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Item 1.01
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Entry into a Material Definitive Agreement.
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On March 12, 2021, Mr. Cooper Group Inc., a Delaware corporation (the “Company”), Xome Holdings LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (the “Seller”), and Title365 Holding Co., a California corporation and a wholly owned subsidiary of the Company (“Title365”), entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Blend Labs, Inc., a Delaware corporation (the “Buyer”), pursuant to which the Buyer will acquire the title business of the Company (the “Business”) for a purchase price of $500 million, consisting of $450 million in cash, subject to certain adjustments specified therein, and a retained interest of 9.9% for the Company (the “Transaction”). Pursuant to the Purchase Agreement, Title365 will retain all cash generated, subject to certain adjustments, between March 13, 2021 and the closing date of the Transaction for the benefit of the Buyer.
Each party’s obligation to consummate the Transaction pursuant to the Purchase Agreement is subject to customary closing conditions as set out therein, including, among others, (i) the accuracy of (A) the fundamental representations and warranties of the Company and the Seller and (B) the representations and warranties of the Buyer, in each case, subject to specified materiality qualifications, (ii) performance in all material respects by each of the parties of its covenants and agreements, (iii) the receipt of certain regulatory approvals, (iv) the absence of (A) any law or order from any governmental entity prohibiting consummation of the Transaction, and (B) any pending lawsuit, claim or legal action relating to the Transaction which seeks to prohibit or restrict the Transaction, (v) the delivery of certain ancillary agreements by each of the parties, (vi) the consummation of the sale of certain joint venture interest of the Seller, (vii) the continued employment of certain employees (or their replacements) and at least 80% of the other employees of the Business and (viii) the absence of a material adverse effect with respect to Title365 and the Business on or after the date of the Purchase Agreement that is continuing as of immediately prior to the closing.
The Purchase Agreement contains customary representations, warranties and covenants by each party that are subject, in some cases, to specified exceptions and qualifications contained in the Purchase Agreement.
The Purchase Agreement contains certain termination rights, including the right of either the Seller or the Buyer to terminate the Purchase Agreement (i) if the Transaction is not consummated by August 12, 2021, (ii) if any law or order from a governmental entity prohibits consummation of the Transaction or (iii) if the other party is in material breach of its respective representations and warranties or covenants under the Purchase Agreement that would give rise to the failure of a closing condition (subject to a cure period).
The foregoing description of the Purchase Agreement is not complete and is qualified in its entirety by reference to the Purchase Agreement, a copy of which is attached to this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference. The representations, warranties and covenants set forth in the Purchase Agreement have been made only for the purposes of the Purchase Agreement and solely for the benefit of the parties thereto, and may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Purchase Agreement instead of establishing these matters as facts. In addition, information regarding the subject matter of the representations and warranties made in the Purchase Agreement may change after the date of the Purchase Agreement. Accordingly, the Purchase Agreement is included with this Current Report on Form 8-K only to provide investors with information regarding its terms and not to provide investors with any other factual information regarding the Company, the Seller, Title365, their subsidiaries or their businesses as of the date of the Purchase Agreement or as of any other date.