter into
a license agreement with GE as contemplated by Section 5.31(d) of the GE
Approved Agreement, the Sellers shall seek to assign and shall, if permitted by
GE, assign such license agreement to Buyer at the Closing and, if so assigned,
such license agreement shall become an Assumed Agreement hereunder.
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5.30. GE Leases. If the GE Condition shall have been satisfied, the
Buyer agrees to negotiate in good faith to enter into a lease for premises at
0000 Xxxxxxx Xxxxx, Xxxxx Xxxx, Xxxxx Xxxxxx and an agreement to provide access
to the data center located at 7360 South Kyrene Road, Building C/1, Tempe
Arizona with GE or its Affiliate on substantially similar terms as those set
forth on Exhibit C hereto and in a form reasonably acceptable to the Buyer (or,
if the Sellers shall have entered into agreements for such premises with GE or
its Affiliate on substantially similar terms as those set forth on Exhibit C
hereto and in a form reasonably acceptable to the Buyer prior to Closing, the
Buyer agrees to assume such agreements from the Sellers; provided however that
the Buyer shall only assume Liabilities thereunder arising after the Closing
Date).
5.31. Waiver of B-2 Guarantee Rights. If and to the extent that the
separation of the B-2 Guarantee Rights from the B-2 Certificates is not
permitted under the MH Servicing Contracts or applicable law or is not ordered
by the Bankruptcy Court by a Final Order, (x) the Buyer agrees to irrevocably
waive and not assert any B-2 Guarantee Rights against any CFC Party or otherwise
and shall cause any direct or indirect transferee to abide by such waiver and
(y) the Sellers agree, and shall cause the CFC Parties to agree, that all other
cash flows associated with or derivative of the B-2 Certificates shall
immediately be assigned, transferred and delivered to Buyer and all rights and
claims associated with or derivative of the B-2 Certificates shall be enforced,
at the direction and expense of the Buyer, for the exclusive benefit of the
Buyer.
5.32. Termination of HE Origination Business. Notwithstanding any
provision of this Agreement to the contrary, including without limitation
Section 5.4 and Section 5.5 above, (a) the Buyer acknowledges that the Sellers
intend to discontinue and terminate the origination portion of the HE Business
(the "HE Origination Business"), including without limitation, the termination
of certain employees and the rejection of certain contracts associated with the
HE Origination Business and (b) the Sellers are hereby permitted to take all
actions reasonably necessary or desirable to effect (i) the termination of the
HE Origination Business and (ii) the termination, as mutually determined by the
Buyer and the Company, of any Business Employee or group of Business Employees
or any employees that the Buyer elects to hire pursuant to Section 5.10(a)(ii),
whether or not related to the HE Origination Business (the "Terminated
Employees"). Notwithstanding any provision to the contrary in this Agreement, in
the event the Sellers discontinue or terminate the HE Origination Business or
terminate any Terminated Employees, (i) the Buyer hereby agrees to reimburse the
Sellers at the Closing for all out-of-pocket costs or expenses paid by any of
the Sellers or any of their respective Affiliates in connection with the
discontinuation or termination of the HE Origination Business or termination of
Terminated Employees, as appropriate, prior to the Closing, including without
limitation severance to all employees who are terminated in connection with the
discontinuation of the HE Origination Business and all Liabilities for paid time
off, sick leave and vacation pay, (ii) all such out-of-pocket costs or expenses
in connection with the termination of the HE Origination Business or in
connection with the termination of Terminated Employees incurred by any of the
Sellers or any of their respective Affiliates in connection with the
discontinuation or termination of the HE Origination Business or termination of
Terminated Employees prior to the Closing which have not been paid by the Buyer
to the Sellers at Closing shall be Assumed Liabilities, including (x) severance
to all employees who are terminated in connection with the discontinuation of
the HE Origination Business in accordance with the amount of severance set forth
on the list which was provided to the Buyer in accordance with Section 3.14, and
(y) all
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Liabilities for paid time off, sick leave and vacation pay for such employees as
set forth under the heading "PTO" in Section 5.10(a) of the applicable Business
Schedules, in each case to the extent such costs and expenses have not been paid
prior to the Closing by the Sellers and reimbursed by the Buyer at the Closing.
5.33. Seller Transition Services. If the transaction contemplated
by the GE Agreement does not close, then (A) Buyer shall provide the Sellers
with (i) loan servicing relating to the home improvement and consumer loans
originated by the HI Origination Business and the CL Origination Business and
any such loans on the balance sheet of Mill Creek Bank at the time of the
Closing Date and (ii) services including, without limitation, network
administration, data center support and system maintenance on terms and
conditions reasonably acceptable to Sellers (collectively, the "Loan and IT
Services") until such time as the Excluded Businesses are sold or liquidated,
but in any event not more than six months after the Closing Date; provided that,
upon Sellers' request, Buyer agrees to negotiate in good faith for the provision
of such Loan and IT Services to Sellers after such six-month period upon
mutually acceptable terms; and (B) Buyer shall use reasonable efforts (and
Seller shall ensure that any applicable purchase agreement for the Excluded
Businesses contains a provision requiring the buyer of such Excluded Businesses
to use such reasonable efforts) to reach mutual agreement with the buyer of the
Excluded Businesses as to the provision by Buyer of the Loan and IT Services to
such buyer in a manner that is reasonable with respect to the Excluded
Businesses.
ARTICLE VI.
CONDITIONS PRECEDENT TO THE BUYER'S OBLIGATIONS
The obligation of the Buyer to consummate the transactions
contemplated by this Agreement is subject to the fulfillment of the following
conditions as of the Closing Date:
6.1. Representations and Warranties; Covenants; Certificates.
(a) The representations and warranties of the Sellers
contained in this Agreement, and in any agreement, instrument, or document
executed and delivered by them in connection with the Closing, shall be true and
correct on and as of the Closing Date as if made on and as of such date, except
as affected by transactions permitted by this Agreement and except to the extent
that any such representation or warranty is made as of a specified date, in
which case such representation or warranty shall have been true and correct as
of such specified date, except in each case to the extent that the failures in
the aggregate of such representations and warranties (disregarding any
qualifications as to materiality contained therein) to be true and correct would
not reasonably be expected to have, and have not had, a Material Adverse Effect.
(b) The Sellers shall have performed and complied in all
material respects with all agreements, obligations, covenants and conditions
required by this Agreement to be performed or complied with by it on or prior to
the Closing, including, without limitation, the covenants set forth in Sections
5.4 and 5.5.
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(c) The Buyer shall have received a certificate, dated as of
the Closing Date, signed by authorized officers of the Sellers to the effect
that such conditions set forth in Sections 6.1(a) and (b) hereof have been
satisfied in all respects.
6.2. Bankruptcy Condition. The Bankruptcy Court shall have entered
the Sale Order, which shall be a Final Order which has not been vacated,
reversed, modified, rescinded or stayed as of the Closing Date.
6.3. Litigation. There shall be in effect no pending or threatened
injunction, decree or order of, or any other action or proceeding before, any
Governmental Authority that could reasonably be expected to (a) prevent the
consummation of the transactions contemplated hereby, (b) cause the transactions
to be rescinded following the consummation thereof or (c) have a material
adverse effect on the Buyer to operate the Purchased Businesses post-Closing.
6.4. Approvals. All authorizations, permits, licenses, certificates
of authority, consents, Orders, filings, notices and approvals (other than bulk
sale approvals) necessary to permit the Sellers to perform the transactions
contemplated hereby and required for the Buyer to own the Purchased Assets and
to operate the Purchased Businesses post-Closing from any Government Authority
shall have been duly obtained, made or given, shall be in form and substance
reasonably satisfactory to the Buyer, shall not be subject to the satisfaction
of any material condition that has not been satisfied or waived and shall be in
full force and effect; provided, however, that the Buyer shall not unreasonably
withhold a waiver of this Section 6.4 based on a failure to obtain an
insignificant authorization, permit, license, certificate of authority, consent
or approval. All material authorizations, permits, licenses, certificates of
authority, consents, Orders, filings, notices and approvals (other than bulk
sale approvals) necessary to permit the Sellers to perform the transactions
contemplated hereby and required for the Buyer to own the Purchased Assets and
to operate the Purchased Businesses post-Closing from any Third Party shall have
been duly obtained, made or given, shall be in form and substance reasonably
satisfactory to the Buyer, shall not be subject to the satisfaction of any
material condition that has not been satisfied or waived and shall be in full
force and effect. All terminations or expirations of waiting periods imposed by
any Governmental Authority necessary for the transactions contemplated under
this Agreement, if any, shall have occurred. This includes, but is not limited
to, the termination or expiration of all applicable waiting periods relating to
the HSR Act and the satisfactory conclusion of any proceedings that may have
been filed or instituted thereunder.
6.5. Instruments of Conveyance and Transfer; Title. The Sellers
shall have delivered to the Buyer such bills of sale, deeds, endorsements,
assignments and other good and sufficient instruments of conveyance and
transfer, including the Intellectual Property Assignment Agreements, in form and
substance, reasonably satisfactory to the Buyer and its counsel, as are
reasonably necessary to vest in the Buyer good and marketable title to all of
the interest of the Sellers in the Purchased Assets, free and clear of all
Liens, other than Permitted Liens and the Lien identified in Section 3.8(a) of
the applicable Business Schedules with respect to the Owned Real Premises
located in Rapid City, South Dakota, opinions of counsel (including with respect
to the matters covered in Section 3.30) and other documents and instruments
referred to in Section 2.3(b); provided, however, that if the GE Condition is
satisfied, then the Owned Real Premises located in Rapid City, South Dakota
shall be transferred free and clear of such Lien
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identified in Section 3.8(a) of the applicable Business Schedules. With respect
to each Residual Asset, the Buyer or its designee shall have been made the
registered owner of such Residual Asset pursuant to the terms of the related
governing documents. In the case of a Stock Sale, the Company shall deliver to
the Buyer or its designees (a) stock certificates representing the Shares, duly
endorsed in blank for transfer or accompanied by appropriate stock powers duly
executed in blank, with all taxes, direct or indirect, attributable to the
transfer of the Shares paid or provided for; (b) the minutes and stock records
of the Subject Subsidiary; and (c) signature cards from all banks or financial
institutions with which the Subject Subsidiary has an account designating
signatures approved by the Buyer to become effective immediately following the
Closing.
6.6. Transition Services Agreement. The Buyer and the Sellers shall
have entered into and delivered a transition services agreement, on terms to be
agreed upon by the Parties acting reasonably and to cover such services as the
Buyer reasonably determines (by written notice to Sellers) by the later of the
date of April 1, 2003 or 15 days after the Sellers have identified the (x)
relevant services pursuant to Section 5.13 and (y) the terms under which they
are provided are necessary to operate the Purchased Businesses post-Closing to
the extent such services were provided by the Sellers prior to the Closing (the
"Transition Services Agreement"); provided, however, that the foregoing shall
not be a condition to Closing if the Sellers shall have used their good faith
efforts to negotiate the Transition Services Agreement and notwithstanding such
good faith efforts no agreement is reached with respect thereto. Notwithstanding
anything to the contrary contained in ARTICLE III of this Agreement, to the
extent that certain assets or services are so identified by the Sellers as to be
provided to the Buyer pursuant to the Transition Services Agreement, it is
expressly understood and agreed that the fact that such assets or services are
not owned by the Buyer after the Closing shall not be deemed to be a breach of
any of the representations or warranties contained in ARTICLE III.
6.7. Resignation or Removal of Officers and Directors of Subject
Subsidiaries. In the case of a Stock Sale, the directors and officers of the
Subject Subsidiary identified by the Buyer shall have: (a) delivered letters of
resignation from their respective positions at the Subject Subsidiary in form
and substance satisfactory to the Buyer or (b) been removed from their
respective positions at the Subject Subsidiary by the taking of the requisite
corporate action in form and substance satisfactory to the Buyer.
6.8. Xxxxxx Facility. The outstanding Xxxxxx Debt Amount shall not,
during any time from December 19, 2002 to the Closing Date, be in excess of a
total aggregate amount of $975 million, and there shall not have occurred any
sale, transfer or liquidation of the Purchased Assets held under the Xxxxxx
Facilities except as permitted by Section 5.5(b). On and as of the Closing Date,
and without limiting the foregoing, no Purchased Asset that is in whole or in
part an asset subject to a repurchase agreement shall be liquidated, set off or
otherwise the subject of an exercise of remedies thereunder.
6.9. No Material Adverse Effect. Since December 31, 2002, there
shall not have been any change, circumstance or event which constitutes or has
resulted in, or that, in the Buyer's reasonable judgment, could reasonably be
expected to result in, a Material Adverse Effect.
6.10. Reserved.
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6.11. Servicing Rights.
(a) The Buyer shall be the servicer or successor servicer with
respect to all Non-MH Servicing Rights under each Non-MH Servicing Contract and
the Buyer shall be recognized as the servicer or successor servicer with respect
to all Non-MH Servicing Rights under each Non-MH Servicing Contract, and any
servicing fees or reimbursement for servicer advances shall be of the priority
accorded to a successor servicer in the cash flow waterfall with respect to the
Securitization covered by such Non-MH Servicing Contract, in each case as
evidenced by the Sale Order.
(b) The Buyer shall be the servicer or successor servicer with
respect to all MH Servicing Rights under each MH Servicing Contract and the
Buyer shall be recognized as the servicer or successor servicer with respect to
all MH Servicing Rights under each MH Servicing Contract, any servicing fees
shall be senior in the cash flow waterfall with respect to the Securitization
covered by such MH Servicing Contract (except in the case of the securitization
trusts set forth on Exhibit E for which P&I insurance is in force, in which
cases, the Revised Monthly Servicing Fee (as defined in the 9019 Order) will be
paid in the highest priority that will not adversely affect the continuation in
force of such insurance) and any reimbursement for servicer advances shall be as
set forth in the Consent Agreement, in each case as evidenced by (x) the Sale
Order, (y) the 9019 Order, and (z) a Consent Agreement which is in full force
and effect and the conditions precedent of which shall have been satisfied or
waived by the parties thereto as of the Closing Date (provided that if a Consent
Agreement is not entered into or does not remain in full force and effect, the
Buyer shall be satisfied that the foregoing orders or other arrangements as may
be in effect are sufficient to provide the Buyer with the foregoing rights).
(c) The servicing fees under each MH Servicing Contract shall
have been increased to 125 basis points (or such other amount as shall be
provided in a Consent Agreement which is in full force and effect) and such
increase shall have been confirmed by a Final Order of the Bankruptcy Court.
6.12. Tax Opinion.
(a) In respect of each Securitization in which a Residual
Asset, the MESA Equity or the NIMS Equity was issued or created, the Sellers
shall furnish to the Buyer an opinion of counsel to the effect that:
(i) in the case of a Securitization involving the
creation of one or more REMICs, each such REMIC will, assuming
that compliance with the terms of its governing documents, be
qualified as a real estate mortgage investment conduit within
the meaning of Section 860D(a) of the Code;
(ii) in the case of the NIMS Issuer, that it will not be
classified as an association treated as a corporation for
federal income tax purposes, as a publicly traded partnership
within the meaning of Section 7704 of the Code, or as a
taxable mortgage pool within the meaning of Section 7701(i) of
the Code and that the NIMS Notes will be treated as
indebtedness for federal income tax purposes;
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(iii) in the case of the MESA Issuers, each will be
classified as a corporation for federal income tax purposes,
if each is managed in accordance with the terms of its
governing documents, it will not be considered engaged in a
United States trade or business within the meaning of Section
864 of the Code, and the MESA Notes will be treated as
indebtedness for federal income tax purposes; and
(iv) in the case of an Other Securitization Entity, it
will be classified as a grantor trust, a partnership or a
disregarded entity, and not an association taxable as a
corporation, a publicly traded partnership or a taxable
mortgage pool, for federal income tax purposes, and, to the
extent that it has issued instruments designated as notes,
bonds, debentures or other evidences of indebtedness, such
instruments will be characterized as indebtedness for federal
income tax purposes;
provided, however, that with respect to Section 6.12(a)(i), such an opinion of
counsel shall be required only with respect to 75 percent of the total value of
such Securitizations and Sellers shall use their best efforts to obtain such an
opinion of counsel with respect to the remaining 25 percent of such
Securitizations.
(b) The requirement of this Section 6.12 may be satisfied by
the delivery of a letter from the law firm that rendered the opinion as to the
U.S. federal income tax treatment of the Securitization in which the relevant
Residual was created, which letter states that the Buyer is entitled to rely on
such opinion to the same extent as the party to whom the opinion was originally
issued. A copy of the relevant opinion shall be attached to the letter that
states that the Buyer is entitled so to rely.
6.13. Data Service Contracts. The Sellers shall have secured for
the Buyer the intellectual property, systems, data and telecommunications
contracts set forth in Section 6.13 of the applicable Business Schedules,
including, without limitation, the following contracts: (a) telecommunications
and data communications services with AT&T; (b) telecommunications and data
communications services with MCI/Worldcom; (c) database management and data
analysis services with Acxiom; and (d) database license with Oracle. Without
limiting the foregoing, at the reasonable request of any of the Sellers, whether
due to an inability to obtain consent or otherwise, the Buyer and the Sellers
shall cooperate and use their good faith efforts to make alternate arrangements
which will be reasonably satisfactory to the Buyer.
6.14. Acceptance of Employment Offers. With respect to each of the
Purchased Businesses, the Buyer shall have received acceptances of offers of
employment from a sufficient number of employees of the Purchased Business so as
to be able to operate the Purchased Business in a manner reasonably consistent
with its operating history, as reasonably determined by the Buyer in the
exercise of its good faith discretion.
6.15. Parent Guarantee. The Bankruptcy Court (with respect to the
bankruptcy proceeding of Parent) shall have entered an Order which shall be a
Final Order approving the letter agreement delivered by Parent on December 19,
2002 with respect to certain tax matters.
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6.16. Xxxxxxx. The Xxxxxxx Final DIP Order shall not have been
entered by the Bankruptcy Court. The Xxxxxxx Credit Agreement and the Xxxxxxx
Commitment Letter shall have been terminated in all respects. Except for the
$8.75 million fee approved in the Xxxxxxx Interim Order, the Company and its
Subsidiaries shall have no Liability to Xxxxxxx or its Affiliates under the
Xxxxxxx Commitment Letter or the Xxxxxxx Credit Agreement.
Any condition specified in this ARTICLE VI may be waived by
the Buyer; provided, however, that no such waiver shall be effective unless it
is set forth in a writing executed by the Buyer or unless the Buyer agrees in
writing to consummate the transactions contemplated by this Agreement without
fulfillment of such condition.
ARTICLE VII.
CONDITIONS PRECEDENT TO THE SELLERS' OBLIGATIONS
The obligation of the Sellers to consummate the transactions
contemplated by this Agreement is subject to the fulfillment of the following
conditions as of the Closing Date:
7.1. Representations and Warranties; Covenants; Certificates.
(a) The representations and warranties of the Buyer contained
in this Agreement, and in any agreement, instrument, or document executed and
delivered by it in connection with the Closing, shall be true and correct on and
as of the Closing Date as if made on and as of such date, except as affected by
transactions permitted by this Agreement and except to the extent that any such
representation or warranty is made as of a specified date, in which case such
representation or warranty shall have been true and correct as of such specified
date, except in each case to the extent that the failures in the aggregate of
such representations and warranties (disregarding any qualifications as to
materiality contained therein) to be true and correct would not reasonably be
expected to have, and have not had, a material adverse effect on the Buyer or
its ability to perform its obligations hereunder or to consummate the
transactions contemplated herein.
(b) The Buyer shall have performed and complied in all
material respects with all agreements, obligations, covenants and conditions
required by this Agreement to be performed or complied with by it on or prior to
the Closing.
(c) The Sellers shall have received a certificate, dated as of
the Closing Date, signed by authorized officers of the Buyer to the effect that
such conditions set forth in Section 7.1(a) and (b) hereof have been satisfied
in all respects.
7.2. Bankruptcy Condition. The Bankruptcy Court shall have entered
the Sale Order, which shall be a Final Order which has not been vacated,
reversed, modified, rescinded or stayed as of the Closing Date.
7.3. Litigation. There shall be in effect no pending or threatened
injunction, decree or order of, or any other action or proceeding before, any
Governmental Authority that could reasonably be expected to prevent the
consummation of the transactions contemplated hereby or cause the transactions
to be rescinded following the consummation thereof.
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7.4. Approvals. The authorizations, permits, licenses, certificates
of authority, consents, notices, filings, orders and approvals (other than bulk
sale approvals) set forth in Section 7.4 of the applicable Business Schedules
shall have been duly obtained, made or given, shall be in form and substance
reasonably satisfactory to the Sellers, shall not be subject to the satisfaction
of any material condition that has not been satisfied or waived and shall be in
full force and effect. All terminations or expirations of waiting periods
imposed by any Governmental Authority necessary for the transactions
contemplated under this Agreement, if any, shall have occurred. This includes,
but is not limited to, the termination or expiration of waiting periods under
the HSR Act.
7.5. Reserved.
7.6. Other Documents. The Sellers shall have received all other
documents and instruments referred to in Section 2.3(b).
Any condition specified in this ARTICLE VII may be waived by
the Sellers; provided that no such waiver shall be effective against the Sellers
unless it is set forth in a writing executed by the Sellers or unless the
Sellers agree in writing to consummate the transactions contemplated by this
Agreement without the fulfillment of such condition.
ARTICLE VIII.
TERMINATION
8.1. Termination Prior to Closing. This Agreement may be terminated
prior to the Closing as follows:
(a) by mutual written agreement of the Buyer and the Company;
(b) by the Buyer or the Company, if there shall be in effect a
Final Order restraining, enjoining or otherwise prohibiting the consummation of
the transactions contemplated by this Agreement;
(c) by the Buyer (provided that Buyer is not then in material
breach of any representation, warranty, covenant or other agreement contained
herein), if there shall have been a breach of any of the representations or
warranties of Sellers which would have a Material Adverse Effect or a material
breach of any of the covenants set forth in this Agreement on the part of the
Sellers, which breach is not cured within 30 days following written notice to
the Company (so long as such breach is capable of being cured);
(d) by the Company (provided that none of the Sellers is then
in material breach of any representation, warranty, covenant or other agreement
contained herein), if there shall have been a breach of any of the
representations or warranties which would have a material adverse effect on
Buyer's ability to perform its obligations hereunder or to consummate the
transactions contemplated herein or a material breach of any of the covenants
set forth in this Agreement on the part of the Buyer, which breach is not cured
within 30 days following written notice to the Buyer (so long as such breach is
capable of being cured);
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(e) by the Buyer, if by the respective dates required by
Section 5.8 hereof the Chapter 11 Case shall not have commenced or the Interim
9019 Order, the Bidding Procedures Order, the 9019 Order or the Sale Order shall
not have been entered, or if any such Orders are vacated, reversed, modified,
amended or stayed;
(f) by the Buyer or the Company, if the Company accepts a
higher and better offer for the Purchased Assets in accordance with Section 5.8
hereof and the Bidding Procedures Order (other than of the Buyer);
(g) by the Buyer or the Company, if the Bankruptcy Court
enters an order approving any Acquisition Proposal (other than a sale of the
Purchased Assets to the Buyer);
(h) by the Buyer or the Company, if the Closing has not
occurred by June 1, 2003, provided such failure of the Closing to occur is not
caused by a breach of this Agreement by the terminating party, provided, that
the Buyer shall be entitled to extend such date for an additional period of up
to 90 days if such failure to close is a result of the condition set forth in
Section 6.4 to be satisfied;
(i) by the Buyer, if the Credit Commitments (as defined in the
DIP Loan) shall have been terminated or the Loans (as defined in the DIP Loan)
shall have been declared due and payable, in each case pursuant to Section 9.2
of the DIP Loan; or
(j) if the Bankruptcy Court declines to enter the Sale Order
because the Bankruptcy Court finds that the sale of the Purchased Assets under
this Agreement can only be approved through or in the context of a plan of
reorganization.
8.2. Break-Up Fee and Expense Reimbursement.
(a) If this Agreement is terminated pursuant to Sections
8.1(f), 8.1(g) or 8.1(j) the Sellers shall, jointly and severally, pay to the
Buyer in immediately available funds a cash fee equal to $30 million (the
"Break-Up Fee"), such fee to be paid upon the earliest to occur of (i) the
closing of the Acquisition Proposal; (ii) the consummation of a plan under
chapter 11 of the Bankruptcy Code by the CFC Parties; (iii) the date which is 20
Business Days after the entry of a sale order with respect to an Acquisition
Proposal or (iv) the date which is 20 Business Days after the Bankruptcy Court
declines to enter the Sale Order for the reason set forth in Section 8.1(j)
hereof. If this Agreement is terminated pursuant to Section 8.1(h) as a result
of the failure of the Company to deliver the capital stock of Mill Creek Bank
free and clear of all Liens at the Closing (other than in the case where the
Buyer has elected not to purchase such stock pursuant to Section 2.1(a)(ii)) the
Sellers shall, jointly and severally, pay to the Buyer in immediately available
funds the Break-Up Fee, such fee to be paid within two days after such
termination. If this Agreement is terminated for any other reason permitted by
Section 8.1 (other than pursuant to Section 8.1(d)), and the Sellers (or any of
them) within one year thereafter consummate an Acquisition Proposal which
constituted a higher and better offer (whether or not constituting a Qualifying
Bid) (as defined in the Original Agreement), the Sellers shall, jointly and
severally, pay to the Buyer in immediately available funds the Break-Up Fee,
such fee to be paid upon consummation of such Acquisition Proposal. The Break-Up
Fee shall not be payable except under the circumstances provided in this Section
8.2(a).
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(b) If this Agreement is terminated pursuant to Sections
8.1(b), 8.1(c), 8.1(e) or 8.1(h) (without regard to the second proviso thereof),
then the Sellers shall, jointly and severally, pay or reimburse the Buyer for
all of the Buyer's actual out-of-pocket costs, fees, expenses (including,
without limitation, the Buyer's half of the HSR Act filing fee and the
reasonable fees and expenses of consultants, financial advisors, accountants,
counsel and financing sources), incurred by the Buyer (or the Investors) in
connection with the transactions contemplated by this Agreement, whether or not
incurred before or after the date of this Agreement, in an amount not to exceed
$5 million, which shall consist of the Buyer's actual and reasonable costs and
fees incurred (the "Expense Reimbursement"). The Expense Reimbursement shall be
made within five Business Days after the Buyer presents reasonable supporting
documentation therefor to the Sellers and the official committee of unsecured
creditors appointed in the Chapter 11 Case. The Expense Reimbursement shall not
be payable except under the circumstances provided in this Section 8.2(b).
(c) The Sellers' obligation to pay the Break-Up Fee and the
Expense Reimbursement pursuant to this Section 8.2 shall survive termination of
this Agreement and shall constitute an administrative expense of the Sellers
under section 364(c)(1) of the Bankruptcy Code with priority over any and all
administrative expenses of the kind specified in section 503(b) or 507(b) of the
Bankruptcy Code.
(d) The Break-Up Fee, payable under the circumstances provided
in Section 8.2(a), and the Expense Reimbursement, payable under the
circumstances provided in Section 8.2(b), shall be the exclusive remedies of the
Buyer and its Affiliates for any termination of this Agreement prior to the
Closing. In no event shall the Sellers or any of their respective Affiliates or
representatives have any Liability with respect to the Buyer or any other Person
hereunder in excess of the applicable Break-Up Fee and Expense Reimbursement in
the event that this Agreement terminates for any reason permitted by Section
8.1, and any claim, right or cause of action by the Buyer or any other Person
against the Sellers or their respective Affiliates or representatives in excess
of the applicable Break-Up Fee and Expense Reimbursement is hereby fully waived,
released and forever discharged. In no event shall the Sellers or their
respective Affiliates have any Liability to the Buyer or any other Person for
any special, consequential or punitive damages, and any such claim, right or
cause of action for any damages that are special, consequential or punitive or
for specific performance of this Agreement is hereby fully waived, released and
forever discharged.
8.3. Termination by Reason of Buyer Default. If this Agreement is
terminated pursuant to Section 8.1(d), the sole and exclusive remedy of the CFC
Parties and their Affiliates shall be strictly limited to retention of the
Purchased Assets and the prompt payment by the Buyer to the Company of an amount
not to exceed $100 million for any Losses on an after Tax basis actually
incurred or suffered by the Sellers as a result of such breach, as liquidated
damages (the "Seller Liquidated Damages"). In no event shall the Buyer or any of
its Affiliates or representatives have any Liability to the CFC Parties or their
respective Affiliates or any other Person hereunder in excess of the Seller
Liquidated Damages in the event that this Agreement terminates pursuant to
Section 8.1(d), and any claim, right or cause of action by the CFC Parties or
their respective Affiliates or any other Person against the Buyer or its
Affiliates or representatives in excess of the Seller Liquidated Damages is
hereby fully waived, released and forever discharged. In no event shall the
Buyer or any of its Affiliates or representatives have
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any liability to the CFC Parties or their respective Affiliates in the event
that this Agreement is terminated for any other reason other than pursuant to
Section 8.1(d), and any claim, right or cause of action by the CFC Parties or
their respective Affiliates or any other Person against the Buyer or its
Affiliates or representatives is hereby fully waived, released and forever
discharged. In no event shall the Buyer or its Affiliates have any Liability to
the CFC Parties or their respective Affiliates or any other Person for any
special, consequential or punitive damages, and any such claim, right or cause
of action for any damages that are special, consequential or punitive or for
specific performance of this Agreement is hereby fully waived, released and
forever discharged. Concurrently with the execution of this Agreement, X.X.
Xxxxxxx I L.P., Fortress Investment Trust II and Cerberus Capital Management,
L.P. shall have delivered to the Company an indemnification letter in the form
of Exhibit D attached hereto.
8.4. Effect of Termination. If none of the transactions
contemplated hereby are consummated then this Agreement shall become null and
void and of no further force and effect and there shall be no Liability on the
part of any Party to any other Party or its shareholders, directors or officers,
except as contemplated by ARTICLE VIII and ARTICLE X hereof. The Parties hereby
acknowledge that the amounts payable pursuant to this ARTICLE VIII are
commercially reasonable and necessary to induce the Buyer to enter into and
consummate the transactions contemplated by this Agreement.
ARTICLE IX.
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
9.1. Survival of Representations.
(a) The respective representations and warranties of the
Parties contained herein and in any Transaction Document or in any other
agreement, certificate, instrument or other document delivered pursuant thereto
or hereto shall survive the Closing until a date 12 months from the Closing
Date, provided that representations and warranties contained in Section 3.22
shall survive until 60 days after the lapse of the applicable statute of
limitations. No claim may be asserted nor may any action be commenced against
the Sellers pursuant to Section 9.2(a)(ii) or against the Buyer pursuant to
Section 9.2(b)(i) unless written notice of such claim or action is received by
the Sellers, in the case of Section 9.2(a)(ii), and Buyer, in the case of
Section 9.2(b)(i), on or prior to the date on which the representation or
warranty is based ceases to survive as set forth in the prior sentence (it being
agreed and understood that if a claim for a breach of a representation or
warranty is timely made, the representation or warranty shall, solely for
purposes of such claim, survive until the date on which such claim is finally
liquidated or otherwise resolved).
(b) Except as otherwise provided herein, the respective
post-Closing covenants of the Parties contained in this Agreement, the
Transaction Documents or in any other agreement, certificate, instrument or
other document delivered pursuant hereto or thereto shall survive the Closing
indefinitely. Pre-Closing covenants and failure to satisfy any condition to the
other party's obligation to consummate the transactions contemplated by this
Agreement shall not survive the Closing. Notwithstanding anything to the
contrary set forth herein, the representations and warranties pertaining to any
claim filed prior to the expiration of the relevant
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survival period specified in Section 9.1(a) hereof, shall, solely for purposes
of such claim survive until the resolution of such claim.
9.2. Indemnification.
(a) From and after the Closing and in addition to any other
remedies available to the Buyer Indemnified Parties pursuant to Section 10.15 in
equity (but subject to Section 9.6), subject to Section 9.3 hereof, the Sellers
shall indemnify, defend and hold the Buyer, the Investors, their Affiliates and
their respective directors, officers, employees, representatives, agents,
successors and assigns (collectively, the "Buyer Indemnified Parties") harmless
from and against all Losses on an after-Tax basis that may be incurred or
suffered by any Buyer Indemnified Party resulting or arising from, related to or
incurred or suffered in connection with:
(i) any failure of the Sellers to assume, pay, perform
and discharge any Excluded Liability;
(ii) any breach of any representation or warranty of the
Sellers contained in this Agreement or the certificate
delivered pursuant to Section 6.1(c) above; or
(iii) any breach of any covenant, obligation or
agreement of the Sellers contained herein or in any
Transaction Document or in any other agreement, certificate,
instrument or other document delivered pursuant thereto or
hereto which is required to be performed by any Sellers after
the Closing.
(b) From and after the Closing, subject to Section 9.3 hereof,
the Buyer shall indemnify, defend and hold the Sellers, their Affiliates and
their respective directors, officers, employees, representatives, agents,
successors and assigns (collectively, the "Seller Indemnified Parties", and
together with the Buyer Indemnified Parties, the "Indemnified Parties") harmless
from and against all Losses, that may be incurred or suffered by any Seller
Indemnified Party resulting or arising from, related to or incurred or suffered
in connection with:
(i) any breach of any representation or warranty of the
Buyer contained in this Agreement or the certificate delivered
pursuant to Section 7.1(c) above;
(ii) any breach of any covenant, obligation or agreement
of the Buyer contained herein or in any Transaction Document
or in any other agreement, certificate, instrument or other
document delivered pursuant thereto or hereto which is
required to be performed by the Buyer after the Closing; or
(iii) any failure of the Buyer to assume, pay, perform
and discharge any Assumed Liability.
9.3. Qualifications on Indemnification. Notwithstanding anything to
the contrary contained in this Agreement,
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(a) the Sellers shall not be required to indemnify the Buyer
Indemnified Parties for any Losses pursuant to Section 9.2(a)(ii) (other than
with respect to representations under Sections 3.22, 3.31, 3.32, 3.33, 3.34,
3.35, 3.36, 3.37 and 3.38) until the aggregate amount of such Losses exceeds $10
million (the "Indemnity Deductible"), and then only for the excess of such
Losses over such Indemnity Deductible; provided, however, that the Sellers shall
not be required to indemnify the Buyer Indemnified Parties for any Losses
pursuant to Section 9.2(a)(ii) (other than with respect to representations under
Sections 3.22, 3.31, 3.32, 3.33, 3.34, 3.35, 3.36, 3.37 and 3.38) for any Losses
in the aggregate in excess of $100 million (the "Cap");
(b) the Buyer shall not be required to indemnify the Seller
Indemnified Parties for any Losses (i) pursuant to Section 9.2(b)(i) until the
aggregate amount of such Losses exceeds the Indemnity Deductible, and then only
for the excess of such Losses over such Indemnity Deductible; provided, however,
that the Buyer shall not be required to indemnify the Seller Indemnified Parties
for any Losses pursuant to Section 9.2(b)(i) for any Losses in the aggregate in
excess of the Cap;
(c) for the purposes of determining whether the Indemnity
Deductible has been attained (but not for purposes of determining whether any
Indemnified Party is entitled to indemnification for Losses pursuant to Section
9.2(a)(ii) or Section 9.2(b)(i) once such Indemnity Deductible has been met),
all qualifications as to "material," "materiality," "Material Adverse Effect,"
or similar exception or qualifier contained therein shall be disregarded; and
(d) after the Buyer has recovered $10 million for Losses
pursuant to this ARTICLE IX, the Sellers shall not be required to indemnify the
Buyer Indemnified Parties for any Losses resulting or arising from, related to
or incurred or suffered in connection with any breach of any representation or
warranty of the Sellers contained in this Agreement or the certificate delivered
pursuant to Section 6.1(c) above or which are actually known by the Buyer prior
to the Closing.
9.4. Notice and Defense of Claims.
(a) Notice of Claims. If an Indemnified Party desires to
assert a Direct Claim or receives notice of the assertion of any claim or of the
commencement of any Third Party Claim with respect to which indemnification is
to be sought from an Indemnifying Party, the Indemnified Party will give such
Indemnifying Party reasonable prompt notice thereof, but the failure to give
timely notice will not affect the rights or obligations of the Indemnifying
Party except to the extent that, as a result of such failure, the Indemnifying
Party has been materially prejudiced by the Indemnified Party's failure to give
such notice, in which case the Indemnifying Party shall be relieved from its
obligations hereunder only to the extent of such material prejudice. Such notice
shall describe the nature of the Third Party Claim in reasonable detail and will
indicate the estimated amount, if practicable, of the Loss that has been or may
be sustained by the Indemnified Party. Any Notice of a Direct Claim will state
the nature of such claim in reasonable detail and indicate the estimated amount,
if practicable.
(b) Third Party Claim Defense. The Indemnifying Party will
have the right to participate in or, by giving Notice to the Indemnified Party,
to elect to assume the defense of, any Third Party Claim at such Indemnifying
Party's own expense and by such Indemnifying Party's
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own counsel. The Indemnified Party shall have the right, but not the obligation,
to participate at its own expense in the defense thereof by counsel of the
Indemnified Party's choice and shall in any event use its commercially
reasonable efforts to cooperate with and assist the Indemnifying Party;
provided, however, that any Indemnified Party shall be entitled to participate
in the defense of any such Third Party Claim with counsel of its own choice at
the expense of the Indemnifying Party if, in the good faith judgment of the
Indemnified Party's counsel, representation by the Indemnifying Party's counsel
presents a material conflict of interest or if the Indemnified Party has
conflicting defenses. If within 10 calendar days after an Indemnified Party
provides notice to the Indemnifying Party of any Third Party Claim, the
Indemnified Party receives notice from the Indemnifying Party that such
Indemnifying Party has elected to assume the defense of such Third Party Claim,
the Indemnifying Party will not be liable for any legal expenses subsequently
incurred by the Indemnified Party in connection with the defense thereof.
Without the prior written consent of the Indemnified Party (not to be
unreasonably withheld), the Indemnifying Party will not enter into any
settlement or compromise of any Third Party Claim unless the sole relief
provided is monetary damages that are paid in full by the Indemnifying Party.
(c) Direct Claim. The Indemnifying Party will have a period of
45 calendar days from the receipt of notice of a Direct Claim within which to
respond to such Direct Claim. If the Indemnifying Party does not respond within
such 45-day period, the Indemnifying Party will be deemed to have accepted such
Direct Claim. If the Indemnifying Party rejects such Direct Claim, the
Indemnified Party will be free to seek enforcement of its rights to
indemnification under this Agreement.
9.5. Tax Treatment. The Parties agree that any indemnification
payments made pursuant to this Agreement shall be treated for Tax purposes as an
adjustment to the Purchase Price, unless otherwise required by applicable Law.
All indemnification payments under this Agreement shall include an amount
sufficient to hold the recipient harmless on a net after-Tax basis from all
Taxes imposed with respect to the receipt or on account of the payment.
9.6. Remedy. Absent fraud, from and after the Closing, the sole
remedy of a party in connection with a breach of any representation or warranty
contained in this Agreement or in any certificate delivered pursuant to Section
6.1(c) or Section 7.1(c) shall be as set forth in this ARTICLE IX.
9.7. Administrative Expense; Administrative Priority. The first
$10.0 million of the Sellers' obligations under Section 5.1(b)(i) and this
ARTICLE IX shall constitute an administrative expense of the Sellers under
section 364(c)(1) of the Bankruptcy Code with priority over any and all
administrative expenses of the kind specified in section 503(b) or 507(b) of the
Bankruptcy Code and the balance of such obligations shall be an unsecured
prepetition claim. Notwithstanding anything to the contrary contained herein,
the Parties acknowledge and agree that the obligations of the CFC Parties
pursuant to Section 5.10(a)(ii) and Section 5.33 shall be separately enforceable
at law or in equity and shall not constitute a claim under ARTICLE IX hereof.
The Sellers' obligations under Section 5.10(a)(ii) and Section 5.33 shall
constitute an administrative expense of the Sellers' estates pursuant to Section
503(b)(1) of the Bankruptcy Code.
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ARTICLE X.
MISCELLANEOUS
10.1. Expenses. Except as otherwise specifically provided in this
Agreement, the Sellers and the Buyer will each pay all costs and expenses
incurred by each of them, or on their behalf respectively, in connection with
this Agreement and the transactions contemplated hereby, including fees and
expenses of their own financial consultants, accountants and counsel.
10.2. Amendment and Waiver. This Agreement may be amended and any
provision of this Agreement may be waived, provided that any such amendment or
waiver shall be binding upon a Party hereto only if such amendment or waiver is
set forth in a writing executed by such Party. No course of dealing between or
among any persons having any interest in this Agreement shall be deemed
effective to modify, amend or discharge any part of this Agreement or any rights
or obligations of any Party hereto under or by reason of this Agreement.
10.3. Notices. All notices, demands and other communications given
or delivered under this Agreement shall be in writing and shall be deemed to
have been given when personally delivered, mailed by first class mail, return
receipt requested, or delivered by express courier service or telecopied (with
hard copy to follow). Notices, demands and communications to the Sellers and the
Buyer shall, unless another address is specified in writing, be sent to the
address or telecopy number indicated below:
Notices to the Sellers: Conseco Finance Corp.
---------------------- 0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telecopy No.: (000) 000-0000
with copies (which shall not constitute
notice) to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X.X. Xxxxxxxxxx, P.C.
Telecopy: (000) 000-0000
Official Committee of Unsecured Creditors of
Conseco Finance Corp. and
Conseco Finance Servicing Corp.
c/o Commonwealth Advisors
000 Xxxxxxx Xx.
Xxxxx Xxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
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and
Xxxxxxxxx Xxxxxxx, LLP
00 X. Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
Notices to the Buyer: c/o X.X. Xxxxxxx I L.P.
-------------------- 000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx
Telecopy No: (000) 000-0000
c/o Fortress Investment Trust II
1251 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
Telecopy No: (000) 000-0000
and
x/x Xxxxxxxx Xxxxxxx Xxxxxxxxxx, X.X.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx
Telecopy No: (000) 000-0000
with copies (which shall not constitute
notice) to:
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
and
Milbank Tweed Hadley & XxXxxx LLP
000 Xxxxx Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
10.4. Binding Agreement; Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns; provided that
neither this Agreement nor any of the rights,
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interests or obligations hereunder may be assigned by the Sellers without the
prior written consent of the Buyer or by the Buyer without the prior written
consent of the Sellers. Notwithstanding the foregoing, without the prior written
consent of the Sellers, each of the Buyer and its permitted assigns may at any
time, in its sole discretion, assign, in whole or in part, (a) its rights and
obligations pursuant to this Agreement and the other Transaction Documents to
one or more of its Affiliates or to one or more other Persons controlled,
directly or indirectly, by any of the Investors, (b) its rights under this
Agreement and the other Transaction Documents for collateral security purposes
to any lender providing financing to the Buyer, such permitted assign or any of
their Affiliates and any such lender may exercise all of the rights and remedies
of the Buyer or such permitted assign hereunder and thereunder; and (c) its
rights under this Agreement and the other Transaction Documents, in whole or in
part, to any subsequent purchaser of the Buyer, such permitted transferee or any
of their divisions or any material portion of their assets (whether such sale is
structured as a sale of stock, sale of assets, merger, recapitalization or
otherwise). However, the Buyer and its permitted assigns shall not be released
or novated from any obligations assigned by the Buyer or its permitted assigns
pursuant to this Section 10.4.
10.5. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provisions or the remaining provisions of this Agreement.
10.6. Construction. The language used in this Agreement shall be
deemed to be the language chosen by the Parties to express their mutual intent,
and no rule of strict construction shall be applied against any Person. Any
reference to any federal, state, local or foreign statute or law shall be deemed
also to refer to all rules and regulations promulgated thereunder, unless the
context otherwise requires. The word "including" shall mean "including without
limitation".
10.7. Captions. The captions used in this Agreement are for
convenience of reference only and do not constitute a part of this Agreement and
shall not be deemed to limit, characterize or in any way affect any provision of
this Agreement, and all provisions of this Agreement shall be enforced and
construed as if no caption had been used in this Agreement.
10.8. Entire Agreement. The annexes, exhibits and schedules
identified in this Agreement are incorporated herein by reference. This
Agreement and the documents referred to herein (including the Confidentiality
Agreement) contain the entire agreement between the Parties and supersede any
prior understandings, agreements or representations by or between the Parties,
written or oral, which may have related to the subject matter hereof in any way,
including without limitation the Original Agreement. Except as expressly set
forth in ARTICLE III and ARTICLE IV of this Agreement (or in the certificates to
be delivered pursuant to Section 6.1(c) and Section 7.1(c), no Party makes any
representation or warranty of any kind, express or implied, and it is further
understood and agreed that Sellers make no representation or warranty of any
kind with respect to the future value or profitability of the Purchased
Businesses or the Purchased Assets.
-101-
10.9. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute one and the same instrument.
10.10. Governing Law. All questions concerning the construction,
validity and interpretation of this Agreement shall be governed by and construed
in accordance with the domestic laws of the State of New York, without giving
effect to any choice of law or conflict of law provision (whether of the State
of New York or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of New York.
10.11. Parties in Interest. Nothing in this Agreement, express or
implied, is intended to confer on any Person other than the Parties and their
respective successors and assigns any rights or remedies under or by virtue of
this Agreement.
10.12. Consent to Jurisdiction. THE PARTIES AGREE THAT JURISDICTION
AND VENUE IN ANY ACTION BROUGHT BY ANY PARTY PURSUANT TO THIS AGREEMENT SHALL
PROPERLY (BUT NOT EXCLUSIVELY) LIE IN ANY FEDERAL OR STATE COURT LOCATED IN NEW
YORK, NEW YORK; PROVIDED, HOWEVER, THE PARTIES AGREE THAT JURISDICTION AND VENUE
IN ANY ACTION BROUGHT BY ANY PARTY PURSUANT TO THIS AGREEMENT OVER ANY DISPUTE
RELATING TO THE AUCTION OR THE PURCHASED ASSETS OR THIS AGREEMENT SHALL
EXCLUSIVELY LIE WITH THE BANKRUPTCY COURT SO LONG AS THE BANKRUPTCY COURT SHALL
BE WILLING TO HEAR SUCH DISPUTE. BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH PARTY IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH COURTS FOR ITSELF AND
IN RESPECT OF ITS PROPERTY WITH RESPECT TO SUCH ACTION. THE PARTIES IRREVOCABLY
AGREE THAT VENUE WOULD BE PROPER IN SUCH COURT, AND HEREBY WAIVE ANY OBJECTION
THAT SUCH COURT IS AN IMPROPER OR INCONVENIENT FORUM FOR THE RESOLUTION OF SUCH
ACTION. THE PARTIES FURTHER AGREE THAT THE MAILING BY CERTIFIED OR REGISTERED
MAIL, RETURN RECEIPT REQUESTED, OF ANY PROCESS REQUIRED BY ANY SUCH COURT SHALL
CONSTITUTE VALID AND LAWFUL SERVICE OF PROCESS AGAINST THEM, WITHOUT NECESSITY
FOR SERVICE BY ANY OTHER MEANS PROVIDED BY STATUTE OR RULE OF COURT.
10.13. Delivery by Facsimile. This Agreement and any Transaction
Document, and any amendments hereto or thereto, to the extent signed and
delivered by means of a facsimile machine, shall be treated in all manner and
respects as an original Contract and shall be considered to have the same
binding legal effects as if it were the original signed version thereof
delivered in person. At the request of any Party hereto or to any such Contract,
each other Party hereto or thereto shall re-execute original forms thereof and
deliver them to all other parties. No Party hereto or to any such Contract shall
raise the use of a facsimile machine to deliver a signature or the fact that any
signature or Contract was transmitted or communicated through the use of a
facsimile machine as a defense to the formation of a Contract and each such
Party forever waives any such defense.
-102-
10.14. Disclosure Schedules. All schedules attached hereto or
referred to herein are hereby incorporated in and made a part of this Agreement
as if set forth in full herein. The description or listing of a matter, event or
thing within the schedules (whether in response for a description or listing of
material items or otherwise) shall not be deemed an admission or acknowledgment
that such matter, event or thing is "material" for any purpose. In addition,
matters reflected in the schedules are not necessarily limited to matters
required by this Agreement to be reflected in such schedules. Such additional
matters are set forth for informational purposes only and do not necessarily
include other matters of a similar nature.
10.15. Specific Performance. The Buyer shall be entitled to seek
specific performance of the obligations to be performed by the Sellers in
accordance with the provisions of this Agreement.
* * * * *
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IN WITNESS WHEREOF, the undersigned have executed this Asset
Purchase Agreement as of the date first written above.
CONSECO FINANCE CORP.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
CONSECO FINANCE SERVICING CORP.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
CONSECO FINANCE CORP. - ALABAMA
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
CONSECO FINANCE CREDIT CORP.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
CONSECO FINANCE CONSUMER DISCOUNT
COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
CONSECO FINANCE LOAN COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
CONSECO FINANCE CANADA HOLDING COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
CONSECO FINANCE CANADA COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
CONVERGENT LENDING SERVICES, LLC
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Its: President
GREEN TREE FINANCE CORP. - FIVE
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
GREEN TREE RESIDUAL FINANCE CORP. I
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
CONSECO FINANCE CREDIT CARD
FUNDING CORP.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
CONSECO FINANCE SECURITIZATIONS CORP.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
CONSECO HE/HI 2001-B-2, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
CONSECO FINANCE ADVANCE RECEIVABLES
CORP.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
CONSECO FINANCE LIQUIDATION EXPENSE
ADVANCE RECEIVABLES 2002-B-CORP.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
GREEN TREE RECS II GUARANTY CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
GREEN TREE SECOND GP INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
CONSECO AGENCY, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
CONSECO AGENCY OF ALABAMA, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
CONSECO AGENCY OF KENTUCKY, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
CONSECO AGENCY OF NEVADA, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
CONSECO AGENCY OF NEW YORK, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
XXXX-XXXX GENERAL AGENCY, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
CONSECO AGENCY REINSURANCE LIMITED
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
RICE PARK PROPERTIES CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
GREEN TREE RETAIL SERVICES BANK
By: /s/ Xxxxxx X. Xxxx, Xx.
------------------------------
Name: Xxxxxx X. Xxxx, Xx.
Its: President
CONSECO FINANCE NET INTEREST MARGIN
FINANCE CORP. I
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
CONSECO FINANCE NET INTEREST MARGIN
FINANCE CORP. II
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
LANDMARK MANUFACTURING HOUSING INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
GREEN TREE FLOORPLAN FUNDING CORP.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
GREEN TREE FIRST GP INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
GREEN TREE FINANCE CORP. -TWO
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: Senior Vice President
CFN INVESTMENT HOLDINGS LLC
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Name: Xxxxxx X. Xxxxx
Its: CEO
PURCHASED BUSINESSES SCHEDULE
RESIDUALS SCHEDULE
MH SERVICING BUSINESS SCHEDULE
INDEX OF EXHIBITS
Exhibit A - Additional Representations and Warranties with Respect to the
Loans and the Residual Assets
Exhibit B - Form of Lost Document Affidavit
Exhibit C - GE Lease Term Sheet
Exhibit D - Form of Indemnification Letter of X.X. Xxxxxxx I L.P., Fortress
Investment Trust II and Cerberus Capital Management, L.P.
Exhibit E - List of Securitization Trusts for which P&I Insurance is in Force
EXHIBIT A
1. Loans. The Sellers make the following representations with
respect to the Loans:
(a) Binding Obligation. The Loans are the legal, valid and
binding obligations of the Obligor thereunder and are enforceable in accordance
with their terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally.
(b) No Defenses. The Loans are not subject to any right of
rescission, setoff, counterclaim or defense, including the defense of usury, and
the operation of any of the terms of the Loans or the exercise of any right
thereunder will not render the Loans unenforceable, in whole or in part, or
subject to any right of rescission, setoff, counterclaim or defense, including
the defense of usury.
(c) Insurance. In the case of all applicable Loans, including,
but not limited to Home Improvement Loans, Home Equity Loans, HELOC and MH
Contracts relating to real property, other than unsecured Loans, as of the date
a CFC Party originated or purchased (as applicable) such Loan, all improvements
on the related real property were covered by a hazard insurance policy as of the
date a CFC Party originated or purchased (as applicable) such Loan. All premiums
due on such insurance had been paid in full. All Loans insured under the FHA's
Title 1 Program that were originated by a CFC Party were originated in
compliance with FHA regulations and are insured, without setoff, surcharge or
defense, by FHA insurance. The Sellers have, in conformity with FHA regulations,
filed all reports necessary for the such Loans to be registered for FHA
insurance. Following the sale, transfer or assignment of such Loans, the Buyer
will be entitled to the full benefits of the FHA insurance. If upon origination
of such Loans by a CFC Party, the property securing such Loans was in an area
identified in the Federal Register by the Federal Emergency Management Agency as
having special flood hazards (and if flood insurance was required by federal
regulation and such flood insurance has been made available in the locale where
the property is located), the property was, at the date of origination, covered
by a flood insurance policy of the nature and in an amount which is consistent
with the Company's servicing standards. "FHA" means the Fair Housing
Administration, an agency with the United States Department of Housing and Urban
Development.
(d) Origination. The Loans were originated by the Sellers in
the ordinary course of business, and if not originated by the Sellers, then
purchased by or assigned to a Seller from a home improvement contractor, home
equity lender, manufactured housing dealer or any similarly situated dealer or
Person in the ordinary course of business. The origination practices with
respect to each Loan (i) have been and are in all material respects legal and
proper in the mortgage origination business and consumer finance business and
(ii) are in accordance with the Sellers' underwriting guidelines in all material
respects (except that, with respect to each Loan that was originated by a Person
other than a Seller, the Sellers make such origination practices representation
and warranty only to their Knowledge).
(e) Lawful Assignment. The Loans were not originated in and
are not subject to the Laws of any jurisdiction whose Laws would make the
transfer or ownership thereof unlawful or unenforceable. The assignment and any
and all documents executed and delivered
A-1
by the Sellers pursuant to this Agreement each constitutes the legal, valid and
binding obligation of the Sellers enforceable in accordance with their terms. As
of the Closing Date, the Sellers will have executed a valid blanket assignment
of the Loans transferred to the Buyer, and will have transferred all their
right, title and interest in such Loans including all rights the Sellers may
have against the originating Person with respect to Loans originated by Persons
other than a Seller.
(f) Compliance with Laws. All requirements of any Law,
including without limitation, the Finance Laws, and FHA regulations, if
applicable, have been complied with in all material respects and such compliance
is not affected by the holding or ownership of the Loans.
(g) Loans In Force. The Loans have not been satisfied,
subordinated or rescinded, in whole or in part, and, in the case of such Loans
secured by collateral, such collateral has not been released, in whole or in
part (except as released in the ordinary course of business consistent with past
practices), from the Lien created thereby.
(h) Liens. With respect to Loans that are Home Equity Loans
and HELOC, such Loans have been duly executed and delivered by the Obligors and
the related mortgages are valid and subsisting first, second or third Liens on
the property described therein. With respect to Loans that are Home Improvement
Loans, such Loans have been duly executed and delivered by the Obligors and the
related mortgage are valid and subsisting first, second or third Liens on the
property described therein or the Home Improvement Loans are unsecured
borrowings of the Obligor. As of the Closing Date, the Sellers will assign any
related mortgage to the Buyer, and the Buyer will have valid and subsisting
Liens on the property therein described. The Sellers have full right to sell and
assign such Loans to the Buyer.
(i) Originals. The Sellers have in their possession (either
directly or through a custodian) and, as of the Closing Date, will have
delivered to the Buyer, all originals of the mortgage notes, promissory notes,
contracts and certificates that constitute or evidence the Loans, together with
an allonge affixed to each such note and certificate showing a complete chain of
endorsements to Buyer. As to any missing mortgage note, promissory note ,
contract or certificate, the Sellers shall deliver or cause to be delivered, a
copy of the lost document and a lost document affidavit with respect thereto,
the form of which is attached hereto at Exhibit B. In the case of Loans secured
by real property, including but not limited to Home Improvement Loans, Home
Equity Loans, HELOC and certain MH Contracts, the Sellers will deliver, or cause
to be delivered, to the Buyer as of the Closing Date, the original mortgage,
with evidence of recording thereon, or if the original mortgage has not yet been
returned from the recording office, a true copy of the mortgage which has been
delivered for recording in the appropriate recording office of the jurisdiction
in which the real property has been delivered, and executed assignments of
mortgage showing a complete chain of assignment of mortgage to the Buyer.
(j) Notation of Security Interest. With respect to the Loans
where the underlying collateral, such as manufactured homes or consumer
products, is located in a state in which notation of a security interest on the
title document is required or permitted to perfect such security interest, the
title document shows, or if a new or replacement title document with respect to
such collateral is being applied for, then such title document will be issued
within 180 days and will show a Seller as the holder of a first priority
security interest in such collateral. If the collateral is located in a state in
which the filing of a financing statement under the UCC is
A-2
required to perfect a security interest in goods of the type of such collateral,
such filings or recording have been duly made and show a Seller as a secured
party.
(k) Purchase Money Security Interest. The retail installment
contracts create a "purchase money security interest" (as defined in the UCC) in
favor of the Sellers in the consumer product covered thereby as security for
payment of the outstanding principal balance of such retail installment contract
and all other obligations of the Obligor under such retail installment contract;
such security interest has been assigned by the Sellers to the Buyer and the
Buyer will have a valid purchase money security interest in such consumer
product.
(l) FHA/VA MH Contracts. If the Loans are MH Contracts
regulated by the FHA or VA, then such MH Contract has been serviced in
accordance with such regulations, the insurance or guarantee of the MH Contract
under such regulations and related Laws is in full force and effect, and no
event has occurred which, with or without notice or lapse of time or both, would
impair such insurance or guarantee.
(m) Home Ownership and Equity Protection Act. With respect to
any Loan subject to the Home Ownership and Equity Protection Act of 1994, each
such Loan has been originated and serviced in compliance with the provisions
thereof.
(n) Licensing Requirements. All CFC Parties which have had any
interest in the Loan, whether as mortgagee, assignee, pledgee or otherwise, are
(or, during the period in which they held and disposed of such interest, were)
(1) in compliance with any and all applicable licensing requirements of the laws
of the state where the related mortgaged property is located, except where
failure to comply with such licensing requirements will not adversely affect the
Buyer's interest in the Loan, all parties were (2)(a) organized under the laws
of such a state, or (b) qualified to do business in such state, or (c) federal
savings and loan associations, savings banks, or national banks having principal
offices in such state, or (d) not doing business in such state, and all parties
had (3) capacity to execute the Loans.
(o) MH Contracts. With respect to each MH Contract,
(i) The MH Contract is either (A) secured by chattel
property, creates a valid, subsisting, enforceable and perfected first lien on
the related manufactured home, or (B) The related manufactured home is
permanently affixed to a foundation which is suitable for the soil conditions of
the site; (b) all foundations, both perimeter and interior, have footings that
are located below the frost line; (c) any wheels, axles and trailer hitches are
removed from the manufactured home; (d) the MH Contract is covered under a
standard real estate title insurance policy or attorney's title opinion or
certificate that identified the manufactured home as part of the real property
and insures or indemnifies against any loss if the manufactured home is
determined not to be part of the real property.
(ii) If the related manufactured home is located in a
state in which notation of a security interest on the title document is required
or permitted to perfect such security interest, the title document shows, or if
a new or replacement title document with respect to such manufactured home is
being applied for such title document will be issued within 150 days and will
show, the Buyer as the holder of a first priority security interest in such
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manufactured home; if the related manufactured home is located in a state in
which the filing of a financing statement under the UCC is required to perfect a
security interest in manufactured housing, such filings or recordings have been
duly made and show the Buyer as secured party.
(iii) The related manufactured home is a "manufactured
home" within the meaning of 00 Xxxxxx Xxxxxx Code, Section 5402(6). Each
manufactured housing dealer from whom the Seller purchased such MH Contract, if
any, was then approved by the Seller in accordance with the requirements of the
Secretary of Housing and Urban Development set forth in 24 CFR ss. 201.27. At
the origination of each MH Contract, the Seller was approved for insurance by
the Secretary of Housing and Urban Development ("HUD") pursuant to Section 2 of
the National Housing Act.
2. Residual Assets. The Sellers make the following representations
with respect to the Residual Assets:
(a) All of the Residual Assets that are certificated
securities have been validly issued, and are fully paid and non-assessable, and
have been offered, issued and sold in compliance with all applicable laws. There
are no outstanding rights, options, warrants or agreements for the purchase
from, or sale or issuance, in connection with such Residual Assets. There are no
agreements on the part of the Sellers to issue, sell or distribute the Residual
Assets and the Sellers have no obligation (contingent or otherwise) to purchase,
redeem or otherwise acquire any securities or interest therein or to pay any
dividend or make any distribution in respect of the Residual Assets.
(b) Except as indicated in the Residuals Schedule, no
servicing termination or over collateralization triggers or early amortization
events have occurred on any Securitization.
(c) The servicing practices used by each of the CFC Parties in
Securitizations are in compliance in all material respects with the requirements
of the related agreements and federal, state and local laws, rules and
regulations.
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EXHIBIT B
FORM OF LOST DOCUMENT AFFIDAVIT
The undersigned does hereby certify as follows
1. The undersigned has made a diligent search for the
documents listed in the attached Exhibit A (the "Documents") and has been unable
to locate said Documents;
2. The undersigned has not assigned, transferred or
hypothecated said documents;
3. The undersigned will, in the event any said Document
is recovered, cause the same to be delivered to ______________;
IN WITNESS WHEREOF, the undersigned has executed this Lost
Document Affidavit as of the ___ day of __________, ______.
_____________________________________
Signature: ___________________
Name: ___________________
Title: ___________________
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EXHIBIT C
Term Sheet for
0000 Xxxxxxx Xxxxx, Xxxxx Xxxx, Xxxxx Xxxxxx, and
0000 Xxxxxx Xxxx, Xxxxxxxx X/0, Xxxxx, Xxxxxxx
The Lease Agreement for 0000 Xxxxxxx Xxxxx, Xxxxx Xxxx, Xxxxx Xxxxxx (the
"Lease")
Landlord: Conseco Finance Servicing Corp. or the
Bankruptcy Acquiror ("CFSC")
Tenant: General Electric Corporation or an entity
designated by GECC ("GECC")
Rapid City Building: 0000 Xxxxxxx Xxxxx, Xxxxx Xxxx, Xxxxx Xxxxxx
Leased Premises: Entire 1st Floor (other than the raised
floor space housing the data and
telecommunications equipment (the "Rapid
City Data Center"))
Possession: The effective date of the Lease shall be the
Funding Date (as defined in the Asset
Purchase Agreement between GECC, Conseco
Finance Corp. and its subsidiaries).
Term: 2 years plus, if applicable, the period
between the Funding Date and the Closing
Date (as defined in the Asset Purchase
Agreement between CFN Investment Holdings
LLC ("CFN"), Conseco Finance Corp. and its
subsidiaries), with an option to extend the
term of the Lease (subject to mutually
agreeable terms)
Annual Base and
Additional Rent: Lease will be triple net, with a base
rent in an amount to be reasonably agreed to
between CFN and GECC, which shall be based
on prevailing market prices for similar
locations.
Rapid City Data Center: Control of the Rapid City Data Center shall
be held by CFN; provided, however, that GECC
shall have reasonable access and use of the
Rapid City Data Center and shall be provided
data center services related to the PL
Business, HI Business and CL Business under
the Transitional Services Agreement.
Entrance: Landlord shall have the right, in its sole
discretion, to choose either entrance to the
Rapid City Building for the purposes of
accessing the 2nd floor space of the Rapid
City Building, provided that GECC shall
continue to have reasonable and exclusive
access to the other entrance of the Leased
Premises and any costs and expenses related
to the modification or addition of any
entrance chosen by Landlord shall be solely
borne by CFN.
Initial Capital Expenditure: Landlord and Tenant shall equally bear the
reasonable costs for segregating the Lease
Premises (other than with respect to any
capital expenditures directly relating to
the entrance chosen by CFN, which shall be
borne solely by CFN) from the remainder of
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the Rapid City Building (which in no event
shall exceed $200,000 without the prior
written agreement of the parties).
Pre-Closing Date Liabilities GECC shall pursue all claims or causes of
actions arising out of any breach by
Landlord under the Lease in the ordinary
course of business, it being understood that
Seller shall be liable for any such breach
by Landlord prior to the Closing Date.
The Lease shall contain customary terms and conditions.
0000 Xxxxxx Xxxx, Xxxxxxxx X/0, Xxxxx, Xxxxxxx ("Tempe Building One")
Subject to obtaining any approval required by the current landlord at Tempe
Building One, CFN shall provide GECC with reasonable access and use of the
raised floor space housing the data and telecommunications equipment located at
Tempe Building One (the "Tempe Data Center") and GECC shall be provided PLCC, HI
and CI related data center services under the Transitional Services Agreement.
AMENDMENT NUMBER ONE TO
AMENDED AND RESTATED ASSET PURCHASE AGREEMENT
THIS AMENDMENT NUMBER ONE TO AMENDED AND RESTATED ASSET
PURCHASE AGREEMENT (this "Amendment") is made as of April 1, 2003, by and among
Conseco Finance Corp., a Delaware corporation (the "Company"), the Subsidiaries
of the Company owning Purchased Assets, which are named on the signature pages
hereof or become parties hereto (the "Selling Subsidiaries"), and CFN Investment
Holdings LLC, a Delaware limited liability company (the "Buyer"). This Amendment
amends the Amended and Restated Asset Purchase Agreement, dated as of March 14,
2003, by and among the Company, the Selling Subsidiaries and the Buyer (the
"Asset Purchase Agreement"). Capitalized terms used herein that are not defined
shall have the meanings ascribed to them in the Asset Purchase Agreement.
WHEREAS, the Parties desire to amend the Asset Purchase
Agreement on the terms and conditions contained herein in accordance with
Section 10.2 of the Asset Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and mutual
promises herein made, and in consideration of the representations, warranties
and covenants herein contained, the Parties hereby agree as follows:
ARTICLE 1. AMENDMENT
1.1. Additional Definitions. The following defined terms shall
be added in alphabetical order to Section 1.1 of the Asset Purchase Agreement:
" "ATM" means ATM Corporation of America, a Pennsylvania
corporation, and its successors and assigns."
" "ATM Approved Agreement" means a membership interest
purchase agreement by and between Conseco Finance Servicing Corp. and ATM in
form and substance reasonably satisfactory to the Buyer."
" "ATM Closing" means the "Closing" as defined in the ATM
Approved Agreement."
" "ATM Condition" means that the ATM Closing occurs."
" "ATM Sale Order" means the "Section 363 Order" as defined in
the ATM Approved Agreement."
" "ATM Vendor Contract" means the Vendor Management Company
Agreement, dated as of February 5, 2002, by and between ATM and the Company."
" "Convergent Assets" means any and all assets, properties,
Contracts and rights owned by Convergent LLC of whatever kind and nature, real
or personal, tangible or intangible, owned, leased, licensed, used or held for
use or license, wherever located, including, without limitation, the Convergent
Contracts."
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" "Convergent Liabilities" means any and all Liabilities of
Convergent LLC."
" "Convergent LLC" means Convergent Lending Services, LLC, a
Pennsylvania limited liability company."
" "Convergent Purchase Price" means the "Purchase Price" as
defined in the ATM Approved Agreement."
" "LLC Conversion" shall have the meaning set forth in Section
5.34 hereof."
1.2. Additional Definitions. The following defined terms in
Section 1.1 of the Asset Purchase Agreement are hereby deleted and replaced in
their entirety with the following:
" "Acquisition Proposal" means a written proposal(s) relating
to (a) any merger, consolidation, business combination, sale, reorganization or
other direct or indirect disposition of one or more of the Purchased Businesses
or of all or a portion of the Purchased Assets, pursuant to one or more
transactions, to one or more affiliated or unaffiliated parties (other than
transactions in the ordinary course of business or transactions permitted or
approved pursuant to Section 5.5), (b) the sale of 20% or more of the
outstanding shares of capital stock of the Company (including, without
limitation, by way of foreclosure or plan of reorganization or liquidation) to
one or more affiliated or unaffiliated parties or a similar transaction
involving one or more affiliated or unaffiliated parties, or (c) any transaction
or series of transactions in which a Person or group provides or commits to
provide $50 million or more of capital to the Company or its Subsidiaries
(whether as debt or equity or a combination thereof) (other than (i) debt
financing in which none of the Purchased Assets is pledged as collateral or
subjected to any Lien other than Permitted Liens, (ii) the DIP Loan, (iii) the
Additional Xxxxxx Debt and (iv) transactions specifically contemplated by the GE
Approved Agreement and the ATM Approved Agreement)."
1.3. GE Condition. The Parties hereby acknowledge and agree
that the GE Condition has been satisfied.
1.4. Section 2.1(a)(v). The following Section 2.1(a)(v) shall
be added to ARTICLE II of the Asset Purchase Agreement:
"(v) If the ATM Condition is satisfied, then (x) the Purchase
Price shall be computed in accordance with Section 2.4 hereof, (y) the
membership interests of Convergent LLC, the Convergent Assets and the ATM Vendor
Contract shall be Excluded Assets and (z) all Convergent Liabilities and other
Liabilities arising from, related to, in connection with or with respect to
Convergent LLC, the Convergent Assets or the employees of Convergent LLC shall
be Excluded Liabilities."
1.5. Section 2.1(c). Section 2.1(c) of the Asset Purchase
Agreement is hereby deleted in its entirety and replaced with the following:
"(i) The Excluded Contracts; (ii) the assets, properties,
Contracts and rights, if any, set forth in Section 2.1(c) of the applicable
Business Schedules; (iii) the outstanding capital stock of Green Tree Retail
Services Bank; (iv) cash of an Excluded Business or representing the
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proceeds of the disposition of an Excluded Asset, provided that all required
payments under the DIP Loan shall have been made; (v) up to $4.5 million of cash
and cash equivalents owned by Green Tree Retail Services Bank; (vi) if the GE
Condition is satisfied, the stock of Mill Creek Bank and the GE Purchased
Assets; (vii) all rights and claims as holders of B-2 Certificates, or rights
derivative of B-2 Certificates, solely to the extent arising from Guarantees by
the CFC Parties pursuant to the MH Servicing Contracts (the "B-2 Guarantee
Rights"), notwithstanding the fact B-2 Certificates constitute Purchased Assets
(it being agreed that if and to the extent such separation of the B-2 Guarantee
Rights from the B-2 Certificates is not permitted under the relevant Contract or
applicable law or is not ordered by the Bankruptcy Court by a Final Order, the
provisions of Section 5.31 shall apply), (viii) the Sellers' rights under this
Agreement; (ix) if the GE Condition is satisfied, all Loans and Receivables with
respect to the HE Business on the balance sheet of Mill Creek Bank as of January
31, 2003 valued at $35.5 million and all Loans and Receivables originated by
Mill Creek Bank after January 31, 2003; (x) if the GE Condition is satisfied,
all Community Reinvestment Act assets, (xi) if the GE Condition is satisfied,
all reaffirmed accounts; (xii) if the GE Condition is satisfied, all Excluded
Receivables as defined in the GE Approved Agreement; (xiii) the Excluded
Contracts; (xiv) rights in and with respect to tax refunds, credits and claims
for periods prior to the Closing; (xv) all defenses, claims, counter-claims,
rights of offset and other actions against any person asserting or seeking to
enforce any Excluded Liability against any of the Sellers or any rights with
respect to Excluded Assets, solely to the extent such defense, claim,
counter-claim, right of offset or other action relates to such Excluded
Liability or Excluded Asset; (xvi) any avoidance or similar actions, including,
but not limited to actions under sections 544, 545, 547, 548, 550 and 553 of the
Bankruptcy Code, including without limitation any avoidance or similar action
with respect to the stock of Mill Creek Bank; (xvii) if the ATM Condition is
satisfied, the membership interests of Convergent LLC, the Convergent Assets and
the ATM Vendor Contract; and (xviii) those other assets, properties, contracts
and rights, if any, that become Excluded Assets (the "Excluded Assets") shall be
excluded from the Purchased Assets to be sold, assigned, transferred, conveyed
and delivered to the Buyer hereunder and, to the extent in existence on the
Closing Date, shall be retained by the Sellers (as applicable)."
1.6. Section 2.2(b).
1.6.1. The word "or" at the end of Section 2.2(b)(xxv) of
the Asset Purchase Agreement is hereby deleted.
1.6.2. The "." at the end of Section 2.2(b)(xxvi) of the
Asset Purchase Agreement is hereby deleted and replaced with ";".
1.6.3. The following Section 2.2(b)(xxvii) and Section
2.2(b)(xxviii) shall be added to ARTICLE II of the Asset Purchase Agreement:
"(xxvii) if the ATM Condition is satisfied, all of the
Liabilities arising from, relating to, in connection with or with respect to
Convergent LLC; or
(xxviii) if the ATM Condition is satisfied, all of the
Liabilities arising from, relating to, in connection with or with respect to the
Convergent Assets, the ATM Vendor Contract and the employees of Convergent LLC
and all of the Convergent Liabilities."
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1.7. Section 2.4(a). The first sentence of Section 2.4(a) of
the Asset Purchase Agreement is hereby deleted in its entirety and replaced with
the following:
"The aggregate purchase price for the Purchased Assets (the
"Purchase Price") shall be equal to (i) the Xxxxxx Debt Amount as of 12:01 A.M.
on the Closing Date, plus (ii) $159 million, minus (iii) the Convergent Purchase
Price, but such subtraction shall be made only if the ATM Condition is
satisfied."
1.8. Section 3.7. The first sentence of Section 3.7 of the
Asset Purchase Agreement is hereby deleted in its entirety and replaced with the
following:
"Except as set forth in Section 3.7 of the applicable
Business Schedules, subject to Section 2.8 above and satisfaction of the
conditions in ARTICLES VI and VII, the Purchased Assets including any assets,
properties, Contracts and rights identified by the Buyer pursuant to Section
2.1(a)(ii), the GE Purchased Assets and the Convergent Assets, together with the
Buyer's rights under this Agreement and the Transaction Documents (including the
assets, rights and services to be made available under the Transition Services
Agreement), constitute all of the assets, properties, contracts and rights
primarily used in the Purchased Businesses and which are necessary to carry on
the Purchased Businesses by the CFC Parties as currently conducted on the date
of this Agreement and there are no assets or properties used in or necessary for
the conduct of the Purchased Businesses as presently conducted which are not
owned, leased or licensed by the Sellers or Mill Creek Bank and its
Subsidiaries."
1.9. Section 3.8. The first sentence of Section 3.8(b) of the
Asset Purchase Agreement is hereby deleted in its entirety and replaced with the
following:
"Section 3.8(b) of the applicable Business Schedules contains
a true and complete list of each written Assumed Lease (and any amendments or
modifications thereto) included in the Purchased Assets of each applicable
Business Schedule, the GE Purchased Assets and the Convergent Assets and
indicates with respect to each Assumed Lease (i) the current rent (including any
additional rent) under each Assumed Lease, (ii) the expiration date of the
Assumed Leases, (iii) the security deposits being held pursuant to the Owned
Real Premises Leases and (iv) any guarantees thereunder."
1.10. Section 5.5(c). Section 5.5(c) of the Asset Purchase
Agreement is hereby deleted in its entirety and replaced with the following:
"(c) amend its Organizational Documents; provided that the
Company shall be entitled to convert Conseco Finance Servicing Corp. and Conseco
Finance Corp.-Alabama to a Delaware limited liability company so long as (i)
such conversion is effected in compliance will all applicable Laws, including
without limitation all Finance Laws and Laws of the Government National Mortgage
Association and (ii) such conversion is effected in a manner that does not
result, directly or indirectly, in a breach of Section 3.6, except to the extent
that such breach would not reasonably be expected to have a Material Adverse
Effect;"
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1.11. Section 5.5(d). Section 5.5(d) of the Asset Purchase
Agreement is hereby deleted in its entirety and replaced with the following:
"(d) except for the potential sale of Conseco Finance Credit
Card Funding Corp. pursuant to the transactions contemplated by the GE Approved
Agreement and the potential sale of Convergent LLC pursuant to the transactions
contemplated by the ATM Approved Agreement, (i) issue, sell or deliver (whether
through the issuance or granting of options, warrants, commitments,
subscriptions, rights to purchase, or otherwise) any shares of its capital stock
of any class or any other securities or equity equivalents; or (ii) amend in any
material respect any of the terms of any such securities outstanding as of the
date hereof;"
1.12. Section 5.5(f). Section 5.5(f) of the Asset Purchase
Agreement is hereby deleted in its entirety and replaced with the following:
"(i) create, incur, guarantee, or assume any indebtedness for
borrowed money or otherwise become liable or responsible for the obligations of
any other Person; or (ii) other than in the ordinary course of business, make
any loans, advances, or capital contributions to, or investments in, any other
Person (other than to wholly owned Subsidiaries or another CFC Party, except
Mill Creek Bank or Mill Creek Bank Servicing Corp.) other than the DIP Loan or
Additional Xxxxxx Debt or as specifically provided under Section 5.9 of the ATM
Approved Agreement; provided, that neither the Company nor its Subsidiaries
shall transfer or contribute to Convergent LLC more than $400,000 of cash during
the period commencing on March 31, 2003 and terminating on the ATM Closing,
except as specifically provided under Section 5.9 of the ATM Approved Agreement,
and no other loans, advances or capital contributions to, or investments in,
Convergent LLC may be made;"
1.13. Section 5.5(j). Section 5.5(j) of the Asset Purchase
Agreement is hereby deleted in its entirety and replaced with the following:
"(j) enter into, assume, amend, modify, cancel, waive or
change in any respect any Assumed Agreement, any material Contract other than
solely with respect to an Excluded Business or Excluded Asset, the Xxxxxx
Documents (other than any amendment to continue the forbearance period under the
Xxxxxx Forbearance Agreement, provided no such amendment includes any provision
which adversely affects the Purchased Assets, the Assumed Liabilities, or the
Purchase Price), the GE Approved Agreement or the ATM Approved Agreement;
provided, however, that the Company or any of its Subsidiaries may amend the GE
Approved Agreement or the ATM Approved Agreement without the consent of the
Buyer if such amendment does not adversely affect the Buyer;"
1.14. Section 5.5(k). Section 5.5(k) of the Asset Purchase
Agreement is hereby deleted in its entirety and replaced with the following:
"(k) enter into any Contract with an Affiliate other than
Contracts entered into in the ordinary course of business consistent with past
practices, involving no more than $100,000 per Contract or series of related
Contracts and that do not affect or impact the Purchased Assets or the Assumed
Liabilities or interfere with or impede the consummation of the
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transactions contemplated hereby; provided, however, no Contracts shall be
entered into with Convergent LLC;"
1.15. Section 5.34. The following Section 5.34 shall be added
to ARTICLE V of the Asset Purchase Agreement:
"5.34. LLC Conversions. The Company shall keep the Buyer
informed of all material aspects of the process to convert Conseco Finance
Servicing Corp. and Conseco Finance Corp.-Alabama into Delaware limited
liability companies and obtaining any regulatory approvals related thereto
(each, an "LLC Conversion"), including, without limitation, the timing for
effecting such LLC Conversion. Prior to effecting the LLC Conversions, the
Company and the Buyer shall cooperate in good faith (a) to determine if the LLC
Conversions would require an application or filing with, or notification to, any
Governmental Authority under the Finance Laws and (b) to coordinate any such
applications, filings or notifications with the applications, filings and
notifications necessary or required pursuant to Section 6.4. In the event that
the Company and Buyer reasonably determine that the LLC Conversions would
require an application or filing with, or notification to, any Governmental
Authority under the Finance Laws, then, prior to effecting any such
applications, filings or notifications, the Company shall prepare drafts of all
such documents and provide the Buyer with copies of such documents and
reasonable opportunity to review and comment on the same. The Company shall
consider in good faith all suggestions of the Buyer in respect of the LLC
Conversions, including but not limited to comments on timing and overall
strategy on effecting such applications, filings and notifications required
under the Finance Laws as a result of the LLC Conversions. Notwithstanding the
foregoing, no application, filing or notification under the Finance Laws shall
be made with respect to the LLC Conversions without the prior consent of the
Buyer (which consent shall not be unreasonably withheld). In the event that the
Company elects to make the LLC Conversions, the Company shall bear the costs and
expenses of the LLC Conversions and shall indemnify, defend and hold the Buyer
Indemnified Parties harmless from and against all Losses suffered by the Buyer
Indemnified Parties and any incremental Liabilities incurred by the Buyer
Indemnified Parties arising from, related to, or as a result of the LLC
Conversions."
1.16. Consent. Notwithstanding anything to the contrary set
forth in the Asset Purchase Agreement, the Buyer hereby consents to Conseco
Finance Servicing Corp. entering into the membership interest purchase agreement
with ATM in the identical form provided to the Buyer (including the schedules
thereto, the "MIPA"), and to the consummation of the transactions contemplated
thereby, including, without limitation, (i) the sale of the membership interests
of Convergent LLC and the Convergent Assets to ATM, (ii) the termination of the
Vendor Management Company Agreement, dated as of February 5, 2002, by and
between ATM and the Company, and (iii) the contribution by Conseco Finance
Servicing Corp. of the intercompany payable balances to the Company created
through the transfer of assets to Convergent LLC (including, but not limited to,
the transfer of fixed assets and cash required to operate its business) to the
capital of the Convergent LLC. The Buyer acknowledges and agrees that the MIPA
constitutes the ATM Approved Agreement.
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ARTICLE 2. MISCELLANEOUS
2.1. Effectiveness and Ratification. All of the provisions of
this Amendment shall be effective as of the date hereof. Except as specifically
provided for in this Amendment, the terms of the Asset Purchase Agreement are
hereby ratified and confirmed and remain in full force and effect.
2.2. Effect of Amendment. Whenever the Asset Purchase
Agreement is referred to in the Asset Purchase Agreement or in any other
agreements, documents and instruments, such reference shall be deemed to be to
the Asset Purchase Agreement as amended by this Amendment.
2.3. Captions. The captions used in this Amendment are for
convenience of reference only and do not constitute a part of this Amendment and
shall not be deemed to limit, characterize or in any way affect any provision of
this Amendment, and all provisions of this Amendment shall be enforced and
construed as if no caption had been used in this Amendment.
2.4. Entire Agreement. The Asset Purchase Agreement (as
amended by this Amendment) and the documents referred to therein (including the
Confidentiality Agreement) contain the entire agreement between the Parties and
supersede any prior understandings, agreements or representations by or between
the Parties, written or oral, which may have related to the subject matter
hereof in any way, including without limitation the Original Agreement. Except
as expressly set forth in ARTICLE III and ARTICLE IV of the Asset Purchase
Agreement (or in the certificates to be delivered pursuant to Section 6.1(c) and
Section 7.1(c) thereof), no Party makes any representation or warranty of any
kind, express or implied, and it is further understood and agreed that Sellers
make no representation or warranty of any kind with respect to the future value
or profitability of the Purchased Businesses or the Purchased Assets.
2.5. Counterparts. This Amendment may be executed in multiple
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute one and the same instrument.
2.6. Governing Law. All questions concerning the
construction, validity and interpretation of this Amendment shall be governed by
and construed in accordance with the domestic laws of the State of New York,
without giving effect to any choice of law or conflict of law provision (whether
of the State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New York.
2.7. Consent to Jurisdiction. THE PARTIES AGREE THAT
JURISDICTION AND VENUE IN ANY ACTION BROUGHT BY ANY PARTY PURSUANT TO THE ASSET
PURCHASE AGREEMENT SHALL PROPERLY (BUT NOT EXCLUSIVELY) LIE IN ANY FEDERAL OR
STATE COURT LOCATED IN NEW YORK, NEW YORK; PROVIDED, HOWEVER, THE PARTIES AGREE
THAT JURISDICTION AND VENUE IN ANY ACTION BROUGHT BY ANY PARTY PURSUANT TO THE
ASSET PURCHASE AGREEMENT OVER ANY DISPUTE RELATING TO THE AUCTION OR THE
PURCHASED ASSETS OR THE ASSET PURCHASE AGREEMENT SHALL EXCLUSIVELY LIE WITH THE
BANKRUPTCY COURT SO LONG AS THE
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BANKRUPTCY COURT SHALL BE WILLING TO HEAR SUCH DISPUTE. BY EXECUTION AND
DELIVERY OF THE ASSET PURCHASE AGREEMENT, EACH PARTY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF SUCH COURTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY WITH
RESPECT TO SUCH ACTION. THE PARTIES IRREVOCABLY AGREE THAT VENUE WOULD BE PROPER
IN SUCH COURT, AND HEREBY WAIVE ANY OBJECTION THAT SUCH COURT IS AN IMPROPER OR
INCONVENIENT FORUM FOR THE RESOLUTION OF SUCH ACTION. THE PARTIES FURTHER AGREE
THAT THE MAILING BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, OF
ANY PROCESS REQUIRED BY ANY SUCH COURT SHALL CONSTITUTE VALID AND LAWFUL SERVICE
OF PROCESS AGAINST THEM, WITHOUT NECESSITY FOR SERVICE BY ANY OTHER MEANS
PROVIDED BY STATUTE OR RULE OF COURT.
2.8. Delivery by Facsimile. This Amendment, to the extent
signed and delivered by means of a facsimile machine, shall be treated in all
manner and respects as an original Contract and shall be considered to have the
same binding legal effects as if it were the original signed version thereof
delivered in person. At the request of any Party hereto or to any such Contract,
each other Party hereto or thereto shall re-execute original forms thereof and
deliver them to all other parties. No Party hereto or to any such Contract shall
raise the use of a facsimile machine to deliver a signature or the fact that any
signature or Contract was transmitted or communicated through the use of a
facsimile machine as a defense to the formation of a Contract and each such
Party forever waives any such defense.
2.9. Specific Performance. The Buyer shall be entitled to
seek specific performance of the obligations to be performed by the Sellers in
accordance with the provisions of the Asset Purchase Agreement.
* * * * *
-8-
IN WITNESS WHEREOF, the undersigned have executed this
Amendment Number One to Amended and Restated Asset Purchase Agreement as of the
date first written above.
CONSECO FINANCE CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Its: President and CEO
CONSECO FINANCE SERVICING CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Its: President
CONSECO FINANCE CORP. - ALABAMA
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
CONSECO FINANCE CREDIT CORP.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
CONSECO FINANCE CONSUMER DISCOUNT
COMPANY
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
CONSECO FINANCE LOAN COMPANY
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
CONSECO FINANCE CANADA HOLDING COMPANY
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
CONSECO FINANCE CANADA COMPANY
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
CONVERGENT LENDING SERVICES, LLC
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Its: President
GREEN TREE FINANCE CORP. - FIVE
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
GREEN TREE RESIDUAL FINANCE CORP. I
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
CONSECO FINANCE CREDIT CARD
FUNDING CORP.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
CONSECO FINANCE SECURITIZATIONS CORP.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
CONSECO HE/HI 2001-B-2, INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
CONSECO FINANCE ADVANCE
RECEIVABLES CORP.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
CONSECO FINANCE LIQUIDATION EXPENSE
ADVANCE RECEIVABLES 2002-B-CORP.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
GREEN TREE RECS II GUARANTY CORPORATION
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
GREEN TREE SECOND GP INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
CONSECO AGENCY, INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
CONSECO AGENCY OF ALABAMA, INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
CONSECO AGENCY OF KENTUCKY, INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
CONSECO AGENCY OF NEVADA, INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
CONSECO AGENCY OF NEW YORK, INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
XXXX-XXXX GENERAL AGENCY, INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
CONSECO AGENCY REINSURANCE LIMITED
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
RICE PARK PROPERTIES CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxx
Its: President
GREEN TREE RETAIL SERVICES BANK
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
CONSECO FINANCE NET INTEREST
MARGIN FINANCE CORP. I
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
CONSECO FINANCE NET INTEREST
MARGIN FINANCE CORP. II
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
LANDMARK MANUFACTURING HOUSING INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
GREEN TREE FLOORPLAN FUNDING CORP.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
GREEN TREE FIRST GP INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
GREEN TREE FINANCE CORP. -TWO
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Its: Senior Vice President
and Secretary
CFN INVESTMENT HOLDINGS LLC
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
Its: COO and Secretary
