MEMBERSHIP INTEREST AND SHARE PURCHASE AGREEMENT

Exhibit 10.19

EXECUTION COPY

MEMBERSHIP INTEREST AND SHARE PURCHASE AGREEMENT

between

RESIDENTIAL FUNDING COMPANY, LLC,

as Seller

and

GMAC LLC,

as Purchaser

March 31, 2009

TABLE OF CONTENTS

 

 

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TABLE OF CONTENTS

(continued)

 

 

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TABLE OF CONTENTS

(continued)

 

 

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MEMBERSHIP INTEREST AND SHARE

PURCHASE AGREEMENT

This MEMBERSHIP INTEREST AND SHARE PURCHASE AGREEMENT is entered into on the 31stday of March, 2009 between Residential Funding Company, LLC, a Delaware limited liability company (“ Seller ”), and GMAC LLC, a Delaware limited liability company (“ Purchaser ”).

WHEREAS, Seller owns (i) all of the issued and outstanding limited liability company interests (the “ RFS Interests ”) of Residential Funding Securities, LLC, a Delaware limited liability company (“ RFS ”) and (ii) the entire legal and beneficial title to all of the capital stock (the “ RFCIL Interests ” and, together with the RFS Interests, the “ Interests ”) in RFC Investments Limited, a private company limited by shares incorporated in England and Wales (“ RFCIL ”);

WHEREAS, RFCIL owns all of the issued and outstanding share capital of RFSC International Limited, a private company limited by shares incorporated in England and Wales (“ RFSC ” and, together with RFS and RFCIL, the “ Acquired Companies ”);

WHEREAS, at the RFS Closing (as defined in Section 1.1 ), simultaneous with the other transactions to be consummated at the RFS Closing, Purchaser shall pay directly to Seller on behalf of RFS an amount equal to all outstanding principal due and payable under that certain National Association of Securities Dealers Subordinated Loan Agreement (bearing the loan number 04-D-SLA-13305) between Seller and RFS, dated as of March 7, 2003, as amended (the “ Subordinated Loan ”), and, immediately thereafter, such Subordinated Loan shall no longer be effective in accordance with its terms;

WHEREAS, as of the date hereof, RFS, as borrower, has entered into that certain new subordinated loan agreement, dated as of the date hereof (the “ New Subordinated Loan Agreement ”), with Purchaser, as lender, which will replace the Subordinated Loan at the RFS Closing, subject to the consent of FINRA;

WHEREAS, upon the terms and subject to the conditions set forth in this Agreement, Seller desires to sell, assign and transfer to Purchaser, and Purchaser desires to purchase from Seller, and take assignment and delivery of, all right, title and interest in and to the Interests;

NOW, THEREFORE, in consideration of the premises and the mutual promises herein contained, Seller and Purchaser agree as follows:

ARTICLE 1.

DEFINITIONS; INTERPRETATION

1.1 Definitions . The following terms shall have the following meanings for the purposes of this Agreement:

“ Acquired Companies ” shall have the meaning set forth in the recitals.

“ Actual Intercompany Liabilities ” shall have the meaning set forth in Section 2.3(b) .

“ Actual Intercompany Liabilities Notice ” shall have the meaning set forth in Section 2.3(b) .

“ Adjustment Report ” shall have the meaning set forth in Section 2.2(b)(iv) .

“ Affiliate ” means any Person controlling, controlled by or under common control with another “Person.” For purposes of this definition only, “control” shall mean the ownership, directly or indirectly, of 50% or more of the outstanding common stock or other equity interest of a Person. Seller and Purchaser shall not be deemed Affiliates for purposes of this Agreement.

“ Agreement ” means this Membership Interest and Share Purchase Agreement, including all Exhibits hereto.

“ Assignment of RFS Interests ” means the Assignment and Assumption of Limited Liability Company Interests with respect to the RFS Interests in the form of Exhibit A attached hereto.

“ Basket Amount ” shall have the meaning set forth in Section 8.4(a) .

“ Business Day ” means any day of the year, other than (i) any Saturday or Sunday or (ii) any other day on which banks located in New York, New York or London, England, as applicable, generally are closed for business.

“ Computer Equipment ” means all equipment and devices (including data processing hardware and related telecommunications equipment, media, and tools) used by the Acquired Companies in the conduct of their businesses, including the Acquired Companies’ rights under all related warranties.

“ Consents ” means all permits, authorizations, consents, waivers and approvals from third parties or Governmental Authorities necessary to consummate this Agreement and the transactions contemplated hereby. The Consents are set forth on a list delivered by Seller to Purchaser on the date hereof.

“ Contract ” means, with respect to any Person, any agreement, commitment, arrangement, undertaking, contract, obligation, promise, indenture, deed of trust or other similar instrument (whether written or oral and whether express or implied) by which that Person, or any of its properties or assets, is legally bound.

“ Dispute Notice ” shall have the meaning set forth in Section 2.2(b)(iii) .

“ Employee Benefit Plan ” means any “employee benefit plan” (as defined in Section 3(3) of ERISA), other than a Multiemployer Plan, and each retirement or deferred compensation plan, incentive compensation plan, stock plan, retention plan or agreement, unemployment compensation plan, vacation pay, change in control, severance pay, bonus or benefit arrangement, insurance or hospitalization program or any fringe benefit arrangements for any employee, director, consultant or agent, whether pursuant to contract, arrangement, custom or informal understanding which does not constitute an employee benefit plan, and including an employment or consulting Contract.

 

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“ Enforceability Exceptions ” shall have the meaning set forth in Section 3.1(a) .

“ Environmental Law ” means any Law relating to the environment, including those pertaining to (i) reporting, licensing, permitting, investigating, remediating and cleaning up in connection with any presence or Release, or the threat of the same, of Hazardous Substances and (ii) the manufacture, processing, distribution, use, treatment, storage, disposal, transport, handling and the like of Hazardous Substances, including those pertaining to occupational health and safety.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, and all regulations and rules issued thereunder, or any successor Law.

“ Estimated Intercompany Liabilities ” shall have the meaning set forth in Section 2.3(a) .

“ Estimated Intercompany Liabilities Notice ” shall have the meaning set forth in Section 2.3(a) .

“ Exchange Act ” means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“ Financial Statements ” shall have the meaning set forth in Section 3.4(a) .

“ FINRA ” means the Financial Industry Regulatory Authority and includes its predecessor, the National Association of Securities Dealers.

“ FSA ” means the Financial Services Authority.

“ GAAP ” means United States generally accepted accounting principles.

“ Governmental Authority ” means any U.S. or non-U.S. federal, state, provincial or municipal entity, any U.S. or non-U.S. governmental entity and any political subdivision or other executive, legislative, administrative, judicial, quasi-judicial or other governmental department, commission, court, board, bureau, agency or instrumentality, domestic or foreign.

“ Hazardous Substance ” means any substance or material that is prohibited, controlled or regulated by any Governmental Authority pursuant to environmental laws, including pollutants, contaminants, dangerous goods or substances, toxic or hazardous substances or materials, wastes (including solid non-hazardous wastes and subject wastes), petroleum and its derivatives and by-products and other hydrocarbons, all as defined in or regulated pursuant to any Environmental Law.

“ Indemnification Cap ” shall have the meaning set forth in Section 8.4(b) .

“ Indemnified Person ” means the Person or Persons entitled to, or claiming a right to, indemnification under Article 8.

“ Intellectual Property ” means domestic and foreign (i) registered and unregistered trade names, trademarks, service marks, applications for trademarks and applications for service

 

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marks, (ii) patent registrations and patent applications, (iii) trade secrets and (iv) copyrights, claims for copyrights, copyright registrations and copyright applications that, in each case, are owned by or licensed to any Acquired Company.

“ Intercompany Debt ” shall have the meaning set forth in Section 3.4(b) .

“ Interests ” shall have the meaning set forth in the recitals.

“ IT Assets ” means IT Inventories, Technical Documentation, Software Contracts and Computer Equipment of the Acquired Companies, in each case to the extent used in, relating to, or arising out of the operation of the businesses of the Acquired Companies.

“ IT Inventories ” means (i) computer software code (in all media) and materials, including all software programs; (ii) computer software documentation, including user materials and (iii) all other unused or reusable materials, stores, and supplies related to computer software, in each case to the extent used in, relating to, or arising out of the operation of the businesses of the Acquired Companies.

“ Law ” means any law, statute, regulation, ordinance, rule, order, decree, judgment, consent decree or governmental requirement enacted, promulgated, entered into, agreed to or imposed by any Governmental Authority.

“ Lien ” means any title defect, conflicting or adverse claim of ownership, mortgage, deed of trust, hypothecation, security interest, lien, pledge, claim, right of first refusal, option, charge, restrictive covenant, lease, order, decree, judgment, stipulation, settlement, attachment, objection or other encumbrance of any nature whatsoever.

“ Loss ” or “ Losses ” means any and all damages, losses, actions, proceedings, causes of action, obligations, liabilities, claims, Liens, penalties, fines, demands, assessments, awards, judgments, settlements, costs and expenses, including (i) court costs and similar costs of litigation, (ii) reasonable attorneys’ and consultants’ fees, including those incurred in connection with (a) investigating or attempting to avoid the matter giving rise to the Losses or (b) successfully establishing a valid right to indemnification for Losses and (iii) interest awarded as part of a judgment or settlement, if any, but in any event shall exclude consequential, punitive, special or incidental damages or lost profits claimed, incurred or suffered by any Indemnified Person (which exclusion does not include any consequential, punitive, special or incidental damages or lost profits for which such Indemnified Person is liable to a third party as a direct, out of pocket cost of such Indemnified Person).

“ Material Adverse Effect ” means any condition, circumstance, change or effect that, individually or when taken together with all other conditions, circumstances, changes or effects, is materially adverse to any Acquired Company, taken as a whole; provided, that, for purposes of this Agreement, a Material Adverse Effect shall not include any condition, circumstance, change or effect resulting from (i) conditions, circumstances or changes to the industry or markets in which the Acquired Companies are operated, (ii) the announcement or disclosure of the transactions contemplated herein, (iii) general economic, regulatory or political conditions or changes in the countries in which the Acquired Companies are operated, (iv) military action or acts of terrorism, (v) changes in applicable Law after the date hereof, (vi) compliance with the

 

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terms of this Agreement or (vii) the conditions in or changes to any financial, banking or securities markets (including any disruption thereof and any decline in the price of any security or market index); and provided, further, that in the case of each of clauses (i) , (iii) , (iv) , (v)  and (vii) , no Acquired Company is materially disproportionately affected by such condition, circumstance, change or effect compared to other Persons engaged in the conduct of businesses similar to the businesses of such Acquired Company.

“ Material Contract ” means any Contract of an Acquired Company, which (i) was entered into in contemplation of a sale or possible sale of shares or assets of such Acquired Company; (ii) involves any joint venture or partnership or agreement to share profits or excess cash flows; (iii) relates to the lease, sub-lease or use of any real estate; (iv) relates to the licensing or use of any Intellectual Property and involves a liability or expenditure of greater than $100,000 annually; (v) involves a liability or expenditure of greater than $100,000 annually; (vi) the duration of which is greater than one year and has an aggregate liability exceeding $100,000 over the life of the Contract; (vii) provides for the guarantee, indemnification, surety or similar obligation of any Person’s obligations (other than the obligations of the Acquired Companies); (viii) restricts in any material respect any Acquired Company from conducting its business as conducted as of the date of this Agreement in any geographic area during any period of time or (ix) was entered into with any Governmental Authority and involves obligations by any Acquired Company that will continue following either the RFS Closing or the RFCIL Closing, as applicable.

“ Multiemployer Plan ” means any “multiemployer plan,” as defined in Section 4001(a)(3) of ERISA.

“ Net Book Value ” means the total equity of either RFS or RFSC, as set forth on the consolidated balance sheet of RFS or RFSC, respectively, dated as of the relevant date. For example, the “Net Book Value of RFS as of February 28, 2009” means the total equity of RFS as set forth on the consolidated balance sheet of RFS, dated as of February 28, 2009.

“ New Subordinated Loan Agreement ” shall have the meaning set forth in the recitals.

“ Permits ” means all material permits, consents, waivers, licenses, certificates, approvals, authorizations, registrations, franchises, rights, privileges and exemptions issued or granted by any Governmental Authority. An accurate and complete list of all Permits that are applicable to RFS and/or RFSC and that have been obtained since January 1, 2007 has been delivered by Seller to Purchaser on the date hereof.

“ Person ” means any individual, corporation, partnership, association, limited liability company, trust, Governmental Authority or other entity or organization in any jurisdiction.

“ Purchase Price ” shall have the meaning set forth in Section 2.2(a) .

“ Purchaser ” shall have the meaning set forth in the preamble.

“ Purchaser Indemnified Parties ” shall have the meaning set forth in Section 8.2 .

 

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“ Purchaser’s RFCIL Closing Certificate ” shall have the meaning set forth in Section 7.2(d) .

“ Purchaser’s RFS Closing Certificate ” shall have the meaning set forth in Section 7.1(d) .

“ Regulatory Filings ” shall have the meaning set forth in Section 3.15(a) .

“ Release ” means any release or discharge of any Hazardous Substance, including any discharge, spray, injection, inoculation, abandonment, deposit, spillage, leakage, seepage, pouring, emission, emptying, throwing, dumping, placing, exhausting, escape, leach, migration, dispersal, dispensing or disposal.

“ ResCap ” means Residential Capital, LLC, a Delaware limited liability company.

“ RFCIL ” shall have the meaning set forth in the recitals.

“ RFCIL Closing ” means the closing of the transactions contemplated hereby with respect to the purchase and sale of the RFCIL Interests.

“ RFCIL Closing Date ” shall have the meaning set forth in Section 2.4 .

“ RFCIL Interests ” shall have the meaning set forth in the recitals.

“ RFCIL Purchase Price ” shall have the meaning set forth in Section 2.2(a) .

“ RFS ” shall have the meaning set forth in the recitals.

“ RFS Closing ” means the closing of the transactions contemplated hereby with respect to the purchase and sale of the RFS Interests.

“ RFS Closing Date ” shall have the meaning set forth in Section 2.4 .

“ RFS Interests ” shall have the meaning set forth in the recitals.

“ RFS Purchase Price ” shall have the meaning set forth in Section 2.2(a) .

“ RFS Valuation ” shall have the meaning set forth in Section 2.2(b)(i) .

“ RFSC ” shall have the meaning set forth in the recitals.

“ RFSC Valuation ” shall have the meaning set forth in Section 2.2(b)(i) .

“ SEC ” means the U.S. Securities and Exchange Commission.

“ Seller ” shall have the meaning set forth in the preamble.

“ Seller’s RFCIL Closing Certificate ” shall have the meaning set forth in Section 6.2(d) .

“ Seller’s RFS Closing Certificate ” shall have the meaning set forth in Section 6.1(d) .

 

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“ Seller’s Knowledge ,” or variations thereof, means the actual knowledge of the Persons set forth on a list delivered by Seller to Purchaser for such purpose.

“ Software Contracts ” means all Contracts, agreements, licenses and other commitments and arrangements, with the exception of generally available or off-the-shelf shrink wrap licenses, with any Person respecting the ownership, license, acquisition, design, development, distribution, marketing, development, use, outsourcing or maintenance of computer program code, related technical or user documentation and databases, in each case relating to or arising out of the businesses of the Acquired Companies.

“ Subordinated Loan ” shall have the meaning set forth in the recitals.

“ Subsidiary ” means, with respect to any Person, any corporation, limited liability company, partnership or other organization, whether incorporated or unincorporated, (i) of which such Person or one or more of its Subsidiaries owns or controls, directly or indirectly, outstanding shares of capital stock, or other equity interests representing 50% or more of the voting power or economic interests of all outstanding stock or ownership interests of such entity, or (ii) of which such Person or any other Subsidiary of such Person is a general partner (or otherwise serves in a capacity of comparable authority) or (iii) of which such Person has power to appoint the governing body or over which such Person otherwise has control or approval rights.

“ Tax ” or “ Taxes ” mean all taxes, charges, fees, duties, levies or other assessments, including income, gross receipts, capital stock, net proceeds, ad valorem, turnover, real, personal and other property (tangible and intangible), goods and services, sales, use, franchise, excise, value added, stamp, leasing, lease, user, transfer, fuel, excess profits, occupational, interest equalization, windfall profits, unitary, severance and employees’ income withholding, unemployment and Social Security taxes, duties, assessments and charges (including the recapture of any tax items such as investment tax credits), which are imposed by the United States or any other Governmental Authority, including any interest, penalties or additions to tax related thereto imposed by any Governmental Authority (including any interest or penalties with respect to such Taxes).

“ Tax Return ” means all returns and reports of or with respect to Taxes required to be filed with any Governmental Authority or depository.

“ Tax Statute of Limitations Date ” with respect to a particular Tax means the opening of business on the day after the expiration of the applicable statute of limitations with respect to such Tax, including any extensions thereof made with the consent of Seller (or if such date is not a Business Day, the next Business Day).

“ Tax Warranty ” means a representation or warranty in Section 3.5 of this Agreement.

“ Technical Documentation ” means all technical and descriptive materials relating to the acquisition, design, development, use, or maintenance of computer code, program documentation, Computer Equipment and materials in the businesses of the Acquired Companies.

 

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“ Termination Agreement ” means the termination agreement between Seller and RFS to be entered into at the RFS Closing in the form attached hereto as Exhibit B , pursuant to which (i) Seller and RFS shall terminate each of the loan agreement, dated March 25, 1999, by and between RFS, as lender, and Seller, as borrower, and the loan agreement, dated October 15, 2008, by and between Seller, as lender, and RFS, as borrower, and (ii) any and all outstanding amounts under each such loan agreement shall be paid in full.

“ Termination Date ” shall have the meaning set forth in Section 10.1(b) .

“ Title and Authorization Warranty ” means a representation or warranty in Section 3.1 , 3.2 or 4.1 of this Agreement.

“ Transaction Documents ” means this Agreement, the Assignment, the Termination Agreement, the New Subordinated Loan Agreement and the Transition Services Agreement.

“ Transferred Employees ” shall have the meaning set forth in Section 3.8(a) .

“ Transition Services Agreement ” means a transition services agreement, to be negotiated pursuant to Section 5.9 after the date hereof and based on the term sheet for transition services attached hereto as Exhibit C , entered into at the earlier of the RFS Closing or the RFCIL Closing by Seller and Purchaser on mutually agreeable terms.

“ Transfer Taxes ” shall have the meaning set forth in Section 9.1 .

“ U.K. GAAP ” means generally accepted accounting practice in the United Kingdom.

“ Valuation ” or “ Valuations ” shall have the meaning set forth in Section 2.2(b)(i).

1.2 Interpretation . The headings preceding the text of Articles and Sections included in this Agreement are for convenience only and shall not be deemed part of this Agreement or be given any effect in interpreting this Agreement. The use of the masculine, feminine or neuter gender or the singular or plural form of words herein shall not limit any provision of this Agreement. The use of the terms “including” or “include” shall in all cases herein mean “including, without limitation” or “include, without limitation,” respectively. Reference to any Person includes such Person’s successors and assigns to the extent such successors and assigns are permitted by the terms of any applicable agreement. Reference to a Person in a particular capacity excludes such Person in any other capacity or individually. Reference to any agreement (including this Agreement), document or instrument means such agreement, document or instrument as amended or modified and in effect from time to time in accordance with the terms thereof and, if applicable, the terms hereof. Underscored references to Articles, Sections, paragraphs, clauses or Exhibits shall refer to those portions of this Agreement. The use of the terms “hereunder,” “hereby,” “hereof,” “hereto” and words of similar import shall refer to this Agreement as a whole and not to any particular Article, Section, paragraph or clause of, or Exhibit to, this Agreement. All references in this Agreement to dollar amounts shall refer to the currency of the United States unless otherwise specified. Unless the context requires otherwise, references to any U.S. or Delaware statutory provision or U.S. or Delaware legal term for any action, remedy, method of judicial proceeding, document, legal status, court, official or any other legal concept or thing shall, in respect of any jurisdiction other than the U.S., be deemed to

 

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include what most nearly approximates in that jurisdiction the U.S. or Delaware statutory provision or U.S. or Delaware legal term. All references to amounts denominated in dollars shall mean U.S. dollars, except where specifically noted otherwise. Whenever any payment hereunder is to be paid in “cash,” payment shall be made in U.S. dollars and the method for payment shall be by wire transfer of immediately available funds. In the event there is any need to convert U.S. dollars into any foreign currency, or vice versa, for any purpose under this Agreement, the exchange rate shall be the mid-market quoted exchange rate by Bloomberg, Inc. at the close of business on the Business Day prior to the date an obligation is paid.

ARTICLE 2.

PURCHASE AND SALE

2.1 Purchase of Interests . On the terms and subject to the conditions set forth in this Agreement, (a) at the RFS Closing, Seller shall sell, assign and transfer to Purchaser, and Purchaser shall purchase from Seller, and take assignment and delivery of, all right, title and interest in and to the RFS Interests in exchange for the RFS Purchase Price, as defined and set forth in Section 2.2 , and (b) at the RFCIL Closing, Seller shall sell, assign and transfer to Purchaser, and Purchaser shall purchase from Seller, and take assignment and delivery of, all right, title and interest in and to the RFCIL Interests in exchange for the RFCIL Purchase Price, as defined and set forth in Section 2.2 .

2.2 Purchase Price .

(a) Consideration . The aggregate value of the consideration to be paid and delivered by Purchaser to Seller (i) in exchange for the RFS Interests at the RFS Closing shall be $43,664,688 in cash (the “ RFS Purchase Price ,” which amount is equal to the Net Book Value of RFS as of February 28, 2009 less $500,000) and (ii) in exchange for the RFCIL Interests at the RFCIL Closing shall be $16,970,486 in cash (the “ RFCIL Purchase Price ,” which amount is equal to the Net Book Value of RFSC as of February 28, 2009, and, together with the RFS Purchase Price, the “ Purchase Price ,” as it may be adjusted pursuant to Section 2.2(b) ). The Net Book Value as of February 28, 2009 of each of RFS and RFSC has been delivered in writing by Seller to Purchaser as of the date hereof.

(b) Purchase Price Adjustment . The Purchase Price shall be adjusted in accordance with the procedures set forth in this Section 2.2(b) after each of the RFS Closing and the RFCIL Closing based upon the amount by which Net Book Value as of the RFS Closing Date less $500,000 for RFS and the Net Book Value as of the RFCIL Closing Date for RFSC is more or less than the RFS Purchase Price and the RFCIL Purchase Price, respectively.

(i) Post-Closing Determination . Within five Business Days following the RFS Closing Date, Purchaser shall deliver to Seller a written notice in reasonable detail of the Net Book Value of RFS as of the RFS Closing Date and within five Business Days following the RFCIL Closing Date, Purchaser shall deliver to Seller a written notice in reasonable detail of the Net Book Value of RFSC as of the RFCIL Closing Date (with respect to RFS, the “ RFS Valuation ” and, with respect to RFSC, the “ RFSC Valuation ”; each being a “ Valuation ” and, collectively, the “ Valuations ”).

 

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(ii) Payment . If the RFS Valuation provides that the Net Book Value of RFS as of the RFS Closing Date is greater than the RFS Purchase Price and/or the RFSC Valuation provides that the Net Book Value of RFSC as of the RFCIL Closing Date is greater than the RFSC Purchase Price, then Purchaser shall pay an amount in cash equal to the aggregate amount of each such difference to Seller within five Business Days after the Valuations become final and binding as provided in Section 2.2(b)(iii) or (iv) . If the RFS Valuation provides that the Net Book Value of RFS as of the RFS Closing Date is less than the RFS Purchase Price and/or the RFSC Valuation provides that the Net Book Value of RFSC as of the RFCIL Closing Date is less than the RFSC Purchase Price, then Seller shall pay an amount in cash equal to the aggregate amount of each such difference to Purchaser within five Business Days after the Valuations become final and binding as provided in Section 2.2(b)(iii) or (iv) . If the RFS Closing and the RFCIL Closing occur simultaneously, all payments required to be made pursuant to this Section 2.2(b)(ii) shall be netted against each other on a dollar-for-dollar basis prior to the payment of any such amounts. All payments required to be made pursuant to this Section 2.2(b)(ii) shall include interest on any such payment from the RFS Closing Date or the RFCIL Closing Date, as applicable, to the date paid at the rate of interest published by the Wall Street Journal (Central edition) on such closing date as the “prime rate” at large U.S. money center banks.

(iii) Objections; Determination Binding . Unless Seller gives written notice to Purchaser of an objection to all or a part of either of the Valuations (a “ Dispute Notice ”) within five Business Days after Seller’s receipt of each such Valuation, the Valuations shall become binding in their entirety at the end of such five-day period. If Seller delivers a Dispute Notice within such five-day period and the parties are unable to agree as to all issues in the Dispute Notice within five days after the Dispute Notice is received by Purchaser, then the relevant Valuation(s) shall be submitted to an Independent Accountant to resolve the issues set forth in the Dispute Notice in accordance with Section 2.2(b)(iv) . Purchaser and Seller shall bear the costs of the Independent Accountant equally.

(iv) Dispute Resolution . The Independent Accountant shall conduct such review of the Valuation(s), the Dispute Notice and any supporting documentation submitted by either Purchaser or Seller or as otherwise determined by the Independent Accountant in its sole discretion to be necessary (but excluding any documentation created by the parties in attempting to resolve any disputes relating to this Section 2.2(b) ), and the Independent Accountant shall hear any presentations desired to be made by the parties as the Independent Accountant. The Independent Accountant shall be provided full access to the books and records of Seller, Purchaser and the Acquired Companies related to such determination. The Independent Accountant shall, as promptly as practicable and in no event later than 30 days following its receipt of the Dispute Notice, deliver to Seller and Purchaser a report (the “ Adjustment Report ”), which shall set forth, in reasonable detail, the Independent Accountant’s determination with respect to the issues specified in the Dispute Notice, and the revisions, if any, to be made to the applicable Valuation together with supporting calculations. Such Adjustment Report and the revisions, if any, to be made to the applicable Valuation(s) shall be final and binding on the parties, absent arithmetical error, and shall be deemed a final arbitration award that is enforceable against each of the parties in any court of competent jurisdiction, and the Purchase Price shall be adjusted according to such Adjustment Report and paid in accordance with Section 2.2(b)(ii) .

 

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2.3 Payment of RFS Intercompany Liabilities; Post-Closing Adjustment .

(a) On the day immediately prior to the RFS Closing, Seller shall deliver to Purchaser a written notice (the “ Estimated Intercompany Liabilities Notice ”) in reasonable detail of the estimated amounts of all outstanding intercompany liabilities owed by RFS to Seller as of the RFS Closing Date (the “ Estimated Intercompany Liabilities ”), including amounts owed by RFS for its share of prior monthly personnel costs shared with Seller and with respect to the accrued and unpaid interest owed by RFS under the Subordinated Loan. Seller shall cause RFS to pay Seller in full all Estimated Intercompany Liabilities on or before the RFS Closing.

(b) Within five Business Days following the RFS Closing, Seller shall deliver to Purchaser a written notice (the “ Actual Intercompany Liabilities Notice ”) in reasonable detail of the actual amounts of all outstanding intercompany liabilities owed by RFS to Seller as of the RFS Closing Date (the “ Actual Intercompany Liabilities ”). If the Actual Intercompany Liabilities Notice provides that the Actual Intercompany Liabilities are greater than the Estimated Intercompany Liabilities, then Purchaser shall cause RFS to pay an amount in cash equal to the aggregate amount of such difference to Seller within five Business Days after Purchaser’s receipt of the Actual Intercompany Liabilities Notice. If the Actual Intercompany Liabilities Notice provides that the Actual Intercompany Liabilities are less than the Estimated Intercompany Liabilities, then Seller shall pay an amount in cash equal to the aggregate amount of such difference to RFS within one Business Day after Purchaser’s receipt of the Actual Intercompany Liabilities Notice.

2.4 Closing . Each of the RFS Closing and the RFCIL Closing shall take place at the offices of Mayer Brown LLP, 71 South Wacker Drive, Chicago, Illinois 60606. The RFS Closing shall take place on the final Business Day of the month in which Purchaser has notified Seller that all closing conditions set forth in Section 6.1 and Section 7.1 have been satisfied or waived, and the RFS Closing shall be effective as of 5:00 p.m. (Eastern time) on such date (the “ RFS Closing Date ”). The RFCIL Closing shall take place on the final Business Day of the month in which Purchaser has notified Seller that all closing conditions set forth in Section 6.2 and Section 7.2 have been satisfied or waived, and the RFCIL Closing shall be effective as of 5:00 p.m. (Eastern time) on such date (the “ RFCIL Closing Date ”). Purchaser, in its sole discretion, upon reasonable notice to Seller may choose to conduct the RFS Closing and the RFCIL Closing separately on the earliest date possible for the RFS Closing or the RFCIL Closing, as the case may be, or simultaneously on the date on which the conditions to both the RFS Closing and the RFCIL Closing have been satisfied or waived. The transactions to be consummated at each of the RFS Closing and the RFCIL Closing shall occur simultaneously.

2.5 Deliveries of Seller .

(a) At the RFS Closing, Seller shall deliver to Purchaser:

(i) the Assignment of RFS Interests duly executed by Seller;

(ii) the Termination Agreement duly executed by Seller and RFS; and

(iii) Seller’s RFS Closing Certificate.

 

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(b) At the RFCIL Closing, Seller shall deliver to Purchaser:

(i) duly executed share transfers with respect to the RFCIL Interests in favor of Purchaser, or as it may direct, together with related share certificates for the RFCIL Interests (or an indemnity on the terms agreed to by Purchaser in the case of any lost certificate);

(ii) an irrevocable power of attorney (on the terms agreed to by Purchaser) executed by Seller in favor of Purchaser, or its nominees, enabling Purchaser, or its nominees, pending registration of the transfers of the RFCIL Interests, to exercise all voting and other rights attaching to the RFCIL Interests and to appoint proxies for that purpose;

(iii) confirmation reasonably satisfactory to Purchaser of the location of the common seal, statutory books and bank mandates of RFCIL and RFSC; and

(iv) Seller’s RFCIL Closing Certificate.

(c) At each of the RFS Closing and the RFCIL Closing, Seller shall deliver to Purchaser such other documents as may be reasonably requested by Purchaser to accomplish the transactions contemplated hereby.

(d) At the earlier of the RFS Closing or the RFCIL Closing, Seller shall deliver to Purchaser the Transition Services Agreement duly executed by Seller.

2.6 Deliveries of Purchaser .

(a) At the RFS Closing, Purchaser shall deliver to Seller:

(i) the RFS Purchase Price by wire transfer in immediately available funds to an account in the U.S. designated in writing by Seller to Purchaser at least two Business Days prior to the RFS Closing;

(ii) the Assignment of RFS Interests duly executed by Purchaser; and

(iii) Purchaser’s RFS Closing Certificate.

(b) At the RFCIL Closing, Purchaser shall deliver to Seller:

(i) the RFCIL Purchase Price by wire transfer in immediately available funds to an account in the U.S. designated in writing by Seller to Purchaser at least two Business Days prior to the RFCIL Closing; and

(ii) Purchaser’s RFCIL Closing Certificate.

(c) At each of the RFS Closing and the RFCIL Closing, Purchaser shall deliver to Seller such other documents as may be reasonably requested by Seller to accomplish the transactions contemplated hereby.

 

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(d) At the earlier of the RFS Closing or the RFCIL Closing, Purchaser shall deliver to Seller the Transition Services Agreement duly executed by Purchaser.

ARTICLE 3.

REPRESENTATIONS AND WARRANTIES OF SELLER

Except as disclosed to Purchaser by Seller in writing on the date hereof, Seller represents and warrants to Purchaser, as of the date hereof and as of the RFS Closing Date and the RFCIL Closing Date (except to the extent any such representations and warranties shall have been expressly made as of a particular date, in which case such representations and warranties shall be made only as of such date), as follows:

3.1 Organization and Authority .

(a) Seller is a limited liability company validly existing, duly organized and in good standing under the laws of the State of Delaware. Seller has good and sufficient limited liability company power, authority and right to enter into and deliver this Agreement and to complete the transactions to be completed by Seller hereunder. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all appropriate corporate authority, and no other corporate action on the part of Seller is necessary to authorize the execution, delivery and performance by Seller of this Agreement or the consummation of the transactions contemplated hereby. This Agreement constitutes a valid and legally binding obligation of Seller, enforceable against Seller in accordance with its terms, except as such enforceability may be limited by principles of public policy and subject to the laws of general application relating to bankruptcy, insolvency, and the relief of debtors and to rules of law governing specific performance, injunctive relief and other equitable remedies (the “ Enforceability Exceptions ”).

(b) RFS is a limited liability company validly existing, duly formed and in good standing under the laws of the State of Delaware, and has all requisite limited liability company power and authority to own, lease and operate its properties and assets and to carry on its business as now being conducted.

(c) RFSC is a private company limited by shares incorporated in England and Wales, and has all requisite private company power and authority to own, lease and operate its properties and assets and to carry on its business as now being conducted.

3.2 Ownership of the Interests; Capitalization; Subsidiaries .

(a) Seller is, and at the RFS Closing Seller will be, the owner of all right, title and interest (record, legal and beneficial) in and to the RFS Interests, free and clear of any Lien. Seller is, and at the RFCIL Closing Seller will be, the owner of all right, title and interest (record, legal and beneficial) in and to the RFCIL Interests, free and clear of any Lien. All of the Interests have been duly authorized and validly issued, are fully paid and nonassessable. The transfer and delivery to Purchaser of the Interests hereunder will transfer to Purchaser legal and valid title to all of the Interests, free and clear of any Lien. There is no Contract or option, or any right or privilege (whether pre-emptive, contractual or otherwise) capable of becoming a

 

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Contract or option, of any Person binding upon any Acquired Company, (i) to sell, acquire, transfer, assign, pledge, charge, mortgage or in any other way dispose of or encumber any of the Interests other than pursuant to the provisions of this Agreement, (ii) to allot or issue any of the unissued equity or ownership interests of RFS or RFCIL or to create any additional equity or ownership interests of RFS or RFCIL or (iii) to sell, acquire, transfer, assign, pledge, mortgage or in any other way dispose of or encumber any of the assets of RFS or RFCIL other than in the usual and ordinary course of business.

(b) The RFS Interests constitute as of the RFS Closing Date all of the issued and outstanding limited liability company or other equity or ownership interests (including any rights to acquire such interests) of RFS. RFS does not own, directly or indirectly, any interest or investment in (whether equity or debt) any corporation, partnership, limited liability company, joint venture, business, trust or other Person.

(c) The RFCIL Interests constitute as of the RFCIL Closing Date all of the issued and outstanding capital stock or other equity or ownership interests (including any rights to acquire such interests) of RFCIL. Other than with respect to its ownership of all of the issued and outstanding shares of capital stock (or other equity interests) of RFSC, which is the only Subsidiary of RFCIL, RFCIL does not own, directly or indirectly, any interest or investment in (whether equity or debt) any corporation, partnership, limited liability company, joint venture, business, trust or other Person.

(d) RFCIL is, and at the RFCIL Closing RFCIL will be, the owner of all right, title and interest (record, legal and beneficial) in and to all of the issued and outstanding shares of capital stock (or other equity interests) of RFSC, free and clear of any Lien. All of the outstanding shares of capital stock (or other equity interests) of RFSC have been duly authorized and validly issued, are fully paid and nonassessable. Other than with respect to its ownership of all of the issued and outstanding shares of capital stock (or other equity interests) of RFSC, RFCIL does not own any assets and there are no liabilities or obligations of any nature or kind of or relating to RFCIL.

(e) The minute books and other corporate records of RFS are in its possession and have been properly kept in all material respects and contain a true, accurate and complete record of all matters with which they should deal. All corporate documents and filings necessary to be filed with the Secretary of State of the State of Delaware have been duly filed and were correct in all material respects when filed.

(f) The register of members and all other statutory books of RFCIL and RFSC are in their possession and have been properly kept in all material respects and contain a true, accurate and complete record of all matters with which they should deal. All returns, resolutions and other documents necessary or desirable to be filed with the Registrar of Companies of England and Wales have been duly filed and were correct in all material respects when filed.

(g) Seller has issued a certificate to its parent, GMAC-RFC Holding Company, LLC, representing all of Seller’s issued and outstanding limited liability company membership interests.

 

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3.3 Consents and Approvals . No consent of, or declaration, filing or registration with, any Governmental Authority or any other Person is required to be obtained or made, as applicable, by Seller in connection with the execution, delivery and performance of this Agreement and the other Transaction Documents, or the consummation of the transactions contemplated by this Agreement or by any other Transaction Document, except for consents, declarations, filings and registrations the failure to have which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect or a material adverse effect on the ability of Seller to consummate the transactions contemplated hereby and satisfy all its obligations hereunder.

3.4 Financial Statements .

(a) Seller has delivered to Purchaser on the date hereof true, complete and correct copies of the audited balance sheets and statements of income as of December 31, 2008 for the year then ended for RFS and the unaudited balance sheets and statements of income as of December 31, 2008 for the year then ended for RFSC (the “ Financial Statements ”). Each of the Financial Statements (including the notes thereto) were prepared from the books and records of the Acquired Companies. Each of the Financial Statements of RFS were prepared in accordance with GAAP and each of the Financial Statements of RFSC were prepared in accordance with U.K. GAAP. Subject to normal year-end and quarterly adjustments and the absence of notes, the Financial Statements fairly present in all material respects the financial condition and the results of operations of the Acquired Companies as of the date of and for the period referred to in such Financial Statements.

(b) There are no liabilities or obligations relating to the Acquired Companies of any nature, whether accrued, contingent or otherwise, except for liabilities or obligations (i) reflected in the Financial Statements, (ii) that are ordinary course performance obligations pursuant to Contracts to which an Acquired Company is a party that, to the extent incurred prior to the date of the Financial Statements, are not required to be reflected therein or (iii) that were incurred since the date of the Financial Statements and were normal and recurring expenses or obligations incurred in the ordinary course of business and have not had and would not reasonably be expected to have a Material Adverse Effect. As of each of the RFS Closing and the RFCIL Closing, Seller shall have no outstanding intercompany debt with respect to the company being sold (the “ Intercompany Debt ”) of any nature, whether accrued, contingent or otherwise.

3.5 Tax . Except as would not have, individually or in the aggregate, a Material Adverse Effect:

(a) All Tax Returns required to be filed by the Acquired Companies have been filed in the prescribed form and within the prescribed time and all such Tax Returns are true, complete and correct;

(b) Each of the Acquired Companies has duly and timely paid all Taxes due and payable whether or not shown on any Tax Return, including all installments on account of Taxes for the current year;

 

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(c) There are no Liens for Taxes against any of the Acquired Companies;

(d) Each of the Acquired Companies has not (i) waived any statute of limitations in respect of Taxes or (ii) agreed to any extension of time with respect to a Tax assessment or deficiency;

(e) No deficiencies exist or, to Seller’s Knowledge, have been asserted with respect to Taxes of any of the Acquired Companies; and no Acquired Company is a party to any action or proceeding for assessment or collection of Taxes, nor, to Seller’s Knowledge, has such an event been asserted or threatened against any of the Acquired Companies, or any of their assets;

(f) Each of the Acquired Companies has duly and timely withheld all Taxes required by Law to be withheld by it (including Taxes required to be withheld by it in respect of any amount paid or credited or deemed to be paid or credited by it to or for the account of any Person) and has duly and timely remitted to the appropriate tax authority such Taxes and other amounts required by Law to be remitted by it; and

(g) Each of the Acquired Companies has duly and timely collected all amounts on account of any sales or transfer taxes, including goods and services, harmonized sales and provincial or territorial sales taxes, required by Law to be collected by it and has duly and timely remitted to the appropriate authority any such amounts required by Law to be remitted by it.

3.6 Contracts .

(a) No Acquired Company is in default or material breach of any Material Contract to which it is a party and, to Seller’s Knowledge, there exists no condition, event or act that, with the giving of notice or lapse of time or both, would constitute such a default or breach, and all such Material Contracts are in good standing and in full force and effect without amendment (except such amendments as are otherwise disclosed by Seller to Purchaser on the date hereof) thereto and such Acquired Company is entitled to all benefits thereunder.

(b) Seller has delivered to Purchaser on the date hereof an accurate and complete list of all Material Contracts. Except for the Material Contracts, no Acquired Company has entered into any Contract outside of the usual and ordinary course of business. Except for Material Contracts and Contracts entered into in the usual and ordinary course of business that are not of a material nature, no Acquired Company has entered into any Contract that contains change of control provisions. Each Material Contract is a legal, valid and binding obligation of the Acquired Company that is a party thereto, enforceable against it in accordance with its terms, except as such enforceability may be limited by the Enforceability Exceptions. No other party to a Material Contract has made, asserted or, to Seller’s Knowledge, has any defense, set-off or counterclaim thereunder and no party has exercised any option granted to it to cancel, terminate or shorten the term thereof.

 

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3.7 Intellectual Property .

(a) Seller has provided to Purchaser on the date hereof a true and complete list of all material IT Assets and Seller has provided to Purchaser on the date hereof a true and complete list of all material Intellectual Property of the Acquired Companies as of the date hereof. The Acquired Companies are the exclusive owners or valid licensees of all their material Intellectual Property, free and clear of all Liens.

(b) All registrations and applications for the Acquired Companies’ Intellectual Property that are owned by the Acquired Companies and that are used in and are material to the conduct of the business of the Acquired Companies as currently conducted are (i) valid, subsisting, in proper form and enforceable, and have been duly maintained in all material respects, including the submission of all necessary filings and fees in accordance with the legal and administrative requirements of the appropriate jurisdictions, and (ii) have not lapsed, expired or been abandoned, and no Intellectual Prop