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Exhibit 6
AGREEMENT
THIS AGREEMENT (as amended or otherwise modified from time to time
pursuant to the terms hereof, the "Agreement"), dated _________, 1997, is among
California Housing Finance L.P., a Delaware limited partnership, (the
"Purchaser"), Capital Pacific Holdings, Inc., a Delaware corporation (the
"Company"), Capital Pacific Holdings L.L.C., a Delaware limited liability
company (the "New L.L.C."), and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, a natural person ("the
Indirect Stockholder").
WHEREAS, CPH2, L.L.C. and CPH3, L.L.C., each a Delaware limited
liability company (collectively, the "Stockholders"), and the Purchaser have
entered into a Stock Purchase Agreement dated as of September 29, 1997 (the
"Stock Purchase Agreement"), pursuant to which the Stockholders shall sell, and
the Purchaser shall buy, 2,484,340 shares (the "Shares") of Common Stock, $.10
par value, of the Company (the "Common Stock") for $10,000,000 (the "Purchase
Price") and the Purchasers, the Stockholders and Nationsbank, N.A. as escrow
agent have entered into an Escrow Agreement dated as of September 29, 1997
(the "Escrow Agreement") pursuant to which the Stock and the Purchase Price are
escrowed pending the consummation of the transactions contemplated by this
Agreement;
WHEREAS, the Indirect Stockholder owns a majority of the membership
interests in CPH2, L.L.C. and CPH3, L.L.C.;
WHEREAS, simultaneously with the execution of this Agreement, the
Company, the Subsidiaries and the Purchaser have entered into an Investment and
Stockholder Agreement (the "Investment Agreement"), pursuant to which the
Company and the Subsidiaries shall transfer substantially all of their
respective assets to the New L.L.C. and the Purchaser shall contribute
$30,000,000 to the capital of the New L.L.C. and execute a counterpart of the
Amended and Restated Limited Liability Company Agreement of the New L.L.C. in
return for a 32.07% membership interest in the New L.L.C. and other rights.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements set forth herein, the
parties agree as follows:
SECTION 1. RESTRICTIVE COVENANTS.
(a) The Indirect Stockholder hereby agrees that he will from and after
the Closing Date during the Restrictions Period (as defined in the Investment
Agreement):
(i) not directly or indirectly (whether through an affiliate or
otherwise) conduct or invest in tract homebuilding or
production homebuilding activity (provided any land
development activity (x) undertaken by the Indirect
Stockholder at a time when he is not the beneficial owner of
more than ten percent (10%) of
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the common equity of the Company or (y) which the
Company is unable to undertake or which the Company and the
Purchaser shall have declined to undertake shall not be
restricted hereby even if the ultimate purpose is
homebuilding) within a 100 mile radius of any current or
future project of the Company, the New L.L.C. or any Future
Affiliate or Mirror Company or of any real property which is
the subject of any purchase agreement or option agreement to
which any such entity is a party, provided however, that in
the event any land development activity by the Indirect
Stockholder was commenced prior to the acquisition of any
such project or the entering into of such purchase agreement
or option contract by the Company, the New L.L.C. or any
Mirror Company or Future Affiliate, the continuation of such
activity of the Indirect Stockholder shall not be in breach
of this Agreement;
(ii) not directly or indirectly hire or solicit the hiring of any
current or future employee (other than any person related by
blood or marriage to the Indirect Stockholder) of the
Company, the Subsidiaries, the new L.L.C. or any Future
Affiliate or Mirror Company; and
(b) The Indirect Stockholder acknowledges that the breach of this
Section 1 shall cause irreparable harm to the Purchaser, which harm cannot be
reasonably, adequately or fully redressed by the payment of damages.
Accordingly, the Purchaser shall be entitled, in addition to any other right it
may have in law or in equity, to an injunction enjoining the Indirect
Stockholder from any breach or threatened breach of this Agreement. The Indirect
Stockholder hereby waives the defense in any equitable proceeding that there is
an adequate remedy at law for any such breach.
SECTION 2. REPRESENTATIONS. The Indirect Stockholder hereby represents and
warrants to the Purchaser as of the date hereof and as of the Closing Date that:
SECTION 2.01 Legal Capacity. He has full power, legal capacity and
authority to execute, deliver and perform this Agreement and this Agreement (i)
has been duly executed and delivered, (ii) is legal, valid and binding and
enforceable against the Indirect Stockholder, and (iii) is not in contravention
of any law, order or agreement by which the Indirect Stockholder is bound.
SECTION 2.02 Organization, Qualifications and Corporate Power. Each of
CPH2, LLC and CPH3, LLC is a limited liability company, duly organized, validly
existing and in good standing under the laws of the State of Delaware and is
duly licensed or qualified to transact business as a foreign company and is in
good standing in each jurisdiction in which the nature of the business
transacted by it or the character of the properties owned or leased by it
requires such licensing or qualification, except where the failure to be so
licensed or qualified and in good standing would not, individually or in the
aggregate, have a material adverse effect on the business, financial condition,
results of operations, prospects, properties, assets or affairs of CPH2, LLC or
CPH3, LLC, respectively, or the ability of CPH2, LLC or CPH3, LLC, to perform
and comply in all material respects with all of its respective covenants and
agreements
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contained in the Stock Purchase Agreement (a "Material Adverse Effect"). Each of
the Stockholders has full power and authority (i) to own and hold its properties
and to carry on its business as now conducted, and (ii) to execute, deliver and
perform its obligations under the Stock Purchase Agreement.
SECTION 2.03 Common Stock Ownership. The Stockholders are the beneficial
and record owner of the Shares in the respective amounts set forth on Schedule A
to the Stock Purchase Agreement, free and clear of any lien, claim, encumbrance
or security interest of any kind (each a "Lien"), and at the Closing under the
Stock Purchase Agreement will transfer to the Purchaser good and marketable
title to such Shares, free and clear of any Lien.
SECTION 2.04 Authorization of Agreement, Etc. The execution and delivery
by the Stockholders and the performance by the Stockholders of their respective
obligations under the Stock Purchase Agreement, and the sale and delivery of the
Shares by the Stockholders, have been duly authorized by the relevant
proceedings of each Stockholder and will not (i) violate any provision of law or
regulatory agency (including any stock exchange rules or requirements), or any
order of any court or other agency of government, (ii) conflict with or result
in a breach of any provision of the limited liability company agreement of
either Stockholder, (iii) conflict with, result in a violation or breach of or
constitute (with due notice or lapse of time or both) a default under, any note,
bond, mortgage, indenture, deed of trust, license, lease, joint venture
agreement, collaborative arrangement or relationship or other contract,
commitment or agreement or other instrument or obligation to which either
Stockholder or any of its properties or assets may be bound or (iv) result in
the creation or imposition of any lien, claim, encumbrance or security interest
of any kind upon any of the properties or assets of either Stockholder.
SECTION 2.05 Validity. The Stock Purchase Agreement has been duly
executed and delivered by the Stockholders and constitutes the legal, valid and
binding obligations of the Stockholders, enforceable against the Stockholders in
accordance with its terms, except as the enforceability hereof may be limited
(i) by bankruptcy, insolvency, reorganization or other similar laws affecting
the enforcement of creditors' rights generally and (ii) by general equitable
principles regardless of whether considered in a proceeding in equity or at law.
SECTION 2.06 Governmental Approvals. Subject to the accuracy of the
representations and warranties of the Purchaser set forth in Section 3.04 of the
Stock Purchase Agreement, no registration or filing with, or consent or approval
of or other action by, any Federal, state or other governmental agency or
instrumentality or regulatory body is or will be necessary for the valid
execution, delivery and performance by the Stockholders of the Stock Purchase
Agreement, or the delivery, sale and transfer of the Shares to the Purchaser
thereunder other than any filings necessary pursuant to Sections 13 and 16 of
the Securities Exchange Act of 1934 and the associated regulations.
SECTION 2.07 Capitalization.
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(a) The authorized capital stock of the Company consists of (1)
30,000,000 shares of Common Stock, and (2) 5,000,000 shares of Preferred Stock.
As of the date of this Agreement, 14,995,000 shares of Common Stock and no
shares of Preferred Stock (together with the Common Stock, the "Company Stock")
are outstanding. All of the Shares have been duly authorized, validly issued and
are fully paid and nonassessable. Except for the Company Stock, there are no
shares of capital stock or other equity securities of the Company outstanding.
(b) Except for the warrants to purchase 790,000 shares of Common Stock
and as contemplated by the Related Agreements, (i) there are no preemptive or
similar rights on the part of any holder of any class of securities of the
Company, and (ii) no options, warrants, conversion or other rights, agreements
or commitments of any kind are outstanding that obligate the Company,
contingently or otherwise, to issue, sell, purchase, return or redeem any shares
of its capital stock of any class or any securities convertible into or
exchangeable for any such shares, and no authorization therefor has been given.
No shares of capital stock of the Company are held in the Company's treasury and
except in respect of the warrants described above no shares of capital stock of
the Company are reserved for issuance. There are no voting trusts, stockholder
agreements, proxies or other agreements or understandings in effect with respect
to the voting or transfer of any of the Shares.
(c) Notwithstanding anything to the contrary set forth herein, the sole
remedy for any breach of the representations and warranties set forth in
subparagraph (b) above shall be a purchase price adjustment (the "Purchase Price
Adjustment") on a retrospective basis so that either (i) the number of Shares
transferred to the Purchaser is increased or (ii) the Purchase Price is
decreased so that, in either such event, the Purchaser shall have as of the
Closing Date the economic equivalent of 15.74% of the capital stock of the
Company (on a fully diluted basis) in consideration of the Purchase Price. The
Indirect Stockholder shall cause the Stockholders to effect the Purchase Price
Adjustment in any such event, and the parties agree that an interest factor of
ten percent (10%) from the Closing Date until the effective date of any such
Purchase Price Adjustment shall be included in the Purchase Price Adjustment to
compensate the Purchaser for the delay in obtaining such economic equivalent.
SECTION 3. MISCELLANEOUS.
SECTION 3.01 Definitions. Capitalized terms not otherwise defined herein
shall have their respective meanings set forth in the Investment Agreement.
SECTION 3.02 Survival. Any representation and warranty made herein shall
survive the execution and delivery of this Agreement, and the sale, transfer and
delivery of the Shares pursuant to the Stock Purchase Agreement for a period of
eighteen (18) months.
SECTION 3.03 Parties in Interest; Assignment. All representations,
warranties, covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties
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hereto whether so expressed or not. No party may assign its rights hereunder
without the prior written consent of the other parties hereto.
SECTION 3.04 Waiver. Any of the terms or conditions of this Agreement
may be waived at any time and from time to time in writing by the party entitled
to the benefits thereof without affecting any other terms or conditions of this
Agreement.
SECTION 3.05 Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given, if delivered in person or by courier, telegraphed, telexed or by
facsimile transmission or mailed by certified or registered mail, postage
prepaid:
If to the Indirect Stockholder: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
c/o Capital Pacific Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Stockholders: CPH2, L.L.C. or CPH3, L.L.C.
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
c/o Capital Pacific Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Chairman of the Board
Capital Pacific Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Wiley, Rein & Fielding
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Purchaser: ▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇.▇.▇.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇
One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Any party may, by written notice to the other parties, change the address or
telecopy number to which notices to such party are to be delivered or mailed or
sent by facsimile transmission. All such notices or other communications shall
be effective and be deemed to have been given as of the date on which such
notices are actually received.
SECTION 3.06 Entire Agreement; Amendment. This Agreement and the Related
Agreements set forth the entire agreement and understanding of the parties in
respect of the transactions contemplated hereby and supersede all other
agreements, arrangements and understandings relating to the subject matter
hereof, both oral and written. No representation, promise, inducement or
statement of intention has been made by any of the parties hereto which is not
embodied in this Agreement, or the written statements, certificates or other
documents delivered pursuant hereto or the Related Agreements referred to above,
and none of the parties hereto shall be bound by or liable for any alleged
representation, promise, inducement or statement of intention not so set forth.
This Agreement and the Related Agreements may be amended or modified only by a
written instrument executed by the parties hereto or by their successors and
assigns.
SECTION 3.07 General. This Agreement (i) shall be construed and enforced
in accordance with the laws of the State of Delaware without giving effect to
the choice of law principles thereof; and (ii) may be executed in counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument. The Section and other headings contained
in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
SECTION 3.08 Severability. To the extent that any provision of this
Agreement which does not materially affect the intent of the parties hereto
shall be invalid or unenforceable, it shall be considered deleted herefrom and
the remainder of such provision and of this Agreement shall be unaffected and
shall continue in full force and effect.
[SIGNATURE PAGE FOLLOWS]
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SIGNATURE PAGE TO AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
CAPITAL PACIFIC HOLDINGS, INC.,
By:
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Chairman
CALIFORNIA HOUSING FINANCE, L.P.
By: California Housing Finance L.L.C.
Its Manager
By: Farallon Capital Management, L.L.C.
Its Manager
By:
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▇▇▇▇▇ ▇▇▇▇▇▇▇
Managing Member
CAPITAL PACIFIC HOLDINGS, L.L.C.
By: Capital Pacific Holdings, Inc.
Managing Member
By:
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Chairman
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, personally
524200v6
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