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EXHIBIT D
[EXECUTION COPY]
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT, entered into as of December 4,
1996 (the "Agreement"), between CENTEX REAL ESTATE CORPORATION, a Nevada
corporation ("CREC"), and ▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the "Principal
Shareholders") and ▇▇▇▇▇ LIMITED PARTNERSHIP, an Arizona limited partnership
(together with the Principal Shareholders, the "Shareholder Parties"),
W I T N E S S E T H:
WHEREAS, in order to induce CREC to enter into an Agreement
and Plan of Merger, dated the date hereof (the "Merger Agreement"), with MFH
Holding Company, a Nevada corporation, MFH Acquisition Company, an Arizona
corporation, Cavco Industries, Inc., an Arizona corporation (the "Company"), and
the Shareholder Parties, each of the Shareholder Parties is willing to enter
into this Agreement;
WHEREAS, if the Merger Agreement shall be terminated for any
reason (other than pursuant to Section 9.1(a), (c)(v), (d)(ii) or (d)(iii)
thereof) (the "Termination Event"), each of the Shareholder Parties desires to
sell to CREC, and CREC desires to purchase from such Shareholder Party, the
respective number of shares ("Company Shares") of Common Stock, par value $.05
per share, of the Company set forth opposite the name of such Shareholder Party
on Exhibit A (such shares being hereinafter referred to with respect to each
Shareholder Party as the "Subject Shares" and collectively with respect to all
of the Shareholder Parties as the "Aggregate Subject Shares"), upon the terms
and subject to the conditions set forth herein;
WHEREAS, if the Termination Event occurs, concurrently with
the purchase and sale of the Aggregate Subject Shares upon the terms and
conditions set forth herein (the "Subject Share Purchase"), the Shareholder
Parties and CREC desire to enter into a Shareholders' Agreement, dated the
Closing Date, in the form attached as Exhibit B (the "Shareholders' Agreement")
in order to evidence their agreement with respect to certain matters in relation
to the Company and their respective holdings of Company Shares; and
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WHEREAS, capitalized terms used but not defined in this
Agreement have the respective meanings set forth in the Merger Agreement;
NOW, THEREFORE, in consideration of the premises, the terms
and conditions set forth herein, the mutual benefits to be gained by 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
SALE OF SUBJECT SHARES
SECTION 1.1. Sale of Subject Shares. If the Termination Event
occurs, upon the terms and subject to the conditions set forth herein, each of
Shareholder Parties shall sell, transfer and deliver to CREC, and CREC shall
purchase from such Shareholder Party, the Subject Shares owned by such
Shareholder Party for a purchase price of $26.75 per Subject Share in cash (the
"Purchase Price").
SECTION 1.2. Conditions.
(a) The respective obligations of the parties to consummate
the Subject Share Purchase are subject to the fulfillment, prior to or
concurrently with the Closing (as hereinafter defined), of each of the following
conditions:
(i) Any waiting period applicable to the Subject Share
Purchase under the HSR Act shall have expired or been terminated; and
(ii) No statute, rule, regulation, order, writ, injunction,
judgment or decree shall have been enacted, promulgated, entered or
enforced by any federal or state court or other Governmental Authority
which has the effect of making illegal, impeding or otherwise
restraining or prohibiting the Subject Share Purchase.
(b) The obligations of CREC to purchase and pay for the
Aggregate Subject Shares are subject to the fulfillment, prior to or
concurrently with the Closing, of each of the conditions set forth in Section
7.2(a) and (b) of the Merger Agreement and to each of the following additional
conditions (any one or more of which may be waived, in whole in part, by CREC):
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(i) Each of the representations and warranties of the
Shareholder Parties contained in this Agreement shall be true and
correct in all material respects as of the Closing Date as if made on
such date; and
(ii) The Shareholder Parties shall have performed and complied
in all material respects with all provisions, covenants and conditions
contained in this Agreement required to be performed or complied with
by them prior to or on the Closing Date.
(c) The obligations of the Shareholder Parties to sell and
deliver the Subject Shares are subject to the fulfillment, prior to or
concurrently with the Closing, of each of the following conditions (any one or
more of which may be waived, in whole in part, by the Shareholder Parties, but
only if all Shareholder Parties waive the condition with respect to the
Aggregate Subject Shares).
(i) Each of the representations and warranties of CREC
contained in this Agreement shall be true and correct in all material
respects as of the Closing Date as if made on such date; and
(ii) CREC shall have performed and complied in all material
respects with all provisions, covenants and conditions contained in
this Agreement required to be performed or complied with by it prior to
or on the Closing Date.
SECTION 1.3. Closing. The closing (the "Closing") of the
Subject Share Purchase shall be held at the offices of ▇▇▇▇▇ & ▇▇▇▇▇, L.L.P.,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (or at such other place as the
parties shall agree) on the third Business Day after the occurrence of the
Termination Event. In the event that, on the day of the Closing determined
pursuant to the provisions of this Section 1.3, the conditions to the
obligations of the parties set forth in Section 1.2 shall not have not been
satisfied or waived, the Closing shall be postponed until the first Business Day
on which all of such conditions shall have been satisfied or waived. At the
Closing, (i) each Shareholder Party shall deliver to CREC a certificate or
certificates evidencing the number of Subject Shares set forth opposite the name
of such Shareholder Party on Exhibit A, duly endorsed in blank or accompanied by
stock powers duly executed by such Shareholder Party in blank, in proper form
for transfer, and (ii) CREC shall deliver to each Shareholder Party a certified
or official bank check payable to the order of such Shareholder Party in an
amount equal to the product of (a) the Purchase Price and (b) the number of
Subject Shares set forth opposite the name of such Shareholder Party on Exhibit
A. In addition, at the Closing, the Shareholder Parties and CREC shall execute
and deliver the Shareholders' Agreement.
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The Shareholder Parties shall bear the cost of any sales, transfer or
documentary taxes payable in connection with the sale of the Aggregate Subject
Shares pursuant to this Agreement. As used herein, the term "Closing Date" means
the date of the Closing, as determined in accordance with this Section 1.3.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDER PARTIES
The Shareholder Parties jointly and severally represent and
warrant to CREC as follows:
SECTION 2.1. Authority; Binding Effect. Each Shareholder Party
has all necessary power and authority to enter into and perform its obligations
under this Agreement and to consummate the transactions contemplated hereby. In
the case of any Shareholder Party that is a partnership, the execution and
delivery of this Agreement by such Shareholder Party have been duly and validly
authorized by all necessary partnership action on the part of such Shareholder
Party and all necessary action on the part of its partners, and no other
proceedings or actions on the part of or with respect to such Shareholder Party
or its partners are necessary to authorize this Agreement, the performance by
such Shareholder Party of its obligations hereunder or the consummation by such
Shareholder Party of the transactions contemplated hereby. This Agreement has
been duly executed and delivered by each Shareholder Party and constitutes a
legal, valid and binding obligation of each of them, enforceable against each
Shareholder Party in accordance with the terms hereof.
SECTION 2.2. Absence of Conflicts. The execution and delivery
by the Shareholder Parties of this Agreement, the performance by them of their
obligations hereunder and the consummation by them of the transactions
contemplated hereby will not (i) in the case of a Shareholder Party that is a
partnership, conflict with, or result in any violation or breach of, any
provision of the partnership agreement of such Shareholder Party or the Charter,
Bylaws or other constitutive instruments of any of its partners, (ii) conflict
with, result in any violation or breach of, constitute a default under, give
rise to any right of termination or acceleration (with or without notice or the
lapse of time or both) pursuant to, or result in being declared void, voidable
or without further effect, any term or provision of any material note, bond,
mortgage, indenture, lease, franchise, permit, license, Contract or other
instrument or document to which the any of the Shareholder Parties is a party or
by which its properties or assets are bound or (iii) assuming that any
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waiting period applicable to the Subject Share Purchase under the HSR Act shall
have expired or been terminated, conflict with, or result in any violation of,
any law, ordinance, statute, rule or regulation of any Governmental Authority or
of any order, writ, injunction, judgment or decree of any court, arbitrator or
Governmental Authority applicable to the Shareholder Parties or their respective
properties or assets.
SECTION 2.3. Governmental Consents and Filings. There is no
requirement applicable to any of the Shareholder Parties to obtain any Consent
of, or to make or effect any declaration, filing or registration with, any
Governmental Authority for the valid execution and delivery by the Shareholder
Parties of this Agreement, the due performance by them of their obligations
hereunder or the lawful consummation by them of the Subject Share Purchase or
the other transactions contemplated hereby, except for (i) the filing by the
Principal Shareholders (as ultimate parent entities of the Company) of a
premerger notification with the FTC and the Antitrust Division under the HSR Act
and (ii) any filings required to be made by the Shareholder Parties in
connection with such transactions pursuant to Section 13(d) of the Exchange Act
and the rules and regulations promulgated by the Commission thereunder.
SECTION 2.4. Title to Shares. As of the date hereof, each
Shareholder Party is the record and beneficial owner of the number of Company
Shares set forth opposite the name of such Shareholder Party on Exhibit C. The
Company Shares set forth opposite the name of each Shareholder Party on such
exhibit are the only Company Shares owned by such Shareholder Party. Such
Company Shares are owned by the Shareholder Parties free and clear of all
Encumbrances, except for those provided for under the express terms of this
Agreement, the Merger Agreement or the Voting Agreement. Upon delivery of
certificates evidencing the Aggregate Subject Shares to CREC and payment of the
Purchase Price therefor pursuant to the provisions of this Agreement, good and
marketable title to the Aggregate Subject Shares, free and clear of all
Encumbrances, will pass to CREC.
SECTION 2.5. Brokers' or Finders' Fees. Except as set forth in
the schedules to the Merger Agreement, the Shareholder Parties have not
authorized any broker, finder or investment banker to act on their behalf or on
behalf of the Company in connection with this Agreement or the transactions
contemplated hereby in such a manner as to give rise to a valid claim against
CREC or the Company for any brokerage or finder's fee or other fees or
commissions.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF CREC
SECTION 3.1. Authority; Binding Effect. CREC has all requisite
corporate power and authority to enter into and perform its obligations under
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery by CREC of this Agreement, the performance by CREC of its
obligations hereunder and the consummation by it of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action on the part of CREC. This Agreement has been duly executed and
delivered by CREC and constitutes a legal, valid and binding agreement of CREC,
enforceable against CREC in accordance with the terms hereof.
SECTION 3.2. Absence of Conflicts. The execution and delivery
by CREC of this Agreement, the performance by CREC of its obligations hereunder
and the consummation by it of the transactions contemplated hereby will not (i)
conflict with, or result in any violation or breach of, any provision of the
Charter or Bylaws of CREC, (ii) conflict with, result in any violation or breach
of, or constitute a default under, any term or provision of any material note,
bond, mortgage, indenture, lease, franchise, permit, license, Contract or other
instrument or document to which CREC is a party or by which its properties or
assets are bound or (iii) assuming that any waiting period applicable to the
Subject Share Purchase under the HSR Act shall have expired or been terminated,
conflict with, or result in any violation of, any law, ordinance, statute, rule
or regulation of any Governmental Authority or of any order, writ, injunction,
judgment or decree of any court, arbitrator or Governmental Authority applicable
to CREC or its properties or assets.
SECTION 3.3. Governmental Consents and Filings. There is no
requirement applicable to CREC to obtain any Consent of, or to make or effect
any declaration, filing or registration with, any Governmental Authority for the
valid execution and delivery by CREC of this Agreement, the due performance by
it of its obligations hereunder or the lawful consummation by it of the Subject
Share Purchase or the other transactions contemplated hereby, except for the
filing by CREC (or its ultimate parent entity) of a premerger notification with
the FTC and the Antitrust Division under the HSR Act.
SECTION 3.4. Securities Act. The Aggregate Subject Shares are
being acquired by CREC for its own account for investment and not with a view to
any public distribution thereof within the meaning of the Securities Act.
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SECTION 3.5. Financing. CREC has, or will have on the Closing
Date, the funds necessary to consummate the Subject Share Purchase.
SECTION 3.6. Brokers' or Finders' Fees. CREC has not
authorized any broker, finder or investment banker to act on its behalf in
connection with this Agreement or the transactions contemplated hereby in such a
manner as to give rise to a valid claim against any of the Shareholder Parties
for any brokerage or finder's fee or other fees or commissions.
ARTICLE IV
CERTAIN COVENANTS
SECTION 4.1. Distributions. If CREC purchases the Aggregate
Subject Shares, any dividends or other distributions (whether payable in cash,
stock or otherwise) by the Company with respect to the Aggregate Subject Shares
with a record date after the occurrence of the Termination Event will belong to
CREC. If any such dividend or distribution is paid by the Company to the
Shareholder Parties, each Shareholder Party shall hold such dividend or
distribution in trust for the benefit of CREC and shall promptly remit such
dividend or distribution to CREC in exactly the form received, accompanied by
appropriate instruments of transfer.
SECTION 4.2. Further Assurances. At the Closing and from time
to time thereafter, the Shareholder Parties shall execute and deliver, or cause
to be executed and delivered, at the expense of CREC, such additional or further
transfers, assignments, endorsements, consents and other instruments as CREC may
reasonably request for the purpose of effectuating the Subject Share Purchase
and the other transactions contemplated by this Agreement.
SECTION 4.3. Shareholders' Agreement. If CREC purchases the
Aggregate Subject Shares, the Shareholder Parties and CREC shall use their
reasonable best efforts to cause the Company to execute and deliver the
Shareholders' Agreement.
SECTION 4.4. HSR Act. Each of CREC (or its ultimate parent
entity) and the Principal Shareholders (as the ultimate parent entities of the
Company) shall promptly file or cause to be filed with the FTC and the Antitrust
Division notification and report forms pursuant to the HSR Act relating to the
Subject Share Purchase and the other transactions contemplated by this Agreement
(which notification and report forms may, to the extent permitted by the HSR
Act, be the same as those filed by such parties in
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connection with the Merger pursuant to the terms of the Merger Agreement). CREC
and the Principal Shareholders shall promptly respond to any request for
additional information or documentary material by the FTC or the Antitrust
Division and shall cooperate with each other in order to ensure that all waiting
periods (and any extension thereof) applicable to the consummation of the
Subject Share Purchase and the other transactions contemplated by this Agreement
under the HSR Act expire or are terminated as promptly as practicable.
ARTICLE V
INDEMNIFICATION
SECTION 5.1. Indemnification by the Shareholder Parties. In
accordance with the terms and subject to the conditions of this Article V, the
Shareholder Parties shall jointly and severally indemnify and hold harmless CREC
and its Representatives for, from and against any and all demands, claims,
actions, causes of action, proceedings, assessments, losses, damages,
liabilities, settlements, judgments, fines, penalties, interest, costs and
expenses (including fees and disbursements of counsel) which are asserted
against, imposed upon or incurred by any such Person as a result of or in
connection with the breach or alleged breach by the Shareholder Parties of any
of their representations, warranties, covenants or agreements contained in this
Agreement (the "CREC Claims"); provided, however, that the Shareholder Parties
shall only be obligated to indemnify CREC and their respective Representatives
pursuant to this Section 5.1 if and to the extent that the aggregate of all CREC
Claims for which any Persons have sought or are seeking indemnification
hereunder exceeds $50,000.
SECTION 5.2. Indemnification by CREC.
(a) In accordance with the terms and subject to the conditions
of this Article V, CREC shall indemnify and hold harmless the Shareholder
Parties and their Representatives for, from and against any and all demands,
claims, actions, causes of action, proceedings, assessments, losses, damages,
liabilities, settlements, judgments, fines, penalties, interest, costs and
expenses (including fees and disbursements of counsel) which are asserted
against, imposed upon or incurred by any such Person as a result of or in
connection with the breach or alleged breach by CREC of any of its
representations, warranties, covenants or agreements contained in this Agreement
(the "Shareholder Party Breach Claims"); provided, however, that CREC shall only
be obligated to indemnify the Shareholder Parties and their Representatives
pursuant to this Section 5.2(a) if and to the extent that the aggregate of all
Shareholder Party Breach Claims for which any Persons have sought or are seeking
indemnification hereunder exceeds $50,000.
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(b) In addition to the indemnification provided for in
paragraph (a) above, in accordance with the terms and subject to the conditions
of this Article V, CREC shall indemnify and hold harmless the Shareholder
Parties, in their capacities as majority shareholders or controlling persons of
the Company (but not in their capacities as general partners of any partnership
or trustees of any trust owing fiduciary duties or obligations to the partners
of any such partnership or beneficiaries of any such trust) for, from and
against (i) any and all demands, claims, actions, causes of action or
proceedings made or brought by a shareholder of the Company (whether on behalf
of such shareholder or derivatively in the name and on behalf of the Company)
alleging a breach of the duties and obligations of the Shareholder Parties to
the Independent Shareholders or the Company which arises out of or is based upon
this Agreement or the Voting Agreement or the Subject Share Purchase or the
other transactions contemplated hereby or thereby or any action or omission
taken or omitted to be taken by the Shareholder Parties in order to effectuate
any such transactions and (ii) any and all assessments, losses, damages,
liabilities, settlements, judgments, fines, penalties, interest, costs and
expenses (including fees and disbursements of counsel) which are asserted
against, imposed upon or incurred by any such Shareholder Party as a result of
or in connection with any such demands, claims, actions, causes of action or
proceedings (the "Shareholder Party Controlling Person Claims" and, together
with the "Shareholder Party Breach Claims," the "Shareholder Party Claims").
SECTION 5.3. Third-Party Claims; Procedures. The obligations
of the parties provided for under Sections 5.1 and 5.2 hereof in respect of any
CREC Claims or Shareholder Party Claims, as the case may be ("Claims"), made or
asserted by a third party ("Third-Party Claims") shall be performed in
accordance with the following procedures:
(a) Each Person entitled to indemnification under Section 5.1
or 5.2 hereof (each, an "Indemnified Party") shall give the party or parties
from whom it is seeking indemnification hereunder (collectively, the
"Indemnifying Party") written notice as promptly as reasonably practicable after
the written assertion of any Third-Party Claim or commencement of any action,
suit or proceeding in respect thereof; provided, however, that, if an
Indemnified Party fails to give Indemnifying Party written notice as provided
herein, Indemnifying Party shall only be relieved of its obligations under this
Article V in respect of such Third-Party Claim if and to the extent that the
Indemnifying Party is materially prejudiced thereby (whether as a result of the
forfeiture of substantive defenses or otherwise).
(b) Promptly after receipt of written notice of a Third-Party
Claim as contemplated by Section 5.3(a), the Indemnifying Party shall (or, in
the case of the Shareholder Parties, may in their sole discretion elect to)
assume the defense of such Third- Party Claim with counsel reasonably
satisfactory to the Indemnified Party; provided,
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however, that (i) if the Indemnifying Party fails, within a reasonable time
after receipt of written notice of such Third-Party Claim, to assume the defense
thereof with counsel reasonably satisfactory to the Indemnified Party, the
Indemnified Party shall have the right to undertake the defense, compromise and
settlement of such Third-Party Claim on behalf of and for the account and risk
of the Indemnifying Party, subject to the right of the Indemnifying Party (upon
notifying the Indemnified Party of its election to do so) to assume the defense
of such Third-Party Claim with counsel reasonably satisfactory to the
Indemnified Party at any time prior to the settlement, compromise, judgment or
other final determination thereof, (ii) if in the reasonable judgment of the
Indemnified Party a direct or indirect conflict of interest exists between the
Indemnified Party and the Indemnifying Party in respect of the Third-Party
Claim, the Indemnified Party shall (upon written notice to the Indemnifying
Party of its election to do so) have the right to undertake the defense,
compromise and settlement of such Third-Party Claim on behalf of and for the
account and risk of the Indemnifying Party (it being understood and agreed that
the Indemnifying Party shall not be entitled to assume the defense of such
Third-Party Claim), (iii) if the Indemnified Party in its sole discretion so
elects, it shall be entitled to employ separate counsel and to participate in
the defense of such Third-Party Claim (and the Indemnifying Party shall
cooperate with the Indemnified Party so as to allow it to participate in the
defense thereof), but the fees and expenses of counsel so employed shall (except
as otherwise contemplated by clauses (i) and (ii) above) be borne solely by the
Indemnified Party and (iv) the Indemnifying Party shall not (A) settle or
compromise any Third-Party Claim, or consent to the entry of any judgment
relating thereto, that does not include as an unconditional term thereof the
grant by the claimant or plaintiff to each Indemnified Party of a release from
any and all liability in respect thereof or (B) settle or compromise any
Third-Party Claim, or consent to the entry of any judgment relating thereto,
that would materially and adversely affect the Indemnified Party other than as a
result of money damages or other money payments fully paid by the Indemnified
Party, without the prior written consent of the Indemnified Party.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Survival of Representations and Warranties. The
representations and warranties made by CREC and the Shareholder Parties in this
Agreement shall survive the Subject Share Purchase and shall continue in effect
after the Closing Date.
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SECTION 6.2. Expenses. Except as expressly provided herein,
all fees and expenses incurred by any of the parties hereto in connection with
this Agreement or any of the transactions contemplated hereby shall be borne and
paid solely by the party incurring such fees and expenses.
SECTION 6.3. Public Announcements. The timing and content of
any public announcement by any party with respect to this Agreement will be
mutually agreed upon by the Principal Shareholders and CREC, except as otherwise
required by applicable law, stock exchange requirements or Nasdaq designation
requirements. If either the Principal Shareholders or CREC determine that a
public announcement is required by applicable law, stock exchange requirements
or Nasdaq designation requirements, prior to making such announcement, it will
consult with the other party regarding the substance thereof.
SECTION 6.4. Action in Shareholder Capacity Only. Each of the
Shareholder Parties makes no agreement or understanding herein as a director or
officer of Company. Each of the Shareholder Parties is entering into this
Agreement solely in his, her or its capacity as a record and beneficial owner of
Shares, and nothing contained herein shall limit or affect, or impose any
obligation with respect to, any actions taken by such Shareholder Party in his,
her or its capacity as a director or officer of Company.
SECTION 6.5. Termination. This Agreement may be terminated
either by CREC or by the Shareholder Parties jointly if the Subject Share
Purchase shall not have been consummated prior to or on the later of (i) 30 days
after termination of the Merger Agreement in accordance with its terms or (ii)
December 31, 1997; provided, however, that the party or parties seeking to
terminate this Agreement shall have diligently and in good faith performed or
complied in all material respects with the agreements and covenants required to
be performed by them hereunder.
SECTION 6.6. Notices. All notices and other communications
hereunder shall be in writing and shall be given by delivery in person, by
registered or certified mail (return receipt requested and with postage prepaid
thereon) or by cable, telex or facsimile transmission to the parties at their
respective addresses set forth in Section 11.3 of the Merger Agreement (or at
such other address as any party shall have furnished to the others in accordance
with the terms of this Section 6.6). All notices and other communications
hereunder that are addressed as provided in or pursuant to this Section 6.6
shall be deemed duly and validly given (a) if delivered in person, upon
delivery, (b) if delivered by registered or certified mail (return receipt
requested and with postage paid thereon), 72 hours after being placed in a
depository of the United States mails and (c) if delivered by
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cable, telex or facsimile transmission, upon transmission thereof and receipt of
the appropriate answerback.
SECTION 6.7. Amendments; Waivers. The terms and provisions of
this Agreement may be modified or amended only by a written instrument executed
by each of the parties hereto, and compliance with any term or provision hereof
may be waived only by a written instrument executed by each party entitled to
the benefits of the same. No failure to exercise 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 granted hereunder.
SECTION 6.8. Entire Agreement. This Agreement (including the
Exhibits hereto) constitutes the entire agreement among the parties with respect
to the subject matter hereof and supersedes all prior written or oral agreements
and understandings and all contemporaneous oral agreements and understandings
among the parties or any of them with respect to the subject matter hereof.
SECTION 6.9. Parties in Interest; Assignment. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns (it being understood and agreed that, except
as expressly provided in this Agreement, nothing contained herein is intended to
confer any rights, benefits or remedies of any kind or character on any other
Person under or by reason of this Agreement). No party may assign this Agreement
without the prior written consent of each of the other parties hereto; provided,
however, that CREC may assign this Agreement to any Qualified Centex Subsidiary
without the consent of any other party, but such assignment shall not relieve
CREC of any of its obligations hereunder to the extent that such obligations are
not performed by the assignee. It is expressly understood and agreed that any
attempted or purported assignment by any party of this Agreement in violation of
this Section 6.9 shall be null and void.
SECTION 6.10. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Texas, without
regard to any principles of conflicts of laws that would result in the
application of the laws of any other jurisdiction.
SECTION 6.11. Severability. In the event that any provision
contained herein shall be held to be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of any such provision in
every other respect and the validity, legality and enforceability of the
remaining provisions contained in this Agreement shall not be in any way
impaired thereby.
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SECTION 6.12. Specific Performance. The parties hereto agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with the terms hereof.
Accordingly, the parties agree that each of them shall be entitled to injunctive
relief to prevent breaches of the terms of this Agreement and to specific
performance of the terms hereof, in addition to any other remedy now or
hereafter available at law or in equity, or otherwise.
SECTION 6.13. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
CENTEX REAL ESTATE CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
__________________________________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman of the Board
/s/ ▇▇ ▇. ▇▇▇▇▇▇
__________________________________________
▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_____________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ LIMITED PARTNERSHIP
By: THE 1994 ALSONS TRUST, created
February 9, 1994, general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
__________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Independent Trustee
By: /s/ ▇▇ ▇. ▇▇▇▇▇▇
__________________________________________
▇▇ ▇. ▇▇▇▇▇▇,
Family Trustee
By: ▇▇▇▇▇▇ AND ▇▇▇▇▇ ▇▇▇▇▇▇ TRUST,
created August 24, 1989, general partner
By: /s/ ▇▇ ▇. ▇▇▇▇▇▇
__________________________________________
▇▇ ▇. ▇▇▇▇▇▇,
Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
__________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Trustee
-15-
16
EXHIBIT A
(to Stock Purchase Agreement)
SUBJECT SHARES
NUMBER
SHAREHOLDER PARTIES OF SHARES
------------------- ---------
▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 103,389
▇▇▇▇▇ Limited Partnership 943,899
---------
Total 1,047,288
=========
17
EXHIBIT B
(to Stock Purchase Agreement)
================================================================================
SHAREHOLDERS' AGREEMENT
AMONG
CAVCO INDUSTRIES, INC.
AND
THE SHAREHOLDERS IDENTIFIED HEREIN
DATED AS OF , 1997
================================================================================
18
TABLE OF CONTENTS
PAGE
ARTICLE I - CORPORATE GOVERNANCE ........................................ 2
SECTION 1.1. Board of Directors ................................ 2
SECTION 1.2. Dividends ......................................... 3
SECTION 1.3. Intercompany Indebtedness ......................... 3
SECTION 1.4. Actions Requiring Supermajority Board Vote ........ 4
SECTION 1.5. Fiscal Year ....................................... 6
SECTION 1.6. Certain Restrictions .............................. 6
ARTICLE II - TRANSFER OF SHARES; RIGHTS OF PURCHASE AND SALE ............ 7
SECTION 2.1. General Restrictions on Transfer .................. 7
SECTION 2.2. Pledge of Shares .................................. 8
SECTION 2.3. Voluntary Transfer; Right of Participation ........ 9
SECTION 2.4. Involuntary Transfer .............................. 10
SECTION 2.5. Put Option ........................................ 10
SECTION 2.6. Call Option ....................................... 11
SECTION 2.7. Appraisal of Additional Businesses ................ 11
SECTION 2.8. Purchase Price .................................... 12
SECTION 2.9. Closing ........................................... 12
SECTION 2.10.HSR Act ........................................... 13
SECTION 2.11.Effect of Prohibited Transfer ..................... 13
ARTICLE III - REPRESENTATIONS AND WARRANTIES ............................ 14
SECTION 3.1. Representations and Warranties of the Company ..... 14
SECTION 3.2. Representations and Warranties of the Major
Shareholders ...................................... 15
ARTICLE IV - DEFINITIONS; ACCOUNTING MATTERS ............................ 17
SECTION 4.1. Certain Definitions ............................... 17
SECTION 4.2. Certain Accounting Matters ........................ 25
ARTICLE V - MISCELLANEOUS ............................................... 26
SECTION 5.1. Legend ............................................ 26
SECTION 5.2. Termination ....................................... 27
SECTION 5.3. Further Assurances; Frustration of Purposes ....... 27
SECTION 5.4. Fees and Expenses ................................. 27
i
19
SECTION 5.5. Certain Reports ...................................... 27
SECTION 5.6. Determination of Certain Amounts; Dispute Resolution . 28
SECTION 5.7. Notices .............................................. 29
SECTION 5.8. Effectiveness ........................................ 31
SECTION 5.9. Amendment; Waivers ................................... 31
SECTION 5.10.Entire Agreement ..................................... 31
SECTION 5.11.Parties in Interest; Assignment ...................... 31
SECTION 5.12.Governing Law ........................................ 32
SECTION 5.13.Severability ......................................... 32
SECTION 5.14.Specific Performance ................................. 32
SECTION 5.15.Default Interest ..................................... 32
SECTION 5.16.Counterparts ......................................... 32
ii
20
SHAREHOLDERS' AGREEMENT
This SHAREHOLDERS' AGREEMENT, entered into as of _______________, 1997
(the "Agreement"), by and among CAVCO INDUSTRIES, INC., an Arizona corporation
(the "Company"), CENTEX REAL ESTATE CORPORATION, a Nevada corporation ("CREC"),
▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ LIMITED PARTNERSHIP, an Arizona limited
partnership ("▇▇▇▇▇ Partnership"),
W I T N E S S E T H:
WHEREAS, as of December 4, 1996, CREC, ▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and ▇▇▇▇▇ Partnership entered into a Stock Purchase Agreement (the "Stock
Purchase Agreement");
WHEREAS, concurrently with the execution and delivery of this
Agreement, the parties to the Stock Purchase Agreement are consummating the
transactions contemplated thereby, including, but not limited to, the sale by
the ▇▇▇▇▇▇ Shareholders of an aggregate of 1,047,288 shares of common stock, par
value $.05 per share ("Common Stock"), of the Company (the "Subject Share
Purchase");
WHEREAS, after giving effect to the consummation of the Subject Share
Purchase, the parties hereto other than the Company own an aggregate of
1,830,729 shares of Common Stock;
WHEREAS, the Stock Purchase Agreement provides that CREC and the ▇▇▇▇▇▇
Shareholders (the "Major Shareholders") will (i) execute and deliver this
Agreement concurrently with the consummation of the Subject Share Purchase and
(ii) use their reasonable best efforts to cause the Company to execute and
deliver this Agreement;
WHEREAS, the parties hereto deem it to be in their best interests to
provide for consistent and uniform management of the Company;
WHEREAS, the parties hereto desire to restrict the Transfer (as
hereinafter defined) of shares of Common Stock, whether issued and outstanding
on the date hereof or issued from time to time hereafter, by the Major
Shareholders and to provide for certain rights and obligations of the Major
Shareholders in respect of the purchase and sale of such shares;
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21
WHEREAS, the parties hereto desire to evidence their agreement with
respect to certain other matters in relation to the Company and the issued and
outstanding shares of Common Stock; and
WHEREAS, capitalized terms used in any provision of this Agreement but
not defined in such provision have the respective meanings set forth in Section
4.1;
NOW, THEREFORE, in consideration of the premises, the terms and
provisions set forth herein, the mutual benefits to be gained by 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
CORPORATE GOVERNANCE
SECTION 1.1. Board of Directors. Each Major Shareholder shall use its
best efforts and take all actions within its power (including, but not limited
to, the voting of shares of Common Stock owned by such Major Shareholder at any
annual or special meeting of the shareholders of the Company, or in any action
by written consent in lieu of a meeting) to effectuate and carry out the
following provisions:
(a) The Company shall at all times be managed by or under the
direction of a Board of Directors consisting of five persons (or, if CREC elects
to designate any directors who are independent of the Company and the Major
Shareholders pursuant to paragraph (b) below, such greater number as shall be
required in order for such independent directors to serve on the Board of
Directors).
(b) The members of the Board of Directors of the Company shall at
all times be designated and elected as follows: (i) so long as the ▇▇▇▇▇▇
Shareholders own the Option Shares, two members of the Board of Directors shall
be designated by the ▇▇▇▇▇▇ Shareholder Representative; and (ii) all of the
remaining members of the Board of Directors shall be designated by CREC. The
directors initially designated by the ▇▇▇▇▇▇ Shareholder Representative are ▇▇
▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇. The directors initially designated by CREC are
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ III.
(c) In the event that any vacancy is created on the Board of
Directors of the Company by reason of the death, resignation or removal of any
director, such vacancy
-2-
22
shall be filled by a substitute director designated by the party or parties
entitled to designate the director whose death, resignation or removal created
such vacancy.
(d) A director shall be removed if, and only if, the party or
parties entitled to designate such director deliver a written notice to the
Company stating that such director shall be removed and replaced with a
substitute director designated in such notice.
(e) The Board of Directors of the Company shall meet no less
frequently than once each calendar quarter.
SECTION 1.2. Dividends. The Company shall (and each Major Shareholder
shall use its best efforts and take all actions within its power to cause the
Company to) declare and pay to the holders of its Common Stock (i) cash
dividends in an amount equal to 20% of the Adjusted Consolidated Net Income of
the Company for each Dividend Period, which dividends shall be paid within 120
days after the end of such Dividend Period to the holders of record of shares of
Common Stock as of the opening of business on the last day thereof, and (ii)
dividends in an amount equal to (and in the same form as) the net proceeds
received by the Company or any of its Subsidiaries from the sale or other
disposition of the Leasing Business, which dividends shall be paid within 30
days after the receipt of such proceeds to the holders of record of shares of
Common Stock as of the date of consummation of the sale or other disposition of
the Leasing Business.
SECTION 1.3. Intercompany Indebtedness. Each Major Shareholder shall
use its best efforts and take all actions within its power to cause all
Intercompany Indebtedness to bear interest at the Intercompany Rate; provided,
however, that if the directors designated by the ▇▇▇▇▇▇ Shareholder
Representative shall have proposed an Eligible Capital Project for consideration
by the Board of Directors of the Company but, notwithstanding the affirmative
vote in favor of such Eligible Capital Project by the directors so designated,
the Board of Directors shall have rejected such project or deferred
consideration thereof (it being understood and agreed that each Major
Shareholder shall use its best efforts and take all actions within its power to
cause the directors designated by it to consider in good faith any Eligible
Capital Project proposed by the directors designated by the ▇▇▇▇▇▇ Shareholder
Representative), then the Eligible Capital Project Deficit Amount shall bear
interest at a rate of 12.5% per annum.
-3-
23
SECTION 1.4. Actions Requiring Supermajority Board Vote. The Company
shall not (and each Major Shareholder shall use its best efforts and take all
actions within its power to cause the Company not to) take any of the following
actions unless approved by a Supermajority Board Vote:
(a) an amendment to the Charter or Bylaws of the Company that
abolishes or alters in any material respect the rights, privileges or
preferences of the holders of Common Stock or the rights, privileges or
immunities of directors or officers of the Company;
(b) a consolidation of the Company with, or merger of the Company
with or into, any Person;
(c) a sale, lease, pledge, transfer or other disposition to any
Person (other than a wholly owned Subsidiary of the Company) of (i) all or
substantially all of the properties and assets of the Company or (ii) any
properties or assets of the Company or any of its Subsidiaries (other than (A)
properties or assets used in connection with the Additional Businesses or (B)
manufactured housing units or other products sold, leased, transferred or
otherwise disposed of in the ordinary course of business) with a fair market
value in excess of $2,000,000;
(d) a sale, transfer or other disposition to any Person (other
than a wholly owned Subsidiary of the Company) of the Leasing Business (whether
in the form of a stock sale, asset sale, merger or otherwise);
(e) a change in the general nature of the Principal Businesses as
conducted by the Company and its Subsidiaries as of the date hereof;
(f) the issuance or transfer to any Person (other than a wholly
owned Subsidiary of the Company) of any shares of Common Stock or other Capital
Stock of the Company or any of its Subsidiaries;
(g) the acquisition of any shares of Common Stock or other Capital
Stock of the Company or any of its Subsidiaries;
(h) the approval of the Annual Budget for any fiscal year of the
Company;
-4-
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(i) an acquisition of a business (whether in the form of a stock
purchase, asset purchase, merger or otherwise) or operating properties or assets
from any Person (A) not related to or for use in the Principal Businesses or (B)
for a purchase price in excess of $5,000,000, other than as contemplated by the
Annual Budget for the fiscal year of the Company in which such acquisition is
consummated;
(j) the approval of a project that would require the Company or
any of its Subsidiaries to make an investment or capital expenditure in an
aggregate amount exceeding $2,000,000, unless such investment or capital
expenditure is contemplated by the Annual Budget for the fiscal year of the
Company in which such investment or capital expenditure is to be made;
(k) a determination not to have the consolidated financial
statements for any fiscal year of the Company and its consolidated subsidiaries
audited by a firm of independent public accountants or to have such consolidated
financial statements audited by any firm other than ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP;
(l) a change in the fiscal year of the Company, other than as
contemplated by Section 1.5;
(m) the payment of any dividend in respect of the Common Stock or
other Capital Stock of the Company not required to be declared and paid pursuant
to Section 1.2;
(n) any payment or reimbursement by the Company or any of its
Subsidiaries to CREC or any of its Affiliates of any Prohibited Intercompany
Charges;
(o) any sale or lease of goods by CREC or any of its Affiliates
(other than the Company or any of its Subsidiaries) to the Company or any of its
Subsidiaries, or by the Company or any of its Subsidiaries to CREC or any of its
Affiliates (other than the Company or any of its Subsidiaries), except on terms
that are at least as favorable to the Company and its Subsidiaries as could be
obtained in an arm's-length transaction with an unaffiliated third party;
(p) any amendment to, or change in the terms of, the Tax Agreement
that is material and adverse to the Company;
(q) the appointment or dismissal of the chief executive officer or
the chief financial officer of the Company;
-5-
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(r) the filing of any petition seeking to reorganize the Company
pursuant to, or to obtain relief under, any federal or state bankruptcy or
insolvency law; and
(s) the dissolution, liquidation or winding-up of the affairs of
the Company.
Each party hereto acknowledges and agrees that, to the fullest extent
permitted by law, with respect to the approval of the matters specified in this
Section 1.4 only, (i) the members of the Board of Directors designated by the
▇▇▇▇▇▇ Shareholders shall have the right to act and vote as directors of the
Company in a manner determined by them as necessary or advisable to preserve and
protect the rights and interests of the ▇▇▇▇▇▇ Shareholders and the shareholders
of the Company other than the Major Shareholders, and except as expressly
provided herein, shall have no duty or obligation to give any consideration to
any interest of CREC and (ii) the members of the Board of Directors designated
by CREC shall have the right to act and vote as directors of the Company in a
manner determined by them as necessary or advisable to preserve and protect the
rights and interests of CREC and the shareholders of the Company other than the
Major Shareholders, and except as expressly provided herein, shall have no duty
or obligation to give any consideration to any interest of the ▇▇▇▇▇▇
Shareholders.
SECTION 1.5. Fiscal Year. The Company shall (and each Major Shareholder
shall use its best efforts and take all actions within its power to cause the
Company to) cause the fiscal year of the Company to be the 12-month period
commencing on the first day of April in each year and ending on the last day of
March in the next succeeding year, with the first such fiscal year to commence
on April 1, 1997 and end on March 31, 1998.
SECTION 1.6. Certain Restrictions. No Major Shareholder shall grant any
proxy, other than to an officer of the Company designated by the Board of
Directors (or, in the case of a ▇▇▇▇▇▇ Shareholder, the ▇▇▇▇▇▇ Shareholder
Representative), or enter into or agree to be bound by any voting trust
agreement or arrangement of any kind with respect to any shares of Common Stock,
nor shall any Major Shareholder enter into any shareholder agreement or
arrangement of any kind with respect to any shares of Common Stock inconsistent
with the provisions of this Agreement, including, but not limited to, any
agreement or arrangement with respect to the voting of shares of Common Stock,
or act as a member of a group or in concert with any other Person in connection
with the acquisition of shares of Common Stock in any manner inconsistent with
the provisions of this Article I.
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ARTICLE II
TRANSFER OF SHARES;
RIGHTS OF PURCHASE AND SALE
SECTION 2.1. General Restrictions on Transfer.
(a) No Major Shareholder shall effect a Transfer of any shares of
Common Stock owned or held by such Major Shareholder unless (i) the certificate
or certificates representing such shares bear a legend as provided in Section
5.1 hereof to the effect that such shares have not been registered under the
Securities Act and that the Transfer thereof is subject to the terms of this
Agreement, (ii) the Transferee shall have executed, as a condition to obtaining
ownership of the shares of Common Stock, an appropriate document (a
"Supplemental Agreement") in which the Transferee agrees that its ownership of
such shares shall be subject to, and that the Transferee shall comply with, all
of the terms and conditions of this Agreement (including, but not limited to,
the restrictions on Transfer set forth in this Section 2.1) and that the
Transferee shall not effect any Transfer of such shares except in compliance
with the provisions hereof and in which the Transferee confirms that the
representations and warranties contained in Section 3.2 are true and correct
with respect to such Transferee as of the date of the Supplemental Agreement and
(iii) the Supplemental Agreement shall have been promptly delivered to the
Company and approved (as to its conformity with the requirements of this Section
2.1) by it in its reasonable discretion prior to the acquisition by such
Transferee of the shares of Common Stock. The Company shall not unreasonably
withhold or delay its approval of any Supplemental Agreement. A Transferee that
is not already a party to this Agreement, by executing a Supplemental Agreement
approved by the Company as hereinabove provided, shall become a Major
Shareholder for all purposes of this Agreement and shall have the same rights
and shall be subject to the same restrictions as the Major Shareholder effecting
the Transfer.
(b) No Major Shareholder shall effect a Transfer of any shares of
Common Stock owned or held by such Major Shareholder if such action would
constitute a violation of any applicable registration or qualification
requirements of the Securities Act or any state securities or blue sky laws. In
the event of any disagreement between a Major Shareholder and the Company as to
whether or not a proposed Transfer would result in a violation of the applicable
registration or qualification requirements of the Securities Act or any state
securities or blue sky laws, such Major Shareholder shall deliver to the Company
an opinion of counsel reasonably acceptable to the Company to the effect that
-7-
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such proposed Transfer would not result in such a violation, which opinion shall
state the basis of the legal conclusions expressed therein. The delivery of such
opinion shall be deemed to constitute compliance with the provisions of this
Section 2.1(b) unless, within ten days after receipt thereof, the Company
notifies the Major Shareholder in writing that, in the judgment of the Company
based upon the advice of its counsel, the proposed Transfer would result in such
a violation.
(c) During the period commencing on the date hereof and ending on
the fifth anniversary of the date hereof, except as expressly contemplated by
this Article II, no Major Shareholder shall effect a Transfer of any shares of
Common Stock owned or held by such Major Shareholder to any Person other than a
Permitted Transferee unless (i) in the case of any Transfer by a ▇▇▇▇▇▇
Shareholder, such Transfer shall have been approved in writing by CREC or (ii)
in the case of any Transfer by CREC, such Transfer shall have been approved in
writing by the ▇▇▇▇▇▇ Shareholder Representative. CREC or the ▇▇▇▇▇▇ Shareholder
Representative, as the case may be, shall have the right to grant or withhold
any approval required under this paragraph (c) in its or his sole discretion
and, in doing so, shall be entitled to consider only such interests and factors
as it or he deems appropriate and shall have no duty or obligation to give any
consideration to any other interest of, or factor affecting, any other party to
this Agreement.
SECTION 2.2. Pledge of Shares. A Major Shareholder shall have the right
to pledge any shares of Common Stock owned or held by such Major Shareholder to
a commercial bank, savings and loan association or other lending or financial
institution or to a Permitted Transferee as security for any bona fide
Indebtedness of such Major Shareholder; provided, however, that no such pledge
shall be made unless (i) the Person to which such pledge is made shall have
executed an appropriate document (a "Pledgee Agreement") in which such Person
agrees that, in the event of foreclosure or other realization upon such shares,
such shares shall continue to be subject to the terms and conditions of this
Agreement (including, but not limited to, the restrictions on Transfer set forth
in Section 2.1) and that such Person shall not effect any Transfer of such
shares except in compliance with the provisions hereof and (ii) the Pledgee
Agreement shall have been promptly delivered to the Company and approved (as to
its conformity with the requirements of this Section 2.2) by it in its
reasonable discretion prior to the pledge of such shares. The Company shall not
unreasonably withhold or delay its approval of any Pledgee Agreement.
-8-
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SECTION 2.3. Voluntary Transfer; Right of Participation.
(a) If either a ▇▇▇▇▇▇ Shareholder or CREC (an "Offeror") desires
to make a voluntary Transfer of any shares of Common Stock owned or held by such
Offeror (other than a pledge permitted pursuant to Section 2.2) at any time
after the fifth anniversary of the date of this Agreement to any Person other
than a Permitted Transferee, such Offeror shall first submit to (i) in the case
of a proposed Transfer by a ▇▇▇▇▇▇ Shareholder, CREC or (ii) in the case of a
proposed Transfer by CREC, the ▇▇▇▇▇▇ Shareholder Representative (the "Offeree")
a written notice (an "Offering Notice") pursuant to which such Offeror shall
irrevocably offer to sell such shares of Common Stock (the "Offered Stock") to
the Offeree. The Offering Notice shall specify (i) the number of shares of
Offered Stock involved in the proposed Transfer, (ii) the proposed Offering
Price (or, if the transaction involves the payment of consideration other than
cash, a good faith estimate thereof), in the case of a sale or other Transfer
for value, or a description of the proposed Transfer, in the case of a
transaction other than a sale or other Transfer for value, (iii) the name and
address of the prospective Transferee, (iv) the other terms of the proposed
Transfer, if any, and (v) if applicable, the Participation Offer required to be
included therein pursuant to paragraph (b) below. Within 30 days (or, if the
Offeree is the ▇▇▇▇▇▇ Shareholder Representative, 180 days) after the receipt of
an Offering Notice from the Offeror, the Offeree shall give written notice (a
"First Refusal Response Notice") to the Offeror stating whether it elects to
purchase the Offered Stock. If the Offered Stock is not purchased by the
Offeree, the Offeror may make a Transfer of the Offered Stock to the Transferee
named in the Offering Notice, but only in strict compliance with the terms
therein stated and subject to the provisions of Section 2.1. If the Offeror
shall fail to complete such a Transfer of the Offered Stock within 30 days after
the delivery of the First Refusal Response Notice, the Offeror shall be required
to submit another Offering Notice in order to make a Transfer of the Offered
Stock in accordance with this Section 2.3(a).
(b) If CREC delivers an Offering Notice to the ▇▇▇▇▇▇ Shareholder
Representative pursuant to paragraph (a) above with respect to a voluntary sale
or other Transfer of shares of Common Stock for value (a "CREC Sale
Transaction"), CREC shall include in such notice an offer (a "Participation
Offer") to include in such CREC Sale Transaction a number of shares owned by the
▇▇▇▇▇▇ Shareholders (which may be allocated among the ▇▇▇▇▇▇ Shareholders in
such manner as is determined by the ▇▇▇▇▇▇ Shareholder Representative) equal to
the product of (i) the aggregate number of shares of Common Stock proposed to be
sold or otherwise transferred for value by CREC and (ii) a fraction the
numerator of which is equal to the number of shares of Common Stock held by the
▇▇▇▇▇▇ Shareholders and denominator of which is equal to the number of shares of
Common Stock held by all of the parties hereto. The ▇▇▇▇▇▇ Shareholder
Representative shall deliver
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a written notice (a "Participation Offer Response Notice") to CREC within 30
days after the delivery of such Offering Notice stating whether the ▇▇▇▇▇▇
Shareholders elect to accept the Participation Offer and the number of shares to
be sold by each ▇▇▇▇▇▇ Shareholder in connection therewith. Any Participation
Offer made by CREC shall be conditioned upon the consummation of the sale by
CREC of the shares of Common Stock specified in the Offering Notice pursuant to
the CREC Sale Transaction. If the ▇▇▇▇▇▇ Shareholder Representative has accepted
the Participation Offer on behalf of the ▇▇▇▇▇▇ Shareholders, CREC shall reduce
the number of shares of Common Stock that it would otherwise have sold in the
CREC Sale Transaction to the extent necessary to permit the ▇▇▇▇▇▇ Shareholders
to sell the number of shares specified pursuant to this paragraph (b), and each
of the ▇▇▇▇▇▇ Shareholders shall be obligated to sell the number of shares
specified in the Participation Offer Response Notice to the proposed Transferee
in accordance with the terms of such sale set forth in the Offering Notice.
(c) Notwithstanding anything to the contrary contained herein, it
is understood and agreed that any Transfer of shares of Common Stock
contemplated by this Section 2.3 shall be subject to, and shall be effected in
compliance with, the provisions of Section 2.1(a) and (b), including, but not
limited to, the requirement that the Transferee execute a Supplemental Agreement
in accordance with Section 2.1(a).
SECTION 2.4. Involuntary Transfer. A Transfer of shares of Common Stock
in connection with any bankruptcy, insolvency or similar proceedings involving a
Major Shareholder or pursuant to any judicial order, legal process, execution or
attachment with respect to a Major Shareholder or any other involuntary Transfer
(other than a Transfer by will, trust or pursuant to the laws of intestate
succession) shall be subject to the restrictions set forth in this Agreement,
and in any such case, the Person seeking to effect such Transfer (the
"Involuntary Transferor") shall be required to effect the same in compliance
with the provisions set forth in Section 2.3 in all respects as if such
Involuntary Transferor were an Offeror desiring to make a voluntary Transfer of
such shares; provided, however, that, in the case of any such involuntary
Transfer, if the Involuntary Transferor is not a Major Shareholder, in addition
to the other information required to be set forth in the Offering Notice
pursuant to Section 2.3, the Offering Notice shall specify the address of the
Involuntary Transferor that is to be its location for notices and other
communications hereunder.
SECTION 2.5. Put Option. At any time during a Put Option Window Period,
the ▇▇▇▇▇▇ Shareholders shall have the option (the "Put Option") to sell all,
but not less than all, of the shares of Common Stock specified in Exhibit A
hereto (the "Option Shares") to CREC at the applicable Purchase Price. The
▇▇▇▇▇▇ Shareholders shall be
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30
entitled to exercise the Put Option by delivering a written notice to CREC,
executed by the ▇▇▇▇▇▇ Shareholder Representative on behalf of each of the
▇▇▇▇▇▇ Shareholders, at any time during a Put Option Window Period stating that
the ▇▇▇▇▇▇ Shareholders irrevocably elect to exercise the Put Option. If the
▇▇▇▇▇▇ Shareholders exercise the Put Option, the ▇▇▇▇▇▇ Shareholders shall be
obligated to sell to CREC, and CREC shall be obligated to purchase from the
▇▇▇▇▇▇ Shareholders, the Option Shares, upon the terms and subject to the
conditions set forth herein.
SECTION 2.6. Call Option. At any time during a Call Option Window
Period, if the Put Option has not been exercised by the ▇▇▇▇▇▇ Shareholders,
CREC shall have the option (the "Call Option") to purchase all, but not less
than all, of the Option Shares from the ▇▇▇▇▇▇ Shareholders at the applicable
Purchase Price. CREC shall be entitled to exercise the Call Option by delivering
a written notice to the ▇▇▇▇▇▇ Shareholder Representative, executed by CREC, at
any time during a Call Option Window Period stating that CREC irrevocably elects
to exercise the Call Option. If CREC exercises the Call Option, the ▇▇▇▇▇▇
Shareholders shall be obligated to sell to CREC, and CREC shall be obligated to
purchase from the ▇▇▇▇▇▇ Shareholders, the Option Shares, upon the terms and
subject to the conditions set forth herein.
SECTION 2.7. Appraisal of Additional Businesses. Within 30 days after
the exercise of the Put Option or the Call Option, if the Company has not sold
or otherwise disposed of or discontinued the Additional Businesses in their
entirety, CREC and the ▇▇▇▇▇▇ Shareholder Representative shall jointly engage an
Independent Appraiser for the purpose of determining the fair market value of
all remaining portions of the Additional Businesses. The Independent Appraiser
shall determine the fair market value of all remaining portions of the
Additional Businesses based on such factors as it considers to be relevant,
including, but not limited to, (i) the financial condition and results of
operations of such businesses, (ii) the prospects for future growth of such
businesses, (iii) if applicable, amounts paid in recent transactions involving
companies engaged in businesses considered to be comparable to such businesses
and (iv) if applicable, trading prices and values of comparable publicly traded
companies. Upon reaching its determination, the Independent Appraiser shall
prepare and deliver to CREC and the ▇▇▇▇▇▇ Shareholder Representative a report
(the "Appraisal Report") stating its determination of the fair market value of
all remaining portions of the Additional Businesses and setting forth in
reasonable detail the method by which the same was determined. The determination
of the fair market value of all remaining portions of the Additional Businesses
set forth in the Appraisal Report shall be final, conclusive and binding on the
parties. CREC and the ▇▇▇▇▇▇ Shareholders shall cooperate with each other and
with the Independent Appraiser and shall provide the Independent Appraiser with
such information as it may reasonably require. The
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fees and expenses of the Independent Appraiser shall be borne equally by CREC
and the ▇▇▇▇▇▇ Shareholders.
SECTION 2.8. Purchase Price. The purchase price (the "Purchase Price")
to be paid for the purchase of shares of Common Stock by the parties hereto
pursuant to this Article II shall be as follows:
(a) in the case of a purchase of the Offered Stock by any party
pursuant to Section 2.3 or 2.4, the applicable Purchase Price shall be (i) in
the case of a voluntary sale or other Transfer for value, the Offering Price or
(ii) in the case of any other Transfer, the Base Price;
(b) in the case of a purchase by CREC of the Option Shares upon
the exercise of the Put Option pursuant to Section 2.5, the applicable Purchase
Price shall be the product of (i) the Formula Price and (ii) the Retained
Interest Fraction; or
(c) in the case of a purchase by CREC of the Option Shares upon
the exercise of the Call Option pursuant to Section 2.6, the applicable Purchase
Price shall be the product of (i) the Formula Price and (ii) the Retained
Interest Fraction (provided, however, that the Purchase Price determined
pursuant to this paragraph (c) shall in no event be less than the Base Price).
SECTION 2.9. Closing. The closing (the "Closing") of any purchase and
sale of shares of Common Stock by a party hereto pursuant to this Article II (a
"Share Purchase") shall take place at the principal office of the Company or at
such other location as may be mutually agreed upon by the party purchasing such
shares (the "Purchaser") and the party selling such shares (the "Seller") on
such date and at such time as shall be specified by the Purchaser in a written
notice (the "Closing Notice") delivered to the Seller as promptly as practicable
after the Purchaser becomes entitled to purchase such shares in accordance with
the provisions of this Agreement (or, if applicable, the date upon which the
applicable Purchase Price for such shares is determined in accordance with the
terms of this Agreement), which date shall be not less than ten nor more than 30
days after the date of such notice; provided, however, that if the condition to
the obligations of the Purchaser and the Seller to consummate such Share
Purchase set forth in Section 2.10 shall not have been satisfied as of the date
specified in the Closing Notice, the date and time of the Closing shall be
postponed until the first Business Day on which such condition shall have been
satisfied. At the Closing, (i) the Seller shall deliver to Purchaser a
certificate or certificates evidencing the shares of Common Stock to be sold by
the Seller, duly endorsed in blank or accompanied by stock powers duly executed
in blank or otherwise in a form
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acceptable for transfer on the books of the Company, and (ii) the Purchaser
shall deliver to the Seller a certified or official bank check payable to the
order of the Seller in an amount equal to the applicable Purchase Price,
whereupon all right, title and interest in and to such shares of Common Stock
will pass to the Purchaser. If the Seller fails to tender for transfer
certificates evidencing the shares of Common Stock to be sold at the Closing,
the Company will treat the Share Purchase as having been completed if the
Purchaser delivers to the Company the aforementioned certified or official bank
check (which the Company will hold in trust for the Seller), and the Seller
thereafter will have no rights as a holder of such shares of Common Stock
(including, but not limited to, any rights to vote such shares or receive
dividends with respect thereto).
SECTION 2.10. HSR Act. The respective obligations of the Purchaser and
the Seller to consummate any Share Purchase pursuant to this Article II shall be
subject to the condition that any waiting period applicable to such Share
Purchase under the HSR Act shall have expired or been terminated. Each of the
Purchaser and the Company (or, if applicable, their ultimate parent entities)
shall promptly file or cause to be filed with the Federal Trade Commission (the
"FTC") and the Antitrust Division of the Department of Justice (the "Antitrust
Division") notification and report forms pursuant to the HSR Act relating to a
Share Purchase whenever required thereunder. The Purchaser and the Company (or,
if applicable, their ultimate parent entities) shall promptly respond to any
request for additional information or documentary material by the FTC or the
Antitrust Division and shall cooperate with each other in order to ensure that
all waiting periods (and any extension thereof) applicable to the consummation
of the Share Purchase under the HSR Act expire or are terminated as promptly as
practicable.
SECTION 2.11. Effect of Prohibited Transfer. Any attempted or purported
Transfer of shares of Common Stock in violation of the provisions of this
Article II shall not be effective to Transfer ownership of such shares to the
purported Transferee, who shall not be entitled to any rights as a holder of
Common Stock with respect to the shares of Common Stock attempted or purported
to be Transferred. All rights with respect to any shares of Common Stock
attempted or purported to be Transferred in violation of the aforementioned
provisions shall remain the property of the Person who initially attempted or
purported to transfer such shares in violation thereof. Upon a determination by
the Board of Directors of the Company that there has been or is threatened an
attempted or purported Transfer of shares of Common Stock in violation of the
aforementioned provisions, the Board of Directors of the Company may take such
action as it deems necessary or appropriate, including, but not limited to,
refusing to give effect on the books of the Company to such attempted or
purported Transfer or instituting legal proceedings to enjoin or rescind the
same, to effectuate the purposes of this Article II.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the Company. The Company
hereby represents and warrants to the Major Shareholders as follows:
(a) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Arizona and has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as presently conducted.
(b) The Company has all requisite corporate power and authority to
enter into and perform its obligations under this Agreement and to consummate
the transactions contemplated hereby. The execution and delivery by the Company
of this Agreement have been duly and validly authorized by all necessary
corporate action on the part of the Company, and no other corporate proceedings
or shareholder actions on the part of or with respect to the Company are
necessary to authorize this Agreement, the performance by the Company of its
obligations hereunder or the consummation by the Company of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Company and constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with the terms hereof.
(c) The execution and delivery by the Company of this Agreement,
the performance by it of its obligations hereunder and the consummation by it of
the transactions contemplated hereby will not (i) conflict with, or result in
any violation or breach of, any provision of the Charter or Bylaws of the
Company or any of its Subsidiaries, (ii) conflict with, result in any violation
or breach of, constitute a default under, give rise to any right of termination
or acceleration (with or without notice or the lapse of time or both) pursuant
to, or result in being declared void, voidable or without further effect, any
term or provision of any material note, bond, mortgage, indenture, lease,
franchise, permit, license, contract or other instrument or document to which
the Company or any of its Subsidiaries is a party or by which their respective
properties or assets are bound or (iii) conflict with, or result in any
violation of, any law, ordinance, statute, rule or regulation of any
Governmental Authority or of any order, writ, injunction, judgment or decree of
any court, arbitrator or Governmental Authority applicable to the Company or any
of its Subsidiaries or their respective properties or assets.
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(d) There is no requirement applicable to the Company to obtain
any consent, authorization or approval of, or to make or effect any declaration,
filing or registration with, any Governmental Authority for the valid execution
and delivery by the Company of this Agreement, the due performance by it of its
obligations hereunder or the lawful consummation by it of the transactions
contemplated hereby, except for any filings under the HSR Act contemplated by
Section 2.10.
SECTION 3.2. Representations and Warranties of the Major Shareholders.
Each Major Shareholder hereby represents and warrants to the Company and the
other Major Shareholders as follows:
(a) If such Major Shareholder is a corporation, such Major
Shareholder is a corporation duly incorporated, validly existing and in good
standing under the laws of the state of its incorporation and has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as presently conducted. If such Major Shareholder is a
partnership, such Major Shareholder is a partnership duly formed, validly
existing and in good standing under the laws of the state of its formation and
has all requisite partnership power and authority to own, lease and operate its
properties and to carry on its business as presently conducted.
(b) Such Major Shareholder has all necessary power and authority
to enter into and perform its obligations under this Agreement and to consummate
the transactions contemplated hereby. If such Major Shareholder is a
corporation, the execution and delivery of this Agreement by such Major
Shareholder have been duly and validly authorized by all necessary corporate
action on the part of such Major Shareholder, and no other corporate proceedings
or shareholder actions on the part of or with respect to such Major Shareholder
are necessary to authorize this Agreement, the performance by such Major
Shareholder of its obligations hereunder or the consummation by such Major
Shareholder of the transactions contemplated hereby. If such Major Shareholder
that is a partnership, the execution and delivery of this Agreement by such
Major Shareholder have been duly and validly authorized by all necessary
partnership action on the part of such Major Shareholder and all necessary
action on the part of its partners, and no other proceedings or actions on the
part of or with respect to such Major Shareholder or its partners are necessary
to authorize this Agreement, the performance by such Major Shareholder of its
obligations hereunder or the consummation by such Major Shareholder of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by such Major Shareholder and constitutes a legal, valid and binding
obligation of such Major Shareholder, enforceable against such Major Shareholder
in accordance with the terms hereof.
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(c) The execution and delivery by such Major Shareholder of this
Agreement, the performance by it of its obligations hereunder and the
consummation by it of the transactions contemplated hereby will not (i) conflict
with, or result in any violation or breach of, if such Major Shareholder is a
corporation, any provision of the Charter or Bylaws of such Major Shareholder
or, if such Major Shareholder is a partnership, any provision of the partnership
agreement of such Major Shareholder or the Charter, Bylaws or other constitutive
instruments of any of its partners, (ii) conflict with, result in any violation
or breach of, constitute a default under, give rise to any right of termination
or acceleration (with or without notice or the lapse of time or both) pursuant
to, or result in being declared void, voidable or without further effect, any
term or provision of any material note, bond, mortgage, indenture, lease,
franchise, permit, license, contract or other instrument or document to which
such Major Shareholder Party is a party or by which its properties or assets are
bound or (iii) assuming that any waiting period applicable to any Share Purchase
by or involving such Major Shareholder under the HSR Act shall have expired or
been terminated, conflict with, or result in any violation of, any law,
ordinance, statute, rule or regulation of any Governmental Authority or of any
order, writ, injunction, judgment or decree of any court, arbitrator or
Governmental Authority applicable to such Major Shareholder or its properties or
assets.
(d) There is no requirement applicable to such Major Shareholder
to obtain any consent, approval or authorization of, or to make or effect any
declaration, filing or registration with, any Governmental Authority for the
valid execution and delivery by such Major Shareholder of this Agreement, the
due performance by it of its obligations hereunder or the lawful consummation by
it of the transactions contemplated hereby, except for any filings under the HSR
Act contemplated by Section 2.10.
(e) If such Major Shareholder is ▇▇▇▇▇▇ Shareholder, such Major
Shareholder has duly appointed the ▇▇▇▇▇▇ Shareholder Representative as its
agent and representative to take all actions and make all decisions required or
permitted to be taken or made by the ▇▇▇▇▇▇ Shareholder Representative in
accordance with this Agreement and in connection with the transactions
contemplated hereby, and all actions and decisions so taken or made shall be
binding in all respects on such Major Shareholder.
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ARTICLE IV
DEFINITIONS;
ACCOUNTING MATTERS
SECTION 4.1. Certain Definitions.
(a) As used herein, the terms set forth below shall have the
following respective meanings:
"Additional Businesses" means the Leasing Business and the Real Estate
Development Business.
"Adjusted Consolidated Net Income" means, with respect to the Company
for any period, the Consolidated Net Income of the Company for such period,
adjusted to exclude (to the extent included in computing Consolidated Net
Income) each of the following:
(i) all income, expenses, gains or losses arising from the
Additional Businesses;
(ii) all gains or losses which are extraordinary (as determined in
accordance with GAAP);
(iii) all income, expenses, gains or losses arising from the sale or
other disposition of assets outside the ordinary course of business;
(iv) all interest, if any, expensed by the Company or its
consolidated subsidiaries during such fiscal year in respect of any Excluded
Debt;
(v) all gains or losses arising from investments in marketable
securities; and
(vi) all charges or credits relating to the amortization of
acquisition costs, intangible assets, deferred taxes (and all write downs of any
such items) and similar charges or credits for depreciation or amortization
arising from any purchase accounting adjustments and write downs or reserves
attributable to purchase accounting write ups as a result of the Merger and the
other transactions contemplated by the Merger Agreement or any future
reorganization or restructuring of the Company or its Subsidiaries.
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"Adjusted EBT" means, with respect to the Company for any period, the
Adjusted Consolidated Net Income of the Company for such period, adjusted to
exclude (to the extent included in computing Adjusted Consolidated Net Income)
consolidated income tax expense for such fiscal year.
"Affiliate" means, with respect to any Person, any other Person who,
directly or indirectly, controls, is controlled by or is under common control
with such Person. As used in this definition, the term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether by contract or
otherwise.
"Annual Budget" means, with respect to the Company for any fiscal year,
a budget prepared by the management of the Company and approved by the Board of
Directors reflecting, among other things, projected expenditures (including
marketing and sales expenditures) and capital outlays by the Company and its
Subsidiaries for such fiscal year.
"Availability Date" means the date upon which audited financial
statements of the Company for any fiscal year are distributed to the Major
Shareholders in accordance with Section 5.5(b).
"Base Price" means the product of (i) the number of shares of Common
Stock to be sold by a party hereto pursuant to the applicable provision of
Article II and (ii) $26.75.
"Business Day" means any day except a Saturday, Sunday or federal
holiday.
"Bylaws" means, with respect to any corporation, the bylaws of such
corporation, as in effect from time to time.
"Call Option Window Period" means a period of 60 days after the
Availability Date with respect to the audited financial statements of the
Company for the fiscal year ending March 31, 2002 and each even numbered fiscal
year thereafter.
"Capital Stock" means, with respect to any corporation, all shares,
interests, participations or other equivalents of capital stock of such
corporation, however designated, and any warrants, options or other rights to
purchase or acquire any such capital stock and any securities convertible into
or exchangeable for any such capital stock.
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"Centex" means Centex Corporation.
"Charter" means, with respect to any corporation, the certificate or
articles of incorporation (or similar governing document) of such corporation,
as in effect from time to time.
"Consolidated Net Income" means, with respect to the Company for any
period, the net income (or loss) of the Company and its consolidated
subsidiaries for such period, determined in accordance with GAAP, applied on a
basis consistent with the Company's past practices as reflected in the most
recent audited financial statements of the Company delivered to CREC prior to
the date hereof.
"Dividend Period" means (i) the period commencing on the date of this
Agreement and ending on March 31, 1998 and (ii) each subsequent period
commencing on the day after the end of the immediately preceding Dividend Period
and ending on the earlier of (A) the last day of the then current fiscal year of
the Company or (B) the Closing Date of any purchase of shares of Common Stock by
a party hereto pursuant to the provisions of Article II.
"Eligible Capital Project" means any investment or capital project
which is reasonably projected to generate an average annual return on investment
by the Company and its Subsidiaries (excluding the effect of any projected
income tax or interest expense) in excess of 20% in accordance with the criteria
and methodology normally used by CREC in evaluating similar investments made by
CREC and its Subsidiaries.
"Eligible Capital Project Deficit Amount" means, with respect to an
Eligible Capital Project, the portion of the Excess Intercompany Indebtedness
outstanding from time to time which, if repaid by CREC, would have been
available for use to fund such Eligible Capital Project if such project had been
approved by the Board of Directors and had been implemented by the Company in
accordance with the financial and operating plans submitted to the Board of
Directors by the directors designated by the ▇▇▇▇▇▇ Shareholder Representative.
"Excess Intercompany Indebtedness" means the excess, if any, of (i) the
net amount of any Intercompany Indebtedness owing by CREC or any of its
Affiliates (other than the Company and its Subsidiaries) to the Company or any
of its Subsidiaries over (ii) $3,000,000.
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"Excluded Debt" means all indebtedness and related finance charges and
expenses incurred to finance the Merger and the other transactions contemplated
by the Merger Agreement.
"Formula Price" means the sum of the following amounts:
(i) the applicable amount set forth below in paragraph (A), (B) or
(C) below:
(A) in the case of a sale of the Option Shares to CREC upon the
exercise of the Put Option after the Availability Date with respect to the
financial statements for the fiscal year ending March 31, 2000 (but prior to
the Availability Date for the financial statements for the next succeeding
fiscal year), an amount equal to six times the Adjusted EBT of the Company
for such fiscal year;
(B) in the case of a sale of the Option Shares to CREC upon the
exercise of the Put Option after the Availability Date with respect to the
financial statements for the fiscal year ending March 31, 2001 (but prior to
the Availability Date for the financial statements for the next succeeding
fiscal year), an amount equal to seven times the Adjusted EBT of the Company
for such fiscal year; or
(C) in the case of a sale of the Option Shares to CREC upon the
Exercise of the Put Option at any time after the Availability Date with
respect to the financial statements for the fiscal year ending March 31,
2002 or upon the exercise of the Call Option at any time, an amount equal to
eight times the Adjusted EBT of the Company for such fiscal year;
(ii) the fair market value of all remaining portions of the
Additional Businesses as set forth in the Appraisal Report; and
(iii) the aggregate amount of the net proceeds received by the
Company and its Subsidiaries from any sale or other disposition of all or any
part of the properties, assets and operations of the Real Estate Development
Business held by the Company as of the date hereof (including the stock of any
Subsidiary of the Company engaged in such business).
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"GAAP" means generally accepted accounting principles as in effect in
the United States on the date of the Merger Agreement.
"▇▇▇▇▇▇ Shareholder Representative" means ▇▇ ▇. ▇▇▇▇▇▇ or such other
Person as is designated from time to time in a written instrument executed by
the holders of at least a majority of the outstanding shares of Common Stock
held by the ▇▇▇▇▇▇ Shareholders and delivered to the Company at its address
specified in Section 5.7.
"▇▇▇▇▇▇ Shareholders" means ▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇
Partnership and any Person who acquires shares of Common Stock directly or
indirectly from ▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇ Partnership and who has
executed a Supplemental Agreement or a Pledgee Agreement which has been approved
by the Company as contemplated by Section 2.1(a) or 2.2, as the case may be.
"Governmental Authority" means any nation or government, any state or
political subdivision thereof, any federal or state court and any other agency
or authority exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"HSR Act" means Section 7A of the ▇▇▇▇▇▇▇ Act (Title II of the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976), as amended (including any
successor statute).
"Independent Appraiser" means an investment banking firm or firm of
independent certified public accountants of national or regional standing and
reputation or other qualified expert or appraiser which has not had any material
business relationship with CREC, the Company or their respective Subsidiaries or
the ▇▇▇▇▇▇ Shareholders for a period of at least two years.
"Intercompany Indebtedness" means all indebtedness owing by the Company
or any of its Subsidiaries to CREC or any of its Affiliates (other than the
Company and its Subsidiaries) or owing by CREC or any of its Affiliates (other
than the Company and its Subsidiaries) to the Company or any of its
Subsidiaries.
"Intercompany Rate" means the weighted average rate of interest charged
from time to time on the outstanding long- and short-term indebtedness of Centex
and its Subsidiaries owing to banks and other outside financing sources or
evidenced by promissory notes, bonds, debentures or other similar instruments,
as calculated by Centex no less frequently than once each calendar week.
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"Leasing Business" means the business conducted by the Company and its
Subsidiaries which relates to the sale and leasing of temporary security storage
containers and trailer vans.
"Offering Price" means, in the case of a sale or other Transfer for
value of any Offered Stock, the amount of cash and the fair market value of any
other consideration to be paid for the Offered Stock by the proposed Transferee.
"Ownership Change" means, with respect to any ▇▇▇▇▇▇ Shareholder that
is a corporation, partnership or other entity, ▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(or their Permitted Transferees) ceasing for any reason to (i) have the full and
exclusive right to manage, conduct and control the business and activities of
such ▇▇▇▇▇▇ Shareholder or (ii) beneficially own all of the outstanding Capital
Stock or equity securities of, or other ownership interests in, such ▇▇▇▇▇▇
Shareholder.
"Permitted Transferee" means (i) in the case of a proposed Transfer by
CREC, any Qualified Centex Subsidiary or (ii) in the case of a proposed Transfer
by a ▇▇▇▇▇▇ Shareholder, any person that is a ▇▇▇▇▇▇ Shareholder named in this
Agreement and any spouse or lineal ancestor or descendant of any such ▇▇▇▇▇▇
Shareholder, any entity the entire equity interest in which is owned by any of
the foregoing persons, any Qualified ▇▇▇▇▇▇ Trust and any executor or
administrator of the estate of any of the foregoing persons.
"Person" means any individual, corporation, partnership, association,
trust or any other entity or organization of any kind or character, including a
Governmental Authority.
"Principal Businesses" means (i) the business of designing,
manufacturing and selling manufactured housing to be used for residential,
recreational or other purposes and (ii) the Additional Businesses.
"Prohibited Intercompany Charges" means any secretarial, bookkeeping,
reporting, data processing, office, rent and other office expenses, salaries and
other compensation expenses and other similar internal administrative,
management or other expenses incurred by CREC or its Affiliates in connection
with the operations of the Company and its Subsidiaries; provided, however, that
such term shall not include any properly allocable costs of premiums and other
insurance costs (whether or not they represent out-of-pocket expenses) or
out-of-pocket expenses incurred by CREC or its Affiliates which are directly
attributable to the operations of the Company or its
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Subsidiaries and the amount of which is not greater than the amount of the
charges that would be incurred by the Company or its Subsidiaries in an
arm's-length transaction with an unaffiliated third party.
"Put Option Window Period" means a period of 60 days after the
Availability Date with respect to the audited financial statements of the
Company for the fiscal years ending March 31, 2000, 2001 and 2002 and each even
numbered fiscal year thereafter.
"Qualified Centex Subsidiary" means a Subsidiary of Centex of which at
least 80% of the outstanding Capital Stock or other equity securities are owned,
directly or indirectly, by Centex.
"Qualified ▇▇▇▇▇▇ Trust" means any trust of which the sole trustees are
persons who are named as ▇▇▇▇▇▇ Shareholders in this Agreement or any spouse or
lineal ancestor or descendant of any such ▇▇▇▇▇▇ Shareholder and of which the
sole beneficiaries are any of the foregoing persons or any charity designated
from time to time by the grantors or trustees of such trust.
"Real Estate Development Business" means the business conducted by the
Company and its Subsidiaries which relates to the development of housing
subdivisions and the sale of manufactured, modular and conventional housing
units or lots located therein.
"Retained Interest Fraction" means a fraction the numerator of which is
the number of Option Shares and the denominator of which is the total number of
shares of Common Stock that are outstanding as of the date upon which the Put
Option or the Call Option, as the case may be, is exercised.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiary" means, with respect to any Person, (i) any corporation or
other Person of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions are owned directly or indirectly by such Person or
(ii) any partnership of which such Person or any of its Subsidiaries is a
general partner or of which such Person directly or indirectly owns partnership
interests which entitle it to receive more than 50% of the distributions made by
such partnership.
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"Supermajority Board Vote" means a vote of directors of the Company
representing at least two-thirds of the total number of members of the Board of
Directors of the Company, including at least one of the directors designated by
the ▇▇▇▇▇▇ Shareholder Representative; provided, however, that for purposes of
this definition, if one or more vacancies is created on the Board of Directors
of the Company by reason of the death, resignation or removal of any director,
the total number of members of the Board of Directors shall be deemed to include
the number of vacancies so created (until such time as such vacancies are filled
in the manner provided in Section 1.1(c)).
"Tax Agreement" means the Tax Sharing and Tax Benefit Reimbursement
Agreement, dated as of the date hereof, between the Company and CREC in the form
attached as Exhibit B hereto.
"Transfer" means any sale, transfer, assignment, gift, exchange,
pledge, hypothecation, encumbrance or other disposition of any shares of Common
Stock, or any interest therein, whether voluntary or involuntary and regardless
of the nature or method thereof.
"Transferee" means a Person that acquires any shares of Common Stock,
or any interest therein, as a result of a Transfer.
(b) Each of the terms set forth below has the meaning specified in
the provision set forth opposite such term in the following table:
Term Provision
---- ---------
Agreement Introductory paragraph
Antitrust Division Section 2.10
Applicable Amounts Section 5.6(a)
Appraisal Report Section 2.7
Call Option Section 2.6
Closing Section 2.9
Closing Notice Section 2.9
Company Introductory paragraph
Common Stock Recitals
CREC Introductory paragraph
CREC Sale Transaction Section 2.3(b)
Dispute Notice Section 5.6(b)
Disputing Major Shareholder Section 5.6(b)
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FTC Section 2.10
First Refusal Response Notice Section 2.3(a)
Involuntary Transferor Section 2.4
▇▇▇▇▇ Partnership Introductory paragraph
Major Shareholders Recitals
Merger Recitals
Offered Stock Section 2.3(a)
Offeree Section 2.3(a)
Offeror Section 2.3(a)
Offering Notice Section 2.3(a)
Option Shares Section 2.5
Participation Offer Section 2.3(b)
Participation Offer Response
Notice Section 2.3(b)
Pledgee Agreement Section 2.2
Purchase Price Section 2.8
Purchaser Section 2.9
Put Option Section 2.5
Seller Section 2.9
Share Purchase Section 2.9
Stock Purchase Agreement Recitals
Subject Share Purchase Recitals
Supplemental Agreement Section 2.1(a)
SECTION 4.2. Certain Accounting Matters. Unless otherwise
specified in this Agreement, all accounting terms used herein shall be
interpreted, all accounting determinations contemplated hereby shall be made and
all financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP, applied on a basis consistent with the Company's past
practices as reflected in the most with the most recent audited financial
statements of the Company delivered to CREC prior to the date hereof.
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ARTICLE V
MISCELLANEOUS
SECTION 5.1. Legend. A copy of this Agreement shall be filed with the
permanent records of the Company and shall be kept at all times at the principal
place of business of the Company. Each Major Shareholder agrees, on behalf of
itself and its successors and assigns, that all certificates representing shares
of Common Stock held by such Major Shareholder shall have affixed thereto a
legend substantially in the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF OR PLEDGED OR HYPOTHECATED UNLESS REGISTERED UNDER THE ACT
AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM
REGISTRATION UNDER THE ACT AND ANY SUCH LAWS IS AVAILABLE (AND, IN SUCH
CASE, AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY SHALL
HAVE BEEN DELIVERED TO THE COMPANY TO THE EFFECT THAT THE OFFER, SALE,
TRANSFER, DISPOSITION, PLEDGE OR HYPOTHECATION THEREOF IS EXEMPT FROM
REGISTRATION UNDER THE ACT AND ANY SUCH LAWS). THE SHARES REPRESENTED
BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN VOTING AGREEMENTS,
RESTRICTIONS ON TRANSFER AND OTHER TERMS AND CONDITIONS SET FORTH IN A
SHAREHOLDERS' AGREEMENT DATED AS OF , 1997 AMONG THE COMPANY
AND CERTAIN OF ITS SHAREHOLDERS. A COPY OF SUCH AGREEMENT WILL BE
FURNISHED TO THE RECORD HOLDER OF THE SHARES REPRESENTED BY THIS
CERTIFICATE WITHOUT CHARGE UPON WRITTEN REQUEST TO THE COMPANY AT ITS
PRINCIPAL PLACE OF BUSINESS OR REGISTERED OFFICE.
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SECTION 5.2. Termination. This Agreement may be terminated by mutual
written consent of the Company, CREC and the ▇▇▇▇▇▇ Shareholder Representative,
and shall terminate automatically upon the Closing of the purchase by CREC or
the ▇▇▇▇▇▇ Shareholders, as the case may be, of all of the outstanding shares of
Common Stock held by the other Major Shareholders pursuant to Article II.
SECTION 5.3. Further Assurances; Frustration of Purposes. The Company
and each Major Shareholder shall do, or cause to be done, such further acts and
execute and deliver, or to cause to be executed and delivered, such further
agreements, instruments, certificates and other documents as may be reasonably
necessary to effectuate and carry out the purposes of this Agreement. No party
to this Agreement shall, directly or indirectly, do any act or thing which is
intended to frustrate the provisions of this Agreement or prevent the
effectuation of the purposes hereof, whether or not such act or thing is
expressly prohibited under the terms hereof. Without limiting the generality of
the foregoing, the ▇▇▇▇▇▇ Shareholders shall use their best efforts and take all
action within their power to prevent the occurrence of an Ownership Change with
respect to any of the ▇▇▇▇▇▇ Shareholders.
SECTION 5.4. Fees and Expenses. Except as expressly provided herein,
all fees and expenses incurred by any of the parties hereto in connection with
this Agreement or any of the transactions contemplated hereby shall be borne and
paid solely by the party incurring such fees and expenses.
SECTION 5.5. Certain Reports. The Company shall furnish to each of the
Major Shareholders:
(a) as soon as available and in any event within 45 days after the
end of each fiscal quarter (including the last) of each fiscal year, (i) the
balance sheet of the Company and its consolidated subsidiaries as of the end of
such fiscal quarter and the related statement of operations of the Company and
its consolidated subsidiaries for such quarter and also for the period beginning
on the first day of such fiscal year and ending on the date of such balance
sheet, all prepared in accordance with GAAP, applied on a consistent basis
throughout the periods covered, subject to the absence of notes thereto and
normal year-end adjustments, (ii) a summary balance sheet and statement of
operations relating to all operations of the Company and its consolidated
subsidiaries other than the Excluded Projects and (iii) a summary balance sheet
and statement of operations relating to each Excluded Project; and
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(b) as soon as available and in any event within 120 days after
the end of each fiscal year, the balance sheet of the Company and its
consolidated subsidiaries as of the end of such fiscal year and the related
statement of earnings and statement of cash flows of the Company for such fiscal
year, all prepared in accordance with GAAP, applied on a consistent basis
throughout the period covered, which financial statements shall be audited by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP (except to the extent otherwise permitted pursuant to
Section 1.4).
SECTION 5.6. Determination of Certain Amounts; Dispute Resolution.
(a) In any case in which the provisions of this Agreement
contemplate or require a determination of (i) the amount of the Purchase Price
to be paid in connection with the purchase of any shares of Common Stock (and,
if applicable, the amounts of the Consolidated Net Income, Adjusted Consolidated
Net Income or Adjusted EBT used in computing such Purchase Price but not the
fair market value of the Additional Businesses used in computing the same, which
shall be determined in accordance with the provisions of Section 2.7) or (ii)
the amount of the Offering Price in the case of a sale or other Transfer of
Offered Stock in a transaction that involves the payment of consideration other
than cash (collectively, the "Applicable Amounts"), such determination shall
initially be made (after consultation with the Company's independent public
accountants) by the Board of Directors of the Company (or any officer of the
Company designated by the Board of Directors) based on the audited financial
statements and other books and records of the Company or such other information
as the Board of Directors or such officer shall consider to be relevant. As
promptly as practicable after any such determination has been made, the Company
shall deliver a written notice (a "Determination Notice") to each of the Major
Shareholders setting forth its determination of the Applicable Amount.
(b) A Major Shareholder (a "Disputing Major Shareholder") shall be
entitled to dispute the determination of any Applicable Amount in accordance
with paragraph (a) above if, and only if, such Major Shareholder delivers a
written notice (the "Dispute Notice"), executed by such Major Shareholder (or,
in the case of a ▇▇▇▇▇▇ Shareholder, by the ▇▇▇▇▇▇ Shareholder Representative on
behalf of such ▇▇▇▇▇▇ Shareholder), to the Company within 30 days after receipt
of the Determination Notice, which Dispute Notice shall describe in reasonable
detail the amount and nature of the dispute. The Company and the Disputing Major
Shareholders shall attempt in good faith to resolve any dispute as to the
determination of an Applicable Amount. In the event that the Company and the
Disputing Major Shareholders are unable to resolve any such dispute within 30
days after delivery of the Dispute Notice, the items in dispute shall be
submitted to an independent accounting firm selected by the parties, whose
determination shall be
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limited to the matters in dispute and shall be final, conclusive and binding on
the parties. The parties will cooperate with each other and with said accounting
firm and will provide said accounting firm with such information as it may
reasonably require. The fees and expenses of said accounting firm shall be borne
equally by the Company and the Disputing Major Shareholders; provided, however,
that if said accounting firm resolves all material elements of any dispute
pursuant to this Section 5.6 against either the Company or the Disputing Major
Shareholders, the Company or the Disputing Major Shareholders, as the case may
be, shall bear all fees and expenses of said accounting firm.
SECTION 5.7. Notices. All notices and other communications hereunder
shall be in writing and shall be given by delivery in person, by registered or
certified mail (return receipt requested and with postage prepaid thereon) or by
cable, telex or facsimile transmission to the parties at the following addresses
(or at such other address as any party shall have furnished to the others in
accordance with the terms of this Section 5.7):
if to the Company:
Cavco Industries, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facs: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇ ▇. ▇▇▇▇▇▇
with copies to (which shall not constitute notice to the Company):
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facs: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
if to CREC:
Centex Real Estate Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facs: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
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with copies to (which shall not constitute notice to CREC):
Centex Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facs: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and
▇▇▇▇▇ & ▇▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facs: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
if to any of the ▇▇▇▇▇▇ Shareholders:
Al R. and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Cavco Industries, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facs: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to (which shall not constitute notice to the ▇▇▇▇▇▇
Shareholders):
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facs: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
All notices and other communications hereunder that are addressed as provided in
or pursuant to this Section 5.7 shall be deemed duly and validly given (a) if
delivered in person, upon delivery, (b) if delivered by registered or certified
mail (return receipt requested and with postage paid thereon), 72 hours after
being placed in a depository of the United States mails and (c) if delivered by
cable, telex or facsimile transmission, upon transmission thereof and receipt of
the appropriate answerback.
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SECTION 5.8. Effectiveness. This Agreement shall become effective
insofar as it relates to the rights, duties and obligations of the Major
Shareholders hereunder immediately upon the execution and delivery hereof by the
Major Shareholders named on the signature page hereof. This Agreement shall
become effective insofar as it relates to the rights, duties and obligations of
the Company hereunder immediately upon the execution and delivery hereof by the
Company. If this Agreement has become effective insofar as to the rights, duties
and obligations of the Major Shareholders hereunder but not insofar as it
relates to the rights, duties and obligations of the Company hereunder, each
Major Shareholder shall, unless otherwise prohibited by law, use its best
efforts and take all actions within its power to cause the Company to perform
its obligations hereunder in the same manner and the same extent as if it were a
party hereto.
SECTION 5.9. Amendment; Waivers. The terms and provisions of this
Agreement may be modified or amended only by a written instrument executed by
CREC and the ▇▇▇▇▇▇ Shareholder Representative and (if this Agreement has become
effective insofar as it relates to the rights, duties and obligations of the
Company) the Company, and compliance with any term or provision hereof may be
waived only by a written instrument executed by each party entitled to the
benefits of the same (or, if the ▇▇▇▇▇▇ Shareholders are the parties entitled to
the benefits thereof, by the ▇▇▇▇▇▇ Shareholder Representative). Except as
expressly provided herein to the contrary, no failure to exercise 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 granted
hereunder.
SECTION 5.10. Entire Agreement. This Agreement (including the Exhibits
hereto) constitutes the entire agreement among the parties with respect to the
subject matter hereof and supersedes all prior written or oral agreements and
understandings and all contemporaneous oral agreements and understandings among
the parties or any of them with respect to the subject matter hereof. All
Exhibits hereto are expressly made a part of this Agreement.
SECTION 5.11. Parties in Interest; Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns (it being understood and agreed that, except as expressly
provided herein, nothing contained in this Agreement is intended to confer any
rights, benefits or remedies of any kind or character on any other Person under
or by reason of this Agreement). No party may assign this Agreement without the
prior written consent of each of the other parties hereto; provided, however,
that a party may assign this Agreement to a Permitted Transferee without the
consent of any other party, but such assignment shall not relieve a
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party of any of its obligations hereunder to the extent that such obligations
are not performed by the assignee. It is expressly understood and agreed that
any attempted or purported assignment by any party of this Agreement in
violation of this Section 5.11 shall be null and void.
SECTION 5.12. Governing Law. This Agreement shall be governed by and
construed and interpreted in accordance with the laws of the State of Arizona,
without regard to any principles of conflicts of law that would result in the
application of the laws of any other jurisdiction.
SECTION 5.13. Severability. In the event any provision contained herein
shall be held to be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of any such provision in every other
respect and the validity, legality and enforceability of the remaining
provisions contained in this Agreement shall not be in any way impaired thereby.
SECTION 5.14. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with the terms hereof. Accordingly,
the parties agree that each of them shall be entitled to injunctive relief to
prevent breaches of the terms of this Agreement and to specific performance of
the terms hereof, in addition to any other remedy now or hereafter available at
law or in equity, or otherwise.
SECTION 5.15. Default Interest. In the event that any amount becomes
due and payable by any party in accordance with the express terms of this
Agreement but is not paid on the date upon which it becomes due, in addition to
any other rights and remedies that may be available as a result of the failure
to pay such amount, the party that is entitled to receive such amount shall have
the right to recover, for each day from and after the due date and until such
amount has been paid, interest thereon at a rate of 10.0% per annum (or such
lower rate as shall be the highest rate of interest permitted under applicable
law).
SECTION 5.16. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed as of the date first above written.
CAVCO INDUSTRIES, INC.
By:__________________________________
Name:________________________________
Title:_______________________________
CENTEX REAL ESTATE CORPORATION
By:__________________________________
Name:________________________________
Title:_______________________________
_____________________________________
▇▇ ▇. ▇▇▇▇▇▇
_____________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ LIMITED PARTNERSHIP
By: THE 1994 ALSONS TRUST, created
February 9, 1994, general partner
By:__________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Independent Trustee
By:__________________________________
▇▇ ▇. ▇▇▇▇▇▇,
Family Trustee
By: ▇▇▇▇▇▇ AND ▇▇▇▇▇ ▇▇▇▇▇▇ TRUST,
created August 24, 1989, general partner
By:__________________________________
▇▇ ▇. ▇▇▇▇▇▇,
Trustee
By:__________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Trustee
54
EXHIBIT A
(TO SHAREHOLDERS' AGREEMENT)
OPTION SHARES
NUMBER
MAJOR SHAREHOLDERS OF SHARES
▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 77,340
▇▇▇▇▇ Limited Partnership 706,101
-------
Total 783,441
=======
55
EXHIBIT B
(to SHAREHOLDERS'
AGREEMENT)
TAX SHARING AND TAX BENEFIT
REIMBURSEMENT AGREEMENT
This AGREEMENT, made and entered into as of the ____ day of
________, 1997, by and between CENTEX CORPORATION, a Nevada corporation
("Centex"), and CAVCO INDUSTRIES, INC., an Arizona corporation ("Cavco").
W I T N E S S E T H:
WHEREAS, Centex files consolidated federal income tax returns
in accordance with the privilege granted by Sections 1501 and 1502 of the
Internal Revenue Code of 1986, as amended (the "Code"), and the temporary and
final Treasury regulations promulgated thereunder (the "Regulations"), for and
on behalf of itself and other "includible corporations" within the meaning of
Section 1504 of the Code which are members of the affiliated group of which
Centex is the common parent (the "Group"); and
WHEREAS, it is deemed equitable that with respect to each
taxable period for which a consolidated return is filed by Centex which includes
Cavco, Cavco pay to Centex an amount equal to Cavco's Separate Return Tax
Liability hereinafter defined; and
WHEREAS, it is deemed equitable that with respect to each
taxable period for which a consolidated return is filed by Centex which includes
Cavco and in which the Group utilizes a net operating loss or credit of Cavco,
Centex shall, in the manner prescribed hereinafter, compensate Cavco therefor in
an amount equal to the income tax benefit obtained by Centex as a result of the
utilization by the Group of such net operating loss or credit of Cavco; and
WHEREAS, it is deemed equitable that in the event that Cavco
or its subsidiaries, if any, for any reason becomes disaffiliated from the Group
as a result of failing to meet the requirements for inclusion in the Group
prescribed by Section 1504 of the Code, the portion of the economic burdens and
benefits of tax payments, deficiencies and refunds of the Group which are
attributable to the period in which disaffiliation occurs and for prior
consolidated return periods in which Cavco or any such subsidiary was included
in the Group, are to be allocated to Centex and Cavco as hereinafter provided.
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NOW, THEREFORE, the parties signatory hereto agree as follows:
1. Definitions. For purposes of this Agreement, the following
additional definitions shall apply:
(a) "Cavco Group" shall mean Cavco and its Subsidiaries, if
any.
(b) "Subsidiary" of Centex or Cavco, as the context may
require, shall mean any corporation that is a member of the Group and that is
connected in an unbroken chain of stock ownership satisfying the requirements of
Section 1504(a) of the Code beginning with Centex or Cavco as the case may be.
2. Payment of Separate Return Tax Liability by Cavco to
Centex.
(a) With respect to each taxable period for which a
consolidated, combined or unitary tax return is filed by Centex which includes
Cavco, Cavco shall pay to Centex an amount equal to the Separate Return Tax
Liability of the Cavco Group, determined in accordance with Section 3 hereof,
such payment by Cavco, including installments of estimated tax payments, to be
made to Centex at least five (5) business days prior to the due dates thereof
(such due dates being determined as if the Cavco Group were required to file a
separate consolidated or unitary tax return reflecting its Separate Return Tax
Liability for the taxable period), whether or not the Group is obligated to pay
a tax liability for the applicable period. The amount and due dates of estimated
tax payments to be made by Cavco to Centex shall be determined by Centex, but
shall not be, in the aggregate, less than the Cavco Group's Separate Return Tax
Liability for the immediately preceding taxable period.
(b) The parties hereto acknowledge that any payment under this
Section 2 is the payment of a tax obligation by Cavco and shall be taken into
account in determining the earnings and profits of Cavco and Centex's basis in
Cavco's stock in the hands of Centex, subject to the applicable provisions of
Sections 1552 and 312(h) of the Code and Sections 1.312-10, 1.1552-1, 1.1502-32,
and 1.1502-33 of the Regulations.
3. Determination of Separate Return Tax Liability. For each
taxable period during which Cavco is a member of the Group, the Separate Return
Tax Liability of the Cavco Group shall mean the hypothetical federal, state or
local income tax liability (computed without regard to any consolidated credit,
capital loss or net operating loss deduction allocated under the Regulations
under Section 1502 of the Code to one or more members of the Cavco Group, to the
extent that (i) such credit or loss becomes allocable as a carryover for the
first taxable year of the Cavco Group beginning on or after the date
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57
on which Cavco becomes disaffiliated from the Group or (ii) such credit or loss
has previously been taken into account in determining the tax sharing
obligations of any member or members of the Cavco Group for any prior taxable
period under this Agreement or any other tax sharing agreement or arrangement
previously in effect), determined as if the Cavco Group had filed a separate
consolidated, unitary or combined income tax return for the applicable period
and its income were taxable at the rates that would have been applicable for
such period. If the computation of the Separate Return Tax Liability of the
Cavco Group pursuant to this Section 3 for a taxable period does not result in
positive tax liability, then for purposes of Section 2 hereof the Separate
Return Tax Liability of the Cavco Group shall be deemed to be zero, and any net
operating loss of the Cavco Group for such period shall be taken into account
only as otherwise provided herein. The determination of the Separate Return Tax
Liability of the Cavco Group shall be made by Centex and such determination
shall be conclusive for purposes hereof.
4. Compensation for Use of Tax Attributes of Cavco. If the
Cavco Group is entitled to a tax credit or would incur a capital or net
operating loss during a taxable period if it filed a separate consolidated
return for such period, or would, if it filed a separate consolidated, combined
or unitary return for all periods covered by this Agreement computed as
described in section 3, be entitled to a credit or a capital or net operating
loss deduction with respect to capital losses, net operating losses or credits
carried forward or back to such period (exclusive of capital losses, net
operating losses or credits for which the Cavco Group has previously received
compensation for use of such items under this Agreement), and if it is
determined by Centex that such credit, capital loss, net operating loss or
deduction will be utilized by Centex in filing its consolidated, combined or
unitary income tax return for the current taxable period or for any previous
period and that such credit, capital loss, net operating loss or deduction will
provide a tax benefit in any such period, Centex shall credit against the
Separate Return Tax Liability owed by Cavco to Centex pursuant to this Agreement
for the current taxable period an amount equal to the net tax benefit which
Centex, in its sole judgement, determines the Group will obtain. Centex shall
apply such credit against the Separate Return Tax Liability of the Cavco Group
as provided above with respect to any taxable period as of the first installment
date for such year. Centex shall have the right to adjust, as of the last day of
succeeding quarters the amount credited pursuant to this Section 4 based upon
the determination of Centex that the amount credited in preceding quarters was
incorrect. To the extent that the amount creditable pursuant to the preceding
terms of this Section 4 exceed the creditable tax liability of Cavco
(hereinafter the " Excess Credit"), Centex shall pay to Cavco, in cash, at the
time the aforesaid credit would have been applied, an amount equal to the Excess
Credit.
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5. Tax Liability of Cavco in the Event of Disaffiliation. In
the event that Cavco or another member of the Cavco Group becomes disaffiliated
from the Group for any reason, Cavco shall remain liable under this Agreement
for the tax liability of the Group for the taxable period during which
disaffiliation occurs and for prior taxable periods in which Cavco or the other
affected member, as the case may be, was a member of the Group and this
Agreement was effective. Cavco shall be required to pay Centex only those
amounts for the period of disaffiliation that are determined pursuant to
Sections 2, 3 and 4 hereof. Payment of such tax liability by Cavco shall be made
to Centex at least five (5) business days prior to the due date of the
applicable tax return. Moreover, should a tax controversy with the Internal
Revenue Service or any state or local taxing authority ultimately result in
assessment of a tax deficiency against the Group for years in which Cavco was
affiliated with such Group, Cavco shall remain liable for Cavco's portion of
such tax deficiency determined pursuant to Sections 2, 3 and 4 hereof, plus
interest and penalties as provided in Section 8, if any.
6. Payment of Tax Refunds to Cavco. If, after the
disaffiliation of Cavco from the Group, Centex receives from the Internal
Revenue Service or any state or local taxing authority any refund of tax (and
interest, if any) paid by the Group, any amount of which in the sole judgment of
Centex should be regarded as a refund of amounts paid by Cavco pursuant to
Section 2 or 4 hereof, such amount shall be paid by Centex to Cavco within sixty
(60) business days after receipt.
7. Indemnity. In the event Cavco is required to pay to the
Internal Revenue Service or any state or local taxing authority tax liability in
excess of its Separate Return Tax Liability determined pursuant to Section 3
hereof, Cavco shall be entitled to reimbursement within sixty (60) business days
of such payment by Centex. In the event Centex is required to pay to the
Internal Revenue Service or any state or local taxing authority additional taxes
due to the disallowance of all or part of any item utilized by Centex and for
which Cavco received credit against amounts due from Cavco hereunder as provided
in Section 4 hereof (or if Centex would have been so required to pay the
Internal Revenue Service or any state or local taxing authority but for other
adjustments), Cavco shall pay to Centex the amount of such additional tax paid
by Centex (or which Centex would have been required to pay but for other
adjustments); provided, however, the amount so paid by Cavco to Centex shall not
exceed the cumulative payments made by Centex to Cavco pursuant to Section 4
hereof with respect to such item (except as provided in Section 8 below).
8. Payment of Interest, Penalties and Expenses. Interest,
penalties and expenses incurred by Centex in connection with the amendment of
any consolidated, combined or unitary tax return, and/or the examination of any
consolidated, combined or
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unitary return by the Internal Revenue Service or any state or local taxing
authority or subsequent administrative or judicial proceedings, shall be borne
equitably by those parties whose tax liability may be affected by such
amendment, examination or subsequent proceedings. No interest shall be charged
to Centex or Cavco in connection with any allocation under this Agreement,
however, unless interest is payable to the Internal Revenue Service or any state
or local taxing authority or to another member of the Group as a result of any
tax allocation.
9. Centex as Agent.
(a) Centex, as agent for the members of the Group, shall have
full authority to prepare and file the Group's consolidated, combined or unitary
tax return, to pay any tax liability shown thereon, and to represent the Group
in connection with the examination of any such return by the Internal Revenue
Service or any state or local taxing authority and in the resolution of disputes
regarding any consolidated, combined or unitary tax liability. Centex shall
consult in good faith with Cavco on all matters that are the subject of this
Agreement affecting Cavco.
(b) Cavco shall provide Centex with the data necessary for the
proper and timely filing of all federal, state and local tax returns and forms.
In the event Cavco fails to provide data in proper form and within sufficient
time to permit the timely filing of any such tax return, any penalties or
interest assessed against the Group by reason of a delay in filing such tax
return shall be payable by Cavco. If Cavco provides data in proper form and
within sufficient time to permit the timely filing of a particular tax return,
any penalties or interest assessed against the Group by reason of a delay in
filing such return shall not be payable by Cavco. Any and all such data shall be
confidential and may be disclosed by Centex to third parties only to the extent
Centex, in the exercise of its reasonable business judgment, determines such
disclosure is necessary or appropriate to comply with its obligations under
applicable federal, state or local taxing provisions.
(c) The agency power of Centex, as described in this section,
shall extend to all periods during which Cavco or any member of the Cavco Group
is a member of the Group, and, in the event of Cavco's disaffiliation, Centex
shall retain the sole power to make or change on behalf of Cavco any election or
other decision affecting tax liabilities for such periods that Cavco was
affiliated with the Group under the provisions of the Code providing for
elections.
10. State or Local Income or Excise Tax Returns. Centex shall
have the responsibility and authority to file in any state or local
consolidated, combined or unitary income, franchise and excise tax returns on
behalf of the Group and to allocate state or
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local income, franchise or excise tax liabilities among the members of the Group
in an equitable manner.
11. Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of Centex and Cavco and their respective successors
and assigns; provided, however, that neither this Agreement, nor any rights or
interest hereunder, shall be assignable by any such corporation without the
prior written consent of Centex.
12. Application of Agreement. This Agreement shall be
applicable to the first taxable period of the Group during which Cavco is a
member thereof, and to each taxable period thereafter, so long as a consolidated
federal income tax return is filed by Centex which includes Cavco.
13. Allocation Among Cavco and Its Included Subsidiaries.
Nothing herein shall be deemed to preclude or require any allocation of the
Separate Return Tax Liability of Cavco among or between Cavco and its
Subsidiaries, if any.
14. Modifications. This Agreement may be modified or amended
only pursuant to an instrument in writing executed by all the parties signatory
hereto.
15. Entire Agreement. This Agreement constitutes the entire
agreement among the parties relating to the allocation of the consolidated
federal income tax liability of the Group between or among the parties.
16. Applicable Law. This Agreement shall constitute a contract
governed and construed in accordance with the laws of the State of Texas.
17. Headings. The headings used in this Agreement are for
convenience only and shall not in any way affect the meaning or interpretation
of any provision hereof.
18. Copies. This Agreement may be executed in multiple
counterparts each of which shall be deemed an original, but all of which shall
together constitute one Agreement.
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IN WITNESS WHEREOF, this Agreement has been executed and the
corporate seals affixed hereto as of the date first above written.
CENTEX CORPORATION
By:
CAVCO INDUSTRIES, INC.
By:
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EXHIBIT C
(to SHAREHOLDERS'
AGREEMENT)
COMPANY SHARES
OWNED BY THE SHAREHOLDER PARTIES
NUMBER
SHAREHOLDER PARTIES OF SHARES
------------------- ---------
▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 180,729
▇▇▇▇▇ Limited Partnership 1,650,000
---------
Total 1,830,729
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