<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
---------
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 30, 1995
THE RYLAND GROUP, INC.
----------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 1-8029 52-0849948
- -------------------------------- ------------- -----------------
(State or other jurisdiction of Commission (I.R.S. Employer
of incorporation) File No. Identification No.)
11000 Broken Land Parkway, Columbia, Maryland 21044
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(Address of principal executive offices) (Zip Code)
(410) 715-7000
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(Registrant's telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On June 30, 1995, pursuant to an Asset Purchase Agreement dated as of April
10, 1995 by and among RMC Asset Management Company, Ryland Mortgage Company,
Ryland Acceptance Corporation and The Ryland Group, Inc. (Ryland), and Norwest
Bank Minnesota, National Association (Norwest) (the "Asset Purchase
Agreement"), Ryland completed the sale of its mortgage securities
administration business to Norwest for a purchase price of $47 million in
cash, subject to certain post-closing adjustments. Ryland's mortgage
securities administration business includes master servicing, securities
administration, investor information services, and tax calculation and
reporting.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS:
a. Financial statements of businesses acquired.
Not applicable.
b. Pro Forma financial information.
The pro forma financial information required by this Item 7(b) is
filed with this Current Report on Form 8-K as shown on page 3 in
the Index to Pro Forma Financial Information.
c. Exhibits
The exhibit as required by this Item 7(c) is filed with this
Current Report on Form 8-K shown in the Index to Exhibits on page
11.
2
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Index to Pro Forma Financial Information
Item 7(b)
Page References
---------------
The pro forma financial information under the following
captions is included herein: Form 8-K
Introductory Statement 4
Pro Forma Consolidated Statement of
Earnings From Continuing Operations (Unaudited)
for the Year ended December 31, 1994 5
Pro Forma Consolidated Statement of
Earnings From Continuing Operations
(Unaudited) for the Three Months ended
March 31, 1995 6
Pro Forma Consolidated Balance Sheet
(Unaudited) as of March 31, 1995 7-8
Notes to Pro Forma Consolidated
Financial Statements 9
3
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Introductory Statement
-----------------------
On June 30, 1995, pursuant to an Asset Purchase Agreement dated as of April
10, 1995 by and among RMC Asset Management Company, Ryland Mortgage Company,
Ryland Acceptance Corporation and The Ryland Group, Inc. (Ryland), and Norwest
Bank Minnesota, National Association (Norwest) (the "Asset Purchase
Agreement"), Ryland completed the sale of its mortgage securities
administration business to Norwest for a purchase price of $47 million in
cash, subject to certain post-closing adjustments. Ryland's mortgage
securities administration business includes master servicing, securities
administration, investor information services, and tax calculation and
reporting. The following pro forma financial information should be read in
conjunction with the historical financial statements and notes thereto of the
Company. The notes to the unaudited pro forma financial information are an
integral part thereof.
Pro Forma Consolidated Statements of Earnings From Continuing Operations
- -------------------------------------------------------------------------
The following unaudited pro forma consolidated statements of earnings are
based on the consolidated statements of earnings of the The Ryland Group, Inc.
(the "Company") and of the mortgage securities administration business for the
year ended December 31, 1994, and for the three months ended March 31, 1995,
as if the disposition had taken place on January 1, 1994, after giving effect
to the pro forma adjustments described in Note 2. These pro forma statements
are not necessarily indicative of the future results of operations or of the
consolidated results of operations had the disposition taken place on January
1, 1994.
Pro Forma Consolidated Balance Sheet
- ------------------------------------
The following unaudited pro forma consolidated balance sheet is based
upon the consolidated balance sheets of the Company and the mortgage
securities administration business as of March 31, 1995 after giving effect to
the pro forma adjustments described in Note 3. This pro forma statement is
not necessarily indicative of the financial position in the future or of the
financial position had the disposition taken place on March 31, 1995.
4
<PAGE>
PROFORMA CONSOLIDATED STATEMENT OF EARNINGS
FROM CONTINUING OPERATIONS
The Ryland Group, Inc. and subsidiaries
(amounts in thousands, except share data)(unaudited)
<TABLE>
<CAPTION>
TWELVE MONTHS PRO FORMA
ENDED ADJUSTMENTS PRO FORMA
12/31/94 12/31/94 12/31/94
----------- ---------- ----------
<S> <C> <C> <C>
REVENUES:
Homebuilding:
Residential revenues $ 1,439,292 $1,439,292
Other revenues 3,920 3,920
----------- ----------
Total homebuilding revenues 1,443,212 1,443,212
Financial services 147,187 $ (23,824) 123,363
Limited-purpose subsidiaries 52,293 52,293
----------- ---------- ----------
Total revenues 1,642,692 (23,824) 1,618,868
----------- ---------- ----------
EXPENSES:
Homebuilding:
Cost of sales 1,261,784 1,261,784
Interest expense 28,209 (1,189) 27,020
Selling, general and
administrative 142,254 142,254
----------- ----------- ---------
Total homebuilding expenses 1,432,247 (1,189) 1,431,058
Financial services:
Interest expense 26,694 (407) 26,287
General and administrative 77,011 (11,180) 65,831
----------- ----------- ---------
Total financial services
expenses 103,705 (11,587) 92,118
Limited-purpose subsidiaries
expenses 52,197 52,197
Corporate expenses 17,187 17,187
----------- ----------- ---------
Total expenses 1,605,336 (12,776) 1,592,560
Equity in losses of
unconsolidated joint ventures (37) (37)
------------ ----------- ---------
Earnings from continuing operations 37,319 (11,048) 26,271
before cumulative effect of accounting
change and before taxes
Tax expense 14,928 (4,419) 10,509
----------- ------------ ---------
Earnings from continuing operations $ 22,391 $ (6,629) $ 15,762
before cumulative effect of accounting
change
Earnings from continuing operations
per common share:
Primary $ 1.29 $ 0.86
Fully-diluted $ 1.28 $ 0.86
Average common shares outstanding:
Primary 15,561,046 15,561,046
Fully-diluted 16,675,803 15,561,046
See Notes to Pro Forma Consolidated Financial Statements.
</TABLE>
<PAGE>
PROFORMA CONSOLIDATED STATEMENT OF EARNINGS
FROM CONTINUING OPERATIONS
The Ryland Group, Inc. and subsidiaries
(amounts in thousands, except share data)(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS PRO FORMA
ENDED ADJUSTMENTS PRO FORMA
3/31/95 3/31/95 3/31/95
----------- ---------- ----------
<S> <C> <C> <C>
REVENUES:
Homebuilding:
Residential revenues $ 311,792 $ 311,792
Other revenues 517 517
----------- ----------
Total homebuilding revenues 312,309 312,309
Financial services 29,094 $ (6,229) 22,865
Limited-purpose subsidiaries 10,001 10,001
----------- ----------- ---------
Total revenues 351,404 (6,229) 345,175
----------- ----------- ---------
EXPENSES:
Homebuilding:
Cost of sales 275,925 275,925
Interest expense 7,509 (370) 7,139
Selling, general and
administrative 33,369 33,369
----------- ----------- ---------
Total homebuilding expenses 316,803 (370) 316,433
Financial services:
Interest expense 5,540 (120) 5,420
General and administrative 14,473 (2,164) 12,309
----------- ---------- ---------
Total financial services expenses 20,013 (2,284) 17,729
Limited-purpose subsidiaries
expenses 9,994 9,994
Corporate expenses 3,680 3,680
----------- ---------- ---------
Total expenses 350,490 (2,654) 347,836
Equity in earnings of
unconsolidated joint ventures 207 207
----------- ---------- ---------
Earnings/(loss) from
continuing operations before taxes 1,121 (3,575) (2,454)
Tax expense/(benefit) 448 (1,430) ( 982)
----------- ----------- ---------
Net earnings/(loss) from
continuing operations $ 673 $ (2,145) $(1,472)
Net earnings/(loss) from continuing
operations per common share:
Primary $ 0.01 $ (0.13)
Fully-diluted $ 0.01 $ (0.13)
Average common shares outstanding:
Primary 15,700,526 15,497,575
Fully-diluted 15,700,987 15,497,575
See Notes to Pro Forma Consolidated Financial Statements.
</TABLE>
<PAGE>
PRO FORMA CONSOLIDATED BALANCE SHEET
The Ryland Group, Inc. and subsidiaries
(amounts in thousands, except share data)
AS OF MARCH 31, 1995 (Unaudited)
<TABLE>
<CAPTION> PRO FORMA
AS REPORTED ADJUSTMENTS PRO FORMA
----------- ------------ -----------
<S> <C> <C> <C>
ASSETS
HOMEBUILDING:
Cash and cash equivalents $ 34,609 $ $ 34,609
Homebuilding inventories:
Homes under construction 391,384 391,384
Land under development and
improved lots 203,164 203,164
Land held for development
or resale 2,320 2,320
------------ ----------
Total inventories 596,868 596,868
Investment in/advances to
unconsolidated joint
ventures 11,219 11,219
Property, plant and equipment 25,443 25,443
Purchase price in excess
of net assets acquired 22,349 22,349
Other assets 57,953 57,953
------------ ------------
748,441 748,441
------------ -----------
FINANCIAL SERVICES:
Cash and cash equivalents 924 924
Mortgage loans held for
sale, net 180,845 180,845
Mortgage-backed securities,
net 118,281 118,281
Purchased servicing and
administration rights,
net 11,419 (3,139) 8,280
Other assets 50,569 (4,405) 46,164
------------ ------------- ----------
362,038 (7,544) 3(b) 354,494
------------ ------------- ----------
LIMITED-PURPOSE SUBSIDIARIES:
Collateral for bonds
payable, net 441,252 441,252
Other assets 5,115 5,115
------------ ----------
446,367 446,367
------------ ---------
Net deferred taxes 30,454 2,000 32,454
Other assets 14,743 14,743
------------ ------------ ------------
TOTAL ASSETS $ 1,602,043 $ (5,544) $ 1,596,499
============ ============= ============
</TABLE>
See Notes to Pro Forma Consolidated Financial Statements.
7
<PAGE>
PRO FORMA CONSOLIDATED BALANCE SHEET
The Ryland Group, Inc. and subsidiaries
(amounts in thousands, except share data)
AS OF MARCH 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
PRO FORMA
AS REPORTED ADJUSTMENTS PRO FORMA
----------- ------------ -----------
<S> <C> <C> <C>
LIABILITIES
HOMEBUILDING:
Accounts payable and
other liabilities $ 72,349 $ 72,349
Long-term debt 456,143 $ (37,500) 3(a) 418,643
------------ ------------- ----------
528,492 (37,500) 490,992
------------ ------------- ----------
FINANCIAL SERVICES:
Accounts payable and
other liabilities 30,457 1,956 3(c) 32,413
Short-term notes payable 267,897 (9,500) 3(a) 258,397
----------- ------------ ------------
298,354 (7,544) 290,810
----------- ------------ ------------
LIMITED-PURPOSE SUBSIDIARIES:
Accounts payable and
other liabilities 13,466 13,466
Bonds payable, net 429,835 429,835
------------ ------------
443,301 443,301
------------ -----------
Other liabilities 22,246 20,000 3(d) 42,246
------------ ------------ -----------
TOTAL LIABILITIES 1,292,393 (25,044) 1,267,349
------------ ------------ -----------
STOCKHOLDERS' EQUITY
Convertible preferred stock,
$1 par value:
Authorized - 1,400,000 shares
Issued - 1,047,903 shares 1,048 1,048
Common stock, $1 par value:
Authorized - 78,600,000 shares
Issued - 15,528,638 shares 15,529 15,529
Paid-in capital 115,643 115,643
Retained earnings 191,529 19,500 211,029
Net unrealized gain on mortgage-
backed securities 816 816
Other (14,915) (14,915)
------------ ------------ -----------
TOTAL STOCKHOLDERS' EQUITY 309,650 19,500 329,150
------------ ------------ ----------
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY $ 1,602,043 $ (5,544) $ 1,596,499
============ ============= ===========
See Notes to Pro Forma Consolidated Financial Statements.
</TABLE>
8
<PAGE>
THE RYLAND GROUP, INC. AND SUBSIDIARIES
Notes to Pro Forma Consolidated Financial Statements
(amounts in thousands, unaudited)
1. On June 30, 1995, the Company completed the sale of its mortgage securities
administration business for $47,000 in cash.
2. The pro forma consolidated statements of earnings for the year ended
December 31, 1994 and three months ended March 31, 1995 have been adjusted to
eliminate revenues and expenses of the mortgage securities administration
business as if the sale had taken place on January 1, 1994. Additionally, a
pro forma adjustment has been made for the elimination of interest expense
incurred on bank borrowings that would have been repaid using proceeds from
the sale. The pro forma data does not purport to be indicative of the results
which would actually have been reported had the disposition occurred on the
date assumed or which may be reported in the future. The pro forma
consolidated statements of earnings have been prepared for continuing
operations and therefore do not give effect to the cumulative effect of a
change in accounting principle reported in 1994 of $2,076 (net of taxes of
$1,384), or to the estimated one-time gain of $19,500 (net of a $13,000
provision for income taxes) resulting from the sale of the institutional
financial services line of business.
3. The pro forma consolidated balance sheet reflects the effects of the sale
of the mortgage securities administration business as if it had been
consummated on March 31, 1995. Pro forma adjustments have been made to
reflect:
a) The receipt of $47,000 in cash and the use of $37,500 of this cash to
repay long-term debt of the homebuilding segment. The remaining cash of
$9,500 is reflected as a reduction of financial services short-term notes
payable.
b) A decrease in financial services assets of $7,544 representing the book
value of the assets sold to Norwest.
c) An increase in financial services other liabilities of $1,956 representing
transaction costs and accrued expenses directly related to the transaction
less the book value of liabilities assumed by Norwest.
d) An increase in other liabilities of $20,000 representing current income
taxes payable of $15,000, additional benefit plan costs of $2,900 and lease
termination and other costs of $2,100 directly associated with the
transaction.
4. For the pro forma twelve months ended December 31, 1994, the three months
ended March 31, 1995, and the proforma three months ended March 31, 1995, no
adjustments have been made to the fully-diluted earnings per common share
computation for the conversion of preferred shares and the related incremental
dividends, as the effect would be anti-dilutive. Additionally, for the pro
forma three months ended March 31, 1995, average shares outstanding have not
been increased by the common stock equivalents relating to the employee stock
option and employee incentive plans, as the effect would be anti-dilutive.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: July 17,1995 By: /s/ Michael D. Mangan
---------------------
Michael D. Mangan,
Executive Vice President
and Chief Financial Officer
10
Index to Exhibits
Item 7(c)
Exhibit Number Pages
(2) Asset Purchase Agreement 12-33
11
<PAGE>
ASSET PURCHASE AGREEMENT
------------------------------------------------
ASSET PURCHASE AGREEMENT (this "Agreement") dated as of the 10th day
of April, 1995 by and among RMC Asset Management Company, a Virginia
corporation ("RAMCO"), Ryland Mortgage Company, an Ohio corporation ("RMC"),
Ryland Acceptance Corporation, a Virginia corporation ("RAC"), The Ryland
Group, Inc., a Maryland corporation ("TRG") and Norwest Bank Minnesota,
National Association (the "Purchaser"). RMC, RAMCO, RAC and TRG are each
referred to herein as the "Seller".
W I T N E S S E T H
---------------------------
The Purchaser wishes to purchase, and the Seller wishes to sell, the
assets used to conduct the Business (as hereinafter defined) on the terms
hereinafter described. TRG is the parent corporation of RMC and is joining in
this Agreement to participate as and undertake all rights, obligations and
liabilities of a Seller hereunder.
Accordingly, in consideration of the foregoing and of the covenants,
agreements, representations and warranties hereinafter contained, and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. CERTAIN DEFINITIONS. In addition to those terms defined
elsewhere herein, the following capitalized terms shall have the meanings
indicated:
(a) "APPLICABLE REQUIREMENTS" means, with respect to the Operating
Contracts and the Business, all of the following: (i) all contractual
obligations of Seller with respect to the Operating Contracts; and (ii) all
applicable federal, state and local legal and regulatory requirements
(including statutes, rules, regulations and ordinances).
(b) "ASSUMED LIABILITIES" means
i) the liabilities and obligations of the Seller arising
from or relating to the Operating Contracts (as hereinafter defined) assigned
to Purchaser hereunder, for which arrangements have been made to provide the
benefits thereof to Purchaser pursuant to Section 6 hereof, or which are
assumed and assigned pursuant to Section 12 hereof, and the Licensing
Agreements (as hereinafter defined), but excluding any such liability or
obligation in respect of matters required to be performed by Seller prior to
the Closing Date and any post-closing indemnity obligation in respect of
matters required to be performed by Seller prior to the Closing Date;
(ii) accounts payable, accrued expenses, and deferred
administration fees representing deferred payments received arising in the
ordinary course of the Business as shown on the Closing Statement of Net
Assets; and
(iii) the liabilities and obligations arising from or
relating to all other contracts, subcontracts, agreements, instruments and
arrangements entered into by the Seller in the ordinary course of the Business
which (y) are identified on "Schedule 1(b)(iii)" hereto, or (z) do not
individually or
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in the aggregate involve an aggregate liability or obligation in excess of
$100,000.00, but excluding any such liability or obligation in respect of
matters required to be performed by Seller prior to the Closing Date and any
post-closing indemnity obligation in respect of matters required to be
performed by Seller prior to the Closing Date.
(c) "BUSINESS" means the mortgage-related institutional financial services
business currently conducted by the Seller consisting of the master servicing,
securities administration, tax and SEC reporting and investor information
services businesses described in "Schedule 1(c)" of this Agreement, excluding
the capital stock of Ryland Mortgage Securities Corporation ("RMSC") and
Ryland Mortgage Securities Corporation Four ("RMSC4") and excluding the
securities issuance business and any related assets including any prepaid
expenses relating to the shelf registration statements maintained or owned by
RMSC and RMSC4 (the "Shelf Registration").
(d)"CONFIDENTIAL MEMORANDUM" means the Confidential Information Memorandum
issued in November 1994 to prospective purchasers of the Business.
(e)"MANAGEMENT INCENTIVE AGREEMENTS" means the incentive bonus and
severance agreements with certain managerial personnel entered into in
connection with the sale of the Business.
(f)"OPERATING CONTRACTS" means the contracts, subcontracts, agreements,
instruments and arrangements pursuant to which the Business is conducted and
which are identified on "Schedule 1(f)" of this Agreement or which are
operating contracts assumed and assigned pursuant to Section 12 hereof.
(g) "PURCHASED ASSETS" means:
(i) all Seller's right, title and interest in and to the Operating
Contracts assigned to Purchaser hereunder, for which arrangements have been
made to provide the benefits thereof to Purchaser pursuant to Section 6
hereof, or which are assumed and assigned pursuant to Section 12 hereof, but
specifically excluding any redemption rights related to the bonds and
collateral associated with any series of mortgage bonds issued by Ryland
Acceptance Corporation Four, a Virginia corporation ("RAC FOUR"), including
redemption rights associated with the series of bonds identified in Exhibit C
to Amendment No. 1 to Standard Terms of Management Agreement by and between
RAC FOUR and RAMCO dated as of January 15, 1995 (the "Management Agreement"),
(but not excluding the redemption rights associated with the series of bonds
identified in Exhibit B to the Management Agreement which shall be considered
part of the Purchased Assets);
(ii) all computer software and programs owned, and/or
developed by the Seller or its affiliates and utilized to conduct the Business
and which are identified on "Schedule 1(g)(ii)" of this Agreement;
(iii) all licenses and rights under licensing agreements
with respect to the use of computer software and programs under license to
Seller or its affiliates and utilized to conduct the Business and which are
identified on Schedule 1(g)(iii) (the "Licensing Agreements"), including any
enhancements of the licensed material owned and/or developed by the Seller or
its affiliates;
13
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(iv) all tangible personal property (including, without
limitation, all computers, computer equipment, furniture, fixtures and other
equipment) relating to or utilized to conduct the Business and which are
identified on "Schedule 1(g)(iv)" of this Agreement;
(v) all client lists, files, books and records relating to
the Business;
(vi) the Seller's rights under leases and service or other
agreements for the use of equipment and/or the furnishing of services relating
to the Business which are identified on "Schedule 1(g)(vi)" of this Agreement;
and
(vii) all Seller's prepaid and prorated fees and expenses
relating to the Business, including, but not limited to, trustee fees,
custodial fees and rating agency examination fees, and all administration fees
receivable of the Business, but excluding the prepaid fees relating to the
Shelf Registration.
(h) "RECOURSE OBLIGATION " means any obligation of the Seller
arising under the terms of an Operating Contract as such terms are in effect
on the Closing Date to repurchase a mortgage loan, or in lieu thereof to pay
for credit losses incurred in connection with the default or foreclosure of,
or acceptance of a deed in lieu of foreclosure in connection with such
mortgage loan, including any such obligation associated with (i) the
conversion of a mortgage loan from an adjustable to a fixed rate of interest
("Conversion Recourse Obligation") or (ii) the breach of a representation or
warranty regarding a mortgage loan made in connection with the issuance of a
mortgage-backed bond or security.
(i) "UNRECOVERABLE ADVANCES" means any advance or proposed
advance that the Seller or Seller's affiliate, or Purchaser after the Closing
Date, is required to make under the Applicable Requirements even though the
Seller or Seller's affiliate, or Purchaser after the Closing Date, has
reasonably determined that such advance is not recoverable from insurance
proceeds, liquidation proceeds, subsequent payments by the mortgagor or
otherwise.
2. SALE AND TRANSFER OF ASSETS. Subject to the terms and conditions
of this Agreement, the parties hereto agree to effect the following
transactions:
2.1 SALE AND TRANSFER OF ASSETS. At the Closing (as hereinafter
defined), the Seller will sell, convey, transfer, assign and deliver to
Purchaser, and Purchaser will purchase, the Purchased Assets.
2.2 ASSUMPTION OF LIABILITIES. At the Closing, the Purchaser
will assume the Assumed Liabilities. Purchaser assumes no liabilities or
obligations of the Seller other than as provided herein.
2.3 CONSIDERATION TO BE PAID. In consideration of the transfers
specified in Section 2.1 hereof, in addition to the assumption of liabilities
set forth in Section 2.2, the Purchaser will pay the Seller, by wire transfer
or certified check of immediately available funds, Forty-Seven Million Dollars
($47,000,000.00) at the Closing (the "Purchase Price").
2.4 PURCHASE PRICE ADJUSTMENT. As soon as practicable, but in
no event more than forty-five (45) days subsequent to the Closing Date (as
hereinafter defined), the Seller, with the assistance of Ernst & Young, whose
fees and expenses will be paid by Seller, and with the
14
<PAGE>
assistance of Purchaser and its employees, shall prepare and deliver to
Purchaser a closing combined statement of net assets (the "Closing Statement
of Net Assets") which shall set forth the net book value (the "Book Value") of
the Purchased Assets (but specifically excluding cash and purchased
administration rights of the Business and specifically excluding any prepaid
amounts related to the Shelf Registration and any mortgage loans purchased out
of the securities administration portfolio because of a failure to maintain
credit insurance in connection therewith), net of the Assumed Liabilities (but
specifically excluding deferred administration fees representing deferred
revenues of the Business) as of the Closing Date prepared on a basis
consistent with the financial statements referred to in Section 4.2 of this
Agreement and attached as Exhibit C to the Confidential Memorandum.
Consistency of preparation shall mean that all methods, practices, and
policies used in the preparation of the financial statements referred to in
Section 4.2 of this Agreement will be utilized in the preparation of the
Closing Statement of Net Assets. Where there are acceptable accounting
alternatives that are in accordance with generally accepted accounting
principles, the one that is consistent with the preparation of the financial
statements referred to in Section 4.2 shall be used in the Closing Statement
of Net Assets. Attached as "Schedule 2.4" is a combined statement of net
assets reflecting the Purchased Assets, net of the Assumed Liabilities, as of
February 28, 1995. The Closing Statement of Net Assets will be accompanied
with a review scope opinion from Ernst & Young LLP in substantially the form
attached as "Attachment A" to this Agreement. If Purchaser disagrees with any
item on the Closing Statement of Net Assets it shall so notify the Seller
within thirty (30) days after its receipt of the Closing Statement of Net
Assets, which notice shall identify with reasonable specificity the nature of
such dispute, and the parties shall use their best efforts to resolve such
dispute. If such dispute cannot be resolved within fifteen (15) days after
the Purchaser's notification of the disagreement to the Seller, the Seller and
the Purchaser shall mutually agree upon and engage an independent accounting
firm of national reputation (the "Review Firm") to review the items in
dispute, and the Review Firm shall prepare and deliver within thirty (30) days
after the submission of such dispute to them a specific procedures report with
their findings as to the net book value of the items in dispute. Such
findings shall be final for all purposes of this Agreement and the Book Value
of the items in dispute as derived from such findings will be incorporated
into the Closing Statement of Net Assets to form a final statement of net
assets (the "Final Statement of Net Assets") which shall set forth the net
book value (the "Final Book Value") of the Purchased Assets net of the Assumed
Liabilities as of the Closing Date. The Final Statement of Net Assets shall
be conclusive and binding on the Purchaser and the Seller. The fees and
expenses of the Review Firm shall be borne equally by the Seller and the
Purchaser.
To the extent that the Book Value (or Final Book Value if applicable) of
the Net Assets exceeds Two Million One Hundred Eighty-Seven Thousand Dollars
($2,187,000), the Purchaser shall, within thirty (30) days following the
delivery of the Closing Statement of Net Assets, or the Final Statement of Net
Assets if the Purchaser raises a dispute and one is prepared, pay the Seller,
by wire transfer or certified check of immediately available funds, an amount
equal to the difference between the Book Value or Final Book Value and Two
Million One Hundred Eight-Seven Thousand Dollars ($2,187,000), or to the
extent that the Book Value or Final Book Value of the Net Assets is less than
Two Million One Hundred Eighty-Seven Thousand Dollars ($2,187,000), the Seller
shall, within five days following the delivery of the Closing Statement of Net
Assets, or the Final Statement of Net Assets if one is prepared, pay to the
Purchaser, by wire transfer or certified check of immediately available funds,
an amount equal to such deficiency.
15
<PAGE>
Any amounts due and unpaid from the date such payment is due by either
party hereto will accrue interest from the Closing Date at the rate of two
percent (2%) per annum above the prime rate of interest as such rate is
established by Chemical Bank. The accrual of interest as provided for above
will not constitute an exclusive remedy and each party hereto expressly
reserves its right to seek any and all other remedies for breach of any
obligation hereunder.
2.5 DELIVERIES BY THE SELLER. At the Closing, the Seller shall
deliver to the Purchaser (unless delivered previously) the following:
(a) the Purchased Assets, transferred by means of a General
Assignment and Bill of Sale in substantially the form set forth in "Attachment
B" hereto and other assignment and transfer agreements consistent with the
terms of this Agreement as may reasonably be required by the Purchaser to
evidence transfer of the Purchased Assets;
(b) certificates, dated as of the Closing Date, executed by
TRG, RAMCO, RMC and RAC certifying (i) that the representations and warranties
of TRG, RAMCO, RMC and RAC contained in this Agreement were true and correct
when made and are true and correct as of the Closing Date, as though made on
and as of the Closing Date; and (ii) that TRG, RAMCO, RMC and RAC have
performed and complied in all material respects with all of the covenants,
agreements and obligations set forth in this Agreement to be performed or
complied with by them on or prior to the Closing Date;
(c) copies of resolutions adopted by the Board of Directors of
TRG, RAMCO, RMC and RAC duly authorizing and approving the execution of this
Agreement and the consummation of the transactions contemplated hereby,
certified by their respective Secretaries as being true and correct as of the
Closing Date;
(d) an opinion of the Corporate Counsel of the Seller, as
required by Section 9.5 hereof; and
(e) copies of all consents received by Seller for assignment
of the Operating Contracts.
2.6 DELIVERIES BY THE PURCHASER. At the Closing, the Purchaser
shall deliver to the Seller (unless delivered previously) the following:
(a) the Purchase Price;
(b) payment of applicable sales or transfer taxes as required
by Section 20 hereof;
(c) a General Assumption Agreement in substantially the form
set forth in "Attachment C" hereto and other assumption agreements consistent
with the terms of this Agreement as may reasonably be required by the Seller
to evidence assumption of the Assumed Liabilities by the Purchaser;
(d) a certificate, dated as of the Closing Date, executed by
the Purchaser certifying (i) that the representations and warranties of the
Purchaser contained in this Agreement were true and correct when made and are
true and correct as of the Closing Date, as though made on and as of the
Closing Date; and (ii) that the Purchaser has performed and complied in all
material respects with
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all of the covenants, agreements and obligations set forth in this Agreement
to be performed or complied with by it on or prior to the Closing Date;
(e) copies of resolutions duly adopted by the Board of
Directors of the Purchaser, duly authorizing and approving the execution of
this Agreement and the consummation of the transactions contemplated hereby,
certified by its Secretary as being true and correct as of the Closing Date;
and
(f) an opinion of counsel to the Purchaser, as required by
Section 10.5 hereof.
3. CLOSING. The closing ("Closing") shall occur on the date (the
"Closing Date") within ten (10) business days after all conditions to closing
set forth in Sections 9 and 10 of this Agreement have been satisfied or waived
by the Seller and Purchaser, or such other date as is mutually agreed, at the
offices of Piper & Marbury, 36 South Charles Street, Baltimore, Maryland 21201
or at such other time or place as may be agreed upon by the parties hereto.
4. REPRESENTATIONS AND WARRANTIES OF THE SELLER. Each Seller hereby
jointly and severally represents and warrants to the Purchaser as follows:
4.1 ORGANIZATION AND STANDING. Each of RAMCO and RAC is duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Virginia, RMC is duly organized, validly existing and in good
standing under the laws of the State of Ohio, and RAMCO, RMC and RAC each
have all requisite corporate power and authority to own and operate their
respective businesses and assets and to perform the actions contemplated
hereby. TRG is duly organized, validly existing and in good standing under
the laws of the State of Maryland and has all requisite corporate power and
authority to perform the actions contemplated and required of TRG under this
Agreement. TRG, RAMCO, RMC and RAC are qualified to do business in all states
where the nature of their assets or business requires such qualification.
4.2 FINANCIAL STATEMENTS. The Seller has provided to the
Purchaser combined statements of net assets for the Business as of September
30, 1994 and December 31, 1993 and 1992 and the related combined statements of
earnings before income taxes and cash flows for the nine months ended
September 30, 1994 and 1993 and for the years ended December 31, 1993 and 1992
(collectively, the "Financial Statements"). Subject to the matters described
on "Schedule 4.2", the Financial Statements have been prepared on a consistent
basis throughout the periods covered thereby and present fairly the financial
position and earnings before income taxes of the Business as of and for the
periods indicated, presented on the basis described in Note 1 to such
Financial Statements. Subject to the matters described on "Schedule 4.2",
there are no liabilities or obligations of the Business, whether contingent or
absolute, as of the dates of such statements, which have not been shown,
disclosed or provided for in the Financial Statements and which are required
to be shown or disclosed thereon to provide a fair presentation of the
financial condition of the Business to the Purchaser.
4.3 AUTHORITY; BINDING OBLIGATION. Except as described on
"Schedule 4.3" hereto, the Seller has full power and authority to assign the
Operating Contracts in accordance with the terms of this Agreement and to
sell, transfer and convey the remainder of the Purchased Assets and to
execute, deliver and perform, and to enter into and consummate all other
transactions contemplated by this Agreement, and this Agreement has been duly
authorized and approved by all requisite corporate
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action of the Seller, and constitutes a legal, valid and binding obligation of
the Seller.
4.4 NO CONFLICT WITH OTHER DOCUMENTS. Except as set forth on
"Schedule 4.4" hereto, neither the execution and delivery of this Agreement
nor the assignment of the Operating Contracts, the sale, transfer and
conveyance of the remainder of the Purchased Assets or the consummation of the
other transactions contemplated hereby will result in any violation,
termination or modification of, or be in conflict with, any terms of any
contract, instrument or other agreement to which the Seller is a party or by
which it is bound, or any law, rule, regulation, order, license, permit,
judgment or decree applicable to the Seller or by which its properties are
bound or affected, or result in any breach of or constitute a default (or with
notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation, or
result in the creation of any lien, charge or encumbrance upon any of its
properties or assets pursuant to any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which the Seller is a party or by which it or any of its
properties is bound or affected.
4.5 PROPERTY. Except as set forth on "Schedule 4.5" hereto, the
Seller has good and marketable title to all of the Purchased Assets, free and
clear of any pledge, mortgage, lien, lease, security agreement, conditional
sales agreement, option , encumbrance, charge or claim of any nature
whatsoever. The Seller is not infringing in any material respect on any
patent, trademark, trade name, trade secret or copyright of another, and has
received no notice or claim of any such infringement, in connection with the
conduct of the Business. The Seller is not in default in any material respect
under any License Agreement or Operating Contract.
4.6 LEGAL PROCEEDINGS. There is no litigation pending or, to
the Seller's knowledge, threatened against the Seller which is likely to
adversely affect the assignment of the Operating Contracts or the sale,
transfer and conveyance of the remainder of the Purchased Assets or the
execution, delivery or enforceability of this Agreement or which is likely to
have a material adverse effect on the ability of the Seller to perform its
obligations hereunder. Attached as "Schedule 4.6" is a list of all litigation
pending or, to the Seller's knowledge, threatened affecting or related to the
Business.
4.7 NO CONTENTS REQUIRED. Except as set forth on "Schedule 4.7"
hereto, no consent, approval, authorization or order of any court or
governmental agency or body or other person or entity is required for (i) the
execution, delivery and performance by the Seller of or compliance by the
Seller with this Agreement; (ii) the assignment of the Operating Contracts to
the Purchaser; or (iii) the sale, transfer and conveyance of the remainder of
the Purchased Assets to the Purchaser or the consummation of the other
transactions contemplated by this Agreement.
4.8 COMPLIANCE. The Business has been operated in compliance in
all material respects with, and currently is not being operated in any
material respect in violation of, and the Seller has obtained, either directly
or indirectly, all material licenses, permits and certificates required by,
any law, rule, regulation, order or decree applicable to the Business, and no
notice of any non-compliance or
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revocation currently is pending or, to the knowledge of the Seller,
threatened. Except as set forth on "Schedule 4.8" and except for those errors
or defaults which have been corrected in all material respects prior to the
Closing Date, Seller and any of Seller's affiliates have performed and are
performing all of Seller's or Seller's affiliates' duties and obligations
under the Operating Contracts in compliance in all material respects with
Applicable Requirements.
4.9 EMPLOYEE BENEFIT PLANS. Attached hereto as "Schedule 4.9"
is a complete list of all plans in effect for pension, profit-sharing,
deferred compensation, severance pay, stock options, stock purchases, or any
other retirement or deferred benefit, or for any health, accident or other
welfare plan, or any other employee or retired employee benefits plan,
program, contract, understanding or arrangement in which any employee, former
employee, retired employee, or beneficiary of any of these, of the Business is
entitled to participate as a result of services rendered in connection with
the Business. The plans, programs, contracts, understandings and arrangements
listed on "Schedule 4.9" are hereinafter referred to as the "Employee Plans."
The Seller will make available to the Purchaser upon its request complete and
accurate copies of each such Employee Plan (or a description thereof if no
written plan exists). There are no lawsuits or proceedings pending or, to the
Seller's knowledge, threatened against the Seller with respect to any Employee
Plan which is in any way material to the Business.
4.10 RECENT OPERATIONS; EMPLOYEE MATTERS. Since September 30,
1994, (i) the Business has been operated substantially as it was operated
immediately prior to said date and only in the ordinary course, and the Seller
has sought to preserve intact the business relationships material to the
Business, and (ii) there have been no bonuses paid to or increases in the
compensation of employees, except in the ordinary course of business on a
basis consistent with past practice and except for the Management Incentive
Agreements. Set forth on "Schedule 4.10" is a complete and accurate list of
all the current employees of the Business. None of the employees of the
Business are covered by a collective bargaining agreement, and, to the
knowledge of the Seller, no union organization efforts with respect to the
employees of the Business are pending or threatened. There are no labor
strikes or other material labor disputes now pending, or to the best of the
Seller's knowledge, threatened, against the Seller in connection with the
conduct of the Business.
4.11 TAXES. The Seller has properly prepared and filed all
federal, state and other tax returns required to be filed by it on or before
the Closing Date in connection with the conduct of the Business. All taxes
shown by such returns or otherwise due and payable on or before the Closing
Date by the Seller in connection with the conduct of the Business have been
paid in full or are adequately provided for.
4.12 NO PENDING TRANSACTIONS. Except for the transactions
contemplated by this Agreement, the Seller is not a party to or bound by or
the subject of any agreement, undertaking or commitment to sell the Purchased
Assets or the Business.
4.13 BROKERS AND ADVISORS. Except for the services provided by
Dillon, Read & Co. Inc., the fees of whom are payable by RMC, the Seller has
not taken any action which would give rise
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to a valid claim against any party hereto for a brokerage commission, finder's
fee, counseling or advisory fee, or like payment.
4.14 PURCHASED ASSETS. Except as disclosed on "Schedule 4.14", the
Purchased Assets include all of the assets of the Business material to the
operation of the Business as it is being operated as of the date hereof and as
of the date of the most recent of the Financial Statements provided to
Purchaser.
4.15 MATERIAL CHANGES. Since December 31, 1994, there has not
been any material adverse change in the financial condition of the Business or
the Purchased Assets taken as a whole.
4.16 TAX REPORTING AND REMICs. With respect to any mortgage-
backed securities transaction for which Seller or its affiliates are
performing services under the Operating Contracts, all tax return filing and
reporting requirements, where applicable, that have or will become due on or
before the Closing Date have been duly complied with in all material respects,
and no action or inaction has been taken by the Seller which (i) would
disqualify any of the real estate mortgage investment conduits (REMICs) or,
where applicable, the grantor trusts, for all periods ending on or before the
Closing Date, (ii) would create any entity level of taxation with respect to
the REMICS and the grantor trusts, or (iii) would constitute a prohibited
transaction under the Internal Revenue Code of 1986, as amended (the "Code").
4.17 NO RECOURSE OBLIGATION. Except for Recourse Obligations,
the Seller has no obligation to repurchase or otherwise pay principal or
interest under or with respect to a mortgage loan. None of the Operating
Contracts require Seller or any of its affiliates to make Unrecoverable
Advances. Except as set forth on "Schedule 4.17", in every instance where
Seller or its affiliates are required to make an advance pursuant to the terms
of an Operating Contract, the primary servicer(s) or subservicers, as
applicable, related to such Operating Contract is under an obligation to make
such advance.
4.18 INVESTOR REMITTANCES AND REPORTING. Except for the
investor remittance errors disclosed on "Schedule 4.18" (the "Investor
Remittance Errors"), Seller and its affiliates have (a) remitted or otherwise
made available to each investor in all material respects (i) all principal and
interest payments received to which the investor is entitled pursuant to
Applicable Requirements, and (ii) all advances of principal and interest
payments required to be made pursuant to Applicable Requirements, and (b)
properly accounted for and allocated all losses pursuant to the Operating
Contracts in all material respects in accordance with Applicable Requirements.
In accordance with the Applicable Requirements, Seller and its affiliates have
in all material respects prepared and submitted to each investor all reports
in connection with such payments required by the Applicable Requirements
4.19 RELATED PARTIES. "Schedule 4.19" lists all of the
contractual relationships between the Seller and any of its affiliates related
to the Purchased Assets, Assumed Liabilities or the Business.
4.20 ESCROW/CUSTODIAL ACCOUNTS. Except for any errors or
defects which have been corrected in all material respects prior to the
Closing Date, all escrow/custodial accounts maintained by Seller related to
the Business have been and are established and maintained in all material
respects in accordance with Applicable Requirements.
4.21 ACCOUNTS RECEIVABLE. The accounts receivable included in
the Purchased Assets are, and will be on the Closing Date, valid accounts
owing to Seller, not subject to setoff or
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counterclaim, and Seller has not received any notice from an investor, insurer
or other appropriate party in which the investor, insurer or other party
disputes or denies a claim by Seller for reimbursement.
5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser
hereby represents and warrants as follows:
5.1 ORGANIZATION AND STANDING. The Purchaser is a National
Banking Association organized, validly existing and in good standing under the
laws of the United States and has the corporate power and authority to enter
into and perform its obligations under this Agreement and under any other
agreements, instruments or documents to be entered into by it pursuant to or
in connection with this Agreement.
5.2 AUTHORITY;BINDING OBLIGATION. The execution, delivery and
performance of this Agreement by the Purchaser have been duly authorized and
approved by all requisite corporate action, and this Agreement is a valid and
legally binding obligation of the Purchaser.
5.3 NO CONFLICT. Neither the execution and delivery of this
Agreement nor the carrying out of the transactions contemplated hereby, will
result in any violation, termination or modification of, or be in conflict
with the Purchaser's Charter or By-laws, or result in a breach of or
constitute a default (or with notice or lapse of time or both would become a
default), or give to others any rights, under the terms of any contract,
instrument or other agreement to which the Purchaser is a party or by which
the Purchaser is bound or affected.
5.4 LICENSES; MINIMUM NET WORTH. The Purchaser has obtained, or
will use its best efforts to obtain on or before the Closing Date, all
licenses, permits, qualifications, approvals and certifications and other
rights or other information required by any law, rule, regulation, order,
decree or provision contained in any of the Operating Contracts or other
requirements, term or condition relating to the assignment of such contract by
the Seller or its affiliate to the Purchaser and no notice of any non-
compliance or revocation with respect to any such licenses, permits, approvals
or certifications currently is pending or, to the knowledge of the Purchaser,
threatened. In addition, the Purchaser (i) currently has a minimum net worth
at least equal to $25,000,000; and (ii) either directly or through an
affiliate, which affiliate agrees on or before the Closing Date in writing to
perform any required back-up primary servicing obligations, possesses current
licenses, certificates and/or approvals from each of the following: approval
by Federal National Mortgage Association and Federal Home Loan Mortgage
Corporation as servicer and seller of mortgages, and approval by the Secretary
of Housing and Urban Development as a mortgagee.
5.5 BROKERS AND ADVISORS. The Purchaser has not taken any
action which would give rise to a valid claim against any party hereto for a
brokerage commission, finder's fee, advisory fee or like payment.
6. ASSIGNMENT OF OPERATING CONTRACTS. Most of the Operating
Contracts to be sold and assigned to the Purchaser pursuant to the provisions
of Section 2 of this Agreement include a requirement for consent by one or
more third parties to the assignment of the Operating Contracts to the
Purchaser. The parties agree that they will cooperate and use reasonable
efforts to secure any such required consents and approvals prior to the
Closing Date; provided, however, that the Seller and the Purchaser shall not
be obligated to pay to the third party from whom such approval is requested
any consideration for such assignment. Seller agrees to pay any expenses or
costs, including attorney fees,
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related to the consents and approvals required in connection with the
assignments of the Operating Contracts to the Purchaser. In the event that
receipt of the approval has not been obtained by the Seller as of the Closing
Date, the Seller shall, during the remaining term of such contract, use all
reasonable efforts to (i) at the request of the Purchaser, cooperate with the
Purchaser to obtain the consent of any such third party to the assignment of
the contract, and (ii) at the request of the Purchaser, cooperate with
Purchaser in any reasonable and lawful arrangements designed to provide the
benefits of any such contract to the Purchaser (through subcontract or other
arrangement or by following procedures for resignation and reappointment of a
substitute party thereto) with the intent that the Purchaser will enjoy the
economic benefits of the contract and will perform all of the duties and
obligations under the contract and assume any related obligations or
liabilities. Notwithstanding the fact that the assignment of a contract has
not been concluded as of the Closing Date, the Purchaser, by an appropriate
subcontract agreement or other arrangement designed to provide the benefits of
such contract to the Purchaser and which is consistent with the terms of this
Agreement including any indemnification rights or obligations hereunder, shall
have a right to all economic benefits of such contract and shall assume the
duties and responsibilities under such contract which constitute an Assumed
Liability hereunder. To the extent that the Seller and the Purchaser enter
into such a subcontract or other arrangement, such Operating Contract shall be
deemed to have been conveyed to the Purchaser for all purposes of this
Agreement. In the event that an Operating Contract which is not assigned as
of the Closing Date is terminated during 1995 by the party from which consent
is required solely as a result of a request for its assignment, Seller shall
remit to Purchaser a reimbursement of the Purchase Price in the amount that is
equal to the outstanding principal balance of such terminated Operating
Contract on the date of termination multiplied by 0.08% and provided that
Seller shall be entitled to retain any termination payment paid by the
terminating party.
7. COVENANTS OF THE SELLER. Each Seller jointly and severally
covenants to the Purchaser as follows:
7.1 ACCESS BY THE PURCHASER. The Seller will give and make
available to the Purchaser and the Purchaser's officers, accountants, counsel
and other representatives reasonable access, during normal business hours
throughout the period prior to the Closing, to the properties, books,
contracts, commitments, employees and records of the Business. The Seller
will furnish to the Purchaser and its accountants, counsel and other
representatives during such period all such information concerning the
Business and its properties and financial affairs as the Purchaser or such
representatives may reasonably request and will cooperate fully with the
Purchaser and its accountants and other representatives in their review of the
financial affairs of the Business, including the providing of access to the
work papers and other information utilized by such accountants in the
preparation of the financial statements for the Business.
7.2 OPERATION IN ORDINARY COURSE OF BUSINESS. Throughout the
period beginning on the date of this Agreement and continuing until the
Closing Date, the Seller will (a) carry on the Business in a manner consistent
with past practice, including reviewing the performance of primary servicers
and taking appropriate action in connection with any servicer problems, and
will use efforts consistent with past practice to preserve intact its present
business organization and preserve its relationships with investors,
customers, suppliers and others having business dealings with Seller; (b) not
increase salaries, bonuses or other compensation of any of the Business's
employees, except in the ordinary course of business on a basis consistent
with past practice; (c) use reasonable efforts to keep
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available the services of its employees; (d) not take any action which may
jeopardize its ownership rights in and to any of the Purchased Assets, and,
without the prior written consent of Purchaser, other than in the ordinary
course of business, not purchase or otherwise acquire assets which would
become Purchased Assets or sell or otherwise dispose of any of the Purchased
Assets; (e) not take any action which would cause the representations and
warranties set forth in Section 4 not to be true at and as of the Closing
Date; (f) comply in all material respects with all Applicable Requirements
relating to the Operating Contracts; and (g) without Purchaser's prior
approval, not enter into any commitment for a service contract or the
acquisition of a fixed asset of the Business involving an aggregate commitment
or purchase price in excess of $25,000.
7.3 CONSENT,CAUSE CONDITIONS TO BE SATISFIED. The Seller agrees
to take all necessary corporate or other action, and will use diligent efforts
to complete all filings and obtain all governmental and other consents and
approvals, required for the assignment of the Operating Contracts and the
consummation of the other transactions contemplated by this Agreement and will
use all reasonable efforts to obtain and furnish to Purchaser evidence of
prior written approval of and/or consent to the transfer of rights and duties
under the Operating Contracts from Seller to Purchaser, which consents or
approvals shall not impose requirements on Purchaser to perform thereunder on
terms or conditions which are substantially different than the terms and
conditions of such Operating Contract prior to transfer to Purchaser. The
Seller will use diligent efforts to cause the conditions described in Section
9 of this Agreement to be satisfied.
7.4 EMPLOYEES. As of the Closing, the Seller shall terminate
the employment of the Purchaser's Employees (as defined in Section 8.3)and
shall terminate the participation of the Purchaser's Employees in the Employee
Plans. Prior to Closing, the Seller shall notify in writing affected
employees of the foregoing in a form approved by the Purchaser. The Seller
shall also provide to such employees all notices, election and other rights
concerning health care continuation privileges afforded to such employees
under state and federal laws concerning health care continuation. The Seller
will comply with all applicable employee termination notice and similar laws
as they impact on the transactions contemplated by this Agreement. The
Purchaser shall have no liability whatsoever to employees of the Business with
respect to any claims arising out of any employee's participation in the
Employee Plans, including claims to any benefits accrued for any employee's
service with the Seller, whether or not any such employee becomes an employee
of the Purchaser.
For a period of two years following the Closing Date, Seller agrees to
provide to Seller's employees hired by Purchaser on the Closing Date a
continuing right to purchase homes in accordance with Seller's "Home Bonus
Program" upon terms and conditions applicable to Seller's current employees
during that time period.
7.5 CONFIDENTIALITY. Subject to Section 17, the Seller will not
disclose to any party the terms of this Agreement (whether or not the
transactions contemplated by this Agreement are consummated), except in
connection with the consummation of the transactions contemplated hereunder or
as otherwise required by law, applicable regulatory authority or court order.
The Seller will not disclose any confidential proprietary information
concerning the Business to persons outside of its management, financial
advisors, accountants and counsel after the Closing Date except as required by
law, applicable regulatory authority or court order.
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8. COVENANTS OF THE PURCHASER. The Purchaser covenants to the Seller
as follows:
8.1 CONSENT; CAUSE CONDITIONS TO BE SATISFIED. The Purchaser
agrees to take all necessary corporate or other action, and will use diligent
efforts on its own behalf and, where necessary, to assist the Seller in
completing filings and obtaining governmental and other consents and
approvals, or obtain all licenses, permits, qualifications, approvals and
certifications and other rights, requirements, terms or conditions required of
Purchaser for the assignment of the Operating Contracts and the consummation
of the other transactions contemplated by this Agreement. The Purchaser will
use diligent efforts to cause the conditions described in Section 10 of this
Agreement to be satisfied.
8.2 CONFIDENTIALITY. Subject to Section 17, the Purchaser will
not disclose to any party the terms of this Agreement (whether or not the
transactions contemplated by this Agreement are consummated), except in
connection with the consummation of the transactions contemplated hereunder or
as otherwise required by law, applicable regulatory authority or court order.
The Purchaser will not disclose any confidential information concerning the
Business to persons outside of its management, financial advisors, accountants
and counsel and, until the Closing Date will continue to be bound by the
Confidentiality Agreement previously executed between Dillon, Read & Co. Inc.
and the Purchaser.
8.3 EMPLOYEES. As soon as practicable, but in no event later
than 30 days following the date of this Agreement, Purchaser will notify
Seller of the names of the employees to whom Purchaser intends to offer
employment on the Closing Date provided said employees are active employees of
Seller at the end of the business day immediately prior to the Closing Date.
Seller shall use reasonable efforts to assist Purchaser in obtaining the
employment of those employees to whom Purchaser desires to offer continued
employment. Purchaser shall hire such employees on an employment at will
basis. Employees who are hired by Purchaser on the Closing Date ("Purchaser's
Employees") shall be eligible the first day of the month following the month
in which the Closing Date occurs for coverage under Purchaser's "welfare
benefit plans" (as defined in Section 3(1) of ERISA) (the "Welfare Benefit
Plans") including the following:
Medical Plan
Dental Plan
Vision Plan
Short Term Disability Plan
Long Term Disability Plan
Long Term Care Plan
Flexible Benefits Plan
Basic Group Life Insurance Plan
Group Universal Life Insurance Plan
Dependent Group Life Insurance Plan
Business Travel Accident Insurance Plan
Accidental Death and Dismemberment Plan
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Purchaser shall pay for any COBRA obligations related to any of Purchaser's
Employees. Purchaser's Employees shall be given credit in connection with the
Welfare Benefit Plans and in determining vacation benefits for service with
Seller or Seller's affiliates prior to the Closing Date. Purchaser's
Employees shall be able to enter into the Norwest Corporation Savings
Investment Plan the first day of the calendar quarter which is at least 32
daysfollowing the Closing Date with past service credit for eligibility and
vesting. Purchaser's Employees shall be entitled to participate in the
Norwest Corporation Pension Plan as new hires.
9. CONDITIONS TO OBLIGATIONS OF THE PURCHASER. Unless waived by the
Purchaser, the obligations of the Purchaser to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, prior to or on
the Closing Date, of each of the following conditions:
9.1 GOVERNMENTAL APPROVALS. All approvals, consents and
actions from any governmental body or agency having jurisdiction whose
approval or consent is required in order to consummate the transactions
contemplated hereby shall have been obtained and shall be effective and in
form and substance reasonably satisfactory to the Purchaser.
9.2 ACTIONS OR EVENTS INTERFERING WITH AGREEMENT. No
investigation, suit, action or other proceeding shall be threatened or pending
before any court or governmental agency which seeks to restrain or prohibit,
or seeks damages or other relief in connection with, this Agreement or the
transactions contemplated hereby, or which could have a material adverse
effect upon the Business or the Purchased Assets.
9.3 HART-SCOTT-RODINO ACT. The Seller shall have complied fully
with (including, without limitation, compliance with the information and
waiting period requirements) the applicable provisions of the Hart-Scott-
Rodino Antitrust Improvements Act of 1976 and the rules and regulations
promulgated thereunder (collectively, the "Hart-Scott-Rodino Act") and no
objection to the consummation of the transactions contemplated by this
Agreement shall have been raised by the Federal Trade Commission or the
Antitrust Division of the United States Department of Justice.
9.4 REPRESENTATIONS AND WARRANTIES; CERTIFICATES. The
representations and warranties set forth in Section 4 hereof shall be true and
accurate at and as of the Closing Date as though such representations and
warranties were made at and as of such time; the Seller shall have performed
all covenants and agreements required to be performed by it by such time; and
the Seller shall have provided at closing a certificate executed by
appropriate officers confirming its representations, warranties and covenants.
9.5 OPINION OF COUNSEL. The Seller shall have delivered to the
Purchaser an opinion of the Corporate Counsel of TRG dated the date of
Closing, substantially in the form of "Schedule 9.5" hereto.
9.6 ASSIGNMENT OF OPERATING CONTRACTS. The principal balance of
the Operating Contracts for which the Seller shall have obtained all necessary
approvals of and consents to the assignment thereof to Purchaser (the
"Assigned Contracts") shall be not less than 90% of the principal balance of
Operating Contracts as set forth on "Schedule 9.6" of this Agreement. The
amounts of the principal balances of Operating Contracts which are set forth
on "Schedule 9.6" shall be the amounts which are used in calculating the
principal balances of the Assigned Contracts for purposes of this Section 9.6.
The principal balance of the Operating Contracts assumed pursuant to Section
12 of this Agreement shall be added, to the extent of the aggregate principal
balance of any Operating Contracts which shall cease to exist as a result of a
complete redemption of the series of the mortgage-
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backed bonds or securities to which such Operating Contract relates, to the
amount of the principal
balance of the Assigned Contracts for purposes of the calculation of Assigned
Contracts pursuant to this Section 9.6.
The Seller shall have obtained the consent of SMFC Funding
Corporation, a Virginia Corporation ("SMFC"), to the assignment of the Amended
and Restated Program Servicing Agreement dated as of December 1, 1994 amount
SMFC, RMC and Resource Mortgage Capital, Inc., a Virginia corporation, to the
Purchaser.
9.7 OFFICE LEASES. The appropriate Ryland Entity shall have
entered into a sublease of office space at 11000 Broken Land Parkway,
Columbia, Maryland 21044 on economic and other terms as set forth on "Schedule
9.7" hereto.
10. CONDITIONS TO OBLIGATIONS OF THE SELLER. Unless waived by
the Seller, the obligations of the Seller to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, prior to or on
the Closing Date, of each of the following conditions:
10.1 GOVERNMENTAL APPROVALS. All approvals, consents and
actions from any governmental body or agency having jurisdiction whose
approval or consent is required in order to consummate the transactions
contemplated hereby shall have been obtained and shall be effective and in
form and substance reasonably satisfactory to the Seller.
10.2 ACTIONS OR EVENTS INTERFERING WITH AGREEMENT. No
investigation, suit, action or other proceeding shall be threatened or pending
before any court or governmental agency which seeks to restrain or prohibit,
or seeks damages or other relief in connection with, this Agreement or the
transactions contemplated hereby.
10.3 HART-SCOTT-RODINO ACT. The Purchaser shall have complied
fully with (including, without limitation, compliance with the information and
waiting period requirements) the applicable provisions of the Hart-Scott-
Rodino Act and the rules and regulations promulgated thereunder and no
objection to the consummation of the transactions contemplated by this
Agreement shall have been raised by the Federal Trade Commission or the
Antitrust Division of the United States Department of Justice.
10.4 REPRESENTATIONS AND WARRANTIES. The representations and
warranties set forth in Section 5 hereof shall be true and accurate at and as
of the Closing Date as though such representations and warranties were made at
and as of such time; the Purchaser shall have performed all covenants and
agreements required to be performed by such time; and the Purchaser shall have
provided a certificate executed by an appropriate officer confirming the
foregoing.
10.5 OPINION OF COUNSEL. The Purchaser shall have delivered to
the Seller an opinion of its counsel dated the date of Closing, substantially
in the form of "Schedule 10.5" hereto.
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11. INDEMNIFICATION.
11.1 INDEMNIFICATION BY THE SELLER. Each Seller jointly and
severally hereby covenants and agrees to indemnify and hold harmless the
Purchaser and its affiliates, and the current, former and future directors,
officers, employees and agents of Purchaser and its affiliates from, and to
reimburse Purchaser, its affiliates and their respective current, former and
future directors, officers, employees and agents, from and after the Closing
Date for, against and in respect of any and all damages, losses, liabilities,
expenses and costs incurred by any such party, arising out of, based upon or
resulting from:
(a) any claim, liability or obligation of the Business or of
Seller or any of its affiliates of any nature, whether accrued, absolute,
contingent or otherwise, which is not specifically assumed by the Purchaser at
the Closing Date pursuant to the terms of this Agreement;
(b) any claim, action or proceeding relating to the Business
where the event, action, inaction or set of facts giving rise to such claim,
action, or proceeding occurred prior to the Closing Date and where the
liability or obligation arising therefrom does not constitute an Assumed
Liability pursuant to Section 1(b)(ii) of this Agreement;
(c) any claim, liability or obligation of Seller or any of its
affiliates under the Management Incentive Agreements;
(d) any misrepresentation, breach of warranty or non-
fulfillment of any agreement or covenant on the part of the Seller under this
Agreement, or any misrepresentation in or omission from any certificates or
other instruments furnished or to be furnished by the Seller hereunder; and
(e) any costs, attorneys' fees and expenses of any nature
incident to any of the matters indemnified against pursuant to this Section
11.1.
11.2 INDEMNIFICATION BY THE PURCHASER. The Purchaser hereby
covenants and agrees to indemnify and hold harmless the Seller and its
affiliates, and the current, former and future directors, officers, employees
and agents of Seller and its affiliates from, and to reimburse Seller, its
affiliates and their respective current, former and future directors,
officers, employees and agents, from and after the Closing Date for, against
and in respect of any and all damages, losses, liabilities, expenses and costs
incurred by any such party, arising out of, based upon or resulting from:
(a) any misrepresentation, breach of warranty or non-
fulfillment of any agreement or covenant on the part of the Purchaser under
this Agreement, or any misrepresentation in or omission from any certificates
or other instruments furnished or to be furnished by the Purchaser hereunder;
(b) any failure of the Purchaser to satisfy or perform the
Assumed Liabilities;
(c) any claim, action or proceeding relating to the Business
where the event, action, inaction or set of facts giving rise to such claim,
action or proceeding occurred on or after the Closing Date; and
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(d) any costs, attorneys' fees and expenses of any nature
incident to any of the matters indemnified against pursuant to this Section
11.2.
11.3 DOLLAR THRESHOLD. The indemnifying party shall only be
liable under this Section 11 after and to the extent that the aggregate amount
of all indemnification obligations of the indemnifying party exceeds
$250,000.00, in which case the indemnifying party shall be liable for all
indemnification obligations. Notwithstanding the foregoing, Seller shall be
liable for all indemnification obligations associated with the Investor
Remittance Errors and such liability shall be excluded for purposes of any
determination of the aggregate amount of indemnification obligations of the
indemnifying party pursuant to the prior sentence.
11.4 NOTICE AND DEFENSE COOPERATION. In the event of the
occurrence of any event which any party asserts is an indemnifiable event
pursuant to this Agreement or upon discovery of a potential claim by the party
seeking indemnity, such party shall notify in writing the indemnifying party
promptly after such party obtains knowledge of such occurrence or discovers
such potential claim, and, if such event involves the claim of any third
party, the indemnifying party shall have sole control over and shall assume
all expense with respect to, the defense, settlement, adjustment or compromise
of any claim as to which this Section 11 requires it to indemnify the other
party; provided that (i) the indemnified party may, if it so desires, employ
counsel at its own expense to assist in the handling of such claim, and (ii)
the indemnifying party shall consult with the indemnified party before
entering into any settlement, adjustment or compromise of such claim or
ceasing to defend against such claim. Failure of a party to give notice under
this section shall not absolve the other party from its obligation to
indemnify except to the extent that the indemnifying party is damaged by such
failure and only to the extent of such damage. Each party agrees in all cases
to cooperate in the compromise of or defending of any such liabilities or
claims.
The Purchaser and the Seller acknowledge that claims and issues may
arise with respect to proper allocation of responsibility for matters relating
to the Operating Contracts and claims made by, or litigation involving,
customers of the Business where it may be necessary to resolve issues or
otherwise determine the appropriate steps to be taken in connection with the
claim, litigation or other matter. In this regard, the parties agree to
cooperate with each other as reasonably required in order to resolve any
outstanding claims, litigation or other matters relating to the Business and
to ascertain appropriate responsibility of the parties for the matter under
the terms of this Agreement. In addition, the parties agree as reasonably
required to provide access to former employees of the Business and to the
books and records relating to the Business for purposes of clarifying
information, copying data and otherwise as required to deal with such tax,
regulatory or other matters, customer disputes or litigation arising in
connection with the Business either prior to or after Closing.
12. OPERATING CONTRACTS. The Seller shall provide to the Purchaser a
copy of any operating contracts entered into after the date of this Agreement.
Unless Purchaser objects in writing to such operating contract within five (5)
business days after receipt, such operating contract shall be considered an
Operating Contract identified on "Schedule 1(f)" of this Agreement, a
Purchased Asset pursuant to Section 1(g) of this Agreement, and an Assumed
Liability pursuant to Section 1(b)(i) of this Agreement.
13. TERMINATION. This Agreement may be terminated at any time at or
prior to the time of the Closing by (i) the Purchaser if the conditions set
forth in Section 9 hereof are not satisfied and have
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not been waived by the Purchaser on or before August 31, 1995, (ii) the Seller
if the conditions set forth in Section 10 hereof are not satisfied and have
not been waived by the Seller on or before August 31, 1995, or (iii) the
mutual consent of the parties hereto. If this Agreement is terminated
pursuant to the foregoing provisions, this Agreement and all agreements
contained herein or attached hereto as exhibits shall become null and void,
and thereafter no party hereto shall have any liability or responsibility to
any other party hereto, except as provided in Sections 11.1 and 11.2 hereof
and except for the continuing obligation of Sections 8.2 and 7.5 of this
Agreement.
14. COVENANT NOT TO COMPETE - FUTURE TRANSACTIONS BETWEEN SELLER AND
PURCHASER.
14.1 NON-COMPETITION. The Seller agrees that for a period of
five (5) years from the Closing Date, neither the Seller nor any of Seller's
affiliates now or hereafter in existence including, without limitation, TRG
nor any direct or indirect subsidiary of TRG (collectively, the "Ryland
Entities") shall, within the United States (the "Geographic Area"), as owner,
partner, consultant, advisor, contractor, stockholder or otherwise, engage in
the mortgage-related institutional financial services business currently
conducted by the Seller consisting of the master servicing, securities
administration, tax and SEC reporting and investor information services
businesses described in "Schedule 1(c)" of this Agreement.
Notwithstanding the foregoing, no Ryland Entity shall be prohibited
from (i) beneficially owning up to five percent (5%) of any class of
securities of a company which is listed on a recognized stock exchange or for
which prices are quoted on the Nasdaq Stock Market (National Market); (ii)
consummating one or more acquisitions of business enterprises that have
divisions, units or subsidiaries engaged in a business activity competitive
with the Business provided that the applicable Ryland Entity divests itself of
such division, unit or subsidiary within one (1) year from the closing of the
acquisition of the applicable business enterprise; or (iii) engaging in any
activity related to the mortgage securities administration business provided
that such activities are conducted entirely on behalf of Ryland Entities and
such securities administration business relates to securities issued by a
Ryland Entity in any calendar year not in excess of $125,000,000.
14.2 EMPLOYEE SOLICITATION. Without the prior written consent
of the Purchaser, no Ryland Entity shall, for a period of five (5) years from
the Closing Date, on its own behalf or in conjunction with or on behalf of any
other person, firm or company, solicit, encourage, or entice away from the
Purchaser any employee of the Business who becomes an employee of the
Purchaser after Closing, whether or not such person would commit a breach of
contract by so doing. General advertising and hiring pursuant to such
advertising shall not be deemed to be solicitation for purposes of this
Section 14.2 of this Agreement.
14.3 CONFIDENTIALITY. Neither the Seller nor any Ryland Entity
shall at any time after the Closing Date make use of, disclose or divulge to
any third party any information of a proprietary, secret or confidential
nature relating to the Business, except such information may be disclosed:
(a) where necessary, to any person in connection with the obtaining of the
consents contemplated or required by the terms of this Agreement; (b) if
required by court order, decree or any applicable law; (c) during the course
of or in connection with any litigation or claims related to obligations or
liabilities relating to the Business as conducted prior to Closing, including
any governmental investigation, arbitration or other proceeding in connection
therewith; or (d) if required in connection with (i) any regulatory,
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governmental or related investigation, inquiry or proceeding, or (ii) any
regulatory compliance requirements imposed upon any Ryland Entity.
14.4 REMEDIES. It is recognized that damages in the event of
breach of this Section 14 would be difficult, if not impossible, to ascertain,
and it is therefore agreed that the Purchaser shall have the right to an
injunction or other equitable relief in any court of competent jurisdiction,
enjoining any such breach. The existence of this right shall not preclude any
other rights and remedies at law or in equity which the Purchaser may have.
The parties agree that the restrictions and agreements contained herein are
reasonable, are the product of arms-length negotiation, and are necessary for
the Purchaser to protect the goodwill and other interests which it is
purchasing under this Agreement; however, in the event that any part of this
Section 14 shall be found to be unenforceable, but would be valid and
enforceable if any part thereof were deleted or otherwise modified, then such
restrictions in this Section 14 shall apply with such modifications as shall
be necessary to make them valid and enforceable.
14.5 EMPLOYEE SOLICITATION BY PURCHASER. Without the prior
written consent of the Seller, Purchaser shall not, for a period of two (2)
years from the Closing Date, on its own behalf or in conjunction with or on
behalf of any other person, firm or company, solicit, encourage, or entice
away from the Seller or Seller's affiliates into employment with Purchaser in
connection with the Business any employee with the title of Manager or above
of Seller or Seller's affiliates located in Columbia, Maryland. General
advertising and hiring pursuant to such advertising shall not be deemed to be
solicitation for purposes of this Section 14.5 of this Agreement. It is
recognized that damages in the event of breach of this Section 14.5 would be
difficult, if not impossible, to ascertain, and it is therefore agreed that
Seller and its affiliates shall have the right to an injunction or other
equitable relief in any court of competent jurisdiction, enjoining any such
breach. The existence of this right shall not preclude any other rights and
remedies at law or in equity which the Seller may have.
14.6 FUTURE BUSINESS. Except as permitted under Section 14.1,
from and after the Closing Date and for a period of not less than five (5)
years following the Closing Date, Seller agrees that, in the event Seller or
any of Seller's affiliates has a need for a service which constitutes a part
of the Business as of the Closing Date and which is being offered by Purchaser
after the Closing Date, Seller will direct such business to Purchaser and
agrees to negotiate in good faith the terms upon which such service will be
performed; provided, however, that Purchaser shall offer to perform such
service on terms and conditions that are no less favorable than are available
or offered at that time by Purchaser.
15. RECOURSE OBLIGATIONS. Anything in this Agreement to the contrary
notwithstanding, the Seller agrees that if and to the extent that the
Purchaser shall have any Recourse Obligation under or in connection with an
Operating Contract, the Purchaser may, by written notice to the Seller within
thirty (30) days, or five (5) business days in the case of a Conversion
Recourse Obligation, after such Recourse Obligation becomes known by
Purchaser, require the Seller to assume the Recourse Obligation. The Seller's
sole obligation under this Agreement in respect of such Recourse Obligation
shall be as provided in this Section 15 and shall survive the Closing of this
Agreement and continue in full force and effect for the duration of the
related Operating Contract, and the Seller shall have no other liability or
obligation arising from or in connection with such Recourse Obligation. In
the event Seller assumes and performs any such Recourse Obligation in
accordance with the terms of this Agreement, the Seller shall retain, or be
assigned by the Purchaser, any indemnification, recourse, restitution or
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reimbursement rights and other rights or obligations which the Purchaser or
Seller may have in connection with such Recourse Obligation.
16. ADVANCES PURSUANT TO OPERATING CONTRACTS. Notwithstanding
anything contained in this Agreement to the contrary, Seller shall have no
obligation or liability after the Closing Date in connection with any advances
or proposed advances by the Purchaser pursuant to the Applicable Requirements
that the Purchaser determines are recoverable from insurance proceeds,
liquidation proceeds, subsequent payments by mortgagors or otherwise but which
for any reason are not subsequently recovered by the Purchaser.
17. PRESS RELEASES. Any press releases which are made in connection
with the transactions contemplated hereunder or otherwise shall be mutually
agreed upon by the Seller and the Purchaser.
18. SURVIVAL. The respective representations, warranties, covenants,
indemnities and agreements of the parties hereto shall survive the Closing of
this Agreement and continue in full force and effect without limitation,
provided that any party seeking indemnification hereunder or otherwise making
a claim with respect to any matter covered by Section 11 of this Agreement
must give written notice of any such claim within five (5) years after the
Closing Date.
19. EXPENSES. The parties hereto will pay their own costs and
expenses relating to the transactions contemplated by this Agreement,
including fees and disbursements of their respective counsel, accountants and
financial advisors, whether or not the transactions contemplated hereunder are
consummated.
20. SALES, TRANSFER AND OTHER TAXES. Any sales or transfer taxes or
similar fees imposed or incurred in connection with the transfer of the
Purchased Assets shall be paid by the Purchaser by delivery of a certified
check of immediately available funds to the Seller at the Closing. The
determination of the fair value of the tangible personal property for purposes
of the calculation of any applicable sales or transfer taxes or similar fees
imposed or incurred in connection with the transfer of the Purchased Assets
shall be mutually agreed upon by Seller and Purchaser no later than five (5)
days prior to the Closing Date, provided however, that such fair value shall
not be less than 90% of the Book Value of the applicable Purchased Assets.
The Purchaser shall assume all responsibility for complying with the
requirements of any sales tax audit with respect to transfer of the Purchased
Assets or other proceedings or inquiries in connection therewith initiated
after the Closing Date. The Purchaser shall also be responsible for payment
of its allocable share of any applicable personal property tax for the 1995
tax year. Seller shall be responsible for any taxes, additions to taxes,
interest or penalties due or owing for periods prior to the Closing Date with
respect to the Business, Purchased Assets or employees of the Business.
21. GOVERNING LAW; ASSIGNMENT; BINDING EFFECT. This Agreement shall
be binding upon and inure to the benefit of the respective parties hereto and
their permitted successors and assigns, as the case may be. This Agreement
may not be assigned by any party without the written consent of the other
parties hereto, except that Purchaser may assign its rights under this
Agreement to an affiliate after the Closing Date provided that no assignment
shall relieve the Purchaser of any of its obligations under this Agreement or
under any of the Operating Contracts. This Agreement shall be
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governed by the laws of the State of Maryland.
22. NOTICES. Except as otherwise provided herein, all notices
hereunder shall be in writing and shall be deemed to have been duly given upon
receipt if delivered by hand or three (3) days after mailing if mailed by
certified or registered mail at the following addresses: if to the Seller, to
The Ryland Group, Inc., 11000 Broken Land Parkway, Columbia, Maryland 21044,
Attention: Michael Mangan, Executive Vice President and Chief Financial
Officer, with a copy to The Ryland Group, Inc., 11000 Broken Land Parkway,
Columbia, Maryland 21044, Attention: Timothy Geckle, Corporate Counsel, and if
to the Purchaser, to, Corporate Secretary, Norwest Corporation, Norwest
Center, Sixth & Marquette, Minneapolis, MN 55426 or to such other address as
hereinafter shall be furnished in writing by a party hereto to the other party
hereto.
23. FURTHER INSTRUMENTS. The Seller will, on the date hereof, or on
such other date or dates as the Purchaser may request, without cost or expense
to the Purchaser, execute and deliver or cause to be executed and delivered to
the Purchaser, such further instruments and will take such other actions as
the Purchaser may reasonably request to carry out more effectively the
transactions contemplated by this Agreement. The parties covenant and agree
diligently to seek to cause the conditions to Closing which reasonably are
within their control to be satisfied on or before the Closing Date.
24. ENTIRE AGREEMENT; HEADINGS. This Agreement (including all
attachments and schedules hereto) constitutes the entire agreement among the
parties pertaining to the subject matter hereof, and may not be modified or
waived except in writing. The headings are for convenience only and shall not
bear upon the construction of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ATTEST: NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By: /s/ Thomas A. Kraack
------------------------
/s/ Rachelle M. Graham Name: Thomas A. Kraack
- --------------------------------
Assistant Secretary Title: Senior Vice President
ATTEST: RMC ASSET MANAGEMENT COMPANY
By: /s/ Michael C. Brown
--------------------------
/s/ Timothy J. Geckle
- ----------------------------- Name: Michael C. Brown
Timothy J. Geckle, Secretary Title: Senior Vice President
ATTEST: RYLAND MORTGAGE COMPANY
By: /s/ Robert J. Gaw
/s/ Timothy J. Geckle -------------------------
- ---------------------------- Name: Robert J. Gaw
Timothy J. Geckle Title: President
Assistant Secretary
ATTEST: RYLAND ACCEPTANCE CORPORATION
By: /s/ Robert J. Gaw
/s/ Timothy J.Geckle -------------------------
- --------------------------- Name: Robert J. Gaw
Timothy J. Geckle, Secretary Title: President
ATTEST: THE RYLAND GROUP, INC.
By: /s/ Michael D. Mangan
/s/ Timothy J. Geckle -----------------------------
- ---------------------------- Name: Michael D. Mangan
Timothy J. Geckle Title: Executive Vice President
Assistant Secretary
33
