Exhibit 3.7
REORGANIZATION AND EXCHANGE AGREEMENT
This REORGANIZATION AND EXCHANGE AGREEMENT (this "AGREEMENT") is made
as of July __, 2001 by and among Delta Funding Residual Exchange Company, LLC, a
Delaware limited liability company (the "COMPANY"), Delta Financial Corporation,
Inc., a Delaware corporation ("DFC"), and Delta Funding Residual NIM Company,
Inc., a Delaware corporation ("NIM Company"). Except as otherwise indicated
herein, capitalized terms used herein are defined in ARTICLE IX hereof.
RECITALS
WHEREAS, subject to the satisfaction of the Minimum Tender Condition
and the other terms and conditions set forth herein, the Company desires to
deliver to DFC, and DFC desires to accept the delivery of, Senior Notes in the
aggregate principal amount of $75,000,000.00 in exchange for DFC's delivery to
the Company of (i) the Securitization Residuals, (ii) the Non-Performing Loan
Trust Residual, and (iii) the Other Consideration, all as more particularly
described in Section 1.1 below (the "EXCHANGE");
WHEREAS, subject to the satisfaction of the Minimum Tender Condition
and the other terms and conditions set forth herein, the Company desires to lend
to NIM Company, and NIM Company desires to borrow from the Company, an amount
equal to its excess inclusion tax liability, as more particularly described in
Section 1.2 below;
[WHEREAS, the exchange of securities as described herein is a
transaction intended to satisfy the requirements of Section _____________ of the
Internal Revenue Code of 1986, as amended (the "IRC").]
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE I
EXCHANGE OF THE SECURITIES
1.1 EXCHANGE. On the terms and subject to the conditions set forth in this
Agreement, including the satisfaction of the Minimum Tender Condition, at the
Closing:
(a) DFC, or its affiliates, shall deliver to the Company the Residual
Certificates duly endorsed to the Company.
(b) DFC shall deliver to the Company such documents as necessary to
effectuate the legal transfer to the Company of the Non-Performing Loan Trust
Residual more fully described in Schedule 1.1(b) attached hereto.
(c) DFC shall deliver to the Company [documents necessary to
effectuate the legal transfer to the Company of the Other Consideration to be
listed].
(d) The Company shall deliver to DFC Senior Notes in the aggregate
principal amount of $75,000,000.00, duly assigned to DFC.
1.2 SHORT TERM LOANS. On the terms and subject to the conditions set forth
in this Agreement, including the satisfaction of the Minimum Tender Condition,
the Company agrees to lend to NIM Company an amount of cash sufficient to permit
NIM Company to pay certain income taxes specifically related to the excess
cashflow certificates underlying the NIM Owner Trust Certificate. At such time
as the tax liability for the revenue generated by the excess cashflow
certificates that underlie the NIM Owner Trust Certificate exceeds the cash
revenues generated by those excess cashflow certificates, such underlying excess
cashflow certificates shall be automatically transferred to the Company from the
NIM Company.
1.3 CLOSING. The closing of the transactions contemplated by this Agreement
(the "CLOSING") will take place at the offices of Stroock & Stroock & Xxxxx LLP,
000 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 on July __, 2001 (the "CLOSING
DATE") (so long as all conditions to the obligations of the parties to
consummate the transactions contemplated hereby have been satisfied or waived),
or at such other time and location as is mutually agreed upon by the Company,
DFC and DFRM, but in no event later than August 31, 2001.
ARTICLE II
CONDITIONS TO CLOSING
2.1 CONDITIONS TO OBLIGATIONS OF DFC AND NIM COMPANY. The obligations of
DFC and NIM Company to consummate the transactions contemplated by this
Agreement are subject to the satisfaction of the following conditions precedent
on or before the Closing Date:
(a) the representations and warranties of the Company set forth in
Article III will be true and correct in all material respects at and as of the
Closing Date as though then made and as though references to the Closing Date
were substituted for references to the date of this Agreement throughout such
representations and warranties;
(b) the Company shall have delivered to the Exchange Agent, for the
benefit of the holders of the Senior Notes, certificates representing (i) one
Class A Voting Membership Unit, (ii) one share of Preferred Stock, and (iii) one
share of DFRM Common Stock, for each $1,000.00 principal amount of Senior Notes
duly and validly tendered in the Exchange Offer and not properly withdrawn in
accordance with the terms of the Exchange Offer;
(c) the Company will have performed and complied in all material
respects with each of the covenants and agreements required to be performed by
it under this Agreement and the agreements and documents attached hereto as
Exhibits;
(d) DFC, DFRM and the Exchange Agent, acting in its capacity as
attorney-in-fact for the Tendering Holders and not individually on its own
behalf, shall have executed and delivered an Amended and Restated Limited
Liability Company Agreement, in the form of EXHIBIT C attached hereto (the
"AMENDED LLC AGREEMENT");
(e) all proceedings to be taken by the Company in connection with the
consummation of the transactions contemplated hereby and by the Exhibits hereto,
and all certificates, opinions, instruments and other documents required to be
delivered by the Company to effect the transactions contemplated hereby and
thereby will be reasonably satisfactory in form and substance to DFC and NIM
Company;
(f) all consents and waivers by third parties that are required for
the consummation of the transactions contemplated hereby and by the Exhibits
hereto, including, without limitation, any consents that are required in order
that the transactions contemplated hereby and thereby do not constitute a breach
of or a default under or a termination or modification of any agreement to which
any party hereto is a party or to which any property of any party hereto or any
Subsidiary of any party hereto is subject, will have been obtained on terms
reasonably satisfactory to DFC and NIM Company;
(g) all governmental filings, authorizations and approvals that are
required for the consummation of the transactions contemplated hereby and by the
Exhibits hereto, if any, will have been duly made and obtained; and
(h) the Company shall have executed and/or delivered to DFC or NIM
Company, as the case may be, the documents and instruments required to be
executed and/or delivered by the Company pursuant to ARTICLE I;
Any condition to the obligations of DFC and NIM Company specified in
this SECTION 2.1 may be waived by DFC and NIM Company in their sole discretion.
2.2 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The obligation of the
Company to consummate the transactions contemplated by this Agreement is subject
to the satisfaction of the following conditions precedent on or before the
Closing Date:
(a) the representations and warranties of DFC and NIM Company set
forth in Articles IV and V, respectively, will be true and correct in all
material respects at and as of the Closing Date as though then made and as
though references to the Closing Date were substituted for the date of this
Agreement throughout such representations and warranties;
(b) DFC and NIM Company will have performed and complied in all
material respects with each of their respective covenants and agreements
required to be performed by them under this Agreement and the agreements and
documents attached hereto as Exhibits;
(c) DFC, DFRM and the Exchange Agent, acting in its capacity as
attorney-in-fact for the Tendering Holders and not individually on its own
behalf, shall have executed and delivered the Amended LLC Agreement;
(d) All proceedings to be taken by DFC and NIM Company in connection
with the consummation of the transactions contemplated hereby and by the
Exhibits hereto and all certificates, opinions, instruments and other documents
required to be delivered by the Company to effect the transactions contemplated
hereby and thereby will be reasonably satisfactory in form and substance to the
Company;
(e) all consents and waivers by third parties that are required for
the consummation of the transactions contemplated hereby and by the Exhibits
hereto, including, without limitation, any consents that are required in order
that the transactions contemplated hereby and thereby do not constitute a breach
of or a default under or a termination or modification of any agreement to which
any party hereto is a party or to which any property of any party hereto and any
Subsidiary of any party hereto is subject, will have been obtained on terms
reasonably satisfactory to the Company;
(f) all governmental filings, authorizations and approvals that are
required for the consummation of the transaction contemplated hereby, and by the
Exhibits hereto, if any, will have been duly made and obtained;
(g) DFC shall have executed and/or delivered to the Company the
documents and instruments required to be executed and/or delivered by DFC
pursuant to ARTICLE I; and
(h) NIM Company shall have executed and/or delivered to the Company
the documents and instruments required to be executed and/or delivered by NIM
Company pursuant to ARTICLE I.
Any condition to the obligations of the Company specified in this
SECTION 2.2 may be waived by the Company in its sole discretion.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As a material inducement to DFC and NIM Company to enter into this
Agreement, the Company hereby represents and warrants to DFC and NIM Company
that:
3.1 CORPORATE EXISTENCE; GOOD STANDING; COMPLIANCE WITH LAW. The Company:
(a) is a limited liability company duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization; (b) is duly
qualified to conduct business and is in good standing in each other jurisdiction
where its ownership of property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not have a
Material Adverse Effect on the Company; (c) has the requisite power and
authority and the legal right to own, pledge, mortgage or otherwise encumber its
properties, to conduct its business as now, heretofore and proposed to be
conducted; (d) has all licenses, permits, consents or approvals from or by, and
has made all filings with, and has given all notices to, all governmental
authorities having jurisdiction, to the extent required for such ownership and
conduct, except where the failure to obtain any such license, permit, consent or
approval, or make any such filing or give any such notice, would not have a
Material Adverse Effect on the Company; (e) is in compliance with the
Certificate of Formation and the LLC Agreement; and (f) is in compliance with
all applicable provisions of law, except where the failure to comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect on the Company. The Company has furnished to counsel for
DFC and NIM Company true and correct copies of the Certificate of Formation, the
LLC Agreement, and all minutes and consents of the members of the Company since
its inception. Such minutes and consents reflect all transactions referred to in
such minutes and consents accurately in all material respects.
3.2 POWER, AUTHORIZATION, ENFORCEABLE OBLIGATIONS. The execution, delivery
and performance by the Company of this Agreement, the other agreements and
documents required to be executed hereby and the transactions contemplated
hereby and thereby: (a) are within the Company's power; (b) have been duly
authorized by all necessary or proper action; (c) do not contravene any
provision of the Certificate of Formation or the LLC Agreement; (d) do not
violate any law, statute, rule or regulation, or any judgment, order or decree
of any court or governmental authority or agency applicable to the Company or by
which the Company or its properties may be bound; (e) do not conflict with or
result in the breach or termination of, with or without notice or the lapse of
time constitute a default under or accelerate or permit the acceleration of any
performance required by, or result in any material modification of the terms of,
any material indenture, mortgage, deed of trust, lease, agreement, contract,
obligation, commitment or other material instrument to which the Company is a
party or by which the Company or any of its property is bound; (f) do not result
in the creation or imposition of any lien, charge or encumbrance of any nature
upon any of the property or assets of the Company; and (g) do not require the
consent or approval of any governmental authority or any other person, except
those disclosed on Schedule 3.2 hereto, all of which will have been duly
obtained, made or complied with as of the Closing. This Agreement and the
agreements and documents attached hereto as Exhibits to which the Company is a
party have been, or, on the Closing Date, will have been, duly executed and
delivered by the Company and each such document constitutes, or shall then
constitute, a legal, valid and binding obligation of the Company enforceable
against it in accordance with its terms, except as enforceability thereof may be
limited by bankruptcy, insolvency, reorganization or other similar laws relating
to the enforcement of creditor's rights generally and by general principles of
equity.
3.3 ACCREDITED INVESTOR. The Company is an "accredited investor" within the
meaning of Regulation D under the Securities Act. The Company understands that
the Securities constitute "restricted securities" within the meaning of Rule 144
under the Securities Act. The Company is acquiring the Securities pursuant to
the Exchange for its own account with the present intention of holding the
Securities for purposes of investment and has no intention of selling the
Securities in a public distribution in violation of the federal securities laws
or any applicable state securities laws[; PROVIDED, HOWEVER, that the parties
hereto acknowledge that the Preferred Stock has been registered under the
Securities Act pursuant to the Registration Statement for issuance to the
Tendering Holders in the Exchange Offer]. Company understands that the
Securities are being offered and exchanged in reliance on exemptions from the
registration requirements of federal and state securities laws and that DFC is
relying upon the truth and accuracy of the Company's representations,
warranties, agreements, acknowledgments and understandings set forth herein to
determine its suitability to acquire the Securities.
3.4 TITLE AND TRANSFER. The Company is the legal owner of the Senior Notes
and has valid and marketable title to the Senior Notes, free and clear of any
lien, pledge and encumbrance or any claim of any third party. As of the Closing
Date, valid and marketable title to the Senior Notes will pass to DFC free and
clear of any lien, pledge and encumbrance or any claim of any third party.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF DFC
As a material inducement to the Company to enter into this Agreement,
DFC hereby represents and warrants to the Company that:
4.1 CORPORATE EXISTENCE; GOOD STANDING; COMPLIANCE WITH LAW. DFC: (a) is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation; (b) is duly qualified to conduct
business and is in good standing in each other jurisdiction where its ownership
of property or the conduct of its business requires such qualification, except
where the failure to be so qualified would not have a Material Adverse Effect on
DFC; (c) has the requisite corporate power and authority and the legal right to
own, pledge, mortgage or otherwise encumber its properties, to conduct its
business as now, heretofore and proposed to be conducted; (d) has all licenses,
permits, consents or approvals from or by, and has made all filings with, and
has given all notices to, all governmental authorities having jurisdiction, to
the extent required for such ownership and conduct, except where the failure to
obtain any such license, permit, consent or approval, or make any such filing or
give any such notice, would not have a Material Adverse Effect on DFC; (e) is in
compliance with its Certificate of Incorporation and the Bylaws; and (f) is in
compliance with all applicable provisions of law, except where the failure to
comply, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect on DFC. DFC has furnished to counsel for the
Company and NIM Company true and correct copies of its Certificate of
Incorporation, Bylaws, and all minutes and consents of the board of directors of
DFC since its inception. Such minutes and consents reflect all transactions
referred to in such minutes and consents accurately in all material respects.
4.2 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The execution,
delivery and performance by DFC of this Agreement, the other agreements and
documents required to be executed hereby and the transactions contemplated
hereby and thereby: (a) are within DFC's corporate power; (b) have been duly
authorized by all necessary or proper corporate action; (c) do not contravene
any provision of its Certificate of Incorporation or Bylaws; (d) do not violate
any law, statute, rule or regulation, or any judgment, order or decree of any
court or governmental authority or agency applicable to DFC or by which DFC or
its properties may be bound; (e) do not conflict with or result in the breach or
termination of, with or without notice or the lapse of time, constitute a
default under or accelerate or permit the acceleration of any performance
required by, or result in any material modification of the terms of, any
material indenture, mortgage, deed of trust, lease, agreement, contract,
obligation, commitment or other material instrument to which DFC is a party or
by which DFC or any of its property is bound; (f) do not result in the creation
or imposition of any lien, charge or encumbrance of any nature upon any of the
property or assets of DFC; and (g) do not require the consent or approval of any
governmental authority or any other person, except those disclosed on Schedule
4.2 hereto, all of which will have been duly obtained, made or complied with as
of the Closing. This Agreement and the agreements and documents attached hereto
as Exhibits to which DFC is a party have been, or, on the Closing Date, will
have been, duly executed and delivered by DFC and each such document
constitutes, or shall then constitute, a legal, valid and binding obligation of
DFC enforceable against it in accordance with its terms, except as
enforceability thereof may be limited by bankruptcy, insolvency, reorganization
or other similar laws relating to the enforcement of creditor's rights generally
and by general principles of equity.
4.3 TITLE AND TRANSFER. DFC, or its affiliates, are the legal owner of and
have valid and marketable title to the Securitization Residuals, the
Non-Performing Loan Trust Residual and the Other Consideration, free and clear
of any lien, pledge and encumbrance or any claim of any third party. As of the
Closing Date, valid and marketable title to the Securitization Residuals, the
Non-Performing Loan Trust Residual and the Other Consideration will pass to the
Company free and clear of any lien, pledge and encumbrance or any claim of any
third party.
ARTICLE V
REPRSENTATIONS AND WARRANTIES OF NIM COMPANY
5.1 CORPORATE EXISTENCE; GOOD STANDING; COMPLIANCE WITH LAW. NIM Company:
(a) is a corporation duly incorporated, validly existing and in good standing
under the laws of its jurisdiction of incorporation; (b) is duly qualified to
conduct business and is in good standing in each other jurisdiction where its
ownership of property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not have a
Material Adverse Effect on NIM Company; (c) has the requisite corporate power
and authority and the legal right to own, pledge, mortgage or otherwise encumber
its properties, to conduct its business as now, heretofore and proposed to be
conducted; (d) has all licenses, permits, consents or approvals from or by, and
has made all filings with, and has given all notices to, all governmental
authorities having jurisdiction, to the extent required for such ownership and
conduct, except where the failure to obtain any such license, permit, consent or
approval, or make any such filing or give any such notice, would not have a
Material Adverse Effect on NIM Company; (e) is in compliance with its
Certificate of Incorporation and the Bylaws; and (f) is in compliance with all
applicable provisions of law, except where the failure to comply, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect on NIM Company. NIM Company has furnished to counsel for the Company and
DFC true and correct copies of its Certificate of Incorporation, Bylaws, and all
minutes and consents of the board of directors of NIM Company since its
inception. Such minutes and consents reflect all transactions referred to in
such minutes and consents accurately in all material respects.
5.2 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The execution,
delivery and performance by NIM Company of this Agreement, the other agreements
and documents required to be executed hereby and the transactions contemplated
hereby and thereby: (a) are within NIM Company's corporate power; (b) have been
duly authorized by all necessary or proper corporate action; (c) do not
contravene any provision of its Certificate of Incorporation or Bylaws; (d) do
not violate any law, statute, rule or regulation, or any judgment, order or
decree of any court or governmental authority or agency applicable to NIM
Company or by which NIM Company or its properties may be bound; (e) do not
conflict with or result in the breach or termination of, with or without notice
or the lapse of time, constitute a default under or accelerate or permit the
acceleration of any performance required by, or result in any material
modification of the terms of, any indenture, mortgage, deed of trust, lease,
agreement, contract, obligation, commitment or other instrument to which NIM
Company is a party or by which NIM Company or any of its property is bound; (f)
do not result in the creation or imposition of any lien, charge or encumbrance
of any nature upon any of the property or assets of NIM Company; and (g) do not
require the consent or approval of any governmental authority or any other
person, except those disclosed on Schedule 5.2 hereto, all of which will have
been duly obtained, made or complied with as of the Closing. This Agreement and
the agreements and documents attached hereto as Exhibits to which NIM Company is
a party have been, or, on the Closing Date, will have been, duly executed and
delivered by NIM Company and each such document constitutes, or shall then
constitute, a legal, valid and binding obligation of NIM Company enforceable
against it in accordance with its terms, except as enforceability thereof may be
limited by bankruptcy, insolvency, reorganization or other similar laws relating
to the enforcement of creditor's rights generally and by general principles of
equity.
ARTICLE VI
COVENANTS OF THE COMPANY
The Company further covenants and agrees as follows:
6.1 FULFILLMENT OF OBLIGATIONS. Each party will observe and comply fully
with all of the terms, conditions and covenants of this Agreement and any other
agreements and instruments to be entered into by such party pursuant to this
Agreement.
6.2 PAYMENT OF FEES AND EXPENSES. All costs and expenses, including,
without limitation, fees and disbursements of counsel, financial advisors and
accountants, incurred by the Company, DFC and NIM Company in connection with
this Agreement and the transactions contemplated hereby shall be paid by
-------------------------------.
ARTICLE VII
TERMINATION
7.1 TERMINATION. This Agreement may be terminated at any time prior to the
Closing:
(a) by mutual written consent of DFC, NIM Company and the Company;
(b) by DFC or the Company if any condition to the Exchange Offer shall
not have been consummated, or if the Closing has not occurred, on or prior to
August 31, 2001; PROVIDED, HOWEVER, that neither DFC nor the Company may
terminate this Agreement pursuant to this SECTION 7.1(B) if such person's
willful breach of this Agreement has prevented the consummation of the
transaction contemplated hereby at or prior to such time; or
(c) by any party, if a court of competent jurisdiction or other
governmental authority having jurisdiction over the parties hereto shall have
issued an order, decree, ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the Closing of the transactions
contemplated by this Agreement and such order, decree, ruling or other action
shall have become final and nonappealable.
7.2 EFFECT OF TERMINATION. In the event of termination of this Agreement as
provided in Section 7.1, this Agreement will forthwith become void and there
will be no liability on the part of any party hereto to any other party hereto
or its shareholders, managers, directors, officers or members in respect hereof,
except that nothing herein will relieve any party from liability resulting from
any breach of this Agreement prior to such termination.
ARTICLE VIII
ADDITIONAL AGREEMENTS
8.1 SURVIVAL. Notwithstanding any examination made for or on behalf of
either party, the knowledge of any of either party's officers, directors,
managers, stockholders, members, employees or agents, or the acceptance of any
certificate or opinion, all representations, warranties, covenants and
agreements set forth in this Agreement or in any writing delivered in connection
with this Agreement shall survive the Closing and shall be fully effective and
enforceable until the termination of any statute of limitation applicable to the
rights of the parties hereunder.
8.2 FURTHER ASSURANCES. Each party (at its own expense) will execute and
deliver such further instruments of conveyance and transfer and take such
additional action as any other party may reasonably deem necessary to effect,
consummate, confirm or evidence the transactions that are the subject of this
Agreement. Each party will execute such documents as may be reasonably necessary
in preserving or perfecting any other party's rights pursuant to this Agreement
and will also complete such actions as are necessary to perform its
representations, warranties and agreements herein, including, without
limitation, after the Closing, making all registrations, filings and
applications, giving all notices and obtaining all governmental, third party or
other consents, transfers, approvals, orders, qualifications and waivers
desirable for the consummation of the transactions contemplated hereby which,
for any reason, have not been made, given or obtained prior to the Closing.
8.3 SPECIFIC PERFORMANCE. Each party acknowledges that the transactions
contemplated hereby are unique and recognize and affirm that in the event of a
breach of this Agreement by either party, money damages may be inadequate and
the other party may have no adequate remedy at law. Accordingly, each party
shall have the right, in addition to any other rights and remedies existing in
its favor at law or in equity, to enforce its rights and the other party's
obligations hereunder not only by an action or actions for damages, but also by
an action or actions for specific performance, injunctive and/or other equitable
relief (without posting of bond or other security).
8.4 INVESTIGATION. Prior to the Closing Date, each party and its
representatives may make or cause to be made such investigation of the matters
pertinent to the transactions contemplated hereby as each party deems reasonably
necessary or advisable and each party shall furnish and disclose promptly to the
investigating party all information concerning said matters as the investigating
party or its representatives reasonably request.
ARTICLE IX
DEFINITIONS
"AGREEMENT" shall have the meaning set forth in the preamble of this
Agreement.
"AMENDED LLC AGREEMENT" shall have the meaning set forth in SECTION
2.1(C).
"CERTIFICATE OF FORMATION" means that certain instrument filed on June
, 2001, with the Secretary of State of the State of Delaware whereby the Company
was formed.
"CLASS A VOTING MEMBER" has the meaning given thereto in the Amended
LLC Agreement.
"CLASS A VOTING MEMBERSHIP UNIT" means a Membership Interest entitled
to the right to receive distributions, liquidation payments, and voting rights
as specified in the Amended LLC Agreement.
"CLOSING" shall have the meaning set forth in SECTION 1.3.
"CLOSING DATE" shall have the meaning set forth in SECTION 1.3.
"COMPANY" shall have the meaning set forth in the preamble to this
Agreement.
"DFC" shall have the meaning set forth in the preamble to this
Agreement.
"DFRM" means Delta Financial Residual Management, Inc., a Delaware
corporation.
"DFRM COMMON STOCK" means the shares of common stock, par value $0.001
per share, of DFRM.
"EXCHANGE" shall have the meaning set forth in the first recital of
this Agreement.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE AGENT" means the U.S. Bank Trust National Association.
"EXCHANGE OFFER" means the exchange offer made by the Company to the
holders of the Senior Notes pursuant to the Registration Statement and the
Schedule TO.
"EXPIRATION DATE" means the date of the expiration of the Exchange
Offer as set forth in the Registration Statement and the Schedule TO.
["IRC" shall have the meaning set forth in the third recital of this
Agreement.]
"LLC AGREEMENT" means that certain Limited Liability Company Agreement
dated as of June __, 2001 executed by DFC, as the sole member of the Company.
"MATERIAL ADVERSE EFFECT" shall mean, with respect to any Person, a
material adverse change in the business, assets, earnings, operations, or
customer, supplier, employee or sales representative relations, or financial
condition of such Person.
"MINIMUM TENDER CONDITION" shall mean the condition to the Exchange
Offer that the holders of Senior Notes representing at least 95% of the
principal amount thereof outstanding on the date hereof shall have validly
tendered such Senior Notes in the Exchange Offer, and the Exchange Offer shall
have expired and such holders shall not have validly withdrawn the tendered
Senior Notes.
"NIM COMPANY" shall have the meaning set forth in the preamble to this
Agreement.
"NIM OWNER TRUST CERTIFICATE" means a net interest margin owner trust
certificate held by NIM Company. The excess cashflow certificates underlying the
NIM Owner Trust Certificate shall be automatically transferred from the NIM
Company to the Company at such time as the tax liability for the revenue
generated by such excess cashflow certificates exceeds the cash revenues
generated by those excess cashflow certificates.
"NON-PERFORMING LOAN TRUST RESIDUAL" means the ownership/residual
interest in the Delta Financial Non-Performing Loan Trust.
"OTHER CONSIDERATION" means all cash and other property held by the
two special purpose vehicles, Delta Funding Residual Holding Trust 2000-1 and
Delta Funding Residual Holding Trust 2000-2, as listed on EXHIBIT A hereto.
"PERSON" means any individual, sole proprietorship, partnership
(including a limited partnership), joint venture, trust, unincorporated
organization, association, corporation, institution, public benefit corporation,
limited liability company, joint stock company, entity or government (whether
federal, state, county, city, municipal or otherwise, including, without
limitation, any instrumentality, division, agency, body or department thereof)
or other business entity.
"REGISTRATION STATEMENT" means that certain registration statement on
Form S-3 (Registration No. 333-60188) filed by DFC [and the Company], as amended
from time to time prior to the Expiration Date, pursuant to the Securities Act.
"RESIDUAL CERTIFICATES" means the certificates listed on EXHIBIT B
attached hereto representing the Securitization Residuals.
"RESIDUAL INTERESTS" means all of the following: (a) the excess
cashflow certificates held by the Company previously held by two special purpose
vehicles, Delta Funding Residual Holding Trust 2000-1 and Delta Funding Residual
Holding Trust 2000-2, and any assets generated by the excess cashflow
certificates; (b) the NIM Owner Trust Certificate; (c) the Other Consideration;
and (d) the Non-Performing Loan Trust Residual.
"SCHEDULE TO" means that certain schedule TO filed by DFC [and the
Company], as amended from time to time prior to the Expiration Date, pursuant to
the Exchange Act.
"SECURITIES" means the Residual Certificates, the Non-Performing Loan
Trust Residual [and the Preferred Stock].
"SECURITIES ACT" means the Securities Exchange Act of 1933, as
amended.
"SECURITIZATION RESIDUALS" shall mean the "residual" and "BIO"
interests listed on EXHIBIT B hereto in the respective securitizations listed on
EXHIBIT B hereto.
"SENIOR NOTES" means DFC's 91/2% Senior Secured Notes due 2004 and
DFC's 91/2% Senior Notes due 2004.
"TENDERING HOLDER" means each holder of Senior Notes which, prior to
the Expiration, shall have duly and validly tendered Senior Notes to the Company
pursuant to the Exchange Offer, which tender shall not have been withdrawn by
such holder and which Senior Notes shall have been accepted for exchange by the
Company.
ARTICLE X
MISCELLANEOUS
10.1 AMENDMENT AND WAIVER. This Agreement may be amended and any provision
of this Agreement may be waived; PROVIDED, HOWEVER, that, subject to the last
sentence of SECTION 2.1 and the last sentence of SECTION 2.2, any such amendment
or waiver will be binding upon a party only if such amendment or waiver is set
forth in a writing executed by all of the parties hereto. No course of dealing
between or among any persons having any interest in this Agreement will be
deemed effective to modify, amend or discharge any part of this Agreement or any
rights or obligations of any party under or by reason of this Agreement.
10.2 NOTICES. All notices, demands and other communications given or
delivered under this Agreement will be in writing and shall be made by hand
delivery, overnight courier, first-class mail, or telecopier and will be deemed
to have been given when personally delivered, four business days after being
mailed by first class mail, return receipt requested, or delivered by express
courier service or telecopied (subject to receipt of written confirmation).
Notices, demands and communications to the parties will, unless another address
is specified in writing, be sent to the addresses indicated below:
Notices to the Company:
Delta Funding Residual Exchange Company, LLC
0000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention:
Telephone number:
Fax number:
With copies to:
[NAME]
[ADDRESS]
Attention:
Telephone number:
Fax number:
Notices to DFC:
Delta Financial Corporation, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx, President
Telephone number: (000) 000-0000
Fax number: (0000 000-0000
With copies to:
Stroock & Stroock & Xxxxx LLP
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxx
Telephone number: (000) 000-0000
Fax number: (000) 000-0000
Notices to NIM Company:
Delta Funding Residual NIM Company, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx, President
Telephone number: (000) 000-0000
Fax number: (0000 000-0000
With copies to:
Stroock & Stroock & Xxxxx LLP
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxx
Telephone number: (000) 000-0000
Fax number: (000) 000-0000
10.3 BINDING AGREEMENT; ASSIGNMENT. This Agreement and all of the
provisions hereof will be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but neither this
Agreement nor any of the rights, interests or obligations hereunder may be
assigned by any party without the prior written consent of the other parties.
10.4 SEVERABILITY. Whenever possible, each provision of this Agreement will
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 will 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.
10.5 NO STRICT CONSTRUCTION. The language used in this Agreement will be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be applied against any person.
10.6 HEADINGS; INTERPRETATION. The headings used in this Agreement are for
convenience of reference only and do not constitute a part of this Agreement and
will not be deemed to limit, characterize or in any way affect any provision of
this Agreement, and all provisions of this Agreement will be enforced and
construed as if no caption had been used in this Agreement. Whenever the term
"including" is used in this Agreement (whether or not that term is followed by
the phrase "but not limited to" or "without limitation" or words of similar
effect) in connection with a listing of one or more items or matters, that
listing will be interpreted to be illustrative only and will not be interpreted
as a limitation on, or an exclusive listing of, such items or matters.
10.7 ENTIRE AGREEMENT. This Agreement and the documents referred to herein
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.
10.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which taken
together will constitute one and the same instrument.
10.9 GOVERNING LAW. THIS AGREEMENT AND THE EXHIBITS AND SCHEDULES HERETO
SHALL BE GOVERNED BY THE INTERNAL LAW OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (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.
10.10 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
DELTA FUNDING RESIDUAL EXCHANGE COMPANY, LLC
By: Delta Financial Corporation, its sole
member
By:
--------------------------------------
[Name], [Title]
DELTA FINANCIAL CORPORATION
By:
--------------------------------------
[Name], [Title]
DELTA FUNDING RESIDUAL NIM COMPANY, INC.
By:
--------------------------------------
[Name], [Title]
EXHIBIT A
OTHER CONSIDERATION
EXHIBIT B
SECURITIZATION RESIDUAL
EXHIBIT C
AMENDED LIMITED LIABILITY COMPANY AGREEMENT
TABLE OF CONTENTS
ARTICLE I EXCHANGE OF THE SECURITIES........................................1
1.1 Exchange............................................................1
1.2 Short Term Loans....................................................2
1.3 Closing.............................................................2
ARTICLE II CONDITIONS TO CLOSING............................................2
2.1 Conditions to Obligations of DFC and NIM Company....................2
2.2 Conditions to the Obligations of the Company........................3
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................4
3.1 Corporate Existence; Good Standing; Compliance with Law.............4
3.2 Power, Authorization, Enforceable Obligations.......................5
3.3 Accredited Investor.................................................5
3.4 Title and Transfer..................................................6
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF DFC............................6
4.1 Corporate Existence; Good Standing; Compliance with Law.............6
4.2 Corporate Power; Authorization; Enforceable Obligations.............7
4.3 Title and Transfer..................................................7
ARTICLE V REPRSENTATIONS AND WARRANTIES OF NIM COMPANY......................7
5.1 Corporate Existence; Good Standing; Compliance with Law.............7
5.2 Corporate Power; Authorization; Enforceable Obligations.............8
ARTICLE VI COVENANTS OF THE COMPANY.........................................9
6.1 Fulfillment of Obligations..........................................9
6.2 Payment of Fees and Expenses........................................9
ARTICLE VII TERMINATION.....................................................9
7.1 Termination.........................................................9
7.2 Effect of Termination...............................................9
ARTICLE VIII ADDITIONAL AGREEMENTS..........................................9
8.1 Survival...........................................................10
8.2 Further Assurances.................................................10
8.3 Specific Performance...............................................10
8.4 Investigation......................................................10
ARTICLE IX DEFINITIONS.....................................................10
ARTICLE X MISCELLANEOUS....................................................13
10.1 Amendment and Waiver...............................................13
10.2 Notices............................................................13
10.3 Binding Agreement; Assignment......................................15
10.4 Severability.......................................................15
10.5 No Strict Construction.............................................15
10.6 Headings; Interpretation...........................................15
10.7 Entire Agreement...................................................15
10.8 Counterparts.......................................................15
10.9 Governing Law......................................................15
10.10 Parties in Interest................................................16
EXHIBITS
Exhibit A - Other Consideration
Exhibit B - Securitization Residual
Exhibit C - Amended Limited Liability Company Agreement
LIST OF SCHEDULES
Schedule 1.1(a) - Securitization Residuals
Schedule 1.1(b) - Non-Performing Loan Trust Residual
Schedule 1.1(c) - Transfer Documents for Other Consideration
Schedule 2.1(c) - Class A Voting Members
Schedule 3.2 - Third Party Consents
Schedule 5.10 - Dividends/Distributions/Acquisitions Schedule
REORGANIZATION AND EXCHANGE AGREEMENT
BY AND AMONG
DELTA FUNDING RESIDUAL EXCHANGE COMPANY, LLC,
DELTA FINANCIAL CORPORATION, INC.,
AND
DELTA FUNDING RESIDUAL NIM COMPANY, INC.
JUNE __, 2001
