SETTLEMENT AND
TERMINATION AGREEMENT
BY AND AMONG
FEDERAL DEPOSIT INSURANCE CORPORATION,
AS MANAGER OF THE FSLIC RESOLUTION FUND
FIRST HEIGHTS BANK, A
FEDERAL SAVINGS BANK,
PULTE DIVERSIFIED COMPANIES, INC.
AND
PULTE HOMES, INC.
f/k/a PULTE CORPORATION
DATED AS OF
October 12, 2001
SETTLEMENT AND TERMINATION AGREEMENT
This SETTLEMENT AND TERMINATION AGREEMENT ("Agreement"), dated as of
October 12, 2001, is entered into by and among the Federal Deposit Insurance
Corporation (the "FDIC") as Manager of the FSLIC Resolution Fund ("FRF")(the
FDIC as Manager of the FRF is herein called "FDIC Manger"), and First Heights
Bank, fsb ("First Heights"), Pulte Diversified Companies Inc. ("PDCI") and
Pulte Homes, Inc., f/k/a Pulte Corporation ("Pulte")(collectively referred to
herein as the "Pulte Entities").
RECITALS
The FRF is the transferee of the assets and liabilities of the Federal
Savings and Loan Insurance Corporation ("FSLIC"). FDIC Manager and the Pulte
Entities desire to provide for: (1) the settlement and dismissal of the certain
lawsuits styled FDIC v. First Heights Bank, fsb, et al., Case No. 95-72722
(E.D. Mich.)(on remand)("District Court Litigation"), and First Heights Bank,
fsb et al. v. FDIC, CA No. 00-1532(6th Cir.)("Sixth Circuit Appeal"); (2) the
termination of all provisions of the Assistance Agreement, dated September 9,
1988, among FSLIC, First Heights, fsa, Heights of Texas, fsb, and PDCI, and the
Amendment to the Assistance Agreement, dated September 23, 1988 (collectively
referred to as "Assistance Agreement"), except as provided in Article 4 herein;
and (3) the termination of the Warrant Agreement, dated September 9, 1988,
between First Heights and FSLIC ("Warrant Agreement").
Capitalized terms not otherwise defined herein shall have the meanings
given such terms in the Assistance Agreement.
AGREEMENT
In consideration of the mutual promises and covenants contained herein,
and of other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, and notwithstanding anything to the contrary
under the terms of the Assistance Agreement or any related agreement, the
parties hereby agree as follows;
ARTICLE 1
CLOSING
The consummation of the transactions contemplated by this Agreement,
subject to the satisfaction or waiver of the conditions precedent set forth in
Article 7 herein, shall take place at a closing (the "Closing") to be held
simultaneously at the offices of FDIC Manager in Washington, D.C., and the
offices of the Pulte Entities in Bloomfield Hills, Michigan on October 12,
2001, or such earlier or later date, or in such other manner, as the parties
hereto may agree in writing (the "Closing Date").
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ARTICLE 2
SETTLEMENT AND TERMINATION PAYMENT
SECTION 2.1 PAYMENT OF SETTLEMENT AND TERMINATION PAYMENT. The Pulte
Entities shall pay or cause to be paid to FDIC Manager, in the manner provided
in Section 2.2 of this Article 2, Forty One Million Five Hundred Thousand and
No/100ths Dollars ($41,500,000), in lawful money of the United States of America
(the"Settlement and Termination Payment"). FDIC Manager shall retain all amounts
it has previously withheld from First Heights, including any interest thereon.
SECTION 2.2 WIRE TRANSFER BY THE PULTE ENTITIES. Within one (1)
business day after the Closing Date, the Pulte Entities shall pay or cause to be
paid to FDIC Manager by wire transfer in immediately available funds, the
Settlement and Termination Payment. The Settlement and Termination Payment
represents the net settlement amount owed to FDIC Manager after taking into
account the amounts FDIC Manager has previously withheld from First Heights.
Such net payment shall satisfy any and all payment obligations of FDIC Manager
to the Pulte Entities under the Assistance Agreement and FSLIC Promissory Notes,
which Notes shall be cancelled, and any and all amounts owed by the Pulte
Entities to FDIC Manager relating to the District Court Litigation, and the
Liquidity Assistance Note shall be cancelled. If the FDIC does not receive the
Settlement and Termination Payment as required by this Article 2, then this
Agreement shall be null and void.
SECTION 2.3 TERMINATION OF ASSISTANCE AGREEMENT. The parties agree
that, except as otherwise provided for in Article 4 of this Agreement, upon the
occurrence of the Closing, the Assistance Agreement (including any and all
provisions which explicitly survive the termination of the Assistance Agreement)
and all rights and obligations of the parties thereto shall terminate effective
as of the Closing Date. Provided, however, that such termination shall not
operate to limit, reduce, or impair in any way the claims asserted by the Pulte
Entities in the litigation captioned First Heights Bank et al. v. United States,
No. 96-811C, now pending in the United States Court of Federal Claims ("Court of
Federal Claims Litigation").
SECTION 2.4 TERMINATION OF WARRANT AGREEMENT. The parties agree that,
pursuant to the terms set forth in Article 5 of this Agreement, the Warrant
Agreement and all rights and obligations of the parties thereto shall terminate
effective as of the Closing Date.
ARTICLE 3
DISMISSAL OF THE LAWSUITS
SECTION 3.1 DISMISSAL OF DISTRICT COURT LITIGATION. Within one (1)
business day after the Closing Date, the Pulte Entities and FDIC Manager shall
prepare, and FDIC Manager shall file, a Stipulated Order of Dismissal of the
District Court Litigation, in the form provided in Exhibit A hereto, pursuant to
which any and all claims asserted by any party therein shall be dismissed with
prejudice, each party bearing its own costs and expenses, including attorney
fees. The appeal bonds shall be cancelled.
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SECTION 3.2 DISMISSAL OF SIXTH CIRCUIT APPEAL. Within one (1) business
day after the Closing Date, the Pulte Entities and FDIC Manager shall prepare,
and the Pulte Entities shall file, a Stipulation To Dismiss the Sixth Circuit
Appeal, in the form provided in Exhibit B hereto, pursuant to which any and all
claims asserted by any party therein shall be dismissed with prejudice, each
party bearing its own costs and expenses, including attorney fees.
SECTION 3.3 DISMISSAL OF AMENDED FINAL PERIOD RECEIVERSHIP TAX RETURN
CLAIMS. To effectuate the release by the Pulte Entities in Section 10.2(c)
below, upon the final resolution of the Court of Federal Claims Litigation,
and conditioned upon (i) FDIC Manger's performance of the obligations set forth
in Section 4.6 of this Agreement and (ii) the amended final period receivership
tax returns for AllenPark Federal Savings and Loan Association, Bay City
Federal Savings and Loan Association, Champion Savings Association, Gulf Coast
Savings and Loan Association, and Heights Savings Association that were filed by
the FDIC as Receiver on or about July 2, 1993 ("1993 Amended Receivership
Returns") not having been given any effect by Internal Revenue Service ("IRS")
or otherwise, the Pulte Entities shall prepare and file, a Stipulated Order Of
Dismissal, in the form provided in Exhibit C hereto, pursuant to which the
claims by the Pulte Entities in the Court of Federal Claims Litigation
regarding the 1993 Amended Receivership Returns, set forth in Counts III and
VII of the Complaint in the Court of Federal Claims Litigation ("Receivership
Tax Return Claims"), shall be dismissed with prejudice, and without costs and
expenses to any party, including attorney fees. In addition, the Pulte Entities
agree that, to the extent the claims set forth in Counts X, XI, XII, XIII, XIV
and XV of the Complaint in the Court of Federal Claims Litigation, which have
been voluntarily withdrawn by the Pulte Entities, are based on the Receivership
Tax Return Claims, then such claims shall not be reinstated by the Pulte
Entities against any party, including the FDIC in all of its capacities, and
the FDIC's present and former subsidiaries and the respective present and
former officers, directors, successors, assigns, employees, agents and
representatives of all the foregoing, the FRF, and the United States, in any
forum.
ARTICLE 4
TAX BENEFIT SHARING MATTERS
SECTION 4.1 TERMINATION OF SECTION 9 OF THE ASSISTANCE AGREEMENT.
Except as provided in Section 4.2 below, Section 9 of the Assistance Agreement
is terminated effective as of the Closing Date.
SECTION 4.2 SURVIVAL OF SECTION 9(j) OF THE ASSISTANCE AGREEMENT.
Section 9(j) of the Assistance Agreement remain in effect for tax years through
2001 under the terms and conditions provided in this Section 4.2. All
references to Section 9(j) herein refer to Section 9(j) of the Assistance
Agreement as modified by the terms and conditions below.
(A) Section 9(j) shall apply where tax benefits attributable to Tax
Benefit Items, as defined in Section 9 of the Assistance Agreement and as
interpreted by the Sixth Circuit in FDIC v. First Heights Bank, fsb et
al. 229 F.3d 528 (6th Cir. 2000) ("Sixth Circuit Opinion"), including
Collateral Effects (as defined below), are disallowed or reduced as the result
of (i) action by the IRS or a state taxing authority, or (ii) amended tax
returns that are filed by the Pulte Entities as the direct result of a federal
or state tax audit or a change in federal or state tax law. As used in this
Agreement, the term "Collateral Effects" shall refer to adjustments to
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taxable income as a result of including Tax Benefit Items in, or excluding Tax
Benefit Items from, taxable income, the calculations of which are included in
Exhibit D hereto. The term "tax benefits" as used in this Agreement includes
tax benefits attributable to Tax Benefit Items, including Collateral Effects.
(B) Section 9(j) shall remain in effect for each tax year through tax year
2001 until three years after the filing of the Pulte Entities' federal and state
tax returns for each such tax year; provided that: (i) if the IRS or a state
taxing authority begins an audit within the applicable three-year period, then
Section 9(j) shall continue with respect to the tax returns that are the subject
of such audit until the conclusion of such audit and any related dispute or
litigation arising from such audit; and (ii) if the IRS or a state taxing
authority requests, and the Pulte Entities agree to, a waiver of the applicable
statute of limitations period to review an issue relating to tax benefits
attributable to Tax Benefit Items (including Collateral Effects), then Section
9(j) shall continue pursuant to the scope and terms of the waiver. It is further
provided that: (a) with respect to the state tax returns for Arizona, California
and Colorado only, Section 9(j) shall remain in effect for each tax year through
2001 for four years after the filing of each such state tax return; (b) with
respect to the state tax returns of Florida for the tax years ending before July
1, 1999, Section 9(j) shall continue in effect for five years after the filing
of each such state tax return; and (c) with respect to the state tax returns for
Minnesota only, Section 9(j) shall continue in effect for each tax year through
2001 for three and one half years after the filing of each such state tax
return. The time periods set forth in the preceding sentence are subject to (i)
and (ii) above.
(C) Section 9(j) applies only to (i) the tax benefits set forth in FDIC
Manager's calculations for tax years 1988-1999, which are attached as Exhibit D
hereto, and (ii) the tax benefits set forth in FDIC Manager's calculations for
tax years after 1999, which are attached as Exhibit E hereto, which the Pulte
Entities claim on their federal or state tax returns for tax years 2000 and
2001. Section 9(j) does not apply to tax benefits set forth in FDIC Manager's
calculations for tax years after 1999, which the Pulte Entities do not claim on
their tax returns for tax years 2000 or 2001, and the Pulte Entities have no
legal claim or cause of action against FDIC Manager for payment for such tax
benefits that are not claimed on the Pulte Entities' tax returns.
(D) For all tax years to which Section 9(j) applies, the Pulte Entities
shall provide FDIC Manager with: (i) copies of all federal and state income tax
returns, all amended federal and state income tax returns, and all schedules
prepared in connection with or related to such income tax returns, within 30
days after the filing of such returns; and (ii) upon FDIC Manager's request, all
tax workpapers relating to such income tax returns. For each year Section 9(j)
is in effect, the Pulte Entities shall provide FDIC Manager with: (i) a copy of
any notice of a federal or state audit, adjustment or proposed adjustment of the
Pulte Entities' income tax returns, within 14 days after the Pulte Entities
receive such notice; (ii) copies of all draft and final federal and state audit
reports (including Revenue Agent Reports) and closing agreements relating to tax
years 1988-2001; (iii) in the event of a disallowance or reduction of tax
benefits, a tax benefit sharing calculation, prepared in accordance with Section
9 of the Assistance Agreement, as interpreted in the Sixth Circuit Opinion and
attested to by the Pulte Entities' independent auditors, that demonstrates a
disallowance or reduction in the tax benefit sharing amount set forth in FDIC
Manager's calculations; (iv) a calculation of FDIC Manager's allocable share of
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interest due on the disallowed or reduced tax benefits, if any, pursuant to this
Agreement; (v) any other documentation necessary to support the Pulte Entities'
claim that there has been a disallowance or reduction in tax benefits to which
Section 9(j) applies; and (vi) written confirmation that the Pulte Entities have
paid or otherwise satisfied or have had an offset imposed by the IRS or a state
taxing authority for the disallowed or reduced tax benefits and interest.
(e) Where Section 9(j) applies, FDIC Manager's obligation to reimburse the
Pulte Entities shall be calculated in accordance with Section 9 of the
Assistance Agreement, as interpreted in the Sixth Circuit Opinion, and shall not
exceed the tax benefit sharing amount reflected in FDIC Manager's calculations
relating to the disallowed or reduced tax benefits, set forth in Exhibits D and
E hereto.
(f) In the event the IRS or a state taxing authority charges the Pulte
Entities interest on any disallowed or reduced tax benefits, and the Pulte
Entities have paid or offset such interest, FDIC Manager shall reimburse the
Pulte Entities the portion of such interest applicable to the amount of tax
benefits reimbursed by FDIC Manager pursuant to Section 9(j); provided that FDIC
Manager shall not be required to pay interest at a rate higher than the coupon
equivalent yield for the average discount rate set on 91-day (13-week) Treasury
bills at the last auction held by the United States Treasury Department during
the quarter preceding the quarter for which interest is charged, and if the
actual amount of interest charged by the IRS attributable to the tax benefits
reimbursed by FDIC Manager is less than such amount, then FDIC Manager shall pay
its pro rata share of the actual amount of interest charged by the IRS; and it
is further provided that if the reason for the disallowance or reduction of tax
benefits, as finally determined by the IRS or a state taxing authority, relates
to fraud by the Pulte Entities, then FDIC Manager shall not be required to pay
any interest. Under no circumstances shall FDIC Manager be required to pay any
penalties imposed on the Pulte Entities by the IRS or a state taxing authority.
(g) If(i) the Pulte Entities are allowed a tax deduction for interest paid
to the IRS or a state taxing authority for which FDIC Manager is required to
reimburse pursuant to this Agreement, and (ii) the Pulte Entities exclude from
taxable income any portion of FDIC Manager's payment of interest pursuant to
this Agreement in connection with Section 9(j), then the amount of FDIC
Manager's interest payment to the Pulte Entities shall be reduced by the amount
of net tax savings to be received by the Pulte Entities on such interest
payments.
(h) To the extent that the disallowance or reduction of tax benefits to
which Section 9(j) applies solely results in a timing difference, meaning that
the Pulte Entities will obtain such tax benefits in a later or earlier year,
then: (i) FDIC Manager is not required to reimburse the Pulte Entities for the
disallowed or reduced tax benefits pursuant to Section 9(j), but FDIC Manager
shall reimburse the Pulte Entities for the amount of interest it would otherwise
be required to reimburse the Pulte Entities pursuant to this Agreement; and (ii)
in the event that FDIC Manager reimburses the Pulte Entities pursuant to Section
9(j) for a disallowance or reduction of tax benefits, and the Pulte Entities
subsequently obtain such disallowed or reduced tax benefits, then within 60 days
of the crediting or receipt of such tax benefits, the Pulte Entities are
required to return to FDIC Manager the amount of tax benefits FDIC Manager
previously paid.
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(i) FDIC Manager's payment to the Pulte Entities pursuant to Section
9(j) shall be made within 60 days after it receives all items set forth in
paragraph (d) above.
(j) In the event FDIC Manager reimburses the Pulte Entities for
disallowed or reduced tax benefits pursuant to Section 9(j), and the disallowed
or reduced tax benefits for which the reimbursement was made are conclusively
reinstated, as the result of the filing of amended tax returns (which shall be
deemed conclusively reinstated when the benefit is received or credited), a
legal challenge by the Pulte Entities, the action of a federal or a state taxing
authority or otherwise, as finally determined by the applicable taxing authority
or court, then, within 60 days of the crediting or receipt of the tax benefit
attributable to such final determination, the Pulte Entities shall reimburse
FDIC Manager for its prior payment plus its pro rata share of any interest
received by the Pulte Entities in connection with the reinstatement of tax
benefits.
(k) The Pulte Entities agree that, in the event that FDIC Manager
reimburses the Pulte Entities for disallowed or reduced tax benefits pursuant to
Section 9(j) based upon action taken by the IRS in connection with the 1993
Amended Receivership Returns ("1993 Returns Reimbursement"), then, in the Court
of Federal Claims Litigation, the Pulte Entities shall not be entitled to
recover from the United States as damages the 1993 Returns Reimbursement. In the
event that the Pulte Entities are awarded damages against the United States in
the Court of Federal Claims in an amount that includes the 1993 Returns
Reimbursement, then the Pulte Entities shall, within 45 days of receipt of such
damages in the Court of Federal Claims Litigation, reimburse to the FDIC an
amount equivalent to the 1993 Returns Reimbursement, plus interest at a rate
equal to the coupon equivalent yield for the average discount rate set on 91-day
(13 week) Treasury bills are the last auction held by the United States Treasury
Department during the quarter preceding the quarter in which the award of
damages is received in the Court of Federal Claims Litigation. In the event that
the Pulte Entities are awarded damages against the United States in the Court of
Federal Claims Litigation in an amount that includes an amount that the FDIC
would be required to reimburse to the Pulte Entities as 1993 Returns
Reimbursement, and the FDIC has not yet paid such 1993 Returns Reimbursement to
the Pulte Entities, then the FDIC shall not be required to pay such 1993 Returns
Reimbursement to the Pulte Entities.
SECTION 4.3 FEES AND EXPENSES. FDIC Manager has no obligation to pay
for any of the Pulte Entities' fees and expenses incurred in connection with a
defense or challenge by the Pulte Entities to a disallowance or reduction of tax
benefits, or in connection with a reinstatement of tax benefits, and the Pulte
Entities' payment to FDIC Manager for tax benefits pursuant to this Agreement
shall not be reduced or netted for such fees and expenses.
SECTION 4.4 INCREASE IN TAX BENEFITS OF PULTE ENTITIES. If there is an
increase in the Pulte Entities' federal or state tax benefits in any tax year
1988-2001 as the result of (i) action by the IRS or a state taxing authority or
(ii) the filing of amended tax returns filed as the result of a federal or state
tax audit or change in federal or state tax law, and the increase results in an
increase to the tax benefit sharing amounts set forth in FDIC Manager's
calculations, attached as Exhibits D and E hereto, then the Pulte Entities are
required to pay FDIC Manager for its allocable share of such increase in tax
benefit amounts within 60 days after the Pulte Entities receive or are credited
the additional tax benefits. In addition, to the extent that the Pulte Entities
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receive interest in connection with the increase in tax benefits, then the Pulte
Entities shall also pay FDIC Manager its pro rata share of such interest,
calculated in the same manner as provided in Section 4.2(f) above, unless FDIC
Manager's share of the actual amount of interest received from the IRS is less
than such amount, in which case FDIC Manager shall receive its pro rata share of
the actual amount of interest received from the IRS. This Section 4.4 shall
remain in effect as long as Section 9(j) remains in effect.
SECTION 4.5 DAMAGES IN COURT OF FEDERAL CLAIMS LITIGATION. The parties
agree that any damages that the Pulte Entities may receive in the Court of
Federal Claims Litigation may include compensation in an amount equal to tax
benefits attributable to Tax Benefit Items (including Collateral Effects) that
the Pulte Entities did not receive as a result of the Government actions alleged
in the Court of Federal Claims Litigation and any prejudgment and post-judgment
interest awarded thereon ("Tax Benefit Component"), and that FDIC Manager is
entitled to 25% of such amount. Accordingly, in the Court of Federal Claims
Litigation, in lieu of the 100% award to the Pulte Entities of the Tax Benefit
Component and a direct payment of 25% of that amount to FDIC Manager, the Pulte
Entities shall be entitled to an award of only 75% of the Tax Benefit Component.
In the event that the Pulte Entities are awarded 100% of the Tax Benefit
Component in the Court of Federal Claims Litigation, the Pulte Entities are
entitled to collect, and the United States is required to pay, only 75% of the
Tax Benefit Component. Such agreement shall not limit the other damages the
Pulte Entities may seek or may be awarded in the Court of Federal Claims
Litigation. FDIC Manager and the United States have the right to enforce this
provision in the Court of Federal Claims or any other court with jurisdiction.
FDIC Manager has no obligation to pay any of the Pulte Entities' legal fees and
expenses incurred in connection with the Court of Federal Claims Litigation.
This provision shall not affect the Pulte Entities' ability to seek an award of
costs and expenses, including attorney fees, against the United States in the
Court of Federal Claims Litigation.
SECTION 4.6 FINAL PERIOD RECEIVERSHIP TAX RETURNS. Within one (1)
business day after the Closing Date, FDIC Manager will withdraw the 1993 Amended
Receivership Returns. FDIC Manager agrees that it will thereafter make no
further final period receivership tax return filings for AllenPark Federal
Savings and Loan Association, Bay City Federal Savings and Loan Association,
Champion Savings Association, Gulf Coast Savings and Loan Association, and
Heights Savings Association. The parties agree to cooperate in carrying out the
actions set forth in Sections 3.3. and 4.6 of this Agreement.
SECTION 4.7 IRS AUDIT. FDIC Manager shall promptly notify the Pulte
Entities in the event that FDIC Manager is notified by the IRS that any of the
final period receivership tax returns of the Acquired Associations are selected
for audit. If FDIC Manager is required to provide information to the IRS with
respect to such returns, then, to the extent permitted by law, FDIC Manager will
first provide reasonable notice to the Pulte Entities of any response to the
IRS.
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ARTICLE 5
TERMINATION OF WARRANT AGREEMENT
SECTION 5.1 TERMINATION OF WARRANT AGREEMENT. The Warrant Agreement
and the rights and obligations of FDIC Manager and the Pulte Entities under the
Warrant Agreement are terminated, provided that:
(A) PDCI and Pulte and any affiliated entity shall not (i) receive
from First Heights any assets, except for the proceeds from the sale of the
First Heights thrift charter and First Heights' recovery in the Court of Federal
Claims Litigation; (ii) redeem or liquidate their First Heights stock for any
assets of First Heights; or (iii) transfer any liabilities into First Heights,
except to recognize on First Heights' books any liability related to this
Agreement. If First Heights is merged, or liquidated and merged, into another
entity, or if all or substantially all of the assets and liabilities of First
Heights are transferred to another entity, then FDIC Manager shall receive from
First Heights' assets 20% of the amount, if any, by which First Heights' assets
exceed its liabilities immediately before such liquidation, merger, or transfer
of assets and liabilities.
(B) To ensure compliance with the terms of this Section 5.1, FDIC
Manager shall have the right to review: (i) First Heights' annual audited
financial statements and, upon request, supporting workpapers; (ii) the thrift
quarterly reports submitted to the Office of Thrift Supervision ("OTS") by First
Heights; (iii) First Heights' accounting for this Agreement; (iv) First Heights'
plan of liquidation, sale or other disposition, and the accounting for such
liquidation, sale or other disposition; (v) pro forma financial statements for
First Heights immediately before any liquidation or merger of First Heights into
another entity or transfer of First Heights' assets and liabilities to another
entity; and (vi) any merger or other agreements relating to such liquidation,
merger or transfer of assets and liabilities.
ARTICLE 6
TRANSFER OF FIRST HEIGHTS LITIGATION
SECTION 6.1 TRANSFER OF FIRST HEIGHTS LITIGATION.
(A) At the Closing, the Pulte Entities shall transfer, assign, and
convey to FDIC Manager, and FDIC Manager shall assume, all of the Pulte
Entities' rights, benefits, obligations, and judgments associated with the
following pending cases (collectively the "Transferred Litigation"):
(i) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, P.C. v. First Heights of Texas and Playa del
Rio, Inc. v. FDIC, Intervenor, Civil Action No. B-99-046
(S.D. Tex.), and ▇▇. ▇▇-▇▇▇▇▇ (▇▇▇ ▇▇▇.): The FDIC's Motion
for Summary Judgment was granted by the district court, and
all funds made the subject of the action were ordered to be
disbursed to the FDIC. The district court further ordered
that Playa del Rio, Inc. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, minority
shareholder of Playa del Rio, take nothing. ▇▇▇▇▇▇▇ and Playa
del Rio filed a notice of appeal of the judgment on May 24,
2001, and that appeal is pending.
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(ii) First Heights Bank, fsb v. First Trust National Assoc., La
Mesa Grande, Inc. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Cause No. 97-03905
(98th Jud. Dist. Tex), and No. 03-01-00301-CV (Tex Civ.
App.): The court entered judgment in favor of First Heights
for $70,261.41, plus prejudgment interest, attorneys fees,
costs and postjudment interest. First Trust National
Association filed a notice of appeal on May 18, 2001, and
that appeal is pending.
(iii) Playa del Rio, Inc. v. Heights of Texas, fsb and Pulte
Diversified Companies, Inc., Cause No. 92-09-5271-C (197th
Judicial District Texas): The litigation is the subject of
an abatement order and is expected to be dismissed.
(B) Effective upon the Closing Date, FDIC Manager shall assume the
responsibility and all liabilities for the defense, management and conduct of
all proceedings relating to the Transferred Litigation set forth in Section
6.1(a). Immediately following the Closing, the Pulte Entities will advise their
outside counsel, in writing, of FDIC Manager's assumption of the responsibility
for managing the Transferred Litigation and, if requested by FDIC Manager,
direct their outside counsel to prepare those documents reasonably necessary to
designate new counsel of record for the Transferred Litigation.
(C) The Pulte Entities certify that, other than the Transferred
Litigation listed in Section 6.1(a), there are no other pending cases,
litigation matters or causes of action as to which the Pulte Entities are
subject to receiving indemnification under Section 7 of the Assistance
Agreement.
(D) Effective upon the Closing Date, the FDIC Manager shall pay all
legal fees, expenses, judgments, settlements and costs incurred in connection
with the Transferred Litigation on or after the Closing Date.
SECTION 6.2 PULTE ENTITIES' COOPERATION WITH RESPECT TO TRANSFER OF
TRANSFERRED LITIGATION. On and after the Closing Date: (i) the Pulte Entities
will execute and deliver all Litigation, in a form and substance reasonably
satisfactory to FDIC Manager and the Pulte Entities; and (ii) the Pulte Entities
will transfer and deliver to FDIC Manager all books, records, documents, files
and all other information in the Pulte Entities' possession, and direct its
counsel to make available to FDIC Manager its litigation and discovery files in
counsel's possession with respect to the Transferred Litigation. At the request
of FDIC Manager, the Pulte Entities shall make their then current employees
available to testify in any lawsuit which constitutes a Transferred Litigation
to the extent the FDIC Manager or its counsel reasonably considers such
testimony to be appropriate, provided that FDIC Manager shall pay to the
Pulte Entities any reasonable out-of-pocket expenses incurred by any of the
Pulte Entities or such employees in connection with providing such testimony.
SECTION 6.3 INDEMNIFICATION. FDIC Manager shall indemnify and hold
harmless First Heights and its present and former officers, directors and
employees from all costs, losses and expenses related to the Transferred
Litigation set forth in Section 6.1(a).
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SECTION 6.4 RECEIPT OF FUNDS BY PULTE ENTITIES. Effective upon the
Closing Date, if the Pulte Entities receive any payment relating to the
Transferred Litigation, then the Pulte Entities shall, within seven (7) days of
receipt, transfer such payment to FDIC Manager.
SECTION 6.5 POTENTIAL TAX BENEFIT. If the Pulte Entities receive a
tax benefit attributable to any amounts paid by FDIC Manager with respect to the
Transferred Litigation, then the Pulte Entities must pay the entire amount of
such tax benefit to FDIC Manager.
ARTICLE 7
CONDITIONS PRECEDENT TO CLOSING
SECTION 7.1 CONDITIONS TO OBLIGATIONS OF FDIC MANAGER. The
obligations of FDIC Manager under this Agreement shall be subject to the waiver
in writing or fulfillment, on or prior to the Closing Date, of each of the
following conditions precedent:
(A) CERTIFICATIONS. FDIC Manager shall have received certificates from
each of the Pulte Entities signed by its corporate secretary or assistant
corporate secretary and dated the Closing Date, certifying that the signatories
to this Agreement have the corporate power and authorization to execute the
Agreement on behalf of the entities for whom the signatories have executed the
Agreement.
(B) INCUMBENCY CERTIFICATE. FDIC Manager shall have received
certificates from each of the Pulte Entities signed by its corporate secretary
or assistant corporate secretary and dated the Closing Date, certifying as to
each person executing this Agreement on behalf of such party, that: (i) such
person is an officer of such party holding the office or offices specified
therein; and (ii) the signature of each person set forth on such certificate is
his or her genuine signature.
(C) PROCEEDINGS. All corporate and other proceedings taken in
connection with the transactions contemplated by this Agreement, and all
documents incident thereto, shall be reasonably satisfactory in form and
substance to FDIC Manager and its counsel, and FDIC Manager shall have received
such counterpart originals or certified or other copies of such documents as it
may reasonably request.
(D) ACCURACY OF REPRESENTATIONS AND WARRANTIES; PERFORMANCE. The
representations and warranties of each of the Pulte Entities contained in this
Agreement shall be true and correct in all material respects on and as of the
Closing Date with the same effect as if made on and as of the Closing Date, and
the Pulte Entities shall have performed or complied with all covenants,
agreements and conditions herein that they are required to perform or comply
with on or prior to the Closing Date.
SECTION 7.2 CONDITIONS TO OBLIGATIONS OF THE PULTE ENTITIES. The
obligations of the Pulte Entities under this Agreement shall be subject to the
waiver in writing or fulfillment, on or prior to the Closing Date, of each of
the following conditions precedent:
(A) INCUMBENCY CERTIFICATE. The Pulte Entities shall have received a
certificate from the FDIC signed by its executive secretary or assistant
executive secretary and dated the Closing Date, certifying as to the person
executing this Agreement on behalf of the FDIC, that:
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(i) such person is an officer of the FDIC holding the office specified therein;
and (ii) the signature of such person set forth on such certificate is his or
her genuine signature.
(b) PROCEEDINGS. All corporate and other proceedings taken in connection
with the transactions contemplated by this Agreement, and all documents incident
thereto, shall be reasonably satisfactory in form and substance to the Pulte
Entities and their respective counsel, and the Pulte Entities shall have
received such counterpart originals or certified or other copies of such
documents as they may reasonably request.
(c) ACCURACY OF REPRESENTATIONS AND WARRANTIES; PERFORMANCE. The
representations and warranties of FDIC Manager contained in this Agreement shall
be true and correct in all material respects on and as of the Closing Date with
the same effect as if made on and as of the Closing Date, and FDIC Manager shall
have performed or complied with all covenants, agreements and conditions herein
that it is required to perform or comply with on or prior to the Closing Date.
SECTION 7.3 CONDITIONS TO OBLIGATIONS OF FDIC MANAGER AND THE PULTE
ENTITIES. The obligations of FDIC Manager and the Pulte Entities under this
Agreement shall be subject to the fulfillment of the following conditions:
(a) DISMISSAL OF THE DISTRICT COURT LITIGATION. The entry by the United
States District Court for the Eastern District of Michigan, Southern Division,
of the Stipulated Order of Dismissal of the District Court Litigation, as
provided in Section 3.1 herein.
(b) DISMISSAL OF THE SIXTH CIRCUIT APPEAL. The entry by the United States
Court of Appeals for the Sixth Circuit of the Stipulation to Dismiss the Sixth
Circuit Appeal as provided in Section 3.2 herein.
(c) DISMISSAL OF RECEIVERSHIP TAX RETURN CLAIMS. The preparation of the
Stipulated Order of Dismissal as provided in Section 3.3 herein, and the entry
of such Stipulated Order of Dismissal when required by Section 3.3.
ARTICLE 8
REPRESENTATIONS AND WARRANTIES
SECTION 8.1 REPRESENTATIONS AND WARRANTIES OF THE PULTE ENTITIES. To
induce FDIC Manager to enter into this Agreement and to consummate the
transactions contemplated thereby, the Pulte Entities jointly and severally
make the following representations and warranties to FDIC Manager as of the date
hereof.
(a) CORPORATE EXISTENCE.
(i) First Heights is a federally chartered stock savings bank duly
organized, validly existing, and in good standing under the laws of the United
States of America, with all requisite power and authority to: (A) own and
operate its properties and conduct its business as currently conducted by it;
and (B) engage in the activities and transactions described in and contemplated
by this Agreement.
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(ii) Pulte and PDCI are each a corporation duly organized, validly
existing, and in good standing under the laws of the State of Michigan, with all
requisite power and authority to: (A) own and operate its properties and conduct
its business as currently conducted by it: and (B) to engage in the activities
and transactions described in and contemplated by this Agreement.
(B) DUE AUTHORIZATION. Each of the Pulte Entities has full power and
authority to execute, deliver and perform this Agreement, and has taken all
necessary action to authorize the execution, delivery and performance of this
Agreement in accordance with its terms. Each of the Pulte Entities has the full
power and authority to perform its respective obligations under this Agreement.
(C) BINDING AGREEMENT. This Agreement has been duly authorized,
executed and delivered by each of the Pulte Entities and, when duly authorized,
executed and delivered by FDIC Manager, this Agreement shall constitute a legal,
valid and binding obligation of each of the Pulte Entities, enforceable against
each of them in accordance with its terms.
(D) COMPLIANCE WITH LAW.
(i) The Pulte Entities have not been notified of any violation of
any statute, regulation, order, decision, judgment, or decree of, or any
restriction imposed by, the United States of America, any state, municipality,
or other political subdivision thereof, or any agency of the foregoing, or any
court or other competent tribunal having jurisdiction over any of the Pulte
Entities, their subsidiaries, any of their assets, or imposed by any foreign
government or agency thereof having jurisdiction over the Pulte Entities, any of
their assets, or imposed by any securities exchange or securities quotation
system on which the Pulte Entities' securities are listed or quoted, in respect
of the conduct of their business or the ownership of their properties, which,
either individually or in the aggregate with all such other violations, would
materially adversely affect the ability of the Pulte Entities to observe or
perform the terms of this Agreement.
(ii) To the best of their knowledge, the execution, delivery, and
performance by the Pulte Entities of this Agreement will not violate or conflict
with any provision of any applicable law or regulation, any order, writ,
judgment, or decree of any court or governmental authority to which any of them
is otherwise subject.
(E) COMPLIANCE WITH OBLIGATIONS.
(i) To the best of their knowledge, the Pulte Entities are not in
violation or breach of or in default under any obligation, agreement, covenant
or condition contained in their respective bylaws or charter, and the Pulte
Entities are not in violation or in breach of or in default under any contract,
lease or other instrument to which any of them is a party (or which is binding
on it or its assets), which violation, breach or default, either individually or
in the aggregate with all such other violations, breaches and defaults, is
material to the ability of the Pulte Entities to observe or perform the terms of
this Agreement.
(ii) The execution, delivery and performance by the Pulte Entities
of this Agreement do not and will not: (A) violate or conflict with any
provision of their respective
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articles of association or organization or bylaws; or (B) to the best of their
knowledge, result in a material violation, or breach of, or default under any
contract, lease or other instrument to which any of them is a party (or which
is binding on any of them or any of their respective assets).
(F) APPROVAL AND CONSENTS. All governmental approvals and other third party
consents that are required in connection with the execution, delivery or
performance of this Agreement or the transactions contemplated by this Agreement
on the part of the Pulte Entities, if any, have been obtained.
(G) LITIGATION. There is no legal action, suit, investigation or proceeding
pending (in which any of the Pulte Entities is a party) or, to any of the Pulte
Entities' knowledge, threatened against of affecting any of the Pulte Entities
(whether or not any of them is a party thereto) or any of their respective
assets which questions the validity of this Agreement, or any of the
transactions contemplated hereby, or which would be reasonably expected, either
individually or in the aggregate with all such other actions, suits,
investigations or proceedings, to materially and adversely affect the ability of
any of the Pulte Entities to perform, satisfy or observe any obligations or
conditions under this Agreement.
(H) TAX MATTERS.
(i) The Pulte Entities represent that they have provided FDIC Manager
with true and complete copies of all federal and state tax returns and amended
tax returns for tax years 1988 through 1999, as required by Section 9(i) of the
Assistance Agreement.
(ii) The Pulte Entities represent that, for tax years 1988 through
1998, First Heights qualified as a Domestic Building and Loan pursuant to 26
U.S.C. ss 7701(a)(19), and that First Heights did not, and does not, so qualify
for tax years after 1998.
(iii) The Pulte Entities represent that there is a current Arizona
audit assessment against the Pulte Entities disallowing the inclusion of First
Heights in Pulte's tax filings for 1993-1994, which the Pulte Entities are
protesting. The Arizona audit assessment for 1995-1997 has been settled and
paid, including interest, and the Pulte Entities will seek reimbursement from
FDIC Manager pursuant to the terms of this Agreement. In addition, the Pulte
Entities represent that there are no other current or threatened audits or
actions by the IRS or a state taxing authority which would trigger the FDIC's
obligation pursuant to Section 9(j).
(I) ACCURACY OF INFORMATION. To the best of their knowledge, no
representation or warranty made by the Pulte Entities in this Agreement contains
any untrue statement of a material fact or omits to state a material fact
necessary to make the statements contained in this Agreement not misleading
under the circumstances made or at the time furnished.
SECTION 8.2 REPRESENTATIONS AND WARRANTIES OF THE FDIC MANAGER. To induce
the Pulte Entities to enter into this Agreement and to consummate the
transactions contemplated hereby, FDIC Manager makes the following
representations and warranties:
(A) POWER AND AUTHORIZATION. The execution, delivery and performance of
this Agreement: (i) are within the legal power and authority of FDIC Manager;
and (ii) have been.
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duly authorized by all necessary action on the part of FDIC Manager. The FRF is
the transferee of the assets and liabilities of the FSLIC on August 8, 1989.
FDIC Manager is the statutory manager of FRF and, as such, has the rights,
powers and duties to control, dispose of, or otherwise act with all of the
rights, powers, and duties of a manager or owner of the assets and liabilities
of the FRF. FDIC Manager is the sole successor to all rights, duties, and
obligations of the FSLIC under the Assistance Agreement and the Warrant
Agreement. FDIC Manager has the sole statutory authority to execute, deliver and
perform this Agreement, and no joinder of any other person or party that is an
agency or instrumentality of the federal government of the United States is
necessary in order to fully effect the transactions contemplated by this
Agreement.
(B) BINDING AGREEMENT. This Agreement has been duly authorized,
executed and delivered by FDIC Manager, and when duly authorized, executed and
delivered by the Pulte Entities, this Agreement shall constitute a legal, valid
and binding obligation of FDIC Manager, enforceable against it in accordance
with its terms.
(C) COMPLIANCE WITH LAW. To the best of its knowledge, the execution,
delivery and performance by FDIC Manager of this Agreement will not violate or
conflict with any provision of any applicable law or regulation, or any order,
writ, judgment, or decree of any court or governmental authority to which it is
otherwise subject.
(D) COMPLIANCE WITH OBLIGATIONS. The execution, delivery and
performance by FDIC Manager of this Agreement does not and will not: (a) violate
or conflict with any provision of its respective articles of association or
organization or bylaws; or (B) to the best of its knowledge, result in a
material violation, or breach of, or default under any contract, lease or other
instrument to which it is a part (or which is binding on it or any of its
assets).
(E) APPROVALS AND CONSENTS. All approvals and other consents that are
required in connection with the execution, delivery or performance of this
Agreement or the transactions contemplated by this Agreement on the part of FDIC
Manager, if any, have been obtained.
(F) LIMIT ON OBJECTIONS. FDIC Manager agrees that:
(i) FDIC Manager will not assert to the OTS or the FDIC
Division of Supervision an objection to the Pulte Entities entering into this
Agreement.
(ii) FDIC Manager will not object to accounting matters of First
Heights, unless they violate the terms of this Agreement.
(iii) FDIC Manager will not assert, directly or indirectly, any
objections to the OTS with respect to the transfer of the stock of First Heights
to an affiliate and/or any aspects of any plan of disposition of First Heights
submitted by the Pulte Entities to the OTS, which could constitute a plan of
dissolution involving a merger or liquidation of First Heights into such
affiliate, unless such stock transfer or plan of disposition violates the terms
of this Agreement.
(iv) FDIC Manager will not assert, directly or indirectly, any
objection to the OTS with respect to the termination by the OTS of the Agreement
between First Heights and the OTS, dated May 18, 2000 ("May 2000 Agreement")
provided that, in the event the May 2000
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Agreement is terminated, such termination shall not in any way alter, affect or
waive any of the parties' respective rights, privileges, powers, remedies,
duties or obligations under this Agreement, all of the terms of which shall
remain in full force and effect.
(G) ACCURACY OF INFORMATION. To the best of its knowledge, no
representation or warranty made by FDIC Manager in this Agreement contains any
untrue statements of a material fact or omits to state a material fact necessary
to make the statements contained in this Agreement not misleading under the
circumstances made or at the time furnished.
(H) WARRANTS. The FRF, as managed by FDIC Manager, is the sole owner
of the Warrants and has not exercised, assigned, transferred, or otherwise
encumbered the Warrants.
ARTICLE 9
COVENANTS
SECTION 9.1 FURTHER ASSURANCES. Each of the parties hereto shall
promptly and duly cause to be taken, executed, acknowledged or delivered all
such further acts, conveyances, documents and assurances as any party hereto may
from time to time reasonably request in order to more effectively carry out the
intent and purposes of this Agreement and the transactions contemplated thereby;
provided that the cost of preparing and filing documents shall be borne by the
party requesting the same.
SECTION 9.2 COSTS AND EXPENSES. Except to the extent otherwise
specifically provided herein, each party hereto agrees to pay all costs and
expenses incurred by it in connection with or incidental to the matters
contained in this Agreement, including any fees and disbursements of attorneys,
accountants and consultants.
SECTION 9.3 FDIC'S OIG. Nothing in this Agreement shall be construed to
prevent or impair the audit and investigative authority of the FDIC's Office of
Inspector General pursuant to the Inspector General Act of 1978, as amended.
ARTICLE 10
RELEASES
SECTION 10.1 RELEASE BY FDIC MANAGER. Except as provided in Section 4.5
of this Agreement, and all the other duties, obligations and other actions or
inactions provided herein and placed upon the Pulte Entities, FDIC Manager
hereby releases, holds harmless, acquits and forever discharges, effective as of
the Closing Date, each of the Pulte Entities, and their respective present and
former parents, subsidiaries and affiliates, and their respective present and
former officers, directors, shareholders, successors, assigns, employees, agents
and representatives of all the foregoing, from and against any and all actions
and causes of action, suits, disputes, debts, accounts, promises, warranties,
damages, claims, proceedings, demands and liabilities, of every kind and
character, direct and indirect, at law or in equity, that FDIC Manager has
raised, or could have raised, known or unknown, at the Closing Date; provided,
however, that except as stated in Sections 10.2 and 10.3, nothing in this
release or in this Settlement Agreement shall operate in any way to limit or
preclude any defenses the United
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States might raise in response to the Pulte Entities' claims in the Court of
Federal Claims Litigation or limit the FDIC from participating in such defenses.
SECTION 10.2 RELEASES BY THE PULTE ENTITIES.
(A) Except for the duties, obligations, and other actions or
inactions provided herein and placed upon FDIC Manager, the Pulte Entities each
hereby release, hold harmless, acquit and forever discharge, effective as of
the Closing Date, the FDIC in all of its capacities, and, except as provided
below, the FRF, and the FDIC's present and former subsidiaries and the
respective present and former officers, directors, successors, assigns,
employees, agents and representatives of all the foregoing, from and against any
and all actions and causes of action, suits, disputes, debts, accounts,
promises, warranties, damages, claims, proceedings, demands and liabilities, of
every kind and character, direct and indirect, at law or in equity, that any of
the Pulte Entities have raised, or could have raised, known or unknown, at the
Closing Date, including, but not limited to, the Pulte Entities' claims
regarding the Separate Return Limitation Year Net Operating Losses ("▇▇▇▇
▇▇▇'▇") of First Heights ("▇▇▇▇ ▇▇▇ Claims"), as defined below, and the Pulte
Entities' Receivership Tax Return Claims; provided that this release and this
Agreement shall not operate in any way to release the United States, and, solely
for the purpose of providing a source to satisfy a judgment against the United
States, the FRF or any other fund that may be available as a source to satisfy a
judgment against the United States, from any liability to the Pulte Entities
for: (i) the Pulte Entities' claim that Congress' enactment of the ▇▇▇▇▇▇▇
legislation (Section 13224 of the Omnibus Budget Reconciliation Act of 1993)
breached the Assistance Agreement; or (ii) subject to Section 10.2(b) and
10.2(c) below, any of the Pulte Entities' other claims in the Court of Federal
Claims Litigation. Nothing in this paragraph shall be construed to imply that
any particular fund is available as a source to satisfy a judgment against the
United States in the Court of Federal Claims Litigation. For purposes of this
release and this Agreement, the Pulte Entities' ▇▇▇▇ ▇▇▇ Claims refer to any and
all claims relating to or arising from the Pulte Entities' assertions, made
during the settlement negotiations preceding this Agreement, that the FDIC is
liable for the Pulte Entities' alleged inability to utilize the ▇▇▇▇ ▇▇▇'▇ of
First Heights due to the FDIC's alleged refusal to consent to the Pulte
Entities' plan to liquidate First Heights in 1999 and thereafter.
(B) The Pulte Entities each hereby release, hold harmless, acquit
and forever discharge the FDIC in all of its capacities, and the FDIC's present
and former subsidiaries and the respective present and former officers,
directors, successors, assigns, employees, agents and representatives of all the
foregoing, and the FRF, effective as of the Closing Date, from and against any
and all liability for the Receivership Tax Return Claims asserted in the Court
of Federal Claims Litigation.
(C) The Pulte Entities each hereby release, hold harmless, acquit and
forever discharge the United States, effective as of the date of the final
resolution of the Court of Federal Claims Litigation, from and against any and
all liability for the Receivership Tax Return Claims asserted in the Court of
Federal Claims Litigation, which Claims will be dismissed with prejudice
pursuant to Section 3.3 of this Agreement, provided that the 1993 Amended
Receivership Returns have not been given any effect by the IRS or otherwise.
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SECTION 10.3 ACCORD AND SATISFACTION. Except as otherwise specifically
provided herein (including Sections 10.1, 10.2 and 10.4), performance by each
party of its respective obligations under this Agreement shall effect a
complete accord and satisfaction of any and all obligations and liabilities of
such party under the Assistance Agreement, and henceforth, such party shall be
fully discharged from any obligation or liability of any kind in connection
therewith, including, without limitation, any and all actions, causes of
action, suits, debts, sums of money, bonds, covenants, agreements, promises,
damages, judgments, claims, and demands whatsoever, known or unknown, suspected
or unsuspected, at law or in equity. This paragraph shall not operate in any way
to effect accord and satisfaction of any liability of the United States to the
Pulte Entities and, solely for the purpose of providing a source to satisfy a
judgment against the United States, the FRF or any other fund that may be
available as a source to satisfy a judgment against the United States, from any
liability to the Pulte Entities for: (i) the Pulte Entities' claim that
Congress' enactment of the ▇▇▇▇▇▇▇ legislation (Section 13224 of the Omnibus
Budget Reconciliation Act of 1933) breached the Assistance Agreement; or (ii)
subject to Section 10.2(b) and 10.2(c) above, any of the Pulte Entities' other
claims in the Court of Federal Claims Litigation, except for the Pulte
Entities' Receivership Tax Return Claims, which will be dismissed with
prejudice pursuant to Section 3.3 of this Agreement. Nothing in this paragraph
shall be construed to imply that any particular fund is available as a source
to satisfy a judgment against the United States in the Court of Federal Claims
Litigation.
SECTION 10.4 RELEASE BY FDIC IN ALL ITS CAPACITIES OTHER THAN AS MANAGER
OF FRF. The FDIC in all its capacities other than as Manager of the FRF hereby
acknowledges and agrees that it is not now, nor has it ever been, a party to
the Assistance Agreement or the District Court Litigation or the Sixth Circuit
Appeal (collectively, the "Litigation"), and that it has no rights or
obligations thereunder. The FDIC in all its capacities other than as Manager of
the FRF releases the Pulte Entities with respect to matters based on any of the
claims and counterclaims asserted in the Litigation.
SECTION 10.5 RIGHTS TO ENFORCE. Notwithstanding the foregoing provisions
of this Article 10, the Pulte Entities and FDIC Manager shall retain their
respective rights to enforce this Agreement, and any other agreement or
instrument executed and delivered by the parties in connection with this
Agreement, in accordance with Section 11.4 of this Agreement.
ARTICLE 11
MISCELLANEOUS
SECTION 11.1 AMENDMENTS. No amendment, modification or waiver of any
provision of this Agreement, nor any consent to any departure therefrom by any
party, shall be effective unless the same shall be embodied in a writing signed
by all parties hereto, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it is given.
SECTION 11.2 NOTICES. Any notice, request, claim, demand, consent,
approval or other communication to any party hereto shall be deemed effective
when received and shall be given in writing and delivered in person against
receipt therefor, or sent by certified mail, postage prepaid, to such party at
its address set forth below (with copies as indicated below) or at such other
address as such party shall hereafter furnish in writing to the other parties:
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(A) If To First Heights:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(B) If To PDCI Or Pulte:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
Pulte Homes, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(C) If To The FDIC Manager:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Assistant Director
Division of Resolutions and Receiverships
Federal Deposit Insurance Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇ ▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
With A Copy To:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Associate General Counsel
Legal Division, Trial Section
Federal Deposit Insurance Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇ ▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. 20429
SECTION 11.3 WAIVER. No failure or delay on the part of any party to
this Agreement in exercising any right, privilege, power or remedy under this
Agreement, and no course of dealing among the parties hereto, shall operate as a
waiver of such right, privilege, power or remedy, nor shall any single or
partial exercise of any right, privilege, power or remedy under this Agreement
preclude any other or further exercise of such right, privilege, power or
remedy. The rights, privileges, powers and remedies available to the parties
hereto are cumulative and not exclusive of any other rights, privileges, powers
or remedies provided by statute, at law, in equity or otherwise. No notice to or
demand on any party shall in any case entitle such party to any other or further
notice or demand in any similar or other circumstances or constitute a waiver of
the right of the party giving such notice or making such demand to take any
other or further action in any circumstances without notice or demand.
SECTION 11.4 GOVERNING LAW. To the extent federal law does not control,
this Agreement and the rights and obligations hereunder shall be governed by and
construed in accordance with the law of the State of Texas. It is the intent of
the parties hereto, as reflected in
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the Stipulated Order of Dismissal of the District Court Litigation referenced
in Section 3.1 and attached as Exhibit A hereto, that the United States
District Court for the Eastern District of Michigan, Southern Division, retain
jurisdiction to enforce this Agreement. Accordingly, any legal action or
proceedings with respect to this Agreement shall be brought in the United
States District Court for the Eastern District of Michigan, Southern Division,
before Hon. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇.
SECTION 11.5 SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under all applicable laws. However, in the event that any provision of this
Agreement shall be held to be prohibited or invalid under any applicable law,
or declared unenforceable, then all of the remaining provisions of this
Agreement shall, to the fullest extent possible, remain in full force and
effect and shall be binding on the parties hereto; provided, however, that this
Section 11.5 shall be of no force or effect if the exclusion of such provision
or portion thereof shall render the remaining provisions of this Agreement
incapable of observance or shall cause this Agreement as a whole to fail of its
essential purpose.
SECTION 11.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and, except as
otherwise provided in this Agreement, their respective successors and assigns;
provided, however, that his Agreement may not be assigned to any person or
entity, nor may any rights or obligations under this Agreement be transferred
or delegated to or vested in any other person or entity, without the prior
written consent of the parties hereto.
SECTION 11.7 HEADINGS. The headings contained in this Agreement are for
convenience only and shall not affect the construction of any provision of this
Agreement.
SECTION 11.8 EXHIBITS. Any Exhibits attached hereto are an integral part
of and are hereby incorporated into this Agreement.
SECTION 11.9 ENTIRE AGREEMENT. This Agreement and the Exhibits attached
hereto embody the entire agreement among the parties hereto relating to the
subject matters herein, and supersedes all prior agreements and understandings
among the parties, oral or written, relating to such matters.
SECTION 11.10 THIRD-PARTY BENEFICIARIES. Except as expressly provided in
this Agreement, no provision of this Agreement is intended to nor shall it
benefit any person other than the parties hereto.
SECTION 11.11 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in separate counterparts, each of which when executed and delivered shall be
deemed to be an original, and all of which taken together shall constitute one
and the same Agreement. The parties agree that, on the Closing Date, they will
exchange executed signature pages by facsimile, which shall constitute the
execution of this Agreement. Each party further agrees to send to the other
party on the Closing Date the respective original executed signature pages by
overnight delivery.
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SECTION 11.12 COMPUTATION OF TIME. Should the operative date for a party's
response or action under any particular provision of this Agreement occur on a
Saturday or Sunday or a federal holiday, then the first business day following
such day shall be the operative date for purposes of such provision.
SECTION 11.13 SURVIVAL OF COVENANTS, REPRESENTATIONS, AND WARRANTIES. The
covenants, representations and warranties made be the parties in this Agreement
shall survive the execution of this Agreement and the consummation of the
transactions contemplated herein.
SECTION 11.14 INTERPRETATION. The parties agree that this Agreement was
the result of arms length negotiations and was effectively drafted by both
parties. Accordingly, in interpreting this Agreement, neither party shall be
deemed the principal draftsman.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
by themselves or their respective officers, as the case may be, as of the day
and year first above written.
FIRST HEIGHTS BANK,
A FEDERAL SAVINGS BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
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Title: Vice President
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PULTE DIVERSIFIED COMPANIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Title: V.P.
-------------------------
PULTE HOMES, INC., f/k/a PULTE CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: S.V.P. & CFO
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FEDERAL DEPOSIT INSURANCE
CORPORATION, AS MANAGER OF
THE FSLIC RESOLUTION FUND
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Deputy General Counsel
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-22-
FEDERAL DEPOSIT INSURANCE
CORPORATION, in all its capacities other
than as Manager of the FSLIC Resolution Fund
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Deputy General Counsel
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Attachments Omitted