EXHIBIT 10.1
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ASSET PURCHASE AGREEMENT
BY AND AMONG
UNITED COMPANIES FINANCIAL CORPORATION, as Debtor and Debtor-in-
Possession, UNITED COMPANIES LENDING CORPORATION(R), as Debtor and Debtor-
in-Possession, and UNITED COMPANIES LENDING GROUP, INC., as Debtor and
Debtor-in-Possession, each of the foregoing individually as "Seller"
and all of the foregoing collectively as "Sellers",
PELICAN MORTGAGE COMPANY, INC., as Debtor and Debtor-in-Possession,
ADOBE, INC., as Debtor and Debtor-in-Possession, ADOBE FINANCIAL, INC. I, as
Debtor and Debtor-in-Possession, GINGER MAE(R), INC., as Debtor and Debtor-in-
Possession, UNICOR MORTGAGE(R), INC., as Debtor and Debtor-in-Possession,
SOUTHERN MORTGAGE ACQUISITION, INC., as Debtor and Debtor-in-Possession,
UNITED COMPANIES FUNDING, INC., as Debtor and Debtor-in-Possession, and
GOPHER EQUITY, INC. I, as Debtor and Debtor-in-Possession, each of which is
referred to individually as a "Related Party" and all of which are referred
to collectively as "Related Parties", and each in the limited capacity
stated herein,
UNITED REALTY XII L.L.C.,
in the limited capacity stated herein,
UNITED COMPANIES REALTY L.L.C.,
in the limited capacity stated herein,
AEGIS MORTGAGE CORPORATION
as Purchaser,
AND
CERBERUS PARTNERS, L.P.,
in the limited capacity stated herein
DATED AS OF
April 26, 1999
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TABLE OF CONTENTS
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Section Page
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ARTICLE I DEFINITIONS 2
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II PURCHASE AND SALE 10
2.1 Assets to be Sold . . . . . . . . . . . . . . . . . . . . 10
2.2 Purchase Price; Deposit . . . . . . . . . . . . . . . . . . 10
2.3 Assumption of Liabilities . . . . . . . . . . . . . . . . . 11
2.4 Prorations. . . . . . . . . . . . . . . . . . . . . . . . . 11
2.5 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.6 Bankruptcy Court Approvals. . . . . . . . . . . . . . . . . 12
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER 14
3.1 Due Incorporation and Good Standing; Qualifications . . . . 14
3.2 Authority and Capacity. . . . . . . . . . . . . . . . . . . 14
3.3 Effective Agreement . . . . . . . . . . . . . . . . . . . . 14
3.4 Consents and Approvals of Governmental Authorities. . .. . .15
3.5 Contracts . . . . . . . . . . . . . . . . . . . . . . .. . .15
3.6 Assets. . . . . . . . . . . . . . . . . . . . . . . . .. . .15
3.7 Compliance with Regulations . . . . . . . . . . . . . .. . .16
3.8 Pipeline and Purchased Mortgage Loans . . . . . . . . .. . .16
3.9 United Credit Card. . . . . . . . . . . . . . . . . . .. . .16
3.10 AS IS . . . . . .. . . . . . . . . . . . . . . . . . .. . .16
3.11 Survival . . . . .. . . . . . . . . . . . . . . . . . .. . .17
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER 17
4.1 Due Organization and Good Standing. . . . . . . . . . .. . .17
4.2 Authority and Capacity. . . . . . . . . . . . . . . . .. . .17
4.3 Effective Agreement . . . . . . . . . . . . . . . . . .. . .18
4.4 Consents and Approvals of Governmental Authorities. . .. . .18
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ARTICLE V CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
PURCHASER 18
5.1 Representations and Warranties True . . . . . . . . . .. . .19
5.2 Performance of Covenants. . . . . . . . . . . . . . . .. . .19
5.3 Court Approval. . . . . . . . . . . . . . . . . . . . .. . .19
5.4 Instruments of Transfer . . . . . . . . . . . . . . . .. . .19
5.5 Execution by Sellers. . . . . . . . . . . . . . . . . .. . .19
5.6 Employees . . . . . . . . . . . . . . . . . . . . . . .. . .19
5.7 No Injunctions or Restraints. . . . . . . . . . . . . .. . .20
5.8 Assumed Leases, etc . . . . . . . . . . . . . . . . . .. . .20
5.9 Consents and Approvals. . . . . . . . . . . . . . . . .. . .20
5.10 Corporate Proceedings.. . . . . . . . . . . . . . . . .. . .20
ARTICLE VI CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
SELLERS 20
6.1 Representations and Warranties True . . . . . . . . . .. . .20
6.2 Performance of Covenants. . . . . . . . . . . . . . . .. . .20
6.3 Corporate Proceedings . . . . . . . . . . . . . . . . .. . .21
6.4 No Injunctions or Restraints. . . . . . . . . . . . . .. . .21
6.5 Consents and Approvals. . . . . . . . . . . . . . . . .. . .21
6.6 Instruments of Assumption . . . . . . . . . . . . . . .. . .21
6.7 Court Order . . . . . . . . . . . . . . . . . . . . . .. . .21
ARTICLE VII CERTAIN GENERAL COVENANTS 21
7.1 Conduct of Business . . . . . . . . . . . . . . . . .. . . .21
7.2 Obtaining Consents and Approvals. . . . . . . . . . .. . . .22
7.3 Good Faith Efforts. . . . . . . . . . . . . . . . . .. . . .23
7.4 Access and Information. . . . . . . . . . . . . . . .. . . .23
7.5 Exclusivity . . . . . . . . . . . . . . . . . . . . .. . . .23
7.6 Preservation of Business. . . . . . . . . . . . . . .. . . .24
7.7 Licensing . . . . . . . . . . . . . . . . . . . . . .. . . .24
7.8 Expenses; Liabilities; Breakup Fee. . . . . . . . . .. . . .25
7.9 Post-Closing Information. . . . . . . . . . . . . . .. . . .25
7.10 Notification of Loan Applicants.. . . . . . . . . . .. . . .26
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7.11 Further Assurances . . . . . . . . . . . . . . . . .. . . .26
7.12 Interim Period Operations and Purchase of Loans . . .. . . .26
7.13 Post-Closing Data Processing Services . . . . . . . .. . . .28
7.14 Space . . . . . . . . . . . . . . . . . . . . . . . .. . . .28
7.15 Other Transitional Services . . . . . . . . . . . . .. . . .29
7.16 Shared Employees . . . . . . . . . . . . . . . . . .. . . .29
7.17 Interests of Related Parties . . . . . . . . . . . .. . . .29
7.18 Solicitations; Files and Records . . . . . . . . . .. . . .30
7.19 Condition of Premises and Equipment . . . . . . . . .. . . .30
ARTICLE VIII CERTAIN OTHER COVENANTS 30
8.1 Employees . . . . . . . . . . . . . . . . . . . . . .. . . .30
ARTICLE IX TERMINATION 32
9.1 Termination . . . . . . . . . . . . . . . . . . . . .. . . .32
9.2 Effect of Termination . . . . . . . . . . . . . . . .. . . .33
9.3 Release of Deposit; Liquidated Damages. . . . . . . .. . . .33
9.4 Automatic Termination . . . . . . . . . . . . . . . .. . . .34
ARTICLE X TERMINATION 34
10.1 Survival. . . . . . . . . . . . . . . . . . . . . . .. . . .34
10.2 Amendment . . . . . . . . . . . . . . . . . . . . . .. . . .34
10.3 Counterparts. . . . . . . . . . . . . . . . . . . . .. . . .34
10.4 Entire Agreement. . . . . . . . . . . . . . . . . . .. . . .34
10.5 Rights Cumulative; Waivers. . . . . . . . . . . . . .. . . .34
10.6 Section Headings. . . . . . . . . . . . . . . . . . .. . . .34
10.7 Notices . . . . . . . . . . . . . . . . . . . . . . .. . . .35
10.8 Governing Law . . . . . . . . . . . . . . . . . . . .. . . .36
10.9 Severability. . . . . . . . . . . . . . . . . . . . .. . . .36
10.10 Successors and Assigns . . . . . . . . . . . . . . .. . . .36
10.11 Exclusive Jurisdiction . . . . . . . . . . . . . . .. . . .36
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EXHIBITS
Exhibit A Pipeline File Documents
Exhibit B Lease Form
SCHEDULES
Schedule 1.1 Branch Offices
Schedule 1.2 Approved Budget
Schedule 1.3 Assumed Contracts
Schedule 1.4 Assumed Furniture and Equipment Leases
Schedule 1.5 Assumed Leases
Schedule 1.8 Software and Programs
Schedule 3. Exceptions to Representations and Warranties Regarding the
Pipeline and Purchased Mortgage Loans
Schedule 5.6 Employees To Be Hired
Schedule 7.1 April Advertising Expenditures
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ASSET PURCHASE AGREEMENT
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THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made as of the
26th day of April, 1999, by and among (i) UNITED COMPANIES FINANCIAL
CORPORATION, as Debtor and Debtor-in-Possession, a corporation organized and
existing under the laws of the State of Louisiana ("UCFC"), UNITED COMPANIES
LENDING CORPORATION , as Debtor and Debtor-in-Possession, a corporation
organized and existing under the laws of the State of Louisiana ("UCLC"), and
UNITED COMPANIES LENDING GROUP, INC., as Debtor and Debtor-in-Possession, a
corporation organized and existing under the laws of the State of Louisiana
("UCLG", and each of UCFC, UCLC and UCLG is referred to individually as
"Seller" and all of which are referred to collectively as "Sellers");
(ii) PELICAN MORTGAGE COMPANY, INC., as Debtor and Debtor-in-Possession, a
corporation organized and existing under the laws of the State of Delaware
("PMC"), ADOBE, INC., as Debtor and Debtor-in-Possession, a corporation
organized and existing under the laws of the State of Nevada ("AI"), ADOBE
FINANCIAL, INC. I, as Debtor and Debtor-in-Possession, a corporation
organized and existing under the laws of the State of Nevada ("AFII"),
GINGER MAE(R), INC., as Debtor and Debtor-in-Possession, a corporation
organized and existing under the laws of the State of Louisiana ("GMI"),
UNICOR MORTGAGE(R), INC., as Debtor and Debtor-in-Possession, a corporation
organized and existing under the laws of the State of Louisiana ("UMI"),
SOUTHERN MORTGAGE ACQUISITION, INC., as Debtor and Debtor-in-Possession, a
corporation organized and existing under the laws of the State of
Louisiana ("SMAI"), UNITED COMPANIES FUNDING, INC., as Debtor and
Debtor-in-Possession, a corporation organized and existing under
the laws of the State of Minnesota ("UCFI"), and GOPHER EQUITY,
INC. I, as Debtor and Debtor-in-Possession, a corporation organized
and existing under the laws of the State of Nevada ("GEII"), and
each of PMC, AI, AFII, GMI, UMI, SMAI, UCFI and GEII are referred
to herein individually as a "Related Party" and all of which are
referred to collectively as "Related Parties"), each in the limited
capacity stated herein; (iii) UNITED REALTY XII L.L.C., a limited
liability company organized and existing under the laws of the
State of Louisiana ("UR") and UNITED COMPANIES REALTY L.L.C., a
limited liability company organized and existing under the laws of
the State of Louisiana ("UCR"), each in the limited capacity stated
herein; (iv) AEGIS MORTGAGE CORPORATION, a corporation organized
and existing under the laws of the State of Oklahoma ("Purchaser");
and (v) CERBERUS PARTNERS, L.P., a limited partnership existing
under the laws of the State of Delaware ("Cerberus"), in the
limited capacity stated herein.
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W I T N E S S E T H:
WHEREAS, Sellers engage in the business of originating, making
and acquiring first and second lien residential mortgage loans,
with their centralized production support unit located at Sellers'
principal place of business in Baton Rouge, Louisiana, and with
branch offices located in various jurisdictions (the "Business");
and
WHEREAS, each Seller and each Related Party has filed a
voluntary bankruptcy petition with the United States Bankruptcy
Court for the District of Delaware (the "Bankruptcy Court") seeking
reorganization relief under chapter 11 of the United States Code,
11 U.S.C Section 101 et seq. (the "Bankruptcy Code");
WHEREAS, subject to the terms and conditions of this
Agreement, each Seller wishes to sell to Purchaser, and Purchaser
wishes to purchase from Sellers, certain of the assets of Sellers
that are used in connection with the Business, all in consideration
of the Purchase Price (as defined herein), Purchaser's assumption
of certain liabilities and obligations of Sellers and the other
agreements of Purchaser and Sellers, all as described below.
NOW, THEREFORE, in consideration of the mutual covenants made
herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties
hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. The following terms when used herein shall
have the following meanings:
"Affiliate" with respect to any Person shall mean any other
Person directly or indirectly controlling, controlled by or under
common control with such Person.
"Agreement" shall mean this Agreement and all Exhibits and
Schedules hereto, as the same may from time to time be amended or
supplemented by one or more instruments executed by all Parties
hereto.
"Applicable Requirements" means and includes, as of the time
of reference, with respect to the Pipeline Mortgage Loans and the
Purchased Mortgage Loans, all of the following: (i) all material
contractual obligations of any Seller with respect to the Pipeline
Mortgage Loans and the Purchased Mortgage Loans, including, without
limitation, those contractual obligations contained herein, for
which any Seller is responsible or at any time was responsible; (ii)
all applicable federal, state and local legal and regulatory requirements
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(including statutes, rules, regulations and ordinances) binding upon any
Seller; (iii) all other applicable requirements and guidelines of each
governmental agency, board, commission, instrumentality and other
governmental or quasi-governmental body or office having jurisdiction; and
(iv) all other applicable judicial and administrative judgments, orders,
stipulations, awards, writs and injunctions.
"Application Fees" shall mean all applicable application,
underwriting, lock-in, processing, appraisal, credit report, home
inspection, commitment, tax service and other third party and
similar fees collected in connection with the Pipeline Mortgage
Loans including, without limitation, plan review fees for Section
203(k) Loans.
"Approved Budget" shall mean the budget attached as Schedule
1.2 hereto.
"Assets" shall mean, except as limited below, the assets of
any Seller, whether tangible or intangible, real, personal or
mixed, (i) located in one or more of the Branch Offices, and (ii)
in the Production Support Unit that are used in connection with the
Business, and (iii) as described in detail in the schedules
attached hereto and as described below:
(i) the Pipeline Mortgage Loans, together with all
interests, rights (including rights to prepaid Application
Fees), documentation and contracts relating thereto;
(ii) all rights of any Seller under the Assumed Leases,
the Assumed Furniture and Equipment Leases, including all
telephone numbers used by the Branch Offices as of the date
hereof, and all rights in security deposits, lease buildout
credits and other sums owing to lessee in connection with such
leases, and the Assumed Contracts;
(iii) the Furniture and Equipment;
(iv) the Purchased Leasehold Improvements;
(v) all rights of any Seller under the Assumed Contracts;
(vi) all Supplies;
(vii) all Files and Records (excluding Personnel
Records); provided, however, that Purchaser and Sellers shall
have reasonable continuing access to all Files and Records for
regulatory, tax and other reasonable purposes;
(viii) the non-exclusive right to use the Intangible
Property Rights;
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(ix) the Tradename; and
(x) the Computer Software.
"Assumed Contracts" shall mean those Contracts listed on
Schedule 1.3 attached hereto, as well as such other Contracts as
are entered into in the ordinary course of the Business, which
satisfy the criteria in Section 3.5 hereof and which Purchaser
agrees to add to Schedule 1.3 by an update thereto on or prior to
the Closing Date, and, subject to Section 7.2 hereof, as to which
any required third party consent is obtained and the assignment and
assumption of which is approved by the Bankruptcy Court in the
Bankruptcy Court Order (or in another order entered by the
Bankruptcy Court); provided, however, that notwithstanding anything
to the contrary herein contained, the term Assumed Contracts for
purposes of Sections 2.6(c), 5.8 and 7.1(c) shall mean all of the
Contracts listed on Schedule 1.3, which satisfy the criteria set
forth in Section 3.5 hereof.
"Assumed Furniture and Equipment Leases" shall mean those
lease agreements with respect to furniture and equipment leased by
any Seller as of the Closing Date and that are used in connection
with the Business, as listed on Schedule 1.4 attached hereto, which
satisfy the criteria set forth in Section 3.5 hereof, and, subject
to Section 7.2 hereof, as to which any required lessor consent is
obtained and the assignment and assumption of which is approved by
the Bankruptcy Court in the Bankruptcy Court Order (or in another
order entered by the Bankruptcy Court); provided, however, that
notwithstanding anything to the contrary herein contained, the term
Assumed Furniture and Equipment Leases for purposes of Sections
2.6(c), 5.8 and 7.1(c) shall mean all of the leases listed on
Schedule 1.4, which satisfy the criteria set forth in Section 3.5
hereof.
"Assumed Leases" shall mean those certain real property
leases, including, without limitation, all rights to the associated
security deposit, leased by any Seller as of the Closing Date and
that are used in connection with the Business, as listed on
Schedule 1.5, which satisfy the criteria set forth in Section 3.5
hereof and, subject to Section 7.2 hereof, as to which any required
third party consent is obtained and the assignment and assumption
of which is approved by the Bankruptcy Court in the Bankruptcy
Court Order (or in another order entered by the Bankruptcy Court);
provided, however, that notwithstanding anything to the contrary
herein contained, the term Assumed Leases for purposes of Sections
2.6(c), 5.8 and 7.1(c) shall mean all of the leases listed on
Schedule 1.5, which satisfy the criteria set forth in Section 3.5
hereof.
"Assumed Liabilities" shall mean solely (i) all obligations of
Sellers accruing on or after the Closing Date (A) under the
Pipeline Mortgage Loans, (B) under the Assumed Leases, (C) under
the Assumed Furniture and Equipment Leases and (D) under the
Assumed Contracts; (ii) obligations of Sellers to pay ordinary
commissions on a loan level basis due on or after the Closing Date
to salespersons with respect to those Pipeline Mortgage Loans that
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Purchaser approves and closes in accordance with Purchaser's
established underwriting criteria and standard business practices;
(iii) obligations of Sellers (if any) under the Purchased Mortgage
Loans and (iv) all obligations under rate lock agreements and loan
commitments issued by any Seller prior to the Closing Date with
respect to the Pipeline Mortgage Loans, provided that such rate
lock agreements and commitments are consistent with Sellers'
established underwriting criteria and business practices in effect
as of the date hereof.
"Bankruptcy Code" shall have the meaning given in the recitals
hereto.
"Bankruptcy Court" shall have the meaning given in the
recitals hereto.
"Bankruptcy Court Order" shall have the meaning given in
Section 2.6.
"Bidding Procedures Order" shall have the meaning given in
Section 2.6.
"Branch Offices" shall mean the offices listed in Schedule 1.1
attached hereto.
"Breakup Fee" shall mean an amount equal to the sum of
$600,000 plus all reasonable expenses incurred (not to exceed
$200,000) by Purchaser in connection with the preparation,
negotiation, execution and Bankruptcy Court approvals of the
Operative Documents and the transactions contemplated thereby
(including, without limitation, reasonable attorneys fees and
costs).
"Business" shall have the meaning given in the recitals
hereto.
"Business Day" shall mean any day that is not a Saturday,
Sunday or day on which banks in New York, New York are authorized
to close.
"Closing" shall have the meaning given in Section 2.5 hereof.
"Closing Date" shall have the meaning given in Section 2.5
hereof.
"Computer Software" shall mean the computer software and
programs set forth in Schedule 1.8 attached hereto
"Contracts" shall mean all contracts, agreements, instruments,
commitments and other binding arrangements, whether oral or written, to
which any Seller is a party or by which any Seller is bound or subject,
and that relate to and are used primarily in connection with the Business,
including, without limitation, leases, rental agreements, options, binding
purchase orders and sales orders and licenses (other than Permits), but
excluding (i) those with respect to which any Seller already has completed
performance thereunder except for the retention of an actual or contingent
liability for breaches thereunder, (ii) Employee Benefit Plans and
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arrangements with individual employees, (iii) indentures
and other evidences of indebtedness for borrowed money, and (iv)
guaranties.
"Deposit" shall have the meaning given in Section 2.2(d)
hereto.
"Employee Benefit Plan" shall mean any and all of the
following, to the extent applicable to the Branch Office, the
Business and/or the Assets: any pension, retirement,
post-retirement, profit-sharing, deferred compensation, bonus or
incentive plan, practice or arrangement, whether formal or
informal, any other employee benefit program, arrangement,
agreement understanding, any medical, vision, dental or other
health plan and any life insurance plan and including, without
limitation, any "employee benefit plan," as defined in Section 3(3)
of ERISA, maintained by any Seller or to which any Seller or any
employee of any Seller contributes or is a party or is bound or
under which it may have liability or under which employees of any
Seller are eligible to participate or derive a benefit.
"ERISA" shall mean Employee Retirement Income Security Act of
1974, as amended.
"Escrow Agent" shall mean the escrow agent retained pursuant
to the Escrow Agreement.
"Escrow Agreement" shall mean the Escrow Agreement dated April
19, 1999, among the Escrow Agent, Purchaser, Cerberus and UCFC (on
behalf of Sellers).
"Files and Records" shall mean (a) to the extent Purchaser, as
the acquirer of any Branch Office, is required by law to retain
such files and records or such files and records relate to the on-going
(rather than just the past) operation of the Business, the
following: (i) a list of all persons who applied to any Seller for
mortgage loans within the one-year period preceding the Closing
Date who have been rejected and (ii) each Seller's files, records,
original documents, papers and customer lists (including those
relating to realtors, builders and contractors and borrowers under
the Pipeline Mortgage Loans); (b) to the extent used primarily in
connection with the Assets and/or the Business, each Seller's data
bases and data manuals; (c) all files and records (including,
without limitation warranties) relating to the Assumed Contracts,
Assumed Leases, Furniture and Equipment, and Assumed Furniture and
Equipment Leases; and (d) a list of each Seller's potential
customers as they relate to the Business and/or the Assets;
provided, however, that (x) the term "Files and Records" shall not
include (i) files related to loans closed by any Seller prior to
the Closing Date (other than those relating to the Purchased
Mortgage Loans, which shall belong to Purchaser) and (ii) except as
provided for in (a)(i) above, files related to loan applications
rejected by any Seller prior to the Closing Date; and (y) lists of
past customers shall not be used by Purchaser for conducting
directed solicitations.
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"Furniture and Equipment" shall mean (i) all furniture and
equipment owned by any Seller that is located in the Branch
Offices; (ii) furniture and equipment used in connection with the
Business located in the Production Support Unit, including, without
limitation, desks, chairs, tables, employee workstation computer
equipment, copiers, telecopy machines, cubicles and miscellaneous
office furnishings and supplies, sufficient to provide those
employees who currently work at the Production Support Unit and who
are hired by Purchaser in connection with the transaction
contemplated hereby with office furnishings and equipment in the
same quantity and of the same quality as those they currently
utilize; and (iii) computer hardware, including, without
limitation, servers, used to provide management information
services, in such quantity and quality as are sufficient to allow
Purchaser to provide itself with management information services
sufficient to operate the Assets of the Business after the Closing
(or, if applicable, after the MIS Transition Date) in a manner
substantially as presently operated by Sellers.
"Insurer" shall mean providers of hazard, title or other
insurance with respect to any of the mortgage loans or the secured
real property associated therewith.
"Intangible Property Rights" shall mean all copyrights,
patents, proprietary processes, designs, inventions, trade secrets,
know-how, procedures, systems, models, ratios, instructions owned
by any Seller and used primarily in connection with the Business.
"Interim Actual Production" shall mean an amount equal to the
actual original principal balance of Sellers' loan production
during the Interim Period.
"Interim Anticipated Production" shall mean $40,000,000.
"Interim Budgeted Expenses" shall mean an amount equal to (but
not in excess of, unless such excess is approved in writing by
Purchaser) the expenses set forth on the Approved Budget for the
Interim Period.
"Interim Period" shall mean the period beginning on (and
including) May 1, 1999 through (and including) May 31, 1999.
"Interim Period Expense" shall mean an amount equal to (i) the
Interim Budgeted Expenses, less (ii) an amount equal to five
percent (5%) of the positive remainder, if any, of the Interim
Anticipated Production minus the Interim Actual Production.
"Liabilities" shall mean claims, liabilities and obligations
of every nature or kind, whether accrued, absolute, contingent or
otherwise and whether asserted or unasserted, known or unknown and
whether due or to become due.
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"Lien" shall mean any lien, claim, mortgage, security
interest, pledge, charge, easement, servitude or other encumbrance
of any kind, including any of the foregoing arising under any
conditional sales or other title retention agreement.
"Material Adverse Effect" shall mean (i) a material adverse
effect on the Business or the Assets, taken as a whole, in an
amount in excess of $500,000, or (ii) a material adverse effect on
Sellers' ability to perform their obligations hereunder. It is
understood that, in calculating whether the $500,000 threshold set
forth in the preceding sentence has been exceeded, the amount of
damages resulting from all material adverse effects on, or relating
to, the Business or the Assets shall be aggregated in determining
whether there has been a "Material Adverse Effect."
"MIS Transition Date" shall have the meaning given in Section
7.13 hereof.
"Operative Documents" shall mean this Agreement and each other
agreement, certificate, exhibit and schedule executed and
delivered, or required to be contemporaneously or hereafter
executed and delivered, in connection herewith.
"Parties" shall mean Sellers, Purchaser, Cerberus, Related
Parties, UR and UCR.
"Permits" shall mean licenses, permits, registrations,
qualifications, authorizations and approvals issued or granted by
(i) any governmental authority or any agency or instrumentality
thereof, or (ii) any self-regulatory organization, in connection
with the brokering, originating or making of residential mortgage
loans.
"Permitted Liens" shall mean (i) Liens for taxes, assessments
or other governmental charges that are not yet due or delinquent;
(ii) statutory Liens or landlords', carriers', warehousemen's,
mechanics', suppliers', materialmen's, repairmen's or other like
Liens arising in the ordinary course of business with respect to
amounts not yet overdue; (iii) as to any real property lease,
zoning, entitlement and other land use restrictions imposed by any
government body; and (iv) as to any real property lease, any Lien
affecting solely the interest of the landlord thereunder and not
the interest of the tenant thereunder, provided, however, that
there is no interference with tenant's occupancy of the leased
premises in the event of any enforcement of such lien.
"Person" shall mean an individual, corporation, partnership,
joint venture, trust or unincorporated organization or a federal,
state, city, municipal or foreign government or an agency or
political subdivision thereof.
"Personnel Records" shall mean all records relating to any and
all of Sellers' Branch Office employees with respect to employment
applications, attendance, date of hire, job description, compensation,
training, vital statistics, accrued vacation, sick leave and personal
9
leave, performance evaluations, references,
health and medical records related to the employment history and
job performance of each such employee.
"Pipeline Loan File" shall mean the file containing the loan
origination documentation with respect to a Pipeline Mortgage Loan,
including, without limitation, each of the documents listed in
Exhibit A hereto.
"Pipeline Mortgage Loans" shall mean all written applications
from prospective borrowers, brokers or correspondents for first
lien, residential mortgage loans which have been accepted for
processing or underwriting by any Seller as of the Closing Date
which have been handled and underwritten following the same
programs and procedures as currently in effect, and which have not
yet been closed and funded.
"Production Support Unit" shall mean Sellers' centralized loan
production support unit (including such functions as data
processing, accounting and cash management) located in Sellers'
headquarters at 0000 Xxxxx Xxxx, Xxxxx Xxxxx, Xxxxxxxxx.
"Purchase Price" shall have the meaning given in Section
2.2(a).
"Purchased Leasehold Improvements" shall mean all leasehold
improvements owned by any Seller and located in any of the Branch
Offices as of the date hereof or at any time after the date hereof.
"Purchased Mortgage Loans" shall mean those loans originated
by Sellers and, pursuant to the provisions of Section 7.12(f), sold
to Purchaser on or prior to the Closing Date.
"Purchaser" shall mean Aegis Mortgage Corporation, its
successors and assigns.
"Related Party" shall mean any of, and "Related Parties" shall
mean all of, PMC, AI, AFII, GMI, UMI, SMAI, UCFI and GEII, as
debtors and debtors-in-possession.
"Section 203(k) Loans" shall mean mortgage loans insured under
Section 203(k) of the National Housing Act, as amended, 12 U.S.C.A.
Section 1709(k) (1989 & Supp. 1999).
"Seller" shall mean each of, and "Sellers" shall mean all of,
UCFC, UCLC and UCLG, as debtors and debtors-in-possession.
"Shared Employees" shall have the meaning given in Section
7.16 hereof.
"Supplies" shall mean all consumable supplies owned by any
Seller and used primarily in connection with the Business.
10
"Tradename" shall mean the name "UC Lending(R)".
"Transferred Employee" shall have the meaning given in Section 8.1(a).
"UCR" shall mean United Companies Realty L.L.C.
"UR" shall mean United Realty XII L.L.C.
ARTICLE II
PURCHASE AND SALE
2.1 Assets to be Sold. Subject to the terms and conditions
of this Agreement, each Seller agrees to sell, transfer, assign and
deliver to Purchaser, and Purchaser agrees to purchase and assume
from each Seller, all of such Seller's right, title and interest in
and to the Assets.
2.2 Purchase Price; Deposit.
(a) The purchase price ("Purchase Price") for the sale
of the Assets made hereunder shall be the sum of: (i) Three
Million Dollars ($3,000,000); plus (ii) the Interim Period Expense.
(b) The Purchase Price (less the Deposit plus earnings
thereon) shall be payable in immediately available funds at the
time of the Closing.
(c) At the time of the Closing, Sellers shall transfer,
assign and convey to Purchaser the Assets.
(d) Purchaser has deposited with the Escrow Agent Five
Million Dollars ($5,000,000.00) as a deposit (the "Deposit").
Subject to the satisfaction (or waiver) of the conditions set forth
in Article 5, at the time of the Closing, Purchaser and Sellers
shall take whatever action may be required under the Escrow
Agreement to direct the Escrow Agent to release to Sellers the
Deposit plus all earnings thereon. The Deposit plus all earnings
thereon shall be applied at the time of Closing against the
Purchase Price.
(e) In the event of a default in the payment of
(i) the Purchase Price or (ii) the liquidated damages to be paid
pursuant to Section 9.3 hereof, Cerberus absolutely, irrevocably and
unconditionally agrees to pay in full the Purchase Price, or the amount
due to be paid pursuant to Section 9.3 hereof, as the case may be. In
addition, Cerberus agrees that it will subordinate its claims as a
holder of $21,700,000 of subordinated debt of Purchaser
11
(which will have been funded prior to the Closing) to up to
$9,500,000 of claims, if any, of third parties under the Assumed
Leases, Assumed Contracts, and Assumed Furniture and Equipment
Leases, as each exists as of the Closing Date, in order to provide
adequate assurances of future performance of Purchaser to such
third parties in connection with Sellers' motion seeking Bankruptcy
Court approval of the assumption by Sellers and the assignment to
Purchaser of such contracts.
2.3 Assumption of Liabilities. On the Closing Date,
Purchaser shall assume the Assumed Liabilities. Other than the
Assumed Liabilities, neither Purchaser, Cerberus nor any of its or
their Affiliates will assume or otherwise be responsible for in any
way whatsoever any other duties, obligations and liabilities of, or
claims against, any Seller (or its employees, agents, officers,
directors, trustees, representatives, past or present shareholders,
Affiliates, or any predecessor entities), including, without
limitation, any obligations to cure existing defaults or any
liabilities in tort or contract and, in any event, except as is
expressly set forth in Section 2.2(e), neither Cerberus nor any of
its Affiliates is assuming, nor will any of them otherwise be
responsible for in any way whatsoever, any other duties,
obligations and liabilities of, or claims against, any Seller or
Purchaser (or any of their respective employees, agents, officers,
directors, trustees, representatives, past or present shareholders,
Affiliates, or any predecessor entities), including, without
limitation, any obligations to cure existing defaults.
2.4 Prorations. All payments under or pursuant to the
Assumed Leases, the Assumed Furniture and Equipment Leases and the
Assumed Contracts relating to periods prior to the Closing Date,
real and personal property taxes related to the Assets relating to
periods prior to the Closing Date, whether or not payable after the
Closing Date, shall be prorated between Purchaser and Sellers, as
the case may be, on the basis of a 365-day year (except with regard
to taxes, which shall be prorated on the basis of the applicable
tax year) and the number of days elapsed as of the Closing Date.
With respect to any products sold (or services rendered) pursuant
to the Assumed Contracts and Assumed Furniture and Equipment
Leases, Sellers and Purchaser shall use reasonable, commercial
efforts to arrange for vendors to xxxx Xxxxxxx directly through the
Closing Date and Purchaser directly after the Closing Date.
Notwithstanding anything to the contrary contained in this
Agreement or any other Operative Document, amounts due for Supplies
received by or services rendered by third party vendors to any Seller
prior to the Closing Date shall be for the account of and paid by Sellers.
Sellers shall, on or prior to the Closing Date, cure any and all defaults
under the Assumed Contracts, the Assumed Leases and the Assumed Furniture
and Equipment Leases, which are required to be cured under the Bankruptcy
Code, so that all of the Assumed Contracts, the Assumed Leases and the
Assumed Furniture and Equipment Leases may be assumed by Sellers and
assigned to Purchaser in accordance with Section 365 of the Bankruptcy
Code, and so that Purchaser will have no obligations for defaults existing
prior to the assignment. In the event the Closing occurs after June 1, 1999,
Purchaser shall reimburse Sellers for out-of-pocket
12
expenses incurred by Sellers after May 31, 1999, to the extent that such
expenses are incurred in a manner that is consistent with the Approved Budget.
2.5 Closing. Subject to the satisfaction of the closing
conditions set forth in Articles V and VI hereof, the purchase and
sale provided for in this Agreement (herein called the "Closing")
shall take place on a Business Day on or after June 1, 1999, but no
later than June 4, 1999, at Sellers' offices, or at such other
place as shall be fixed by agreement among the Parties hereto. The
effective date of the Closing shall be May 31, 1999, and is herein
referred to as the "Closing Date".
2.6 Bankruptcy Court Approvals. The obligations of Sellers
and Purchaser under this Agreement shall be subject to the entry by
the Bankruptcy Court, after a hearing on such notice as shall be
required by the Federal Rules of Bankruptcy Procedure, the local
Rules of the Bankruptcy Court and the Bankruptcy Court, of an order
entered on or before April 28, 1999, approving the bidding
procedures, in form and substance reasonably satisfactory to
Purchaser (the "Bidding Procedures Order") and an order entered on
or before May 20, 1999, approving, in form and substance reasonably
satisfactory to Purchaser, (i) the sale of the Assets to Purchaser
under this Agreement and (ii) the assumption by Sellers, and the
contemporaneous assignment to and assumption by Purchaser, of the
Assumed Leases, the Assumed Contracts, and the Assumed Furniture
and Equipment Leases (the "Bankruptcy Court Order"). Prior to the
execution and delivery of this Agreement, Sellers moved in the
Bankruptcy Court for the entry of the Bidding Procedures Order,
upon motion and notice papers reasonably acceptable to Purchaser
and, thereafter, Sellers shall use reasonable, commercial efforts
to obtain the entry of the Bidding Procedures Order. As soon as
practical after moving for entry of the Bidding Procedures Order,
Sellers shall move in the Bankruptcy Court for entry of the
Bankruptcy Court Order, upon motion and notice papers reasonably
acceptable to Purchaser and, thereafter, Sellers shall use
reasonable, commercial efforts to obtain the entry of the
Bankruptcy Court Order.
(a) Bidding Procedures Order. The Bidding Procedures
Order shall provide, among other things, (a) that the terms of this
Agreement providing for a Breakup Fee are approved, (b) that the terms of
this Agreement specifying the manner of operation of the Business after the
execution and delivery hereof, including, without limitation, during the
Interim Period, are approved and, specifically, the advertising expenditures
both prior to and during the Interim Period as specified in Section 7.1(b)(viii)
and in the Approved Budget are approved, and (c) the procedures to be followed
in connection with the submission and acceptance of bids for the Assets by any
Person (other than Purchaser), including, without limitation, the following:
(i) all bids shall be due no later than May 10, 1999; (ii) all bids shall be
for all of the Assets and Assumed Liabilities and, subject to (iii) below,
shall containterms and conditions (including a deposit and, if applicable, a
financial guaranty of any financier) substantially equivalent to those
contained in this Agreement; and (iii) no bid shall be
considered by Sellers unless, among other things, it provides for
a Purchase Price that is in excess of the Purchase Price by at
13
least $900,000 and it is not conditioned upon obtaining of
financing or the performance or outcome of due diligence.
(b) Bankruptcy Court Order. The Bankruptcy Court
Order shall provide, among other things, (a) that the sale and transfer
of the Assets to Purchaser pursuant to the Operative Documents (i)
is or will be a legal, valid and effective transfer of the Assets;
and (ii) vests or will vest Purchaser with good and marketable
title to the Assets owned by Purchaser and valid, subsisting and
enforceable leasehold interests in all of the Assumed Leases and
Assumed Furniture and Equipment Leases, and other contract rights
in all of the Assumed Contracts, in each case, free and clear of
all Liens (other than Liens created by Purchaser); (b) that the
assignment to and assumption by Purchaser pursuant to the Operative
Documents of the Assumed Contracts, the Assumed Furniture and
Equipment Leases, and the Assumed Leases shall be approved by the
Bankruptcy Court pursuant to Section 365 of the Bankruptcy Code;
(c) that the Assumed Contracts, the Assumed Furniture and Equipment
Leases and the Assumed Leases shall be transferred to, and remain
in full force and effect for the benefit of, Purchaser,
notwithstanding any provision therein (including, without
limitation, those described in Sections 365(b)(2) and (f) of the
Bankruptcy Code) that prohibits such assignment or transfer; (d)
that Purchaser is or will be a good faith purchaser within the
meaning of Section 363(m) of the Bankruptcy Code, and any reversal
or modification on appeal of the Bankruptcy Court Order shall not
affect the validity of the sale of the Assets as authorized
pursuant thereto; and (e) that the terms of this Agreement and the
transactions contemplated by this Agreement and the Operative
Documents, to the extent not approved in the Bidding Procedures
Order, are approved.
(c) Third Party Objections. In the event a party
(other than any Seller, any Related Party, UR or UCR) to any of the
Assumed Leases, Assumed Contracts, or Assumed Furniture and
Equipment Leases objects to the assignment to and assumption by
Purchaser thereof and, as a result, the assignment and assumption
of such contract to Purchaser is not effected at the time of the
Closing, then Sellers shall, for the benefit and at the expense of
Purchaser (other than with respect to any cost or expense related
to the cure of any pre-petition monetary defaults, which shall be
paid by Sellers), maintain such contract and the related Branch
Office until the earliest of: (i) such time as either such
contract is assigned to and assumed by Purchaser or a final non-
appealable order is entered by the Bankruptcy Court to the effect
that such contracts cannot be assumed by Sellers and assigned to
and assumed by Purchaser; (ii) the date on which such contract
terminates by its terms; (iii) the date that is one (1) year after
the Closing Date; or (iv) the date specified by Purchaser by notice
to Sellers. Sellers shall use commercially reasonable efforts to
effectuate the assignment to and the assumption by Purchaser of all
of the Assumed Leases, Assumed Furniture and Equipment Leases and
Assumed Contracts.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser to enter into this Agreement and
to consummate the sale of the Assets hereunder, each Seller
represents and warrants to Purchaser as follows (it being
acknowledged that each such representation and warranty is made to
Purchaser as of both the date of execution hereof and the Closing):
3.1 Due Incorporation and Good Standing; Qualifications.
Each Seller is a corporation duly organized, validly existing and
in good standing under the laws of its state of incorporation.
Each Seller is duly qualified, licensed and in good standing as a
corporation, and is properly authorized and has all necessary
permits to conduct the Business in the jurisdiction in which the
Production Support Unit is located and in all of the jurisdictions
in which the Branch Offices are located, except where the absence
of such qualification would not reasonably be expected to have a
Material Adverse Effect. Neither the nature of the Business nor
the location of the Assets requires any Seller to be qualified,
licensed, in good standing or otherwise authorized in any
jurisdiction other than the jurisdictions in which the Production
Support Unit or Branch Offices are located. Each Seller has in
full force and effect (without notice of possible suspension,
revocation or impairment) all requisite Permits that are required
in connection with the Business and the Assets, except where the
lack thereof would not reasonably be expected to have a Material
Adverse Effect.
3.2 Authority and Capacity. Subject to the approval of the
Bankruptcy Court, each Seller has all requisite corporate power,
authority and capacity to enter into the Operative Documents and to
perform its obligations thereunder. Each Seller has duly and
validly authorized the execution and delivery of the Operative
Documents and the consummation of the transactions contemplated
thereby by all necessary corporate action. Subject to the approval
of the Bankruptcy Court, each of the Operative Documents will, upon
its execution by Sellers and Purchaser, constitute a valid and
legally binding agreement of each Seller enforceable in accordance
with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights
generally and general equitable principles.
3.3 Effective Agreement. Subject to the approval
of the Bankruptcy Court, the execution, delivery and performance
of the Operative Documents by each Seller, its compliance
with the terms thereof, and consummation of the transactions
contemplated thereby, will not (a) violate any judgment, decree,
injunction or order of any court or any governmental entity
applicable to such Seller, (b) conflict with any of the terms
of (i) such Seller's articles of incorporation, bylaws or other
constituent documents, or (ii) any other governing instrument
relating to the conduct of such Seller's business or the ownership
of its properties, or (c) violate, conflict with, constitute a
default under, or result in a breach of, any other agreement to which
such Seller is or was a party or by which it is or was bound, which
15
such violation, conflict or default would not reasonably be expected
to have a Material Adverse Effect.
3.4 Consents and Approvals of Governmental Authorities.
Other than the entry of the Bidding Procedures Order and the
Bankruptcy Court Order, and except for such approvals as have been
or will, prior to the Closing, be obtained by Sellers no consent,
approval, authorization or waiver of, or declaration, filing or
registration with, or notification to, any governmental or
regulatory authority is required in connection with the execution,
delivery and performance by Sellers of the Operative Documents and
the consummation by Sellers of the transactions contemplated
thereby.
3.5 Contracts. The Assumed Contracts listed on Schedule 1.3
attached hereto constitute all of the Contracts used primarily by
Sellers in connection with the Assets and the Business, other than
those contracts that (i) are terminable by any Seller without
penalty upon notice of thirty (30) days or fewer; (ii) involve the
receipt or payment by any Seller of less than Ten Thousand Dollars
($10,000) per year; or (iii) are Contracts that either Purchaser
has advised Sellers will not be assumed by Purchaser or that
Sellers and Purchaser have agreed will not be assigned to
Purchaser. At the time of the Closing, Sellers shall have cured
any and all defaults with respect to the Assumed Leases, the
Assumed Contracts and the Assumed Furniture and Equipment Leases as
required by Section 365(b) of the Bankruptcy Code and, as of the
time of the Closing, there will not be, under any Assumed Contract,
or any Assumed Lease, or any Assumed Furniture and Equipment Lease,
any existing default, event of default or other event which, with
or without due notice or lapse of time or both, would constitute a
default or event of default on the part of any Seller, except such
defaults, events of default and other events as to which requisite
waivers or consents have been obtained or which would not
reasonably be expected, individually or in the aggregate, to have
a Material Adverse Effect.
3.6 Assets. Sellers collectively own or possess adequate
licenses or other rights to use the Tradename, the Computer
Software and all Intangible Property Rights, subject to, in the
case of the Computer Software and Intangible Property Rights, the
terms and conditions of license contracts or other agreements under
which such rights exist, and each Seller has good title to all of
the other Assets owned by it and has valid, subsisting and
enforceable leasehold interests in all of the Assets leased by it,
except where the lack thereof would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect. All of the Assets owned or leased by any Seller are owned
or leased, as applicable, free and clear of all Liens, except
Permitted Liens, other than those that will be released upon the
sale of the Assets to Purchaser and the entry of the Bankruptcy
Court Order. The Tradename, the Computer Software and the
Intangible Property Rights are freely transferable to Purchaser
and, upon transfer thereof to Purchaser pursuant to Section 2.1
hereof, will be free and clear of all Liens (other than Liens
created by Purchaser); the use of the Tradename, the Computer
Software and the Intangible Property Rights does not and will not
infringe upon or conflict with the rights of others, except where
such infringement or conflict would not be expected to
16
have a Material Adverse Effect. Upon entry of the Bankruptcy Court
Order and transfer of the other Assets to Purchaser pursuant to Section
2.1 hereof, Purchaser will have good and marketable title to all of
the Assets owned by any Seller prior to the Closing Date and
enforceable leasehold interests in all of the Assets leased by any
Seller prior to the Closing Date, free and clear of all Liens
(other than Liens created by Purchaser), except where the lack
thereof would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each Seller enjoys,
and is entitled to, quiet possession of all tangible Assets owned
or leased b it, except where the lack thereof would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
3.7 Compliance with Regulations. Each Seller has complied
and is complying with the Applicable Requirements, except where the
lack thereof would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
3.8 Pipeline and Purchased Mortgage Loans. Except as set
forth on Schedule 3.8 attached hereto (which such exceptions are
furnished for information only and not as a defense to the
liability of any Seller), Sellers are the sole owners and holders
of all right, title and interest in and to the Pipeline Mortgage
Loans and are or will be the sole owners and holders of all right,
title and interest in and to the Purchased Mortgage Loans, except
where the absence of such ownership and possession would not
reasonably be expected to have a Material Adverse Effect. The
sale, transfer and assignment by Sellers to Purchaser of the
Pipeline Mortgage Loans on the Closing Date and the Purchased
Mortgage Loans on such dates as they are transferred to Purchaser
pursuant to Section 7.12 will be valid and enforceable in
accordance with their terms and will effectively vest in Purchaser
good title to the Pipeline Mortgage Loans and the Purchased
Mortgage Loans, in each case free and clear of any and all Liens.
No Seller has previously assigned, transferred or encumbered the
Pipeline Mortgage Loans or the Purchased Mortgage Loans.
3.9 United Credit Card, Inc. Neither United Credit Card,
Inc., which is a debtor and debtor-in-possession and an Affiliate
of Sellers, nor any of its creditors (in their capacity as such)
has any interest in the Assets or in, to or under any of the
Assumed Contracts, Assumed Leases, Assumed Furniture and Equipment
Leases or the Purchased Mortgage Loans.
3.10 AS IS. EXCEPT AS IS EXPRESSLY SET FORTH IN THIS
AGREEMENT (INCLUDING, WITHOUT LIMITATION, SECTION 3.11), AS A
MATERIAL PART OF THE CONSIDERATION FOR THIS AGREEMENT, THE PARTIES
HERETO AGREE THAT AT CLOSING PURCHASER IS PURCHASING AND TAKING THE
ASSETS "AS IS" WITH ANY AND ALL LATENT AND PATENT DEFECTS AND THAT
UPON CLOSING THERE IS NO WARRANTY BY THE SELLERS AS TO THE CONDITION
OF THE ASSETS OR THAT THE ASSETS ARE FIT FOR A PARTICULAR PURPOSE.
PURCHASER ACKNOWLEDGES THAT UPON CLOSING IT IS NOT RELYING UPON
17
ANY REPRESENTATION, STATEMENT OR OTHER ASSERTION WITH
RESPECT TO THE CONDITION OF THE ASSETS, BUT IS RELYING UPON
PURCHASER'S DUE DILIGENCE AND EXAMINATION OF THE ASSETS. PURCHASER
TAKES THE ASSETS UNDER THE UNDERSTANDING THAT THERE ARE NO
EXPRESSED OR IMPLIED WARRANTIES, OTHER THAN AS SET FORTH HEREIN.
3.11 Survival. The representations and warranties in Sections
3.5 and 3.9 shall survive the Closing for a period of one (1) year.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Sellers to enter into this Agreement, Purchaser
and Cerberus represent and warrant (each with respect to itself and not with
respect to each other) to Sellers as follows (it being acknowledged that each
such representation and warranty is made to Sellers as of both the date of
execution hereof and the Closing):
4.1 Due Organization and Good Standing. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Oklahoma. Purchaser is or shall be approved by each of the
respective Insurers as required to conduct the Business and purchase the
Assets. Cerberus is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware.
4.2 Authority and Capacity. Subject to the provisions of
Section 7.7, Purchaser has, or by the Closing Date will have, all
requisite power, authority and capacity to enter into the
Operative Documents and to perform the obligations required of it
thereunder; the execution and delivery of the Operative
Documents, and the consummation of the transactions contemplated
thereby, each have been duly and validly authorized by all
necessary corporate action; and each of the Operative Documents
will, upon its execution by the Parties, constitute a valid and
legally binding agreement of Purchaser enforceable in accordance
with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights
generally and general equitable principles. Subject to the
provisions of Section 7.7, Cerberus has, or by the Closing Date
will have, all requisite power, authority and capacity to enter
into the Operative Documents and to perform the obligations
required of it thereunder; the execution and delivery of the
Operative Documents, and the consummation of the transactions
contemplated thereby, each have been duly and validly authorized
by all necessary partnership action; and each of the Operative
Documents will, upon its execution by the Parties, constitute a
valid and legally binding agreement of Cerberus enforceable in
accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
18
moratorium or similar laws affecting the enforcement of
creditors' rights generally and general equitable principles.
4.3 Effective Agreement. The execution, delivery and
performance of the Operative Documents by Purchaser, its
compliance with the terms thereof and the consummation of the
transactions contemplated thereby, will not (a) violate any
judgment, decree, injunction or order of any court or any
governmental entity applicable to Purchaser, (b) conflict with
any of the terms of (i) Purchaser's articles of incorporation,
bylaws or other constituent documents, or (ii) any other
governing instrument relating to the conduct of Purchaser's
business or the ownership of its properties, or (c) violate,
conflict with, constitute a default under, or result in a breach
of, any other agreement to which Purchaser is or was a party or
by which it is or was bound. The execution, delivery and
performance of the Operative Documents by Cerberus, its
compliance with the terms thereof and the consummation of the
transactions contemplated thereby, will not (a) violate any
judgment, decree, injunction or order of any court or any
governmental entity applicable to Cerberus, (b) conflict with any
of the terms of (i) Cerberus' partnership agreement or other
constituent documents, or (ii) any other governing instrument
relating to the conduct of Cerberus' business or the ownership of
its properties, or (c) violate, conflict with, constitute a
default under, or result in a breach of, any other agreement to
which Cerberus is or was a party or by which it is or was bound.
4.4 Consents and Approvals of Governmental Authorities.
Subject to the provisions of Section 7.7 and except for such
approvals as have been or will, prior to the Closing, be obtained
by Purchaser, no consent, approval, authorization or waiver of,
or declaration, filing or registration with, or notification to,
any governmental or regulatory authority is required in
connection with the execution, delivery and performance by
Purchaser of the Operative Documents and the consummation by
Purchaser of the transactions contemplated thereby. Subject to
the provisions of Section 7.7 and except for such approvals as
have been or will, prior to the Closing, be obtained by Cerberus,
no consent, approval, authorization or waiver of, or declaration,
filing or registration with, or notification to, any governmental
or regulatory authority is required in connection with the
execution, delivery and performance by Cerberus of the Operative
Documents and the consummation by Cerberus of the transactions
contemplated thereby.
ARTICLE V
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER
The obligation of Purchaser to effect the Closing hereunder
is subject to the satisfaction (or waiver by Purchaser) of all of
the following conditions on or prior to the Closing:
19
5.1 Representations and Warranties True. The
representations and warranties of each Seller contained herein,
in the Schedules to this Agreement, and in the other Operative
Documents, shall be true and accurate in all material respects as
of the date when made and shall be deemed to be made again at and
as of the Closing and (except for changes specifically
contemplated by this Agreement) shall then be true and accurate
in all material respects.
5.2 Performance of Covenants. Each Seller shall have
performed and complied in all material respects with each and
every covenant, agreement and condition required by this
Agreement to be performed or complied with by it prior to or on
the Closing.
5.3 Court Approval. The Bankruptcy Court Order shall have
been entered, in form and substance reasonably satisfactory to
Purchaser, and neither the Bidding Procedures Order nor the
Bankruptcy Court Order shall be subject to any stay pending
appeal or shall have been withdrawn or amended, and both shall
remain in full force and effect, and Purchaser shall have
received copies thereof.
5.4 Instruments of Transfer. Sellers shall have delivered
to Purchaser, all in such form as Purchaser may reasonably
specify:
(a) Deeds, bills of sale, assignments of leases,
Contracts and Permits, and such other good and sufficient
instruments of assignment, transfer and conveyance as shall be
necessary to vest in Purchaser all of Sellers' right, title and
interest in and to the Assets, including, without limitation, a
xxxx of sale, assignment and assumption agreement and a lease
assignment, assumption and consent agreement, and such limited
powers of attorney as may be necessary to effect transfers and
substitutions in relation to the Pipeline Mortgage Loans;
(b) Physical possession of the tangible Assets, or the
means to achieve such possession immediately; and
(c) The transfer of all escrow or custodial accounts
and the Application Fees relating to the Pipeline Mortgage Loans.
5.5 Execution by Sellers. Sellers shall have executed and
delivered the Operative Documents not executed on the date
hereof.
5.6 Employees. At least sixty percent (60%) of the branch
managers and sixty percent (60%) of the loan officers listed on
Schedule 5.6 hereto shall have agreed to employment by Purchaser;
provided, however, that this condition shall be deemed waived by
Purchaser if Purchaser does not deliver written notice of
termination of this Agreement on or before April 30, 1999 on
account of failure of this condition.
20
5.7 No Injunctions or Restraints. 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 by the Operative Documents shall be in effect.
5.8 Assumed Leases, etc. At the time of the Closing, at
least eighty percent (80%) of the Assumed Leases, eighty percent
(80%) of the Assumed Contracts, and eighty percent (80%) of the
Assumed Furniture and Equipment Leases shall be assigned to and
assumed by Purchaser.
5.9 Consents and Approvals. Subject to the provisions of
Section 7.7, all Permits, consents, authorizations, approvals and
waiting periods required or imposed by law or any governmental
agency or authority as a condition to the consummation of the
transactions contemplated by this Agreement shall have been
obtained or satisfied, and any such Permits, consents,
authorizations and approvals shall be in form and in substance
reasonably satisfactory to Purchaser and its counsel.
5.10 Corporate Proceedings. Purchaser shall have received
copies of resolutions duly adopted by the board of directors of
each of UR and UCR and certified by the Secretary or other
officer of UR or UCR, as applicable, in each case authorizing all
actions to be taken by such party in connection with the
transactions contemplated by the Operative Documents in
accordance with applicable law and in accordance with the
articles of incorporation and bylaws of such party so as to give
such transactions full force and effect.
ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLERS
The obligation of Sellers to effect the Closing hereunder is
subject to the satisfaction (or waiver by Sellers) of all of the
following conditions on or prior to the Closing.
6.1 Representations and Warranties True. The
representations and warranties of Purchaser contained herein, in
the Schedules to this Agreement, and in the other Operative
Documents shall be true and accurate in all material respects as
of the date when made and shall be deemed to be made again at and
as of the Closing and (except for changes specifically
contemplated by this Agreement) shall then be true and accurate
in all material respects.
6.2 Performance of Covenants. Purchaser shall have
performed and complied in all material respects with each and
every covenant, agreement and condition required by this
Agreement to be performed or complied with by it prior to or on
the Closing.
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6.3 Corporate Proceedings. Sellers shall have received
copies of (i) resolutions duly adopted by the board of directors
of Purchaser and certified by the Secretary or other officer of
Purchaser, and (ii) resolutions of the general partner of
Cerberus, in each case, authorizing all actions to be taken by
such party in connection with the transactions contemplated by
the Operative Documents in accordance with applicable law and in
accordance with the articles of incorporation and bylaws of
Purchaser or the agreement of limited partnership of Cerberus, as
the case may be, so as to give such transactions full force and
effect.
6.4 No Injunctions or Restraints. 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 by the Operative Documents shall be in effect.
6.5 Consents and Approvals. All Permits, consents,
authorizations, approvals and waiting periods required or imposed
by law or any governmental agency or authority as a condition to
the consummation of the transactions contemplated by this
Agreement shall have been obtained or satisfied, and any such
Permits, consents, authorizations and approvals shall be in form
and substance reasonably satisfactory to Sellers and its counsel.
6.6 Instruments of Assumption. Purchaser shall have
delivered to Sellers, all in such form as Sellers may reasonably
specify, instruments of assumption under which Purchaser shall
assume the Assumed Liabilities, including, without limitation, a
xxxx of sale, assignment and assumption agreement and a lease
assignment, assumption and consent agreement.
6.7 Court Order. The Bankruptcy Court Order shall have
been entered, and shall not have been withdrawn or amended.
ARTICLE VII
CERTAIN GENERAL COVENANTS
7.1 Conduct of Business.
(a) No Seller will, nor will it permit any Affiliate
to, take any action (except for any action specifically
contemplated by this Agreement) that would cause the conditions
set forth in Section 5.1 hereof not to be satisfied. Purchaser
agrees that it will not, and will not permit any of its
Affiliates to, take any action (except any action specifically
contemplated by this Agreement) that would cause the conditions
set forth in Section 6.1 hereof not to be satisfied.
22
(b) Each Seller agrees that from the date hereof to
the Closing, it will cause the Business to be conducted only in
the ordinary course and in substantially the same manner as
heretofore conducted since the bankruptcy petition date as a
debtor and a Debtor-in-Possession, including, without limitation,
the maintenance of Sellers' loan production operation at the
Branch Offices and pursuant to the Approved Budget, and each
Seller shall: (i) use its reasonable, commercial efforts to
maintain its employee work force (including, without limitation,
its loan production employees) at its present level at the Branch
Offices and, in connection with employees of the Business, shall
not grant any executive salary adjustment or bonus, except for
stay bonuses granted in the ordinary course of business and as
approved by the Bankruptcy Court (other than pursuant to
compensation programs existing on the date hereof) and shall make
no adjustments in wages or hours of work, nor adopt any new
pension, benefit or severance plan, except in the ordinary course
of business (and consistent with past practices); (ii) pay,
perform and discharge all post-petition Liabilities relating to
the Business and/or the Assets (including, without limitation, to
vendors, employees, landlords and service providers) and maintain
an inventory of Supplies at levels consistent with past
practices; (iii) not enter into material agreements, commitments
or contracts relating to the Business and/or the Assets, except
in the ordinary course of business and pursuant to the Approved
Budget; (iv) not sell, transfer, assign, mortgage or encumber any
Assets, except in the ordinary course of business; (v) not
create, incur or assume any debt relating to the Business and/or
the Assets, other than in the ordinary course of business; (vi)
refrain from taking any action to terminate, or allow to be
terminated, existing Permits, governmental licenses,
registrations, consents and approvals relating to the Business
and/or the Assets, except where such action would not,
individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect; (vii) not enter into forward purchase
contracts relating to the Business at the Branch Offices and/or
the Assets; (viii) make advertising expenditures of at least
$710,000 by April 16, 1999, and an additional amount of
approximately $650,000 in increments when due as set forth on
Schedule 7.1 hereto on or prior to April 30, 1999; and (ix)
maintain a warehouse or other line of credit or other source of
funding sufficient to fund (in accordance with Section 7.12(f))
loans aggregating at least $40,000,000 during the Interim Period
(and will not take any action which would adversely affect its
ability to fund such loans).
(c) Each Seller shall perform all post-petition
obligations of such Seller under the Assumed Leases, under the
Assumed Contracts and under the Assumed Furniture and Equipment
Leases in all material respects and such Assumed Leases, Assumed
Contracts and Assumed Furniture and Equipment Leases shall not be
amended, altered or modified in any material respect.
7.2 Obtaining Consents and Approvals. Sellers shall in
good faith (but, in any event, in compliance with their fiduciary
obligations as Debtors-in-Possession) seek the entry of the
Bankruptcy Court Order, the Bidding Procedures Order and,
subject to such Bidding Procedures Order, all such other consents,
approvals, authorizations and waivers, to obtain such Permits, to make
such filings, declarations and registrations and to give such notices as
23
are reasonably required to satisfy the conditions
contained in Sections 5.3 and 5.10 hereof; provided, however,
that Sellers shall not be required to make any payments (other
than payments required pursuant to the penultimate sentence in
Section 2.4) to any third party to obtain such consents,
approvals authorizations or waivers. Purchaser shall cooperate
with Sellers with respect to obtaining the Bankruptcy Court Order
(in accordance with Section 2.6) and provide such assistance as
may be reasonably necessary in connection with the foregoing.
7.3 Good Faith Efforts.
(a) Subject to the Bidding Procedures Order and the
provisions of Section 7.2 hereof, each of the Parties hereto
shall in good faith employ all commercially reasonable efforts to
cause each of the conditions to the consummation of the
transactions contemplated hereby applicable to it to be fulfilled
as soon as practicable after the date hereof; provided, however,
that Sellers shall not be required to make any payments (other
than payments required pursuant to the penultimate sentence in
Section 2.4) to any third party to obtain such consents,
approvals authorizations or waivers described in Section 7.2
hereof.
(b) Subject to the Bidding Procedures Order, each
Seller shall use commercially reasonable efforts to effect the
transfer and assignment of the Pipeline Mortgage Loans and the
Purchased Mortgage Loans to Purchaser in accordance with
Applicable Requirements.
(c) Sellers shall designate one employee to assist
Purchaser, from time to time upon Purchaser's reasonable request,
in obtaining any and all Permits, consents and approvals required
in connection with the transactions contemplated herein, and
effecting the transfer and assignment of the Pipeline Mortgage
Loans and the Purchased Mortgage Loans to Purchaser.
7.4 Access and Information. Each Seller shall permit
Purchaser and its representatives, after the date of execution of
this Agreement and until the Closing, to have access upon
reasonable notice, during regular business hours, to the Assets,
Business, Sellers' employees and to the Personnel Records of
employees (with the consent of such employees) involved in the
Business and shall furnish, or cause to be furnished, to
Purchaser such financial and operating data and other information
with respect to the Business and the Assets as Purchaser shall,
from time to time, reasonably request. Purchaser shall be
entitled to conduct interviews and tests with, and take and
accept applications from, prospective employees in accordance
with Section 8.1 hereof. No investigation by Purchaser
heretofore or hereafter made shall be deemed to constitute a
waiver of any breach of the representations and warranties
contained in the Operative Documents.
7.5 Exclusivity. While this Agreement is in effect, except
as may be required for Sellers to comply with their fiduciary
obligations as Debtors-in-Possession and, in any case, in
24
accordance with the Bidding Procedures Order, neither any Seller,
Purchaser nor any Affiliate or representative of either of them,
shall, directly or indirectly, encourage, initiate or engage in
discussions or negotiations with, or provide any information to,
any Person or group, other than the other Party or as required in
connection with the transactions contemplated hereby, concerning
any proposal for an acquisition or other business combination
involving all or any part of the Business or the Assets or any
interest therein.
7.6 Preservation of Business. Subject to the Bidding
Procedures Order, from the date hereof through the Closing
neither any Seller nor any Affiliate or representative of any
Seller shall intentionally take any affirmative action which is
inconsistent with any Seller's obligations in Section 7.1(b).
7.7 Licensing. Sellers acknowledge that, before Purchaser
can operate certain of the Branch Offices, Purchaser must obtain
licenses to do so and those licenses must permit Purchaser to
conduct business under the name of "UC Lending ". Purchaser
shall apply for and diligently pursue obtaining those licenses
with the objective that it will obtain all such licenses prior to
the Closing. In the event Purchaser is unable to secure prior to
the Closing all such licenses, then, (a) with respect to each
Branch Office for which Purchaser requires further licenses to
operate, until such time as Purchaser secures such further
licenses, (i) Purchaser shall not hire any of Sellers' employees
in that Branch Office, (ii) to the extent legally permissible,
Purchaser shall operate, at its expense, each such Branch Office
under Sellers' licenses, and (iii) to the extent legally
permissible, loans produced by such Branch Offices shall be
closed in the name of Sellers and funded by and simultaneously
assigned to Purchaser, (b) in the event Sellers in good faith and
acting reasonably determine that Purchaser's loan origination
products offered or underwriting guidelines being used in a
Branch Office after the Closing under Sellers' licenses violate
applicable law, rules or regulations or otherwise present Sellers
with an undue or material risk of loss, then Sellers shall
provide Purchaser with notice that Sellers object (including
reasonable detail as to the reasons for Sellers' objections), and
Purchaser shall cease such activity (provided, however, that
Sellers shall not object to the continued use after Closing of
any loan origination product offered or underwriting guidelines
used during the Interim Period that does not otherwise violate
applicable law, rules or regulations), and (c) Purchaser shall
indemnify and hold harmless Sellers from and against any and all
claims asserted against and damages, obligations, liabilities and
expenses (including, without limitation, reasonable attorneys
fees and disbursements) incurred by Sellers in connection with
Purchaser's operation of such Branch Offices after the Closing.
With respect to each jurisdiction for which Purchaser does not,
at the time of the Closing, have all requisite licenses to
operate one or more Branch Offices within that jurisdiction,
Sellers shall use reasonable, commercial efforts to maintain
their licenses in such jurisdiction until the earlier to occur of
(i) such time as Purchaser obtains all required licenses in such
jurisdiction or, (ii) in the case of New York, the day that is
nine (9) months and, in the case of all other jurisdictions, the
day that is six (6) months after the Closing Date. In order to
facilitate Purchaser's ability to obtain the licenses as described
25
above, Sellers agree that Purchaser, prior to the
Closing, may make such applications or filings as are necessary
to use the name "UC Lending " in all jurisdictions in which there
exists any Branch Office, and Sellers will provide Purchaser with
a letter specifically authorizing the same, which Purchaser may
include as a part of its applications or other filings; provided,
however, that (x) Purchaser's use of such name under the
applications or other filings shall not be effective until June
1, 1999, (y) Purchaser shall not use such name until the Closing
occurs and, (z) in the event this Agreement is terminated
pursuant to Section 9.1 or 9.4, Purchaser shall withdraw its
applications or other filings to use such name.
7.8 Expenses; Liabilities; Breakup Fee.
(a) Sellers and Purchaser shall, except as otherwise
specifically provided herein, bear their respective expenses
incurred in connection with the preparation, execution and
performance of the Operative Documents and the transactions
contemplated thereby, including, without limitation, all fees and
expenses of agents, representatives, counsel and accountants.
(b) Each Seller represents and warrants to Purchaser
and Purchaser represents and warrants to each Seller, that
neither it nor any of its Affiliates nor any party acting on its
behalf has incurred any liability, either express or implied, to
any "broker" or "finder" or similar Person in connection with the
Operative Documents or any of the transactions contemplated
thereby.
(c) Sellers shall be responsible for paying any and
all transfer, conveyance, recording and similar fees or taxes
(including, without limitation sales, use and real and personal
property transfer taxes) arising from the consummation of the
transactions contemplated by the Operative Documents. Each
Seller and Purchaser shall be responsible for preparing and
filing any returns, reports or other filings required by law to
be filed by such Seller or by Purchaser, respectively.
(d) In light of the fact that this Agreement is
subject to the entry of the Bidding Procedures Order and the
Bankruptcy Court Order and, in the course of seeking such orders,
competing potential bidders may be notified of the proposed sale
to Purchaser, and that Purchaser has expended and will, prior to
the entry of the Bankruptcy Court Order and the Closing, continue
to expend substantial sums of money in connection with the
transactions contemplated hereby, except as otherwise set forth
in Section 9.3, in the event this Agreement is terminated in
accordance with Section 9.1(c) or (e), at the time of such
termination, and subject to the Bidding Procedures Order and (if
applicable) any further orders of the Bankruptcy Court, Sellers
shall pay Purchaser the Breakup Fee.
7.9 Post-Closing Information. From time to time after
the Closing, the Parties shall deliver to each other such
information and data as any Party may reasonably request,
26
including that required in order to enable such Party to
complete and file all Federal, state and local forms which
may be required to be filed by it and to complete all customary
tax and accounting procedures and otherwise to enable such
Party to satisfy its internal accounting, tax and other
requirements.
7.10 Notification of Loan Applicants. In accordance with
applicable Federal and State laws and regulations, including,
without limitation, the Applicable Requirements, Sellers shall,
at their expense, mail any required form of notification of the
transfer of the Pipeline Mortgage Loans and Purchased Mortgage
Loans to the loan applicants or borrowers, as applicable,
associated with the Pipeline Mortgage Loans and Purchased
Mortgage Loans and instruct such loan applicants and borrowers to
deliver all correspondence to Purchaser after the Closing Date.
7.11 Further Assurances. Each of the Parties shall execute
such documents and other papers and take such further actions in
good faith as may be reasonably required or desirable to carry
out the provisions of and the transactions contemplated by the
Operative Documents. Purchaser acknowledges and agrees that, due
to the previous integration of Sellers' loan origination and loan
servicing operations, Purchaser or Sellers may subsequently
determine that certain files and records relevant only to the
servicing of loans closed by Sellers prior to the Closing Date
(other than the Purchased Mortgage Loans) have been commingled
with the Files and Records included in the Assets. Purchaser
agrees that: (i) if, after the Closing, the person responsible
for administering this Agreement on behalf of Purchaser receives
actual notice to the effect that Purchaser possesses such files
and records, Purchaser shall forward such files and records to
Sellers or (ii) if Sellers notify Purchaser in writing that they
believe that Purchaser possesses such files and records relating
to particular loans or groups of loans closed by Sellers prior to
the Closing Date (other than the Purchased Mortgage Loans),
Purchaser shall make reasonable efforts to locate such files and
records and forward them to Sellers.
7.12 Interim Period Operations and Purchase of Loans.
Subject to the further provisions of this Section 7.12, and the
entry of the Bidding Procedures Order, the following provisions
shall apply during the Interim Period:
(a) The Business shall be operated by Sellers
substantially in accordance with the Approved Budget, with
Sellers making the expenditures substantially as budgeted therein
unless Purchaser shall have otherwise agreed in writing. In the
event any Seller determines that expenses as budgeted could be
reduced if Sellers were not to operate substantially in
accordance with the Approved Budget, and that doing so would not
have a material adverse effect on the Business, such Seller shall
notify Purchaser and provide Purchaser with an opportunity to
waive Sellers' compliance with the Approved Budget with respect
to such expenses, such waiver not to be unreasonably withheld or
delayed. Sellers shall, upon request of Purchaser, provide
Purchaser with evidence reasonably satisfactory to Purchaser of
Sellers' compliance with this provision.
27
(b) Sellers shall comply with the provisions of
Section 7.1, including, without limitation, the advertising
expenditure requirements of Section 7.1(b)(viii).
(c) Sellers shall follow Purchaser's reasonable
instructions in establishing and implementing (and will, upon
notice thereof, cause to be made such changes to the management
information services as are needed to implement such
instructions) the types of loans and loan programs to be offered,
the product mix and loan pricing, including, without limitation,
interest rates and points.
(d) Sellers shall follow Purchaser's reasonable
instructions in establishing and implementing (and will, upon
notice thereof, cause to be made such changes to the management
information services as are needed to implement such
instructions) underwriting guidelines, standards and procedures.
(e) Sellers shall allow Purchaser to communicate
freely with the employees listed on Schedule 5.6 hereto,
including, without limitation, providing such employees with (i)
notice of the execution and delivery of this Agreement, entry of
the Bidding Procedures Order and timing of the transaction
contemplated thereby, (ii) information and instructions regarding
products, pricing and underwriting, (iii) information regarding
production goals and expectations, and (iv) offers of employment
(contingent upon Closing and, to the extent applicable, Purchaser
obtaining all licenses necessary to operate the Branch Office in
which such employee works).
(f) Purchaser shall purchase from Sellers, on the
first Business Day after funding thereof, loans that are
originated by Sellers prior to and during the Interim Period for
which funds are disbursed by a closing agent during the Interim
Period. Purchaser shall be entitled to all principal, interest
and other amounts due with respect to such loans. Purchaser's
obligation to purchase loans pursuant to this Section 7.12(f) is
conditioned upon Purchaser's reasonable determination, with
respect to each loan, that such loan meets Sellers' program
requirements and underwriting guidelines (as specified to Sellers
pursuant to Section 7.12(c) and (d)). For each such loan
purchased, Purchaser shall pay to Sellers an amount equal to the
actual amount funded by Sellers to close the loan plus an amount
equal to Sellers' cost of funds with respect to the amount so
funded for the period beginning on (and including) Sellers'
funding date for the loan and ending on (but not including) the
date Purchaser pays Sellers for the loan. Sellers shall deliver
to Purchaser all loan documentation, including, without
limitation, any applicable mortgage guaranty certificate, the
note and an appropriate endorsement and recordable assignment.
(g) Notwithstanding the other provisions of this
Section 7.12, during the Interim Period, Purchaser shall permit
third parties to conduct due diligence with respect to
28
the Assets if, in accordance with the Bidding Procedures Order,
any Seller has authorized them to do so.
(h) At any time after the entry of the Bankruptcy
Court Order, Purchaser may direct Sellers to make advertising
expenditures that are in addition to expenditures specified in
the Approved Budget and Sellers shall make all such additional
expenditures as and when directed by Purchaser subject to
Purchaser providing Sellers with the funding necessary to do so.
7.13 Post-Closing Data Processing Services. Purchaser and
Sellers will work together in good faith and diligently to
partition and effect a transition to Purchaser at the time of the
Closing of the management information services employees (to the
extent hired by Purchaser) and the management information
services hardware and software relating to the Business.
Throughout the process of effectuating such partition and
transition, the management information systems will continue in
operation so as to allow the Business to operate uninterrupted.
Upon completion of such partition and transition, the management
information services hardware and software conveyed to Purchaser
will be operational so as to allow Purchaser to begin to conduct
business in the manner in which the Business was conducted
between the date hereof and the Closing (with such changes as
Purchaser may implement). In the event Purchaser and Sellers
determine that it is not practical to effect such a transition at
the time of the Closing, a date subsequent to the Closing, but no
later than July 31, 1999 (the "MIS Transition Date") shall be
established as the date on which such transition shall occur and,
after the Closing and until the MIS Transition Date, Sellers
shall provide Purchaser with all data processing services
required by Purchaser in connection with the operation of the
Business for a fee equal to Purchaser's estimate of the expense
it will incur (following the MIS Transition Date) of providing
such services itself. Purchaser shall reimburse Sellers for
one-half of the cost of segregating the management information
services equipment and facilities. Purchaser shall pay the costs
of moving employees hired by it into the space leased by it
pursuant to Section 7.14.
7.14 Space. After the Closing and until at least December
31, 1999 (with an option for Purchaser to extend the lease for up
to three (3) years thereafter), UR shall lease to Purchaser
sufficient contiguous space on the second floor in the building
known as Building 12 in order to accommodate the employees who
currently work at the Production Support Unit who Purchaser hires
in connection with the transactions contemplated hereby. The
premises will be in the condition they are in on the date hereof
subject to ordinary wear and tear. The rental rate shall be
$17.50 per square foot through December 31, 1999. Subject to the
right of UR to terminate the lease pursuant to the next sentence
hereof, Purchaser shall be entitled to exercise its option to
extend the lease beyond December 31, 1999, upon ninety (90) days
prior notice to UR, with the rental rate to be $17.50 per square
foot during the first year of such extension and $18 per square
foot in the following two years of such extension. UR will not
unreasonably withhold or delay consent to alterations in the
premises. Purchaser will pay its
29
percentage share of increases in real estate taxes (using the
first lease year as the base) and operating costs (using
calendar year 2000 as a base). UR may terminate the lease by
notice given on or prior to August 1, 1999, in which case the
lease shall terminate on December 31, 1999 (unless terminated
earlier by Purchaser in accordance therewith), provided, however,
that UR shall not exercise its right to terminate the lease
pursuant to this sentence unless it is necessary to effectuate
a sale of the building. The lease shall provide that Purchaser
shall be entitled to the use of the leasehold improvements in such
space during the term of the lease and that Purchaser shall have the
right to terminate the lease, without payment, premium or penalty,
upon thirty (30) days prior notice to Sellers. Except as otherwise
provided herein and as UR and Purchaser may agree, the lease shall
be on the lease form attached as Exhibit B hereto.
7.15 Other Transitional Services. Effective as of the time
of the Closing, Sellers shall establish and, for a period of 120
days after Closing, Sellers shall maintain for Purchaser, in
connection with the Business and the Assets being sold, a general
ledger with an electronic feed from the application processing
system, including, without limitation, as reasonably necessary, a
chart of accounts, and process all journal entries and interface
entries, provide and review monthly general ledger reports, and
provide funding check system liaison with the Branch Offices. In
addition, during the 120-day period after the Closing, Sellers
shall allow Purchaser to share Sellers computer servers so as to
allow Purchaser to operate the Assets substantially as those
Assets were operated as part of the Business prior to the
Closing. In consideration of the services provided to Purchaser
pursuant to this Section 7.15, Purchaser shall pay Sellers a
monthly fee, to be negotiated in good faith and mutually
agreeable to Purchaser and Sellers, in order to reimburse Sellers
for the cost of providing such services.
7.16 Shared Employees. Sellers and Purchaser acknowledge
that there are certain employees of Sellers which, after the
Closing, will be needed by both Purchaser and Sellers in
connection with their respective operations after the Closing
(the "Shared Employees"). Accordingly, for a period of 120 days
after the Closing, the Shared Employees will provide support to
both Sellers and Purchaser and Sellers and Purchaser will share
the cost of such employees on a 50/50 basis. Purchaser and
Sellers shall work together, in good faith, to identify the
Shared Employees as soon as practicable after the execution and
delivery of this Agreement.
7.17 Interests of Related Parties. Effective at the time of
the Closing, each Related Party hereby transfers, assigns and
conveys to Purchaser, without representation or warranty, any and
all right, title and interest that such Related Party has or may
have in or under any of the following: the Assets, the Assumed
Leases, the Assumed Contracts, the Assumed Furniture and Equipment
Leases, and the Purchased Mortgage Loans. The Related Parties shall
execute such documents and other papers and take such further actions
in good faith as may be reasonably required or desirable to carry out
the transactions contemplated by this Section 7.17. Nothing contained
herein shall imply that any Related Party has any interest in
30
any of the Assets or the Business or in or under any of the Assumed Leases,
the Assumed Contracts, the Assumed Furniture and Equipment Leases, or the
Purchased Mortgage Loans, or that any Related Party is entitled
to any portion of the Purchase Price.
7.18 Solicitations; Files and Records. Purchaser agrees
that it will not (i) use files and records of Sellers (however
obtained) with respect to loans (other than the Purchased
Mortgage Loans) closed by Sellers prior to the Closing Date (such
borrowers in their capacity as borrowers with respect to such
loans referred to as "Sellers' borrowers") for the purpose of
developing mailing or solicitation lists, or (ii) specifically
target Sellers' borrowers to refinance such loans in any
television, newspaper or other advertising, direct mailing,
telephone solicitation, or any other solicitation or
communication whatsoever.
7.19 Condition of Premises and Equipment. At the time of
the Closing, the premises subject to the Assumed Leases, the
furniture and equipment subject to the Assumed Furniture and
Equipment Leases, the Furniture and Equipment and the Computer
Software will be in the condition they are in on the date hereof
subject to ordinary wear and tear.
ARTICLE VIII
CERTAIN OTHER COVENANTS
8.1 Employees.
(a) Subject to the provisions of Section 7.7, on or
immediately after the Closing, Purchaser will offer employment on
an "at will" basis to certain of Sellers' employees employed by
the Business as set forth on Schedule 5.6 hereto. Purchaser
shall have access to such employees pursuant to Sections 7.4 and
7.12(e) hereof and shall be entitled to make offers of
employment. Sellers will not discourage such employees from
accepting Purchaser's offers of employment (or offer such
employees positions with Sellers). Purchaser shall offer such
employees (i) substantially equivalent compensation and (ii)
employee benefits which, together, will be comparable in the
aggregate, to the compensation and employee benefits such
employees received immediately prior to the Closing; provided,
however, that with respect to up to twenty percent (20%) of
employees to be hired by Purchaser who are employed by Sellers at
the Production Support Unit, Purchaser shall not be obligated to
offer compensation at the same pay grade as such employee
received immediately prior to the Closing Date. Any employee who
accepts Purchaser's offer of employment shall be referred to
herein as a transferred employee (the "Transferred Employee")
from and after his or her date of employment with Purchaser.
Notwithstanding the foregoing, and other than is set forth on
Schedule 5.6, unless Sellers consent, Purchaser shall not hire
employees who work at the Production Support Unit; provided,
however, that Purchaser and Sellers will work together in good
faith to reach agreement on additional Production Support Unit
employees to be hired by Purchaser. Purchaser agrees that, with
respect to all of its employee benefit plans, programs
31
and arrangements covering or otherwise benefiting any of the
Transferred Employees on or after the Closing Date, service with
Sellers and their Affiliates prior to the Closing Date shall be
counted for purposes of determining any period of eligibility to
participate or to vest in benefits to the same extent such
service was counted under Sellers' benefit plans, programs and
arrangements. Purchaser shall provide group health plans as of
the Closing Date so as to ensure uninterrupted coverage for all
Transferred Employees. Purchaser shall waive all pre-existing
condition exclusions with respect to group health plans of
Purchaser (to the extent such pre-existing conditions were
satisfied prior to the Closing Date under Sellers' group health
plans). Purchaser shall credit each Transferred Employee with
all deductible payments and co-payments paid by such Transferred
Employee under Sellers' group health plans prior to the Closing
Date during the current year for purposes of determining the
extent to which any such employee has satisfied any deductible to
maximum out-of-pocket limitation under such plan for such plan
year.
(b) Sellers shall be responsible for any obligation
arising under the Worker Adjustment and Retraining Notification
Act, as amended, 29 U.S.C. Section 2101, et. seq., or any similar state
or local law with respect to the termination of any employee's
employment from any Seller.
(c) Each Seller shall be solely responsible for and
shall pay and fund in full to all of its employees and
contractors all compensation, incentive payments, bonuses,
retirement annuities, deferred compensation, profit sharing
benefits and all accrued sick pay, vacation pay and severance pay
accrued through the Closing Date for which any Seller is
obligated under any Contract or Employee Benefit Plan, or under
any personnel or employee manual or policy or under any law or
regulation, Sellers shall be solely responsible for and shall pay
all claims incurred by any Transferred Employees (or their
covered beneficiaries) on or prior to the Closing Date under
Seller's employee health plans, and each Seller shall satisfy all
other obligations to such employees accrued through the Closing
Date (including, without limitation, all tax deposits). Except
as expressly provided herein, no such responsibility or
obligation shall constitute an Assumed Liability in any way
whatsoever. Each Seller shall be solely responsible for
satisfying any obligations under Section 4980(B) of the Internal
Revenue Code of 1986, as amended, to provide continuation of
group medical coverage with respect to (i) any of its employees
who becomes an employee of Purchaser (and any qualified
beneficiary of such an employee) and incurs a qualifying event on
or prior to the date the employee becomes an employee of
Purchaser, and (ii) any of its employees who does not become an
employee of Purchaser (and any qualified beneficiary of such an
employee). To the extent included in the definition of Assumed
Liabilities, Purchaser shall be responsible for and shall pay any
and all ordinary loan level (but not cumulative or volume based)
commissions, due on or after the Closing Date to salespersons
with respect to those Pipeline Mortgage Loans that Purchaser
approves and closes in accordance with Purchaser's established
underwriting criteria and standard business practices.
32
(d) Purchaser is not assuming, and shall not have any
responsibility whatsoever for the continuation of, or any
Liabilities under or in connection with, any Employee Benefit
Plan or any employment contract, collective bargaining agreement
or severance arrangement. Purchaser is not, and shall not be
deemed to be, a successor employer to any Seller with respect to
any Employee Benefit Plan; and no plan adopted or maintained by
Purchaser after the Closing is or shall be deemed to be a
"successor plan," as such term is defined in Section 4021(a) of
ERISA, of any Employee Benefit Plan. No assets held under any
Employee Benefit Plan shall be transferred to Purchaser or to any
plan adopted or maintained by Purchaser. Except as specifically
set forth herein, Purchaser shall not be obligated to assume or
continue any term or condition of employment currently or
previously promised or maintained by any Seller with regard to
its current, former or retired employees or contractors, and
shall not be responsible for any debt, payment, obligation,
claim, Liability or agreement which relates to or arises from any
Seller's employment (or termination of employment) of, or
contract (or termination of contract) with its current, former or
retired employees, regardless of whether such employees are
offered employment by Purchaser.
(e) No Seller shall have responsibility for
Purchaser's obligations to any employee or contractor accruing
after the Closing Date.
(f) None of the Parties intend this Agreement to
create any rights or interests, except as among the Parties, and
no present, former or future employee or contractor of any Party
(including, without limitation, any Transferred Employee) shall
be treated as a third party beneficiary in or under this
Agreement.
ARTICLE IX
TERMINATION
9.1 Termination. This Agreement may be terminated (such
termination to be effected by notice of termination being
delivered to Sellers or Purchaser, respectively) at any time
prior to the Closing:
(a) by mutual written consent of Sellers and
Purchaser;
(b) by Purchaser or Sellers if (i) the Bidding
Procedures Order is not entered on or before April 28, 1999, or
(ii) the Bankruptcy Court Order is not entered on or before May
20, 1999;
(c) by Purchaser if Sellers are in material breach of
any covenant and such breach is not cured within three (3) days
after notice thereof;
(d) by Sellers (i) if Purchaser breaches its
obligations under this Agreement
33
by failing to pay the Purchase Price when due in accordance with the
terms hereof; or (ii) if Purchaser fails, in breach of its obligations
under Section 7.12(f), to purchase mortgage loans pursuant to Section
7.12 with an aggregate original principal balance of $2 million or
more; or
(e) by Sellers in the event that Sellers receive
(other than in violation of Section 7.5 of this Agreement) and
accept another offer to acquire the Assets from a Person other
than Purchaser and the Bankruptcy Court approves acceptance of
such offer.
9.2 Effect of Termination. In the event of termination of
this Agreement as provided in Section 9.1 or 9.4 hereof, this
Agreement shall forthwith become void, and there shall be no
liability under this Agreement on the part of any Party hereto,
except in each case for the following: (i) Section 7.8 hereof and
the provisos in the last sentence of Section 7.7 hereof shall
remain in full force and effect and binding upon all Parties
hereto, (ii) the obligations of the Parties with respect to
Purchased Mortgage Loans shall remain in full force and effect,
and (iii) the Parties shall take all action necessary (including,
without limitation, executing such requests for release as the
Escrow Agreement may require) to have the Deposit plus all
earnings thereon released in accordance with Section 9.3.
9.3 Release of Deposit; Liquidated Damages. The Deposit
plus all earnings thereon shall be released to Purchaser if (and
at the time that) this Agreement is terminated pursuant to
Section 9.1(a), (b), (c) or (e) or Section 9.4. In the event
that this Agreement is terminated pursuant to Section 9.1(d),
Sellers shall be entitled to receive the Deposit plus all
earnings thereon and Purchaser shall pay Sellers an additional
amount equal to the difference between (i) the Interim Budgeted
Expenses and (ii) the amount of the Deposit plus all earnings
thereon. In the event that this Agreement is terminated pursuant
to Section 9.1(c) as a result of Sellers' breach of the
obligations contained in Section 7.1(b)(ix), Purchaser shall be
entitled to receive (in addition to the Deposit) $250,000. In
the event this Agreement is terminated pursuant to Section 9.1(c)
(as a result of any breach by Sellers other than a breach of the
obligations contained in Section 7.1(b)(ix)) or pursuant to
Section 9.1(e), Purchaser shall be entitled to receive the
Breakup Fee (in addition to the Deposit). Sellers and Purchaser
agree that the amounts retained and/or paid to Sellers or
Purchaser pursuant to the three immediately preceding sentences
in the event of a termination are fixed, agreed and liquidated
damages (and not a penalty) and are in lieu of any and all other
damages, rights and remedies (at law or in equity) to which
Sellers or Purchaser (as applicable) might otherwise be entitled;
and Purchaser and Sellers agree that actual damages resulting in
the event of such a termination of this Agreement will be
difficult or impossible to measure and that the amounts due to
Sellers or Purchaser (as applicable) hereunder are a reasonable
estimate of those damages. In addition, in the event that this
Agreement is terminated pursuant to Section 9.1(a), (b),(c) or
(e) or Section 9.4, Purchaser shall pay Sellers (and such amount
shall be deducted from the Deposit to the extent available) an
amount equal to the difference between (i) 101% of the original
principal balance of the Purchasd Mortgage Loans funded during
the Interim Period and (ii) the amount expended by Purchaser to
fund the Purchased Mortgage Loans during the Interim Period.
34
9.4 Automatic Termination. In the event that the Closing
does not occur by June 4, 1999, and this Agreement is not
terminated prior thereto in accordance with Section 9.1, then
this Agreement shall terminate automatically.
ARTICLE X
MISCELLANEOUS
10.1 Survival. Except as otherwise expressly stated herein,
the representations, warranties, covenants and agreements
contained in the Operative Documents shall not survive the
Closing Date and shall terminate automatically at the Closing.
Notwithstanding the foregoing, the covenants and agreements of
Sellers and Purchaser that require performance for any period
after the Closing shall survive the Closing.
10.2 Amendment. This Agreement may not be amended except by
an instrument in writing signed on behalf of each of the Parties
hereto.
10.3 Counterparts. This Agreement may be executed in one or
more counterparts, each of which when assembled shall be deemed
to be an original, but all of which shall be considered one and
the same instrument.
10.4 Entire Agreement. The Operative Documents contain the
entire agreement between the Parties and supersede all prior
agreements, arrangements and understandings relating to the
subject matter thereof. There are no written or oral agreements,
understandings, representations or warranties between the Parties
other than those set forth in the Operative Documents.
10.5 Rights Cumulative; Waivers. The rights of each of the
Parties under this Agreement are cumulative, may be exercised as
often as any Party considers appropriate and are in addition to
each such Party's rights under any of the other Operative
Documents or, except as otherwise modified herein, under law.
The Parties may not waive or vary any right hereunder except by
an express written waiver or variation. Any failure to exercise
or any delay in exercising any of such rights, or any partial or
defective exercise of such rights, shall not operate as a waiver
or variation of that or any other such right.
10.6 Section Headings. The section and article headings
contained in this Agreement are for reference purposes only and
shall not in any way affect the meaning or interpretation of this
Agreement.
35
10.7 Notices. All notices and other communications
hereunder shall be in writing (including a writing delivered by
facsimile transmission) and shall be deemed to have been duly
given (i) when delivered, if sent by registered or certified mail
(return receipt requested), (ii) when delivered, if delivered
personally or by telecopy or (iii) on the next business day, if
sent by United States Express Mail or overnight courier, in each
case to the Parties at the following addresses (or at such other
addresses as shall be specified by like notice):
If to Sellers to:
UNITED COMPANIES FINANCIAL CORPORATION
0000 Xxxxx Xxxx
Xxxxx Xxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxx Xxxxx Midanek
Facsimile No: 000-000-0000
with copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Facsimile No: 000-000-0000
If to Purchaser to:
AEGIS MORTGAGE CORPORATION
00000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: D. Xxxxxxx Xxxxxxxx, President and
Chief Executive Officer
Facsimile No: 000-000-0000
with a copy to:
Xxxxxx Xxxxxxx & Xxxx LLP
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxxxx X. Xxxxx, Esq.
Facsimile No: 202-721-4646
and
36
Cerberus Partners, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Neporent, Esq.
Facsimile No: 000-000-0000
If to Cerberus to:
CERBERUS PARTNERS, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Neporent, Esq.
Facsimile No: 000-000-0000
10.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
10.9 Severability. In the case any provision in this
Agreement (except for Article II hereof) shall be found by a
court of competent jurisdiction to be invalid, illegal or
unenforceable, such provision shall be construed and enforced as
if it had been more narrowly drawn so as not to be invalid,
illegal or unenforceable, and the validity, legality and
enforceability of the remaining provisions of this Agreement
shall not in any way be affected or impaired thereby.
10.10 Successors and Assigns. This Agreement shall be
binding upon the Parties hereto and their respective successors
and assigns (including, without limitation, any trustee appointed
in any of the Sellers' or Related Parties' cases pending before
the Bankruptcy Court) and shall inure to the benefit of the
Parties hereto and their respective permitted successors and
assigns. No Party may assign or delegate its rights or duties
hereunder without prior written approval of each other Party and
subject to applicable provisions of the Bidding Procedures Order
and the Bankruptcy Court Order, and any attempted assignment or
delegation without such consent or in violation of such orders
shall be void.
10.11 Exclusive Jurisdiction. The Parties hereby agree
that, without limitation of any party's right to appeal any order
of the Bankruptcy Court, (a) the Bankruptcy Court shall retain
exclusive jurisdiction to enforce the terms of this Agreement and
to decide any claims or disputes which may arise or result from,
or be connected with this Agreement, any breach of default
hereunder, or the transactions contemplated herein, and (b) any
and all claims, action, causes of action, suits or proceedings
relating to the foregoing shall be filed and maintained only in
the Bankruptcy Court, and the Parties hereby consent and submit
to the jurisdiction of
37
the Bankruptcy Court. The Parties further agree that service
of any process, summons, notice or document by U.S. registered
mail to such Party's respective address set forth in Section 19
shall be effective with respect to any matters to which it has
submitted to jurisdiction as set forth above. The
Parties hereto irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or
proceeding arising out of this Agreement in the Bankruptcy Court,
and irrevocably and unconditionally waives and agrees not to
plead or claim in such court that any such action, suit or
proceeding brought in such court has been brought in an
inconvenient forum.
S-1
IN WITNESS WHEREOF, this Agreement has been signed on behalf
of each of the Parties hereto by an authorized representative,
all as of the day and year first above written.
"PURCHASER"
AEGIS MORTGAGE CORPORATION
By: /s/ D. XXXXXXX XXXXXXXX
--------------------------
Name: D. Xxxxxxx Xxxxxxxx
Title: President
"SELLERS"
UNITED COMPANIES FINANCIAL CORPORATION
By: /s/ XXXXXXX X. XXXXXXX
-----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer
UNITED COMPANIES LENDING CORPORATION
By: /s/ XXXXX X. XXXXXXX
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Sr. V/P
UNITED COMPANIES LENDING GROUP, INC.
By: /s/ XXXXX X. XXXXXXX
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Sr. V/P
S-2
"RELATED PARTIES"
Solely with respect to the terms and provisions of Section
7.17.
PELICAN MORTGAGE COMPANY, INC.
By: /s/ XXXXX X. XXXXXXX
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Sr. V/P
ADOBE, INC.
By: /s/ XXXXX X. XXXXXXX
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Sr. V/P
ADOBE FINANCIAL, INC. I
By: /s/ XXXXX X. XXXXXXX
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Sr. V/P
GINGER MAE(R), INC.
By: /s/ XXXXX X. XXXXXXX
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Sr. V/P
UNICOR MORTGAGE, INC.
By: /s/ XXXXX X. XXXXXXX
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Sr. V/P
S-3
SOUTHERN MORTGAGE ACQUISITION, INC.
By: /s/ XXXXX X. XXXXXXX
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Sr. V/P
UNITED COMPANIES FUNDING, INC.
By: /s/ XXXXX X. XXXXXXX
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Sr. V/P
GOPHER EQUITY, INC. I
By: /s/ XXXXX X. XXXXXXX
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Sr. V/P
Solely with respect to the terms and provisions of Sections
2.2(e) and 9.3 and Article IV hereof.
CERBERUS PARTNERS, L.P.
By: Cerberus Associates LLC
Its: General Partner
By: /s/ XXXX X. NEPORENT
----------------------------
Name: Xxxx X. Neporent
Title: V.P.
S-4
Solely with respect to the terms and provisions of Section
7.14 hereof.
UNITED REALTY XII L.L.C.
By: /s/ XXXXX X. XXXXXXX
---------------------------
Name: Xxxxx X. Xxxxxxx
Title: Sr. V/P
Solely as a party to certain of the Assumed Leases and with
respect to the terms of Section 2.6 hereof.
UNITED COMPANIES REALTY L.L.C.
By: /s/ XXXXX X. XXXXXXX
---------------------------
Name: Xxxxx X. Xxxxxxx
Title: Sr. V/P
