EXHIBIT 99.2
LEGEND
The appearance of four (4) consecutive asterisks ("****") in this exhibit
indicates that a confidential portion of this document has been omitted in such
location. The Enstar Group, Inc. has filed a request for confidential treatment
with respect to such omitted information, and such omitted information has been
filed separately with the Securities and Exchange Commission.
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the "Agreement") is made as
of this 10th day of March, 2004, by and among X.X. XXXXXXX I LP, a Delaware
limited partnership (the "Flowers Fund"), JCF CFN LLC, a Delaware limited
liability company ("JCF CFN I"), JCF CFN II LLC ("JCF CFN II" and together with
JCF CFN I, the "JCF CFN Entities"), JCF AIV II LP, a Delaware limited
partnership ("JCF AIV II"), JCF AIV III LP, a Delaware limited partnership ("JCF
AIV III" and, together with the Flowers Fund, the JCF CFN Entities and JCF AIV
II, the "Sellers" and each a "Seller"), JCF Associates I LLC, a Delaware limited
liability company ("JCF") and FIT CFN Holdings LLC, a Delaware limited liability
company (the "Purchaser").
WITNESSETH:
WHEREAS each of the Flowers Fund and JCF CFN I is a Non-Voting
Member of (i) Green Tree Investment Holdings LLC, a Delaware limited liability
company ("Holdings"), and (ii) FPS DIP LLC, a Delaware limited liability company
("FPS" and together with Holdings, the "Companies"), pursuant to the Limited
Liability Company Agreement of Holdings dated as of December 19, 2002, as
amended, among the Purchaser and the additional parties admitted to Holdings as
members and the Limited Liability Company Agreement of FPS dated as of December
19, 2002, among the Purchaser and the additional parties admitted to FPS as
members (collectively, the "LLC Agreements");
WHEREAS each of the Sellers other than the Flowers Fund has
made direct and indirect capital contributions and loans to the entities listed
on Schedule I hereto in the amounts set forth on Schedule I hereto (each such
Seller's right, title and interest in respect of such capital contributions and
loans, including any payments and all distributions, dividends, rights and
interests issued or exchanged in respect thereof other than the Escrow
Distributions (as defined below), the "Green Tree Interests");
WHEREAS payments in the amounts set forth on Schedule II
hereto (net of expenses) are to be received by the Sellers pursuant to Section
7.14 hereof from the escrow account established by that certain Escrow Agreement
(the "Escrow Agreement") dated as of January 15, 2004 by and among Green Tree
Investment Holdings II LLC, Green Tree Investment Holdings III LLC, Green Tree
MH Investor LLC, Green Tree HE/HI Investor LLC, Green Tree Residuals Investor
LLC and LaSalle Bank National Association (such distributions, the "Escrow
Distributions");
WHEREAS each of the Flowers Fund and JCF CFN I desires to sell
and transfer to the Purchaser 100% of its membership interests in each of the
Companies (other than the membership interests in the Companies which are to be
transferred to Coinvest pursuant to the Assignment and Assumption Agreement,
dated as of the date hereof, among the Flowers Fund, Coinvest, Cerberus Capital
Management, L.P. and the Purchaser concurrently with the consummation of the
sales and purchases contemplated by Sections 2.1 and 2.2 (the "Coinvest
Interests")) set forth on Schedule I hereto (the "CFN Interests" and, together
with the Green Tree Interests, the "Investment Interests") and each of the
Sellers (other than the Flowers Fund) desires to sell and transfer to the
Purchaser 100% of its respective Green Tree Interests;
WHEREAS the Purchaser has agreed to purchase the Investment
Interests and, in the case of the CFN Interests, to become a party to and be
bound by the terms of the LLC Agreements and to be admitted to each of the
Companies as a Member with respect to the CFN Interests as provided in the LLC
Agreements;
WHEREAS JCF has a profits interest (the "Profits Interest") in
Cerberus JCF Coinvest, LLC ("Coinvest"); and
WHEREAS JCF desires to transfer all of its right, title and
interest in the Profits Interest to the Purchaser for an amount equal to ****
minus any distributions on account of the Profits Interest which are paid to JCF
prior to the Closing Date (the "Profits Interest Price");
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein made and intending to be legally bound, the parties hereto
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:
"Affiliate" of any particular Person shall mean any other
Person controlling, controlled by or under common control with such particular
Person.
"Agreement" shall have the meaning assigned to such term in
the recitals.
"Business Day" shall mean a day which is not a Saturday,
Sunday or a day on which banks in New York, New York are closed.
"Cerberus Entities" shall have the meaning assigned to such
term in Section 7.2.
--------
**** Confidential information has been omitted. The Enstar Group, Inc. has
filed a request for confidential treatment with respect to such omitted
information, and such omitted information has been filed separately
with the Securities and Exchange Commission.
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"CFN Interests" shall have the meaning assigned to such term
in the recitals.
"Closing" shall have the meaning assigned to such term in
Section 6.1.
"Closing Date" shall have the meaning assigned to such term in
Section 6.1.
"Coinvest" shall have the meaning assigned to such term in the
recitals.
"Coinvest Interests" shall have the meaning assigned to such
term in the recitals.
"Companies" shall have the meaning assigned to such term in
the recitals.
"Distributions" shall mean any and all payments and
distributions in respect of the CFN Interests or the Green Tree Interests prior
to the Closing Date.
"Escrow Agreement" shall have the meaning assigned to such
term in the recitals.
"Escrow Distributions" shall have the meaning assigned to such
term in the recitals.
"Escrow Released Parties" shall mean each of the Escrow
Releasing Parties and each of the their respective Affiliates, and each of their
respective managing members, members, partners, directors, officers, employees,
representatives, agents, successors and assigns and all other Persons or
entities who by any mechanism or process whatsoever have received any rights
from or on behalf of them.
"Escrow Releasing Parties" shall mean the Sellers, JCF, the
Purchaser, Fortress Investment Group LLC, the Companies, Green Tree Investment
Holdings II LLC, Green Tree Investment Holdings III LLC, Green Tree MH Investor
LLC, Green Tree HE/HI Investor LLC, Green Tree Residuals Investor LLC and each
of their respective managing members, members, partners, directors, officers,
employees, representatives, agents, successors and assigns and all other Persons
or entities who by any mechanism or process whatsoever have received any rights
from or on behalf of them.
"Flowers Fund" shall have the meaning assigned to such term in
the recitals.
"FPS" shall have the meaning assigned to such term in the
recitals.
"Green Tree Agreements" shall mean the draft limited liability
company agreements of Green Tree Investment Holdings II LLC, Green Tree
Investment Holdings III LLC and Green Tree Residuals Investor LLC and the draft
notes and draft note purchase agreements evidencing indebtedness of Green Tree
Investment Holdings III LLC and Green Tree Residuals Investor LLC, in each case
in the form attached as part of Annex D hereto and in each case (other than the
schedules to, or anything in, any such draft agreements or draft notes
reflecting investment, ownership figures or principal sum held by any Person
other than the
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Purchaser and its subsidiaries and Affiliates) representing an oral agreement
among the entities listed as parties thereto.
"Green Tree Interests" shall have the meaning assigned to such
term in the recitals.
"Green Tree Transactions" shall mean transactions involving,
or investments in, the business that resulted from the sale of the assets and
operations of Conseco Finance Corp. and its subsidiaries.
"Holdings" shall have the meaning assigned to such term in the
recitals.
"Interim Equityholders Agreement" shall have the meaning
assigned to such term in Section 3.2.
"Investment Interests" shall have the meaning assigned to such
term in the recitals.
"JCF" shall have the meaning assigned to such term in the
recitals.
"JCF AIV II" shall have the meaning assigned to such term in
the recitals.
"JCF AIV III" shall have the meaning assigned to such term in
the recitals.
"JCF CFN Entities" shall have the meaning assigned to such
term in the recitals.
"JCF CFN I" shall have the meaning assigned to such term in
the recitals.
"JCF CFN II" shall have the meaning assigned to such term in
the recitals.
"Lien" shall mean any lien, mortgage, pledge, claim, security
interest, encumbrance, claim, tax, charge, restriction or limitation of any
kind, whether arising by agreement, operation of law or otherwise.
"LLC Agreements" shall have the meaning assigned to such term
in the recitals.
"Material Adverse Change" shall mean that the combined
members' equity of Green Tree Investment Holdings II LLC and Green Tree
Investment Holdings III LLC as of June 30, 2004, determined in accordance with
U.S. generally accepted accounting principles applied on a basis consistent with
the preparation of the audited financial statements of such entities for the
fiscal year ended December 31, 2003, and calculated without deduction for any
distributions or payments by Green Tree Investment Holdings II LLC and Green
Tree Investment Holdings III LLC to the members thereof after December 31, 2003,
shall not equal at least 90% of the combined members' equity of Green Tree
Investment Holdings II LLC and Green Tree Investment Holdings III LLC as of
December 31, 2003; provided, however that changes in the combined members'
equity of Green Tree Investment Holdings II LLC and Green Tree
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Investment Holdings III LLC which are caused by the taking of a Prohibited
Action (as defined in the LLC Agreements and the Green Tree Agreements) by the
Purchaser or which result from the activity which is a Prohibited Action shall
not constitute a Material Adverse Change.
"Person" shall mean any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by The Chase Manhattan Bank (or any successor
thereto) as its prime rate in effect at its principal office in New York City.
"Profits Interest" shall have the meaning assigned to such
term in the recitals.
"Profits Interest Consent" shall have the meaning assigned to
such term in Section 5.2.
"Profits Interest Price" shall have the meaning assigned to
such term in the recitals.
"Purchase Price" shall mean an amount equal to $254 million
minus the aggregate Distributions and Escrow Distributions made to the Sellers
prior to the Closing Date.
"Purchaser" shall have the meaning assigned to such term in
the recitals.
"Required Consents" shall have the meaning assigned to such
term in Section 3.2.
"Seller" or "Sellers" shall have the meaning assigned to such
term in the recitals.
"Subsequent Issuance" shall have the meaning assigned to such
term in Section 7.16(d).
"Subsequent Issuance Price" means an amount equal to the sum
of (i) the product of (a) the Percentage Interest (as defined in, and as
reflected in the applicable schedule to, the relevant Green Tree Agreement) of
the relevant Seller in the relevant Green Tree Entity or Series (as defined in
the relevant Green Tree Agreement) as of the date of this Agreement and (b) the
aggregate capital contributions or amounts paid, as applicable, by the Initial
Members (as defined in the relevant Green Tree Agreement) in connection with
such Subsequent Issuance (such product, the "Initial Price") and (ii) an
additional amount on the Initial Price at a rate equal to the Prime Rate plus 2%
from the date each such capital contribution was made or amount paid, as
applicable, prorated based upon the actual number of days elapsed. For purposes
of this definition, the term "Green Tree Agreement" shall be deemed to include
the schedules to such Green Tree Agreement.
"Transaction Documents" shall have the meaning assigned to
such term in Section 3.1.
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ARTICLE II.
PURCHASE AND SALE OF INVESTMENT INTERESTS AND PROFITS INTEREST
2.1. Purchase and Sale of Investment Interests.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, (i) each of the Flowers Fund and JCF CFN I hereby agrees to sell and
transfer the CFN Interests free and clear of all Liens to the Purchaser on the
Closing Date and (ii) each of the Sellers other than the Flowers Fund hereby
agrees to sell and transfer the Green Tree Interests free and clear of all Liens
to the Purchaser on the Closing Date.
(b) Upon the terms and subject to the conditions set forth in this
Agreement, the Purchaser hereby agrees to (i) pay the Purchase Price on the
Closing Date to the Sellers, such Purchase Price to be apportioned among the
Sellers in accordance with the ratios set forth opposite each Seller's name on
Schedule III hereto and (ii) assume and perform from and after the Closing Date
all of the obligations of the Sellers after the Closing Date with respect to the
Investment Interests.
2.2. Purchase and Sale of Profits Interest. Upon the terms and
subject to the conditions set forth in this Agreement, JCF shall transfer the
Profits Interest free and clear of all Liens (other than Liens which either of
the Cerberus Entities or any of their Affiliates may have) to the Purchaser on
the Closing Date in consideration of the Purchaser's payment of the Profits
Interest Price.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller hereby severally and not jointly represents and
warrants to the Purchaser as follows.
3.1. Authorization. Seller is duly formed, validly existing
and in good standing under the laws of its state of formation. Seller has the
requisite limited liability company or limited partnership power, as
appropriate, and authority to enter into, execute and deliver this Agreement and
each of the other documents and instruments to be executed and delivered
(including the Releases, dated as of the date hereof, and the Assignment and
Assumption Agreement, dated as of the date hereof) hereunder (the "Transaction
Documents") by it and to perform all the obligations to be performed by it
hereunder and under the applicable Transaction Documents. This Agreement is, and
the applicable Transaction Documents will have been after execution and delivery
at the Closing, duly and validly authorized, executed and delivered by Seller.
This Agreement constitutes, and each of the applicable Transaction Documents
will constitute, Seller's legal, valid and binding obligation, enforceable
against Seller in accordance with its terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors' rights or
by general principles of equity.
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3.2. No Conflicts. The execution and delivery of this
Agreement and the Transaction Documents by Seller and (assuming the accuracy of
Purchaser's representations and warranties in Article IV) the performance and
consummation of the transactions contemplated hereby and thereby do not and will
not violate, result in a breach of, or constitute a default under any law,
regulation, judgment, order, writ, decree, permit, license, contract, agreement,
commitment, document or instrument to which it is a party or by which it is
bound, except for the requirement to obtain the consents or forbearance required
under Article IV of the LLC Agreements and Sections 1, 3, 4 and 7 of the Interim
Equityholders Agreement dated as of June 20, 2003 (the "Interim Equityholders
Agreement") (collectively, the "Required Consents").
3.3. Investment Interests. Seller has good, legal and valid
title to the Investment Interests that it is selling hereunder, and such
Investment Interests are not subject to any Liens, except for the Required
Consents. Part I of Schedule I hereto accurately sets forth the true and correct
capital contributions made by each of the Sellers to, and the membership
interests of each of the Sellers in, the entities set forth therein. The
Investment Interests represent 100% of the interests of the Sellers, their
Affiliates, The Enstar Group, Inc. and Castlewood Holdings Limited (other than
the Coinvest Interests) in the entities (other than those designated as Sellers
on the schedules hereto) set forth on Schedule I, Schedule IV and Schedule V
hereto. From the applicable date of acquisition of each of the Investment
Interests until the date hereof, none of the Investment Interests have been
transferred, assigned, pledged or otherwise disposed of. After the consummation
of the transactions contemplated hereby and by the Transaction Documents and the
concurrent transfer of the Coinvest Interests, none of the Sellers, their
Affiliates, The Enstar Group, Inc. and Castlewood Holdings Limited will have any
interest in any of the entities set forth on Schedule I, Schedule IV or Schedule
V hereto (other than those designated as Sellers on such schedules).
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser hereby represents and warrants to the Sellers
and JCF as follows:
4.1. Authorization. Purchaser is duly formed, validly existing
and in good standing under the laws of its state of formation. Purchaser has the
requisite limited liability company power and authority to enter into, execute
and deliver this Agreement and each of the other Transaction Documents to be
executed and delivered by it hereunder and to perform all the obligations to be
performed by it hereunder and under the applicable Transaction Documents. This
Agreement and the applicable Transaction Documents will have been after
execution and delivery at the Closing duly and validly authorized, executed and
delivered by the Purchaser. This Agreement constitutes, and each of the
applicable Transaction Documents will constitute, Purchaser's legal, valid and
binding obligation, enforceable against the Purchaser in accordance with its
terms, except as such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights or by general principles of equity.
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4.2. No Conflicts. The execution and delivery of this
Agreement and the Transaction Documents by the Purchaser and (assuming the
accuracy of the representations and warranties of the Sellers in Article III and
of JCF in Article V) the performance and consummation of the transactions
contemplated hereby and thereby do not and will not violate, result in a breach
of or constitute a default under any law, regulation, judgment, order, writ,
decree, permit, license, contract, agreement, commitment, document or instrument
to which it is a party or by which it is bound, except for the requirement to
obtain the Required Consents and the Profits Interest Consent. The Purchaser has
delivered true and correct copies of (a) the Required Consents to the Sellers
and (b) the Profits Interest Consent to JCF.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF JCF
JCF hereby represents and warrants to the Purchaser as
follows.
5.1. Authorization. JCF is duly formed, validly existing and
in good standing under the laws of its state of formation. JCF has the requisite
limited liability company power and authority to enter into, execute and deliver
this Agreement and each of the other Transaction Documents to be executed and
delivered by it hereunder and to perform all the obligations to be performed by
it hereunder and under the Transaction Documents. This Agreement has been, and
the other Transaction Documents will have been after execution and delivery at
Closing, duly authorized, executed and delivered by JCF. This Agreement
constitutes, and each of the applicable Transaction Documents will constitute,
JCF's legal, valid and binding obligation, enforceable against JCF in accordance
with its terms, except as such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights or by general principles
of equity.
5.2. No Conflicts. The execution and delivery of this
Agreement and the applicable Transaction Documents by JCF and (assuming the
accuracy of the representations and warranties of the Purchaser Article IV) the
performance and consummation of the transactions contemplated hereby and thereby
do not and will not violate, result in a breach of or constitute a default under
any law, regulation, judgment, order, writ, decree, permit, license, contract,
agreement, commitment, document or instrument to which it is a party or by which
it is bound, except for the requirement to obtain the Required Consents and the
consent attached to this Agreement at Annex A (the "Profits Interest Consent").
5.3. Profits Interest. The Profits Interest is not subject to
any Liens except for the Required Consents, the Profits Interest Consent and any
other Liens which either of the Cerberus Entities or any of their Affiliates may
have. The Profits Interest represents 100% of the interests of JCF, the Sellers
and their Affiliates in Coinvest. From the date of acquisition of the Profits
Interest until the date hereof, neither the Profits Interest nor any portion
thereof has been transferred, assigned, pledged or otherwise disposed of. After
the consummation of the transactions contemplated hereby and by the Transaction
Documents, none of JCF, the Sellers or their Affiliates will have any interest
in Coinvest.
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ARTICLE VI.
CLOSING
6.1. Closing. Subject to the satisfaction or waiver of the
conditions precedent set forth in Section 6.2 and Section 6.3, the closing (the
"Closing") of the transactions contemplated hereby shall take place at the
offices of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (or at such other place as the parties hereto may agree) at 10:00
a.m., New York City time, on July 15, 2004 (or such other date as the Closing
actually occurs, the "Closing Date"). At the Closing:
(a) each Seller shall execute the documentation dated the Closing Date
substantially in the form of Annex B attached hereto assigning the Investment
Interests to the Purchaser (or its assignee);
(b) the Purchaser shall deliver, or cause to be delivered, the Purchase
Price by wire transfer of immediately available funds to the Sellers' bank
accounts (to be designated in writing by the respective Sellers to the Purchaser
at least five Business Days prior to the Closing Date), such Purchase Price to
be apportioned among the Sellers in accordance with the ratios set forth on
Schedule III hereto;
(c) JCF shall execute the documentation dated the Closing Date
substantially in the form of Annex C attached hereto necessary to effect the
transfer by JCF of the Profits Interest to the Purchaser (or its assignee); and
(d) the Purchaser shall make, or cause to be made, a payment in the
amount of the Profits Interest Price to JCF by wire transfer of immediately
available funds to JCF's bank account (to be designated in writing by JCF to the
Purchaser at least five Business Days prior to the Closing Date).
6.2. Conditions to the Obligation of the Purchaser to Close.
The obligation of the Purchaser to consummate the transactions contemplated by
this Agreement at the Closing is subject to the following conditions unless
waived by the Purchaser:
(a) no Material Adverse Change shall have occurred;
(b) if applicable, the termination or expiration of the applicable
waiting period under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended, and the regulations related thereto, shall have occurred;
(c) no temporary restraining order, preliminary or permanent injunction
or other order issued by any court of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the transactions
contemplated hereby shall be in effect, and there shall not be any action taken,
or any statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the transactions contemplated hereby, by any governmental
authority which makes the consummation of the transactions contemplated hereby
illegal;
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(d) the representations and warranties of the Sellers and JCF set forth
in this Agreement shall be true and correct in all material respects as of the
date of this Agreement and (except to the extent such representations and
warranties speak as of an earlier date) as of the Closing Date as though made on
and as of the Closing Date;
(e) each of the Sellers and JCF shall have performed in all material
respects all obligations required to be performed by it under this Agreement at
or prior to the Closing Date;
(f) each of the Investment Interests and the Profits Interest shall be
transferred to the Purchaser (or its assignee) at the Closing Date; and
(g) each of the Sellers and JCF shall have delivered to the Purchaser a
completed IRS Form W-9, Request for Taxpayer Identification Number and
Certification.
6.3. Conditions to the Obligation of the Sellers and JCF to
Close. The obligation of the Sellers and JCF to consummate the transactions
contemplated by this Agreement at the Closing is subject to the following
conditions unless waived by JCF on behalf of itself and the Sellers:
(a) no temporary restraining order, preliminary or permanent injunction
or other order issued by any court of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the transactions
contemplated hereby shall be in effect, and there shall not be any action taken,
or any statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the transactions contemplated hereby, by any governmental
authority which makes the consummation of the transactions contemplated hereby
illegal;
(b) the representations and warranties of the Purchaser set forth in
this Agreement shall be true and correct in all material respects as of the date
of this Agreement and (except to the extent such representations and warranties
speak as of an earlier date) as of the Closing Date as though made on and as of
the Closing Date;
(c) if applicable, the termination or expiration of the applicable
waiting period under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended, and the regulations related thereto, shall have occurred; and
(d) the Purchaser shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or prior to
the Closing Date.
ARTICLE VII.
MISCELLANEOUS
7.1. Expenses. Each party hereto shall pay all of its own fees
and expenses (including attorneys' fees) incurred in connection with this
Agreement and the transactions contemplated hereby.
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7.2. Cerberus. The Purchaser has previously delivered to JCF
and the Sellers the Required Consents and the Profits Interest Consent on the
part of Cerberus Green Tree Investments, LLC and Coinvest (together, the
"Cerberus Entities") to the transactions contemplated hereby and by the
Transaction Documents. In this regard, the Purchaser has informed the Sellers
and JCF that the Purchaser and the Cerberus Entities are, concurrently with the
execution of this Agreement, entering into an agreement pursuant to which the
Cerberus Entities and the Purchaser agree, subject to consummation of the sales
and purchases contemplated by Sections 2.1 and 2.2, that (a) the Cerberus
Entities (or their assignees) will acquire a portion of the Investment Interests
to be acquired by the Purchaser hereunder on the same terms and conditions as
the Purchaser's acquisition of the Investment Interests and (b) Coinvest will
acquire the Profits Interest for a cash price equal to the Profits Interest
Price. JCF AIV II and JCF AIV III acknowledge that Affiliates of the Cerberus
Entities (i) in their capacities as limited partners of JCF AIV II and JCF AIV
III indirectly hold in the aggregate 24.9635% of the aggregate Green Tree
Interests held by JCF AIV II and JCF AIV III (which, based upon an aggregate
21.323% interest of JCF AIV II and JCF AIV III in the Green Tree Transactions,
results in an aggregate indirect interest of such Affiliates of the Cerberus
Entities in the Green Tree Transactions of 5.323%) and (ii) shall be entitled to
receive a share of the proceeds from the sale of the Green Tree Interests by JCF
AIV II and JCF AIV III attributable to such 24.9635% interest, in accordance
with the terms of their investments in JCF AIV II and JCF AIV III.
7.3. Termination. This Agreement may be terminated and the
transactions contemplated by this Agreement abandoned for any reason (a) at any
time prior to the Closing Date by mutual written agreement of all of the parties
hereto or (b) by any party, upon written notice to the other parties, if the
Closing shall not have occurred on or before September 1, 2004 (subject to
extension by 60 calendar days by any party hereto if the failure to close is due
to the failure of the conditions set forth in Section 6.2(b) and Section 6.3(c)
to be satisfied); provided, however, that the right to terminate this Agreement
under this Section 7.3 shall not be available to any party whose failure to
comply with any provision of this Agreement has been the cause of, or resulted
in, the failure of the Closing to occur on or before such date.
7.4. No Additional Representations. The parties acknowledge
that, except as expressly set forth in the representations and warranties set
forth in Articles III, IV and V of this Agreement, there are no representations
or warranties by any party of any kind, express or implied, with respect to the
Investment Interests or the transactions contemplated hereby, and that Purchaser
is purchasing, and the Sellers and JCF are selling, the Investment Interests and
the Profits Interest "as is", "where is" and "with all faults".
7.5. Specific Performance. Each party hereto hereby
acknowledges and agrees that money damages would not be a sufficient remedy for
any breach of any provision of this Agreement by the other. In such event, each
party agrees that the other parties shall have the right, in addition to any
other rights it or they may have (whether at law or in equity), to seek specific
performance and injunctive or other equitable relief as a remedy for any such
breach of this Agreement. No failure or delay by any party hereto in exercising
any right, power or
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privilege hereunder will operate as a waiver thereof, nor will any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder.
7.6. Notices. All notices, consents, waivers and other
communications hereunder shall be in writing and shall be deemed to have been
duly given and received when delivered in person, when received by facsimile
transmission, or one day after duly sent by overnight courier, addressed as
follows (or at such other address for a party as shall be specified by like
notice):
if to the Purchaser to: with a copy to:
Fortress Investment Group LLC Xxxxxxx Xxxx & Xxxxxxxxx LLP
1251 Avenue of the Americas 000 Xxxxxxx Xxxxxx
00xx Xxxxx Xxx Xxxx, XX 00000
Xxx Xxxx, XX 00000 Attention: Xxxxxx X. Xxxxxxxx, Esq.
Attention: Xxxxxx X. Xxxxxxx Facsimile: 000-000-0000
Facsimile: 000-000-0000
if to the Sellers to: with a copy to:
JCF Associates I LLC Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx, 00xx Xxxxx 000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
Attention: Xxxxx Rocker, Esq. Attention: Xxxxxx X. Xxxx, Esq.
Facsimile: 000-000-0000 Facsimile: 000-000-0000
if to JCF to: with a copy to:
JCF Associates I LLC Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx, 00xx Xxxxx 000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
Attention: Xxxxx Rocker, Esq. Attention: Xxxxxx X. Xxxx, Esq.
Facsimile: 000-000-0000 Facsimile: 000-000-0000
7.7. No Assignment; Binding Effect. Neither this Agreement nor
any of the rights, interests or obligations under this Agreement may be assigned
by any party without the prior written consent of the other parties hereto and
any attempt to do so will be void, except for assignments and transfers by
operation of law; provided, however, that without the prior written consent of
the Sellers or JCF, the Purchaser may at any time in its sole discretion assign,
in whole or in part, it rights and obligations pursuant to this Agreement and
the Transaction
-12-
Documents to one or more of its Affiliates or subsidiaries so long as the
Purchaser shall not be released from any obligations assigned by it pursuant to
this Section 7.7; provided, further, however, that on the Closing Date without
the prior written consent of the Sellers or JCF, the Purchaser may at any time
in its sole discretion assign, in whole or in part, its rights and obligations
pursuant to this Agreement and the Transaction Documents to the Cerberus
Entities so long as the Purchaser shall not be released from any obligations
assigned by it pursuant to this Section 7.7. This Agreement shall be binding
upon, inure to the benefit of, and may be enforced by, each of the parties to
this Agreement and their respective successors and permitted assigns.
7.8. Entire Agreement. This Agreement supersedes any other
agreement, whether written or oral, that may have been made or entered into by
the parties hereto relating to the matters contemplated hereby and constitutes
the entire agreement of the parties with respect to the subject matter hereof.
7.9. Amendments, Supplements, etc. This Agreement may be
amended or supplemented only by a writing signed by each of the parties hereto
specifically referring to this Agreement. No term of this Agreement, nor
performance thereof or compliance therewith, may be waived except by a writing
signed by the party charged with giving such waiver.
7.10. Headings and Captions. The headings and captions in this
Agreement are for reference purposes only and shall not affect the construction
or interpretation of any provision of this Agreement.
7.11. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
7.12. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
the conflicts of laws principles thereof.
7.13. No Third-Party Beneficiaries. This Agreement is not
intended to confer upon any other Person any rights or remedies hereunder.
7.14. Release of Escrow.
(a) Forthwith following the execution of this Agreement, the Purchaser
shall deliver an Escrow Release (as defined in the Escrow Agreement) to the
Escrow Agent (as defined in the Escrow Agreement) in order to cause to be
distributed to each of the Sellers its pro rata share of the Escrow
Distributions in accordance with the terms of the Escrow Agreement, such pro
rata share to be computed based upon the relative direct and indirect capital
contributions and loans made by each Seller as of the date of this Agreement to
the entities set forth on Schedule I that generated such proceeds. The Sellers
acknowledge that all amounts held in the escrow account established by the
Escrow Agreement will be released following the execution of this Agreement and
the receipt of releases acceptable to the Purchaser. Any Distributions shall
also be
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distributed among the Sellers based on its pro rata share to be computed based
upon the relative direct and indirect capital contributions and loans made by
each Seller to the entities set forth on Part II of Schedule I.
(b) Subject to (i) the Purchaser complying with its obligation under
Section 7.14(a) and (ii) an Affiliate of Cerberus Capital Management, L.P.
executing a release (or a document including a release) for the benefit of the
Purchaser and its Affiliates that is substantially similar in substance to the
release provided by the Sellers and JCF pursuant to this Section 7.14(b), each
of the Escrow Releasing Parties hereby releases the Escrow Released Parties
from, on and against any and all claims, demands, payment of attorneys' fees,
suits, actions, damages, causes of action or charges whether presently known or
unknown, and of every nature and extent whatsoever, that the Escrow Releasing
Parties have had, may now have, or may hereinafter have or acquire against the
Escrow Released Parties resulting or arising from, related to or suffered,
directly or indirectly, in connection with (w) the transactions contemplated by
the Escrow Agreement, (x) the payment of the Escrow Distributions or other
Distributions made based upon the direct and indirect capital contributions and
loans made by them to the entities set forth in Part II of Schedule I, (y) the
payment to the Cerberus Entities of their pro rata share of the amounts escrowed
pursuant to the Escrow Agreement or other payments and distributions made based
upon the direct and indirect capital contributions and loans made by them to the
entities set forth on Schedule IV hereto as evidenced on the ownership schedules
to the limited liability company agreements, note purchase agreements and notes
for those entities and any future capital contributions or loans made by the
Cerberus Entities at or prior to the Closing, or (z) the payment to the
Purchaser or any of its subsidiaries or Affiliates of payments and distributions
made based upon the direct and indirect capital contributions and loans made by
them to the entities set forth on Schedule V hereto as evidenced on the
ownership schedules to the limited liability company agreements, note purchase
agreements and notes for those entities and any future capital contributions or
loans made by the Purchaser or any of its subsidiaries or Affiliates at or prior
to the Closing.
7.15. Access and Cooperation for Tax, Regulatory and Other
Purposes; Further Assurances.
(a) Each party agrees that from and after the date hereof, both before
and after the Closing, after prior notice, it will reasonably cooperate with and
make available (or cause to be made available) to the other party, during normal
business hours, all books and records, information and employees (without
substantial disruption of employment) of the Companies or Green Tree Investment
Holdings II LLC, Green Tree Investment Holdings III LLC and Green Tree Residuals
Investor LLC and their direct and indirect subsidiaries which are necessary or
useful in connection with filing any tax return or other filing or notice with a
regulatory agency or any tax inquiry, audit, or dispute, any litigation or
investigation, any financial reporting requirements or any other matter
requiring any such books and records, information or employees for any
reasonable business purpose. The party requesting any such books and records,
information or employees shall bear all of the out-of-pocket costs and expenses
-14-
reasonably incurred in connection with providing such books and records,
information or employees.
(b) Each party also agrees that from and after the date hereof, both
before and after the Closing, it will reasonably cooperate with the other
parties hereto, the Companies, Green Tree Investment Holdings II LLC, Green Tree
Investment Holdings III LLC and their direct and indirect subsidiaries with
respect to the filing of any notices or providing of any information to
regulatory authorities regarding the transactions contemplated hereby and by the
Transaction Documents.
(c) Upon the request of the Purchaser or its successors and assigns at
any time after the Closing Date, the Sellers and JCF will execute and deliver
such further instruments of assignment, transfer, authorization or other
documents as the requesting party may reasonably request in order to effect the
transfer of title to the Investment Interests and the Profits Interest or
otherwise to effectuate the purposes of this Agreement and the Transaction
Documents. The parties hereto agree not to take any action that is inconsistent
with effectuating the purposes of this Agreement and consummating the
transactions contemplated hereby and by the Transaction Documents.
(d) The Purchaser shall provide to the JCF CFN Entities (i) the audited
consolidated financial statements of Green Tree Investment Holdings II LLC and
its direct and indirect subsidiaries as of the last day of the 2003 fiscal year
and for the period then ended, and the audited consolidated financial statements
of Green Tree Investment Holdings III LLC and its direct and indirect
subsidiaries as of the last day of the 2003 fiscal year and for the period then
ended, and (ii) the unaudited consolidated financial statements of Green Tree
Investment Holdings II LLC and its direct and indirect subsidiaries, the
unaudited consolidated financial statements of Green Tree Investment Holdings
III LLC and its direct and indirect subsidiaries, each as of the last day of
each quarterly accounting period subsequent to the date hereof and prior to the
Closing Date and for the respective periods then ended. The JCF CFN Entities
agree to use their reasonable efforts to cause any of their beneficial owners
that is required to publicly disclose any information furnished to it pursuant
to this Section 7.15(d) to disclose only such portion, if any, of the
information which it is advised by its outside accountants is required to be
disclosed.
7.16. Additional Agreements.
(a) Between the date hereof and the earlier of the Closing Date and the
date this Agreement is terminated in accordance with its terms, the Sellers and
JCF agree (i) not to exercise any rights to deliver a Buy-Sell Notice pursuant
to the Interim Equityholders Agreement, the LLC Agreements, the Green Tree
Agreements or any other oral or written agreement which may have been entered
into with respect thereto and (ii) not to exercise any other remedies if a
Prohibited Action is taken or a Prohibited Action Notice is delivered under the
Interim Equityholders Agreement, the LLC Agreements, the Green Tree Agreements
or any other oral or written agreement which may have been entered into with
respect thereto; provided that in the event (x) a Prohibited Action is taken or
a Prohibited Action Notice is delivered prior to the Closing Date and (y) this
Agreement is terminated in accordance with its terms, then the
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Sellers shall be entitled to deliver a Buy-Sell Notice during the fifteen day
period commencing on the date of termination of this Agreement in accordance
with its terms (other than a termination of the agreement due to a failure by
the Sellers or JCF to satisfy the conditions set forth in Sections 6.2(d),
6.2(e), 6.2(f) or 6.2(g). Capitalized terms used in this Section 7.16(a) shall
have the meanings ascribed to them in the Interim Equityholders Agreement and
the relevant LLC Agreements and Green Tree Agreements.
(b) Between the date hereof and the Closing Date, except with the prior
written consent of the Purchaser, no Investment Interests shall be, directly or
indirectly, transferred, sold, assigned, pledged or otherwise disposed of,
including, without limitation, through transactions by and among the Sellers,
JCF and/or their Affiliates. The provisions of this Section 7.16(b) shall not
survive a termination of this Agreement in accordance with its terms.
(c) Except as provided in Section 7.16(a), between the date hereof and
the Closing Date, each of the Sellers shall retain all of its rights pursuant to
the Interim Equityholders Agreement, the LLC Agreements and the Green Tree
Agreements including, without limitation, any rights to consent (not to be
unreasonably withheld) or vote with respect to its interests in Green Tree
Investment Holdings II LLC, Green Tree Investment Holdings III LLC and Green
Tree Residuals Investor LLC; provided, however, the Sellers and their Affiliates
shall have no such rights at any time with respect to (i) the execution and
delivery of this Agreement and the Purchase and Sale Agreement, dated as of the
date hereof, by and among the Purchaser, Cerberus Green Tree Investments, LLC
and Cerberus JCF Coinvest, LLC and the consummation of the transactions
contemplated thereby, (ii) any and all distributions or payments to be made by
any of the entities set forth on Schedule I, Schedule IV and Schedule V provided
that they are made in accordance with the terms of this Agreement and (iii) the
execution and delivery of (A) the Release, dated as of the date hereof, by and
among the Purchaser, Cerberus Green Tree Investments, LLC and Cerberus JCF
Coinvest, LLC and the other parties named therein and (B) the Release, dated as
of the date hereof, by and among the Purchaser, the Sellers, JCF and the other
parties named therein.
(d) In the event that (i) prior to the Closing Date (a) any of Green
Tree Investment Holdings II LLC, Green Tree Investment Holdings III LLC or Green
Tree Residuals Investor LLC (collectively, the "Green Tree Entities") sells
Units of a Series or equity securities junior in rank to the Units of a Series
or securities convertible into or exercisable for any of the foregoing, (b) any
of the Green Tree Entities sells Units in or other equity securities of a Series
or such Green Tree Entity ranking senior to or pari passu with the Units held by
any of the Sellers or securities convertible into or exercisable for any of the
foregoing or (c) the Managing Member of any of the Green Tree Entities requests
a Voluntary Capital Contribution (any of such events a "Subsequent Issuance")
and (ii) this Agreement is terminated in accordance with its terms (other than a
termination of the agreement due to a failure by the Sellers or JCF to satisfy
the conditions set forth in Sections 6.2(d), 6.2(e), 6.2(f) or 6.2(g)), then
each Seller shall be entitled, during the 12 Business Day period commencing on
the date of the termination of this Agreement, to give notice to the other
Initial Members of its intention to purchase (which notice shall be delivered at
least 2 Business Days prior to the proposed closing of such purchase) and to
consummate the
-16-
purchase from the other Initial Members (provided that such 12 Business Day
period shall be extended to the extent such purchase is not consummated due to
an action or failure to act by any of the other Initial Members) a pro rata
amount of such Units or securities based on such Seller's Percentage Interest in
the relevant Green Tree Entity or Series as reflected in the applicable schedule
to the Green Tree Agreements (which, for purposes of this Section 7.16(d), shall
be deemed to include the schedules to such Green Tree Agreements) for an
aggregate price equal to the Subsequent Issuance Price. Any Subsequent Issue
Price paid by any of the Sellers shall be paid to the Initial Members that
participated in such Subsequent Issuance on a pro rata basis in accordance with
the amounts paid by or capital contributions made by such Initial Members in
connection with such Subsequent Issuance and shall cause a corresponding
reduction in the Percentage Interest of such Initial Members in the relevant
Green Tree Entity or Series based on the Initial Price. Capitalized terms used
in this Section 7.16(d) and not defined in this Agreement shall have the
meanings ascribed to them in the relevant Green Tree Agreements.
7.17. Survival. The representations, warranties, covenants and
agreements contained in this Agreement shall survive the Closing.
7.18. Consent. In its capacity as managing member of Holdings,
FPS, Green Tree Investment Holdings II LLC, Green Tree Investment Holdings III
LLC and Green Tree Residuals Investor LLC, the Purchaser hereby unconditionally
(a) consents to the execution and delivery of this Agreement by the parties
hereto and the consummation of the transactions contemplated hereby and by the
Transaction Documents and (b) waives notice of transfers required in Section
4(a) of the note purchase agreements included as part of Annex D hereto in
connection with the consummation of the transactions contemplated hereby and by
the Transaction Documents.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
"Sellers"
JCF CFN LLC
By: JCF Associates I LLC, its managing member
By: /s/ Xxxxx Rocker
---------------------------------------------
Name: Xxxxx Rocker
Title: Principal
JCF CFN II LLC
By: JCF Associates I LLC, its managing member
By: /s/ Xxxxx Rocker
---------------------------------------------
Name: Xxxxx Rocker
Title: Principal
JCF AIV II LP
By: JCF Associates I LLC, its general partner
By: /s/ Xxxxx Rocker
---------------------------------------------
Name: Xxxxx Rocker
Title: Principal
JCF AIV III LP
By: JCF Associates I LLC, its general partner
By: /s/ Xxxxx Rocker
---------------------------------------------
Name: Xxxxx Rocker
Title: Principal
X.X. XXXXXXX I LP
By: JCF Associates I LLC, its general partner
By: /s/ Xxxxx Rocker
---------------------------------------------
Name: Xxxxx Rocker
Title: Principal
-18-
"Purchaser"
FIT CFN HOLDINGS LLC
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Operating Officer and Secretary
JCF ASSOCIATES I LLC
By: /s/ Xxxxx Rocker
---------------------------------------------
Name: Xxxxx Rocker
Title: Principal
With respect to Section 7.14 of this Agreement:
FORTRESS INVESTMENT GROUP LLC
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Operating Officer
GREEN TREE INVESTMENT HOLDINGS II LLC
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
GREEN TREE INVESTMENT HOLDINGS III LLC
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
-19-
FPS DIP LLC
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Operating Officer and Secretary
GREEN TREE MH INVESTOR LLC
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
GREEN TREE HE/HI INVESTOR LLC
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
GREEN TREE RESIDUALS INVESTOR LLC
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
-20-
SCHEDULE III
DIVISION OF PURCHASE PRICE AMONG SELLERS
Name Percentage
---- ----------
X.X. Xxxxxxx I LP 0%
JCF CFN LLC and JCF CFN II LLC 15.78%
JCF AIV II LP and JCF AIV III LP 84.22%
Total 100%
ADDITIONAL SCHEDULES AND ANNEXES
Schedule 1 -- Investment Interests
Schedule II -- Escrow Distributions Spreadsheet
Schedule IV -- Investment Entities
Schedule V -- Investment Entities
Annex A -- Form of Consent
Annex B -- Form of Xxxx of Sale
Annex C -- Form of Xxxx of Sale
Annex D -- Limited Liability Company Agreements and other
Agreements
The above listed Schedules and Annexes will be provided upon request to the
Company.
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