SHARE PURCHASE AGREEMENT

Exhibit 10.3

Execution Version

SHARE PURCHASE AGREEMENT

between

GMAC RESIDENTIAL FUNDING OF CANADA, LIMITED,

as Seller

and

GMAC LLC,

as Purchaser

November 20, 2008

 

TABLE OF CONTENTS

 

 

-i-

TABLE OF CONTENTS

(continued)

 

 

 

-ii-

TABLE OF CONTENTS

(continued)

 

 

-iii-

TABLE OF CONTENTS

(continued)

 

 

-iv-

Exhibits

 

 

i

SHARE PURCHASE AGREEMENT

This SHARE PURCHASE AGREEMENT is entered into on the 20 ^th day of November, 2008 between GMAC Residential Funding of Canada, Limited, a company organized under the laws of Canada (“Seller”), and GMAC LLC, a Delaware limited liability company (“ Purchaser ”).

WHEREAS, Seller owns all of the issued and outstanding shares (the “ 1020491 Shares ”) of 1020491 Alberta Ltd., a corporation existing under the laws of Alberta (“ 1020491 ”);

WHEREAS, Seller and 1020491 own all of the issued and outstanding shares (the “ RCC Shares ;” the RCC Shares owned by Seller together with the 1020491 Shares are referred to herein as the “ Shares ”) of ResMor Capital Corporation, a corporation existing under the laws of Alberta (“ RCC ”);

WHEREAS, RCC owns all of the issued and outstanding shares (the “ Trust Shares ”) of ResMor Trust Company, a Canadian federally incorporated trust company (“ ResMor Trust ”);

WHEREAS, simultaneously with and as a condition to the execution and delivery of this Agreement, Seller, as borrower, is entering into a Loan Agreement and a Pledge and Security Agreement, each dated as of the date hereof (the “ Loan Agreements ”), with Purchaser as lender;

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, the Shares;

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:

“ 1020491 ” shall have the meaning set forth in the preamble.

“ 1020491 Shares ” shall have the meaning set forth in the preamble.

“ 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 Share Purchase Agreement, including all Exhibits hereto.

“ Bankruptcy Code ” means Chapter 11 of Title 11, U.S.C. §§101 et seq., as amended.

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

“ Benefit Plans ” shall have the meaning set forth in Section 3.12 .

“ 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, Toronto, Ontario or Calgary, Alberta generally are closed for business.

“ Canadian GAAP ” means generally accepted accounting principles from time to time approved by the Canadian Institute of Chartered Accountants, or any successor institution.

“ CMHC ” means the Canada Mortgage and Housing Corporation.

“ CDIC ” means the Canada Deposit Insurance Corporation.

“ Closing ” means the closing of the transactions contemplated hereby.

“ Closing Date ” shall have the meaning set forth in Section 2.3 .

“ Computer Equipment ” means all equipment and devices (including data processing hardware and related telecommunications equipment, media, and tools) used by ResMor Trust in the conduct of its business, including ResMor Trust’s rights under all related warranties.

“ Consents ” shall have the meaning set forth in Section 5.2 .

“ 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.

“ Credit and Collection Policy ” means all mortgage loan credit, collection and administrative policies and procedures of ResMor Trust in effect on the date of this Agreement.

“ Customer Agreement ” means the loan and deposit agreement and servicing agreements of ResMor Trust.

“ Deposit Broker ” means a deposit broker that has signed an agency contract with ResMor Trust substantially in the form of ResMor Trust’s standard form agency contract.

“ Deposit Customer ” means customers who have purchased a guaranteed investment certificate through ResMor Trust.

“ Derivative Transaction ” means any Contract of any Person in respect of a commodity, hedging, derivative, interest rate, swap, cap, floor other interest rate risk management agreement.

“ Employee Leasing Agreement ” means the Employee Leasing Agreement in the form set forth as Exhibit A hereto, pursuant to which certain employees of ResCap shall provide services to ResMor Trust from the Closing Date through the term specified in the Employee Leasing Agreement.

 

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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.

“ Escrow Agreement ” means the Escrow Agreement, to be executed and delivered as of the date hereof, by Seller and Purchaser in the form set forth on Exhibit E attached hereto.

“ Event of Default ” shall have the meaning ascribed to such term in the Loan Agreements.

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

“ Genworth ” means Genworth Financial Mortgage Insurance Company Canada.

“ Governmental Authority ” means any U.S., Canadian, state, provincial or municipal entity, any foreign government 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 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 ResMor Trust.

“ IT Assets ” means IT Inventories, Technical Documentation, Software Contracts and Computer Equipment of ResMor Trust, in each case to the extent used in, relating to, or arising out of ResMor Trust’s operation of its business.

“ 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 ResMor Trust’s operation of its business.

 

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“ 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.

“ Leases ” shall have the meaning set forth in Section 3.14 .

“ 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.

“ Loan ” means the loan in the amount of CDN $82,000,000 made by Purchaser to Seller pursuant to the terms of the Loan Agreements.

“ Loan Agreements ” shall have the meaning set forth in the preamble.

“ Loan-to-Value Ratio ” means, with respect to a Mortgage, a fraction, expressed as a percentage, the numerator of which is the then current outstanding principal balance of such Mortgage, and the denominator of which is the value of the related property as determined by an independent appraisal obtained (i) at the time of origination of such Mortgage, or (ii) if a subsequent independent appraisal has been obtained, such subsequent independent appraisal; or (iii) if the Mortgage is insured, the value determined by the insurer.

“ 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).

“ Marlborough ” shall have the meaning set forth in Section 5.10 .

“ Master Mortgage Loan Purchase Agreements ” means all the mortgage loan purchase agreements to which ResMor Trust is a party.

“ Master Securitized Mortgage Loan Purchase Agreements ” means all master mortgage loan purchase agreements to which ResMor Trust is a party.

“ Master Servicing Agreements ” means all the mortgage servicing agreements to which ResMor Trust is a party.

 

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“ 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 ResMor Trust, 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 ResMor Trust is 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 ResMor Trust is operated, (iv) military action or acts of terrorism, (v) changes in applicable Law after the date hereof, (vi) the filing of Residential Capital, LLC and certain of its U.S. subsidiaries of a voluntary petition for relief under Chapter 11 of the Bankruptcy Code; (vii) compliance with the terms of this Agreement or (viii) 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 (viii) , ResMor Trust is not materially disproportionately affected by such condition, circumstance, change or effect compared to other Persons engaged in the conduct of businesses similar to ResMor Trust.

“ Material Contract ” means any Contract of ResMor Trust which (i) was entered into in contemplation of a sale or possible sale of shares or any material amount of assets of ResMor Trust; (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 CDN $350,000 annually; (v) involves a liability or expenditure of greater than CDN $350,000 annually; (vi) the duration of which is greater than one year and has an aggregate liability exceeding CDN $350,000 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 ResMor Trust); (viii) is a Derivative Transaction; (ix) is a Securitization Document, Servicing Document or other material document in respect of Securitized Mortgages or Serviced Mortgages; (x) restricts in any material respect ResMor Trust from conducting its business as conducted as of the Closing Date in any geographic area in Canada during any period of time; or (xi) was entered into with any Governmental Authority and involves obligations by ResMor Trust that will continue following the Closing Date; but excludes in each of the foregoing, any Mortgage and any usual and ordinary course deposit liability.

“ Mortgage ” means (i) a mortgage loan (including residential mortgage loans, and mortgage loans made to owners or developers of multi-family residential properties or commercial properties, but excluding Subserviced Mortgages) made to a Mortgagor in Canada which is evidenced and secured by a mortgage, charge or hypothec on a freehold or condominium interest in real or immoveable property that is owned by such Mortgagor and (ii) all obligations of the Mortgagor thereunder, including all monies payable thereunder (whether scheduled payments, prepayments, interest or other finance charges, prepayment bonuses, indemnities or penalties, fees or other charges with respect thereto).

“ Mortgage Loan ” means, collectively, (i) a Mortgage and (ii) the Related Security.

“ Mortgage Loan File ” means, with respect to any Mortgage, any or all of: (a) the original fully executed copy of documents evidencing the Mortgage, (b) the duplicate registered physical

 

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or electronic form of Mortgage evidencing and securing such Mortgage Loan bearing a certificate or registration from the applicable land registry office, land titles office or similar place of public record in which the related Mortgage is registered together with the promissory note, if any, evidencing such Mortgage Loan fully executed by the Mortgagor, (c) fully executed copies of the other loan and/or security agreements, if any, securing the Mortgage, fully executed by the Mortgagor, (d) a record, facsimile or electronic copy of the original credit application fully executed by the Mortgagor and all other credit information obtained by ResMor Trust in connection with the Mortgage and the related Mortgagors, (e) the solicitor’s report of title or title insurance policy obtained by ResMor Trust in connection with the initial advance of the Mortgage Loan together with the survey, if applicable, relied upon by the solicitor or title insurance company in issuing his or its report or title insurance policy, (f) the most recent appraisal of the related mortgaged property obtained in accordance with the credit and collection policy of ResMor Trust, (g) the insurance policy or certificate of insurance evidencing the Mortgagor’s insurance against fire and other standard risks showing ResMor Trust or its agent as first mortgagee and loss payee and containing a standard mortgage endorsement, (h) a copy or other evidence of the related mortgage insurance policy underwritten and issued by CMHC or Genworth or any similar insurer, as the case may be, to ResMor Trust or any confirmation or certificate of such insurer confirming same and/or (i) any and all other documents (including all electronic documents) that ResMor Trust, as servicer, keeps on file relating to such Mortgage Loan.

“ Mortgagor ” means, with respect to any Mortgage Loan, the borrower and mortgagor under such Mortgage Loan and any other Person obligated to make payments pursuant to such Mortgage Loan, including any co-borrower or co-mortgagor or guarantor.

“ OSFI ” means the Office of the Superintendent of Financial Institutions (Canada).

“ 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 Permits that have been obtained since November 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.

“ Prior Escrow Agreement ” means the Escrow Agreement, dated as of November 1, 2007, entered into by Seller, 1316548 Alberta Ltd. and McCarthy Tétrault LLP, as escrow agent, in connection with the Prior Purchase Agreement.

“ Prior Purchase Agreement ” shall have the meaning set forth in Section 3.18 .

“ Prior Rights Assignment ” means the assignment and assumption, to be executed and delivered as of the date hereof and effective as of the Closing Date, by Seller and Purchaser in the form set forth on Exhibit B attached hereto, pursuant to which Seller will assign to Purchaser its rights under the Prior Purchase Agreement and the Prior Escrow Agreement.

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

 

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

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

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

“ RCC Shares ” shall have the meaning set forth in the preamble.

“ Related Security ” means, with respect to any Mortgage,

(i) all of ResMor Trust’s right, title and interest in the related records, including the Mortgage and the security interest granted to ResMor Trust by the related Mortgagor in the related mortgaged property as security for or pursuant to such Mortgage;

(ii) all other security interests or liens and property subject thereto from time to time purporting to secure payment of such Mortgage, whether pursuant to the Related Security or otherwise, together with all financing statements or other filings relating thereto;

(iii) all guarantees, indemnities, insurance and other agreements (including the Mortgage) or arrangements of whatever character from time to time supporting or securing payment of such Mortgage or otherwise relating to such Mortgage whether pursuant to the Related Security or otherwise, including the related mortgage insurance policy entered into by ResMor Trust and the applicable insurer with respect to the Mortgage; and

(iv) all proceeds of or relating to the foregoing.

“ 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.

“ ResMor Trust ” shall have the meaning set forth in the preamble.

“ Securitization Approvals ” means, in respect of the Securitization Documents and the Securitized Mortgages, all of the approvals, consents, waivers, amending agreements, assignment and assumption agreements, other Contracts, opinions and filings to be obtained, entered into or filed from, by or with any conduit (including any special purpose entity), trustee, rating agency or any other Person, as the case may be, in connection with the transactions contemplated in this Agreement, including those disclosed in writing by Seller to Purchaser on the date hereof.

“ Securitization Documents ” means all of the Contracts (including the NHA Mortgage-Backed Securities Program Guide , as amended from time to time) relating to the securitization of Securitized Mortgages, including the Master Securitized Mortgage Loan Purchase Agreement. An accurate and complete list of Securitization Documents that have been entered into since November 1, 2007 has been delivered to Purchaser on the date hereof.

 

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“ Securitized Mortgages ” means the Mortgages originated by ResMor Trust that were subsequently sold as part of the securitization transactions entered into by ResMor Trust. An accurate and complete list of Securitized Mortgages since November 1, 2007 has been delivered to Purchaser on the date hereof.

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

“ 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.

“ Serviced Mortgages ” means (i) all mortgages originated or purchased by ResMor Trust which (a) have been pooled with the other mortgages originated or purchased by ResMor Trust and sold to a purchaser and in respect of which the purchaser has not appointed another servicer of the mortgage pool or (b) are held by ResMor Trust as an investment, and (ii) all mortgages originated by third parties, the servicing rights to which have been purchased by ResMor Trust pursuant to a Master Servicing Agreement.

“ Servicing Documents ” means all of the Contracts relating to the Serviced Mortgages (other than contracts between the mortgagee and Mortgagor), which consist of documents related to the sales and servicing of mortgage pools under a Master Mortgage Loan Purchase Agreement, and to the servicing of mortgage pools under a Master Servicing Agreement.

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

“ 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 ResMor Trust’s business.

“ Subserviced Mortgages ” means the portfolio of Serviced Mortgages that ResMor Trust purchased from Seller. Seller has delivered an accurate and complete list of Subserviced Mortgages to Purchaser on the date hereof.

“ 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, Canada or any 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.

 

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“ 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 business of ResMor Trust.

“ Termination Agreement ” means the termination agreement relating to the Master Mortgage Purchase Agreement, dated as of April 3, 2008, to be dated as of the date hereof and effective as of the Closing Date, between Seller and ResMor Trust in the form set forth on Exhibit D attached hereto.

“ 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 Prior Rights Assignment, the Employee Leasing Agreement and the Transition Services Agreement.

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

“ Transition Services Agreement ” means the Transition Services Agreement, to be executed and delivered as of the date hereof and effective as of the Closing Date, by ResCap, Seller and ResMor Trust in the form set forth on Exhibit C attached hereto.

“ Trust Shares ” shall have the meaning set forth in the preamble.

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 Canada unless otherwise specified.

 

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ARTICLE 2.

PURCHASE AND SALE

2.1 Purchase of Shares . On the terms and subject to the conditions set forth in this Agreement, at the Closing, Seller shall sell, assign and transfer to Purchaser, and Purchaser shall purchase from Seller, and take assignment and delivery of, the Shares in exchange for the Purchase Price set forth in Section 2.2 .

2.2 Purchase Price . The aggregate value of the consideration to be paid and delivered by Purchaser to Seller at Closing shall be CDN $82,000,000 (the “ Purchase Price ”). The Purchase Price shall be paid by Purchaser on the Closing Date as an offset against the entire amount of the outstanding principal of the Loan as of the Closing Date (without adjustment for any change in the currency exchange rate used under the Loan Agreements on the date hereof).

2.3 Closing . The Closing shall take place at the offices of Torys LLP, 79 Wellington Street West, Suite 3000, Toronto, Ontario, M5K 1N2 Canada, upon the earlier of: (a) the next Business Day after (i) either Purchaser determines in its reasonable discretion and has notified Seller and ResCap (or has received a notice from Seller or ResCap) that (A) an Event of Default under Section 8.1.7 of the Loan Agreement between Seller and Purchaser, dated as of the date hereof, is likely to occur, or (B) an event of default is likely to occur in respect of any credit or funding agreement or indenture between (x) ResCap or any of its subsidiaries and (y) any counterparty other than Purchaser or any of its affiliates, under which there is indebtedness outstanding of USD $10 million or more and (ii) Purchaser has notified Seller that all closing conditions in Article 6 and Article 7 have been satisfied or waived; or (b) December 22, 2008 or such earlier date as Purchaser and Seller agree (the “ Closing Date ”).

2.4 Deliveries of Seller .

(a) At the Closing, Seller shall deliver to Purchaser the Shares, duly endorsed in blank for transfer or duly signed powers of attorney for transfer in blank.

(b) On the date hereof, Seller shall execute and deliver to Purchaser the following agreements, which shall be placed in escrow pursuant to the terms of the Escrow Agreement until released pursuant to the terms thereof:

(i) the Employee Leasing Agreement duly executed by ResCap and ResMor Trust;

(ii) the Transition Services Agreement duly executed by ResCap, Seller and ResMor Trust;

(iii) the Prior Rights Assignment duly executed by Seller;

 

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(iv) the Termination Agreement duly executed by Seller and ResMor Trust; and

(v) such other documents as may be reasonably requested by Purchaser to accomplish the transactions contemplated hereby.

2.5 Deliveries of Purchaser . At the Closing, Purchaser shall deliver to Seller the Purchase Price as an offset against the then outstanding principal amount of the Loan.

ARTICLE 3.

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Purchaser, as of the date hereof and as of the 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 Authority .

(a) Seller is a company organized and existing under the laws of Canada. Seller has good and sufficient 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 approved by the directors of ResCap, including its independent directors, under Section 2(b) of the Amended and Restated Operating Agreement, dated as of November 27, 2006, between General Motors Corporation, GMAC and ResCap. 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 ”). Seller is not a non-resident of Canada within the meaning of the Income Tax Act (Canada).

(b) 1020491 is a duly incorporated, organized and subsisting corporation under the laws of Alberta.

(c) RCC is a duly incorporated, organized and subsisting corporation under the laws of Alberta.

(d) ResMor Trust is a federally incorporated trust company duly incorporated, organized and subsisting under the federal laws of Canada. ResMor Trust has the corporate capacity to own its assets and to carry on its business as presently conducted. ResMor Trust is a member institution in good standing within the meaning of the Canada Deposit Insurance Corporation Act (Canada). ResMor Trust is a member in good standing with the Canada Payments Association and has all necessary authorizations to offer checking accounts to the public and to accept retail deposits.

 

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3.2 Ownership of the Shares .

(a) The Trust Shares constitute as of the Closing Date all of the issued and outstanding shares or other equity interests (including any rights to acquire such interests) of ResMor Trust. The authorized capital of ResMor Trust consists of an unlimited number of common shares without nominal or par value. There are 28,894,750 issued and outstanding common shares of ResMor Trust, and RCC is the registered and beneficial holder of all the Trust Shares. All of the Trust Shares have been duly authorized, validly issued and are outstanding as fully paid and non-assessable shares. No shares, options or other securities have been issued by ResMor Trust since September 30, 2008. RCC is the owner of all right, title and interest (record and beneficial) in and to the Trust Shares, free and clear of any Lien. Seller has delivered to Purchaser all constituting documents of ResMor Trust and all rights, privileges, restrictions and conditions attached to the Trust Shares are contained therein.

(b) The 1020491 Shares constitute as of the Closing Date all of the issued and outstanding shares or other equity interests (including any rights to acquire such interests) of 1020491. The authorized capital of 1020491 consists of an unlimited number of common shares without nominal or par value. There are 9,885,613.35 issued and outstanding 1020491 Shares, and Seller is the owner of all right, title and interest (record and beneficial) in and to all of the 1020491 Shares, free and clear of any Lien. All of the 1020491 Shares have been duly authorized, validly issued and are outstanding as fully paid and non-assessable shares. Seller has delivered to Purchaser all constituting documents of 1020491 and all rights, privileges, restrictions and conditions attached to the 1020491 Shares are contained therein.

(c) The RCC Shares constitute as of the Closing Date all of the issued and outstanding shares or other equity interests (including any rights to acquire such interests) of RCC. The authorized capital of RCC consists of an unlimited number of Class A Common Shares of RCC and an unlimited number of Class B Common Shares of RCC. There are 25,011,393 issued and outstanding Class A Common Shares. Seller is the owner of all right, title and interest (record and beneficial) in and to 25,001,508 Class A Common Shares, and 1020491 is the owner of all right, title and interest (record and beneficial) in and to 9,885 Class A Common Shares, in each case free and clear of any Lien. There are 100,000 issued and outstanding Class B Common Shares of RCC. Seller is the owner of all right, title and interest (record and beneficial) in and to 38,665 Class B Common Shares, and 1020491 is the owner of all right, title and interest (record and beneficial) in and to 61,335 Class B Common Shares, in each case free and clear of any Lien. All of the RCC Shares have been duly authorized, validly issued and are outstanding as fully paid and non-assessable shares. Seller has delivered to Purchaser all constituting documents of RCC and all rights, privileges, restrictions and conditions attached to the RCC Shares are contained therein.

(d) The transfer and delivery to Purchaser of the Shares hereunder will transfer to Purchaser legal and valid title to all of Seller’s Shares, free and clear of any Lien. There is no Contract, option or any other right of any Person binding upon Seller, RCC or 1020491, as applicable, (i) to sell, transfer, assign, pledge, charge, mortgage or in any other way dispose of or encumber any of the Shares, the RCC Shares or Trust Shares other than pursuant to the provisions of this Agreement, (ii) to allot or issue any of the unissued shares of RCC, 1020491 or ResMor Trust or to create any additional class of shares of RCC, 1020491 or

 

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ResMor Trust, or (iii) to sell, transfer, assign, pledge, mortgage or in any other way dispose of or encumber any of the assets of RCC, 1020491 or ResMor Trust other than in the usual and ordinary course of business.

3.3 Regulatory Matters .

(a) No consent of, or declaration, filing or registration with, the CDIC, OSFI or any other Governmental Authority or Person is required to be obtained or made, as applicable, by Seller, RCC, 1020491 or ResMor Trust in connection with the execution, delivery and performance of its obligations under this Agreement and the other Transaction Documents, or the consummation of the transactions contemplated by this Agreement or the other Transaction Documents, 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.

(b) ResMor Trust owns, possesses or has obtained and is in compliance with, all Permits necessary to conduct its business as now conducted, all of which are in good standing and none of which are subject to any directives or orders of any Governmental Authority that are unique to ResMor Trust. From November 1, 2007 through the date of this Agreement, ResMor Trust has not received any correspondence or notice from or had any conversations or meetings with any Governmental Authority indicating that such Governmental Authority was considering or was likely to revoke, cancel, rescind, refuse to renew in the usual and ordinary course or modify any of ResMor Trust’s Permits, nor is any proceeding ongoing or pending for any such purpose.

(c) Since November 1, 2007, ResMor Trust has conducted, and is conducting, its business in compliance in all material respects with all applicable Laws and is not in breach in any material respect of any such applicable Laws, including all applicable Laws pertaining to privacy, money laundering and terrorist financing, and with respect to the creation and adoption of internal policies and procedures for a trust company under the Canadian Trust and Loan Companies Act . ResMor Trust is duly licensed, registered or qualified in each of the provinces and territories of Canada (other than Quebec where it is not registered as a trust company) in which it carries on its business to enable it to be carried on as now conducted and its assets to be owned, leased and operated.

(d) ResMor Trust is not conducting its business in any jurisdictions other than the provinces and territories of Canada.

3.4 Financial Statements .

(a) Seller has delivered to Purchaser on the date hereof (i) the audited balance sheet, statement of earnings, comprehensive earnings and retained earnings and statement of cash flows of ResMor Trust for the year ended December 31, 2007, and (ii) the unaudited balance sheet and income statement of ResMor Trust for the nine months ended September 30, 2008 (the “ Financial Statements ”). The Financial Statements were prepared from the books and records of Seller and ResMor Trust. Except as otherwise disclosed in writing by Seller to Purchaser on the

 

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date hereof, the Financial Statements, subject in the case of unaudited financial statements to normal year-end and quarterly adjustments and the absence of notes, fairly present in all material respects the financial condition and the results of operations of ResMor Trust as of the date of and for the period referred to in such Financial Statements, and were prepared in accordance with Canadian GAAP.

(b) Except as disclosed in writing by Seller to Purchaser on the date hereof, there are no liabilities or obligations relating to ResMor Trust of any nature, whether accrued, contingent or otherwise, except for liabilities or obligations (a) reflected in the Financial Statements, (b) that are ordinary course performance obligations pursuant to Contracts to which ResMor is a party which, to the extent incurred prior to the date of the Financial Statements, are not required to be reflected therein, or (c) 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. There have been no impairments to any assets or adjustments to the valuations of the assets or retained interests made or required to be made since December 31, 2007. Except as disclosed in writing by Seller to Purchaser on the date hereof, all expenses of the business of ResMor Trust for 2008 through October 31, 2008 are set forth in the Financial Statements.

(c) Except as otherwise disclosed in writing by Seller to Purchaser on the date hereof, neither RCC nor 1020491 has any liabilities or obligations whether accrued, absolute, contingent or otherwise or any assets except its ownership of Trust Shares and RCC Shares respectively.

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

(a) Except as otherwise disclosed in writing by Seller to Purchaser on the date hereof, all Tax Returns required to be filed by 1020491, RCC and ResMor Trust since November 1, 2007 have been filed in the prescribed form and within the prescribed time and all such Tax Returns are true, complete and correct;

(b) Since November 1, 2007, each of 1020491, RCC and ResMor Trust 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;

(c) There are no Liens for Taxes against 1020491, RCC or ResMor Trust;

(d) Since November 1, 2007, each of 1020491, RCC and ResMor Trust 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 since November 1, 2007 with respect to Taxes of 1020491, RCC or ResMor Trust; and each of 1020491, RCC and ResMor Trust is not 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 1020491, RCC or ResMor Trust, or any of its respective assets;

 

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(f) Since November 1, 2007, each of 1020491, RCC and ResMor Trust 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, including any employees, officers or directors and any Person not resident in Canada for Canadian Tax purposes) 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) Since November 1, 2007, each of 1020491, RCC and ResMor Trust 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) ResMor Trust is not 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, other than, in each case, as a result of any such default, material breach, condition, event or act that occurred or arose before November 1, 2007 and either (i) is not continuing after that date or (ii) has not had a material adverse effect on ResMor Trust’s ability to conduct its business.

(b) Seller has delivered to Purchaser on the date hereof an accurate and complete list of all Material Contracts entered into on or after November 1, 2007. Except for such Material Contracts, ResMor Trust has not entered into any Contract outside of the usual and ordinary course of business on or after November 1, 2007. Except for Material Contracts and Contracts entered into in the usual and ordinary course of business that are not of a material nature, ResMor Trust has not entered into any Contract on or after November 1, 2007 that contains change of control provisions that would require a consent or waiver in connection with the transactions contemplated hereby. Each Material Contract is a legal, valid and binding obligation of ResMor Trust, enforceable against it in accordance with its terms, except as such enforceability may be limited by the Enforceability Exceptions. Since November 1, 2007, 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.

(c) Except as disclosed in writing by Seller to Purchaser on the date hereof, there are no Contracts or arrangements for payments or allocations of expenses between ResMor Trust, on the one hand, and Seller or any of its Affiliates (other than ResMor Trust) on the other hand.

 

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3.7 Securitizations .

(a) Seller has delivered to Purchaser on the date hereof an accurate and complete and accurate list of all Securitization Documents entered into on or after November 1, 2007 to which ResMor Trust or its Affiliates is a party, and copies of all such Securitization Documents have been delivered to Purchaser. Neither ResMor Trust nor, to Seller’s Knowledge, any other party to any Securitization Document, is in default in any material respect in the performance of its obligations thereunder or has any valid defense or any valid right of rescission, set-off, abatement, diminution or counterclaim (other than as provided in any Securitization Document) that would prevent the enforcement of any provisions thereof by any other party thereto, other than any such default, defense or right that results from a condition, event or act that occurred or arose before November 1, 2007 and either (i) is not continuing after that date or (ii) has not had a material adverse effect on ResMor Trust’s ability to conduct its business. Each of the Securitization Documents to which ResMor Trust is a party is in full force and effect (other than any failure to be in full force and effect that occurred or arose before November 1, 2007 and either (i) is not continuing after that date or (ii) has not had a material adverse effect on ResMor Trust’s ability to conduct its business) and is a valid, binding and enforceable obligation of ResMor Trust and, to Seller’s Knowledge, the other parties thereto, except as such enforceability may be limited by the Enforceability Exceptions. No event or condition currently exists which is or, to Seller’s Knowledge, which would, with notice or passage of time or both, constitute a trigger event, servicer termination event, event of default or similar event under the Securitization Documents, other than as a result of any such event or condition that existed or occurred before November 1, 2007 and either (i) is not continuing after that date or (ii) has not had a material adverse effect on ResMor Trust’s ability to conduct its business. Other than the Securitization Approvals, no approvals of any other Person are required under any Securitization Document to effect the consummation of the transactions contemplated hereby. Assuming all Securitization Approvals are obtained, the consummation for the transactions contemplated hereby will not cause the occurrence of any trigger event, servicer termination event, event of default or other similar event under Securitization Documents.

(b) Except as otherwise disclosed in writing by Seller to Purchaser on the date hereof, ResMor Trust does not have any obligation to make advances of any kind with respect to the securitization transactions relating to the Securitization Documents.

(c) None of the Securitized Mortgages would, pursuant to Canadian GAAP, be consolidated on the balance sheet of ResMor Trust or any of its Affiliates for accounting purposes.

(d) Except as otherwise disclosed in writing by Seller to Purchaser on the date hereof, since November 1, 2007, there has been no claim, demand or exercise of a right of indemnity or repurchase under any of the Securitization Documents, and to Seller’s Knowledge there is no fact, event or omission, which, with notice or passage of time or both, would reasonably be expected to give rise to a claim, demand or exercise of right of indemnity or repurchase under any of the Securitization Documents.

(e) Except as otherwise disclosed in writing by Seller to Purchaser on the date hereof, ResMor Trust has not assigned its right, title or interest to or in any Securitization Document to, nor has ResMor Trust delegated to any Person any of its duties under any of the Securitization Documents.

 

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(f) ResMor Trust is in compliance with Guideline B-5 of OSFI.

3.8 Master Servicing Agreements and Master Mortgage Loan Purchase Agreements .

(a) Neither ResMor Trust nor, to Seller’s Knowledge, any other party to any Servicing Document is in default in any material respect in the performance of its obligations thereunder or has any valid defense or any valid right of rescission, set-off, abatement, diminution or counterclaim (other than as provided in any Servicing Document) that would prevent the enforcement of any provisions thereof by any other party thereto, other than, in each case, any such default, defense or right that occurred or arose before November 1, 2007 and either (i) is not continuing after that date or (ii) has not had a material adverse effect on ResMor Trust’s ability to conduct its business. Each of the Servicing Documents to which ResMor Trust is a party is in full force and effect (other than any failure to be in full force and effect that occurred or arose before November 1, 2007 and either (i) is not continuing after that date or (ii) has not had a material adverse effect on ResMor Trust’s ability to conduct its business) and is a valid, binding and enforceable obligation of ResMor Trust and, to Seller’s Knowledge, the other parties thereto, except as such enforceability may be limited by the Enforceability Exceptions. To Seller’s Knowledge, no event or condition exists which is or, with notice or passage of time or both, would constitute a trigger event, termination event, servicer termination event, event of default or other similar event under the Master Mortgage Servicing Agreements or Master Mortgage Loan Purchase Agreements, other than any such event or condition that occurred or arose before November 1, 2007 and either (i) is not continuing after that date or (ii) has not had a material adverse effect on ResMor Trust’s ability to conduct its business. The consummation of the transactions contemplated hereby will not cause the occurrence of any trigger event, termination event, servicer termination event, event of default or other similar event under the Master Servicing Agreements or Master Mortgage Loan Purchase Agreements.

(b) Since November 1, 2007, there has been no claim, demand or exercise of a right of indemnity or repurchase under any of the Servicing Documents, and to Seller’s Knowledge there is no fact, event or omission that, with notice or passage of time, would reasonably be expected to give rise to a claim, demand or exercise of a right of indemnity or repurchase under any of the Servicing Documents.

(c) Except as otherwise disclosed in writing by Seller to Purchaser on the date hereof, ResMor Trust has not assigned its right, title or interest to or in any Servicing Document to, and ResMor Trust has not delegated to any Person any of its duties under any of the Servicing Documents.

(d) Seller has provided to Purchaser on the date hereof a complete and accurate list of all Master Servicing Agreements entered into on or after November 1, 2007 to which ResMor Trust or its Affiliates is a party, and copies of all such Master Servicing Agreements have been delivered to Purchaser.

(e) Seller has provided to Purchaser on the date hereof a complete and accurate list of all Master Mortgage Loan Purchase Agreements entered into on or after November 1, 2007 to which ResMor Trust or its Affiliates is a party, and copies of all such Master Mortgage Loan Purchase Agreements have been delivered to Purchaser.

 

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(f) Seller has provided to Purchaser on the date hereof a complete and accurate list of all Master Securitized Mortgage Loan Purchase Agreements entered into on or after November 1, 2007 to which ResMor Trust or its Affiliates is a party, and copies of all such Master Securitized Mortgage Loan Purchase Agreements have been delivered to Purchaser.

(g) Except as otherwise disclosed in writing by Seller to Purchaser on the date hereof, ResMor Trust does not have any obligation to make advances of any kind under or pursuant to any Master Servicing Agreements, Master Mortgage Loan Purchase Agreements or Master Securitized Mortgage Loan Purchase Agreements.

3.9 Mortgages .

(a) The extension of credit to the Mortgagor, the origination or renewal (whichever was later) of the Mortgage, and the administration of the Mortgage have been completed by ResMor Trust (i) in accordance with the Credit and Collection Policy in all material respects, (ii) in accordance with standards at least equal to those required by Genworth and CMHC, as applicable, in each case, as in effect at the time of such extension of credit, origination or renewal, and (iii) in accordance with all applicable Laws in all material respects. As of the date of this Agreement, ResMor Trust has no obligation, under any Mortgage or other Contract or applicable Law, to renew or refinance any Mortgage at its contractual maturity date; provided , that ResMor Trust is obligated pursuant to Contracts with Genworth or CMHC to offer borrowers a renewal or extension at the then-current market rate as a condition to maintaining the insurance on the related Mortgage in full force and effect.

(b) Except as otherwise disclosed in writing by Seller to Purchaser on the date hereof, other than uninsured Mortgages which have Loan-to-Value Ratios at the time of origination not exceeding 75% with respect to any Mortgages funded prior to April 20, 2007 and 80% with respect to any Mortgages funded thereafter, each Mortgage of ResMor Trust and each Subserviced Mortgage is insured by Genworth or CMHC.

(c) There are no loans or security made or granted by ResMor Trust which have not been made or granted for good and valuable consideration in the usual course of business in all material respects. The loans, loan documentation, security and security documentation are genuine and complete and legally enforceable in all material respects in accordance with their terms against the respective Mortgagors, except as such enforceability may be limited by the Enforceability Exceptions. All security and security documentation have been duly and properly registered or recorded in all material respects in all places necessary or advisable in connection therewith, other than registrations and documentation that are in the usual and ordinary course of business in the process of being duly and properly registered or recorded in such places. To Seller’s Knowledge, the Mortgage Loan Files relating to Mortgages are accurate and complete in all material respects.

(d) Except as otherwise disclosed in writing by Seller to Purchaser on the date hereof, all of the loans and Mortgages comprising part of the business conducted by ResMor Trust are with respect to residential properties, and no such loans and Mortgages relate to commercial or corporate properties or are construction financing loans.

 

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(e) Except as otherwise disclosed in writing by Seller to Purchaser on the date hereof, there are no Mortgages that are delinquent for a period of greater than 60 days as of September 30, 2008.

(f) Seller has provided to Purchaser on the date hereof an accurate and complete list of all Mortgage Loans to be funded by ResMor Trust under commitments to advance that are outstanding on the date hereof.

3.10 Deposits . Except for employees and shareholders, ResMor Trust does not accept deposits from any Person other than through the Deposit Brokers. Each deposit accepted by ResMor Trust since November 1, 2007 complies with the applicable Customer Agreement and has been solicited, originated, created, maintained and serviced in compliance in all material respects with (a) ResMor Trust’s standard policies, practices and procedures, (b) the Canada Deposit Insurance Corporation Act and (c) all other applicable Laws. Each Customer Agreement entered into on or after November 1, 2007 is a legal, valid and binding obligation of ResMor Trust, enforceable against it in accordance with its terms and to Seller’s Knowledge, each other party thereto, except in each case as such enforceability may be limited by the Enforceability Exceptions. Since November 1, 2007, no Person has deposited any money with ResMor Trust other than Deposit Customers.

3.11 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 ResMor as of the date hereof, which was acquired, entered into or came into existence as applicable, since November 1, 2007. Neither RCC nor 1020491 owns or uses any IT Assets or Intellectual Property. ResMor Trust is the exclusive owner or valid licensee of all its material Intellectual Property, free and clear of all Liens, other than any Liens that may have been incurred before November 1, 2007 and either (i) have been released since that date or (ii) have not had a material adverse effect of ResMor Trust’s ability to operate its business.

(b) Since November 1, 2007, all registrations and applications for ResMor Trust’s Intellectual Property (including registrations with, filed in or issued by, as the case may be, the Canadian Intellectual Property Office or such other filing offices, domestic or foreign) that are owned by ResMor Trust and that are used in and are material to the conduct of the business of ResMor Trust 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 Property or any registration or application therefore is the subject of any opposition, interference, cancellation proceeding or other legal proceeding (including litigation) or governmental proceeding before any Government Authority in any jurisdiction, or of any outstanding order, judgment, decree or agreement adversely affecting the ownership, validity, registrability, or enforceability of ResMor Trust’s Intellectual Property use thereof or rights thereto.

 

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(c) Except as otherwise disclosed in writing by Seller to Purchaser on the date hereof, with respect to ResMor Trust’s Intellectual Property: (i) ResMor Trust owns and possesses all right, title and interest in and to, or have a valid, binding and enforceable license to use, such Intellectual Property; (ii) since November 1, 2007, no claim by any third party contesting the validity, enforceability, use or ownership of any of such Intellectual Property has been made or, to Seller’s Knowledge, is threatened; (iii) to Seller’s Knowledge, none of ResMor Trust’s Intellectual Property is being infringed upon or violated by any other person; (iv) to Seller’s Knowledge, since November 1, 2007, ResMor Trust has not received any notices of any infringement or misappropriation by any third party with respect to such Intellectual Property; and (v) since November 1, 2007. ResMor Trust has not infringed, misappropriated or otherwise conflicted with any proprietary rights of any third parties.

(d) Since November 1, 2007, ResMor Trust has taken all reasonable measures to protect the secrecy, confidentiality and value of all trade secrets required for, related to and used in ResMor Trust’s business, and to Seller’s Knowledge, such trade secrets have not been used, disclosed to or discovered by any Person except pursuant to valid and appropriate non-disclosure and/or license agreements, which have not been breached. To Seller’s Knowledge, no employee has any patents issued or applications pending for any device, process, design or invention of any kind now used or needed by ResMor Trust in the furtherance of ResMor Trust’s business that have not been assigned to ResMor Trust.

(e) To Seller’s Knowledge, no ResMor Trust employee’s performance of his or her employment activities violates the intellectual property or other rights of any Person.

(f) Except as otherwise disclosed in writing by Seller to Purchaser on the date hereof, ResMor Trust is not in breach of any (i) material Software Contract, or (ii) any material license, sublicense or other agreement relating to the IT Assets or its Intellectual Property, except, in each case, any such breach that occurred or arose before November 1, 2007 and either (i) is not continuing after that date or (ii) has not had a material adverse effect on ResMor Trust’s ability to conduct its business, and the execution and delivery of this Agreement, or the performance of its obligations hereunder will not result in the breach of, or give rise to the termination, cancellation or acceleration (whether after the filing of notice or the lapse of time or both) of any right of ResMor Trust under, or a loss of any benefit to which ResMor Trust is entitled under, or the imposition of any obligation under, or a Lien on, any Software Contract, or license, sublicense or other agreement relating to the IT Assets or Transferred Intellectual Property. To Seller’s Knowledge, since November 1, 2007, ResMor Trust has not infringed or misappropriated any IT Assets.

(g) Since November 1, 2007, ResMor Trust has not granted, transferred or assigned any right or interest in the software programs, the Technical Documentation, or its Intellectual Property to any Person.

3.12 Employee Benefit Plans .

(a) Seller shall cause ResMor Trust to deliver to Purchaser by November 26, 2008, a list of every benefit plan, program, agreement or arrangement (whether written or unwritten) maintained, contributed to or provided for the benefit of any current or former employee, director or independent contractor of ResMor Trust or their respective dependants or beneficiaries (the “ Benefit Plans ”) to which ResMor Trust is obliged to contribute or comply.

 

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(b) Seller shall cause ResMor Trust to deliver or make available to Purchaser by November 26, 2008 complete and up-to-date copies of all Benefit Plans and compensation policies and all amendments thereto together with copies of any current related documentation, including employee booklets and, as applicable, investment policies or contracts, insurance contractors, trust contracts or other related contracts.

(c) Except as otherwise disclosed in writing by Seller to Purchaser on the date hereof, no Benefit Plan provides benefits after retirement or termination of employment.

(d) Except as otherwise disclosed in writing by Seller to Purchaser on the date hereof, no promises or commitments, whether written or oral, have been made by ResMor Trust to amend any current Benefit Plan or compensation policy.

(e) Except as otherwise disclosed in writing by Seller to Purchaser on the date hereof, all of the Benefit Plans are and, since November 1, 2007, have been duly registered, administered, sponsored and funded in accordance with and as required by applicable Law.

(f) Neither this Agreement, nor the consummation of the transactions contemplated by this Agreement, in and of itself, will result in any payment or obligation of ResMor Trust to any employee or former employee or director of ResMor Trust (whether or not under any Benefit Plan), materially increase the benefits payable or provided under any Benefit Plan, result in any acceleration of the time of payment or vesting of any such benefit, or increase or accelerate employer contributions thereunder.

3.13 Employees .

(a) Except as otherwise disclosed in writing by Seller to Purchaser on the date hereof, ResMor Trust (i) is not a party to or bound by any Contract or commitment to pay any management or consulting fee, (ii) does not have any written employment Contract with any Person, and (iii) there are no independent contractors working for ResMor Trust. Any individual whose relationship to ResMor Trust that purports to that of an independent contractor is in fact an independent contactor and not an employment relationship.

(b) By November 26, 2008, Seller shall make available to Purchaser an accurate and complete list of the names and titles or job descriptions and salary and other compensation of employees of ResMor Trust on the date of this Agreement and any changes in such list that have occurred or are expected to occur prior to the Closing Date. Seller agrees to provide Purchaser with such other information with respect to employees as reasonably requested by Purchaser.

(c) ResMor Trust is not bound by or a party to any collective bargaining agreement. To Seller’s Knowledge, since November 1, 2007, no trade union, council of trade unions, employee bargaining agency or affiliated bargaining agent: (i) has applied to be certified as the bargaining agent of any employees; or (ii) has applied to have ResMor Trust declared a related employer or successor employer pursuant to the applicable labor legislation. There are no

 

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actual, or, to Seller’s Knowledge, pending or threatened organizing activities of any trade union, council of trade unions, employee bargaining agency or affiliated bargaining agent pertaining to ResMor Trust.

(d) Except as otherwise disclosed in writing by Seller to Purchaser on the date hereof, ResMor Trust is in material compliance with applicable taxation, health, labor, pension, labor and employment Laws and is not in breach in any material respect of any such Laws, and there are no outstanding assessments, levies or penalties under such Laws.

3.14 Realty . Neither RCC nor 1020491 owns, leases or has any other rights in any real property. Seller has delivered to Purchaser on the date hereof an accurate and complete list of leases with respect to real property leased or occupied by ResMor Trust (the “Leases”). Except for the Leases, ResMor Trust does not own, lease or have any rights in any real property. Except for ResMor Trust’s interest in the Leases, ResMor Trust does not currently own and since November 1, 2007 has not previously owned or been a mortgagee in possession of any other real property, including any freehold property.

3.15 Environmental . Since November 1, 2007, the business of ResMor Trust and its assets, are in compliance in all material respects with all applicable Environmental Laws. There are no outstanding or, to Seller’s Knowledge, threatened writs, injunctions, decrees, orders, judgments, actions, suits, claims, governmental information requests or proceedings against ResMor Trust relating to non-compliance with or liability under any Environmental Law.

3.16 No Material Adverse Change . Except as otherwise disclosed in writing by Seller to Purchaser on the date hereof, since December 31, 2007, there has not occurred any change in the business or operations of ResMor Trust that has had, or would 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.

3.17 Litigation . Except as otherwise disclosed in writing by Seller to Purchaser on the date hereof, there is no demand, claim, suit, action, arbitration or legal, administrative or other proceeding pending or, to Seller’s Knowledge, threatened against Seller, RCC, 1020491, ResMor Trust or any of their respective Affiliates, officers, directors or employees or their assets or operations.

3.18 Prior Purchase Agreement . Seller has delivered to Purchaser a true and complete copy of the Purchase Agreement dated as of June 8, 2007, as amended (the “ Prior Purchase Agreement ”), between GMAC Residential Funding of Canada, Limited and the Interested Parties and all schedules and other documents or agreements entered into in connection therewith. Seller has made no claims for indemnification under the Prior Purchase Agreement and, to Seller’s Knowledge, there are no claims for indemnification that could be made under the Prior Purchase Agreement.

3.19 Brokers or Finders . Except for Goldin Associates, LLC, Seller has not incurred, nor will it incur, directly or indirectly, any liability for brokerage or finders’ fees or agents’ commissions or any similar charges in connection with this Agreement or the transactions contemplated hereby.

 

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