EXHIBIT 10.15
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DISTRIBUTION AGREEMENT
AMONG
CENTEX CORPORATION,
CAVCO INDUSTRIES, LLC
AND
CAVCO INDUSTRIES, INC.
DATED AS OF
May 30, 2003
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TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS.................................................................................2
SECTION 1.1. Certain Definitions.............................................................2
SECTION 1.2. Other Defined Terms.............................................................6
ARTICLE II. PRELIMINARY TRANSACTIONS...................................................................7
SECTION 2.1. Regulatory Filings and Related Actions..........................................7
SECTION 2.2. Nasdaq National Market Application..............................................8
SECTION 2.3. Business Separation.............................................................8
SECTION 2.4. Internal Distributions..........................................................9
SECTION 2.5. Resignations....................................................................9
SECTION 2.6. Ancillary Agreements...........................................................10
SECTION 2.7. Restated Cavco Charter and Restated Cavco Bylaws...............................10
ARTICLE III. THE DISTRIBUTION.........................................................................10
SECTION 3.1. Record Date and Distribution Date..............................................10
SECTION 3.2. Distribution Agent.............................................................10
SECTION 3.3. Delivery of Certificates.......................................................10
SECTION 3.4. The Distribution...............................................................10
SECTION 3.5. Fractional Shares..............................................................11
ARTICLE IV. ACCESS TO INFORMATION.....................................................................11
SECTION 4.1. Provision of Corporate Records.................................................11
SECTION 4.2. Access to Information..........................................................11
SECTION 4.3. Litigation Cooperation.........................................................12
SECTION 4.4. Reimbursement..................................................................12
SECTION 4.5. Treatment of Records...........................................................13
SECTION 4.6. Confidentiality................................................................13
ARTICLE V. CERTAIN OTHER AGREEMENTS...................................................................13
SECTION 5.1. Intercompany Accounts..........................................................13
SECTION 5.2. Further Assurances and Consents................................................14
ARTICLE VI. INDEMNIFICATION AND OTHER MATTERS.........................................................14
SECTION 6.1. Assumed Liabilities, Exculpation and Indemnification by Cavco..................14
SECTION 6.2. Exculpation and Indemnification by Centex......................................15
SECTION 6.3. Specific Indemnification Issues................................................15
SECTION 6.4. Notice and Payment of Claims...................................................16
SECTION 6.5. Defense of Third-Party Claims..................................................17
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ARTICLE VII...........................................................................................18
SECTION 7.1. Conditions.....................................................................18
ARTICLE VIII. DISPUTE RESOLUTION......................................................................19
SECTION 8.1. Application....................................................................19
SECTION 8.2. Initial Discussions............................................................19
SECTION 8.3. Appeal to Higher Management....................................................19
SECTION 8.4. Mediation......................................................................20
SECTION 8.5. Arbitration....................................................................20
ARTICLE IX. MISCELLANEOUS.............................................................................21
SECTION 9.1. Notices........................................................................22
SECTION 9.2. Interpretation.................................................................22
SECTION 9.3. Amendments; No Waivers.........................................................22
SECTION 9.4. Successors and Assigns.........................................................22
SECTION 9.5. Governing Law..................................................................23
SECTION 9.6. Counterparts; Effectiveness....................................................23
SECTION 9.7. Entire Agreement...............................................................23
SECTION 9.8. Severability...................................................................23
SECTION 9.9. Termination....................................................................23
SECTION 9.10. Survival......................................................................23
SECTION 9.11. Expenses......................................................................23
EXHIBITS
Exhibit A -- Form of Administrative Services Agreement
Exhibit B -- Form of Agreement to Assign Trademark Rights and Limited
Consent to Use Centex Trademarks
Exhibit C -- Form of Tax Sharing Agreement
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DISTRIBUTION AGREEMENT
This
DISTRIBUTION AGREEMENT, dated as of May 30, 2003 (this
"Agreement") is entered into by and among CENTEX CORPORATION, a Nevada
corporation ("Centex"), CAVCO INDUSTRIES, LLC, a Delaware limited liability
company ("Cavco LLC"), and CAVCO INDUSTRIES, INC., a Delaware corporation
("Cavco" and, together with Cavco LLC, the "Cavco Parties");
WITNESSETH:
WHEREAS, the Board of Directors of Centex has determined that it is in
the best interests of Centex and its shareholders to separate the businesses
currently conducted by Cavco LLC from the other businesses conducted by Centex
and its Subsidiaries (as hereinafter defined);
WHEREAS, in furtherance of the foregoing, Centex intends to cause (i)
certain intellectual property held in the name of Centex to be transferred to
Cavco and (ii) Cavco LLC to be merged with and into Cavco;
WHEREAS, upon the consummation of the transactions described above and
subject to the fulfillment of the conditions set forth herein, Centex intends to
effect the distribution (the "Distribution") of all of the outstanding shares of
common stock, par value $.01 per share, of Cavco (the "Cavco Common Stock") on a
pro rata basis to the holders of shares of common stock, par value $.25 per
share, of Centex (the "Centex Common Stock") as of the Record Date (as
hereinafter defined);
WHEREAS, Centex and Cavco intend for the Distribution to qualify as a
tax-free transaction under the Internal Revenue Code of 1986, as amended (the
"Code");
WHEREAS, Centex and Cavco desire to set forth herein certain terms and
provisions governing the principal transactions to be effected in connection
with the Distribution; and
WHEREAS, Centex and Cavco propose to enter into the Ancillary
Agreements (as hereinafter defined) in order to set forth certain terms and
provisions governing the relationship between the parties in connection with and
after the Distribution;
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NOW, THEREFORE, in consideration of the premises, the terms and
conditions set forth herein, the mutual benefits to be gained from the
performance thereof, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. Certain Definitions. The following terms, as used herein,
have the following meanings:
"AAA Holdings" means AAA Holdings, Inc., a Delaware
corporation and an indirect wholly owned Subsidiary of Centex.
"AAA Sub" means a Delaware limited liability company to be
formed as a wholly owned Subsidiary of AAA.
"Action" means any suit, action, arbitration, inquiry,
investigation or other proceeding of any nature (whether criminal, civil,
legislative, administrative, regulatory, prosecutorial or otherwise) by or
before any arbitrator or Governmental Entity or similar Person or body.
"Administrative Services Agreement" means the Administrative
Services Agreement to be entered into on or before the Distribution Date between
Cavco and Centex Service Company, which shall be substantially in the form of
Exhibit A hereto, with such changes therein as Cavco and Centex Service Company
shall mutually agree.
"Affiliate" has the meaning assigned to such term in Rule
12b-2 of the Exchange Act; provided, however, that Centex and Cavco shall not be
deemed to be Affiliates of each other for purposes of this Agreement.
"Ancillary Agreements" means all agreements, certificates,
deeds, instruments, assignments and other written arrangements (other than this
Agreement) entered into between Centex and Cavco in connection with the
transactions contemplated hereby, including the Administrative Services
Agreement, the Intellectual Property Agreement and the Tax Sharing Agreement.
"Business Day" means any day other than a Saturday, Sunday or
one on which banks are authorized or required by law to close in New York, New
York.
"Cavco Business" means the businesses of manufacturing and
selling manufactured homes, park model homes and commercial structures as
conducted by
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Cavco LLC and its Subsidiaries prior to the Merger and as the same is to be
conducted by Cavco and its Subsidiaries after the Merger.
"Cavco Group" means (i) prior to the Merger Date, Cavco LLC
and its Subsidiaries and their respective successors and (ii) after the Merger
Date, Cavco and its Subsidiaries and their respective successors, but in each
case excludes Centex and its Subsidiaries.
"Cavco Group Liabilities" means the following Liabilities
(including Liabilities arising out of any litigation): (a) the Liabilities
arising from or related to the ownership, operation or conduct of the Cavco
Business or the use, possession or enjoyment of the assets used in connection
therewith at any time prior to or on the Distribution Date, (b) all other
Liabilities of the Cavco Group expressly contemplated by the Transaction
Agreements as Liabilities of or to be assumed by Cavco or any member of the
Cavco Group and (c) all other Liabilities that would be reflected as liabilities
or obligations on a balance sheet dated as of the Distribution Date relating
solely to the Cavco Business. Notwithstanding the foregoing, (i) Liabilities
arising from or relating to the Transferred Intellectual Property shall be
deemed "Cavco Group Liabilities" and (ii) Liabilities arising from or relating
to the Excluded Plants shall not be deemed "Cavco Group Liabilities."
"Centex Business" means the businesses of home building,
investment real estate, financial services, construction products and
construction services and all other businesses conducted by the Centex Group.
"Centex Group" means Centex and its Subsidiaries and their
respective successors, but excludes any members of the Cavco Group.
"Centex Group Liabilities" means all Liabilities of Centex or
any other member of the Centex Group (including Liabilities arising out of any
litigation), except for the Cavco Group Liabilities.
"Centex Service Company" means Centex Service Company, a
Nevada corporation and an indirect wholly owned Subsidiary of Centex.
"Commission" means the Securities and Exchange Commission.
"Contract" means any agreement, lease, license, contract,
treaty, note, mortgage, indenture, franchise, permit, concession, arrangement or
other obligation.
"CREC" means Centex Real Estate Corporation, a Nevada
corporation and an indirect wholly owned Subsidiary of Centex.
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"Damages" means, with respect to any Person, any and all
damages (including punitive and consequential damages if not otherwise expressly
excluded), losses, Liabilities, fines, costs and expenses incurred or suffered
by such Person (including all expenses of investigation, all reasonable
attorneys' and expert witnesses' fees and all other out-of-pocket expenses
incurred in connection with any Action or threatened Action).
"Distribution Agent" means Mellon Investor Services L.L.C.
"Distribution Date" means the date and time as of which the
Distribution shall be effected, which shall be determined by, or under the
authority of, the Board of Directors of Centex.
"Distribution Ratio" means .05 shares of Cavco Common Stock
for each share of Centex Common Stock outstanding as of the Record Date.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Excluded Plants" means (i) the manufacturing plant previously
owned by Cavco LLC located in Seguin,
Texas and (ii) the manufacturing facility
previously leased by Cavco LLC located in Belen, New Mexico, which in each case
have been transferred and distributed to a wholly owned indirect Subsidiary of
Centex.
"Finally Determined" means, with respect to any Action,
threatened Action or other matter, that the outcome or resolution of that
Action, threatened Action or other matter either (i) has been decided through
binding arbitration or by a Governmental Entity of competent jurisdiction by
judgment, order, award or other ruling or (ii) has been settled or voluntarily
dismissed by the parties pursuant to the dispute resolution procedure set forth
in Article VIII or otherwise and, in the case of each of clauses (i) and (ii),
the claimants' rights to maintain that Action, threatened Action or other matter
have been finally adjudicated, waived, released, discharged, barred or
extinguished or the judgment, order, ruling, award, settlement or dismissal
(whether mandatory or voluntary, but if voluntary the dismissal must be final,
binding and with prejudice as to all claims specifically pleaded in that Action,
threatened Action or other matter) resolving the same is subject to no further
appeal, vacatur proceeding or discretionary review.
"Form 10" means the registration statement on Form 10 filed by
Cavco with the Commission in order to effect the registration of Cavco Common
Stock pursuant to Section 12(g) of the Exchange Act, as the same may be
supplemented and amended from time to time.
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"Governmental Entity" means any federal, state, local or
foreign government or any court, tribunal, administrative agency or commission
or other governmental or regulatory authority or agency, domestic, foreign or
supranational.
"Group" means the Cavco Group or the Centex Group, as the
context requires.
"Information Statement" means the information statement to be
mailed to each holder of record of Centex Common Stock as of the Record Date in
connection with the Distribution.
"Intellectual Property Agreement" means the Agreement to
Assign Trademark Rights and Limited Consent to Use Centex Trademarks to be
entered into on or before the Distribution Date between Centex and Cavco, which
shall be substantially in the form of Exhibit B hereto, with such changes
thereto as Centex and Cavco shall mutually agree.
"International" means Centex International, Inc., a Nevada
corporation and a direct wholly owned Subsidiary of Centex.
"IRS" means the Internal Revenue Service.
"Law" means any applicable federal, state, local or foreign
law, statute, ordinance, directive, rule, regulation, judgment, order,
injunction, decree, arbitration award, agency requirement, license or permit of
any Governmental Entity.
"Liability" or "Liabilities" means any and all claims, debts,
liabilities, assessments, costs, deficiencies, charges, demands, fines,
penalties, damages, losses, disgorgements and obligations of any kind, character
or description (whether absolute, contingent, matured, not matured, liquidated,
unliquidated, accrued, known, unknown, direct, indirect, derivative or
otherwise) whenever arising, including all costs, interest and expenses relating
thereto (including all expenses of investigation, all reasonable attorneys' and
expert witnesses' fees and all other out-of-pocket expenses in connection with
any Action or threatened Action) and expressly including any of the foregoing
arising from the negligence or other misconduct of an Indemnified Party.
"Person" means any individual, corporation, general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, Governmental Entity or other entity of any kind or
nature.
"Record Date" means the close of business on the date
determined by the Board of Directors of Centex (or by a committee of such Board
of Directors or any other Person acting under authority duly delegated to that
committee or Person by the Board of Directors of Centex or a committee of such
Board of Directors) as the record
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date for determining the holders of record of Centex Common Stock entitled to
receive the Distribution.
"Restated Cavco Bylaws" means the restated Bylaws of Cavco,
which shall be in such form as the Board of Directors of Cavco reasonably
determines with the approval of Centex.
"Restated Cavco Charter" means the restated Certificate of
Incorporation of Cavco, which shall be in such form as the Board of Directors of
Cavco reasonably determines with the approval of Centex.
"Subsidiary" means, with respect to any Person, (i) any
corporation of which at least a majority of the securities or other ownership
interests having by their terms ordinary voting power to elect a majority of the
board of directors are directly or indirectly owned or controlled by such Person
and its Subsidiaries, (ii) any partnership of which such Person or one of its
Subsidiaries is a general partner or as to which such Person and its
Subsidiaries are entitled to receive at least a majority of the assets upon the
liquidation thereof or (iii) any limited liability company of which such Person
or one of its Subsidiaries is a manager (or is entitled as a member to exercise
management rights over the conduct of the business of such limited liability
company) or as to which such Person and its Subsidiaries are entitled to receive
at least a majority of the assets upon the liquidation thereof.
"Tax Returns" has the meaning set forth in the Tax Sharing
Agreement.
"Tax Sharing Agreement" means the Tax Sharing Agreement to be
entered into on or before the Distribution Date between Centex and its
Affiliates and Cavco, which shall be substantially in the form attached as
Exhibit C hereto, with such changes thereto as Centex and Cavco shall mutually
agree.
"Taxes" has the meaning set forth in the Tax Sharing
Agreement.
"Transaction Agreements" means this Agreement and the
Ancillary Agreements.
SECTION 1.2. Other Defined Terms. Each of the terms set forth below has
the meaning set forth in the provision set forth opposite such term:
TERM SECTION
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AAA Section 8.5(b)
Agreement Preamble
Cavco Preamble
Cavco Common Stock Recitals
Cavco Damages Section 6.2(b)
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TERM SECTION
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Cavco Indemnifiable Liabilities Section 6.1(a)
Cavco Indemnitees Section 6.2(a)
Cavco Licenses Section 2.3(c)
Cavco LLC Preamble
Cavco Parties Preamble
Centex Preamble
Centex Common Stock Recitals
Centex Damages Section 6.1(b)
Centex Indemnifiable Liabilities Section 6.2(a)
Centex Indemnitees Section 6.1(a)
Code Recitals
Corporate Records Section 4.1
Distribution Recitals
Indemnified Party Section 6.4(a)
Indemnifying Party Section 6.4(a)
Merger Section 2.3(b)
Merger Date Section 2.3(a)
Transferred Intellectual Property Section 2.3(a)
ARTICLE II.
PRELIMINARY TRANSACTIONS
SECTION 2.1. Regulatory Filings and Related Actions.
(a) Centex and Cavco have prepared, and Cavco has filed with
the Commission, the Form 10, which includes the Information Statement as an
exhibit thereto. Each of Centex and Cavco shall use commercially reasonable
efforts to cause the Form 10 to become effective under the Exchange Act as
promptly as reasonably practicable after the date upon which it is filed with
the Commission.
(b) Centex and Cavco have prepared the Information Statement.
Centex shall, if required by law, file the Information Statement with the
Commission. As promptly as practicable after the Form 10 has become effective,
Centex shall mail the Information Statement to the holders of record of Centex
Common Stock as of the Record Date.
(c) Each of Centex and Cavco shall take all such actions as
may be necessary or appropriate under the securities or blue sky laws of states
or other jurisdictions within the United States in connection with the
Distribution and the other transactions contemplated hereby.
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SECTION 2.2. Nasdaq National Market Application. Centex and Cavco have
prepared and filed with the National Association of Securities Dealers, Inc., an
application for the Cavco Common Stock to be admitted for quotation on the
Nasdaq National Market. Each of Centex and Cavco shall use commercially
reasonable efforts to cause such application to be approved so that the Cavco
Common Stock is admitted for quotation on the Nasdaq National Market prior to
the Distribution Date.
SECTION 2.3. Business Separation.
(a) Prior to the date and time at which the Merger is
consummated (the "Merger Date"), Centex shall grant, assign, contribute, convey,
transfer and deliver to Cavco all intellectual property rights that are
identified in the Intellectual Property Agreement as being transferred to Cavco
(the "Transferred Intellectual Property").
(b) Prior to the Distribution Date, Centex shall cause Cavco
LLC to be merged with and into Cavco, with Cavco being the sole surviving entity
in the merger (the "Merger"). As a result of the Merger, (i) Cavco LLC shall
cease to exist, (ii) Cavco shall succeed to all of the properties, assets,
rights and entitlements of Cavco LLC and shall be subject to all of its
Liabilities and (iii) the total number of outstanding shares of Cavco Common
Stock shall be increased to equal the product of the Distribution Ratio and the
number of shares of Centex Common Stock outstanding on the Record Date.
(c) Centex and the Cavco Parties shall use commercially
reasonable efforts to cooperate in transferring to Cavco all licenses, permits
and authorizations that relate to the Cavco Business (the "Cavco Licenses") but
that are held in the name of Centex or any other member of the Centex Group or
any of their respective employees, officers, directors, stockholders, agents or
otherwise (or, in the case of any Cavco Licenses that are held in the name of
Centex or any other member of the Centex Group or any of their respective
employees, officers, directors, stockholders, agents or otherwise that are not
transferable under applicable Law, obtaining new licenses, permits and
authorizations from the relevant Governmental Entities in the name of Cavco to
replace such Cavco Licenses). In the event any such transfer of the Cavco
Licenses (or the grant of any new licenses, permits and authorizations to
replace such Cavco Licenses) cannot be effected prior to the Distribution Date,
Centex shall, except as prohibited by applicable Law, allow Cavco to operate the
Cavco Business under such Cavco Licenses until such transfer can be effected (or
new licenses, permits and authorizations are granted by the relevant
Governmental Entities).
(d) Centex and the Cavco Parties shall use commercially
reasonable efforts to have Centex and any other member of the Centex Group
released, on or prior to the Distribution Date or as soon as practicable
thereafter, as a guarantor in respect of any guarantees of any Cavco Group
Liabilities.
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(e) It is the intention of the parties that all material
transactions contemplated by this Section 2.3 shall be consummated prior to or
on the Distribution Date; provided, however, that, to the extent that any such
transactions shall not have been consummated prior to or on the Distribution
Date, Centex and Cavco shall cooperate to effect such transactions as promptly
as practicable after Distribution Date. Nothing contained in this Agreement
shall be deemed to require the transfer of any properties, assets, rights or
entitlements, the assumption of any Liabilities or the release of guarantees
which, by their terms or by operation of Law, cannot be transferred, assumed or
released; provided, however, that Centex and the Cavco Parties shall cooperate
to seek to obtain any necessary consent or approval for any transfer, assumption
or release contemplated by this Section 2.3. In the event that any such
transfer, assumption or release has not been consummated as of the Distribution
Date, then, from and after the Distribution Date, the party who retains the
applicable asset or Liability or who is not able to obtain a release of the
applicable guarantee shall hold such asset in trust for the use and benefit of
the party entitled thereto (at the expense of the party entitled thereto), shall
retain such Liability for the account of the party by whom such Liability is to
be assumed or shall hold the other parties harmless against the guarantee to be
released, as the case may be, and take such other action as may be reasonably
requested by the party to whom such asset is to be transferred, from whom such
liability is to be assumed or for the benefit of whom such guarantee is to be
released, as the case may be, in order to place such party, insofar as is
reasonably possible, in the same position as would have existed had such asset
been transferred, such liability assumed or such guarantee released as
contemplated hereby. As and when any such asset becomes transferable, such
liability becomes assumable or such release is obtainable, the transfer,
assumption or release thereof shall be effected forthwith by the parties hereto.
SECTION 2.4. Internal Distributions. Immediately after the Merger Date,
Centex shall cause (i) AAA Holdings to distribute all of the outstanding shares
of Cavco Common Stock to CREC, (ii) CREC to distribute all of the outstanding
shares of Cavco Common Stock to International and (iii) International to
distribute all of the outstanding shares of Cavco Common Stock to the
Corporation.
SECTION 2.5. Resignations. Centex shall cause all of its directors,
officers and employees who will be officers or employees of the Centex Group
from and after the Distribution Date (as designated by Centex) to resign,
effective as of the Distribution Date, from all positions as directors, officers
or employees of Cavco or any its Subsidiaries; provided, however, that ▇▇.
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, who is an executive officer and Chairman of the Board of
Directors of Centex, shall not resign his position as a member of the Board of
Directors of Cavco. Cavco shall cause all of its directors, officers and
employees who will be officers and employees of Cavco or any of its Subsidiaries
after the Distribution Date (as jointly designated by Centex and Cavco) to
resign, effective as of the Distribution Date, from all positions as officers or
employees of Centex or any member of the Centex Group in which they serve.
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SECTION 2.6. Ancillary Agreements. Prior to or on the Distribution
Date, (i) Centex shall cause Centex Service Company to, and Cavco shall, enter
into the Administrative Services Agreement, (ii) Centex and Cavco shall enter
into the Intellectual Property Agreement and (iii) Centex, on behalf of itself
and its Affiliates, and Cavco shall enter into the Tax Sharing Agreement.
SECTION 2.7. Restated Cavco Charter and Restated Cavco Bylaws. Prior to
or on the Distribution Date, (i) Cavco and Centex shall take such action as is
required to adopt the Restated Cavco Charter and (ii) Cavco shall take such
action as is required to adopt the Restated Cavco Bylaws.
ARTICLE III.
THE DISTRIBUTION
SECTION 3.1. Record Date and Distribution Date. Subject to the
fulfillment of the conditions set forth in Section 7.1, the Board of Directors
of Centex (or a duly authorized committee thereof) shall, in the manner provided
for under applicable Law, declare the Distribution and establish the Record Date
and the Distribution Date and any appropriate procedures in connection with the
Distribution.
SECTION 3.2. Distribution Agent. Prior to or on the Distribution Date,
Centex shall enter into an agreement with the Distribution Agent providing for,
among other things, the delivery to the holders of Centex Common Stock as of the
Record Date of certificates evidencing the shares of Cavco Common Stock included
in the Distribution.
SECTION 3.3. Delivery of Certificates. Prior to the Distribution Date,
Centex shall deliver to the Distribution Agent, for the benefit of the holders
of Centex Common Stock as of the Record Date, a stock certificate or
certificates, representing all of the outstanding shares of Cavco Common Stock
to be owned by Centex as of the Distribution Date. After the Distribution Date,
Cavco shall, upon request of the Distribution Agent, provide to the Distribution
Agent any additional certificates representing shares of Cavco Common Stock that
the Distribution Agent shall require to effect the Distribution.
SECTION 3.4. The Distribution. Subject to the terms and conditions
hereof, Centex shall instruct the Distribution Agent to distribute, on or as
soon as practicable after the Distribution Date, to each holder of record of
Centex Common Stock as of the Record Date a number of shares of Cavco Common
Stock equal to the result obtained by multiplying the Distribution Ratio by the
number of shares of Centex Common Stock held by such holder as of the Record
Date. Such distribution shall be effected by the mailing of stock certificates
to such holders or, if practicable, by book-entry
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transfer. All of the shares of Cavco Common Stock issued in the Distribution
shall have been duly authorized and shall be fully paid and nonassessable.
SECTION 3.5. Fractional Shares. Notwithstanding anything to the
contrary contained in this Article III, no fractional shares of Cavco Common
Stock shall be distributed in the Distribution. The parties shall direct the
Distribution Agent to determine the number of fractional shares of Cavco Common
Stock allocable to each holder of record of Centex Common Stock as of the Record
Date. After the Distribution Date, upon the determination by the Distribution
Agent of such number of fractional shares, the Distribution Agent, acting on
behalf of the holders thereof, shall sell such fractional shares for cash on the
open market at the then-prevailing market prices and shall disburse to each
holder entitled thereto, in lieu of any fractional share, without interest, that
holder's ratable share of the proceeds of that sale, after making appropriate
deductions of the amounts required, if any, to be withheld for United States
federal income tax purposes, and to repay expenses of the Distribution Agent in
connection with such sale.
ARTICLE IV.
ACCESS TO INFORMATION
SECTION 4.1. Provision of Corporate Records. Except as otherwise
specifically set forth in the Transaction Agreements, as soon as practicable
after the Distribution Date, each Group shall deliver to the other Group all
documents, Contracts, books, records and data (including minute books, stock
registers, stock certificates and documents of title) (collectively, "Corporate
Records") in its possession relating primarily to the other Group or its
business, assets and affairs; provided, however, that if any such documents,
Contracts, books, records or data relate to both Groups or their businesses,
assets and affairs, each such Group shall provide to the other Group true and
complete copies of such documents, Contracts, books, records or data. Data
stored in electronic form shall be provided in the format in which it existed at
the Distribution Date, except as otherwise specifically set forth in the
Transaction Agreements.
SECTION 4.2. Access to Information. From and after the Distribution
Date, each Group shall afford to the other Group and its accountants, counsel
and other designated representatives reasonable access during normal business
hours to all personnel, documents, Contracts, books, records, computer data and
other data in such Group's possession relating to the other Group or the
business and affairs of such other Group (other than data and information
subject to an attorney-client or other privilege that is not specifically
subject to the provisions of this Article IV), insofar as such access is
reasonably required by such other Group for a reasonable and appropriate
purpose, including for audit, accounting, regulatory compliance and disclosure
and reporting purposes.
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SECTION 4.3. Litigation Cooperation. From and after the Distribution
Date:
(a) Each Group shall use all reasonable efforts to make
available to the other Group and its accountants, counsel and other designated
representatives, upon written request, its current and former directors,
officers, employees and representatives as witnesses, and shall otherwise
cooperate with the other Group, to the extent reasonably required in connection
with any Action or threatened Action arising out of either Group's business and
operations in which the requesting party may from time to time be involved,
except for any action in which one Group is asserting a claim against or seeking
relief from the other Group and except to the extent that there is a conflict of
interest in the Action or threatened Action between the requesting Group and
itself.
(b) Each Group shall promptly notify the other Group, upon its
receipt or the receipt by any of its members, of a request or requirement (by
written questions, interrogatories, requests for information or documents,
subpoenas, civil investigative demands or other similar processes) that relates
to the business and operations of the other Group that could reasonably be
regarded as calling for the inspection or production of any documents or other
information in its possession, custody or control. Each Group shall assert and
maintain, or cause its members to assert and maintain, any applicable claim to
privilege, immunity, confidentiality or protection in order to protect such
documents and other information from disclosure, and shall seek to condition any
disclosure that may be required on such protective terms as may be appropriate.
No Group may voluntarily waive, undermine or fail to take any action reasonably
necessary to preserve an applicable privilege without the prior written consent
of the affected party (or any affected Group member or Affiliates of any such
party) except, in the opinion of such party's counsel, as required by law.
(c) Each Group shall enter into such joint defense agreements
with the other Group, in customary form, as Centex and Cavco shall determine are
necessary, appropriate or advisable.
SECTION 4.4. Reimbursement. Except to the extent that any member of one
Group is obligated to indemnify any member of the other Group under Article VI
for such cost or expense, each Group providing information or witnesses to the
other Group, or otherwise incurring any expense in connection with cooperating,
under Sections 4.1, 4.2 or 4.3, shall be entitled to receive from the recipient
thereof, upon the presentation of reasonably detailed invoices therefor, payment
for all out-of-pocket costs and expenses that may reasonably be incurred in
providing such information, witnesses or cooperation.
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SECTION 4.5. Treatment of Records. Except as otherwise required by law
or agreed to in writing, upon compliance with the requirements set forth in
Section 4.1, each of Centex and Cavco shall, and shall cause the members of its
respective Group to, destroy or otherwise dispose of any photocopies or similar
reproductions of all Corporate Records provided to, or relating primarily to,
the other Group or its business, assets and affairs; provided, however, that
prior to any such destruction, the other party shall be provided the opportunity
to take possession of such records if it so desires. Any Corporate Records
received by any member of one Group after the Distribution Date and relating
primarily to the other Group or its business, assets or affairs shall promptly
be delivered to such other Group, and retained, in accordance with the
procedures set forth in Section 4.1 and this Section 4.5. Notwithstanding the
foregoing, there shall be no requirement for Centex or Cavco, or any members of
their respective Groups, to destroy or otherwise dispose of any Corporate
Records (or photocopies or similar reproductions thereof) to the extent that
such Corporate Records relate to its business, assets and affairs.
SECTION 4.6. Confidentiality. Except as may be more specifically
addressed in any Transaction Agreement, each party shall hold, and shall cause
its consultants and advisors to hold, in strict confidence, unless compelled to
disclose by judicial or administrative process or, in the opinion of its
counsel, by other requirements of Law, all confidential or proprietary
information concerning the other party hereto furnished it by such other party
or its representatives pursuant to this Agreement (except to the extent that
such information can be shown to have been (i) previously known by the party to
which it was furnished, (ii) in the public domain through no fault of the party
to which it was furnished or (iii) independently developed by the receiving
party), and each party shall not release or disclose such information to any
other Person, except its auditors, attorneys, financial advisors, bankers and
other consultants and advisors who shall be advised of the provisions of this
Section 4.6.
ARTICLE V.
CERTAIN OTHER AGREEMENTS
SECTION 5.1. Intercompany Accounts. Except as otherwise specifically
set forth in any of the Transaction Agreements, all intercompany loan balances,
accounts receivable and accounts payable between any member of one Group and any
member of another Group in existence at the Distribution Date shall be settled
and paid in full, in cash or other immediately available funds, by the party or
parties owing such obligations as soon as practicable (but in no event more than
60 calendar days) after the Distribution Date. If, at any time after the
Distribution Date, either party receives payments belonging to the other party,
the recipient shall promptly account for and remit said payment to the other
party.
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SECTION 5.2. Further Assurances and Consents. In addition to the
actions specifically provided for elsewhere in the Transaction Agreements, each
of Centex and Cavco shall use its reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things, reasonably
necessary, proper or advisable under applicable Laws, regulations and agreements
or otherwise to consummate and make effective the transactions contemplated by
this Agreement, including using its reasonable efforts to obtain any consents
and approvals and to make any filings and applications necessary or desirable in
order to consummate the transactions contemplated by this Agreement. Centex and
Cavco agree to enter into and execute such additional documents as may be
reasonably necessary, proper or advisable to effect the transactions
contemplated by the Transaction Agreements.
ARTICLE VI.
INDEMNIFICATION AND OTHER MATTERS
SECTION 6.1. Assumed Liabilities, Exculpation and Indemnification by
Cavco.
(a) From and after the Distribution Date, Cavco shall, without
any further responsibility or liability of, or recourse to, Centex or any
Affiliate of Centex or any of their respective directors, stockholders,
officers, employees, agents, consultants, representatives, successors,
transferees or assignees (collectively, the "Centex Indemnitees"), absolutely
and irrevocably assume and be solely liable and responsible for the Cavco Group
Liabilities. Neither Centex nor any of the Centex Indemnitees shall be liable to
Cavco or any Affiliate of Cavco or any of their respective directors,
stockholders, officers, employees, agents, consultants, customers,
representatives, successors, transferees or assignees for any reason whatsoever
on account of (i) any Cavco Group Liabilities or (ii) any Liabilities arising
from the breach by Cavco of any of its obligations under this Agreement;
provided that Centex shall remain liable to Cavco for any breach by Centex of
any of its obligations under this Agreement. The matters with respect to which
Cavco assumes liability pursuant to clauses (i) and (ii) above are referred to
herein as the "Cavco Indemnifiable Liabilities."
(b) Cavco shall indemnify, save and hold harmless each of the
Centex Indemnitees from and against all (i) all Cavco Indemnifiable Liabilities
and (ii) except as otherwise provided in the Transaction Agreements, all
Liabilities that are or are alleged to be related to, arising from, or
associated with the ownership, operation or conduct of the Cavco Business or the
use, possession or enjoyment of the assets used in connection therewith at any
time after the Distribution Date (all of which are collectively called the
"Centex Damages"). In addition, if Centex so elects in its sole discretion,
Cavco shall defend any or all of the Centex Indemnities in any Action in which
any Centex Damages are asserted against any Centex Indemnitees.
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(c) Centex Damages with respect to which, but only to the
extent that, any proceeds are received by Centex, or by any of its Affiliates,
from any third party insurance policy (and are non-reimbursable by Centex under
any self insurance policy), shall not be the subject of indemnification under
this Agreement.
SECTION 6.2. Exculpation and Indemnification by Centex.
(a) Centex shall, without any further responsibility or liability of,
or recourse to, Cavco or any Affiliate of Cavco or any of their respective
directors, stockholders, officers, employees, agents, consultants,
representatives, successors, transferees or assignees (collectively, the "Cavco
Indemnitees"), absolutely and irrevocably be solely liable and responsible for
the Centex Group Liabilities. Neither Cavco nor any of the other Cavco
Indemnitees shall be liable to Centex or any Affiliate of Centex or any of their
respective directors, stockholders, officers, employees, agents, consultants,
customers, representatives, successors, transferees or assignees for any reason
whatsoever on account of (i) any Centex Group Liabilities or (ii) any
Liabilities arising from the breach by Centex of any of its obligations under
this Agreement; provided that Cavco shall remain liable to Centex for any breach
by Cavco of any of its obligations under this Agreement. The matters with
respect to which Centex retains liability pursuant to clauses (i) and (ii) above
are referred to herein as the "Centex Indemnifiable Liabilities."
(b) Centex shall indemnify, save and hold harmless each of the Cavco
Indemnitees from and against (i) all Centex Indemnifiable Liabilities and (ii)
except as otherwise provided in the Transaction Agreements, all Liabilities that
are or are alleged to be related to, arising from, or associated with the
ownership, operation or conduct of the Centex Businesses or the use, possession
or enjoyment of the assets used in connection therewith at any time after the
Distribution Date, other than the Cavco Indemnifiable Liabilities (all of which
are collectively called the "Cavco Damages"). In addition, if Cavco so elects in
its sole discretion, Centex shall defend any or all of the Cavco Indemnities in
any Action in which any Cavco Damages are asserted against any Cavco
Indemnitees.
(c) Cavco Damages with respect to which, but only to the extent that,
any proceeds are received by, or on behalf of, Cavco or by any of its
Affiliates, from any third party insurance policy (and are non-reimbursable
under any self insurance policy), shall not be the subject of indemnification
under this Agreement.
SECTION 6.3. Specific Indemnification Issues.
(a) It is the express intention of the parties hereto that each party
to be indemnified pursuant to this Article VI shall be indemnified and held
harmless from and against all Damages as to which indemnity is provided for
hereunder, NOTWITHSTANDING THAT ANY SUCH DAMAGES ARISE OUT OF OR RESULT FROM THE
ORDINARY, STRICT, SOLE, OR CONTRIBUTORY NEGLIGENCE, OR THE STRICT LIABILITY (OR
OTHER LIABILITY WITHOUT FAULT) OF
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SUCH PARTY AND REGARDLESS OF WHETHER ANY OTHER PARTY (INCLUDING ANOTHER PARTY TO
THIS AGREEMENT) IS OR IS NOT ALSO NEGLIGENT OR OTHERWISE LIABLE WITH RESPECT TO
THE MATTER IN QUESTION.
(b) It is acknowledged that after the Distribution Date the parties
will have negotiated business relationships, which relationships will be
described in the Contracts, agreements and other documents entered into in the
normal course of business. Such documents may include agreements by the parties
and their Affiliates and Subsidiaries to supply, after the Distribution Date,
materials, products and services and to lease facilities, tangible and
intangible property. Such business relationships shall not be subject to the
indemnity provisions hereof, unless the parties expressly agree to the contrary
in the agreements governing such relationships.
(c) Except as otherwise provided herein, in the event an Action is
brought by a third party in which the liability as between Centex and Cavco is
Finally Determined to be joint or in which the entitlement to indemnification
hereunder is not determinable, the parties shall negotiate in good faith in an
effort to agree, as between Centex and Cavco, on the proper allocation of
liability or entitlement to indemnification, as well as the proper allocation of
the costs of any joint defense or settlement pursuant to Section 6.5, all in
accordance with the provisions of, and the principles set forth in, this
Agreement. In the absence of any such agreement, such allocation of liability or
entitlement to indemnification, and such allocation of costs, shall be subject
to ultimate resolution between Centex and Cavco pursuant to Article IX.
SECTION 6.4. Notice and Payment of Claims.
(a) If any party to this Agreement or a person entitled to
indemnification under this Agreement (an "Indemnified Party") determines that it
is or may be entitled to a defense or indemnification by Centex or Cavco, as the
case may be (the "Indemnifying Party"), under this Agreement, the Indemnified
Party shall deliver promptly to the Indemnifying Party a written notice and
demand for indemnification, specifying the basis for the claim for
indemnification, the nature of the claim, and, if known, the amount for which
the Indemnified Party reasonably believes it is entitled to be indemnified. The
Indemnifying Party shall have 30 days from receipt of such notice in which to:
(w) assume the defense of such litigation or claim; (x) pay the claim in
immediately available funds; (y) reserve its rights pending negotiations under
Section 6.5 or (z) object in accordance with Section 6.4(b). This 30-day period
may be extended by express agreement of the parties.
(b) An Indemnifying Party may object to, or reserve its rights with
respect to, the claim for indemnification set forth in any notice delivered by
the Indemnified Party pursuant to Section 6.4(a) so long as it acts in good
faith and with a reasonable basis for its belief that it is not obligated to
indemnify the Indemnified Party.
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SECTION 6.5. Defense of Third-Party Claims.
(a) If the Indemnified Party's claim for Indemnification is based,
under this Agreement, on an Action, judicial or otherwise, brought by a third
party, and the Indemnifying Party does not object under Section 6.4(b), the
Indemnifying Party may, participate in the defense of such Action and may assume
the defense of such Action with counsel satisfactory to the Indemnified Party if
(i) the Indemnified Party agrees to assumption thereof by the Indemnifying Party
or (ii) the Indemnifying Party shall have confirmed in writing (without
reservation or qualification) its obligation to provide indemnification for the
liability asserted in such action. If the Indemnified Party shall reasonably
conclude that its interests in such Action are materially different from those
of the Indemnifying Party or that it may have defenses that are different from
or in addition to those available to the Indemnifying Party, the Indemnified
Party may use separate counsel to protect such interests and assert such
defenses and otherwise participate in the defense of such Action. If the
Indemnifying Party shall assume the defense with counsel satisfactory to the
Indemnified Party, the Indemnifying Party shall not be liable for any legal
expenses (other than investigation expenses) subsequently incurred by the
Indemnified Party, unless the Indemnified Party shall have employed separate
counsel in accordance with the preceding sentence.
(b) The Indemnifying Party shall pay to the Indemnified Party in
immediately available funds the amounts for which the Indemnified Party is
entitled to be indemnified within 30 days after such third party claim is
Finally Determined (or within such longer period as agreed to by the parties).
(c) In the event an Action is brought by a third party in which the
liability as between Centex and Cavco is alleged to be joint or in which the
entitlement to indemnification hereunder is not determinable or as to which
there has been a reservation of rights, the parties shall cooperate in a joint
defense. Such joint defense shall be under the general management and
supervision of the party which is expected to bear the greater share of the
liability; provided, however, that neither party shall settle or compromise any
such joint defense matter without the consent of the other. The costs of such
joint defense shall be borne as the parties may agree, or in the absence of such
agreement, such costs shall be borne by the party incurring such costs, subject
to ultimate resolution pursuant to Article IX hereof.
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ARTICLE VII.
CONDITIONS
SECTION 7.1. Conditions. The obligations of Centex and Cavco to
consummate the Distribution shall be subject to the fulfillment (or, if
permissible under applicable law, the waiver by Centex) of the following
conditions at or prior to the Distribution Date:
(a) The Form 10 shall have become effective under the Exchange Act, and
no stop order with respect thereto shall be in effect;
(b) The Information Statement shall have been mailed to the holders of
record of Centex Common Stock as of the Record Date;
(c) The shares of Cavco Common Stock to be delivered in the
Distribution shall have been approved for quotation on the Nasdaq National
Market;
(d) The transactions contemplated by Section 2.3 shall have been
consummated on terms satisfactory to Centex in its sole discretion;
(e) Each of the Ancillary Agreements shall have been executed and
delivered by the Persons who are proposed to become parties thereto;
(f) The Restated Cavco Charter and Restated Cavco Bylaws shall be in
effect;
(g) all consents, approvals and authorizations of any Governmental
Entity required for the consummation of the Distribution and the other
transactions contemplated hereby and by the Ancillary Agreements shall have been
obtained and shall be in full force and effect, and such consents, approvals and
authorizations shall be in form and substance satisfactory to Centex in its sole
discretion;
(h) no order, preliminary or permanent injunction or decree shall have
been issued by any court or agency of competent jurisdiction or any other
Governmental Entity and no other legal restraint or prohibition shall be in
effect that prevents or makes unlawful the Distribution;
(i) the Centex Board of Directors shall have received an opinion from a
nationally recognized valuation firm, which opinion shall be in form and
substance satisfactory to Centex in its sole discretion, and Centex shall
otherwise be reasonably satisfied that, after giving effect to the Distribution,
(i) the present fair saleable value and the fair value of the assets of Centex
and Cavco will exceed their liabilities; (ii) Cavco and Centex will be able to
pay their debts as such debts mature during the normal course of business; (iii)
Cavco will not have unreasonably small capital for the business
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in which it is and will be engaged; and (iv) the total assets of Centex will
exceed its total liabilities, plus the amount that would be needed, if Centex
were dissolved at the time of the distribution, to satisfy any preferential
rights of stockholders whose preferential rights are superior to those receiving
the distribution; and
(j) Centex shall have received a ruling from the IRS to the effect that
the Distribution will be a tax-free transaction for federal income tax purposes,
and such ruling shall be in form and substance satisfactory to Centex in its
sole discretion.
ARTICLE VIII.
DISPUTE RESOLUTION
SECTION 8.1. Application. Any dispute arising out of or relating to
this Agreement, including the breach or termination hereof, shall be resolved in
accordance with the procedures specified in this Article VIII, which shall be
the sole and exclusive procedure for the resolution of any such disputes;
provided, however, that a party may file a complaint to seek a preliminary
injunction or other provisional judicial relief, if in its sole judgment such
action is necessary. Despite such action the parties will continue to
participate in good faith in the procedures set forth in this Article VIII and
each party is required to continue to perform its obligations under this
Agreement pending final resolution of any dispute arising out of or relating to
this Agreement, unless to do so would be impossible or impracticable under the
circumstances. All negotiations between the parties pursuant to this Article
VIII are confidential and shall be treated as compromise and settlement
negotiations for purposes of applicable rules of evidence. The requirements of
this Article VIII shall not be deemed a waiver of any right of termination under
this Agreement.
SECTION 8.2. Initial Discussions. Any dispute shall be first discussed
by an appropriate senior executive officer of each of the parties or his or her
designee. Any party may initiate such discussions by giving the other party
written notice specifying in detail the nature of the dispute. Within 15
Business Days after delivery of the notice, the receiving party shall submit to
the other a written response, including a statement of such party's position and
a summary of arguments supporting such position. Within 10 Business Days (or
such other period as agreed upon by the parties) after receipt of such response,
the executives of both parties shall meet at a mutually acceptable time and
place, and thereafter as often as they reasonably deem necessary, to attempt to
resolve the dispute. All reasonable requests for information made by one party
to the other shall be honored.
SECTION 8.3. Appeal to Higher Management. If, in spite of such
discussions, no mutually acceptable solution is reached within 30 Business Days
after the delivery of one party's written request to the other party to discuss
such dispute, any
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such dispute shall be referred to the Chief Legal Officer of Centex and the
Chief Executive Officer of Cavco.
SECTION 8.4. Mediation. If the dispute is not resolved within 30
Business Days (or such other period as agreed upon by the parties) following the
submission of the dispute to senior management pursuant to Section 8.3, the
parties shall attempt to resolve the dispute employing non-binding mediation
under the then-current CPR Mediation Procedure. If within 10 Business Days (or
any other period agreed upon by the parties) after the commencement of such
mediation the dispute still has not been resolved, each of the parties may
commence arbitration proceedings pursuant to Section 8.5.
SECTION 8.5. Arbitration. The parties hereto agree that all disputes,
controversies or claims that may arise out of the transactions contemplated by
this Agreement, or the breach, termination or invalidity thereof, shall be
submitted to, and determined by, binding arbitration in accordance with the
following procedures:
(a) Either Centex or Cavco may submit a dispute, controversy or claim
to arbitration by giving the other party written notice to such effect, which
notice shall describe, in reasonable detail, the facts and legal grounds forming
the basis for the filing party's request for relief. The arbitration shall be
held before one neutral arbitrator in Dallas,
Texas.
(b) Within 30 days after the other party's receipt of such demand,
Centex and Cavco shall mutually determine who the arbitrator will be. If the
parties are unable to agree on the arbitrator within that time period, the
arbitrator shall be selected by the American Arbitration Association ("AAA"). In
any event, the arbitrator shall have a background in, and knowledge of,
transactions in the homebuilding or manufactured housing industries and shall
otherwise be an appropriate person based on the nature of the dispute. If a
person with experience in such matters is not available, the arbitrator shall be
chosen from the retired federal judges pool.
(c) The arbitration shall be governed by the Commercial Arbitration
Rules of the AAA, except as otherwise expressly provided in this Section 8.5.
However, the arbitration shall be administered by any organization mutually
agreed to in writing by the parties. If the parties are unable to agree on the
organization to administer the arbitration, it shall be administered by the AAA.
(d) Discovery shall be limited to the request for and production of
documents, depositions and interrogatories. Interrogatories shall be allowed
only as to the names, last known addresses and telephone numbers of all persons
having knowledge of facts relevant to the dispute and a brief description of
that person's knowledge and the names, addresses and telephone numbers of any
experts who may be called as an expert witness or who have been used for
consultation. All discovery shall be guided by the Federal Rules of Civil
Procedure. All issues concerning discovery
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upon which the parties cannot agree shall be submitted to the arbitrator for
determination.
(e) In rendering an award, the arbitrator shall determine the rights
and obligations of the parties according to the substantive and procedural laws
of the State of Delaware.
(f) The decision of, and award rendered by, the arbitrator shall be
determined no more than 30 days after the selection of the arbitrator and shall
be final and binding on the parties and shall not be subject to appeal. Judgment
on the award may be entered in and enforced by any court of competent
jurisdiction.
(g) Each party shall bear its own costs and expenses (including filing
fees) with respect to the arbitration, including one-half of the fees and
expenses of the arbitrator.
ARTICLE IX.
MISCELLANEOUS
SECTION 9.1. Notices. Any and all notices or other communications
required or permitted to be given under any of the provisions of this Agreement
shall be in writing and may be delivered by hand, by certified mail, return
receipt requested, postage prepaid, or by nationally recognized overnight
courier service, or by facsimile transmission addressed as follows:
If to Centex:
Centex Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Legal Officer
If to Cavco:
Cavco Industries, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
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SECTION 9.2. Interpretation.
(a) The article, section and paragraph headings contained herein are
for the purposes of convenience only and are not intended to define or limit the
contents of said articles, sections or paragraphs. Whenever the words "include,"
"includes" and "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation." Whenever a reference is made in this
Agreement to a "party" or "parties," such reference shall be to a party or
parties to this Agreement unless otherwise indicated. Whenever the context
requires, the use of any gender herein shall be deemed to be or include the
other genders and the use of the singular herein shall be deemed to include the
plural (and vice versa). The use of the words "hereof" and "herein" and words of
similar import shall refer to this entire Agreement and not to any particular
article, section, subsection, clause, paragraph or other subdivision of this
Agreement, unless the context otherwise requires.
(b) Each party hereto stipulates and agrees that the rule of
construction to the effect that any ambiguities are to be or any be resolved
against the drafting party shall not be employed in the interpretation of this
Agreement to favor any party against the other, and that no party, including any
drafting party, shall have the benefit of any legal presumption (including
"meaning of the authors") or the detriment of any burden of proof by reason of
any ambiguity or uncertain meaning contained in this Agreement.
(c) If this Agreement contains any terms and provisions (including, but
not limited to, the provisions of Article VI) that govern or otherwise apply, or
could be construed to govern or otherwise apply, to the preparation or filing of
Tax Returns, the allocation of liability for Taxes or any other matter relating
to the obligations of the parties with respect to Taxes or any Action arising in
connection therewith, to the extent that any such terms and provisions are
inconsistent in any respect with the terms and provisions of the Tax Sharing
Agreement, the terms and conditions of the Tax Sharing Agreement shall control
and shall be deemed to supersede the terms and provisions hereof.
SECTION 9.3. Amendments; No Waivers. Any provision of this Agreement
may be amended or waived if, and only if, such amendment or waiver is in writing
and signed, in the case of an amendment, by each party, or in the case of a
waiver, by the party against whom the waiver is to be effective. No failure or
delay by any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
SECTION 9.4. Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Nothing contained in this Agreement is
intended to confer upon any Person other than the parties hereto and their
respective successors and permitted assigns, any benefit, right or remedies
under or by reason of this Agreement,
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except that the provisions of Article VI shall inure to the benefit of the
Centex Indemnitees and the Cavco Indemnitees. Neither party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the prior written consent of the other party hereto, which shall not be
unreasonably withheld.
SECTION 9.5. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of
Texas, without regard
to the conflict of laws rules thereof.
SECTION 9.6. Counterparts; Effectiveness. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
a counterpart hereof signed by the other party hereto.
SECTION 9.7. Entire Agreement. This Agreement and other Transaction
Agreements constitute the entire understanding of the parties with respect to
the subject matter hereof and thereof and supersede all prior agreements,
understandings and negotiations, both written and oral, between the parties with
respect to the subject matter hereof and thereof. No representation, inducement,
promise, understanding, condition or warranty not set forth in the Transaction
Documents has been made or relied upon by any party hereto.
SECTION 9.8. Severability. If any one or more of the provisions
contained in this Agreement should be declared invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of the remaining
provisions contained in this Agreement shall not in any way be affected or
impaired thereby so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such a declaration, the parties shall modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner so that the transactions contemplated hereby are consummated
as originally contemplated to the fullest extent possible.
SECTION 9.9. Termination. Notwithstanding any provision in this
Agreement to the contrary, this Agreement may be terminated and the Distribution
amended, modified or abandoned at any time prior to the Distribution, without
penalty or liability, by and in the sole discretion of Centex and without the
approval of Cavco or of Centex's stockholders.
SECTION 9.10. Survival. All covenants and agreements of the parties
contained in this Agreement shall survive the Distribution Date.
SECTION 9.11. Expenses. Except as otherwise set forth in the
Transaction Agreements, all costs and expenses incurred prior to or on the
Distribution Date in connection with the preparation, execution and delivery of
the Transaction Agreements,
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the preparation of the Information Statement (including any registration
statement on Form 10 of which such Information Statement may be a part) and the
consummation of the Distribution and the other transactions contemplated thereby
shall be charged to and paid by AAA Holdings, CREC, International, Centex and
Cavco on a pro rata basis in proportion to the net book value of their
respective assets as of such date as Centex shall determine.
[Signature page follows]
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IN WITNESS WHEREOF the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
date first above written.
CENTEX CORPORATION
By:
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
CAVCO INDUSTRIES, LLC
By:
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
CAVCO INDUSTRIES, INC.
By:
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
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