EXHIBIT
2.2
STOCK PURCHASE AGREEMENT
BY AND AMONG
MONACO COACH CORPORATION,
MCC
ACQUISITION CORPORATION,
OUTDOOR RESORTS OF AMERICA, INC.,
AND
OUTDOOR RESORTS MOTORCOACH COUNTRY
CLUB, INC.,
Dated
as of November 27, 2002
TABLE
OF CONTENTS
i
ii
iii
INDEX
OF SCHEDULES AND EXHIBITS
iv
STOCK PURCHASE AGREEMENT
This Stock Purchase
Agreement (the “Agreement”) is made and entered into as of November 27, 2002
by and among Monaco Coach Corporation, a Delaware corporation (“Monaco”),
MCC Acquisition Corporation, a Delaware corporation and a wholly-owned
subsidiary of Monaco (“Buyer”),
Outdoor Resorts of America, Inc., a Delaware corporation (“ORA”), and Outdoor Resorts Motorcoach
Country Club Inc., a California corporation and a wholly-owned subsidiary of
ORA (the “Company).
RECITALS
A. ORA
owns all of the issued and outstanding capital stock of the Company, consisting
of 100 shares (the “Shares”) of the Company’s Class A common
stock (“Common
Stock”).
B. The
Boards of Directors of each of the Buyer and the Company believe it is in the
best interests of each company and their respective stockholders that Buyer
acquire the Company through the purchase of all the outstanding Common Stock
directly from ORA (the “Acquisition”), and, in furtherance thereof,
have approved the Acquisition.
C. Concurrently
with the execution and delivery of this Agreement, Monaco, Buyer, ORA, and
Outdoor Resorts of Naples Inc., a Florida corporation (“ORN”), are entering into a Stock Purchase
Agreement (the “ORN Agreement”)
pursuant to which Buyer will purchase all the outstanding capital stock of ORN
(the “ORN Acquisition”).
D. Concurrently
with the execution and delivery of this Agreement, Monaco, Buyer, ORA, and
Outdoor Resorts of Las Vegas, Inc., a Nevada corporation (“ORLV”) are entering into a Stock Purchase
Agreement (the “ORLV Agreement”)
pursuant to which Buyer will purchase all the outstanding capital stock of ORLV
(the “ORLV Acquisition”).
E. Concurrently
with the execution and delivery of this Agreement, the Principals (as defined
below) are entering into a Guaranty in favor of Monaco and Buyer in the form
attached hereto as Exhibit A (the “Guaranty”)
pursuant to which the Principals are agreeing to guarantee ORA’s obligations
under ARTICLE VII of this Agreement.
F. Concurrently
with the execution and delivery of this Agreement, Monaco, Buyer, ORA, the
Company, ORN, ORLV and the Principals are entering into an Affiliates Agreement in the form attached hereto as Exhibit
B (the “Affiliates Agreement”) pursuant to which
Monaco, Buyer, ORA, the Company, ORN, ORLV and the Principals release each
other from certain liabilities and the Principals agree to vote any shares of
stock of ORA held by them in favor of this Agreement and the transactions
contemplated hereby.
G. Concurrently
with the execution and delivery of this Agreement, the Company, ORA and ORI are
entering into a Management Agreement in the form attached hereto as Exhibit
C (the “Management Agreement”)
pursuant to which ORA and ORI will develop, manage, operate and maintain the
Property.
H. Concurrently
with the execution and delivery of this Agreement, the Company and ORA are
entering into a Trademark License Agreement in the form attached hereto as Exhibit
D (the “Trademark Agreement”)
pursuant to which ORA will license or assign certain of its trademarks to the
Company.
I. ORA,
on the one hand, and Monaco and Buyer, on the other hand, desire to make
certain representations, warranties, covenants and other agreements in
connection with the Acquisition.
Now, therefore, in
consideration of the covenants, promises and representations set forth herein,
and for other good and valuable consideration, the parties agree as follows:
ARTICLE I
PURCHASE
AND SALE OF COMPANY CAPITAL STOCK
1.1 Purchase and Sale. At the Closing (as defined in Section 1.2) and subject
to and upon the terms and conditions of this Agreement, Buyer shall purchase
from ORA and ORA shall sell, convey, transfer, assign and deliver to Buyer,
free and clear of all liens, encumbrances or other defects of title, all the
Shares.
1.2 Closing Date.
Unless this Agreement is earlier terminated pursuant to Sections
5.11, 5.12, 5.13, 8.1 or 8.2, the closing of the Acquisition (the “Closing”)
will take place simultaneously with the closing of the ORN Acquisition and the
ORLV Acquisition and as promptly as practicable, but no later than five (5)
business days, following satisfaction or waiver of the conditions set forth in
Article VI, at the offices of Wilson Sonsini Goodrich & Rosati, 650 Page
Mill Road, Palo Alto, California, unless another place or time is agreed to in
writing by Monaco and ORA. The date
upon which the Closing actually occurs is herein referred to as the “Closing
Date”.
1.3 Certain Definitions. For the purposes of this Agreement, the
following capitalized terms have the following meanings:
(a) “Accounts
Receivable” shall have the meaning set forth in Section 2.17(a).
(b) “Acquisition”
shall have the meaning set forth in the recitals.
(c) “Agreement”
shall have the meaning set forth in the preamble.
(d) “Affiliates
Agreement” shall have the meaning set forth in the recitals.
(e) “Alternate
Transaction” shall have the meaning set forth in Section 4.2(a).
(f) “Annual
Financials” shall have the meaning set forth in Section 2.5.
(g) “Applicable
Levels of Regulatory Concern” shall mean those soil or groundwater clean-up
standards existing as of the Closing Date and applicable to the affected
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property adopted pursuant to Environmental Laws or
otherwise imposed by any Governmental Entity pursuant to Environmental Laws.
(h) “Approvals”
shall have the meaning set forth in Section 2.26(f).
(i) “BankAtlantic
Loan” shall mean that certain loan in the amount of $7,408,942 made by
BankAtlantic, a Federal Savings Bank (“BankAtlantic”), evidenced by a note
dated October 31, 2001 from the Company in favor of BankAtlantic and secured by
a deed of trust dated October 31, 2001.
(j) “Benefits
Liabilities” means any and all claims, debts, liabilities,
commitments and obligations, whether fixed, contingent or absolute, matured or
unmatured, liquidated or unliquidated, accrued or unaccrued, known or unknown,
whenever or however arising, including all costs and expenses relating thereto
arising under law, rule, regulation, permits, action or proceeding before any
Governmental Entity, order or consent decree or any award of any arbitrator of
any kind relating to any Plan, Employment Agreement or otherwise to an
Employee.
(k) “Buyer”
shall have the meaning set forth in the preamble.
(l) “Carryover
Loss” shall mean the net loss, if any, from any Sale which is carried-over
and reflected in a Net Profit Calculation of any subsequent Sale and shall
equal, when reflected in a Net Profit Calculation, (i) the absolute value of
the most recently completed Net Profit Calculation, if such calculation yields
a negative number, or (ii) zero (0), if such calculation yields a positive
number or if no previous Sale has occurred.
(m) “Closing”
shall have the meaning set forth in Section 1.2.
(n) “Closing
Costs” shall mean the sum of (a) the premium charged for the Title Policy
other than premiums for any endorsements requested by Buyer, (b) charges and
fees required to cause title to the Property to be free and clear of all liens,
restrictions and encumbrances except Permitted Exceptions and any unrecorded
mechanic’s liens which are addressed in Article IX and (c) the closing or
escrow charges by the title company issuing the Title Policy.
(o) “Closing
Date” shall have the meaning set forth in Section 1.2.
(p) “COBRA”
shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended.
(q) “Code”
shall mean the Internal Revenue Code of 1986, as amended, or any successor
thereto.
(r) “Common
Stock” shall have the meaning set forth in the recitals.
(s) “Company”
shall have the meaning set forth in the preamble.
(t) “Company
Contracts” shall have the meaning set forth in Section 2.13(a).
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(u) “Company
Financials” shall have the meaning set forth in Section 2.5.
(v) “Confidential
Information” shall have the meaning set forth in Section 5.4.
(w) “Conflict”
shall have the meaning set forth in Section 2.4.
(x) “Customer
Information” shall have the meaning set forth in Section 2.11(d).
(y) “Development
Costs” shall have the meaning set forth in Section 5.3.
(z) “Disclosure
Supplement” shall have the meaning set forth in Section 5.11.
(aa) “DOL”
shall mean the Department of Labor.
(bb) “Employee”
means any current or former or retired employee or consultant of either the
Company or any ERISA Affiliate of the Company whose responsibilities primarily
relate, or related, as the case may be, to the Company’s business.
(cc) “Employment
Agreement” means each management, employment, severance, consulting, relocation,
repatriation, expatriation, visas, work permit or other agreement, contract or
understanding between the Company or any ERISA Affiliate of the Company and any
Employee relating, directly or indirectly, to such Employee’s terms and
condition of employment.
(dd) “Environmental
Laws” shall mean any and all applicable laws, statutes, ordinances, rules,
codes, orders, decrees, directives, guidelines and regulations which prohibit,
regulate or control any Hazardous Material or relate in any way to pollution,
the environment, or the protection of human health and worker safety, or
natural and cultural resources, and all amendments and modifications of any of
the foregoing.
(ee) “Environmental
Remediation Costs” shall mean any
liability, obligation, judgment, claim, penalty, fine, cost or expense
(including reasonable attorneys’ fees and environmental consultant costs of any
kind or nature) or the duty to indemnify, defend, or reimburse any Person with
respect to Remedial Activities which are necessary or required to both (i)
comply with and fulfill Environmental Laws existing as of the Closing Date
(including without limitation any orders of any Governmental Entity and any
consent decree, consent agreement or memorandum of understanding with Governmental
Entities), and (ii) remediate and/or remove Hazardous Materials to a level
compliant with Applicable Levels of Regulatory Concern. Such Remedial Activities shall, at a
minimum, be those Remedial Activities necessary to insure that the affected
property is not encumbered by any use or deed restriction (1) which is more
restrictive than any current use or deed restriction of any kind affecting the
Property or (2) which would materially affect the development of the Project.
(ff) “Equipment”
shall have the meaning set forth in Section 2.11(c).
(gg) “ERISA” means the Employee Retirement
Income Security Act of 1974, as amended.
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(hh) “ERISA Affiliate” means any other
person or entity under common control with the Company within the meaning of
Section 414(b), (c), (m) or (o) of the Code and the regulations issued
thereunder.
(ii) “Expiration
Date” shall have the meaning set forth in Section 5.1(a).
(jj) “FMLA”
shall mean the Family Medical Leave Act of 1993, as amended.
(kk) “GAAP”
shall have the meaning set forth in Section 2.5.
(ll) “Governmental
Authorizations” shall mean each consent, license, permit, grant or other
authorization issued to the Company by a Governmental Entity (i) pursuant to
which the Company currently operates or holds any interest in any of its
properties, or (ii) which is required for the operation of its business or the
holding of any such interest, including the completion and operation Phase I.
(mm) “Governmental
Entity” shall have the meaning set forth in Section 2.4.
(nn) “Guaranty” shall have the meaning set forth in the
recitals.
(oo) “Hazardous
Material” shall mean any material or substance that is prohibited or
regulated by any Environmental Law or that has been designated by any
Governmental Entity to be radioactive, toxic, hazardous, a pollutant, or
otherwise a danger to health, safety, reproduction or the environment other
than (1) products containing such materials used for janitorial or office
purposes properly and safely used and maintained and (2) building materials or
products used in improving or maintaining the Property containing such
materials and properly and safely used in compliance with Environmental Laws.
(pp) “Improvements”
shall mean all improvements, structures and fixtures located on the Land.
(qq) “Indemnified
Party” shall have the meaning set forth in Section 7.2
(rr) “Indemnification
Cap” shall have the meaning set forth in the ORN Agreement.
(ss) “Inspection
Period” shall have the meaning set forth in Section 5.12.
(tt) “Intellectual
Property” shall have the meaning set forth in Section 2.12(a).
(uu) “Intercompany
Payables” shall mean any amount owed by the Company to any of ORA, The
Robert A. Schoellhorn Trust, Robert A. Schoellhorn and E. Randall Henderson or
any affiliates of such parties.
(vv) “Intercompany
Receivables” shall mean any amount owed to the Company by any of ORA, The
Robert A. Schoellhorn Trust, Robert A. Schoellhorn and E. Randall Henderson or
any affiliates of such parties.
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(ww) “Interim
Balance Sheet” shall have the meaning set forth in Section 2.5.
(xx) “Interim
Financials” shall have the meaning set forth in Section 2.5.
(yy) “International
Employee Plan” shall mean each Plan that has been adopted or maintained by
the Company or any ERISA Affiliate, whether informally or formally, or with
respect to which the Company or any ERISA Affiliate will or may have any
liability,
for the benefit of Employees who perform services outside the United States.
(zz) “IRS”
shall mean the Internal Revenue Service.
(aaa) “knowledge”
“to the knowledge of” “aware of” and words or phrases of similar
effect with reference to the Company and/or ORA shall mean the knowledge, after
due inquiry, of the officers, directors and managerial employees of the Company
and ORA and any direct or indirect subsidiary of ORA and shall include the
knowledge of Robert A. Schoellhorn, E. Randall Henderson, Ronald W. Petty,
Orien Dickerson and Dawn Schulz.
(bbb) “Land”
shall mean all that certain approximately 80 acre tract or parcel of land
located in Indio, California, and more particularly described on Exhibit E
attached hereto.
(ccc) “Liens”
shall have the meaning set forth in Section 2.9(b)(vii).
(ddd) “Losses”
shall have the meaning set forth in Section 7.2(a).
(eee) “Management
Agreement” shall have the meaning set forth in the recitals.
(fff) “Material
Adverse Effect” shall have the meaning set forth in Section 2.1.
(ggg) “Monaco”
shall have the meaning set forth in the preamble.
(hhh) “Monaco
Loan” shall mean that certain loan from Monaco to the Company in the amount
of $3,056,671 pursuant to a Loan Agreement dated July 27, 2001, as amended by a
First Amendment to Agreement dated October 5, 2001 and secured by a deed of
trust dated October 5, 2001 on the Land and the Improvements.
(iii) “Monaco
Loan Cost” shall mean the principal amount of the Monaco Loan plus the
principal amount of any other loans by Monaco to the Company plus any interest
that has accrued on any of the foregoing loans as of the relevant date.
(jjj) “Mortgages”
shall have the meaning set forth in Section 2.26(j).
(kkk) “Multiemployer
Plan” shall mean any “Pension Plan” (as defined below) which is a
“multiemployer plan,” as defined in Section 3(37) of ERISA.
(lll) “Net
Profit Calculation” shall mean any calculation to determine net profit
under Sections 9.2, 9.3, 9.4 and 9.5.
(mmm) “Officer’s
Certificate” shall have the meaning set forth in Section 7.2(c)(i).
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(nnn) “ORA”
shall have the meaning set forth in the preamble.
(ooo) “ORA
Annual Financials” shall have the meaning set forth in Section 2.6.
(ppp) “ORA’s
and Company’s Unknown Environmental Liabilities” shall mean the presence of
any Hazardous Material in the soil, groundwater, surface water, air or building
materials of any real property owned or leased by the Company at any time which
(1) are not present as a result of the actions or omissions of the Company, the
Principals or ORA or (2) were not known to the Company, the Principals or ORA
as of the Closing Date.
(qqq) “ORA
Closing Costs” shall have the meaning set forth in Section 9.6.
(rrr) “ORA
Financials” shall have the meaning set forth in Section 2.6.
(sss) “ORA
Interim Financials” shall have the meaning set forth in Section 2.6.
(ttt) “ORI”
shall mean ORA Realty, Inc., a Tennessee corporation.
(uuu) “ORLV”
shall have the meaning set forth in the recitals.
(vvv) “ORLV
Acquisition” shall have the meaning set forth in the recitals.
(www) “ORLV
Agreement” shall have the meaning set forth in the recitals.
(xxx) “ORN”
shall have the meaning set forth in the recitals.
(yyy) “ORN
Acquisition” shall have the meaning set forth in the recitals.
(zzz) “ORN
Agreement” shall have the meaning set forth in the recitals.
(aaaa) “Pension
Plan” shall mean each Company Employee Plan which is an “employee pension
benefit plan,” within the meaning of Section 3(2) of ERISA.
(bbbb) “Permitted
Exceptions” shall mean those title exceptions set forth in Schedule
1.3(bbbb).
(cccc) “Person”
shall mean an individual, a partnership, a limited liability company, a
corporation, an association, a joint stock corporation, a trust, a joint
venture, an unincorporated organization, or a Governmental Entity.
(dddd) “Personalty”
shall mean all tangible personal property and all intangible property used or
usable in connection with the Land, the Improvements or the tangible personal
property, or any part thereof, or the construction or operation thereof or in
connection with the use thereof; including, without limitation, all electrical,
mechanical, structural, heating, ventilation, air conditioning and other
equipment and operating systems, any and all agreements, contract rights,
guaranties, warranties (including, but not limited to, those relating to
construction, fabrication and environmental condition), utility contracts and
rights, plans and specifications, governmental approvals, permits, land use and
development rights, easements and building materials.
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(eeee) “Phase
I” shall mean that certain phase of the Project consisting of 136 lots and
common areas including 1/3 of the main lake, 2 small lakes, 1 bathhouse, 1
swimming pool, a sales/administration building and 2 holes of golf.
(ffff) “Phase
I Completion Date” shall have the meaning set forth in Section 9.2(a).
(gggg) “Phase
I Net Profit” shall have the meaning set forth in Section 9.2(a).
(hhhh) “Phase
II” shall mean that certain phase of the project consisting of 113 lots and
common areas including a clubhouse, 1/3 of the main lake, 1 swimming pool, 2
spas, a maintenance building, 4 tennis courts and 4 holes of golf.
(iiii) “Phase
II Completion Date” shall have the meaning set forth in Section 9.3(a).
(jjjj) “Phase
II Net Profit” shall have the meaning set forth in Section 9.3(b).
(kkkk) “Phase
III” shall mean that certain phase of the Project consisting of 151 lots
and common areas including an expansion of the clubhouse, 1/3 of main lake, 2
small lakes, 1 bathhouse, 1 swimming pool, 1 spa, and 3 holes of golf.
(llll) “Phase
III Completion Date” shall have the meaning set forth in Section 9.4(a).
(mmmm) “Phase III Net
Profit” shall have the meaning set forth in Section 9.4(b).
(nnnn) “Plans”
means any plan, program, policy, practice, contract, Employment Agreement or
other arrangement providing for compensation, severance, termination pay,
pension benefits, retirement benefits, deferred compensation, performance
awards, stock or stock-related awards, fringe benefits (including health,
dental, vision, life, disability, sabbatical, accidental death and
dismemberment benefits), or other employee benefits or remuneration of any
kind, whether written, unwritten or otherwise, funded or unfunded, including,
without limitation, each “employee benefit plan,” within the meaning of
Section 3(3) of ERISA, which is or has been maintained, sponsored by,
contributed to, or required to be contributed to, by the Company for the
benefit of any Employee, or with respect to which the Company has or may have
any liability or obligation to any Employee.
(oooo) “Plans
and Specifications” shall have the meaning set forth in Section 2.26(r).
(pppp) “Principals”
shall mean Robert A. Schoellhorn, E. Randall Henderson, and the Robert A.
Schoellhorn Trust.
(qqqq) “Project”
shall mean that certain motor coach resort to be constructed and operated on
the Property, consisting of Phase I, Phase II and Phase III.
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(rrrr) “Property”
shall mean the Land, Improvements and Personalty.
(ssss) “Remedial
Activities” shall mean any activities related to investigating, removing,
remediating, treating, transporting, disposing, characterizing, sampling,
monitoring, encapsulating or assessing Hazardous Materials (including, without
limitation, any assessment of health or environmental risks posed by Hazardous
Materials).
(tttt) “Replacement
Loan” shall mean that certain loan or loans that Monaco intends to secure
to pay off the BankAtlantic Loan and/or to finance the Property.
(uuuu) “Resale”
shall mean the Company’s sale of all or any portion of a Resale Property other
than the sale of developed lots to third party users or the deeding of portions
of the Property to the Project’s home owner’s association.
(vvvv) “Resale
Closing Date” shall have the meaning set forth in Section 9.5.
(wwww) “Resale
Property” shall mean that portion of the Property that has not been sold by
the Company or deeded to the Project’s home owners’ association.
(xxxx) “Resale
Net Profit” shall have the meaning set forth in Section 9.5.
(yyyy) “Returns”
shall have the meaning set forth in Section 2.9(b)(i).
(zzzz) “Sale”
means any sale of any portion of the Property by the Company that triggers a Net
Profit Calculation.
(aaaaa) “Sellers’
Disclosure Letter” shall mean the disclosure letter delivered by ORA to
Monaco concurrently with the execution and delivery of this Agreement.
(bbbbb) “Shares”
shall have the meaning set forth in the recitals.
(ccccc) “Subcontractors
Warranties” shall have the meaning set forth in Section 2.26(r).
(ddddd) “Supplemental
Disclosure Election” shall have the meaning set forth in Section 5.11.
(eeeee) “Tax”
shall have the meaning set forth in Section 2.9(a).
(fffff) “Title
Policy” shall have the meaning set forth in Section 6.3(n).
(ggggg) “Trademark
Agreement” shall have the meaning set forth in the recitals.
(hhhhh) “Work”
shall mean shall mean the Improvements (including the buildings and building
pads and all drives, parking lots, landscaping, curbs, sidewalks, sewers and
other utilities) and all other construction activities and related services on
the Property, including grading and filling, whether completed or uncompleted,
and includes all other labor, materials, equipment
9
and services provided by ORA or the Company in
connection with the construction of the Improvements and the Project.
1.4 Acquisition Consideration. As consideration for the purchase of the
Shares, Monaco and Buyer shall take the following actions:
(a) Satisfaction
of BankAtlantic Loan. At the
Closing, Monaco shall pay or cause to be paid to BankAtlantic the entire
outstanding principal and interest under the BankAtlantic Loan.
(b) Affiliates
Agreement. Monaco will release ORA
and the Principals from certain liabilities as set forth in the Affiliates
Agreement.
(c) Profits
from Resale of the Property. Buyer
shall pay the amounts, if any, which may become due pursuant to Section 9.2
through 9.5 hereof.
1.5 Transfer of Certificates and Agreements. At the Closing, ORA shall deliver to Buyer
(i) stock certificates representing the Shares duly endorsed or accompanied by
stock powers duly endorsed in blank, with any required transfer stamps affixed
thereto, and (ii) all other documents, agreements, certificates, instruments or
writings required to be delivered by the Company or ORA on or prior to the
Closing Date pursuant to this Agreement.
The Company shall transfer on its books all shares sold pursuant to this
Agreement.
1.6 Lost, Stolen or Destroyed Certificates. In the event any certificates evidencing the
Shares shall have been lost, stolen or destroyed, ORA shall make an affidavit
of that fact, and shall deliver to Monaco at Closing (i) such affidavit and
(ii) an agreement (in form and substance satisfactory to Monaco) to indemnify
Monaco against any claim that may be made against Monaco with respect to the
certificates alleged to have been lost, stolen or destroyed.
1.7 Tax. Buyer shall
bear and pay any transfer taxes, documentation charges, recording fees or
similar charges, fees or expenses that may become payable in connection with
the sale of the Shares, provided that Buyer shall not be responsible for ORA’s
income taxes resulting from the sale of the Shares, which taxes shall be borne
by ORA.
1.8 Taking of Necessary Action; Further Action. At any time, and from time to time on or
after the Closing, at the reasonable request of Monaco and without further
consideration, ORA and the Company will execute and deliver those other
instruments of sale, transfer, conveyance, assignment and confirmation and take
such action as Monaco may reasonably determine is necessary to transfer, convey
and assign to Buyer, and to confirm Buyer’s title to or interest in the Shares,
to put Buyer in actual possession and operating control of the Company and to
assist Buyer in exercising all rights with respect thereto and to otherwise
carry out the purposes of this Agreement including without limitation assigning
to the Company any contracts, rights or warranties relating to the Property
that are in the name of ORA or other affiliates of ORA. If, at any time after the Closing, any such
further action is necessary or desirable to carry out the purposes of this
Agreement, Monaco, Buyer, ORA, the Company and the officers and directors of
the Company and the Buyer are fully authorized in the name of their respective
companies or otherwise to take, and
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will take, all such lawful and necessary action, so
long as such action is consistent with this Agreement.
1.9 Interpretation and Construction.
(a) All references in this Agreement to “Articles,”
“Sections,” “Schedules” and “Exhibits” refer to the
articles, sections, schedules and exhibits of this Agreement, unless otherwise
indicated.
(b) As
used in this Agreement, neutral pronouns and any variations thereof shall be
deemed to include the feminine and masculine and all terms used in the singular
shall be deemed to include the plural, and vice versa, as the context may
require.
(c) The
words “hereof,” “herein” and “hereunder” and other words
of similar import refer to this Agreement as a whole, as the same may from time
to time be amended or supplemented, and not to any subdivision contained in
this Agreement.
(d) The
word “including” when used herein is not intended to be exclusive and
means “including, without limitation.”
(e) The
parties agree that they have been represented by counsel during the negotiation
and execution of this Agreement and, therefore, waive the application of any
law, regulation, holding or rule of construction providing that ambiguities in
an agreement or other document will be construed against the party drafting
such agreement or document.
ARTICLE II
REPRESENTATIONS
AND WARRANTIES OF ORA
ORA represents and
warrants to Monaco and Buyer, subject to such exceptions as are specifically
disclosed in the Sellers’ Disclosure Letter, as follows:
2.1 Organization of the Company. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of
California. The Company has the
corporate power to own its properties and to carry on its business as now being
conducted. The Company is duly qualified
to do business and in good standing as a foreign corporation in each
jurisdiction in which the failure to be so qualified would have a material
adverse effect on the business, assets (including intangible assets), financial
condition or results of operations of the Company (hereinafter referred to as a
“Material
Adverse Effect”). The
Company has delivered a true and correct copy of its Articles of Incorporation
and Bylaws, each as amended and in full force and effect to date, to
Monaco. Schedule 2.1 lists the
directors and officers of the Company.
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2.2 Company Capital Structure.
(a) The
authorized capital stock of the Company consists of 1,000 shares of Class A
Common Stock, $1.00 par value per share, of which 100 shares are issued and
outstanding, and 1,000 shares of Class B Preferred Stock, no par value per
share, of which no shares are issued and outstanding. All outstanding shares of the capital stock of the Company are
duly authorized, validly issued, fully paid and non-assessable and not subject
to preemptive rights created by statute, the Articles of Incorporation or
Bylaws of the Company or any agreement to which the Company is a party or by
which it is bound and have been issued in compliance with federal and state
securities laws. There are no declared
or accrued but unpaid dividends with respect to any shares of the Company’s
capital stock. Schedule 2.2(a)
sets forth any restrictions as to the vesting of any of the Company’s capital stock,
including the number of shares subject to restriction, the holder thereof and
the material terms of any such agreement.
(b) ORA
is and will be until immediately prior to the Closing the record and beneficial
owner and holder of the Shares, free and clear of any charge, claim, community
property interest, condition, equitable interest, lien, option, pledge,
security interest, right of first refusal, or restriction of any kind,
including any restriction on use, voting, transfer, receipt of income, or exercise
of any other attribute of ownership.
The Shares constitute and will constitute on the Closing Date, all the
outstanding capital stock of the Company. As a result of the Acquisition, Buyer
will be the sole record and beneficial owner of all outstanding capital stock
of the Company.
(c) There
are no options, warrants, calls, rights, commitments or agreements of any
character, written or oral, to which the Company is a party or by which it is
bound obligating the Company to issue, deliver, sell, repurchase or redeem, or
cause to be issued, delivered, sold, repurchased or redeemed, any shares of the
capital stock of the Company or obligating the Company to grant or enter into
any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement,
there is no rights agreement, voting trust, proxy or other agreement or
understanding to which the Company is a party or by which it is bound with
respect to any security of any class of the Company.
2.3 Subsidiaries.
The Company does not have and has never had any subsidiaries or
affiliated companies and does not otherwise own and has never otherwise owned
any shares of capital stock or any interest in, or control, directly or
indirectly, any other corporation, partnership, association, joint venture or
other business entity.
2.4 Authority.
The Company and ORA have all requisite power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the Company and
ORA. This Agreement has been duly
executed and delivered by the Company and ORA and constitutes the valid and
binding obligation of the Company and ORA, enforceable 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 rules of law governing specific
performance, injunctive relief or other equitable remedies. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
conflict with, or result in any violation of, or default under (with or without
notice or lapse of time, or both), or give rise to a right of termination,
cancellation or acceleration of any obligation or loss
12
of any benefit under (any such event, a “Conflict”)
(i) any provision of the Articles of Incorporation or Bylaws of the Company, or
(ii) any mortgage, indenture, lease, contract or other agreement or instrument,
permit, Approval, concession, franchise, license, warranty, insurance policy,
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to the Company and/or ORA or their respective properties or assets. No consent, waiver, approval, order or authorization
of, or registration, declaration or filing with, any court, administrative
agency or commission or other federal, state, county, local or foreign
governmental authority, instrumentality, agency or Commission (“Governmental
Entity”) or any third party (so as not to trigger any Conflict), is
required by or with respect to the Company and/or ORA in connection with the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
2.5 Company Financial Statements. Schedule 2.5 sets forth the
Company’s audited balance sheet as of March 31, 2002 and the related audited
statements of income and cash flow for the twelve-month period then ended
(collectively the “Annual Financials”), and the Company’s
unaudited balance sheet as of September 30, 2002 and the related unaudited
statements of income and cash flow for the six-month period then ended
(collectively the “Interim Financials”) (the Annual
Financials and the Interim Financials collectively the “Company Financials”). The Company Financials are (a) true and
correct in all material respects, (b) present fairly the financial condition
and operating results of the Company as of the dates and during the periods
indicated therein, (c) are derived from and consistent with the Company’s books
and records, and (d) are prepared in accordance with generally accepted
accounting principles (“GAAP”)
applied on a basis consistent throughout the periods indicated and consistent
with each other (except that the Interim Financials need not contain the
footnotes required by GAAP and are subject to normal year-end adjustments,
which will not be material in amount or significance in the aggregate). Schedule 2.5 also sets forth a true,
complete and accurate list of the Company’s accounts payable as of November 26,
2002. The Company’s balance sheet as of
September 30, 2002 may be referred to hereinafter as the “Interim Balance Sheet.”
2.6 ORA Financial Statements. Schedule 2.6 sets forth ORA’s audited balance sheet
as of March 31, 2002 and the related audited statements of income and cash flow
for the twelve-month period then ended (collectively the “ORA Annual Financials”), and
ORA’s unaudited balance sheet as of September 30, 2002 and the related
unaudited statements of income and cash flow for the six-month period then ended
(collectively the “ORA Interim Financials”) (the ORA Annual
Financials and the ORA Interim Financials collectively the “ORA Financials”). The ORA Financials are (a) true and correct
in all material respects, (b) present fairly the financial condition and
operating results of ORA as of the dates and during the periods indicated
therein, (c) are derived from and consistent with ORA’s books and records, and
(d) are prepared in accordance with GAAP on a basis consistent throughout the
periods indicated and consistent with each other (except that the ORA Interim
Financials need not contain the footnotes required by GAAP and are subject to
normal year end audit adjustments which are not material in amount).
2.7 No Undisclosed Liabilities. The Company does not have any liability,
indebtedness, obligation, expense, claim, deficiency, guaranty or endorsement
of any type, whether accrued, absolute, contingent, matured, unmatured or other
(whether or not required to be reflected in financial statements in accordance
with GAAP), which, individually or in the aggregate, (i) has not
13
been reflected in the Company Financials, or (ii) has
arisen since the date of the Interim Financials outside the ordinary course of
the Company’s business.
2.8 No Changes.
Except as contemplated by this Agreement, since the date of the Interim
Balance Sheet, there has not been, occurred or arisen any:
(a) transaction
by the Company except in the ordinary course of business as conducted on the
date of the Interim Balance Sheet and consistent with past practices;
(b) amendments
or changes to the Articles of Incorporation or Bylaws of the Company;
(c) expenditure
or commitment by the Company in excess of $10,000 individually or $50,000 in
the aggregate;
(d) destruction
of, damage to or loss of any material assets, business or customer of the
Company (whether or not covered by insurance), including the Property;
(e) change
in accounting methods or practices (including any change in depreciation or
amortization policies or rates) by the Company;
(f) revaluation
by the Company of any of its assets, including the Property;
(g) declaration,
setting aside or payment of a dividend or other distribution with respect to
the capital stock of the Company;
(h) material
change in any compensation arrangement or agreement with any employee, officer,
director or stockholder;
(i) acquisition,
sale, lease, license or other disposition of any of the assets of the Company,
or any creation of any security interest in such assets or properties,
including the Property;
(j) amendment
or termination of any material contract, agreement, permit, approval or license
to which the Company is a party or by which it is bound, including any purchase
and sale agreements for lots in the Project;
(k) loan
by the Company to any Person, incurring by the Company of any indebtedness,
guaranteeing by the Company of any indebtedness, issuance or sale of any debt
securities of the Company or guaranteeing by the Company of any debt securities
of others;
(l) waiver
or release of any right or claim of the Company, including any write-off or
other compromise of any account receivable of the Company;
(m) commencement
or notice or threat of commencement of any lawsuit or judicial or
administrative proceeding against or investigation of the Company or its
affairs, including the Project;
14
(n) any
event or condition of any character that has or could be reasonably expected to
have a material adverse impact on the Company;
(o) any
agreement, contract, lease or commitment or any extension or modification of
the terms of any agreement, contract, lease or commitment which (i) involves
the payment of greater than $25,000 per annum, (ii) extends for more than one
(1) year, (iii) involves any payment or obligation to any affiliate of the
Company other than in the ordinary course of business as conducted on that date
and consistent with past practices, or (iv) involves the sale of, lease of or
transfer of any interest in any material assets;
(p) hiring
of, or offer of employment to, any employees (or if an offer was accepted
people that would become employees); or
(q) negotiation
or agreement by the Company or any officer or employees thereof to do any of
the things described in the preceding clauses (a) through (p) (other than
negotiations with Monaco or Buyer and their representatives regarding the
transactions contemplated by this Agreement).
2.9 Tax and Other Returns and Reports.
(a) Definition
of Taxes. For the purposes of this
Agreement, “Tax” or, collectively, “Taxes”, means (i) any and all federal,
state, local and foreign taxes, assessments and other governmental charges,
duties, impositions and liabilities, including taxes based upon or measured by
gross receipts, income, profits, sales, use and occupation, and value added, ad
valorem, transfer, franchise, withholding, payroll, recapture, employment,
excise and property taxes, together with all interest, penalties and additions
imposed with respect to such amounts and any obligations under any agreements
or arrangements with any other Person with respect to such amounts, (ii) any
liability for the payment of any amounts of the type described in clause (i) of
this Section 2.9(a) as a result of being a member of an affiliated,
consolidated, combined or unitary group for any period, and (iii) any liability
for the payment of any amounts of the type described in clauses (i) or (ii) of
this Section 2.9(a) as a result of any express or implied
obligation to indemnify any other Person or as a result of and including any
liability for taxes of a predecessor entity.
(b) Tax
Returns and Audits.
(i) The
Company has prepared and timely filed all required federal, state, local and
foreign returns, estimates, information statements and reports (“Returns”)
relating to any and all Taxes concerning or attributable to the Company or its
operations and such Returns are true and correct and have been completed in
accordance with applicable law.
(ii) The
Company: (A) has timely paid all Taxes
it is required to pay and (B) has withheld with respect to its employees (and
timely paid over to the appropriate taxing authority) all federal and state
income taxes, Federal Insurance Contribution Act, Federal Unemployment Tax Act
and other Taxes required to be withheld.
(iii) The
Company has not been delinquent in the payment of any Tax nor is there any Tax
deficiency outstanding, proposed or assessed against the Company, nor has the
15
Company executed any waiver of any statute of
limitations on or extending the period for the assessment or collection of any
Tax.
(iv) No
audit or other examination of any Return of the Company is presently in
progress, nor has the Company been notified of any request for such an audit or
other examination.
(v) The
Company does not have any liabilities for unpaid federal, state, local and
foreign Taxes which have not been accrued or reserved against on the Company
Financials, whether asserted or unasserted, contingent or otherwise, and the
Company and/or ORA have no knowledge of any basis for the assertion of any such
liability attributable to the Company or its assets or operations. Since the date of the Interim Balance Sheet,
the Company has not incurred any liability for Taxes other than in the ordinary
course of business.
(vi) The
Company has provided to Monaco or its legal counsel copies of all federal and
state income and all state sales and use Tax Returns filed by the Company for
all periods since inception.
(vii) There are (and as of immediately
following the Closing there will be) no liens, pledges, charges, claims,
security interests or other encumbrances of any sort (“Liens”) on the assets of the
Company relating to or attributable to Taxes other than Permitted Exceptions
and the lien of ad valorem real estate taxes which are not delinquent as of the
Closing Date.
(viii) Neither the
Company nor ORA has any knowledge of any basis for the assertion of any claim
relating or attributable to Taxes which, if adversely determined, would result
in any Lien on the assets of the Company other than Permitted Exceptions and
the lien of ad valorem real estate taxes which are not delinquent as of the
Closing Date.
(ix) None
of the Company’s assets are treated as “tax-exempt use property” within the
meaning of Section 168(h) of the Code.
(x) No
adjustment relating to any Tax Return filed by the Company has been proposed
formally or, to the knowledge of the Company or ORA, informally by any taxing
authority to the Company or any representative thereof.
(xi) The
Company has not filed any consent agreement under Section 341(f) of the Code or
agreed to have Section 341(f)(2) of the Code apply to any disposition of a
subsection (f) asset (as defined in Section 341(f)(4) of the Code) owned by the
Company.
(xii) The Company has (a) never been a member of an affiliated group (within the meaning of
Code §1504(a)) filing a consolidated federal income Tax Return (other than a
group the common parent of which was ORA), (b) never been a party to a
Tax sharing, indemnification or allocation agreement nor does the Company owe
any amount under any such agreement, (c) no
liability for the Taxes of any Person (other than the Company) under Treas.
Reg. § 1.1502-6 (or any similar provision of state, local or foreign law), as a
transferee or successor, by contract, or otherwise and (d) never been a party
to any joint venture, partnership or other agreement that could be treated as a
partnership for Tax purposes.
16
(xiii) The Company
is not, nor has at any time been, a “United States real property holding
corporation” within the meaning of Section 897(c)(2) of the Code.
(xiv) The
Company’s tax basis in its assets is accurately reflected on the Company’s tax
books and records and will not be affected by any transactions contemplated by
this Agreement.
(xv) The Company has not constituted either a
“distributing corporation” or a “controlled corporation” in a distribution of
stock qualifying for tax-free treatment under Section 355 of the Code (x) in
the two (2) years prior to the date of this Agreement or (y) in a distribution
which could otherwise constitute part of a “plan” or “series of related transactions”
(within the meaning of Section 355(e) of the Code) in conjunction with the Acquisition.
(c) Executive
Compensation Tax. There is no
contract, agreement, plan or arrangement to which the Company is a party,
including the provisions of this Agreement, covering any employee or former
employee of the Company, which individually or collectively, could give rise to
the payment of any amount that would not be deductible pursuant to Sections
280G, 404 or 162(m) of the Code.
2.10 Restrictions on Business Activities. There is no agreement (noncompete or
otherwise), commitment, judgment, injunction, order or decree to which the
Company is a party or otherwise binding upon the Company which has or
reasonably could be expected to have the effect of prohibiting or impairing any
business practice of the Company, any acquisition of property (tangible or
intangible) by the Company or the conduct of business by the Company, including
the completion or operation of the Project.
2.11 Title of Properties; Absence of Liens
and Encumbrances; Condition of Equipment.
(a) Except
for the Property, the Company does not own, lease, license, sublease or
otherwise occupy any real property, nor has it ever owned, leased, licensed,
subleased or otherwise occupied any real property.
(b) The
Company has good and valid title to, or, in the case of leased properties and
assets, valid leasehold interests in, all of their tangible properties and
assets, real, personal and mixed, used or held for use in its business, free
and clear of any Liens (as defined in Section 2.9(b)(vii)), except
(i) as reflected in the Company Financials, (ii) the lien of ad valorem real
estate taxes which are not delinquent as of the Closing Date, (iii) liens for
other taxes not yet due and payable and (iv) such imperfections of title and
encumbrances, if any, which are not material in character, amount or extent,
and which do not materially detract from the value, or materially interfere
with the present use, of the property subject thereto or affected thereby.
(c) Schedule 2.11(c)
identifies all material items of equipment, machinery, furniture, fixtures and
tangible personal property owned or leased by the Company for use in the
business of the Company (collectively, the “Equipment”)
and identifies if any such items are subject to any lien or encumbrance. The Equipment set forth on Schedule 2.11(c)
is all the
17
equipment, machinery, furniture, fixtures and tangible
personal property used by the Company in the operation of its business.
(d) The
Company has sole and exclusive ownership, free and clear of any Liens, of all
customer lists, customer contact information, customer correspondence and
customer licensing and purchasing histories relating to its current and former
customers (the “Customer Information”).
No Person other than the Company possesses any claims or rights with
respect to use of the Customer Information.
2.12 Intellectual Property.
(a) Status. Set forth in Schedule 2.12 is a
list and brief description of all trademarks, trademark applications, service
marks, service mark applications and trade names, and all applications for such
which are in the process of being prepared, owned by or registered in the name
of the Company, or of which the Company is a licensor or licensee or in which
the Company has any right, and in each case a brief description of the nature
of such right (the “Intellectual Property”).
(b) Ownership. Neither the Company nor ORA has any
knowledge of any conflict with or infringement of the rights of others with
respect to the Intellectual Property.
There are no outstanding options, licenses, or agreements of any kind
relating to the Intellectual Property, nor is the Company bound by or a party
to any options, licenses or agreements of any kind with respect to the
trademarks, service marks and trade names of any other Person.
(c) Infringement. The Company has not received any
communications alleging that the Company has violated or, by conducting its
business as proposed, would violate any of the trademarks, service marks and
trade names of any other Person.
Neither the Company nor ORA is aware of any action, suit, proceeding or
investigation pending or currently threatened against the Company which relate
to the Company’s ownership of the Intellectual Property that may, to the
Company’ or ORA’s knowledge, materially and adversely affect the Company’s
business as now conducted, nor are the Company or ORA aware that there is any
basis for the foregoing.
2.13 Agreements, Contracts and Commitments.
(a) Set
forth in Schedule 2.13(a) is a list of all agreements, contracts,
leases, licenses or commitments (a) under which the Company has or may acquire
any rights, (b) under which the Company has or may become subject to any obligation
or liability, or (c) by which the Company or any of the assets owned or used by
it is or may become bound (collectively, the “Company
Contracts”), including any of the following:
(i) any
agreements or arrangements that contain any severance pay or post-employment
liabilities or obligations,
(ii) any
bonus, deferred compensation, pension, profit sharing or retirement plans, or
any other employee benefit plans or arrangements,
18
(iii) any
employment or consulting agreement, contract or commitment with an employee or
individual consultant or salesperson or consulting or sales agreement, contract
or commitment with a firm or other organization,
(iv) any
fidelity or surety bond or completion bond,
(v) any
lease of personal property,
(vi) any
agreement of indemnification or guaranty,
(vii) any
agreement, contract or commitment containing any covenant limiting the freedom
of the Company to engage in any line of business or to compete with any Person,
(viii) any
agreement, contract or commitment relating to capital expenditures,
(ix) any
agreement, contract or commitment relating to the disposition or acquisition of
assets or any interest in any business enterprise outside the ordinary course
of the Company’s business,
(x) any
mortgages, indentures, loans or credit agreements, security agreements or other
agreements or instruments relating to the borrowing of money or extension of
credit, including guaranties referred to in clause (vi) hereof,
(xi) any
purchase order or contract for the purchase of raw materials,
(xii) any
construction contracts,
(xiii) any
distribution, joint marketing or development agreement, or
(xiv) any other
agreement, contract or commitment that is not cancelable without penalty within
thirty (30) days.
(b) The
Company has not breached, violated or defaulted under, or received notice that
it has breached, violated or defaulted under, any of the terms or conditions of
any Company Contract. Each Company
Contract is in full force and effect and is not subject to any default
thereunder of which the Company or ORA have knowledge by any party obligated to
the Company pursuant thereto.
(c) No
consents, waivers and approvals of parties to any Company Contract are
necessary in order to avoid any breach, violation, default, acceleration or
termination right or other loss of rights or event that would constitute a
breach, violation, default, acceleration or termination right or other loss of
rights with the lapse of time, giving of notice, or both, in connection with
the execution and delivery of this Agreement and the consummation of
transactions contemplated hereby.
19
(d) The
Company has delivered to Monaco true, correct and complete copies of the
Company Contracts, including all exhibits, amendments and supplements and all
material correspondence related thereto.
No party to any Company Contract has informed the Company of its
intention to terminate or not renew such Company Contract. No issue has been raised by any party out of
the ordinary course of business, if unresolved, would result in the termination
or nonrenewal of such Company Contract.
Following the Closing, the Company will be permitted to exercise all of
the rights that the Company had under the Company Contracts prior to the
Closing without payment of any additional amounts or consideration other than
ongoing fees or payments which the Company would otherwise be required to pay
pursuant to the terms of such Company Contract had the transactions
contemplated by this Agreement not occurred.
2.14 Interested Party Transactions.
(a) Other
than by virtue of its interest in ORA, no officer, director or shareholder of
the Company or, to the knowledge of the Company or ORA, nor any ancestor,
sibling, descendant or spouse of any of such Persons, or any trust, partnership
or corporation in which any of such Persons has an interest, has, directly or
indirectly, (i) an interest in any entity which furnished or sold, or furnishes
or sells, services or products that the Company furnishes or sells or proposes
to furnish or sell, or (ii) an interest in any entity that purchases from or
sells or furnishes to the Company any goods or services, or (iii) a beneficial
interest in any Company Contract; provided, that ownership of no more than one
percent (1%) of the outstanding voting stock of a publicly traded corporation
shall not be deemed an “interest in any entity” for purposes of this Section 2.14.
(b) Schedule 2.14(b)
accurately lists and describes each Intercompany Receivable and each
Intercompany Payable.
2.15 Governmental Authorization.
(a) Schedule 2.15
accurately lists each Governmental Authorization. The Governmental
Authorizations are in full force and effect and constitute all Governmental
Authorizations required to permit the Company to operate or conduct its
business substantially as it is currently, has been and is proposed to be
conducted to complete and operate Phase I or hold any interest in its
properties or assets.
(b) No
event has occurred or circumstance exists that may (with or without notice or
lapse of time) (i) constitute or result directly or indirectly in a material
violation of or a failure to comply with any term or requirement of any
Governmental Authorization listed or required to be listed on Schedule 2.15
or (ii) result directly or indirectly in the revocation, withdrawal,
suspension, cancellation or termination of, or any modification to, any
Governmental Authorization listed or required to be listed on Schedule 2.15.
(c) None
of the Company, ORA or the Principals have received any notice or other
communication (whether written or oral) from any Governmental Entity or any
other Person regarding (i) any actual, alleged, possible or potential violation
of or failure to comply with any term or requirement of any Governmental
Authorization or (ii) any actual, proposed, possible or potential
20
revocation, withdrawal, suspension, cancellation,
termination of or modification to any Governmental Authorization.
2.16 Litigation.
Except as set forth on Schedule 2.16, there is no action,
suit, claim or proceeding of any nature pending or threatened against the
Company or its properties, any of its officers or directors in their respective
capacities as such or the Project (other than litigation which has been filed
but of which the Company and ORA have no knowledge of and with respect to which
have not been served), nor, to the knowledge of the Company or ORA, is there
any basis therefor. There is no
investigation pending or threatened against the Company or its properties or
any of its officers or directors by or before any Governmental Entity, nor, to
the knowledge of the Company or ORA, is there any basis therefor. Schedule 2.16 sets forth, with
respect to any pending or threatened action, suit, proceeding or investigation,
the forum, the parties thereto, the subject matter thereof and the amount of
damages claimed or other remedy requested.
No Governmental Entity has at any time challenged or questioned the
legal right of the Company to complete or operate the Project which remains
unresolved or which continues to be asserted.
There is no action, suit, claim or proceeding of any nature pending, or
overtly threatened, against the Company, or its properties or any of its
officers or directors, arising out of, or in any way connected with, the
execution and delivery of this Agreement or the other transactions contemplated
by the terms of this Agreement.
2.17 Accounts Receivable.
(a) The
Company has made available to Monaco a list of all accounts receivable of the
Company reflected on the Company Financials (“Accounts Receivable”) along
with a range of days elapsed since invoice.
(b) All
Accounts Receivable of the Company arose in the ordinary course of business,
are carried at values determined in accordance with GAAP consistently applied
and, to the best knowledge of the Company and ORA, should be collectible except
to the extent of reserves therefor set forth in the Company Financials. No Person has any Lien on any of such
Accounts Receivable and no request or agreement for material deduction or
discount has been made with respect to any of such Accounts Receivable.
2.18 Minute Books.
The minute books of the Company made available to counsel for Buyer
contain complete and accurate copies of the only minute books of the Company
and such copies contain an accurate summary of all meetings of directors (or
committees thereof) and shareholders and actions by written consent of
directors or shareholders since the time of incorporation of the Company.
2.19 Environmental Matters. No Hazardous Materials are present, as a
result of actions or omissions of the Company or ORA, or to the Company’s or
ORA’s knowledge, as a result of any actions or omissions of any third party or
otherwise, in, on, or under any property, including the land and the
improvements, ground water and surface water thereof, that the Company has at
any time owned, operated, occupied or leased. The Company has obtained, and is
and has been in compliance in all material respects with all applicable
permits, licenses, registrations, approvals and other authorizations that are
required for the operation of the Company’s business (including the completion
and operation of the Project) under all applicable Environmental Laws. The Company is
21
and has been in compliance with all applicable
Environmental Laws and to the knowledge of the Company and ORA, the Company’s
agents, predecessors in interest, contractors, invitees or licensees are and
have been in compliance with all applicable Environmental Laws in connection
with the operation of the Company’s business and the Project. The Company has not disposed of, released,
discharged, or emitted any Hazardous Materials into the air, soil, groundwater
or otherwise at any properties owned, leased or occupied at any time by the
Company, or at any other property, or exposed any employee or other individual
to any Hazardous Materials or any workplace or environmental condition in such
a manner as would reasonably be expected to subject the Company to
liability. Neither the Company nor ORA
is aware of any fact or circumstance, which could result in any environmental liability
which could reasonably be expected to result in a Material Adverse Effect on
the business or financial status of the Company. The Company has delivered to
Monaco or made available for inspection by Monaco and its agents,
representatives and employees all records in the Company’s possession or
reasonably available to the Company concerning the Company’s compliance with
Environmental Laws, and all environmental site assessments, sampling, analyses,
tests, audits and engineering data relating to any real property currently or
formerly owned or leased by the Company. The Company has complied with all
environmental disclosure obligations imposed by applicable law with respect to
this transaction.
2.20 Brokers’ and Finders’ Fees; Third Party
Expenses. The Company 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 any transaction contemplated hereby for which
Monaco or Buyer could become liable or obligated.
2.21 Employee Matters and Benefit Plans.
(a) Schedule. Schedule 2.21(a) contains an
accurate and complete list of each Plan and each Employment Agreement. The Company does not have any plan or
commitment to establish any new Plan or Employment Agreement, to modify any
Plan or Employment Agreement (except to the extent required by law or to
conform any such Plan or Employment Agreement to the requirements of any
applicable law, in each case as previously disclosed to Monaco and Buyer in
writing, or as required by this Agreement), or to adopt or enter into any Plan
or Employment Agreement.
(b) Documents. The Company has provided to Monaco and Buyer
correct and complete copies of: (i) all documents embodying each Plan and each
Employment Agreement including (without limitation) all amendments thereto and
all related trust documents, administrative service agreements, group annuity
contracts, group insurance contracts, and policies pertaining to fiduciary
liability insurance covering the fiduciaries for each Plan; (ii) the most
recent annual actuarial valuations, if any, prepared for each Plan;
(iii) the three (3) most recent annual reports (Form Series 5500 and
all schedules and financial statements attached thereto), if any, required
under ERISA or the Code in connection with each Plan; (iv) if the Plan is
funded, the most recent annual and periodic accounting of Plan assets;
(v) the most recent summary plan description together with the
summary(ies) of material modifications thereto, if any, required under ERISA
with respect to each Plan; (vi) all IRS determination, opinion, notification
and advisory letters, and all applications and correspondence to or from the
IRS or the DOL with respect to any such application or letter; (vii) all
communications material to any Employee or Employees relating to any Plan and
22
any proposed Plans, in each case, relating to any
amendments, terminations, establishments, increases or decreases in benefits,
acceleration of payments or vesting schedules or other events which would
result in any material liability to the Company; (viii) all correspondence to
or from any governmental agency relating to any Plan; (ix) all COBRA forms and
related notices (or such forms and notices as required under comparable law);
(x) the three (3) most recent plan years discrimination tests for each Plan;
and (xi) all registration statements, annual reports (Form 11-K and all
attachments thereto) and prospectuses prepared in connection with each Plan.
(c) Plan
Compliance.
(i) The
Company has performed in all material respects all obligations required to be
performed by it under, is not in default or violation of, and has no knowledge
of any default or violation by any other party to each Plan, and each Plan has
been established and maintained in all material respects in accordance with its
terms and in compliance with all applicable laws, statutes, orders, rules and
regulations, including but not limited to ERISA or the Code
(ii) Each
Plan intended to qualify under Section 401(a) of the Code and each trust
intended to qualify under Section 501(a) of the Code has either received a
favorable determination, opinion, notification or advisory letter from the IRS with
respect to each such Plan as to its qualified status under the Code, including
all amendments to the Code effected by the Tax Reform Act of 1986 and
subsequent legislation, or has remaining a period of time under applicable
Treasury regulations or IRS pronouncements in which to apply for such a letter
and make any amendments necessary to obtain a favorable determination as to the
qualified status of each such Plan.
(iii) No “prohibited
transaction,” within the meaning of Section 4975 of the Code or Sections 406
and 407 of ERISA, and not otherwise exempt under Section 4975 of the Code or
Section 408 of ERISA (or any administrative class exemption issued thereunder),
has occurred with respect to any Plan.
(iv) There
are no actions, suits or claims pending, or, to the knowledge of the Company,
threatened or reasonably anticipated (other than routine claims for benefits)
against any Plan or against the assets of any Plan.
(v) Each
Plan (other than any stock option plan) can be amended, terminated or otherwise
discontinued after the Closing Date, without material liability to Monaco and
Buyer, Company or any of its ERISA Affiliates (other than ordinary
administration expenses).
(vi) There
are no audits, inquiries or proceedings pending or, to the knowledge of the
Company or any ERISA Affiliates, threatened by the IRS or DOL with respect to
any Plan.
(vii) Neither the Company nor any
ERISA Affiliate is subject to any penalty or tax with respect to any Plan under
Section 502(i) of ERISA or Sections 4975 through 4980 of the Code.
23
(d) Pension
Plan. Neither the Company nor any
ERISA Affiliate has ever maintained, established, sponsored, participated in,
or contributed to, any Pension Plan which is subject to Title IV of ERISA
or Section 412 of the Code.
(e) Collectively
Bargained, Multiemployer and Multiple Employer Plans. At no time has the Company or any ERISA
Affiliate contributed to or been obligated to contribute to any Multiemployer
Plan. Neither the Company, nor any
ERISA Affiliate has at any time ever maintained, established, sponsored,
participated in, or contributed to any multiple employer plan, or to any plan
described in Section 413 of the Code.
(f) No
Post-Employment Obligations. No
Plan provides, or reflects or represents any liability to provide retiree
health to any person for any reason, except as may be required by COBRA or
other applicable statute, and the Company has never represented, promised or
contracted (whether in oral or written form) to any Employee (either
individually or to Employees as a group) or any other person that such
Employee(s) or other person would be provided with retiree health, except to
the extent required by statute.
(g) Health
Care Compliance. Neither the Company
nor any ERISA Affiliate has, prior to the Closing Date and in any material
respect, violated any of the health care continuation requirements of COBRA,
the requirements of FMLA, the requirements of the Health Insurance Portability
and Accountability Act of 1996, the requirements of the Women’s Health and
Cancer Rights Act of 1998, the requirements of the Newborns’ and Mothers’
Health Protection Act of 1996, or any amendment to each such act, or any
similar provisions of state law applicable to its Employees.
(h) Effect
of Transaction.
(i) The
execution of this Agreement and the consummation of the transactions
contemplated hereby will not (either alone or upon the occurrence of any
additional or subsequent events) constitute an event under any Plan, Employment
Agreement, trust or loan that will or may result in any payment (whether of
severance pay or otherwise), acceleration, forgiveness of indebtedness,
vesting, distribution, increase in benefits or obligation to fund benefits with
respect to any Employee.
(ii) No
payment or benefit which will or may be made by the Company or its ERISA
Affiliates with respect to any Employee or any other “disqualified individual”
(as defined in Code Section 280G and the regulations thereunder) will be
characterized as a “parachute payment,” within the meaning of Section
280G(b)(2) of the Code.
(i) Employment
Matters. The Company: (i) is
in compliance in all respects with all applicable foreign, federal, state and
local laws, rules and regulations respecting employment (including, without
limitation, all applicable foreign, federal, state and local laws, rules and
regulations respecting termination of employment), employment practices, terms
and conditions of employment and wages and hours, in each case, with respect to
Employees; (ii) has withheld and reported all amounts required by law or
by agreement to be withheld and reported with respect to wages, salaries and
other payments to Employees; (iii) is not liable for any arrears of wages
or any
24
taxes or any penalty for failure to comply with any of
the foregoing; and (iv) is not liable for any payment to any trust or
other fund governed by or maintained by or on behalf of any governmental
authority, with respect to unemployment compensation benefits, social security
or other benefits or obligations for Employees (other than routine payments to
be made in the normal course of business and consistent with past
practice). There are no pending,
threatened or reasonably anticipated claims or actions against the Company
under any worker’s compensation policy or long-term disability policy.
(j) Labor. No work stoppage or labor strike against the
Company is pending, threatened or reasonably anticipated. The Company does not know of any activities
or proceedings of any labor union to organize any Employees. There are no actions, suits, claims, labor
disputes or grievances pending, or, to the knowledge of the Company, threatened
or reasonably anticipated relating to any labor, safety or discrimination
matters involving any Employee, including, without limitation, charges of
unfair labor practices or discrimination complaints, which, if adversely
determined, would, individually or in the aggregate, result in any material liability
to the Company. Neither the Company nor
any of its subsidiaries has engaged in any unfair labor practices within the
meaning of the National Labor Relations Act.
The Company is not presently, nor has it been in the past, a party to,
or bound by, any collective bargaining agreement or union contract with respect
to Employees and no collective bargaining agreement is being negotiated by the
Company.
(k) International
Employee Plan. The Company does not
now, nor has it ever had the obligation to, maintain, establish, sponsor,
participate in, or contribute to any International Employee Plan.
2.22 Insurance. Schedule 2.22
contains a true, correct and complete list of all insurance policies and bonds
covering the assets, business, equipment, properties, operations, employees,
officers and directors of the Company. There is no claim by the Company pending
under any of such policies or bonds as to which coverage has been questioned,
denied or disputed by the underwriters of such policies or bonds. All premiums due, payable and not yet
delinquent under all such policies and bonds have been paid and the Company is
otherwise in compliance with the terms of such policies and bonds (or other
policies and bonds providing substantially similar insurance coverage). The Company and ORA have no knowledge of any
threatened termination of, or material premium increase with respect to, any of
such policies.
2.23 Compliance with Laws. The Company is in material compliance with
all federal, state and local statutes, laws or regulations, domestic or
foreign, and has not received any notices of violation with respect to any of
such statutes, laws or regulations.
2.24 Consents. No
consent, waiver, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity or any third party (so as
not to trigger any Conflict), is required by or with respect to the Company
and/or ORA in connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby or thereby.
2.25 No Injunctions or Restraints on
Conduct of Business. No
temporary restraining order, preliminary or permanent injunction or other order
issued by any court of competent
25
jurisdiction or other legal or regulatory restraint or
provision challenging Buyer’s proposed acquisition of the Company, or limiting
or restricting Buyer’s conduct or operation of the business of the Company or
the completion or operation of the Project (or its own business) following the
Closing is in effect, nor, to ORA’s and the Company’s knowledge, has any
proceeding by an administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign, seeking any of the foregoing
been overtly threatened or commenced.
2.26 Representations relating to the
Property.
(a) No
Condemnation Pending or Threatened.
There is no pending condemnation, environmental, zoning or other land
use regulatory proceeding affecting the Property or the completion and
operation of the Project or any portion thereof, and neither the Company nor
ORA have any knowledge that any such action is currently contemplated or
threatened.
(b) Parties
in Possession. There are no parties
in possession of any portion of the Property, whether as lessees, tenants at
sufferance, trespassers or otherwise.
(c) Flood
Zone. No portion of the Property is
located in a wetland area, as defined by laws, or in a designated or recognized
flood plain, flood plain district, flood hazard area or area of similar
characterization. The Project will not
violate any requirement of the United States Corps of Engineers or laws
relating to wetland areas.
(d) Existing
Improvements. Except as set forth
in Schedule 2.26(d), all of the Improvements required for the completion
and operation of Phase I have been completed. To the best of the Company’s and
ORA’s knowledge, (a) the Improvements (including the buildings and building
pads and all drives, parking lots, landscaping, curbs, sidewalks, sewers and
other utilities) and all other construction activities of the Property,
including grading and filling, have been constructed, performed and installed
substantially in accordance with plans and specifications approved by the
various governmental authorities having jurisdiction, in compliance with all
laws and the recommendations of the Company’s consultants and (b) all material
licenses, permits, authorizations and approvals required for the Improvements
by all governmental authorities having jurisdiction have been issued and have
been paid for, and as of the Closing all of the same will be in full force and
effect. All drives and parking areas on
the Property are private and have not been dedicated to any public
authority. Schedule 2.26(d)
lists all Improvements required for the completion and operation of Phase I
that are not yet complete, the status of completion of each such Improvement,
the estimated time required to complete such Improvement, the estimated cost to
complete such Improvement and any anticipated impediments to completing such
Improvement.
(e) Hazardous
Substances.
(i) To
the knowledge of the Company and ORA (a) there are no surface impoundments,
lagoons, waste piles, injection wells, or underground storage areas, or other
man-made facilities located on the Property that may have accommodated
Hazardous Materials; (b) no portion of the Property has been used as a dump or
landfill or consists of filled-in land; (c) there are no buried, partially
buried, above-ground or other tanks, storage vessels, drums or containers
located on the Property; and (d) there has never been a spill, leak, discharge,
emission, escape, leaching or
26
disposal of the contents of any underground storage
tank into groundwater, surface water or subsurface soils.
(ii) To
the knowledge of the Company and ORA, the Property currently complies with all
Environmental Laws, and the Company has received no warning, notice,
administrative complaint, judicial complaint or other formal or informal notice
alleging that any conditions on the Property are or may be in violation of any
Environmental Laws. The Company has not
received and, to the knowledge of the Company, and ORA, no previous owner of
the Property has received any notice, summons, citation, letter or other
communication, written or oral, from any Governmental Entity alleging or
inquiring into any possible release, emission, discharge, disposal, use,
storage, production, handling or presence of any Hazardous Materials on or
about the Property or the soil, surface water or groundwater thereof.
(iii) To the knowledge of the
Company and ORA, there are no wells on the Property and the Project does not
include installation of any wells for purposes of irrigation or consumptive use
and all water necessary for consumption and irrigation for the Project as it is
anticipated to be developed is currently provided by a municipal water supply
which extends to the Property boundary.
(f) Governmental
Approvals; No Violations of Zoning Laws.
Except as set forth on Schedule 2.26(f), the Company has
obtained all material licenses, permits, variances, approvals, authorizations,
easements and rights of way, including proof of dedication, required from all
Governmental Entities having jurisdiction over the Property or from private
parties, for the completion and operation of Phase I, including, without
limitation, the sale of lots to third party users, and to insure vehicular and
pedestrian ingress to and egress from the Property and adequate parking on the
Property (“Approvals”). No action, proceeding, amendment procedure,
writ, injunction or claim is pending, or to the Company’s or ORA’s knowledge,
threatened concerning any such permit.
No land use, zoning, building or other law, ordinance, regulation or
restriction (including, without limitation, the Americans with Disabilities
Act) is, or as of the Closing Date will be, violated by the Property or the
completion and operation of Phase I, including the sale of lots on the
Property. The Improvements and all
parts thereof do not violate any restrictive covenants affecting it. Except as
set forth on Schedule 2.26(f), there are no commitments to
governmental authorities or agencies or quasi-governmental entities which
relate to land use or zoning affecting the Property and there are no conditions
of the Property’s zoning or use which have not been completely fulfilled. To the Company’s and ORA’s knowledge, there
is no law, ordinance, order, regulation or requirement now in existence or
under active consideration by any government agency or legislative body which
would require the owner of the Property to make any expenditure in excess of
$1,000 to modify or improve the Property in order to bring it into compliance
therewith or to complete Phase I. There
is nothing that would constitute an uncured material violation of Federal,
state, or municipal laws, ordinances, orders, regulations or requirements
affecting any portion of the Property.
Neither the sewage nor any waste water systems nor the heating
equipment, incinerators or other burning devices violate any applicable
Federal, state or municipal laws, ordinances, orders, regulations or
requirements. Schedule 2.26(f)
lists all Approvals that have not yet been received or that require further
performance by the Company thereunder, the status of receipt of each Approval
and/or the performance by the Company thereunder, the steps required to receive
or complete performance with respect to each Approval, the estimated time
required to receive and/or complete required
27
performance with respect to each Approval, the
estimated cost to receive and/or complete performance with respect to each
Approval and any anticipated impediments to receiving and/or completing
performance with respect to each Approval.
(g) Soundness. To the best of the Company’s and ORA’s
knowledge, the mechanical, electrical, plumbing and sewer systems serving the
Improvements are fully operational, there are no structural, electrical,
mechanical, plumbing, roof, paving or other defects in the Property, the roofs
of the Improvements are free of leaks and in sound structural condition, and
the Personalty is in good working order.
(h) Access. The Property has adequate direct access to
and from completed, dedicated and accepted public roads for the completion and
operation of the Project and there is no pending or threatened governmental
proceeding which would impair or curtail such access.
(i) Utilities. Except as set forth in Schedule 2.26(i),
there are presently in existence telephone, telecommunication, water, sewer,
gas and electrical lines and cables and surface drainage systems on the Land
and in the Improvements which have been completed, installed and paid for in
compliance with all laws and which are sufficient to fully service Phase I when
Phase I is completed and operating. All utility lines serving the Property are
separately metered, are located in the rights of way of public roadways bordering
the Land and are set up to serve the Property independently of the neighboring
properties. Schedule 2.26(i)
lists all such utility, telecommunications and drainage systems that are not
yet completed, installed and paid for in compliance with laws, the status of
completion of each such item, the estimated time required to complete such
item, the estimated cost to complete such item and any anticipated impediments
to completing such item.
(j) Property. Except for the recorded mortgages/deeds of
trust securing the Monaco Loan and the BankAtlantic Loan, liens for ad valorem
real estate taxes not delinquent at the Closing Date, the Permitted Exceptions
and as set forth in Schedule 2.26(j), the Company is and, following the
consummation of the transaction contemplated by this Agreement will be, the
owner of good and marketable fee simple title to the Property free and clear of
any liens, mortgages, pledges, security interests, options, rights, leases,
charges, encumbrances or restrictions of any kind (“Mortgages”). The
Property is all the property that is used or will be required in connection
with the operation and completion of the Project. Except as set forth in Schedule 2.11(c), there is no
personal property owned by the Company which is used by the Company in
connection with the ownership of the Property other than the Personalty. The Property is segregated on the applicable
tax rolls, so that no other property is included on any tax bill relating to
any portion of the Property. There are
no tax exemptions or abatements affecting any of the Property. The Property complies in all respects with
the applicable subdivision or parcel map acts and has been properly subdivided
so that the Property may be conveyed to Buyer as provided herein and the lots can
be conveyed to third party purchasers without future action. The Property has sufficient parking for the
completion and operation of the Project as required by applicable law and does
not have any shared parking with any other property. Schedule 2.26(j) lists (i) all Mortgages to which the
Project is subject (other than the recorded mortgages/deeds of trust securing
the BankAtlantic Loan and the Monaco Loan), the parties in whose favor the
Mortgages run, the dates of such Mortgages, the amounts of such Mortgages and
the subject matter of such Mortgages, and (ii) all Approvals required so that
the
28
Property may be conveyed to third party purchasers,
the status of receipt of each Approval, the steps required to obtain each
Approval, the estimated time required to obtain each such Approval, the
estimated cost to obtain each such Approval and any anticipated impediments to
obtaining each Approval.
(k) Leases;
Options; Broker Agreement. Except
as set forth in Schedule 2.26(k), there are no oral or written
leases, licenses or other occupancy agreements, pending purchase and sale
agreements or parking agreements with respect to the Property or options or
rights of first refusal to lease or purchase the Property. Schedule 2.26(k) sets forth a
list of all such agreements, the names of the parties thereto, the dates
thereof, the portions of the Property affected thereby (including the lot
number, if applicable) and (a) as to leases, licenses and other occupancy
agreements, the terms thereof and the aggregate rental and/or fees payable
thereunder and (b) as to purchase agreements, the purchase price, the amount of
the earnest money deposit, the estimated closing date and the conditions to
closing. The Company has delivered to
Monaco true, correct and complete copies of all such agreements, and such
agreements constitute the entire agreement with the Company thereunder. The Company and the other parties thereto do
not have any right to cancel or terminate any such agreements as a result of
any existing fact known to the Company.
The Company is not in default under any such agreements, and to the best
knowledge of the Company, and ORA, the other party thereto is not in default
under any such agreements, and has performed all of the obligations required to
be performed by the Company thereunder.
All such obligations to be performed on or prior to the Closing will
have been duly performed and paid for in full by the time of Closing. No brokerage or leasing commissions or other
compensation is due or payable to any Person with respect to any such
agreements or any extension, expansion or renewal thereof. No claims or litigation, actual or
threatened, exist with regard such agreements.
Neither the Company nor ORA nor any of the Principals has entered into
any broker agreements, listing agreements or other similar agreements with
respect to the sale or leasing of any portion of the Property.
(l) Service
Contracts. There are presently in
existence no service contracts, billboard or other advertising agreements or
other sorts of operating agreements with respect to the Property, other than
those listed on Schedule 2.26(l), all of which can be canceled,
without penalty or other payment, upon written notice of thirty (30) days or
less. There are no union contracts
affecting the Property. Schedule 2.26(l)
sets forth a list of all such agreements, the names of the parties thereto, the
dates thereof, the work covered thereby, the terms thereof and the aggregate
payments thereunder.
(m) Insurance. The Property is insured by “all-risk”
property insurance at its full replacement value in favor of the Company. The Company also carries commercial general
liability insurance with respect to the Property in the amount of $12,000,000.
(n) No
Assessments. To the Company’s and
ORA’s best knowledge, there are no pending or threatened assessments,
improvements or activities of any public or quasi-public body either planned,
in the process of construction or completed which may give rise to any
assessment against the Property or any portion thereof, including upon
completion of the Project.
(o) BankAtlantic
Loan. With respect to the
BankAtlantic Loan, (i) prepayment of such indebtedness is permitted at any
time without premium or penalty, (ii) the Company has
29
provided Monaco true, correct and complete copies of
all of the documents securing and evidencing the BankAtlantic Loan and none of
such documents has been endorsed, renewed, amended, transferred, pledged or
otherwise modified, and (iii) the current outstanding principal balance under
the BankAtlantic Loan is seven million four hundred eight thousand nine hundred
fourty-two dollars ($7,408,942).
(p) Project. As of the date hereof, no lots have been
sold, there are no pending purchase and sale agreements with respect to the
lots and there are 15 lot reservations.
Schedule 2.26(p) lists each lot and whether it has been sold, its
asking price if it has not been sold, its sale price, sale date and purchaser
if it has been sold, its pending sale date and purchase price if it is under
contract, the amount of the monthly assessments for each lot and whether such
assessments area current. All the Approvals that have been obtained or
that will be obtained at Closing, all of the agreements described in Section
2.26(k) and (l) above, all warranties, construction contacts and all
similar documents and agreements relating to the Property and the Project are
in the name of and/or in favor of the Company.
None of the drinking water supplied to the Project comes from the ground
water on the Property, and it is not anticipated that future drinking water
will come from the ground water on the Property. The 3” PVC pipe located on the Property that was noted on an
environmental report provided to Buyer was a breather pipe for irrigation and
has been removed in accordance with Legal Requirements. To the best knowledge of the Company and
ORA, there is no opposition to the Project from any individual, group or
entity.
(q) Adverse
Information. The Company has no
information or knowledge that there are any laws, ordinances or restrictions,
or any change contemplated therein, or any judicial or administrative action,
or any action by adjacent landowners, or natural or artificial conditions upon
the Property, or any other facts or conditions which could, in the aggregate,
have a material adverse effect upon the Property or the completion or operation
of the Project, including the value or profitability thereof. The Company has not received any notice from
any insurance company of any defects or inadequacies in any of the Property
which could materially and adversely affect the insurability of the Property or
the Project or the premiums for the insurance thereof. No notice has been given by any insurance
company which has issued a policy with respect to any of the Property or by any
board of fire underwriters (or other body exercising similar functions) requesting
the performance of any repairs, alterations or other work with which compliance
has not been made.
(r) Delivery
of Documents. The Company has
provided Monaco with true, correct and complete copies of the following items
to the extent that ORA or the Company or their affiliates possess such
items: (a) all existing land use
and development licenses, permits and approvals and building permits and
“building finals” regarding the Project; (b) the most recent as-built
survey of the Property in the Company’s possession; (c) evidence that the
Property is properly zoned for the Project; (d) evidence that there
currently exist no violations of any building, fire, health or safety code,
law, rule, regulation or order; (e) a copy of the Company’s policy of
title insurance on the Property; (f) all of the documents and agreements
described in this Section 2.26, including, without limitation, those set
forth in Schedules 2.26(k) and (l) and those described in Section 2.26(o),
and none of such documents or agreements have been amended, transferred, other
than pursuant to the BankAtlantic Loan documents, pledged or otherwise
modified; (g) copies of all air, soil, water, engineering (including, without
limitation, structural and seismic reports and reports with respect to the
American with Disabilities Act) and environmental reports, tests, indemnities
and
30
materials regarding the Property in the possession of
or commissioned or requested by the Company; (h) a complete copy of all
plans and specifications for the construction of the Improvements and the
development of the Project (the “Plans and
Specifications”); (i) a copy of all construction contracts
entered into by the Company or otherwise in the Company’s possession with
regard to the Property; (j) copies of all product and equipment warranties
relating to the Improvements and/or the Personalty, including, without
limitation, copies of all roof warranties; (k) copies of all concession
agreements, commercial licenses, governmental licenses, permits, covenants,
conditions and restrictions and any other agreements related to the Property,
which have been certified by the Company to be true, correct and complete
copies; (l) copies of all contracts relating to the operation, maintenance
and management of the Property, including all service and supply agreements,
franchise agreements and personal property leases; (m) copies of the
Property tax bills for the last three (3) years and a schedule of all bond
assessments, if applicable, for the Property for the last three (3) years; (n)
copies of all financing documents pertaining to the Property; (o) copies of all
fire, casualty (including earthquake and flood), liability and other insurance
policies regarding the Property; (p) an inventory of all tangible Personalty;
and (q) all written warranties from each subcontractor that performed Work at
the Property as to the Work performed by such subcontractor (such written
warranties, the “Subcontractors Warranties”).
(s) Monies
Owed. Schedule 2.26(s) sets
forth a true, correct and complete list of all amounts owed by the Company to
third parties in connection with services or supplies furnished to the
Property, the development of the Project or otherwise.
(t) Loan
Applications. The Company has used
all of the loan proceeds received from the BankAtlantic Loan and the Monaco
Loan, except as expressly approved by Monaco as to the Monaco Loan, only for
the purposes for which such proceeds were required in the Company’s loan
application.
(u) Off-Site
Improvements. The Company has
properly completed all of its construction and other obligations under the
covenants, conditions and restrictions and agreements with Governmental
Entities relating to the development of the Project.
(v) Project
Home Owner’s Association. The amount
of the assessments for the Project’s home owner’s association set forth in the
budget approved by the California Department of Real Estate is materially
adequate for the purposes for which it is required.
(w) Monaco
Loan. The current outstanding principal
balance under the Monaco Loan is three million fifty-six thousand six hundred
seventy dollars ($3,056,670).
2.27 Warranties; Indemnities. Except for those set forth in this
Agreement, the Company has not given indemnities relating to the Project.
2.28 Representations Complete; Disclosure. None of the representations or warranties
made by the Company and ORA (as modified by the Sellers’ Disclosure Letter),
nor any statement made in any Schedule or certificate furnished by the Company
or ORA pursuant to this Agreement, contains or will contain at the Closing, any
untrue statement of a material fact, or omits or will omit at the Closing to
state any material fact necessary in order to make the statements contained
herein
31
or therein, in the light of the circumstances under
which made, not misleading. Each
document delivered by the Company or its counsel to Monaco or its counsel in
connection with this Agreement or the transactions contemplated hereby was a
true and complete copy of such document including all exhibits, schedules and
amendments thereto.
2.29 No Other Representations or
Warranties. Except for
the representations and warranties made by the Company or ORA in this
Agreement, the ORLV Agreement, the ORN Agreement, the Guaranty and the
Affiliates Agreement, neither the Company nor ORA make any representations or
warranties, and the Company and ORA hereby disclaim any other representations
or warranties, whether made by the Company or ORA or their respective officers,
directors or employees, with respect to the execution and delivery of this
Agreement, the Guaranty or the Affiliates Agreement or the transactions
contemplated hereby and thereby, notwithstanding the delivery or disclosure to Monaco
or Buyer or its representatives of any documentation or other information with
respect to any one or more of the foregoing.
ARTICLE III
REPRESENTATIONS
AND WARRANTIES OF MONACO AND BUYER
Monaco and Buyer
represent and warrant to the Company as follows:
3.1 Organization,
Standing and Power.
Each of Monaco and Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Each of Monaco and Buyer has the corporate
power to own its properties and to carry on its business as now being conducted
and is duly qualified to do business and is in good standing in each
jurisdiction in which the failure to be so qualified would have a material
adverse effect on the ability of Monaco or Buyer to consummate the transactions
contemplated hereby.
3.2 Authority. Each of Monaco and
Buyer has all requisite corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of each of Monaco and
Buyer. This Agreement has been duly
executed and delivered by Monaco and Buyer and constitutes the valid and
binding obligation of Monaco and Buyer, enforceable 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 rules of law governing specific
performance, injunctive relief or other equitable remedies.
3.3 Consents.
No consent of any Person not a party to this Agreement and no consent of
any Governmental Entity is required to be obtained on the part of Monaco or
Buyer to permit the consummation of the transactions contemplated by this
Agreement.
3.4 Noncontravention. The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated hereby will
not, conflict with any provision of the Certificate of Incorporation or Bylaws
of Monaco or Buyer.
32
3.5 Brokers’ and Finders’ Fees; Third Party Expenses. Neither Monaco nor Buyer has incurred, not
will they incur, directly or indirectly, any liability for brokerage or
finders’ fees or agents’ commissions or any similar charges in connection with
this Agreement or any transaction contemplated hereby for which the Company,
ORA or the Principals could become liable or obligated.
3.6 Monaco Loan.
The current outstanding principal balance under the Monaco Loan is three
million fifty-six thousand six hundred seventy dollars ($3,056,670).
3.7 No Other Representations or Warranties. Except for the representations and
warranties made by the Monaco or Buyer in this Agreement, the ORLV Agreement
and the ORN Agreement, neither Monaco nor Buyer make any representations or
warranties, and Monaco and Buyer hereby disclaim any other representations or
warranties, whether made by the Monaco or Buyer or their respective officers,
directors or employees, with respect to the execution and delivery of this
Agreement or the transactions contemplated hereby and thereby, notwithstanding
the delivery or disclosure to ORA or its representatives of any documentation
or other information with respect to any of the foregoing.
ARTICLE IV
CONDUCT
PRIOR TO CLOSING
4.1 Conduct of Business of the Company. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Closing, the Company agrees (except to the extent that Monaco shall
otherwise consent in writing), to carry on its business in the usual, regular
and ordinary course in substantially the same manner as heretofore conducted,
materially comply with all the terms, conditions and provisions of all laws,
rules regulations, orders, leases, liens, mortgages, agreements, insurance
policies and other contractual arrangements relating to the Property, to pay
its debts and Taxes when due, to pay or perform other obligations when due,
confer with Monaco concerning material business or operational matters relating
to the Company’s business, use reasonable, good faith efforts to maintain all
the assets of the Company in their current condition and to promptly replace,
repair or restore such assets in the event of any damage to or destruction of
any of such assets prior to the Closing, maintain the books and records in the
usual, regular and ordinary manner, on a basis consistent with prior years,
report periodically to Monaco concerning the status and operation of the
Project, and to use all reasonable efforts consistent with past practice and
policies to preserve intact the Company’s present business organizations, keep
available the services of its present officers and key employees and preserve
their relationships with customers, suppliers, licensors, licensees, and others
having business dealings with it, all with the goal of preserving unimpaired
the Company’s goodwill and ongoing businesses at the Closing; it being
understood that Monaco and the Company shall keep each other informed of
developments to, and relating actions to be taken in connection with the
matters described in Schedule 6.3(g) hereto. Without limiting the foregoing, but subject
to the limitations in Sections 4.1(a)-4.1(aa) below, during such
period, the Company agrees to (i) perform all of its
33
obligations under all Approvals and applications
therefore other than recording the subdivision Plat for Phase I of the Project
and obtaining the Property Report from the California Division of Real Estate
to permit the sale of lots in Phase I and
(ii) maintain the present insurance on the Property and promptly provide Monaco
with copies of any written notice from any insurance company or board of fire
underwriters (or other body exercising similar functions) of any defects or
inadequacies in the Property or requesting performance of any repairs,
alterations or other work to the Property. The Company shall promptly notify
Monaco of any event or occurrence or emergency not in the ordinary course of
business of the Company, and any material event involving the Company. Except as expressly contemplated by this
Agreement, the Company shall not, without the prior written consent of Monaco:
(a) Enter
into any commitment or transaction not in the ordinary course of business or
any commitment or transaction of the type described in Section 2.8
hereof;
(b) Enter
into, assume, become bound or obligated by, or extend or modify the terms of
any agreement, contract or commitment which (i) involves the payment of greater
than $10,000 per annum, (ii) extends for more than one year or (iii) involves
any payment or obligation to any affiliate of the Company;
(c) Prepay
any outstanding indebtedness;
(d) Transfer
to any Person any rights to the Intellectual Property;
(e) Amend
or otherwise modify (or agree to do so), except in the ordinary course of
business, or violate the terms of, any of the Company Contracts or Approvals;
(f) Commence,
settle, institute, prosecute, compromise any action, suit, proceeding,
arbitration, or governmental or regulatory investigation or audit or obtain the
release of any threatened action, suit, proceeding, arbitration, or
governmental or regulatory investigation or audit involving or relating to the
Company or its business or assets;
(g) Declare
or pay any dividends on or make any other distributions (whether in cash, stock
or property) in respect of any of its capital stock, or split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of
capital stock of the Company, or repurchase, redeem or otherwise acquire,
directly or indirectly, any shares of its capital stock (or options, warrants
or other rights exercisable therefor);
(h) Issue,
deliver or sell or authorize or propose the issuance, delivery or sale of, or
purchase or propose the purchase of, any shares of its capital stock or
securities convertible into, or subscriptions, rights, warrants or options to
acquire, or other agreements or commitments of any character obligating it to
issue any such shares or other convertible securities;
(i) Cause
or permit any amendments to its Articles of Incorporation or Bylaws;
(j) Acquire
or agree to acquire by merging or consolidating with, or by purchasing a
substantial portion of the assets of, or by any other manner, any business or
any
34
corporation, partnership, association or other
business organization or division thereof, or otherwise acquire or agree to
acquire any assets which are material, individually or in the aggregate, to the
business of the Company;
(k) Sell,
lease, license or otherwise dispose of any of its properties or assets, or
grant a security interest in any of such properties or assets;
(l) Incur
any indebtedness for borrowed money or guarantee any such indebtedness or issue
or sell any debt securities of the Company or guarantee any debt securities of
others;
(m) Hire
or extend an offer of employment with the Company to any individual;
(n) Change,
increase or amend the rate of remuneration or amount of bonuses or other benefits
or any other terms of employment of any employee;
(o) Grant
any severance or termination pay to any employee, or adopt any new severance
plan, amend or modify or alter in any manner any severance plan, agreement or
arrangement relating to any employee;
(p) Adopt
or amend any Plan;
(q) Revalue
any of its assets, including without limitation writing down the value of
inventory or writing off notes or accounts receivable other than in the
ordinary course of business;
(r) Pay,
discharge or satisfy, in an amount in excess of $25,000 (in any one case) or
$50,000 (in the aggregate), any claim, liability or obligation (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the
payment, discharge or satisfaction in the ordinary course of business of
liabilities reflected or reserved against in the Company Financial Statements
(or the notes thereto);
(s) Make
or change any material election in respect of Taxes, adopt or change any
accounting method in respect of Taxes, enter into any closing agreement, settle
any claim or assessment in respect of Taxes, or consent to any extension or
waiver of the limitation period applicable to any claim or assessment in
respect of Taxes;
(t) Enter
into any strategic alliance or joint marketing arrangement or agreement;
(u) grant
any loans to others or purchase debt securities of others or amend the terms of
any outstanding loan agreement;
(v) enter
into any agreement to purchase or sell any interest in real property, grant any
security interest in any real property or enter into any lease, sublease,
license or other occupancy agreement with respect to any real property;
(w) grant
nor otherwise create or consent to the creation of any easement, covenant,
restriction, assessment, encumbrance or lien affecting any of the Property;
35
(x) convey
any of the Property or any interest or rights therein, nor commit, permit or
suffer to exist any waste or nuisance on the Property;
(y) make
or permit to be made any material change in the Property;
(z) take
any action, or fail to take any action, that would reasonably be expected to
result in any of the representations and warranties set forth in ARTICLE II not being true and correct on and as of
the Closing Date with the same force and effect as if such representations and
warranties had been made on and as of the Closing Date; or
(aa) take,
or agree in writing or otherwise to take, any of the actions described in
Sections 4.1(a) through (z) above, or any other action that would prevent the
Company from performing or cause the Company not to perform its covenants
hereunder.
4.2 Other Offers
In the event the Company or ORA or any of the Principals shall receive
any offer or proposal with respect to any proposed agreement, contract or
commitment to sell to any Person other than Monaco or the Buyer all or any
portion of the Company’s business and properties or capital stock, whether by
merger, sale of assets, tender offer or otherwise (an “Alternate Transaction”), the Company and/or
ORA shall promptly (i) inform Monaco that such an offer or proposal has been
received and (ii) disclose to Monaco the identity of the party making the offer
or proposal and the terms of such offer or proposal. Thereafter, the Company and ORA shall consult with Monaco
regularly with regard to such offer or proposal and the status of discussions
and/or negotiations with respect thereto.
The Company and ORA will not enter into, and will prohibit the Company’s
and ORA’s officers from entering into, any agreement, contract or commitment
with respect to an Alternate Transaction without the prior written consent of
Monaco.
ARTICLE V
ADDITIONAL
AGREEMENTS
5.1 Securityholder Agreements.
(a) Agreement
to Retain Shares. ORA agrees not to
transfer (except as may be specifically required by court order), sell,
exchange, pledge or otherwise dispose of or encumber any shares of capital
stock of the Company beneficially owned by ORA as of the date hereof, or to
make any offer or agreement relating thereto, at any time prior to the
Expiration Date. As used herein, the
term “Expiration
Date” shall mean the earlier to occur of (i) the Closing Date, and
(ii) such date and time as this Agreement shall be terminated pursuant to
Article VIII hereof.
(b) Agreement
to Vote Shares. At every meeting of
the shareholders of the Company called with respect to any of the following,
and at every adjournment thereof, and on every action or approval by written
consent of the shareholders of the Company with respect to any of the
following, ORA shall vote the Shares:
(i) in favor of approval of this Agreement and the Acquisition and any
matter that could reasonably be expected to facilitate the Acquisition; and (ii) against approval of
any proposal made in opposition to or competition with consummation of the
36
Acquisition and against any merger, consolidation,
sale of assets, reorganization or recapitalization, with any party other than
with Monaco, Buyer and their affiliates and against any liquidation or winding
up of the Company.
(c) Additional
Documents. ORA hereby covenants and
agrees to execute and deliver any additional documents necessary or desirable,
in the reasonable opinion of Monaco or the Company, as the case may be, to
carry out the intent of this Agreement.
(d) Consent
and Waiver. ORA hereby gives any
consents or waivers that are reasonably required for the consummation of the
Acquisition under the terms of any agreements to which such ORA is a party or
pursuant to any rights ORA may have.
5.2 Resignation of Directors and Officers of
Company. The Company and ORA shall
use their reasonable best efforts to cause all of the directors and officers of
the Company to resign their respective positions effective as of the Closing,
and to cause each director and officer of the Company to deliver written notice
of such resignation to Buyer at the Closing.
5.3 Access.
The Company and ORA shall afford Monaco and its accountants, counsel,
consultants, and other representatives, full and complete access to the
Property and the Company’s books and records, personnel, business and
commercial relationships relating to the Company’s business, the Property and
the Project during normal business hours during the period from the date hereof
and prior to the Closing, including without limitation, to (i) all of the
Company’s and ORA’s properties, books, contracts, commitments, and records
related to the Company’s business, the Property and the Project, including without
limitation, access to the Property for the purpose of (a) conducting an
environmental audit or assessment that may include soil, groundwater, or
Hazardous Materials sampling as Monaco in its discretion deems necessary and
desirable to identify the presence or absence of Hazardous Materials, (b)
conducting such surveys, tests, inspections and examinations as Monaco desires
in regard to engineering and planning for future development of the Property,
and examining the current condition of the Property, and determining the
feasibility of future uses of the Property, including without limitation,
as-built surveys, engineering studies, and seismic tests and (c) communicating
with the Company’s personnel, consultants, Governmental Entities, and
representatives from financial institutions, (ii) other information concerning
the business, properties and personnel (subject to restrictions imposed by
applicable law) of the Company, including but not limited to documents relating
to the planning, permitting, construction and development costs (“Development Costs”) of the Project,
forecasted future Development Costs of the Project and actual and forecasted
sales of lots within the Project, and (iii) the records of the Company’s
independent accountants related to the Property or the Project. The Company
agrees to provide to Monaco and its accountants, counsel, consultants, and
other representatives copies of internal financial statements (including Tax
returns and supporting documentation) promptly upon request. No information or knowledge obtained in any
investigation pursuant to this Section 5.3 shall affect or be
deemed to modify any representation or warranty contained herein or the
conditions to the obligations of the parties to consummate the Acquisition.
5.4 Confidentiality. Each of the parties hereto hereby agrees to
keep such information or knowledge obtained in any investigation pursuant to Section 5.3,
or pursuant to the negotiation and execution of this Agreement or the
effectuation of the transactions contemplated hereby
37
(“Confidential Information”), confidential
and not to use such Confidential Information except as contemplated by this
Agreement; provided, however, that the foregoing shall not apply to information
or knowledge which (a) a party can demonstrate was already lawfully in its
possession prior to the disclosure thereof by the other party, (b) is
generally known to the public and did not become so known through any violation
of law, (c) became known to the public through no fault of such party,
(d) is later lawfully acquired by such party from other sources (and not
in violation of an obligation of confidentiality of such other sources with
respect to such information), (e) is required to be disclosed by order of
court or government agency with subpoena powers, (f) is disclosed in the course
of any litigation between any of the parties hereto or (g) is developed
independently by either party without reference to, or specific knowledge of,
the other parties’ Confidential Information.
5.5 Expenses.
Whether or not the Acquisition is consummated, all fees and expenses
incurred in connection with the Acquisition shall be the obligation of the
respective party incurring such fees; provided, however, all fees
and expenses incurred by the Company in connection with the Acquisition shall
be borne by ORA. Such expenses shall
include, without limitation, all legal, accounting, financial advisory,
consulting and all other fees and expenses of third parties incurred by a party
in connection with the negotiation and effectuation of the terms and conditions
of this Agreement and the transactions contemplated hereby.
5.6 Brokers’ or Finders’ Fees Monaco and Buyer will indemnify and hold the
Company and ORA harmless from any claim for brokers’ or finders’ fees arising
out of the transactions contemplated hereby by any Person claiming to have been
engaged by Monaco or Buyer. ORA will
indemnify and hold Monaco and Buyer harmless from any claim for brokers’ or finders’
fees arising out of the transactions contemplated hereunder by any Person
claiming to have been engaged by the Company or ORA.
5.7 Employee Matters. Effective as of the Closing, the Company
will terminate the Company’s employment of the Employees.
5.8 Consents.
The Company and ORA shall use their reasonable best efforts to obtain
the consents, waivers and approvals under any of the Company Contracts as may
be required in connection with the Acquisition so as to preserve all rights of,
and benefits to, the Company thereunder.
5.9 Reasonable Best Efforts. Subject to the terms and conditions provided
in this Agreement, each of the parties hereto shall use its reasonable best
efforts to take promptly, or cause to be taken, all actions, and to do promptly,
or cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated hereby, to obtain all necessary waivers, consents and approvals
and to effect all necessary registrations and filings and to remove any
injunctions or other impediments or delays, legal or otherwise, in order to
consummate and make effective the transactions contemplated by this Agreement
for the purpose of securing to the parties hereto the benefits contemplated by
this Agreement.
5.10 Notification of Certain Matters. The Company and ORA shall give prompt notice
to Monaco, and Monaco shall give prompt notice to the Company, of (i) the
occurrence or
38
nonoccurrence of any event, the occurrence or
nonoccurrence of which is likely to cause any representation or warranty of the
Company, ORA, Monaco or Buyer, respectively, contained in this Agreement to be
untrue or inaccurate at or prior to the Closing Date and (ii) any failure of
the Company, ORA, Monaco or Buyer, as the case may be, to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied
by it hereunder; provided, however, that the delivery of any notice pursuant to
this section shall not (a) limit or otherwise affect any remedies available to
the party receiving such notice or (b) constitute an acknowledgment or
admission of a breach of this Agreement.
No disclosure by any party pursuant to this Section 5.10
shall be deemed to amend or supplement the Disclosure Letter or prevent or cure
any misrepresentation, breach of warranty or breach of covenant.
5.11 Election to Supplement Sellers’
Disclosure Letter. ORA
is entitled to make a one time election (the “Supplemental
Disclosure Election”) to provide Monaco with a Supplement to the
Seller’s Disclosure Schedule (the “Disclosure
Supplement”) at least seven (7) days prior to the Closing Date or,
if Monaco provides less than nine (9) days notice of the Closing Date, within
two (2) days after notice of the Closing Date.
The Disclosure Supplement may contain only qualifications to ORA’s
representations and warranties that the Company and ORA had no knowledge of as
of the date of this Agreement.
Notwithstanding Section 5.10 hereof, the Disclosure
Supplement will be deemed to amend the Sellers’ Disclosure Schedule and to cure
any breach of any or the representations or warranties related to such
Disclosure Supplement. If ORA makes the
Supplemental Disclosure Election, Monaco may terminate this Agreement in its
sole an absolute discretion, whether or not the information contained in the
Disclosure Supplement is material.
5.12 Inspection Period. Notwithstanding the provisions of Section 5.9,
at any time between the date hereof and the date that is thirty (30) days
thereafter (the “Inspection Period”),
Monaco may terminate this Agreement in accordance with the provisions of this
Section if (a) Monaco is not satisfied, in Monaco’s sole and absolute
discretion, with the information obtained from its examination of the Property
or from documents delivered to it by the Company pursuant to the provisions of
this Agreement or otherwise obtained by the Monaco; or (b) Monaco is not
satisfied, in Monaco’s sole and absolute discretion, with the information
determined by it or its representatives’ inspections of or inquiries regarding
the Property or relevant financial records; or (c) if Monaco does not approve,
in Monaco’s sole and absolute discretion, the form and substance of each
Permitted Exception or is dissatisfied in any other way. This Agreement establishes an option which
can be exercised for any of the foregoing reasons if Monaco notifies the
Company of its dissatisfaction, in writing, on or prior to the last day of the
Inspection Period, which notice may, but need not, set forth the conditions
giving rise to Monaco’s dissatisfaction, if any. Monaco shall have the right at its option either immediately to
terminate this Agreement by written notice or to terminate this Agreement
immediately prior to the date specified in Section 8.1(b)(i) unless
those conditions specified in the notice of dissatisfaction have by then been
satisfied to Monaco’s satisfaction in Monaco’s sole and absolute discretion.
5.13 Risk of Loss. The Company shall bear all risk of loss or damage to the Property
by fire, other casualty, condemnation or Hazardous Materials prior to the
Closing. If before the Closing the
Property should be damaged or taken or threatened to be taken or Hazardous
Materials shall become present on the Property, or if access to or parking for
the Property is altered in any regard, Monaco may, at its option, (a) terminate
this Agreement by written notice delivered to the Company
39
at or prior to the Closing or (b) proceed to Closing
as provided under this Agreement, in which event Monaco shall receive any and
all insurance and condemnation proceeds attributable to the casualty or
condemnation.
5.14 Notice of Damage. If at any time prior to the Closing all or
any portion of the Property is destroyed or damaged as a result of fire or any
other cause whatsoever, or taken by condemnation or eminent domain or any
proceeding in condemnation or eminent domain or the Company or ORA become aware
of the threat of such taking, or Hazardous Materials shall become present on
the Property, the Company or ORA, as applicable, shall promptly give written
notice thereof to Monaco.
5.15 Public Disclosure. No party shall issue any statement or
communication to any third party (other than to their respective agents)
regarding the subject matter of this Agreement or the transactions contemplated
hereby, including, if applicable, the termination of this Agreement and the
reasons therefore, without the prior written consent of the other party, which
consent shall not be unreasonably withheld.
This Section 5.15 shall not apply to any disclosure deemed
necessary or advisable by Monaco (i) in order for Monaco to complete its due
diligence of the Company, (ii) in order to comply with applicable securities
laws, or to any disclosure required by other applicable law or (iii) to satisfy
the condition to Closing set forth in Section 6.2(c).
5.16 Closing Cost Schedule. Monaco and ORA shall mutually agree at least
one (1) business day prior to the Closing Date on a Closing Cost Schedule,
which shall identify the Closing Costs.
5.17 Additional Documents and Further
Assurances. Each party
hereto, at the request of another party hereto, shall execute and deliver such
other instruments and do and perform such other acts and things as may be
necessary or desirable for effecting completely the consummation of this
Agreement and the transactions contemplated hereby.
ARTICLE VI
CONDITIONS
TO THE ACQUISITION
6.1 Conditions to Obligations of Each
Party to Effect the Acquisition. The respective obligations of each party to this Agreement to
effect the transactions contemplated by this Agreement shall be subject to the
satisfaction at or prior to the Closing of the following conditions:
(a) No
Injunctions or Restraints; Illegality.
No temporary restraining order, preliminary or permanent injunction or
other order issued by any court of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the transactions
contemplated by this Agreement shall be in effect, nor shall any proceeding
brought by an administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign, seeking any of the foregoing
be pending; nor shall there be any action taken, or any statute, rule,
regulation or order enacted, entered, enforced or deemed applicable to the
Acquisition, which makes the consummation of the Acquisition illegal.
40
(b) Certain
Related Agreements. (i) All
conditions set forth in ARTICLE VII of each of the ORN Agreement and the
ORLV Agreement shall have been satisfied or waived and (ii) the ORN Acquisition
and the ORLV Acquisition shall have closed concurrently with the Closing.
(c) Federal
and State Filings and Approvals.
All applicable federal and state filing or licensing requirements, and
all required federal and state regulatory approvals, in connection with the
transactions contemplated by this Agreement shall have been satisfied or
obtained, respectively.
6.2 Additional Conditions to
Obligations of the Company and ORA. The obligations of the Company and ORA to consummate and effect
this Agreement and the transactions contemplated hereby shall be subject to the
satisfaction at or prior to the Closing of each of the following conditions,
any of which may be waived, in writing, exclusively by the Company and ORA:
(a) Representations,
Warranties and Covenants. The
representations and warranties of Monaco and Buyer in this Agreement shall be
true and correct in all material respects on and as of the Closing as though such
representations and warranties were made on and as of such time (other than
those representations and warranties which were qualified by terms such as
“material,” “materially,” or “Material Adverse Effect,” which representations
and warranties shall have been true and correct, as so qualified, in all
respects on and as of the Closing) and Monaco and Buyer shall have performed
and complied in all material respects with all covenants, obligations and
conditions of this Agreement required to be performed and complied with by
them.
(b) Certificate
of Monaco. ORA shall have been
provided with a certificate executed on behalf of the Monaco by one of its
executive officers to the effect that, as of the Closing:
(i) all
representations and warranties made by the Monaco and Buyer in this Agreement
are true and correct in all material respects (other than those representations
and warranties which were qualified by terms such as “material,” “materially,”
or “Material Adverse Effect,” which representations and warranties so qualified
shall have been true and correct in all respects on and as of the Closing);
(ii) all
covenants and obligations under this Agreement to be performed or complied with
by Monaco and Buyer on or prior to the Closing have been so performed or
complied with in all material respects; and
(iii) all conditions to the
obligations of the Company set forth in this Section 6.2 have been
satisfied (unless otherwise waived in accordance with the terms of this
Agreement.
(c) Payment
of BankAtlantic Loan. Monaco shall
have paid or caused to be paid to BankAtlantic the entire outstanding principal
and interest under the BankAtlantic Loan.
6.3 Additional Conditions to the
Obligations of Monaco and Buyer. The obligations of Monaco and Buyer to consummate and effect this
Agreement and the transactions contemplated
41
hereby shall be subject to the satisfaction at or
prior to the Closing of
each of the following conditions, any of which may be waived, in writing,
exclusively by Monaco:
(a) Representations,
Warranties and Covenants. The
representations and warranties of the Company and ORA in this Agreement were
true and correct on the date they were made and shall be true and correct in
all material respects on and as of the Closing as though such representations
and warranties were made on and as of such time (other than those
representations and warranties which were qualified by terms such as
“material,” “materially,” or “Material Adverse Effect,” which representations
and warranties shall have been true and correct, as so qualified, in all
respects on and as of the Closing) and each of the Company and ORA shall have
performed and complied in all material respects with all of their respective
covenants, obligations and conditions of this Agreement required to be
performed and complied with by them as of the Closing.
(b) Written
Resignations. All directors and
officers of the Company shall have delivered to Buyer written resignations from
their respective positions, effective as of the Closing.
(c) Certificates
of Company ORA. Monaco shall have
been provided with certificates executed by ORA and executed on behalf of the
Company by its President and Secretary to the effect that, as of the Closing:
(i) all
representations and warranties made by the party providing the certificate in
this Agreement are true and correct in all material respects (other than those
representations and warranties which were qualified by terms such as
“material,” “materially,” or “Material Adverse Effect,” which representations
and warranties shall have been true and correct as so qualified in all respects
on and as of the Closing);
(ii) all
covenants and obligations under this Agreement to be performed or complied with
by the Company and the party providing the certificate on or prior to the
Closing have been so performed or complied with in all material respects; and
(iii) all conditions to the
obligations of Monaco and Buyer set forth in this Section 6.3 have been
satisfied (unless otherwise waived in accordance with the terms of this
Agreement.)
(d) Secretary’s
Certificate of Company. Monaco
shall have been provided with a certificate executed on behalf of the Company
by its Secretary to the effect that, as of the Closing:
(i) the
Company has provided Monaco with complete and accurate copies of the Company’s
Articles of Incorporation and Bylaws, each as amended and corrected to date;
(ii) the
Company has provided Monaco with complete and accurate copies of resolutions of
ORA’s and the Company’s Boards of Directors approving the Acquisition and the
transactions contemplated by this Agreement; and
(iii) the Company has provided
Monaco with complete and accurate copies of resolutions of its shareholders
approving the Acquisition and the transactions contemplated by this Agreement.
42
(e) Incumbency
Certificate. The Company has
provided Buyer with a certificate as to the incumbency of signatories and
genuineness of signatures.
(f) Claims. No claims shall have been asserted (whether
or not asserted in litigation) which might materially and adversely affect the
consummation of the transactions contemplated hereby or the business assets
(including intangible assets), financial condition or results of operations of
the Company.
(g) Third
Party Consents. Any and all
consents, waivers, and approvals listed pursuant to Schedule 6.3(g)
shall have been obtained.
(h) Soper
Opinion. Monaco shall have received
a legal opinion from Soper & Oakley, PLLC, legal counsel to the Company and
ORA, substantially in the form of Exhibit F hereto.
(i) Tribler
Opinion. Monaco shall have received
a legal opinion from Tribler Orpett & Crone, Professional Corporation,
legal counsel to the Principals, substantially in the form of Exhibit G
hereto.
(j) No
Material Adverse Changes. There
shall not have occurred any material adverse change in the business, assets
(including intangible assets), results of operations, liabilities (contingent
or accrued) or financial condition of the Company.
(k) Litigation. There shall be no action, suit, claim or
proceeding of any nature pending, or overtly threatened, against the Buyer or
the Company, their respective properties or any of their officers or directors,
arising out of, or in any way connected with, the Acquisition or the other
transactions contemplated by the terms of this Agreement.
(l) FIRPTA
Compliance. The Company shall have
delivered to Monaco a properly executed statement in a form reasonably
acceptable to Monaco for purposes of satisfying Monaco’s and Buyer’s
obligations under Treasury Regulation Section 1.1445-2(b).
(m) Intercompany
Payables. ORA shall have provided
evidence satisfactory to Monaco that all Intercompany Payables have been
permanently and irrevocably forgiven.
(n) Title
Insurance. Buyer shall have obtained an ALTA form of owner’s title insurance
policy with the survey exception deleted insuring Buyer’s fee simple title to
the Property following the Closing at standard rates in the amount of $12
million, subject only to the Permitted Exceptions, and including zoning and
subdivision endorsements and such endorsements as Buyer may require, but
excluding mechanics’ and materialmen’s liens coverage (the “Title Policy”).
(o) Title
Affidavits. The Company and ORA
shall have provided such affidavits and other documents as are reasonably
required as a condition to issuing the Title Policy without the survey
exception or other exceptions, except the Permitted Exceptions and the
preprinted mechanic’s lien exception, including, without limitation, an owner’s
affidavit and gap indemnity.
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(p) Loan
Documents. Buyer shall have
received pay-off statements acceptable to Monaco and the title company issuing
the Title Policy regarding the BankAtlantic Loan and any liens to be satisfied
on Closing, and such other documents and instruments (including, without
limitation, requests for reconveyance or substitutions of trustee and
reconveyances of deeds of trust) as the title company issuing the Title Policy
may require as a condition to insuring Buyer’s title to the Property free and
clear of such deeds of trust.
(q) Intercompany
Receivables. The Company shall have
been paid all amounts owed to it pursuant to Intercompany Receivables.
(r) Permits. Any Governmental Authorization relating to
the Project issued to any person or entity other than the Company shall have
been transferred to or re-issued in the name of the Company.
(s) Guaranty. Each of the parties to the Guaranty shall
have executed and delivered the Guaranty.
(t) Affiliates
Agreement. Each of the parties to
the Affiliates Agreement shall have executed and delivered the Affiliates
Agreement.
(u) Management
Agreement. Each of the parties to
the Management Agreement shall have executed and delivered the Management
Agreement.
(v) Employees. The Company shall have terminated the
Company’s employment of all Employees.
(w) Trademark
Agreement. ORA and the Company
shall have executed and delivered the Trademark Agreement.
(x) Warranties. ORA shall have provided to Monaco all
Subcontractors Warranties to the extent that ORA or the Company or their
affiliates or consultants possess such warranties.
(y) Schlecht
Opinion. Monaco shall have received
a legal opinion from Schlecht, Shevlin & Shoenberger, a Law Corporation,
legal counsel to the Company and ORA, substantially in the form of Exhibit H
hereto.
ARTICLE VII
SURVIVAL
OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
7.1 Survival of Representations and
Warranties. All
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement, shall survive the Closing for three years, provided,
however, that (i) the representations and warranties in Section 2.2(b)
relating to title matters and the representations and warranties in Sections 2.9
relating to tax matters
44
shall survive the Closing and shall not terminate and
(ii) the representations and warranties in Sections 2.19 and 2.26(e)
relating to environmental matters and hazardous substances shall survive the
Closing and shall terminate at the close of business on the 120th
day following the expiration of the applicable statute of limitations with
respect to the environmental liabilities in question.
7.2 Indemnification.
(a) General
Indemnification. ORA covenants and agrees to indemnify, defend, protect and
hold harmless Monaco, Buyer and their affiliates (each an “Indemnified Party”) from, against and in
respect of any claim, loss, expense, liability or other damage (including
without limitation any liability of Monaco, Buyer or any of their affiliates
for expenses incurred by the Company related to the transactions contemplated
hereby), including reasonable attorneys’ fees, to the extent of the amount of
such claim, loss, expense, liability or other damage that Monaco, Buyer or any
of their affiliates have incurred or reasonably and in good faith anticipates
incurring (i) by reason of the inaccuracy or breach of any representation or
warranty of the Company and ORA contained herein or in any certificate, instrument,
or other document delivered pursuant to this Agreement, subject to Section 7.1,
(ii) by reason of a breach of any covenant or agreement, of the Company and ORA
contained herein, (iii) relating to ORA’s and Company’s Unknown Environmental
Liabilities, but only to the extent of any Environmental Remediation Costs,
(iv) by reason of Company’s Benefit Liabilities, (v) relating to Taxes
attributable to ORA or a member of ORA’s affiliated group (as defined in
Section 1504(a)) of the Code (other than the Company) as a result of the
Company having been a member of ORA’s affiliated group or having filed a
consolidated (or similar) return with the ORA affiliated group or (vi) relating to any and all payroll,
employee related or income taxes whensoever arising with respect to or relating
to the Company that are attributable to any taxable period ending on or prior
to the Closing Date and, in case of a taxable period that includes, but does
not end on the Closing Date, the portion of such taxable period that ends on
the Closing Date (all of the foregoing collectively “Losses”); provided, however, that
Monaco and Buyer shall only have the right to be indemnified against Losses
described in clauses (i), (ii) and (iii) above if, and to the extent that, the
aggregate of the Losses (as such term is defined in each of this Agreement, the
ORN Agreement and the ORLV Agreement) under this Agreement, the ORN Agreement
and the ORLV Agreement exceeds $250,000 (though the right to offset Losses set
forth in Section 9.2(b) shall apply to all Losses and not solely to
the amount of Losses above and beyond such $250,000 threshold). After the Closing, ORA’s aggregate
contractual liability for Losses under this Agreement, the ORN Agreement and
the ORLV Agreement shall not exceed the Indemnification Cap; provided, however,
that nothing herein shall limit any noncontractual remedy for fraud. For the
purpose of determining the amount of any Loss for which any of the indemnified
parties may be entitled to indemnification by ORA pursuant to this ARTICLE
VII, any representation or warranty contained in this Agreement or in any
certificate, instrument, or other document delivered pursuant to this Agreement
that is qualified by a term or terms such as “material,” “materially,” or
“Material Adverse Effect,” shall be deemed made or given without such
qualification.
(b) Exclusive
Remedy. Except as provided in Section 10.10
and except for remedies relating to fraud, the provisions of this ARTICLE
VII shall constitute the sole and exclusive remedy of the Indemnified
Parties with respect to any Losses.
45
(c) Indemnification
Procedures. All claims for
indemnification under this ARTICLE VII shall be asserted and resolved as
follows:
(i) Indemnification
Claims. In the event that an
Indemnified Party has a claim for Losses hereunder which does not involve claim
being asserted against or sought to be collected by a third party, Monaco shall
deliver to ORA and each of the Principals a certificate signed by any officer
of Monaco (an “Officer’s Certificate”):
(A) stating that Monaco (or an Indemnified Party) has paid or properly
accrued or reasonably and in good faith anticipates that it will have to pay or
accrue Losses, and (B) specifying in reasonable detail the individual items of
Losses included in the amount so stated, the date each such item was paid or
properly accrued, or the basis for such anticipated liability, and the nature
of the misrepresentation, breach of warranty or claim to which such item is
related. If ORA does not notify Monaco
in writing within thirty (30) days from the date of receipt of the Officer’s
Certificate that ORA objects to any claim or claims made in any Officer’s
Certificate, the amount of the claim for Losses contained in the Officer’s
Certificate shall be conclusively deemed a liability of the indemnifying party
hereunder. Notwithstanding the
foregoing, Monaco may not deliver an Officer’s Certificate to ORA to seek
indemnification from ORA pursuant to this Section 7.2 for Losses relating to
the inaccuracy or breach of any representation or warranty of ORA contained
herein or in any certificate, instrument, or other document delivered pursuant
to this Agreement after the applicable representations or warranties have terminated
in accordance with Section 7.1.
(ii) Resolution
of Conflicts.
(1) In
case ORA shall so object in writing to any claim or claims made in any
Officer’s Certificate, ORA and Monaco shall attempt in good faith to agree upon
the rights of the respective parties with respect to each of such claims. If ORA and Monaco should so agree, a
memorandum setting forth such agreement shall be prepared and signed by both
parties.
(iii) If no such agreement can
be reached after good faith negotiation, either Monaco or ORA may demand
arbitration of the matter as set forth below in Section 7.3 unless
the amount of the damage or loss is at issue in pending litigation with a third
party, in which event arbitration shall not be commenced until such amount is
ascertained by court judgment or settlement of the parties to the litigation or
Monaco and ORA agree to arbitration.
(d) Third-Party
Claims. In the event Monaco becomes
aware of a third-party claim which Monaco believes may result in a claim by
Monaco for indemnification pursuant to this ARTICLE VII, Monaco shall
notify ORA of such claim, and ORA shall be entitled, at its expense, to
participate in any defense of such claim.
Monaco shall have the right in its sole discretion to settle any such
claim; provided, however, that except with the consent of ORA, no settlement of
any such claim with third-party claimants shall alone be determinative of the
amount of any claim against ORA under this Section 7.2. In the event that ORA has consented to any
such settlement, ORA shall have no power or authority to object under any
provision of this ARTICLE VII to the amount of any claim by Monaco
against ORA for indemnification with respect to such settlement.
46
7.3 Arbitration.
(a) The
resolution of any disputes arising under this ARTICLE VII shall be
settled by Arbitration. Such
arbitration shall be conducted by three arbitrators. Monaco shall select one arbitrator and ORA shall select one
arbitrator. The two arbitrators so
selected shall select a third arbitrator.
The decision of a majority of the three arbitrators as to the validity
and amount of any claim in an Officer’s Certificate shall be binding and
conclusive upon the parties to this Agreement.
Judgment upon any award
rendered by the arbitrators may be entered in any court having
jurisdiction. Any such arbitration
shall be held in Lane County, Oregon under the rules then in effect of the
American Arbitration Association. For purposes of this subsection, in any arbitration
hereunder in which any claim or the amount thereof stated in the Officer’s
Certificate is at issue, Monaco shall be deemed to be the Non-Prevailing Party
in the event that the arbitrators award Monaco less than the sum of one half of
the disputed amount plus any amounts not in dispute; otherwise, ORA shall be
deemed to be the Non-Prevailing Party.
Each party shall pay its own expenses and one-half the fees of each
arbitrator and the administrative fee of the American Arbitration Association;
provided, however, that the arbitrators may require the Non-Prevailing Party to
pay the expenses, including without limitation, reasonable attorneys’ fees and
costs, incurred by the other party to the arbitration if the arbitrators find
that the arbitration action was brought or defended other than in good faith
and with a reasonable basis in fact by the Non-Prevailing Party.
7.4 Guaranty.
In the event that after the procedures set forth above have been
followed, an Indemnified Party is entitled to indemnification pursuant to this ARTICLE
VII, Monaco may, in its sole discretion, seek payment of such amount from
either ORA pursuant to this Agreement or from the Principals pursuant to the
Guaranty or both, provided that no Indemnified Party shall be entitled to
receive in payment in aggregate in excess of the amount it is entitled to under
this ARTICLE VII.
7.5 Subrogation. In the event ORA pays any Indemnified Party for Losses pursuant
to Section 7.2 in connection with any third party claim, ORA shall
be subrogated to the extent of such payment to all of the rights of recovery of
the Company, Monaco and Buyer, which shall cooperate with ORA to enable ORA to
secure such rights and to effectively to bring suit to enforce such rights.
7.6 Claims Made by ORA. If ORA brings an action against Monaco or
Buyer relating to (i) the inaccuracy or breach of any representation or
warranty of Monaco and Buyer contained herein or in any certificate,
instrument, or other document delivered pursuant to this Agreement, subject to Section 7.1,
or (ii) a breach of any covenant or agreement, of Monaco and Buyer contained
herein, then ORA may recover from Monaco or Buyer for any loss, expense,
liability or other damage (including without limitation any liability of ORA or
any of its affiliates for expenses incurred by ORA related to the transactions
contemplated hereby), including reasonable attorney’s fees, arising from (i) or
(ii) above; provided, however,
that ORA and its affiliates shall only have the right to such recovery if, and
to the extent that, Monaco’s and Buyer’s aggregate contractual liability under
this Agreement, the ORN Agreement and the ORLV Agreement exceeds $250,000. After the Closing, Monaco’s and Buyer’s
aggregate contractual liability under this Agreement, the ORN Agreement and the
ORLV Agreement shall not exceed the Indemnification Cap; provided, however,
that nothing herein shall limit any noncontractual remedy for fraud.
47
ARTICLE VIII
TERMINATION,
AMENDMENT AND WAIVER
8.1 Optional Termination. Except as provided in Section 8.3
below, this Agreement may be terminated and the Acquisition abandoned at any
time prior to the Closing:
(a) by
mutual consent of ORA and Monaco;
(b) by
Monaco or ORA if: (i) the Closing has
not occurred on or before December 15, 2002; (ii) there shall be a final
nonappealable order of a federal or state court in effect preventing
consummation of the Acquisition; or (iii) there shall be any statute, rule,
regulation or order enacted, promulgated or issued or deemed applicable to the
Acquisition by any Governmental Entity that would make consummation of the
Acquisition illegal;
(c) by
Monaco if there shall be any action taken, or any statute, rule, regulation or
order enacted, promulgated or issued or deemed applicable to the Acquisition by
any Governmental Entity, which would:
(i) prohibit or materially and adversely restrict Buyer’s or the
Company’s ownership or operation of all or a portion of the business of the
Company or (ii) compel Buyer or the Company to dispose of or hold separate all
or a portion of the business or assets of the Company or Buyer as a result of
the Acquisition;
(d) by
Monaco if it is not in material breach of its obligations under this Agreement
and there has been a material breach of any representation, warranty, covenant
or agreement contained in this Agreement on the part of the Company or ORA and
such breach has not been cured within ten (10) business days after written
notice to the Company (provided that no cure period shall be required for a
breach which by its nature cannot be cured);
(e) by
Monaco if there shall have occurred any event or condition of any character
that has had or is reasonably likely to have a material adverse effect on the
business or operations of the Company;
(f) by
the Company or ORA if they are not in material breach of their obligations
under this Agreement and there has been a material breach of any
representation, warranty, covenant or agreement contained in this Agreement on
the part of Monaco and such breach has not been cured within ten (10) business
days after written notice to Monaco (provided that, no cure period shall be
required for a breach which by its nature cannot be cured);
(g) pursuant
to Sections 5.11, 5.12, or 5.13 of this Agreement.
Where action is taken to
terminate this Agreement pursuant to this Section 8.1, it shall be
sufficient for such action to be authorized by the Board of Directors (as
applicable) of the party taking such action.
48
8.2 Automatic Termination. Except as provided in Section 8.3
below, this Agreement shall terminate and the Acquisition shall be abandoned if
at any time prior to the Closing either the ORLV Agreement or the ORN Agreement
is terminated pursuant to Section 8.1 of such agreements.
8.3 Effect of Termination. In the event of termination of this
Agreement as provided in Sections 8.1 or 8.2, this Agreement
shall forthwith become void and there shall be no liability or obligation on
the part of Monaco, Buyer, the Company, or ORA, or their respective officers,
directors or shareholders, if applicable, provided that each party shall remain
liable for any breaches of this Agreement prior to its termination; and
provided further that, the provisions of Sections 5.4, 5.5, 5.6, this Section 8.3 and ARTICLE X of this Agreement shall
remain in full force and effect and survive any termination of this Agreement.
8.4 Amendment.
Except as may otherwise required by applicable law after the
shareholders of the Company approve this Agreement, this Agreement may be
amended at any time by execution of an instrument in writing signed by Monaco,
Buyer, the Company and ORA.
8.5 Extension; Waiver. At any time prior to the Closing, Monaco and
Buyer, on the one hand, and the Company and ORA, on the other, may, to the
extent legally allowed, (i) extend the time for the performance of any of the
obligations of the other party hereto, (ii) waive any inaccuracies in the
representations and warranties made to such party contained herein or in any
document delivered pursuant hereto, and (iii) waive compliance with any of the
agreements or conditions for the benefit of such party contained herein. Any agreement on the part of a party hereto
to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
ARTICLE IX
POST-CLOSING
COVENANTS
9.1 Phase I Financing and Completion. Buyer shall use commercially reasonable
efforts to provide or obtain the financing necessary for, and to complete, (i)
the construction of the Improvements required to complete Phase I and (ii) the
sale to third party users on terms acceptable to Buyer in its sole and absolute
discretion all of the lots in Phase I.
Notwithstanding the foregoing, Buyer shall have the right at any time,
in its sole discretion, to cease all efforts to complete the Phase I
Improvements and/or to sell the lots and elect instead to use commercially
reasonable efforts to sell all or any portion of the Resale Property (including
all or any portion of Phase I) on terms acceptable to Buyer in its sole and
absolute discretion, in which case the provisions of Section 9.5
shall apply.
9.2 Phase I Profits.
(a) Allocation
of Phase I Profits. Within ten (10)
days after all of the Improvements required to complete Phase I have been
completed and all of the lots in Phase I have been sold to third party users
(the “Phase I Completion Date”),
Buyer or Monaco shall pay to ORA an amount equal to 20% of the Phase I Net
Profit less any amounts paid to ORA pursuant to Section 9.2(c). As used herein, the date that a lot is sold
shall mean the date the escrow for such sale is closed (or if
49
there is no escrow, upon recordation of the deed). “Phase I Net Profit” shall mean all cash
proceeds received by Buyer from the original sales by Buyer of developed lots
in Phase I after the Closing Date, less:
(i)
all amounts paid by Buyer or Monaco to repay the BankAtlantic Loan (including
accrued interest) and pay off
any delinquent taxes, mechanics’ liens and default judgments, including any
prepayment penalties, legal fees, processing fees, recording fees and any other
associated costs;
(ii) all
amounts paid by Buyer or Monaco to secure the Replacement Loan, if any,
including legal fees, processing fees, recording fees and any other associated;
(iii) the Carryover Loss;
(iv) all
interest that has accrued under the Replacement Loan up to and including the
Phase I Completion;
(v) all
reasonable overhead costs of Monaco and Buyer relating to the operation and
management of the Property from the Closing Date to the Phase I Completion;
(vi) the
Monaco Loan Cost as of the Phase I Completion Date;
(vii) all amounts outstanding
(including interest) under any other loans to the Company as of the
Phase I Completion Date;
(viii) all Losses to the extent that
Buyer or Monaco are unable to seek indemnification against ORA pursuant to Section 7.2(a)
due to the fact that the aggregate amount of Losses is less than $250,000;
(ix) all
Tax liabilities arising from the sale of lots in Phase I;
(x) all
taxes paid by Buyer under Section 1.7 hereof;
(xi) all
liabilities incurred or costs paid by the Company under the Management Agreement
and the Trademark Agreement up to and including the Phase I Completion Date;
and
(xii) all liabilities incurred
or costs paid by Buyer, Monaco or the Company in connection with the operation
and completion of the Project from the Closing Date to the Phase I Completion
Date, including all payments to satisfy contractors, consultants, management
companies, taxing authorities and vendors, and assessments, insurance, permit
and land use fees and approvals, attorneys’ fees and payroll costs for
employees of Monaco or Buyer relating to services provided on the Project and
including in connection with the sale of the lots in the phase, including
broker commissions, transfer taxes, escrow costs, title costs, survey fees,
attorneys’ fees and other closing costs.
50
Notwithstanding the
foregoing, (A) all items listed in (i), (ii) and (iv) through (xii) shall not
be included in the foregoing calculation to the extent that such amounts have
already been accounted for in a prior Net Profit Calculation and (B) if the
Company conveys or sells any lots in Phase I to Buyer or any affiliate of
Buyer, then for the purpose of the Net Profit Calculation in this Section
9.2(a), Buyer will be deemed to have sold such lots and to have received an
amount equal to the market value of such lots.
(b) Carryover
Loss. If the Phase I Net Profit
calculation set forth in Section 9.2(a) above yields a negative
number, then (i) ORA shall receive no payments with respect to the completion of
Phase I and, (ii) to the extent that such calculation yields a negative amount,
such negative amount shall be reflected in the Net Profit Calculation of the
next Sale as a Carryover Loss.
(c) Estimated
Phase I Net Profit. Within thirty
(30) days after 95% all of the lots in Phase I have been sold to third party
users, Buyer or Monaco shall pay to ORA an amount equal to the lesser of (i)
Buyer’s conservative good faith estimate of what 20% of the Phase I Net Profit
will be upon sale of all the lots in Phase I and (ii) 20% of the Phase I Net
Profit resulting from the Net Profit Calculation contained in Section 9.2(a)
assuming that the sale of 95% of the lots in Phase I was the sale of all the
lots in Phase I.
9.3 Phase II Obligations.
(a) Option
with Respect to Phase II. Buyer
may, in its sole and absolute discretion, (i) commence development of Phase II
and sell lots on Phase II on terms acceptable to Buyer in its sole and absolute
discretion or, (ii) at any time, sell all or any portion of the Resale Property
(including all or any portion of Phase II).
If Buyer develops Phase II, then within ten (10) days after all of the
Improvements required to complete Phase II have been constructed and all of the
lots in Phase II have been sold to third party users (the “Phase II Completion Date”), Buyer or Monaco
shall pay to ORA the amounts described in Section 9.3(b). If at any
time Buyer determines that it will not develop or that it will cease developing
Phase II, then Buyer shall use commercially reasonable efforts to sell all or
any portion of the Resale Property on terms acceptable to Buyer in its sole and
absolute discretion. Profits from any
Resale shall be distributed in accordance with Section 9.5.
(b) Developed
Phase II Profit Participation. If
Buyer develops Phase II, then after the Phase II Completion Date, Buyer shall
pay to ORA an amount equal to 20% of the Phase II Net Profit less any amounts
paid to ORA pursuant to Section 9.3(d).
“Phase II Net Profit” shall
mean all cash proceeds received by Buyer from the original sales by Buyer of
developed lots in Phase II after the Closing Date, less:
(i) all
amounts paid by Buyer or Monaco to repay the BankAtlantic Loan (including
accrued interest) and pay off any delinquent taxes, mechanics’ liens and default
judgments, including any prepayment penalties, legal fees, processing fees,
recording fees and any other associated costs;
51
(ii) all
amounts paid by Buyer or Monaco to secure the Replacement Loan, if any,
including legal fees, processing fees, recording fees and any other associated
costs;
(iii) the Carryover Loss;
(iv) all
interest that has accrued under the Replacement Loan up to and including the
Phase II Completion Date;
(v) all
reasonable overhead costs of Monaco and Buyer relating to the operation and
management of the Property from the Closing Date to the Phase II Completion
Date;
(vi) the
Monaco Loan Cost as of the Phase II Completion Date;
(vii) all amounts outstanding
(including interest) under any other loans to the Company as of the Phase II
Completion Date;
(viii) all Losses to the extent that
Buyer or Monaco are unable to seek indemnification against ORA pursuant to Section 7.2(a)
due to the fact that the aggregate amount of Losses is less than $250,000;
(ix) all
Tax liabilities arising from the sale of lots in Phase II;
(x) all
taxes paid by Buyer under Section 1.7 hereof;
(xi) all
liabilities incurred or costs paid by the Company under the Management
Agreement and the Trademark Agreement up to and including the Phase II
Completion Date; and
(xii) all liabilities incurred
or costs paid by Buyer, Monaco or the Company in connection with the operation
and completion of the Project from the Closing Date to the Phase II Completion
Date, including all payments to satisfy contractors, consultants, management
companies, taxing authorities and vendors, and assessments, insurance, permit
and land use fees and approvals, attorneys’ fees and payroll costs for
employees of Monaco or Buyer relating to services provided on the Project and
including in connection with the sale of the lots in the phase, including
broker commissions, transfer taxes, escrow costs, title costs, survey fees,
attorneys’ fees and other closing costs.
Notwithstanding the
foregoing, (A) all items listed in (i), (ii) and (iv) through (xii) shall not
be included in the foregoing calculation to the extent that such amounts have
already been accounted for in a prior Net Profit Calculation and (B) if the
Company conveys or sells any lots in Phase II to Buyer or any affiliate of
Buyer, then for the purpose of the Net Profit Calculation in this Section
9.3(a), Buyer will be deemed to have sold such lots and to have received an
amount equal to the market value of such lots.
(c) Carryover
Loss. If the Phase II Net Profit
calculation set forth in Section 9.3(a) above yields a negative
number, then (i) ORA shall receive no payments with respect to the completion
of Phase II and, (ii) to the extent that such calculation yields a negative
amount,
52
such negative amount shall be reflected in the Net
Profit Calculation of the next Sale as a Carryover Loss.
(d) Estimated
Phase II Net Profit. Within thirty
(30) days after 95% all of the lots in Phase I have been sold to third party
users, Buyer or Monaco shall pay to ORA an amount equal to the lesser of (i)
Buyer’s conservative good faith estimate of what 20% of the Phase II Net Profit
will be upon sale of all the lots in Phase II and (ii) 20% of the Phase II Net
Profit resulting from the Net Profit Calculation contained in Section 9.3(a)
assuming that the sale of 95% of the lots in Phase II was the sale of all the
lots in Phase II.
9.4 Phase III Obligations.
(a) Option
with Respect to Phase III. Buyer
may, in its sole and absolute discretion, (i) commence development of Phase III
and sell lots on Phase III on terms acceptable to Buyer in its sole and
absolute discretion or, (ii) at any time, sell all or any portion of the Resale
Property (including all or any portion of Phase III). If Buyer develops Phase III, then within ten (10) days after all
of the Improvements required to complete Phase III have been constructed and
all of the lots in Phase III have been sold to third party users (the “Phase III Completion Date”), Buyer or
Monaco shall pay to ORA the amounts described in Section 9.4(b). If
at any time Buyer determines that it will not develop or that it will cease
developing Phase III, then Buyer shall use commercially reasonable efforts to
sell all or any portion of the Resale Property on terms acceptable to Buyer in
its sole and absolute discretion.
Profits from any Resale shall be distributed in accordance with Section 9.5.
(b) Developed
Phase III Profit Participation. If
Buyer develops Phase III, then after the Phase III Completion Date, Buyer shall
pay to ORA a sum equal to 20% of the Phase III Net Profit less any amounts paid
to ORA pursuant to Section 9.2(c). “Phase III Net Profit” shall mean all cash
proceeds received by Buyer from the original sales by Buyer of developed lots
in Phase III after the Closing Date, less:
(i) all
amounts paid by Buyer or Monaco to repay the BankAtlantic Loan (including
accrued interest) and pay off any delinquent taxes, mechanics’ liens and
default judgments, including any prepayment penalties, legal fees, processing
fees, recording fees and any other associated costs;
(ii) all
amounts paid by Buyer or Monaco to secure the Replacement Loan, if any,
including legal fees, processing fees, recording fees and any other associated
costs;
(iii) the Carryover Loss;
(iv) all
interest that has accrued under the Replacement Loan up to and including the
Phase III Completion Date;
(v) all
reasonable overhead costs of Monaco and Buyer relating to the operation and
management of the Property from the Closing Date to the Phase III Completion
Date;
(vi) the
Monaco Loan Cost as of the Phase III Completion Date;
53
(vii) all amounts outstanding
(including interest) under any other loans to the Company as of the Phase III
Completion Date;
(viii) all Losses to the extent that
Buyer or Monaco are unable to seek indemnification against ORA pursuant to Section 7.2(a)
due to the fact that the aggregate amount of Losses is less than $250,000;
(ix) all
Tax liabilities arising from the sale of lots in Phase III;
(x) all
taxes paid by Buyer under Section 1.7 hereof;
(xi) all
liabilities incurred or costs paid by the Company under the Management
Agreement and the Trademark Agreement up to and including the Phase III
Completion Date; and
(xii) all liabilities incurred
or costs paid by Buyer, Monaco or the Company in connection with the operation
and completion of the Project from the Closing Date to the Phase III Completion
Date, including all payments to satisfy contractors, consultants, management
companies, taxing authorities and vendors, and assessments, insurance, permit
and land use fees and approvals, attorneys’ fees and payroll costs for
employees of Monaco or Buyer relating to services provided on the Project and
including in connection with the sale of the lots in the phase, including
broker commissions, transfer taxes, escrow costs, title costs, survey fees,
attorneys’ fees and other closing costs.
Notwithstanding the
foregoing, (A) all items listed in (i), (ii) and (iv) through (xii) shall not
be included in the foregoing calculation to the extent that such amounts have
already been accounted for in a prior Net Profit Calculation and (B) if the
Company conveys or sells any lots in Phase III to Buyer or any affiliate of
Buyer, then for the purpose of the Net Profit Calculation in this Section
9.4(a), Buyer will be deemed to have sold such lots and to have received an
amount equal to the market value of such lots.
(c) Carryover
Loss. If the Phase III Net Profit
calculation set forth in Section 9.4(a) above yields a negative
number, then (i) ORA shall receive no payments with respect to the completion
of Phase III and, (ii) to the extent that such calculation yields a negative
amount, such negative amount shall be reflected in the Net Profit Calculation
of the next Sale as a Carryover Loss.
(d) Estimated
Phase III Net Profit. Within thirty
(30) days after 95% all of the lots in Phase III have been sold to third party
users, Buyer or Monaco shall pay to ORA an amount equal to the lesser of (i)
Buyer’s conservative good faith estimate of what 20% of the Phase III Net
Profit will be upon sale of all the lots in Phase III and (ii) 20% of the Phase
III Net Profit resulting from the Net Profit Calculation contained in Section
9.4(a) assuming that the sale of 95% of the lots in Phase III was the sale of
all the lots in Phase III.
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9.5 Resales.
(a) Resale
Profit Participation. If Buyer
sells all or any portion of a Resale Property (other than the sale of developed
lots to third party users in any of Phase I, Phase II or Phase III), Buyer or
Monaco shall pay to ORA upon the close of escrow of such Resale (or if there is
no escrow, upon recordation of the deed) (a “Resale
Closing Date”) an amount equal to 20% of the Resale Net Profit. “Resale
Net Profit” shall mean all cash proceeds received by Buyer from a
Resale after the Closing Date, less:
(i) all
amounts paid by Buyer or Monaco to repay the BankAtlantic Loan (including
accrued interest) and pay off any delinquent taxes, mechanics’ liens and
default judgments, including any prepayment penalties, legal fees, processing
fees, recording fees and any other associated costs;
(ii) all
amounts paid by Buyer or Monaco to secure the Replacement Loan, if any,
including legal fees, processing fees, recording fees and any other associated
costs;
(iii) the Carryover Loss
(iv) all
interest that has accrued under the Replacement Loan up to and including such
Resale Closing Date;
(v) all
reasonable overhead costs of Monaco and Buyer relating to the operation and
management of the Property from the Closing Date to such Resale Closing Date;
(vi) the
Monaco Loan Cost as of such Resale Closing Date;
(vii) all amounts outstanding
(including interest) under any other loans to the Company as of such Resale
Closing Date;
(viii) all Losses to the extent that
Buyer or Monaco are unable to seek indemnification against ORA pursuant to Section 7.2(a)
due to the fact that the aggregate amount of Losses is less than $250,000;
(ix) all
Tax liabilities arising from such Resale
(x) all
taxes paid by Buyer under Section 1.7 hereof.
(xi) all
liabilities incurred or costs paid by the Company under the Management
Agreement and the Trademark Agreement up to and including such Resale Closing
Date;
(xii) all liabilities incurred
or costs paid by Buyer, Monaco or the Company in connection with the operation
and completion of the Project from the Closing Date to the such Resale Closing
Date, including all payments to satisfy contractors, consultants, management
companies, taxing authorities and vendors, and assessments, insurance, permit
and land use fees and approvals, attorney’s fees and payroll costs for
employees of Monaco or Buyer relating to services provided on the Project and
including in connection with the sale of the lots in the Project, including
55
broker commissions, transfer taxes, escrow costs,
title costs, survey fees, attorneys’ fees and other closing costs; and
(xiii) all liabilities incurred or
costs paid by Buyer, Monaco and the Company in connection with such Resale,
including broker commissions, transfer taxes, escrow costs, title costs, survey
costs, attorneys’ fees and other closing costs.
Notwithstanding the
foregoing, all items listed in (i), (ii) and (iv) through (xiii) shall not be
included in the foregoing calculation to the extent that such amounts have
already been accounted for in a prior Net Profit Calculation.
Buyer shall have no obligation to pay any amount in
connection with any sale transaction which fails to close (i.e., title is
conveyed to the purchaser) for any reason.
Buyer shall have the right, in its sole and absolute discretion, to
reject any offer to purchase any portion of the Resale Property.
(b) Carryover
Loss. If a Resale Net Profit
calculation set forth in Section 9.5(a) above yields a negative
number, then (i) ORA shall receive no payments with respect to the Resale and,
(ii) to the extent that such calculation yields a negative amount, such
negative amount shall be reflected in the Net Profit Calculation of the next
Sale as a Carryover Loss.
9.6 Closing Costs. Notwithstanding any other provision of this Article IX, Buyer’s
aggregate payment obligations to ORA under Sections 9.2, 9.3, 9.4 and
9.5 shall be reduced by an amount equal to 50% of the Closing Costs (the “ORA Closing Costs”), and Buyer shall not
pay any amounts to ORA pursuant to such sections until the ORA Closing Costs
have been offset against such payments.
9.7 Interest on Certain Loans. Notwithstanding the foregoing, the Net
Profit Calculations shall not include interest accrued on loans from Monaco to
the Company after the Closing to the extent that the interest rate on such
loans exceeds the greater of (i) Monaco’s regular corporate funds borrowing
rate at the time the loan is made and (ii) the prime rate at the time the loan
is made plus one percent (1%).
9.8 Tax Matters.
(a) Tax
Filing. For purposes of this
Agreement and the filing of applicable Tax Returns, whenever Monaco and ORA
reasonably agree that it is equitable to allocate an item of income, gain,
deduction, loss or credit to either a taxable year or period that ends on or
before the Closing Date or a taxable year or period that begins after the
Closing Date, rules consistent with those in Treasury Regulation Section
1.1502-76(b) will be applied.
(b) Assistance
and Cooperation.
(i) After
the Closing Date, the parties to this Agreement shall (or shall cause their
respective affiliates to):
56
(A) assist
the other party, to the extent the party providing assistance has pertinent
information, in preparing any Tax Returns which such other party is responsible
for preparing and filing after the Closing Date;
(B) cooperate
fully, to the extent the party providing assistance has pertinent information,
in preparing for any audits of, or disputes with taxing authorities regarding,
any Tax Returns of the Company or its subsidiaries; and
(C) make
available to the other party and to any taxing authority as reasonably
requested all information, records, and documents relating to Taxes of the
Company.
(ii) After
the Closing Date but no later than July 31, 2003, ORA shall (or shall cause its
respective affiliates to) deliver to Monaco a written good faith estimate of
any items (including, but not limited to, net operating losses) to be reported
on ORA’s 2002 federal or state income tax returns, which items would be
required by Monaco in preparing its 2002 federal or state income tax
returns. ORA shall deliver to Monaco a
written final determination of any items reported on such estimate within 30
days after ORA has filed its 2002 federal or state income tax return.
9.9 ORA Additional Cooperation. In consideration of the profit participation
set forth hereinabove (i) ORA agrees after Closing to provide to Buyer any
contacts, inquiries or other communication received by Buyer in connection with
the possible sale of the Property, or any portion thereof, and (ii) with
respect to any letter of intent, contract, offer or other communication
presently in the files of ORA or the Company or received after Closing, ORA
agrees after Closing to assist Buyer in connection with Buyer’s review,
assessment, negotiation and consummation of any transaction resulting in a
Resale as Buyer may choose to pursue. The profit participation set forth
hereinabove is in consideration of this agreement and undertaking by ORA and
shall not be construed to be a finder’s fee, broker’s fee or similar payment,
such profit participation being part of the consideration for the transactions
contemplated by this Agreement.
9.10 Loan Release. Monaco shall use commercially reasonable efforts following the
Closing Date to obtain a release of the deed of trust securing the BankAtlantic
Loan and a cancellation of the related note and other loan documents.
9.11 Employee Matters. Following the Closing, ORA, with Buyer’s
cooperation, shall prepare and provide to Buyer for filing all federal, state
and local tax returns required with respect to the employment of any of the
Company’s Employees prior to the Closing.
Such returns shall include those required for income tax withholding,
Federal Insurance Contribution Act taxes, unemployment taxes and any other
employment related taxes that may apply. ORA, with Buyer’s cooperation, will
also prepare and provide to Buyer all required annual information returns
associated with these Employees.
Required information returns shall include 2002 Forms W-2, Form W-3 and
any state or local equivalents or reconciliations required to be filed with any
taxing jurisdiction where the Company has employees. ORA shall deliver final copies of all such tax and information
returns to Monaco at least twenty (20) days before they must be filed.
9.12 Financial Information. Buyer shall furnish to ORA within one
hundred twenty (120) days after the end of each fiscal year of the Company, an
unaudited balance sheet of the Company as
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at the end of such fiscal year and unaudited
statements of income and cash flows of the Company for such year, prepared in
accordance with generally accepted accounting principles consistently applied.
ARTICLE X
GENERAL
PROVISIONS
10.1 Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally or by commercial delivery
service, or mailed by registered or certified mail (return receipt requested)
or sent via facsimile (with acknowledgment of complete transmission) or sent
via electronic mail (with electronic acknowledgement of receipt) to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice):
(a) if
to Monaco or Buyer, or to the Company after the Closing, to: Monaco Coach Corporation, 91320 Industrial
Way, Coburg, Oregon 97408, Attention:
Controller, Tel: (541) 686-8011, Fax: (541) 302-3800, and to Monaco Coach
Corporation, Indiana Operations, 606 Nelson’s Parkway, Wakarusa, IN 46573,
Attention: General Counsel, Tel (800)
650-7337, Fax: (219) 293-1528.
with a copy to: Wilson Sonsini Goodrich & Rosati,
Professional Corporation,
650 Page Mill Road, Palo Alto, California 94304-1050, Attention: Henry P.
Massey, Jr., Esq., Tel: 650-493-9300, Fax: 650-493-6811.
(b) if
to ORA, or to the Company up to and including the Closing, to: Robert A. Schoellhorn, President, Marathon
Coach, Inc., 91333 Coburg Industrial Way, Coburg, OR 97408-9432, Tel: (541)
343-9991, Fax: (541) 343-2401.
with a copy to: Stephen
M. Alderman, Garfield & Merel, Ltd., 223 West Jackson Blvd., Suite 1010,
Chicago, IL 60606, Tel: (312) 583-1600, Fax: (312) 583-1700.
(c) if
to a Principal, to the address for notice set forth on the signature page
to the Affiliates Agreement.
with a copy to: Daniel D.
Drew, Tribler, Orpett & Crone, 30 North La Salle Street, Chicago, IL 60602,
Tel: (312) 201-6414, Fax: (312) 201-6401.
58
10.2 Headings.
The table of contents and headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
10.3 Counterparts. This Agreement may be executed in one or more counterparts, all
of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other party, it being understood that all parties need not
sign the same counterpart.
10.4 Entire Agreement. This Agreement, the Schedules and Exhibits
hereto, and the documents and instruments and other agreements among the
parties hereto referenced herein: (a) constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof, including without limitation the agreement
in principal among certain of the parties hereto dated July 24, 2002.
10.5 Assignment.
No party may assign or delegate either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other parties. Subject to the
immediately preceding sentence, this Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. Notwithstanding the foregoing, Buyer may assign its rights under
this Agreement without the consent of the Company or ORA provided the assignee
assumes in writing all obligations and liabilities of Buyer, in which event
Buyer but not Monaco shall be relieved of any further liability hereunder.
10.6 Severability. In the event that any provision of this Agreement or the
application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other Persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further agree to replace such
void or unenforceable provision of this Agreement with a valid and enforceable
provision that will achieve, to the extent possible, the economic, business and
other purposes of such void or unenforceable provision.
10.7 Other Remedies. Except as otherwise provided herein, any and all remedies herein
expressly conferred upon a party will be deemed cumulative with and not
exclusive of any other remedy conferred hereby, or by law or equity upon such
party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.
10.8 No Third Party Beneficiaries. This Agreement is solely for the benefit of
(a) Monaco and Buyer and its successors and permitted assigns with respect
to the obligations of the Company, and ORA under this Agreement and
(b) the Company and ORA, and their respective successors and permitted
assigns with respect to the obligations of Monaco and Buyer under this
Agreement. This Agreement shall not be
deemed to confer upon or give to any other third party any remedy, claim, right
to reimbursement, cause of action or other right, unless expressly provided for
in this Agreement.
59
10.9 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Oregon, regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws thereof.
10.10 Specific
Performance. The parties
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached.
It is accordingly agreed that either party shall be entitled to seek an
injunction or injunctions or other equitable relief to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction over the dispute.
60
IN WITNESS
WHEREOF, Monaco, Buyer, the Company and ORA have executed this Agreement as of
the date first written above.
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MONACO COACH CORPORATION
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MCC ACQUISITION CORPORATION
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By:
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/s/ John W. Nepute
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By:
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/s/ John W. Nepute
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John W. Nepute,
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John W. Nepute,
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President
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Vice President
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OUTDOOR RESORTS OF AMERICA, INC.
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By:
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/s/ E. Randall
Henderson
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E. Randall Henderson,
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President
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OUTDOOR RESORTS MOTORCOACH
COUNTRY CLUB, INC.
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By:
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/s/ E. Randall
Henderson
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E. Randall Henderson,
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President
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[SIGNATURE
PAGE TO ORMCC STOCK PURCHASE AGREEMENT]
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With
respect to the following pages, the Company has omitted the listed exhibits,
but agrees to furnish supplementally a copy of the exhibit to the Commission
upon request.
EXHIBIT
A
FORM OF GUARANTY
62
EXHIBIT
B
FORM OF AFFILIATES AGREEMENT
63
EXHIBIT
C
FORM OF MANAGEMENT AGREEMENT
64
EXHIBIT
D
FORM OF TRADEMARK AGREEMENT
65
EXHIBIT
E
DESCRIPTION OF LAND
66
EXHIBIT
F
FORM
OF OPINION OF SOPER & OAKLEY, PLLC
67
EXHIBIT
G
FORM OF OPINION OF
TRIBLER ORPETT & CRONE, PROFESSIONAL CORPORATION
68
EXHIBIT
H
FORM OF OPINION OF
SCHLECHT, SHEVLIN & SHOENBERGER, A LAW CORPORATION
69