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EXHIBIT 10.15
MORTGAGE COMPANY AGREEMENT
THIS AGREEMENT ("Agreement") is executed as of this 5th day of November
by and between PRESLEY MORTGAGE COMPANY, a California corporation ("Presley")
and DUXFORD FINANCIAL SERVICES, INC., a California corporation ("Duxford"), with
reference to the following:
RECITALS
A. William Lyon Homes, Inc., a California corporation ("Lyon Inc."),
William Lyon, an individual, William H. Lyon, an individual, Presley Homes, a
California corporation ("Presley Homes"), and The Presley Companies, a Delaware
corporation, have entered into that certain Purchase Agreement and Escrow
Instructions dated as of October 7, 1999 (the "Purchase Agreement") in which,
among other things, Presley Homes agreed to buy substantially all of Lyon Inc.'s
real estate assets and certain other assets related thereto pursuant to the
terms and conditions of the Purchase Agreement.
B. Duxford is a privately owned mortgage company that has made mortgage
loans in connection with residential projects built by Lyon Inc. or other
builders ("Loans").
C. Duxford intends to engage in an orderly shut-down of its business
and liquidation following the closing of the Purchase Agreement.
D. Presley desires to offer employment to the employees of Duxford
pursuant to the terms and conditions set forth in this Agreement.
E. In connection with the Purchase Agreement and Duxford's contemplated
orderly shut-down, Presley and Duxford desire to enter into this Agreement
pursuant to the terms and conditions contained herein.
AGREEMENT
1. Definitions. All initially capitalized terms not otherwise defined
herein shall have the definitions assigned to such terms in the Purchase
Agreement.
2. Employee Matters.
(a) Effective as of the November 5, 1999 ("Closing Date"), Presley
will offer employment on an "at will" basis to officers, employees and sales
agents of Duxford on such terms and conditions of employment that are
substantially similar in the aggregate to the terms and conditions applicable to
similarly situated employees of Presley. Presley shall credit each Duxford
employee who accepts such offer of employment for his or her services with
Duxford for purposes of eligibility and vesting with respect to vacation,
personal and sick days and benefits under each ERISA Plan (as herein defined)
maintained by Presley and provided to such Duxford employees.
(b) Duxford shall take all actions necessary to comply with the
applicable requirements of Section 4908B of the Internal Revenue Code (the
"Code") and part 6 of Subtitle B of Title I of the Employee Retirement Income
Security Act of 1974, as amended
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("ERISA") and any comparable state or local law with respect to the termination
of its employees in connection with the transactions contemplated by this
Agreement. Duxford and their ERISA Affiliates (defined below) will continue any
group health plan coverage to their employees to the extent necessary to prevent
Presley from being deemed to be a successor employer of Duxford or any of their
ERISA Affiliates within the meaning of Proposed Treasury Regulations Section
54.4980B-9 Q&A-8(c).
(c) Presley and Duxford acknowledge and agree that, for the purposes
of the Worker Adjustment and Retraining Notification Act, 29 U.S.C. Sections
2101 et seq., (the "WARN Act"), any person who is a Duxford employee who accepts
Presley's offer of employment made pursuant to this Agreement shall be
considered to be an employee of Presley immediately upon the Closing and Presley
and Duxford agree to comply with any applicable requirements of the WARN Act
with respect to such Duxford employees.
3. Employment Contracts and Benefits.
(a) Duxford has previously delivered to Presley copies, descriptions
and/or a list of all employment contracts and collective bargaining agreements,
and all compensation, pension, retirement, deferred compensation, health care,
bonus, profit-sharing, stock option or other plans, trusts, funds, agreement or
arrangements, providing for employee remuneration or benefits to any of
Duxford's present officers, employees and sales agents (collectively, "Employee
Benefit Plans") and to which Duxford is a party or by which Duxford is bound.
Such copies, descriptions and list, taken together, sets forth for Duxford's
present officers', employees' and sales agents' complete information with
respect to withholding accounts, accrued vacation, sick leave and other amounts,
and all other accruals and accounts held for employee benefit, including but not
limited to, any insurance policies or accounts. Except as set forth in such
copies or descriptions or on such list, Duxford has not entered into any
severance or similar arrangement in respect of any present or former officer,
employee or sales agent that will result in any absolute or contingent
obligation of Presley to make any payment to any present or former officer,
employee or sales agent following termination of employment.
(b) To Duxford's knowledge:
(i) Neither Duxford nor any entity (an "ERISA Affiliate") which,
together with any of them, is deemed a "single employer" within the
meaning of Section 4001(a)(15) of ERISA, nor any of the plans so
listed which is an "employee welfare benefit plan" or "employee
pension benefit plan" as such terms are defined in Sections 3(1) and
3(2) of ERISA (such plans being referred to herein as "ERISA
Plans"), nor any trust created thereunder, nor any trustee or
administrator thereof, has engaged in a transaction or has taken or
failed to take any action in connection with which Presley could be
subject to a tax imposed pursuant to Section 4980B of the Code.
(ii) Each of the plans so listed or described has been operated
and administered in all material respects in accordance with
applicable laws, including but not limited to ERISA and the Code.
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(iii) Each of the ERISA Plans that is intended to be "qualified"
within the meaning of Section 401(a) of the Code is so qualified.
(iv) No amounts payable under the plans so listed or any other
agreement or arrangement to which Duxford or any ERISA Affiliate is
a party will fail to be deductible for federal income tax purposes
by virtue of Section 280G of the Code.
(v) No "leased employee," as that term is defined in Section
414(n) of the Code, performs services for Duxford.
(vi) There are no liens under Section 412(n) of the Code or
Sections 302(f) or 4068 of ERISA.
(vii) Neither Duxford nor any of its respective ERISA Affiliates
is, or at anytime during the previous six (6) years was, obligated
to contribute to any "multi-employer plan" within the meaning of
Section 3(37) of ERISA or any plan subject to Title IV of ERISA.
(viii) Presley shall have no obligation with respect to
compensation or employee benefits accruing to employees of Duxford
for any period prior to the Closing Date, and shall have no
obligation to contribute to, or any liability in respect of, any
Employee Benefit Plan sponsored or maintained by Duxford or any
ERISA Affiliate, or to which Duxford or any ERISA Affiliate is or
was obligated to contribute.
4. Transfer of Loans.
(a) All Loans originated and identified in writing by Duxford prior
to the Closing Date ("Pre-Existing Loans") shall be the property of and for the
continued economic benefit of Duxford. Duxford shall be responsible for meeting
all obligations relating to the Pre-Existing Loans, including, without
limitation, paying all commissions relating to the Pre-Existing Loans. All Loans
originated after the Closing Date ("Pre-Existing Loans")
(b) Presley shall use it's best efforts to close all Pre-Existing
Loans as soon as commercially reasonable after the Closing Date. In recognition
of Presley's obligations with respect to the Pre-Existing Loans, Duxford shall
pay Presley Fifty Five Thousand and 00/100 Dollars ($55,000.00) per month for
the first ninety (90) days following the Closing Date, which amount represents
fifty percent (50%) of Duxford's allocated overhead, determined in accordance
with Duxford's General and Administrative Expense Report. Duxford shall pay such
amount in monthly installments for the first three (3) months following the
Closing Date upon receipt of an invoice for such amount from Presley.
(c) Catellus Contract. Duxford has previously entered into an
agreement with Catellus for supplying mortgage services to Catellus' projects
until December 31, 1999 (the "Catellus Contract"). The Catellus Contract shall
continue to be the property of and for the economic benefit of Duxford for its
current term expiring December 31, 1999. Duxford shall use its best efforts to
assign or renew the Catellus Contract so that the Catellus Contract shall be for
the benefit of Presley after the expiration of the current term.
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5. Miscellaneous.
(a) Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto pertaining to the subject matter hereof,
and the final, complete and exclusive expression of the terms and conditions
thereof. All prior agreements, representations, negotiations and understandings
of the parties hereto, oral or written, express or implied, are hereby
superseded and merged herein.
(b) Captions. The captions used herein are for convenience only and
are not a part of this Agreement and do not in any way limit or amplify the
terms and provisions hereof.
(c) Time of Essence. Time is of the essence of every provision of
this Agreement in which time is an element.
(d) Governing Law. This Agreement has been negotiated and executed
in the State of California and shall be governed by and construed in accordance
with the laws of the State of California without giving effect to conflicts of
laws principles.
(e) Invalidity of Provision. If any provision of this Agreement as
applied to either party to any circumstance shall be adjudged by a court of
competent jurisdiction to be void or unenforceable for any reason, the same
shall in no way affect (to the maximum extent permissible by law) any other
provision of this Agreement, the application of any such provision under
circumstances different from those adjudicated by the court, or the validity or
enforceability of the Agreement as a whole.
(f) Amendments. No addition to or modification of any provision
contained in this Agreement shall be effective unless fully set forth in writing
by both Presley and Duxford.
(g) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
PRESLEY:
PRESLEY MORTGAGE COMPANY, a California
corporation
By: /s/ DAVID M. SIEGEL
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David M. Siegel
Title: Senior Vice President
By: /s/ W. Douglass Harris
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W. Douglass Harris
Title: Vice President
DUXFORD:
DUXFORD FINANCIAL SERVICES, INC.,
a California corporation
By: /s/ MARK CARVER
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Mark Carver
Title: President
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