EXHIBIT 4.11
STOCK PURCHASE AGREEMENT
By and Between
XXXXX XXXXX XXXXXX, as Trustee, XXXXXXX XXXXX XXXXX,
DREW XXXX XXXXX, XXXXXX X. XXXXX, and
XXXXXX X. XXXXX, as Joint Tenants and
GENERAL MANUFACTURED HOUSING, INC.
and
GMH ACQUISITION CORP.
Dated as of October 10, 1995
TABLE OF CONTENTS
Section Page
1. Definitions. . . . . . . . . . . . . . . . . . . . . 1
2. Purchase and Sale of Stock . . . . . . . . . . . . . 4
3. Purchase Price . . . . . . . . . . . . . . . . . . . 4
(a) Cash; Installment Notes . . . . . . . . . . . . 4
(b) Escrow Arrangements . . . . . . . . . . . . . . 4
(c) Interest. . . . . . . . . . . . . . . . . . . . 5
4. Closing . . . . . . . . . . . . . . . . . . . . . . 5
5. Deliveries by the Sellers . . . . . . . . . . . . . 5
6. Deliveries by the Buyer . . . . . . . . . . . . . . 5
7. Joint and Several Representations and Warranties
of the Sellers. . . . . . . . . . . . . . . . . . . 6
(a) Organization; Good Standing; Power; Etc. . . . 6
(b) Capitalization . . . . . . . . . . . . . . . . 6
(c) Effective Agreement. . . . . . . . . . . . . . 7
(d) Consents . . . . . . . . . . . . . . . . . . . 7
(e) Title to Property and Assets . . . . . . . . . 7
(f) Leases and Licensing Agreements. . . . . . . . 8
(g) Agreements, Etc. . . . . . . . . . . . . . . . 9
(h) ERISA. . . . . . . . . . . . . . . . . . . . . 10
(i) Stockholder Agreements . . . . . . . . . . . . 11
(j) Financial Statements . . . . . . . . . . . . . 11
(k) Litigation, Etc. . . . . . . . . . . . . . . . 11
(l) Licenses and Permits . . . . . . . . . . . . . 12
(m) Taxes. . . . . . . . . . . . . . . . . . . . . 12
(n) No Material Adverse Change . . . . . . . . . . 13
(o) Business Property Rights . . . . . . . . . . . 13
(p) Insurance. . . . . . . . . . . . . . . . . . . 13
(q) Inventories. . . . . . . . . . . . . . . . . . 14
(r) Offices. . . . . . . . . . . . . . . . . . . . 14
(s) Company Actions. . . . . . . . . . . . . . . . 14
(t) Related Party Transactions . . . . . . . . . . 15
(u) Undisclosed Liabilities. . . . . . . . . . . . 15
(v) Inaccuracies . . . . . . . . . . . . . . . . . 16
(w) Suppliers and Customers. . . . . . . . . . . . 16
(x) Potential Conflicts of Interest. . . . . . . . 16
(y) Accounts Receivable. . . . . . . . . . . . . . 17
(z) Environmental Compliance . . . . . . . . . . . 17
(aa) Brokers. . . . . . . . . . . . . . . . . . . . 21
(bb) GMH Authorization. . . . . . . . . . . . . . . 21
(cc) GMH Title. . . . . . . . . . . . . . . . . . . 21
8. Individual Representations and Warranties of the
Sellers . . . . . . . . . . . . . . . . . . . . . . 21
(a) Authority. . . . . . . . . . . . . . . . . . . 21
(b) Effective Agreement. . . . . . . . . . . . . . 21
(c) Title to Stock . . . . . . . . . . . . . . . . 22
(d) Interests in Competitors . . . . . . . . . . . 22
9. Representations and Warranties of the Buyer . . . . 22
(a) Organization; Good Standing; Power . . . . . . 22
(b) Authorization. . . . . . . . . . . . . . . . . 22
(c) Effective Agreement. . . . . . . . . . . . . . 22
(d) Consents . . . . . . . . . . . . . . . . . . . 23
(e) Litigation . . . . . . . . . . . . . . . . . . 23
(f) Brokers. . . . . . . . . . . . . . . . . . . . 23
10. Covenants of the Sellers. . . . . . . . . . . . . . 23
(a) Cooperation. . . . . . . . . . . . . . . . . . 23
(b) Transactions in the Ordinary Course of
Business . . . . . . . . . . . . . . . . . . . 24
(c) Conduct of Business. . . . . . . . . . . . . . 24
(d) Maintenance of Books; Compliance . . . . . . . 24
(e) Access to Properties . . . . . . . . . . . . . 24
(f) Settlement of Obligations. . . . . . . . . . . 24
(g) Further Disclosure . . . . . . . . . . . . . . 24
11. Covenants of the Buyer. . . . . . . . . . . . . . . 25
(a) Cooperation. . . . . . . . . . . . . . . . . . 25
(b) Further Disclosure . . . . . . . . . . . . . . 25
(c) Best Efforts to Obtain Required Financing. . . 25
12. Conditions Precedent to the
Obligations of the Sellers. . . . . . . . . . . . . 25
13. Conditions Precedent to the
Obligations of the Buyer. . . . . . . . . . . . . . 27
14. Additional Covenants. . . . . . . . . . . . . . . . 29
(a) No Shop. . . . . . . . . . . . . . . . . . . . 29
(b) Environmental Covenants. . . . . . . . . . . . 29
15. Indemnification; Survival . . . . . . . . . . . . . 29
(a) Indemnification by the Buyer . . . . . . . . . 29
(b) Joint and Several Indemnification by the
Sellers. . . . . . . . . . . . . . . . . . . . 30
(c) Several Indemnification by the Sellers . . . . 31
(d) Deductibles and Ceilings . . . . . . . . . . . 32
(e) Notice . . . . . . . . . . . . . . . . . . . . 33
(f) Defense of Claims or Actions . . . . . . . . . 33
(g) Cooperation. . . . . . . . . . . . . . . . . . 34
(h) Escrow . . . . . . . . . . . . . . . . . . . . 34
(i) Set Off Rights . . . . . . . . . . . . . . . . 35
(j) Survival . . . . . . . . . . . . . . . . . . . 35
(k) Exclusive Remedy . . . . . . . . . . . . . . . 36
16. Covenants Against Competition . . . . . . . . . . . 36
(a) Non-Compete. . . . . . . . . . . . . . . . . . 36
(b) Confidential Information . . . . . . . . . . . 37
(c) Employees of the Buyer . . . . . . . . . . . . 37
(d) Rights and Remedies Upon Breach. . . . . . . . 37
(e) Severability of Covenants. . . . . . . . . . . 38
(f) Blue-Pencilling. . . . . . . . . . . . . . . . 38
(g) Enforceability in Jurisdictions. . . . . . . . 38
16-A Buyer's Post-Closing Covenants. . . . . . . . . . . 38
17. Termination . . . . . . . . . . . . . . . . . . . . 39
18. Amendments; Waivers, Etc. . . . . . . . . . . . . . 39
19. Expenses. . . . . . . . . . . . . . . . . . . . . . 40
20. Notices, Etc. . . . . . . . . . . . . . . . . . . . 40
21. Assignment. . . . . . . . . . . . . . . . . . . . . 41
22. Applicable Law. . . . . . . . . . . . . . . . . . . 41
23. Entire Agreement. . . . . . . . . . . . . . . . . . 41
24. Counterparts. . . . . . . . . . . . . . . . . . . . 41
25. Headings. . . . . . . . . . . . . . . . . . . . . . 41
26. Binding Effect; Benefits. . . . . . . . . . . . . . 41
27. Publicity . . . . . . . . . . . . . . . . . . . . . 42
LIST OF EXHIBITS
Exhibit A - Share Ownership
Exhibit B - Form of Employment Agreement by and between
Xxxxxx X. Xxxxx X. Xxxxx and GMH Acquisition
Corp.
Exhibit C - Form of Employment Agreement by and between
Xxxxxxx Xxxxx Xxxxx and Xxxx Xxxx Xxxxx and
GMH Acquisition Corp.
Exhibit D - Escrow Agreement
Exhibit E - Form of Installment Promissory Note
Exhibit F - Form of Incentive Compensation Plan
Exhibit G - Form of Stock Subscription Agreements
Exhibit H - Opinion of Holland & Knight
Exhibit I - Opinion of Nixon, Hargrave, Devans & Xxxxx LLP
LIST OF SCHEDULES
Schedule 7(a) Organization; Good Standing; Power; Etc.
Schedule 7(b) Capitalization
Schedule 7(c) Effective Agreement
Schedule 7(d) Consents
Schedule 7(e) Title to Property and Assets
Schedule 7(f) Leases and Licensing Agreements
Schedule 7(g) Agreements, Etc.
Schedule 7(h) Pension Plans
Schedule 7(j) Financial Statements
Schedule 7(k) Litigation
Schedule 7(l) Licenses and Permits
Schedule 7(m) Taxes
Schedule 7(n) Material Adverse Changes
Schedule 7(o) Business Property Rights
Schedule 7(p) Insurance
Schedule 7(q) Inventories
Schedule 7(r) Offices
Schedule 7(s) Company Actions
Schedule 7(t) Related Party Transactions
Schedule 7(u) Undisclosed Liabilities
Schedule 7(w) Suppliers and Customers
Schedule 7(x) Potential Conflicts of Interest
Schedule 7(y) Accounts Receivable
Schedule 7(z) Environmental Compliance
Schedule 14(b) Environmental Covenants
STOCK PURCHASE AGREEMENT
Stock Purchase Agreement dated as of October 10, 1995 by and among
XXXXX XXXXX XXXXXX, as Trustee, XXXXXXX XXXXX XXXXX, XXXX XXXX XXXXX, XXXXXX X.
XXXXX and XXXXXX X. XXXXX, as Joint Tenants (individually a "Seller" and
collectively the "Sellers"), GENERAL MANUFACTURED HOUSING, INC., a Georgia
corporation ("GMH") and GMH ACQUISITION CORP., a Delaware corporation (the
"Buyer").
W I T N E S S E T H :
WHEREAS, the Sellers own all of the outstanding shares of capital
stock of GMH;
WHEREAS, GMH is a 99% member and Xxxxxx X. Xxxxx is a 1% member of
Xxxxx Housing LLC, a Georgia limited liability company ("Xxxxx" and, together
with GMH, collectively, the "Acquired Entities"; and
WHEREAS, the Sellers desire to sell all of the capital stock and
membership interests of the Acquired Entities to the Buyer, and the Buyer
desires to purchase the same, all upon the terms and conditions hereinafter set
forth (the "Transaction").
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the parties hereto do hereby agree as follows:
Section 1. Definitions. As used in this Agreement, terms defined
in the preamble and recitals of this Agreement shall have the meanings set forth
therein and the following terms shall have the meanings set forth below.
"Affiliate" shall mean, with respect to any person or entity, any
shareholder, subsidiary, officer, director or partner of such person or entity
and any other person which directly or indirectly controls, is controlled by or
is under common control with such person or entity, whether through the
ownership of securities, by contract or otherwise.
"Agreement" shall mean this Stock Purchase Agreement and all Schedules
and Exhibits hereto, as the same may from time to time be amended.
"Audit Date" shall mean December 31, 1994.
"Audited Financial Statements" shall mean the audited financial
statements of GMH as and for the fiscal years ending December 31, 1992, 1993 and
1994 (including the balance sheets, the related statements of income and cash
flow and the related footnotes thereto), examined by Xxxxxx Xxxxxxxx LLP for
1994 and by Xxxx X. Xxxxxx for 1993 and 1992.
"Business Conditions" shall mean, collectively, the business,
properties, condition (financial or otherwise) or prospects (exclusive, in the
case of the Acquired Entities, of circumstances or events generally affecting
businesses competing in the manufactured housing industry) of the person or
entity in question.
"Business Property Rights" shall mean and include all of the Acquired
Entities' right, title and interest in and to the name "General Manufactured
Housing", all domestic and foreign patents, patent licenses and applications,
trademarks, trademark licenses and applications, trade names, trade name
licenses and applications, copyrights, copyright licenses and applications, know
how, trade secrets, formulae, computer software, processes, technology,
innovations, inventions, manufacturing drawings, engineering drawings, product
designs, product patterns, and other intangible property rights of the Acquired
Entities, together with all other intangible personal property owned by the
Acquired Entities.
"Closing" shall mean the closing of the transactions contemplated by
this Agreement in Buffalo, New York on the Closing Date or in such other place
as may be agreed to by the parties to this Agreement.
"Closing Date" shall mean a date on or after the conditions specified
in Sections 12 and 13 hereof have been satisfied or waived, but in no event
later than November 30, 1995 or such other date as may be agreed to by the
parties to this Agreement.
"Code" shall mean the Internal Revenue Code of 1986 and all
regulations promulgated thereunder, as the same have from time to time been
amended.
"Employment Agreements" shall mean the employment agreements between
the Buyer and each of Xxxxxx X. Xxxxx, Xxxxxxx X. Xxxxx and Xxxx X. Xxxxx,
substantially in the forms of Exhibits B and C hereto.
"Environmental Reports" shall mean the following reports prepared by
United Consulting Group, Ltd: Phase 1 Environmental Site Assessment for
Plants 1, 2 and 3 dated August 25, 1995; Asbestos Survey, Radon Gas Testing and
Xxxxxxx Map Review for Plants 1, 2, 3 and 4 dated September 18, 1995; Phase 2
Environmental Site Assessment Report for Plants 1, 2 and 3 dated September 21,
1995; Phase 1 Environmental Site Assessment Report for Plant 4 dated October 2,
1995 and Draft Phase 1 Environmental Site Assessment Report for Plant 5 dated
October 6, 1995.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974
(and any sections of the Code amended by it) and all regulations promulgated
thereunder, as the same have from time to time been amended.
"Escrow Agent" shall mean Manufacturers & Traders Trust Company, or
such other financial institution as is mutually acceptable to the parties
hereto.
"Escrow Agreement" shall mean the escrow agreement by and between the
Buyer, the Sellers and the Escrow Agent substantially in the form of Exhibit D
hereto.
"Escrowed Funds" shall mean the sum of $1,000,000 deposited with the
Escrow Agent pursuant to Section 3(b) hereof.
"Financial Statements" shall mean the Audited Financial Statements and
the Unaudited Financial Statements.
"GAAP" shall mean generally accepted accounting principles, as in
effect from time to time.
"Litigation Expense" shall mean any expenses incurred in connection
with investigating, defending or asserting any claim, action, suit or proceeding
incident to any matter indemnified against under this Agreement, including,
without limitation, court filing fees, court costs, arbitration fees or costs,
witness fees, and fees and disbursements of legal counsel (whether incurred in
any action or proceeding between the parties to this Agreement or between any
party to this Agreement and any third party), investigators, expert witnesses,
accountants and other professionals.
"Loss" shall mean any loss, obligation, claim, liability, settlement
payment, award, judgment, fine, penalty, interest charge, expense, damage or
deficiency or other charge, other than Litigation Expense.
"Net Worth" shall mean total assets minus total liabilities, as those
terms are defined by GAAP.
"Person" shall mean and include an individual, a corporation, a
partnership, a limited liability company, a limited liability partnership, a
joint venture, a trust, an unincorporated association, a government or political
subdivision or agency thereof or any other entity.
"Premises" shall mean the facilities owned or leased by the Acquired
Entities which are identified in the Environmental Reports.
"Sellers knowledge" or the equivalent language used herein shall mean
facts actually known or recollected by any of the Sellers, independently and
after review of reports prepared for the Sellers in connection with the
Transaction, including, without limitation, the Environmental Reports, and after
investigation limited to inquiry of Messrs. Xxxxx Xxxxxxx, Xxxxxx Xxxxxx, Xxxx
Xxxxxx, Esq. and Xxx Xxxxxx at or about the time of execution and delivery of
this Agreement and shall not include or be deemed to include facts that the
Sellers might have learned through more extensive investigation.
"Stock" shall mean the shares of capital stock and limited liability
company interests to be sold by the Sellers to the Buyer, as set forth in
Exhibit A hereto.
"Unaudited Financial Statements" shall mean the unaudited financial
statements of GMH as and for the nine month period ending September 30, 1995,
including the balance sheet, the related statements of income and cash flow and
the related footnotes thereto.
"Working Capital" shall mean total current assets minus total current
liabilities, as those terms are defined by GAAP.
Section 2. Purchase and Sale of Stock. In reliance on the
representations and warranties, upon the terms, and subject to the
conditions of this Agreement, the Buyer agrees to purchase and accept delivery
from the Sellers and GMH, and the Sellers and GMH agree to sell, assign,
transfer and deliver to the Buyer, at the Closing provided for in Section 4
hereof, all of the Stock held by them, free and clear of all liens, claims,
charges, restrictions, equities or encumbrances of any kind.
Section 3. Purchase Price.
(a) Cash; Installment Notes. As consideration for the Stock, the
Buyer, at the Closing, will pay to the Sellers cash in the amount of $46,000,000
(which amount will be allocated among the Sellers as set forth in Exhibit A
hereto), less, if elected by the Sellers to be paid out of such amount, the
amount of any debt repayment required pursuant to the terms of this Agreement.
Such amount, less any amounts deposited with the Escrow Agent pursuant to
Section 3(b) hereof, shall be paid by wire transfer of immediately available
funds and by delivery of the installment promissory notes, substantially in the
form of Exhibit E attached hereto in such amounts as are mutually agreed by the
parties hereto.
(b) Escrow Arrangements. At the Closing, the Buyer shall cause to be
deposited with the Escrow Agent, in cash, in immediately available funds, the
Escrowed Funds. Any payment of the Escrowed Funds to the Sellers shall be made
in accordance with the provisions of Section 15(h) hereof.
(c) Interest. In the event the Closing occurs after October 31,
1995, the Buyer agrees to pay to the Sellers in cash, on the Closing Date,
interest at the rate of 8% per annum on $46,000,000 for each day from November
1, 1995 until the Closing occurs, such amount to be allocated among the Sellers
as set forth on Exhibit A hereto. In addition, in the event the Closing occurs
after October 31, 1995, the Sellers shall be permitted to withdraw, immediately
prior to the Closing, the amount of cash in GMH on October 31, 1995 less
$100,000 and less any amounts required to repay any debt of GMH in accordance
with the terms of this Agreement, if so elected by the Sellers pursuant to
Section 3(a) hereof.
Section 4. Closing. The Closing shall take place at the offices
of Nixon, Hargrave, Devans & Xxxxx LLP, Buffalo, New York (or at such other
place as the parties may mutually agree) at 10:00 in the forenoon, local time,
on October 31, 1995 or on such other date as the parties may mutually agree (the
"Closing Date"), but in no event later than November 30, 1995.
Section 5. Deliveries by the Sellers. At the Closing, the Sellers
and GMH will deliver to the Buyer:
(a) Stock certificates and other evidence of ownership for the Stock,
free and clear of all liens, claims, charges, restrictions, equities or
encumbrances of any kind, which certificates shall be duly endorsed to the Buyer
or accompanied by duly executed stock powers in form satisfactory to the Buyer,
and to which all required transfer tax stamps shall be affixed;
(b) A certificate of the Sellers certifying as to the accuracy of the
Sellers' representations and warranties at and as of the Closing and that the
Sellers have performed and complied with all of the terms, provisions and
conditions to be performed and complied with by the Sellers at or before the
Closing; and
(c) Such other certificates and documents as the Buyer or its counsel
may reasonably request.
Section 6. Deliveries by the Buyer. At the Closing, the Buyer
will deliver to the Sellers:
(a) Cash and installment promissory notes of the Buyer in the
aggregate principal amount of $46,000,000, allocated among the Sellers as set
forth on Exhibit A attached hereto, less, if elected to be paid by the Sellers
out of such amount, the amount of any debt of GMH required to be paid under the
terms of this Agreement. Each of such notes shall be in the form of Exhibit E
hereto, with the blanks appropriately completed;
(b) A certificate of the Buyer certifying as to the accuracy of the
Buyer's representations and warranties at and as of the Closing and that the
Buyer has performed and complied with all of the terms, provisions and
conditions to be performed and complied with by the Buyer at or before the
Closing; and
(c) Such other certificates and documents as the Sellers or their
counsel may reasonably request.
Section 7. Joint and Several Representations and Warranties of the
Sellers. Each of the Sellers jointly and severally represents and warrants to
the Buyer as follows:
(a) Organization; Good Standing; Power; Etc. GMH is a duly organized,
validly existing corporation in good standing under the laws of the State of
Georgia. Xxxxx is a duly organized, validly existing limited liability company
in good standing under the laws of the State of Georgia. Each of the Acquired
Entities has all requisite power, authority and capacity to own, lease and
operate its properties, and to carry on its business as the same is now being
conducted. Each of the Acquired Entities is qualified as a foreign corporation
or limited liability company, as applicable and is in good standing in all such
other jurisdictions, set forth on Schedule 7(a) hereto, where the business
conducted or the assets owned by it requires such qualification, except where
the failure to so qualify would not have a material adverse effect on the
Business Conditions of such Acquired Entity. Except as otherwise set forth on
Schedule 7(a) hereto, none of the Acquired Entities have any equity interest,
direct or indirect, in any corporation, partnership, joint venture or other
entity. Set forth on Schedule 7(a) hereto is a true, complete and correct list
of all the assumed names or trade names under which any of the Acquired Entities
conducts business.
(b) Capitalization. Set forth on Schedule 7(b) hereto is a
description of the authorized, issued and outstanding equity interests of each
of the Acquired Entities and the names of the persons to whom it is issued.
There are no other classes or series of capital stock or other equity interest
of any of the Acquired Entities authorized, issued or outstanding. All of the
issued and outstanding shares of capital stock or other equity interest of each
of the Acquired Entities are validly issued, fully paid and non-assessable with
no liability attaching to the ownership thereof. Except as set forth on Schedule
7(b), there are no outstanding rights of subscription, warrants, call options,
contracts or other agreements of any kind, issued or granted by any of the
Sellers or any of the Acquired Entities, to purchase or otherwise acquire
securities of any of the Acquired Entities.
(c) Effective Agreement. Except as set forth on Schedule 7(c)
hereto, the execution, delivery and performance of this Agreement by each of the
Sellers and the consummation of the Transaction do not and will not: (i)
conflict with, violate or result in the breach of any of the terms or conditions
of, or constitute a default under, the organizational or constituent documents
of any of the Acquired Entities, or any contract, agreement, commitment,
indenture, mortgage, pledge, note, bond, license, permit or other instrument or
obligation to which any of the Acquired Entities is a party or by which any of
the Acquired Entities or their assets may be bound or affected, or any law,
regulation, ordinance or decree to which any of the Acquired Entities or their
assets are subject, except for (A) requirements for consents of governmental
authorities, persons or entities referred to in Section 7(d) hereof and (B) such
violations, breaches or defaults which would not have a material adverse effect
on the Business Conditions of any of the Acquired Entities or on the Sellers'
ability to consummate the Transaction and other transactions contemplated hereby
to which they are parties; or (ii) result in the creation or imposition of any
lien, security interest, charge, encumbrance, restriction or right, including
rights of termination or cancellation, in or with respect to, or otherwise
materially adversely affect, any of the properties, assets or businesses of any
of the Acquired Entities (other than liens, security interests, charges,
encumbrances, restrictions or rights arising in connection with the financing of
the Transaction).
(d) Consents. No permit, consent, approval, or authorization of, or
designation, declaration or filing with, any governmental authority or any other
person or entity on the part of any of the Sellers or any of the Acquired
Entities is required in connection with the execution or delivery by any of the
Sellers of this Agreement or the consummation of the Transaction other than
those specified in Schedule 7(d) hereto, except where the failure to obtain such
consent would not have a material adverse effect on the Business Conditions of
any of the Acquired Entities or on the Transaction.
(e) Title to Property and Assets. A list of, to Sellers' knowledge,
all the property and assets, real and personal, tangible and intangible, having
a book value in excess of $20,000.00, owned by each of
the Acquired Entities is set forth in Schedule 7(e) hereto (including, but not
limited to, a list of all motor vehicles and vehicle I.D. numbers, and all bank
accounts maintained by each of the Acquired Entities). Except as set forth in
Schedule 7(e) hereto, to Sellers' knowledge, each of the Acquired Entities has
good and marketable title to all such properties and assets, subject to no
mortgage, pledge, lien, security interest, lease, charge, encumbrance or
conditional sale or other title retention agreement (collectively,
"Encumbrances"), except for such Encumbrances which do not materially adversely
affect the use, operation or transfer of such property or asset. Except as set
forth on Schedule 7(e) hereto, to Sellers' knowledge, all plants, warehouses,
structures and equipment of each of the Acquired Entities are in good operating
condition and repair, normal wear and tear excepted (meaning that, to Sellers'
knowledge, the aggregate repair costs to be incurred by the Acquired Entities
during the 12 months following the Closing will not materially exceed historical
repair costs on a per plant basis). To Sellers' knowledge, no property or asset
owned or leased by any of the Acquired Entities is in violation of any
applicable building or zoning law in respect thereof. The assets, properties,
rights and business of each of the Acquired Entities constitute all of the
material assets, properties and rights in which the Sellers (or any of their
Affiliates) have any interest, direct or indirect, and which are used in
connection with the business of the Acquired Entities. Except as set forth in
Schedule 7(e) hereto, there are no other material assets which are used
substantially on an exclusive basis in connection with the business of the
Acquired Entities which are not owned by the Acquired Entities.
(f) Leases and Licensing Agreements. Schedule 7(f) hereto contains a
list and brief description of, all leases of real property and all franchises,
licensing agreements and leases of (or other arrangements for the use of) any
item of personal property to which any of the Acquired Entities is a party,
either as lessor or lessee and which involves annual payments of at least
$25,000. Each of the Acquired Entities enjoys peaceful and undisturbed
possession under all leases under which it is now operating and no substantial
portion of which expires within a one year period. To Sellers' knowledge, all
such leases, franchises and licensing agreements are in good standing and are
valid and effective in accordance with their respective terms, and to Sellers'
knowledge, there are no existing defaults or events of default or events which
with notice or lapse of time or both would constitute defaults, the consequences
of which would permit the acceleration of payments due under or the termination
of any of such leases, franchises or licensing agreements. None of the Sellers
or, to Sellers' knowledge, any of the Acquired Entities have given or received
any notice, nor do the Sellers have any knowledge, of any claimed default with
respect to any lease, franchise or licensing agreement set forth in Schedule
7(f) hereto. Except for any consents referred to in Section 7(d) hereto, to
Sellers' knowledge, the continuation, validity and effectiveness of all such
leases, franchises and licensing agreements will in no way be adversely affected
by the Transaction.
(g) Agreements, Etc. Set forth in Schedule 7(g) hereto are complete
and accurate lists of the following:
(i) all indentures, mortgages, agreements, contracts,
arrangements, commitments, instruments, understandings or obligations,
oral or written, of each of the Acquired Entities, which are to be
performed by any party in whole or in part on or after the date of
Closing, including, without limitation, all product warranties,
individually obligating the Acquired Entities in amounts greater than
$25,000 (other than purchase orders for goods entered into by any of
the Acquired Entities in the ordinary course of business which
individually do not exceed $75,000);
(ii) all agreements, contracts, understandings, arrangements and
obligations, oral or written, of each of the Acquired Entities with
any supplier to which any of the Acquired Entities has paid more than
$250,000 in any of the last three fiscal years, or with any customer
which has paid to any of the Acquired Entities more than $500,000 in
any of the last three fiscal years;
(iii) all employee bonus, incentive, compensation, profit sharing,
retirement, pension, group insurance, death benefit or other fringe
benefit plans, deferred compensation and post-termination obligations
or trust agreements of each of the Acquired Entities in effect or
under which any amounts remain unpaid on the date of Closing or are to
become effective after the date of Closing;
(iv) all collective bargaining agreements of each of the Acquired
Entities with any labor union or other representative of employees,
including local agreements, amendments, supplements, letters and
memoranda of understanding of all kinds and all employment and
consulting contracts not terminable at will without penalty to which
any of the Acquired Entities is a party;
(v) each instrument defining the terms on which funded
indebtedness of or guarantees by any of the Acquired Entities in
excess of $25,000 have been or may be issued;
(vi) any agreement limiting the freedom of any of the Sellers or
any of the Acquired Entities to compete in any line of business or
with any person, or limiting the freedom of any other person to
compete with any of the Sellers or any of the Acquired Entities;
(vii) all other agreements, contracts, arrangements, commitments,
instruments, understandings, or obligations, oral or written, to which
any of the Acquired Entities is a party and in which any Seller or any
Affiliate of any of the Acquired Entities has any interest, direct or
indirect, which involve payments of more than $25,000 to or from any
of the Acquired Entities;
(viii) the amounts and terms of all loans or advances individually
in excess of $25,000 by any of the Acquired Entities to the Sellers or
their Affiliates or the employees and Affiliates of any of the
Acquired Entities; and
(ix) a summary of the anticipated terms and conditions of any
item currently being negotiated by or on behalf of any of the Acquired
Entities which would upon completion be included within the scope of
paragraphs (i) through (viii) of this Section 7(g).
Except as set forth on Schedule 7(g) hereto, (A) there are no
agreements in effect which are required to be listed on Schedule 7(g) hereto
which permit any of the Acquired Entities to incur debt for borrowed money to
any bank, insurance company or other financial institution; (B) to Seller's
knowledge none of the rights or obligations of any of the Acquired Entities
under any indenture, mortgage, agreement, contract, arrangement, commitment,
instrument, understanding or obligation listed on Schedule 7(g) hereto will be
materially adversely affected by the Transaction; and (C) to Seller's knowledge,
there is no material default or claimed or purported or alleged default or state
of facts which with notice or lapse of time or both would constitute a material
default on the part of any party in the performance of any obligation to be
performed or paid by any party under any indenture, mortgage, agreement,
contract, arrangement, commitment, instrument, understanding or obligation
listed on Schedule 7(g) hereto.
(h) ERISA. Schedule 7(h) lists, to Sellers' knowledge, all the
employee benefit plans, programs and arrangements (the "Plans") maintained for
the benefit of any current or former employee, officer or director of any of the
Acquired Entities or any other corporation or trade or business which must be
aggregated with any of the Acquired Entities as required by any subsection of
Section 414 of the Code (an "ERISA Affiliate"), and the Buyer has been furnished
with a copy of each Plan and each material document prepared in connection with
each Plan. None of the Plans are or are required to be qualified under Section
401(a) of the Code.
(i) Stockholder Agreements. On the Closing Date, there will be no
agreements, written or oral between any of the Acquired Entities and any Seller
(or any Affiliates of such Seller) or any other person, or between or among any
of the Sellers, relating to the acquisition, disposition or voting of the
capital stock of any of the Acquired Entities.
(j) Financial Statements. Except as set forth on Schedule 7(j)
hereto, the Audited Financial Statements (i) to Sellers' knowledge, are true,
correct and complete in every material respect, (ii) have been prepared in
accordance with the books and records of GMH, (iii) present fairly the financial
position and results of operations of GMH, as of the dates and for the periods
indicated, and (iv) have been prepared in accordance with GAAP applied on a
consistent basis for GMH. Except as set forth on Schedule 7(j) hereto, to
Sellers' knowledge, the Unaudited Financial Statements (i) are true, correct and
complete in every material respect, (ii) have been prepared in accordance with
the books and records of GMH, (iii) present fairly the financial position and
results of operations of GMH, as of the date and for the period indicated and
(iv)
have been prepared in accordance with GAAP applied on a consistent basis for
GMH. As of the Audit Date, the amounts due or accrued to any Seller from GMH
(other than for employment compensation and shareholder distributions) were as
set forth on Schedule 7(j) hereto, and GMH has not incurred or will not incur
any liability for any additional amounts of such accruals or amounts due
subsequent to the Audit Date.
(k) Litigation, Etc. Except as set forth on Schedule 7(k)
hereto, there is no suit, action or litigation, administrative hearing,
arbitration, labor controversy or negotiation, or other proceeding or
governmental inquiry or investigation affecting any of the Acquired
Entities or their respective properties (including product liability,
environmental or land use proceedings) pending or to Sellers' knowledge,
threatened against any of the Acquired Entities which, if resolved
adversely, would have a material adverse effect on the Business Conditions
of any of the Acquired Entities. There are no judgments, consent decrees
or injunctions against, or to Seller's knowledge, affecting or binding upon
any of the Acquired Entities or any officer or director thereof. To
Sellers' knowledge, each of the Acquired Entities is in compliance with all
laws, ordinances, requirements, orders and regulations applicable to its
business (including, without limitation, the National Manufactured Housing
Construction and Safety Standards Act of 1974, as amended, and regulations
promulgated thereunder by the United States Department of Housing and Urban
Development, as amended), the violation of which would have a material
adverse effect on its Business Conditions, and none of the Sellers or any
of the Acquired Entities have received notice of any claimed default with
respect to any of the foregoing that was not resolved in the ordinary
course of business.
(l) Licenses and Permits. Schedule 7(l) hereto contains a complete
and accurate list and brief description of, to Sellers' knowledge, all
governmental licenses and permits issued in the name or for the benefit of any
of the Acquired Entities. To Sellers' knowledge, none of the Acquired Entities
is required, nor will be required in connection with or as a result of the
Transaction, to possess or obtain any governmental license or permit except for
those described on Schedule 7(l) hereto. Except as set forth on Schedule 7(l)
hereto, to Sellers' knowledge, all such licenses and permits may be transferred
to the Buyer as contemplated by this Agreement.
(m) Taxes. Each of the Acquired Entities has duly filed all federal,
state, local, foreign and other tax returns which are required to be filed by
it, and all such returns are true and correct. Each of the Acquired Entities has
paid all taxes pursuant to such returns or pursuant to any assessments received
by it or which it is obligated to withhold from amounts owing to any employee,
creditor or third party. Except as set forth on Schedule 7(m), the tax returns
of any Acquired Entity have not been audited by the relevant taxing authorities
in any of the six consecutive years immediately preceding the Closing Date, no
returns of any of the Acquired Entities are currently being audited by any
local, state or federal authority, and none of the Acquired Entities have been
notified by any such authority of a forthcoming audit. All monies required to be
withheld by any of the Acquired Entities from employees for income taxes, Social
Security and unemployment insurance taxes have been collected or withheld, and
either paid to the respective governmental agencies or set aside in accounts for
such purpose, or accrued, reserved against, and entered upon the books of such
Acquired Entity, as applicable. Set forth on Schedule 7(m) hereto are all
elections made by each of the Acquired Entities or by any of the Sellers under
the Code or any state, local, foreign or other tax law affecting any tax return
for any of the Acquired Entities covering fiscal years ending in or after 1989.
All such elections were, to Sellers' knowledge, valid when made and are
currently valid, and no Acquired Entity nor any Seller will take any action
which would result in the termination of such election prior to the Closing
Date, without the prior written consent of the Buyer.
(n) No Material Adverse Change. Except as described in Section 7(a)
hereto, since the Audit Date, there has been no material adverse change in the
condition of any of the Acquired Entities, financial or otherwise, as shown on
the balance sheets referred to in Section 7(j) hereof as at the Audit Date. To
Sellers' knowledge, there is no fact, condition, proposal or circumstance which
exists or which any Seller has reason to believe may exist in the future
relating to the business of any of the Acquired Entities, which materially
adversely affects the same, or which more than likely will in the future
materially adversely affect the same, which has not been disclosed on Schedule
7(n) hereto. Anything herein to the contrary notwithstanding, the Sellers make
no representation or warranty as to the future prospects of the manufactured
housing industry
in general, in whole or in part. Except as shown on Schedule 7(n), to Sellers'
knowledge, there are no controversies pending between any of the Acquired
Entities and any of their employees which have affected or more than likely will
in the future affect the Business Conditions of any of the Acquired Entities.
(o) Business Property Rights. Set forth on Schedule 7(o) hereto is,
to Sellers' knowledge, a complete and accurate, in every material respect, list
and brief description of all Business Property Rights owned or held by any of
the Acquired Entities or for which application has been made as of the date
hereof. Except as described on Schedule 7(o) hereto, to Sellers' knowledge, the
Acquired Entities have the sole and exclusive right to use all such Business
Property Rights. Except as set forth on Schedule 7(o) hereto, none of the
Sellers or, to Sellers' knowledge, any of the Acquired Entities have received
any notice of any claimed conflict with respect to the Business Property Rights
of others. Except as set forth on Schedule 7(o) hereto, to Sellers' knowledge,
all such Business Property Rights are fully assignable without the consent of
any third party and without infringing or violating the rights of any third
party.
(p) Insurance. Schedule 7(p) hereto contains a list of, to Sellers'
knowledge, all insurance policies of each of the Acquired Entities and a
description of the terms thereof. To Sellers' knowledge, all of the insurance
policies listed on Schedule 7(p) are valid and enforceable in accordance with
their terms and in full force and effect. To Sellers' knowledge, such policies
carry such limits of liability and coverage for such risks and liabilities as
are customary for companies engaged in the same or similar business activities.
None of the Sellers or any of the Acquired Entities have received any notice of
any cancellation, modification, change in premium or denial of renewal in
connection with any of the insurance policies listed on Schedule 7(p) hereto or
any renewal of any of them. Except as set forth on Schedule 7(p) hereto, to
Sellers' knowledge, no claims, other than workers' compensation claims, in
excess of $50,000 each or $100,000 in the aggregate have been made or are
pending on such insurance policies since January 1, 1992.
(q) Inventories. Schedule 7(q) hereto contains a list of the
locations at which the inventories of any of the Acquired Entities are located.
To Sellers' knowledge, the inventory of each of the Acquired Entities (including
that reflected on the balance sheet contained as part of the Unaudited Financial
Statements) is, or was prior to the Closing Date, in good condition and suitable
and usable in the ordinary course of business at the aggregate amounts carried
on such balance sheet (net of reserves for obsolete or otherwise unusable
inventory) and on the books and records of the Acquired Entities at September
30, 1995. To Sellers' knowledge, such inventory is in sufficient supply,
consistent with past practice and projected operations, to furnish the inventory
requirements of the business of each of the Acquired Entities in the ordinary
course of business and is not materially in excess of the normal purchasing
patterns of any of the Acquired Entities. To Sellers' knowledge, the value of
finished goods inventory returned to any of the Acquired Entities by all of
their customers and not resold has not exceeded 5% of the total value of their
finished goods inventories during the last 12 months.
(r) Offices. The Acquired Entities maintain principal executive
offices and other offices at the locations set forth on Schedule 7(r) hereto,
and the books and records of each of the Acquired Entities are kept at the
location set forth on such Schedule. During the four months immediately
preceding the Closing Date, none of the Acquired Entities have changed their
name, the location of their principal executive offices, their identity or their
structure, except as contemplated by this Agreement.
(s) Company Actions. Since the Audit Date, except as otherwise
contemplated by this Agreement or as set forth in Schedule 7(s) hereto, none of
the Acquired Entities have:
(i) issued any capital stock, bonds or other corporate
securities,
(ii) borrowed any amount or incurred or become subject to any
liabilities (absolute or contingent) except current liabilities
incurred, and liabilities under contracts entered into, in the
ordinary course of business,
(iii) discharged or satisfied any lien or encumbrance or paid any
obligation or liability (absolute or contingent) other than current
liabilities shown on their balance sheet as at the Audit
Date, or current liabilities incurred since the Audit Date in the
ordinary course of business,
(iv) declared or made any payment or distribution to stockholders
in respect to their capital stock or purchased or redeemed any shares
of their capital stock,
(v) split or otherwise subdivided or reclassified their shares,
(vi) mortgaged, pledged or subjected to lien, charge or any other
encumbrance any of their assets, tangible or intangible, except
possible mechanics' liens or liens of real or personal property taxes
not yet due and payable,
(vii) sold, assigned or transferred any of its tangible assets or
cancelled any debts or obligations (except in the ordinary course of
business),
(viii) sold, assigned or transferred any Business Property Rights,
(ix) suffered any extraordinary losses, or waived any rights of
substantial value (whether or not in the ordinary course of business),
(x) made any changes in officer compensation, except in the
ordinary course of business and consistent with past practice,
(xi) made any investment in, advanced any money to, or guaranteed
any obligation of any third person or entity, or
(xii) entered into any transaction other than in the ordinary
course of business.
(t) Related Party Transactions. Except as set forth on Schedule 7(t)
hereto, none of the Acquired Entities is currently, directly or indirectly,
purchasing, acquiring or leasing any property from, or selling, transferring or
leasing any property to, or entering into any other transaction or agreement
with, any of the Sellers or their Affiliates or any Affiliate of any of the
Acquired Entities.
(u) Undisclosed Liabilities. Except as set forth on Schedule 7(u)
hereto or otherwise disclosed in the various schedules delivered pursuant to
this Section 7, to Sellers' knowledge, there are no material liabilities of any
of the Acquired Entities of any kind whatsoever, whether or not accrued and
whether or not contingent, absolute, determined or determinable, and to Sellers'
knowledge, there is no existing condition which could reasonably result in such
liability, other than liabilities reflected or reserved against on the Audited
Financial Statements ending on the Audit Date or on the Unaudited Financial
Statements.
(v) Inaccuracies. To Sellers' knowledge, neither the financial
statements referred to in Section 7(j) hereof, nor this Agreement, nor any
schedule, certificate or statement furnished by or on behalf of any of the
Sellers or any of the Acquired Entities pursuant to this Agreement, contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements contained therein not misleading; and to
Sellers' knowledge, there is no fact in connection with this Agreement which
materially adversely affects the Business Conditions of any of the Acquired
Entities which has not been set forth herein or in a schedule, certificate or
statement furnished to the Buyer by or on behalf of any of the Sellers or any of
the Acquired Entities.
(w) Suppliers and Customers. Except as set forth on Schedule 7(w)
hereto, to Sellers' knowledge, no supplier or customer listed on Schedule 7(g)
hereto has cancelled or otherwise terminated, or made any written threat to any
of the Sellers or any of the Acquired Entities to cancel or otherwise terminate,
for any reason, including the contemplated consummation of the Transaction, its
relationship with any of the Acquired Entities, or has at any time on or after
January 1, 1995 decreased materially its services or supplies to any of the
Acquired Entities in the case of any such supplier, or its purchases of the
products of any of the Acquired Entities, or made any written claim that any
product sold by any of the Acquired Entities failed to meet any specification
with respect thereto or was otherwise defective, in the case of any such
customer, other than in the ordinary course of business. Except as set forth on
Schedule 7(w), none of the Sellers has any knowledge that any such supplier or
customer intends to cancel or otherwise terminate its relationship with any of
the Acquired Entities or to decrease materially its services or supplies to any
of the Acquired Entities, or its purchases of the products of any of the
Acquired Entities, as the case may be.
(x) Potential Conflicts of Interest. Except as set forth in Schedule
7(x), none of the Sellers or any Affiliate of any of the Acquired Entities (i)
is an officer, director, employee or consultant of, or owns or otherwise
controls any person which is, or is engaged in business as, a competitor,
customer or supplier of any of the Acquired Entities in connection with their
respective businesses; (ii) owns, directly or indirectly, in whole or in part,
any tangible or intangible property which any of the Acquired Entities is using
in a material way in connection with its business or the use of which is
necessary for its business; or (iii) has any cause of action or other claim
whatsoever against, or owes any amount to any of the Acquired Entities, except
for claims in the ordinary course of business, such as for accrued vacation pay,
accrued benefits under employee benefit plans and similar matters and agreements
existing on the date hereof.
(y) Accounts Receivable. To Sellers' knowledge, all of the accounts
receivable (net of reserves for uncollectible accounts) reflected on the balance
sheets referred to in Section 7(j) hereof and in the books and records of each
of the Acquired Entities are valid and arose in the ordinary course of business.
Except as set forth on Schedule 7(y) hereto, none of the Sellers has any
knowledge of any such account receivable with a value in excess of $50,000 that
is being contested or disputed by the obligor thereon.
(z) Environmental Compliance. Except as set forth on Schedule 7(z)
hereto or on the Environmental Reports, to Sellers' knowledge:
(i) (A) The Premises are not being and have not been used for
the treatment, storage, generation, transportation,
processing, handling or production of any Hazardous
Substance, or for the storage of petroleum or petroleum
based products other than those referenced herein.
(B) The Premises are not being and have not been used for
the disposal of any Hazardous Substance, or as a
landfill, or other waste disposal site or for military,
manufacturing or industrial purposes.
(C) The Premises are not being and have not been used for
storage, treatment, generation, transportation,
processing, handling, production or disposal of any
Hazardous Waste as that term is defined under RCRA,
CERCLA, or comparable state Environmental Laws, and the
regulations thereunder (hereinafter, "Hazardous
Waste"), or as a Hazardous Waste landfill or other
Hazardous Waste disposal site.
(ii) Underground storage tanks are not and have not been located on
the Premises.
(iii) The soil, subsoil, bedrock, surface water and groundwater of the
Premises are free of any Hazardous Substances.
(iv) There has been no Release nor is there the threat of a Release
of any Hazardous Substance on, at or from the Premises which
through soil, subsoil, bedrock, surface water or groundwater
migration could come to be located on the Premises, and the
Seller has not received any form of notice or inquiry from any
federal, state or local governmental agency or authority, any
operator, licensee or occupant of the Premises or any other
person with regard to a Release or the threat of a Release of
any Hazardous Substance on, at or from the Premises.
(v) All necessary Environmental Permits have been obtained and are
in full force and effect.
(vi) No event has occurred with respect to the Premises which, with
the passage of time or the giving of notice, or both,
would constitute a violation of any applicable Environmental Law
or non-compliance with any Environmental Permit, and at all
times, the Premises and all present and prior uses thereof have
complied with all Environmental Laws.
(vii) There are no agreements, consent orders, decrees, judgments,
license or permit conditions or other orders or directives of
any federal, state or local court, governmental agency or
authority relating to the past, present or future ownership,
use, operation, sale, transfer or conveyance of the Premises
which require any change in the present condition of the
Premises or any work, repairs, construction, containment, clean
up, investigations, studies, removal or other remedial action or
capital expenditures with respect to the Premises.
(viii) There are no actions, suits, claims or proceedings, pending,
contemplated, or threatened, which could cause the incurrence of
expenses or costs of any name or description or which seek money
damages, injunctive relief, remedial action or any other remedy
that arise out of, relate to or result from (A) a violation or
alleged violation of any applicable Environmental Law or non-
compliance or alleged non-compliance with any Environmental
Permit, (B) the presence of any Hazardous Substance or a release
or the threat of a Release of any Hazardous Substance on, at or
from the Premises or (C) human exposure to any Hazardous
Substance, noises, vibrations or nuisances of whatever kind to
the extent the same arise from the condition of the Premises or
the ownership, use, operation, sale, transfer or conveyance
thereof.
(ix) Each Acquired Entity is in compliance with all applicable
Environmental Laws.
(x) None of the Acquired Entities have (A) received any notice of,
or (B) been subject to, any administrative or judicial
proceeding pursuant to any applicable Environmental Law, either
now or at any time during the past three years.
(xi) There are no present facts or circumstances that could form the
basis for the assertion of any claim against any Acquired Entity
relating to environmental matters including, without limitation,
any claim arising from past or present environmental practices
asserted under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), the Resource
Conservation and Recovery Act ("RCRA") or any other federal,
state or local environmental statute.
For purposes of this Section 7(z), the following terms shall have the
meanings set forth below:
"Environment" means any water or water vapor, including groundwater
and surface water, any land, including land surface or subsurface, air, fish,
wildlife, biota and all other natural resources.
"Environmental Laws" mean all federal, state and local environmental,
land use, zoning, health, chemical use, safety and sanitation laws,
environmental permit requirements statutes, ordinances, rules, regulations and
codes relating to the protection of the Environment, including, but not limited
to those laws and requirements governing the use, storage, treatment,
generation, transportation, processing, handling, production or disposal of
Hazardous Substances, those laws with regard to record keeping, notification and
reporting requirements respecting hazardous materials, and the rules,
regulations, policies, guidelines, interpretations, decisions, orders and
directives of federal, state and local governmental agencies and authorities
with respect thereto.
"Environmental Permits" mean all permits, certificates, licenses,
approvals, authorizations, consents or registrations required by any applicable
Environmental Law, and/or required: (i) in connection with the ownership, use
and/or operation of the Premises; (ii) for the storage, treatment, generation,
transportation, processing, handling, production or disposal of Hazardous
Substances; or (iii) for the sale, transfer or conveyance of the Premises.
"Hazardous Materials" means materials defined as "hazardous
substances," "hazardous wastes" or "solid wastes" in CERCLA, RCRA and in
any similar federal, state or local environmental statute.
"Hazardous Substance" means, without limitation, any flammable
explosives, radon, radioactive materials, asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls, petroleum and petroleum products
(including, without limitation, waste petroleum and waste petroleum products),
methane, hazardous materials, hazardous wastes, pollutants, contaminants, and
hazardous or toxic substances or related materials, or chemicals posing an
unreasonable risk of harm to health or the environment, as regulated or defined
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended (42 U.S.C. Section 9601, et seq.), the Hazardous Materials
Transportation Act, as amended (49 U.S.C. Section 1801, et seq.), the Resource
Conservation and Recovery Act, as amended (42 U.S.C. Section 6901, et seq.), the
Toxic Substances Control Act, as amended (15 U.S.C. Section 2601, et seq.), or
any other applicable Environmental Law, and the regulations promulgated
thereunder.
"Release" means any past or present spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
disposing or dumping of a Hazardous Substance into the Environment (including
the abandonment or discarding of barrels, containers, and other closed
receptacles containing any Hazardous Substance), including the meaning as given
to that term in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.), and the
regulations promulgated thereunder.
(aa) Brokers. There is no broker or finder or other Person who would
have any valid claim against any of the Sellers or any of the Acquired Entities
for a fee, commission or brokerage in connection with this Agreement or the
transactions contemplated hereby as a result of any agreement, understanding,
arrangement or action by any of the Sellers or any of the Acquired Entities.
(bb) GMH Authorization. GMH has all requisite corporate power,
authority and capacity to enter into this Agreement and to perform all of its
obligations hereunder. The Board of Directors and shareholders of GMH have duly
authorized the execution and delivery of this Agreement and the performance of
the transactions contemplated hereby. This Agreement constitutes the legal,
valid and binding obligation of GMH enforceable against it in accordance with
its terms.
(cc) GMH Title. GMH is the sole record and beneficial owner of the
membership interest in Xxxxx set forth opposite its name on Exhibit A, free and
clear of all liens, claims, charges, restrictions, equities and encumbrances of
any kind.
Section 8. Individual Representations and Warranties of the Sellers.
Each of the Sellers severally, but not jointly, represents and warrants to the
Buyer as follows:
(a) Authority. Such Seller has the power, authority and capacity to
enter into this Agreement and to perform all of his or her obligations
hereunder, including without limitation the obligation to transfer all of the
shares of the Stock held by such Seller. This Agreement constitutes the legal,
valid and binding obligation of such Seller enforceable against such Seller in
accordance with its terms.
(b) Effective Agreement. The execution, delivery and performance of
this Agreement by or on behalf of such Seller and the consummation of the
Transaction do not and will not conflict with, violate or result in the breach
of any terms or conditions of, or constitute a default under, any contract,
agreement, commitment, indenture, mortgage, pledge, note, license, permit or
other instrument or obligation or any law, regulation, ordinance or decree to
which such Seller is a party or by which such Seller or the Stock owned by such
Seller may be bound or affected, except for (i) requirements of consents which
will be obtained and (ii) such violations, breaches or defaults which would not
have a material adverse effect on the ability of such Seller to consummate the
transactions contemplated hereby.
(c) Title to Stock. Such Seller is the sole record and beneficial
owner of the Stock set forth opposite his or her name on Exhibit A hereto, free
and clear of all liens, claims, charges, restrictions, equities and encumbrances
of any kind.
(d) Interests in Competitors. Except for the Stock, such Seller has
no equity interest, direct or indirect, in any corporation,
partnership, joint venture or other entity engaged in a business similar to or
competing with the business of any of the Acquired Entities, except as reflected
on Schedule 7(x) attached hereto.
Section 9. Representations and Warranties of the Buyer. The Buyer
represents and warrants to the Sellers as follows:
(a) Organization; Good Standing; Power. The Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. The Buyer has the corporate power, authority and capacity to
own, lease and operate its properties and to carry on its intended business. The
Buyer has no subsidiaries or interest in any joint venture, partnership, limited
liability company, limited liability partnership or any other entity.
(b) Authorization. The Buyer has all requisite corporate power,
authority and capacity to enter into this Agreement and to perform all of its
obligations hereunder. The Board of Directors and shareholders of the Buyer have
duly authorized the execution and delivery of this Agreement and the performance
of the transactions contemplated hereby. This Agreement constitutes the legal,
valid and binding obligation of the Buyer enforceable against it in accordance
with its terms.
(c) Effective Agreement. The execution, delivery and performance of
this Agreement by the Buyer and the consummation of the Transaction do not and
will not (i) conflict with, violate or result in the breach of any of the terms
or conditions of, or constitute a default under, the Certificate of
Incorporation or the By-Laws of the Buyer, or any contract, agreement,
commitment, indenture, mortgage, pledge, note, bond, license, permit or other
instrument or obligation to which the Buyer is a party or by which the Buyer or
its assets may be bound or affected, or any law, regulation, ordinance or decree
to which the Buyer or its assets are subject; or (ii) result in the creation or
imposition of any lien, security interest, charge, encumbrance, restriction or
right, including rights of termination or cancellation, in or with respect to,
or otherwise materially adversely affect, any of the properties, assets or
businesses of the Buyer (other than liens, security interests, charges,
encumbrances, restrictions or rights arising in connection with the financing of
the Transaction).
(d) Consents. No permit, consent, approval or authorization of, or
designation, declaration or filing with, any governmental authority or any other
person or entity on the part of the Buyer is required in connection with the
execution or delivery by the Buyer of this Agreement or the consummation of the
Transaction other than consents from the shareholders of the Buyer, except where
the failure to obtain such consent would not have a material adverse effect on
the Business Conditions of the Buyer.
(e) Litigation. There is no suit, action or litigation,
administrative hearing, arbitration or other proceeding or governmental inquiry
or investigation affecting the Buyer, its Affiliates, or their properties
pending or, to Buyer's knowledge, threatened against the Buyer or its
Affiliates, which could materially and adversely affect the transactions
contemplated by this Agreement. The Buyer is in compliance with all laws,
ordinances, requirements, orders and regulations applicable to it, the violation
of which would have a material, adverse effect on its Business Conditions, and
the Buyer has not received notice of any claimed default with respect to any of
the foregoing, and none of the foregoing will be affected by the Transaction.
(f) Brokers. Except for R. Xxxxx Xxx, there is no broker or finder
or any other Person who would have any valid claim against the Buyer for a fee,
commission or brokerage in connection with this Agreement or the transactions
contemplated hereby as a result of any agreement, understanding, arrangement or
action by the Buyer. Buyer covenants and agrees to satisfy and discharge any and
all obligations to Xx. Xxx arising from or relating to the transactions
contemplated by this Agreement and to indemnify Sellers for, and hold them
harmless from, any and all claims and liabilities relating to such obligations.
Section 10. Covenants of the Sellers. Each of the Sellers covenants
and agrees that, prior to the Closing Date, except as otherwise consented to in
writing by the Buyer or as permitted by this Agreement:
(a) Cooperation. Each of the Sellers and each of the Acquired
Entities shall use its best efforts to obtain all consents and authorizations of
third parties and to make all filings with and give all notices to third parties
which may be necessary or reasonably required in
order to effect the Transaction and shall take such additional actions as the
Buyer may reasonably request in writing to cooperate so that the transactions
contemplated by this Agreement may be expeditiously consummated.
(b) Transactions in the Ordinary Course of Business. Each of the
Sellers shall cause each of the Acquired Entities to enter into transactions
only in the ordinary course of business.
(c) Conduct of Business. Each of the Sellers shall, and shall cause
each of the Acquired Entities to, conduct his or its business and affairs in
such a manner as to assure reasonably that the representations and warranties of
the Sellers contained in this Agreement shall continue to be true, correct and
complete at and as of the Closing Date.
(d) Maintenance of Books; Compliance. Each of the Sellers shall
cause each of the Acquired Entities to maintain its respective books, accounts
and records in the usual manner consistent with prior years and to use all
reasonable efforts to duly comply in all material respects with all laws or
decrees applicable to it and the conduct of its respective business.
(e) Access to Properties. Each of the Acquired Entities shall give
to the Buyer and to its counsel, accountants, and other representatives, full
access during normal business hours, upon reasonable prior notice, to all of the
properties, books, tax returns, contracts, commitments and records of each of
the Acquired Entities and shall furnish to the Buyer copies of all such
documents, authenticated in a manner and to the extent reasonably requested by
the Buyer, and information with respect to its affairs, as the Buyer may from
time to time reasonably request.
(f) Settlement of Obligations. All obligations owed to any of the
Acquired Entities by any of the Sellers or their Affiliates or any Affiliate
(other than an Acquired Entity) of any of the Acquired Entities, except as
otherwise contemplated by this Agreement, shall be paid in full and satisfied.
All obligations of any of the Acquired Entities to any such other person shall
be paid. Each of the Acquired Entities and the Sellers shall be released from
all guarantees of the obligations of such other persons.
(g) Further Disclosure. From time to time prior to the Closing Date,
the Sellers shall promptly disclose in writing to the Buyer any matter hereafter
arising which, if existing or occurring at the date of this Agreement, would
have been required to be disclosed as an exception to the representations and
warranties of the Sellers. No such disclosure shall have the effect of curing
any misrepresentation or breach of any warranty without the written consent of
the Buyer, unless the Buyer consummates the Transaction following such
disclosure.
Section 11. Covenants of the Buyer. The Buyer covenants and agrees
that, prior to the Closing Date, except as otherwise consented to in writing by
the Sellers or as permitted by this Agreement:
(a) Cooperation. The Buyer shall use its best efforts to obtain all
consents and authorizations of third parties and to make all filings with and
give all notices to third parties which may be necessary or reasonably required
in order for it to effect the Transaction and shall take such additional actions
as the Sellers may reasonably request in writing to cooperate so that the
transactions contemplated by this Agreement may be expeditiously consummated;
provided, however, that neither the Buyer nor any shareholder of the Buyer shall
be obligated to make any financial concessions or to guarantee the obligations
of any other party in connection with the Buyer's efforts under this Section
11(a), except as expressly contemplated by this Agreement.
(b) Further Disclosure. From time to time prior to the Closing Date,
the Buyer shall promptly disclose in writing to the Sellers any matter hereafter
arising which, if existing or occurring at the date of this Agreement, would
have been required to be disclosed as an exception to the representations and
warranties of the Buyer. No such disclosure shall have the effect of curing any
misrepresentation or breach of any warranty without the written consent of the
Sellers, unless the Sellers consummate the Transaction following such
disclosure.
(c) Best Efforts to Obtain Required Financing. The Buyer shall use
its best efforts in good faith to obtain any and all financing required for it
to consummate the Transaction on terms reasonably acceptable to the Buyer.
Section 12. Conditions Precedent to the Obligations of the Sellers.
All obligations of the Sellers under this Agreement are subject to the
fulfillment, at or prior to the Closing Date, of each of the following
conditions, which conditions may be waived only by the Sellers:
(a) The representations and warranties of the Buyer herein contained
shall be true and correct as of the date hereof and shall continue to be true
and correct as of the Closing Date with the same force and effect as though made
as of the Closing Date.
(b) The Buyer shall have performed or complied with all the
obligations, agreements and covenants of the Buyer herein contained to be
performed by it prior to or as of the Closing Date.
(c) The Sellers shall have received a certificate of the Buyer as to
compliance with paragraphs (a) and (b) of this Section 12.
(d) Messrs. Nixon, Hargrave, Devans & Xxxxx LLP, counsel to the
Buyer, shall have delivered to the Sellers an opinion, dated the Closing Date,
in substantially the form attached hereto as Exhibit I.
(e) No action, suit or proceeding by or before any court or any
governmental or regulatory authority shall have been commenced or threatened,
and no investigation by any governmental or regulatory authority shall have been
commenced or threatened, seeking to restrain, prevent or change the Transaction
or seeking judgments against the Sellers, any of the Acquired Entities or the
Buyer awarding substantial damages in respect of the Transaction.
(f) All deliveries required to be made under this Agreement to the
Sellers at or before the Closing Date shall have been received by the Sellers.
(g) The Buyer shall have entered into the Employment Agreements with
Xxxxxx X. Xxxxx, Xxxxxxx X. Xxxxx and Xxxx X. Xxxxx, in substantially the forms
attached hereto as Exhibits B and C, with such changes thereto as the parties
hereto agree.
(h) The Buyer shall have adopted the Incentive Compensation Plan in
substantially the form attached hereto as Exhibit F, with such changes to
Sections 4(a), 5(a), 5(d) and 5(e) thereof as shall be acceptable to the
Sellers.
(i) The Buyer shall have entered into the Stock Subscription
Agreement(s) with the Sellers and/or their designees (which shall include, but
not be limited to, Xxxxx Xxxxxxx, Xxxxxx Xxxxxx and Xxx Xxxxxx) relating to
their acquisition of an aggregate 10% equity interest in the Buyer for $100,000,
in substantially the form attached hereto as Exhibit G, and the Sellers shall
have been granted representation on the Board of Directors of the Buyer for so
long as amounts payable under the Incentive Compensation Plan remain
outstanding.
(j) The balance sheet of GMH as of October 31, 1995 shall reflect (i)
Working Capital of at least $3,250,000, (ii) accounts receivable from M/H
Retail, Inc. of not more than $250,000, and (iii) Net Worth of at least
$7,560,000.
(k) The Sellers shall have been released from all personal guarantees
securing the obligations of GMH.
Section 13. Conditions Precedent to the Obligations of the Buyer. All
obligations of the Buyer under this Agreement are subject to the fulfillment, at
or prior to the Closing Date, of each of the following conditions, which
conditions may be waived only by the Buyer:
(a) The representations and warranties of the Sellers herein
contained shall be true and correct as of the date hereof and shall continue to
be true and correct as of the Closing Date with the same force and effect as
though made as of the Closing Date.
(b) The Sellers and GMH shall have performed or complied with all the
obligations, agreements and covenants of the Sellers herein contained to be
performed by them prior to or as of the Closing Date.
(c) The Buyer shall have received a certificate from the Sellers and
GMH as to compliance with paragraphs (a) and (b) of this Section 13.
(d) Messrs. Holland & Knight, counsel to the Sellers and GMH, shall
have delivered to the Buyer an opinion, dated the Closing Date, in substantially
the form attached hereto as Exhibit H.
(e) No action, suit or proceeding by or before any court or any
governmental or regulatory authority shall have been commenced or threatened,
and no investigation by any governmental or regulatory authority shall have been
commenced or threatened, seeking to restrain, prevent or change the Transaction
or seeking judgments against any of the Sellers, any of the Acquired Entities or
the Buyer awarding substantial damages in respect of the Transaction.
(f) All deliveries required to be made under this Agreement to the
Buyer on or before the Closing Date shall have been received by the Buyer.
(g) The Buyer shall have received evidence, satisfactory to it and
its counsel, that all of the consents disclosed in Schedule 7(d) hereto have
been duly obtained.
(h) Xxxxxx X. Xxxxx, Xxxxxxx X. Xxxxx and Xxxx X. Xxxxx shall have
entered into their respective Employment Agreements with the Buyer in
substantially the forms attached as Exhibits B and C, with such changes thereto
as the parties hereto shall agree.
(i) The Buyer shall have obtained senior and subordinated financing
for the Transaction on terms reasonably acceptable to the Buyer.
(j) The Buyer shall have received an audited balance sheet of each of
the Acquired Entities as at October 31, 1995, examined by Xxxxxx Xxxxxxxx LLP
which shall reflect no breach of Sellers' representations, warranties or
covenants contained in this Agreement, together with a schedule of cash
transactions from the date of such balance sheet to the Closing Date.
(k) All of the funded indebtedness of GMH shall have been repaid in
full (or provision for such payment shall be made at Closing), and the cash
balance of GMH on the Closing Date shall be at least $100,000 (after giving
effect to such debt repayment).
(l) The Sellers, the Escrow Agent and the Buyer shall have entered
into the Escrow Agreement.
(m) The Sellers shall have delivered to the Buyer true, correct and
complete copies of the by-laws, articles of incorporation, operating agreements,
other organizational and constituent documents and minute books of each of the
Acquired Entities and all agreements, leases, licenses, financial statements,
tax returns, Business Property Rights and insurance policies referred to in
Sections 7(f), 7(g), 7(i), 7(j), 7(m), 7(o) and 7(p) hereof.
(n) The Buyer shall have received a letter from Xxxxxx X. Xxxxx, in
form and content acceptable to the Buyer, relating to his resignation as an
officer and director of Sweetwater Homes, Inc. and agreeing not to participate
in any way in the business of Sweetwater Homes, Inc.
(o) The balance sheet of GMH as of October 31, 1995 shall reflect (i)
Working Capital of at least $3,250,000, (ii) accounts receivable from M/H
Retail, Inc. of not more than $250,000, and (iii) Net Worth of at least
$7,560,000.
(p) The Sellers shall have agreed to the terms of the Incentive
Compensation Plan substantially in the form of Exhibit F attached hereto, with
such changes to Sections 4(a), 5(a), 5(d) and 5(e) thereof as are acceptable to
the Buyer.
Section 14. Additional Covenants.
(a) No Shop. From and after the execution of this Agreement and
until the earlier of (i) termination of this Agreement in accordance with the
provisions of Section 17 hereof and (ii) November 30, 1995, each of the Sellers,
jointly and severally, agrees that such Seller shall not solicit from others,
offers relating to, or engage with others in any discussions or negotiations
relating to, participation in the acquisition of the Acquired Entities, whether
such acquisition is proposed to be in the form of an acquisition of stock or
otherwise.
(b) Environmental Covenants. The parties hereto agree that
promptly upon execution of this Agreement, the Buyer will commence and
diligently pursue the environmental remediation with respect to the Premises
listed on Schedule 14(b) hereto. The Buyer shall bear all costs of the
environmental remediation listed on Schedule 14(b) hereto, together with any
confirmatory sampling and any further remedial action on or around the Premises
required or identified as a result of or in conjunction with such remediation
and/or sampling up to a maximum of $100,000. Any and all costs of the
environmental remediation listed on Schedule 14(b) hereto and any such
confirmatory sampling and further remedial action in excess of $100,000 shall be
borne by the Sellers and treated as a Loss, payable in accordance with the
provisions of Section 15.
Section 15. Indemnification; Survival.
(a) Indemnification by the Buyer. Subject to the provisions of
Section 15(d) hereof, the Buyer shall indemnify and save harmless each of the
Sellers, the Affiliates of the Sellers and their respective successors and
assigns from, against, for and in respect of:
(i) any Loss incurred or required to be paid because of the breach of
any representation, warranty, covenant or agreement of the Buyer
in this Agreement or in any document delivered by the Buyer
pursuant to this Agreement; and
(ii) any Litigation Expense incurred or required to be paid in
connection with any matter indemnified against in Section
15(a)(i) hereof, except for Litigation Expense incurred in any
claim, action, suit or proceeding brought by a party indemnified
under Section 15(a)(i) hereof seeking indemnification hereunder
in which there is not either a settlement or a final
determination that such indemnified party is entitled to
indemnification hereunder.
(b) Joint and Several Indemnification by the Sellers. Subject to the
provisions of Section 15(d) hereof, each of the Sellers jointly and severally
shall indemnify and save harmless the Buyer, the Affiliates of the Buyer and
their respective successors and assigns, from, against, for and in respect of:
(i) any Loss incurred or required to be paid because of the breach of
any representation, warranty, covenant or agreement of any Seller
in this Agreement, other than those contained in Sections 7(m),
7(bb), 7(cc), 8, 14(a), 14(b) and 16 hereof, or in any document
delivered by any of the Sellers or any of the Acquired Entities
pursuant to this Agreement;
(ii) any Loss incurred or required to be paid because of the breach of
any representation or warranty contained in Section 7(m) of this
Agreement and any obligation or payment by the Buyer in respect
of federal, state, local, foreign and other income taxes ("income
taxes") of any of the Acquired Entities, or of any affiliated
group, as defined in the Code, which included any of the Acquired
Entities (but only to the extent that the subject taxes are
attributable to the Acquired Entities), for all taxable periods
ended on or prior to the Closing Date, in excess of amounts (x)
previously paid with respect thereto by any of the Acquired
Entities (or, if applicable, by any such affiliated group), or
(y) reflected in the Financial Statements referred to in Section
7(j) hereof, or (z) attributable to income of any of the Acquired
Entities earned in the ordinary course of business after the
Audit Date through and including the Closing Date, determined on
a basis consistent with that used in determining tax liability on
the Financial Statements referred to in Section 7(j) hereof;
(iii) any Loss incurred or required to be paid arising out of the
complaints filed by the following individuals against GMH with
the Equal Employment Opportunity Commission: Xxxxxxx Xxxxxx;
Xxxxx X. Xxxxxxx; Xxxxx X. Xxxxxxx; Xxxxx X. Xxxxxxxx; Xxxxxxx X.
Xxxxxx and Xxxxx Xxxxx;
(iv) any Loss incurred or required to be paid because of the breach of
any representation, warranty, covenant or agreement of the
Sellers contained in Section 7(bb) or 7(cc) of this Agreement, or
in any document delivered by any Seller or any Acquired Entity
pursuant thereto;
(v) any Loss incurred or required to be paid because of the breach of
any covenant or agreement contained in Section 14(a) hereof;
(vi) any Loss incurred or required to be paid because of the breach of
any covenant or agreement of the Sellers contained in Section
14(b) hereof; and
(vii) any Litigation Expense incurred or required to be paid in
connection with any matter indemnified against in Section
15(b)(i), (ii), (iv), (v) or (vi) hereof, except for Litigation
Expense incurred in any claim, action, suit or proceeding brought
by a party indemnified under Section 15(b)(i), (ii), (iv), (v) or
(vi) hereof seeking indemnification hereunder in which there is
not either a settlement or a final determination that such
indemnified party is entitled to indemnification hereunder.
(c) Several Indemnification by the Sellers. Each of the Sellers
severally, but not jointly, shall indemnify and save harmless the Buyer, the
Affiliates of the Buyer and their respective successors and assigns, from,
against, for and in respect of:
(i) any Loss incurred or required to be paid because of the breach of
any representation, warranty, covenant or agreement of such
Seller contained in Section 8 or 16 hereof; and
(ii) any Litigation Expense incurred or required to be paid in
connection with any matter indemnified against in Section
15(c)(i) hereof, except for Litigation Expense incurred in any
claim, action, suit or proceeding brought by a party indemnified
under Section 15(c)(i) hereof seeking indemnification hereunder
in which there is not either a settlement or a final
determination that such indemnified party is entitled to
indemnification hereunder.
(d) Deductibles and Ceilings.
(i) Deductibles.
(A) The Buyer shall be obligated to pay indemnity for any Loss
described in Section 15(a)(i) hereof or any Litigation Expense
described in Section 15(a)(ii) hereof relating thereto, only to
the extent such Losses and Litigation Expenses exceed $300,000 in
the aggregate.
(B) The Sellers shall be obligated to pay indemnity for (1) any
Loss described in Sections 15(b)(i) and 15(b)(iii) hereof, (2)
any Litigation Expense described in Section 15(b)(vii) hereof
relating thereto and (3) any Litigation Expense relating to any
Loss described in Section 15(b)(ii) hereof, only to the extent
such Losses and Litigation Expenses exceed $300,000 in the
aggregate.
(C) The Sellers shall be obligated to pay indemnity for any Loss
described in Section 15(b)(vi) hereof, and any Litigation Expense
described in Section 15(b)(vii) relating thereto, only to the
extent that such Losses and Litigation Expenses exceed $100,000
in the aggregate.
(ii) Ceilings.
(A) The Buyer shall not be obligated to pay indemnity for any
Loss described in Section 15(a)(i) hereof and any Litigation
Expense relating thereto in excess of $4,000,000 in the
aggregate.
(B) The Sellers shall not be obligated to pay indemnity for (1)
any Loss described in Section 15(b)(i), 15(b)(iii) 15(b)(iv) or
15(b)(vi) hereof, (2) any Litigation Expense described in Section
15(b)(vii) hereof relating thereto and (3) any Litigation Expense
relating to any Loss described in Section 15(b)(ii) hereof in
excess of $4,000,000 in the aggregate; provided, however, that
such $4,000,000 ceiling shall be reduced dollar-for-dollar for
any and all amounts in excess of $1,000,000 earned by and paid to
the Sellers
under the Incentive Compensation Plan referred to in Section
15(i) hereof.
(e) Notice. The indemnified party shall use its best efforts to give
prompt written notice to the indemnifying party or parties of any claim or event
known to it which does or may give rise to a claim by the indemnified party
against the indemnifying party or parties based on this Agreement, stating the
nature and basis of said claims or events and the amounts thereof, to the extent
known.
(f) Defense of Claims or Actions. In the event any claim, action,
suit or proceeding is made or brought by third parties, with respect to which a
party may be entitled to indemnity hereunder, the indemnified parties shall give
written notice of such claim, action, suit or proceeding and a copy of the
claim, process and all legal pleadings with respect thereto to the indemnifying
parties within ten business days of being served with such claim, process or
legal pleading. Such notice shall not be a condition precedent to any liability
of the indemnifying parties under this Agreement unless the failure to give such
notice results in actual prejudice to the indemnifying party. The indemnifying
parties shall have the right to assume the defense of any such claim or action.
If the indemnifying parties wish to assume the defense of such claim or action,
such assumption shall be evidenced by written notice to the indemnified parties.
After such notice, the indemnifying parties shall engage independent legal
counsel of reputable standing selected by them and reasonably acceptable to the
indemnified parties, to assume the defense and may contest, pay, settle or
compromise any such claim or action on such terms and conditions as the
indemnifying parties may determine. If the indemnifying parties assume the
defense of any such claim, action, suit or proceeding, the indemnified parties
shall have the right to employ their own counsel, at their own expense, and if
the indemnified parties shall have reasonably concluded and specifically
notified the indemnifying parties either that there may be specific defenses
available to them which are different from or additional to those available to
the indemnifying parties or that such claim, action, suit or proceeding involves
or could have a material adverse effect upon them with respect to matters beyond
the scope of the indemnity provided hereunder, then the counsel representing
them, to the extent made necessary by such defenses, shall have the right to
direct such defenses of such claim, action, suit or proceeding in its behalf. In
the event that the indemnifying parties shall not agree in writing to assume the
defense of such claim or action, the indemnified parties may engage independent
counsel of reputable standing selected by them to assume the defense and may
contest, pay, settle or compromise any such claim or action on such terms and
conditions as the indemnified parties may determine; provided, however, that the
indemnified parties shall not settle or compromise any claim or action without
the prior consent of the indemnifying parties if such indemnifying parties
acknowledge in writing their liability for any Loss or Litigation Expense
incurred or required to be paid in respect of such claim or action. The fees and
expenses of such counsel shall constitute Litigation Expenses. The indemnified
parties and the indemnifying parties shall cooperate in good faith in connection
with such defense and all such parties shall have the right to employ their own
counsel, but, except as provided above, the fees and expenses of their counsel
shall be at their own expense. The indemnified parties or the indemnifying
parties, as the case may be, shall be kept fully informed of such claim, action,
suit or proceeding at all stages thereof whether or not they are represented by
their own counsel.
(g) Cooperation. The parties hereto agree to render to each other
such assistance as they may reasonably require of each other and to cooperate in
good faith with each other in order to ensure the proper and adequate defense of
any claim, action, suit or proceeding brought by any third party. Where
independent counsel has been selected by the indemnifying parties or by the
indemnified parties pursuant to Section 15(f) hereof, the indemnifying parties
or the indemnified parties, as the case may be, shall be entitled to rely upon
the reasonable advice of such counsel in the reasonable conduct of the defense,
and no indemnifying party shall be relieved of liability hereunder by reason of
such reliance or the defense conducted by such counsel.
(h) Escrow. To secure the Sellers' obligations to indemnify the
Buyer against (i) any Loss pursuant to Sections 15(b)(i), 15(b)(ii), 15(b)(iii),
15(b)(iv) and 15(b)(vi) and 15(c)(i) hereof and (ii) any Litigation Expense
pursuant to Section 15(b)(vii) and 15(c)(ii) hereof with respect thereto, the
Buyer shall deposit the Escrowed Funds with the Escrow Agent in accordance with
the provisions of Section 3(b) hereof. The Escrow Agent shall hold and dispose
of the Escrowed Funds and shall act as Escrow Agent in accordance with the terms
of the Escrow Agreement. Nothing
contained in this Section 15(h) is intended to diminish the Buyer's rights to
indemnity pursuant to Sections 15(b) and 15(c) hereof, and in the event the
Buyer incurs or is required to pay a Loss or a Litigation Expense with respect
thereto which is in excess of the Escrowed Funds, the Buyer shall continue to
have all rights to indemnity pursuant to the terms of this Agreement, including,
without limitation, the right to set off against the Incentive Compensation Plan
pursuant to Section 15(i) hereof, subject to the limitations provided in Section
15(d) hereof.
(i) Set Off Rights. Each of the Sellers agrees that in the event
that either the Buyer incurs or is required to pay a Loss or Litigation Expense
for which it is entitled to indemnity pursuant to Section 15(b) or Section 15(c)
hereof, the full amount of any such Loss and Litigation Expense shall be set off
against amounts owed, but not theretofore paid, by the Buyer to the Sellers
pursuant to the Incentive Compensation Plan to the extent such Loss or
Litigation Expense is not otherwise paid by the Sellers, regardless of whether
such Loss or Litigation Expense is paid from the Escrowed Funds or otherwise. In
the event the Buyer exercises its set off rights hereunder against the Incentive
Compensation Plan, it will give the Sellers written notice thereof, including
the amount to be set off, and upon the giving of such notice, the amount due to
the Sellers shall automatically be reduced by the amount set forth in the notice
as if such amount had been prepaid by the Buyer and applied to the payments in
the order of maturity. Anything herein to the contrary notwithstanding, the
foregoing set-off rights of the Buyer shall apply only to amounts owed, but not
theretofore paid, by the Buyer to the Sellers pursuant to the Incentive
Compensation Plan, and any amounts theretofore earned and paid to the Sellers
pursuant to the Incentive Compensation Plan shall not thereafter be subject to
any claim by the Buyer except with respect to a Loss for which the Sellers shall
have an indemnification obligation to the Buyer pursuant to Section 15(b)(ii)
hereof.
(j) Survival. All representations, warranties, covenants and
agreements contained herein shall survive the execution, delivery and
consummation of this Agreement for a period of two years following the Closing
Date, except for (a) the covenants contained in Section 16 hereof, which shall
survive for a period of five years following the Closing Date; (b) the
representations, warranties and covenants contained in Sections 7(m) and
15(b)(ii) hereof, and the indemnification obligations relating thereto pursuant
to Section 15 hereof, which shall survive until the expiration of the applicable
statutes of limitations; (c) the covenants contained in Section 14(b) hereof,
which shall survive until the expiration of the applicable statute of
limitations; and (d) the representations and warranties contained in Sections
7(bb), 7(cc) and 8 hereof, and the indemnification obligations relating thereto
contained in Section 15 hereof, which shall survive until the expiration of the
applicable statute of limitations. In addition, if written notice of a violation
or breach of any specified representation, warranty, covenant or agreement is
given to the party charged with such violation or breach during the period
provided for in the preceding sentence, such representation, warranty, covenant
or agreement shall continue to survive until such matter has been resolved by
settlement, litigation (including all appeals related thereto) or otherwise.
(k) Exclusive Remedy. It is understood and agreed by the parties
hereto that, in the event the transactions contemplated herein are consummated,
the indemnification and set-off rights of the Buyer provided in this Section 15
shall be the sole and exclusive remedy of the Buyer, the Affiliates of the
Buyer, and their respective successors and assigns to redress or obtain
satisfaction or indemnity with respect to any breach by any one or more of the
Sellers of any one or more of the representations, warranties or covenants
contained in Sections 7, 8 and 10 hereof, except for claims arising out of any
willful fraud committed by any of the Sellers. Except as set forth in the
immediately preceding sentence, any and all other remedies or causes of action
which might otherwise relate thereto or accrue to the Buyer in connection
therewith are hereby knowingly and expressly waived and released by the Buyer.
It is acknowledged by the Buyer that the agreements contained in this Section 15
(k) are material inducements to the Sellers to engage in the transactions
contemplated by this Agreement and that the Sellers would not have entered into
this Agreement but for the foregoing understanding and agreement.
Section 16. Covenants Against Competition. Each of the Sellers
acknowledges that (i) the business of producing and distributing at wholesale
manufactured housing (the "Business") is conducted by the Acquired Entities in
eleven (11) contiguous southeastern states, i.e., Florida, Georgia, South
Carolina, North Carolina, Virginia, West Virginia,
Alabama, Mississippi, Louisiana, Kentucky and Tennessee (collectively, the
"Current Market Area"), and the Business involves the identification and
development of new markets relating to the production and distribution at
wholesale of manufactured housing; (ii) the Acquired Entities have developed
trade secrets and confidential information concerning the Business; and (iii)
the agreements and covenants contained in this Section 16 are essential to
protect the Business of the Acquired Entities following the consummation of the
transactions contemplated hereby. Accordingly, each of the Sellers severally
covenants and agrees, with respect to himself, as follows:
(a) Non-Compete. For a period of five years following the Closing
(the "Restricted Period"), such Seller (or any other entity 5% or more of the
beneficial ownership of which is held by such Seller alone or together with any
of the other Sellers or related family members (a "Controlled Entity")) shall
not anywhere in the Current Market Area or any state contiguous thereto (i)
engage in the Business by owning or operating facilities in the United States
for its own account, or (ii) become a partner, owner, principal, employee,
consultant or agent of any person or entity engaged in the Business, except for
employment or consulting services performed for the Buyer under the agreements
referred to in Sections 12(g) and 13(h) hereof or any amendments or renewals
thereof; provided, however, that Xxx Xxxxx may continue to own no more than 20%
of the equity of Sweetwater Homes, Inc. in accordance with the terms of the
letter agreement described in Section 13(n) thereof.
(b) Confidential Information. During and after the Restricted
Period, such Seller and any Controlled Entity shall keep secret and retain in
strictest confidence, and shall not use, in competition with or in a manner
otherwise detrimental to the interests of the Buyer, for the benefit of himself
or others other than the Buyer any confidential information, including without
limitation any confidential "know-how," trade secrets, customer lists, details
of client or consultant contracts, pricing policies, operational methods,
marketing plans or strategies, product development techniques or plans, business
acquisition plans and new personnel acquisition plans related to the Business
("Confidential Information"). The term "Confidential Information" does not
include, and there shall be no obligation hereunder with respect to, (i)
information that becomes generally available to the public other than as a
result of a disclosure by such Seller or a Controlled Entity or any agent or
other representative thereof and (ii) general business methods applicable to the
Business including, but not limited to, pricing policies, operational methods
and marketing concepts. Neither such Seller nor any Controlled Entity shall have
any obligation hereunder to keep confidential any of the Confidential
Information to the extent disclosure of any thereof is required by law, or
determined in good faith by such Seller to be necessary or appropriate to comply
with any legal or regulatory order, regulation or requirement; provided,
however, that in the event disclosure is required by law such Seller or the
Controlled Entity concerned shall provide the Buyer with prompt notice of such
requirement so that the Buyer may seek an appropriate protective order.
(c) Employees of the Buyer. During the Restricted Period, such
Seller and any Controlled Entity shall not, directly or indirectly, (i) hire or
solicit any employee of the Buyer or encourage any such employee to leave such
employment, or (ii) solicit, induce or influence any customer, supplier, lender,
lessor or any other person or entity which has a business relationship with the
Buyer to discontinue or reduce the extent of such relationship with the Buyer.
(d) Rights and Remedies Upon Breach. In the event such Seller or any
Controlled Entity breaches, or threatens to commit a breach of, any of the
provisions of this Section 16 (the "Restrictive Covenants"), the Buyer shall
have the following rights and remedies, which shall be independent of any others
and severally enforceable, and shall be in addition to, and not in lieu of, any
other rights and remedies available to the Buyer at law or in equity:
(i) the right and remedy to enjoin the breaching party from violating
or threatening to violate the Restrictive Covenants and to have
the Restrictive Covenants specifically enforced by any court of
competent jurisdiction, it being agreed that any breach or
threatened breach of the Restrictive Covenants would cause
irreparable injury to the Buyer and that money damages would not
provide an adequate remedy to the Buyer; and
(ii) the right and remedy to require the breaching party to
account for and pay over to the Buyer all compensation, profits,
monies, accruals, increments or other benefits derived or
received by such party as the result of any transactions
constituting a breach of the Restrictive Covenants.
(e) Severability of Covenants. Such Seller acknowledges and agrees
that the Restrictive Covenants are reasonable and valid in geographical and
temporal scope and in all other respects. If any court determines that any of
the Restrictive Covenants, or any part thereof, are invalid or unenforceable,
the remainder of the Restrictive Covenants shall not thereby be affected and
shall be given full effect, without regard to the invalid portions.
(f) Blue-Pencilling. If any court determines that any of the
Restrictive Covenants, or any part thereof, are unenforceable because of the
duration or geographic scope of such provision, such court shall have the power
to reduce the duration or scope of such provision, as the case may be, and, in
its reduced form, such provision shall then be enforceable.
(g) Enforceability in Jurisdictions. The parties hereto intend to
and hereby confer jurisdiction to enforce the Restrictive Covenants upon the
courts of any jurisdiction within the geographical scope of such Restrictive
Covenants. If the courts of any one or more of such jurisdictions hold the
Restrictive Covenants unenforceable by reason of the breadth of such scope or
otherwise, it is the intention of the parties hereto that such determination not
bar or in any way affect the Buyer's right to the relief provided above in the
courts of any other jurisdiction within the geographical scope of such
Restrictive Covenants, as to breaches of such Restrictive Covenants in such
other respective jurisdictions, such Restrictive Covenants as they relate to
each jurisdiction being, for this purpose, severable into diverse and
independent covenants.
Section 16-A. Buyer's Post-Closing Covenants. Buyer covenants and
agrees to use its best efforts in good faith following consummation of the
Transaction to defend vigorously any claims asserted against any of the Acquired
Entities that could result in a Loss for which Sellers might have
indemnification obligations under Sections 15(b)(ii) or (iii) hereof. In
connection with such defense, Buyer agrees to employ independent legal counsel
of reputable standing reasonably acceptable to the Sellers. Additionally, in
connection with any claims for which the Sellers might have indemnification
obligations pursuant to Section 15(b)(ii) hereof, the Buyer agrees, if requested
by the Sellers, to utilize the services of Xxxxxx Xxxxxxxx LLP to assist in the
defense of any additional tax assessment.
Section 17. Termination. Notwithstanding anything to the contrary
herein, this Agreement may be terminated and the transactions contemplated
hereby may be abandoned:
(a) by the mutual consent of the Sellers and the Buyer at any time
prior to the Closing Date;
(b) by action of the Board of Directors of the Buyer if there exists
a material breach of any representation, warranty, covenant or agreement made to
the Buyer under this Agreement (which breach cannot be cured or is not cured
upon 15 days written notice) or if any condition to the obligation of the Buyer
hereunder becomes impossible to fulfill in any material way, or if the Closing
has not occurred by the Closing Date, as such may have been extended by mutual
written consent of the parties;
(c) by Xxxxxx X. Xxxxx if there exists a material breach of any
representation, warranty, covenant or agreement made to the Sellers (which
breach cannot be cured or is not cured upon 15 days written notice) or if any
condition to the obligation of the Sellers hereunder becomes impossible to
fulfill in any material way, or if the Closing has not occurred by the Closing
Date, as such may have been extended by mutual written consent of the parties;
or
(d) by Xxxxxx X. Xxxxx or the Buyer if the Transaction has not been
consummated by November 30, 1995.
Upon the termination of this Agreement under this Section 17, no party
hereto shall have any further liability or obligation to any other party
hereunder, except for the obligation of each party to pay its own expenses as
set forth in Section 19 hereof.
Section 18. Amendments; Waivers, Etc. This Agreement may be
amended, modified and supplemented by written agreement approved by the Sellers
and the Buyer at any time prior to the Closing Date with respect to any of the
terms contained herein. Prior to or on the Closing Date, the parties hereto may
in writing (i) extend the time for the performance of any of the obligations or
other acts of the parties hereto, (ii) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
hereunder, and (iii) waive compliance with any of the agreements or conditions
contained herein.
Section 19. Expenses. Whether the Transaction is consummated or not,
each party hereto shall bear all of its own expenses, including, without
limitation, the fees and disbursements of its counsel; provided, however, that
if the Transaction is consummated, the Buyer shall (a) reimburse the Sellers for
the cost of the Environmental Reports and the audited balance sheet prepared by
Xxxxxx Xxxxxxxx LLP pursuant to Section 13(j) hereof and (b) reimburse the Buyer
for its expenses incurred in connection with the Transaction, including, without
limitation, the fees and disbursements of its counsel.
Section 20. Notices, Etc. All notices, consents, demands, requests,
approvals and other communications which are required or may be given hereunder
shall be in writing and shall be deemed to have been duly given (a) when
delivered personally, (b) if sent by telecopy, when receipt thereof is
acknowledged at the telecopy number below, (c) the second day following the day
on which the same has been delivered prepaid to a national air courier service
or (d) five business days following deposit in the mails registered or
certified, postage prepaid, in each case, addressed as follows:
If to the Sellers:
c/o Xxxxxx X. Xxxxx
General Manufactured Housing, Inc.
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxx 00000-0000
Telecopy: 000-000-0000
with a copy to:
Xxxx X. Xxxxxx, Esq.
Xxxx and Xxxxxx, P.C.
0000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Telecopy: 000-000-0000
and
X. Xxxxxx Xxxxxx III, Esq.
Holland & Knight
00 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
X.X. Xxx 00000
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Telecopy: 000-000-0000
If to the Buyer:
Xxxx X. Xxxxx, President
GMH Acquisition Corp.
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
Telecopy: 000-000-0000
with a copy to:
Xxxxxxx X. Xxxxxx, Esq.
Nixon, Hargrave, Devans & Xxxxx LLP
0000 Xxxx Xxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Telecopy: 716-853-8109
or to such other person or persons at such address or addresses as may be
designated by written notice hereunder.
Section 21. Assignment. Neither the Sellers nor the Buyer may assign
or convey this Agreement or any of their respective rights or obligations
hereunder to any other party; provided, however, that (a) the Buyer may assign
any or all of its rights hereunder to an institutional lender or lenders
providing financing for the Transaction and (b) prior to
the Closing Date, any one or more of the Sellers may assign all of his or her
rights and obligations hereunder to the trustee of a trust all of the beneficial
interests of which are owned by such Seller(s) or his, her or their immediate
family members.
Section 22. Applicable Law. This Agreement shall be governed by and
construed and interpreted in accordance with the laws or the State of Georgia
without giving effect to conflict of laws principles thereof.
Section 23. Entire Agreement. This Agreement and all Exhibits and
Schedules hereto embody the entire agreement and understanding of the parties
hereto and supersede any prior agreement or understanding between the parties.
Section 24. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
Section 25. Headings. Headings of the Sections in this Agreement are
for reference purposes only and shall not be deemed to have any substantive
effect.
Section 26. Binding Effect; Benefits. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
heirs, administrators, executors, successors and assigns; provided, however,
that nothing in this Agreement, expressed or implied, is intended to confer on
any person other than the parties hereto or their respective successors and
assigns, any rights and remedies, obligations or liabilities under or by reason
of this Agreement.
Section 27. Publicity. The timing and content of any press release
or other announcements regarding the transactions described herein shall be
mutually acceptable.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the date first above written.
SELLERS:
/s/ Xxxxx Xxxxx Xxxxxx
------------------------------------
XXXXX XXXXX XXXXXX, as Trustee
/s/ Xxxxxxx Xxxxx Xxxxx
------------------------------------
XXXXXXX XXXXX XXXXX
/s/ Drew Xxxx Xxxxx
------------------------------------
DREW XXXX XXXXX
/s/ Xxxxxx X. Xxxxx
------------------------------------
XXXXXX X. XXXXX, as Joint Tenant
/s/ Xxxxxx X. Xxxxx
------------------------------------
XXXXXX X. XXXXX, as Joint Tenant
GENERAL MANUFACTURED HOUSING, INC.
By: /s/ Xxx Xxxxx
--------------------------------
Title: Xxx Xxxxx, Chairman
BUYER:
GMH ACQUISITION CORP.
By:/s/ Xxxx X. Xxxxx
---------------------------------
Xxxx X. Xxxxx, President
EXHIBIT A
EXHIBIT A
SHARE OWNERSHIP
General Manufacturing Housing, Inc.
Name of Shareholder Number of Shares Purchase Price
Xxxxx Xxxxx Xxxxxx, Trustee 1,220
Xxxxxxx Xxxxx Xxxxx 1,220
Drew Xxxx Xxxxx 1,220
Xxxxxx X. Xxxxx and
Xxxxxx X. Xxxxx,
Joint Tenants 1,590
Xxxxx Housing LLC % of Interests Purchase Price
Name of Member
General Manufactured
Housing, Inc. 99%
Xxxxxx X. Xxxxx 1%
EXHIBIT B
EXHIBIT B
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is made and entered
into as of October ____, 1995, by and between GMH ACQUISITION CORP., a Delaware
corporation with an office at X.X. Xxx 0000, Xxxxxxxx, Xxxxxxx 00000-0000 (the
"Company") and XXXXXX X. XXXXX, currently residing at 0000 Xxxxx Xxxxxxxx
Xxxxxx, Xxxxxxxxxx Xxxxx, Xxxxxxx 32034(the "Executive").
The parties hereto, intending to be legally bound hereby, and in
consideration of the mutual covenants herein contained, agree as follows:
1. Employment.
1.1 The Company employs the Executive, and the Executive accepts
such employment (the "Employment"), as Chief Executive Officer of the Company.
The Executive agrees to accept the employment and agrees to remain in the employ
of the Company during the Employment Term (as defined in Section 2 hereof) and
any extensions thereof and to perform such lawful duties as are from time to
time assigned to him by the Board of Directors of the Company (the "Board") and
which are normally associated with the position of Chief Executive Officer in
the manufactured housing industry and generally consistent with past practices
of the Company.
1.2 During the Employment Term and any extensions thereof, the
Executive will devote his best efforts and full business time, skill and
attention to the performance of his duties on behalf of the Company.
2. Term of Employment. Subject to the provisions of Section 6
hereof, the term of the Executive's employment hereunder shall be from the date
hereof until December 31, 2000 (the "Employment Term").
3. Compensation.
3.1 The Company agrees to pay, and the Executive agrees to
accept, as base compensation for all services to be rendered by the Executive in
any capacity to the Company or its affiliates during the Employment Term, a
salary of $300,000 per annum, subject to such deductions and withholdings as may
be required by law or by further agreement with the Executive (the "Base
Salary"), payable in arrears in equal bi-weekly installments. The Base Salary
may be increased from time to time in the discretion of the Board. Any such
increases shall be added to the Base Salary then being paid to the Executive,
and the sum thereof shall then become the Base Salary for each successive year,
until further adjusted in accordance with the provisions of this Section 3.1.
3.2 In addition to the Base Salary, the Executive shall
participate in the Company's Executive Bonus Plan, a copy of which is attached
hereto as Exhibit 1, (the "Plan") subject to the terms and conditions of the
Plan. The Executive's "Participant Percentage" under the Plan will never be less
than 20% of the "Bonus Pool" (as such terms are defined in the Plan). The
Company will award not less than a $100,000 incentive award to the Executive for
the 1996 Plan Year regardless of the size of the Bonus Pool.
3.3 The Company shall reimburse the Executive for all reasonable
and necessary expenses incurred by the Executive in connection with the
Employment, including without limitation, travel and lodging expenses and
charges incurred on a Company credit card for business entertainment. Such
expenses shall be reimbursed to the Executive by the Company after the
Executive's submittal of an invoice to the Company with respect to the
reimbursable expenses incurred by him. All invoices for reimbursable expenses
shall include adequate supporting documentation of the expenses incurred by the
Executive, including receipts.
4. Additional Benefits. During the Employment Term, the Company
shall provide the following additional benefits to the Executive:
4.1 The Executive shall be entitled to paid vacation during each
calendar year in such amounts and at such times as the Executive in his sole
discretion, shall determine consistent with past practice and in accordance with
the Executive's obligations under this Agreement.
4.2 The Company shall provide the Executive with health, medical
and hospitalization insurance benefits equal to those provided by the Company to
other executive officers of the Company. In addition, the Executive shall be
permitted, if and to the extent eligible, to participate in any pension plan or
other "fringe benefits" of the Company, which may be available generally to
other executive officers of the Company.
4.3 So long as the Company shall own or lease on an exclusive
basis an airplane, the Executive or his family members shall be entitled to
personal use thereof, subject to the business requirements of the Company, at
the rate of ten (10) hours of flying time per month on a cumulative basis. The
Executive shall be deemed to have received additional compensation in the amount
of $175.00 for each such hour of actual personal use of such Company airplane.
4.4 To defray the expenses of operating his personal automobile
in connection with the performance of his duties hereunder, the Executive shall
be entitled to an automobile allowance in the amount of $500.00 per month.
4.5 The Company shall maintain during the term of this Agreement
and pay all premiums on that certain key-man, split-dollar life insurance
presently in force (or a substitute policy of comparable quality) insuring the
life of the Executive and carrying a death benefit of not less than $600,000.
The beneficiary(ies) of such life insurance shall be designated by the
Executive.
4.6 The Company shall obtain, maintain throughout the term of
this Agreement and pay all premiums on a policy or policies of disability
insurance covering the Executive for the lesser of (a) the maximum amount
permitted by law and (b) $300,000 per annum, payable to not less than age 70,
reasonably obtainable under the circumstances. Such policy or policies of
disability insurance shall provide for commencement of benefits payable
thereunder immediately following any termination of the Executive's employment
pursuant to Section 6.5 hereof.
4.7 During the term of this Agreement, the Executive or his
designee(s) shall be entitled to the exclusive use and enjoyment of the six (6)
season tickets to the Jacksonville Jaguars NFL football games. Additionally,
upon termination of this Agreement, the Company shall sell and assign to
Executive all remaining tickets for the balance of the then current season and
all rights and/or licenses to purchase such season tickets in the future, all at
the face value thereof.
4.8 The Executive shall have the right, in his sole discretion,
to designate the recipients of any and all incentive travel and other benefits
awarded by suppliers of the Company for the year 1995.
5. Insurance. In addition to any insurance coverage provided for in
Section 4 hereof, the Company may, in its discretion, purchase or renew
insurance on the life of the Executive, with the Company or a lender of the
Company as beneficiary in an amount determined by the Company or such lender
from time to time. The Executive agrees to submit to medical examinations and
otherwise to cooperate with the Company and any such lender in connection with
obtaining such insurance.
6. Termination.
6.1 In the event the Executive's employment is terminated for
"Cause", the Executive shall have no further rights under this Agreement, except
the right to receive the Base Salary up to the date of termination by the
Company of the Executive's employment hereunder. The decision to terminate the
Executive under this Section 6.1 shall be made by the Board. The term "Cause"
shall mean any of the following: (a) any deliberate or intentional act or
omission by the Executive with the intent of causing damage to the Company's
relationships with its lenders, suppliers or customers; (b) any fraud,
misappropriation or embezzlement by the Executive involving properties, assets
or funds of the Company; (c) a conviction of the Executive, or plea of nolo
contendere by the Executive, to any crime or offense involving monies or other
property of the Company or any other felony or criminal act involving moral
turpitude; (d) any usurpation by the Executive of a corporate opportunity of the
Company or the Executive's willful and continual neglect of or willful and
continual failure to perform any of his material duties, responsibilities or
obligations as an employee of the Company, but only after notice of such
usurpation, neglect or failure is delivered to the Executive and the Executive
fails or refuses to remedy such usurpation, neglect or failure to the reasonable
satisfaction of the Board within thirty (30) days after the receipt of such
notice; provided, that any action or omission taken by the Executive in good
faith and in the reasonable belief that such action or omission was in the best
interests of the Company shall not constitute "Cause"; or (e) the violation by
the Executive of Section 7 of this Agreement or of any other non-competition
agreement or covenant binding upon the Executive.
6.2 In the event the Executive's employment is terminated
without "Cause", the Executive shall have no further rights under this Agreement
except the right to receive (a) the Base Salary for the balance of the term of
this Agreement, payable in arrears, in bi-weekly installments, (b) any amounts
due in accordance with the terms of the Plan, (c) all benefits under Section 4.1
hereof which have accrued as of the date of termination and (d) uninterrupted
continuation of all rights and benefits accorded the Executive under Sections
4.2, 4.5 and 4.6 hereof for the duration of this Agreement. Additionally, upon
termination by the Company of the Executive's employment without "Cause", the
Executive and the other participants in the Incentive Compensation Plan shall be
entitled to immediate payment of their respective shares of an amount equal to
the difference between $4,000,000 and the aggregate amount of payments
theretofore made to the Executive and the other participants pursuant to such
Plan or set off pursuant to Section 15(i) of the Stock Purchase Agreement dated
as of October __, 1995 by and among the Company, the Executive and certain other
parties thereto.
6.3 In the event of the Executive's death during the Employment
Term, the Employment Term shall terminate automatically as of
the date of the Executive's death, and the Executive's executor, administrator
or other legal representative shall have no further rights hereunder, except the
right to receive (a) the Base Salary up to the date of the Executive's death and
(b) any amounts due under the Plan.
6.4 If for any reason (other than pursuant to Section 6.3 or
6.5), the Executive resigns from his employment hereunder, this Agreement shall
terminate automatically, and the Executive shall have no further rights
hereunder, except the right to receive the Base Salary up to the date of the
Executive's resignation.
6.5 If, by reason of any illness, disability or incapacity, the
Executive is unable to perform his duties under this Agreement for a period of
six (6) consecutive months (or shorter periods aggregating to nine (9) months in
any twelve (12) month period) ("Disability"), the Company may terminate the
Employment Term as of the last day of such six (6) or nine (9) month period, as
the case may be, or as of such other day thereafter, provided the Executive
remains unable to perform his duties hereunder. The Executive or his legal
representative, if one is appointed, shall be entitled to receive, within sixty
(60) days after the date of such termination, any amounts payable to the
Executive pursuant to this Agreement up to the date of termination of this
Agreement. Notwithstanding the foregoing, if the Executive suffers a Disability
and his employment hereunder is not terminated, the Executive shall be entitled
to receive any amounts owing to him hereunder, less any disability insurance
payments which Executive receives pursuant to disability insurance provided by
the Company hereunder.
6.6 Upon the termination of the Executive's employment pursuant
to this Section 6, the Executive shall have no further rights under this
Agreement except as expressly provided in this Section 6.
7. Non-Competition, Non-Interference and Non-Disclosure.
7.1 The Executive acknowledges that: (a) the business of
producing and distributing at wholesale, manufactured housing, currently
conducted and as conducted from time to time throughout the term of this
Agreement (collectively, the "Business") is conducted by and is proposed to be
conducted by the Company throughout the states of Florida, Georgia, South
Carolina, North Carolina, Virginia, West Virginia, Alabama, Mississippi,
Louisiana, Kentucky and Tennessee (the "Company's Market"); (b) the Business
involves the identification and development of new products and markets relating
to the production and distribution at wholesale of manufactured housing; (c) the
Company has developed trade secrets and confidential information concerning the
Business; and (d) the agreements and covenants contained in this Section 7 are
essential to protect the Business of the Company. In order to induce the Company
to enter into this Employment Agreement, the Executive covenants and agrees
that:
7.2 For a period commencing on the date of this Agreement and
ending (a) on the date that the Executive's employment is terminated without
Cause, or (b) in the case of the expiration of this Agreement or the Executive's
voluntary resignation or termination with Cause, on the date which is two years
following such expiration, resignation or termination of this Agreement, neither
the Executive nor any entity of which 5% or more of the beneficial ownership is
held by the Executive or a related family member ("Controlled Entity") will,
anywhere in the Company's Market, directly or indirectly own, manage, operate,
control, invest or acquire an interest in, or otherwise engage or participate
in, whether as a proprietor, partner, stockholder, director, officer, "Key
Employee" (defined herein to include any person who is employed in a management,
executive, supervisory, marketing or sales capacity for another person), joint
venturer, investor or other participant, any business which competes with the
Business ("Competitive Business") without regard to (i) whether the Competitive
Business has its office, manufacturing or other business facilities within or
without the Company's Market, (ii) whether any of the activities of the
Executive referred to above occur or are performed within or without the
Company's Market or (iii) whether the Executive resides, or reports to an
office, within or without the Company's Market.
7.3 During the period commencing on the date of this Agreement
and ending on the date which is two years following the expiration or
termination of this Agreement, whether by resignation, termination with or
without Cause, or otherwise (the "Restricted Period"), neither the Executive nor
any Controlled Entity will directly or indirectly solicit, induce or influence
any customer, supplier, lender, lessor or any other person which has a business
relationship with the Company, or which
had on the date of this Agreement, a business relationship with the Company, to
discontinue or reduce the extent of such relationship with the Company.
7.4 During the Restricted Period, neither the Executive nor any
Controlled Entity will directly or indirectly recruit, solicit or otherwise
induce or influence any employee or sales agent of the Company or any of its
affiliates to discontinue such employment or agency relationship with the
Company. During the Restricted Period, neither the Executive nor any Controlled
Entity will employ or seek to employ, or cause or induce any Competitive
Business to employ or seek to employ for any Competitive Business, any person
who is then (or was at any time within six months prior to the date the
Executive or the Competitive Business employs or seeks to employ such person)
employed by the Company. Nothing herein shall prevent the Executive from
providing a letter of recommendation to an Employee with respect to a future
employment opportunity.
7.5 During the Restricted Period and thereafter, neither the
Executive nor any Controlled Entity will directly or indirectly disclose to
anyone, or use or otherwise exploit for the Executive's or any Controlled
Entity's own benefit or for the benefit of anyone other than the Company, any
confidential information, including, without limitation, any confidential "know-
how", trade secrets, customer lists, details of client or consultant contracts,
pricing policies, operational methods, marketing plans or strategies, product
development techniques or plans, computer software, business acquisition plans
and new personnel acquisition plans of the Company related to the Business or
any portion or phase of any scientific or technical information, design,
process, procedure, formula or improvement of the Company that is valuable and
not generally known to the competitors of the Company whether or not in written
or tangible form (hereinafter referred to as "Confidential Information"). The
term "Confidential Information" does not include, and there shall be no
obligation hereunder with respect to, (a) information that becomes generally
available to the public other than as a result of a disclosure by the Executive
or a Controlled Entity or any agent or other representative thereof and (b)
general business methods applicable to a sales business including, but not
limited to, pricing policies, operational methods and marketing concepts.
Neither the Executive nor any Controlled Entity shall have any obligation
hereunder to keep confidential any Confidential Information to the extent
disclosure of any thereof is required by law, or determined in good faith by the
Executive to be necessary or appropriate to comply with any legal or regulatory
order, regulation or requirement; provided, however, that in the event
disclosure is required by law, the Executive or the Controlled Entity concerned
shall provide the Company with prompt notice of such requirement so that the
Company may seek an appropriate protective order.
7.6 In the event the termination or expiration of this
Agreement, the covenants and agreements contained in this Section 7 shall
survive, shall continue thereafter, and shall not expire unless and except as
expressly set forth in such Sections.
7.7 The parties to this Agreement agree that (a) if either the
Executive or any Controlled Entity breaches any provision of this Section 7, the
damage to the Company will be substantial, although difficult to ascertain, and
money damages will not afford the Company an adequate remedy, and (b) if either
the Executive or any Controlled Entity is in breach of this Agreement, or
threatens a breach of this Agreement, the Company shall be entitled, in addition
to all other rights and remedies as may be available to the Company at law or in
equity, to (i) specific performance, (ii) injunctive and other equitable relief
to prevent or restrain a breach of this Agreement and (iii) require the
breaching party to account for and pay over to the Company all compensation,
profits, monies, accruals or other benefits derived or received by such party as
the result of any transactions constituting a breach hereof.
7.8 If any court determines that any provision of this Section 7
is unenforceable because of the duration or geographic scope of such provision,
such court shall have the power to reduce the scope or duration of such
provision, as the case may be, and, in its reduced form, such provision shall
then be enforceable.
7.9 Notwithstanding anything to the contrary contained herein, a
continuation of the Executive's present twenty percent (20%) equity interest in
Sweetwater Homes, Inc. ("Sweetwater"), a current competitor of the Company,
shall not be deemed a violation or breach of any of the provisions of this
Section 7, so long as the Executive does not, from and after the date of this
Agreement, directly or indirectly: (i)
increase his equity interest in Sweetwater; (ii) serve as an officer, director
or employee of, or consultant to Sweetwater; or (iii) otherwise assist
Sweetwater in any aspect of its operations.
8. Additional Covenants of Company.
(a) If at any time during the term of this Agreement the Company
shall decide to sell the airplane hangar owned by it on the date hereof, the
Company shall first offer such property for sale to the Executive at such
purchase price and on such terms as the Company shall deem reasonable under the
circumstances. The Executive shall have fifteen (15) business days in which to
exercise his purchase option and an additional thirty (30) days in which to
consummate the purchase transaction should he elect to purchase such property.
If the Executive fails or refuses to exercise his purchase option within the
prescribed 15-day period, the Company may offer such property for sale to any
third party at a price and on terms no more favorable to the prospective
purchaser than those offered to the Executive.
(b) If at any time during the term of this Agreement the Company
shall decide not to exercise one or both of the purchase options that are
included in the leases in existence on the date hereof covering the Company's
Plants No. 4 and 5, respectively (the "Purchase Options"), prior to the
expiration of the Purchase Options, the Company shall permit the Executive to
purchase such properties for his personal use and benefit pursuant to the terms
and conditions of the Purchase Options as if the Company were exercising such
Purchase Options.
9. Headings. The section headings of this Agreement are for
convenience of reference only and are not to be considered in the interpretation
of the terms and conditions of this Agreement.
10. Notices. All notices and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given (a) when delivered personally, (b) if sent by
telecopy, when receipt thereof is acknowledged at the telecopy number below, (c)
the day following the day on which the same has been delivered prepaid for
overnight delivery to a national air courier service or (d) three business days
following deposit in the United States Mail, registered or certified, postage
prepaid, in each case, addressed as follows:
If to the Company: GMH Acquisition Corp.
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxx X. Xxxxx
Telecopy: _____________
with copies to: Strategic Investments &
Holdings, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxx
Telecopy: 000-000-0000
Nixon, Hargrave, Devans & Xxxxx LLP
0000 Xxxx Xxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Telecopy: 716-853-8109
If to the
Executive: Xxxxxx X. Xxxxx
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxx 00000
Telecopy: __________________
with a copy to: Holland & Knight
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: X. Xxxxxx Xxxxxx, III, Esq.
Telecopy: 000-000-0000
Any party may change the persons and address to which notices or other
communications are to be sent by given written notice of such change to the
other party in the manner provided herein for giving notice.
11. Waiver of Breach. No waiver by either party of any
condition or of the breach by the other of any term or covenant contained in
this Agreement, whether by conduct or otherwise, in any one or more instances
shall be deemed or construed as a further or continuing waiver of any such
condition or breach or a waiver of any other condition, or of the breach of any
other term or covenant set forth in this Agreement. The failure of either party
to exercise any right hereunder shall not bar the later exercise thereof.
12. Binding Nature; Assignment. This Agreement shall inure to
the benefit of and be binding on the parties and their respective
successors in interest, and shall not be assignable by either party without
the written consent of the other; provided that nothing in this Section
shall preclude the Executive from designating a beneficiary to receive any
benefit payable hereunder upon his death, or the executors, administrators
or other legal representatives of the Executive or his estate from
assigning any rights hereunder to which they become entitled to the person
or persons entitled thereto.
13. Governing Law. This Agreement is entered into and shall be
construed in accordance with the laws of the State of Georgia, without
giving effect to conflict of laws principles thereof requiring application
of the substantive laws of another jurisdiction.
14. Invalidity or Unenforceability. If any term or provision of
this Agreement is held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall not affect any other term or provision
hereof and this Agreement shall continue in full force and effect as if
such invalid or unenforceable term or provision (to the extent of the
invalidity or unenforceability) had not been contained herein.
15. Entire Agreement. This Agreement constitutes the full and
complete understanding and agreement of the Executive and the Company
respecting the subject matter hereof, and supersedes all prior
understandings and agreements concerning the subject matter hereof, oral or
written, express or implied. This Agreement may not be modified or amended
orally, but only by an agreement in writing, signed by the party against
whom enforcement of any modification or amendment is sought.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be deemed one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written.
EXECUTIVE
/s/ Xxxxxx X. Xxxxx
______________________________
Xxxxxx X. Xxxxx
COMPANY
GMH ACQUISITION CORP.
By: /s/ Xxxx X. Xxxxx
__________________________
Xxxx X. Xxxxx
Title: Executive Vice President
EXHIBIT C
EXHIBIT C
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of October
___, 1995, by and between GMH ACQUISITION CORP., a Delaware corporation
with an office at X.X. Xxx 0000, Xxxxxxxx, Xxxxxxx 00000-0000 (the
"Company") and [XXXXXXX XXXXX/XXXX XXXX] XXXXX, currently residing at
_________________________________________________ (the "Executive").
The parties hereto, intending to be legally bound hereby, and in
consideration of the mutual covenants herein contained, agree as follows:
1. Employment.
1.1 The Company employs the Executive, and the Executive accepts
such employment (the "Employment"), as ______________________________ of the
Company. The Executive agrees to accept the employment and agrees to remain in
the employ of the Company during the Employment Term (as defined in Section 2
hereof) and any extensions thereof and to perform such lawful duties as are from
time to time assigned to him by the Chief Executive Officer or the Board of
Directors of the Company (the "Board") and which are normally associated with
the position of ______________________________ in the manufactured housing
industry.
1.2 During the Employment Term and any extensions thereof, the
Executive will devote his best efforts and full business time, skill and
attention to the performance of his duties on behalf of the Company.
2. Term of Employment. Subject to the provisions of Section 6
hereof, the term of the Executive's employment hereunder shall be from the date
hereof until December 31, 2000 (the "Employment Term").
3. Compensation.
3.1 The Company agrees to pay, and the Executive agrees to
accept, as base compensation for all services to be rendered by the Executive in
any capacity to the Company or its affiliates during the Employment Term, a
salary of $100,000 per annum, subject to such deductions and withholdings as may
be required by law or by further agreement with the Executive (the "Base
Salary"), payable in arrears in equal bi-weekly installments. The Base Salary
may be increased from time to time in the discretion of the Board. Any such
increases shall be added to the Base Salary then being paid to the Executive,
and the sum thereof shall then become the Base Salary for each successive year,
until further adjusted in accordance with the provisions of this Section 3.1.
3.2 In addition to the Base Salary, the Executive shall
participate in the Company's Executive Bonus Plan, a copy of which is attached
hereto as Exhibit 1, (the "Plan") subject to the terms and conditions of the
Plan. The Executive's "Participant Percentage" under the Plan will never be less
than 20% of the "Bonus Pool" (as such terms are defined in the Plan). The
Company will award not less than a $100,000 incentive award to the Executive for
the 1996 Plan Year regardless of the size of the Bonus Pool.
3.3 The Company shall reimburse the Executive for all reasonable
and necessary expenses incurred by the Executive in connection with the
Employment, including without limitation, travel and lodging expenses and
charges incurred on a Company credit card for business entertainment. Such
expenses shall be reimbursed to the Executive by the Company after the
Executive's submittal of an invoice to the Company with respect to the
reimbursable expenses incurred by him. All invoices for reimbursable expenses
shall include adequate supporting documentation of the expenses incurred by the
Executive, including receipts.
4. Additional Benefits. During the Employment Term, the Company
shall provide the following additional benefits to the Executive:
4.1 The Executive shall be entitled to ____ (__) weeks of paid
vacation during each calendar year.
4.2 The Company shall provide the Executive with health, medical
and hospitalization insurance benefits equal to those provided by the Company to
other executive officers of the Company. In addition, the Executive shall be
permitted, if and to the extent eligible, to participate in any pension plan or
other "fringe benefits" of the Company, which may be available generally to
other executive officers of the Company.
4.3 To defray the expenses of operating his personal automobile
in connection with the performance of his duties hereunder, the Executive shall
be entitled to an automobile allowance in the amount of $200.00 per month.
5. Insurance. In addition to any insurance coverage provided for in
Section 4 hereof, the Company may, in its discretion, purchase or renew
insurance on the life of the Executive, with the Company or a lender of the
Company as beneficiary in an amount determined by the Company or such lender
from time to time. The Executive agrees to submit to medical examinations and
otherwise to cooperate with the Company and any such lender in connection with
obtaining such insurance.
6. Termination.
6.1 In the event the Executive's employment is terminated for
"Cause", the Executive shall have no further rights under this Agreement, except
the right to receive the Base Salary up to the date of termination by the
Company of the Executive's employment hereunder. The decision to terminate the
Executive under this Section 6.1 shall be made by the Chief Executive Officer of
the Company or by the Board. The term "Cause" shall mean any of the following:
(a) any deliberate or intentional act or omission by the Executive with the
intent of causing damage to the Company's relationships with its lenders,
suppliers or customers; (b) any fraud, misappropriation or embezzlement by the
Executive involving properties, assets or funds of the Company; (c) a conviction
of the Executive, or plea of nolo contendere by the Executive, to any crime or
offense involving monies or other property of the Company or any other felony or
criminal act involving moral turpitude; (d) any usurpation by the Executive of a
corporate opportunity of the Company or the Executive's willful and continual
neglect of or willful and continual failure to perform any of his material
duties, responsibilities or obligations as an employee of the Company, but only
after notice of such usurpation, neglect or failure is delivered to the
Executive and the Executive fails or refuses to remedy such usurpation, neglect
or failure to the reasonable satisfaction of the Board within thirty (30) days
after the receipt of such notice; provided, that any action or omission taken by
the Executive in good faith and in the reasonable belief that such action or
omission was in the best interests of the Company shall not constitute "Cause";
or (e) the violation by the Executive of Section 7 of this Agreement or of any
other non-competition agreement or covenant binding upon the Executive.
6.2 In the event the Executive's employment is terminated
without "Cause", the Executive shall have no further rights under this Agreement
except the right to receive (a) the Base Salary for the balance of the term of
this Agreement, payable in arrears, in bi-weekly installments, (b) any amounts
due in accordance with the terms of the Plan, (c) all benefits under Section 4.1
hereof which have accrued as of the date of termination and (d) uninterrupted
continuation of all rights and benefits accorded the Executive under Section 4.2
hereof for the duration of this Agreement.
6.3 In the event of the Executive's death during the Employment
Term, the Employment Term shall terminate automatically as of the date of the
Executive's death, and the Executive's executor, administrator or other legal
representative shall have no further rights hereunder, except the right to
receive (a) the Base Salary up to the date of the Executive's death and (b) any
amounts due under the Plan.
6.4 If for any reason (other than pursuant to Section 6.3 or
6.5), the Executive resigns from his employment hereunder, this Agreement shall
terminate automatically, and the Executive shall have no further rights
hereunder, except the right to receive the Base Salary up to the date of the
Executive's resignation.
6.5 If, by reason of any illness, disability or incapacity, the
Executive is unable to perform his duties under this Agreement for a period of
six (6) consecutive months (or shorter periods aggregating to nine (9) months in
any twelve (12) month period) ("Disability"), the Company may terminate the
Employment Term as of the last day of such six (6) or nine (9) month period, as
the case may be, or as of such other day thereafter, provided the Executive
remains unable to perform his duties hereunder. The Executive or his legal
representative, if one is appointed, shall be entitled to receive, within sixty
(60) days after the date of such termination, any amounts payable to the
Executive pursuant to this Agreement up to the date of termination of this
Agreement. Notwithstanding the foregoing, if the Executive suffers a Disability
and his employment hereunder is not terminated, the Executive shall be entitled
to receive any amounts owing to him hereunder, less any disability insurance
payments which Executive receives pursuant to disability insurance provided by
the Company hereunder.
6.6 Upon the termination of the Executive's employment pursuant
to this Section 6, the Executive shall have no further rights under this
Agreement except as expressly provided in this Section 6.
7. Non-Competition, Non-Interference and Non-Disclosure.
7.1 The Executive acknowledges that: (a) the business of
producing and distributing at wholesale manufactured housing currently conducted
and as conducted from time to time throughout the term of this Agreement
(collectively, the "Business") is conducted by and is proposed to be conducted
by the Company throughout the states of Florida, Georgia, South Carolina, North
Carolina, Virginia, West Virginia, Alabama, Mississippi, Louisiana, Kentucky and
Tennessee (the "Company's Market"); (b) the Business involves the identification
and development of new products and markets relating to the production and
distribution at wholesale of manufactured housing; (c) the Company has developed
trade secrets and confidential information concerning the Business; and (d) the
agreements and covenants contained in this Section 7 are essential to protect
the Business of the Company. In order to induce the Company to enter into this
Employment Agreement, the Executive covenants and agrees that:
7.2 For a period commencing on the date of this Agreement and
ending (a) on the date that the Executive's employment is terminated without
Cause, or (b) in the case of the expiration of this Agreement or the Executive's
voluntary resignation or termination with Cause, on the date which is two years
following such expiration, resignation or termination of this Agreement, neither
the Executive nor any entity of which 5% or more of the beneficial ownership is
held by the Executive or a related family member ("Controlled Entity") will,
anywhere in the Company's Market, directly or indirectly own, manage, operate,
control, invest or acquire an interest in, or otherwise engage or participate
in, whether as a proprietor, partner, stockholder, director, officer, "Key
Employee" (defined herein to include any person who is employed in a management,
executive, supervisory, marketing or sales capacity for another person), joint
venturer, investor or other participant, any business which competes with the
Business ("Competitive Business") without regard to (i) whether the Competitive
Business has its office, manufacturing or other business facilities within or
without the Company's Market, (ii) whether any of the activities of the
Executive referred to above occur or are performed within or without the
Company's Market or (iii) whether the Executive resides, or reports to an
office, within or without the Company's Market.
7.3 During the period commencing on the date of this Agreement
and ending on the date which is two years following the expiration or
termination of this Agreement, whether by resignation, termination with or
without Cause, or otherwise (the "Restricted Period"), neither the Executive nor
any Controlled Entity will directly or indirectly solicit, induce or influence
any customer, supplier, lender, lessor or any other person which has a business
relationship with the Company, or which had on the date of this Agreement, a
business relationship with the Company, to discontinue or reduce the extent of
such relationship with the Company.
7.4 During the Restricted Period, neither the Executive nor any
Controlled Entity will directly or indirectly recruit, solicit or otherwise
induce or influence any employee or sales agent of the Company or any of its
affiliates to discontinue such employment or agency relationship with the
Company. During the Restricted Period, neither the Executive nor any Controlled
Entity will employ or seek to employ, or cause or induce any Competitive
Business to employ or seek to employ for any Competitive Business, any person
who is then (or was at any time within six months prior to the date the
Executive or the Competitive Business employs or seeks to employ such person)
employed by the Company. Nothing herein shall prevent the Executive from
providing a letter of recommendation to an Employee with respect to a future
employment opportunity.
7.5 During the Restricted Period and thereafter, neither the
Executive nor any Controlled Entity will directly or indirectly disclose to
anyone, or use or otherwise exploit for the Executive's or any Controlled
Entity's own benefit or for the benefit of anyone other than the Company, any
confidential information, including, without limitation, any confidential "know-
how", trade secrets, customer lists, details of client or consultant contracts,
pricing policies, operational methods, marketing plans or strategies, product
development techniques or plans, computer software, business acquisition plans
and new personnel acquisition plans of the Company related to the Business or
any portion or phase of any scientific or technical information, design,
process, procedure, formula or
improvement of the Company that is valuable and not generally known to the
competitors of the Company whether or not in written or tangible form
(hereinafter referred to as "Confidential Information"). The term "Confidential
Information" does not include, and there shall be no obligation hereunder with
respect to, (a) information that becomes generally available to the public other
than as a result of a disclosure by the Executive or a Controlled Entity or any
agent or other representative thereof and (b) general business methods
applicable to a sales business including, but not limited to, pricing policies,
operational methods and marketing concepts. Neither the Executive nor any
Controlled Entity shall have any obligation hereunder to keep confidential any
Confidential Information to the extent disclosure of any thereof is required by
law, or determined in good faith by the Executive to be necessary or appropriate
to comply with any legal or regulatory order, regulation or requirement;
provided, however, that in the event disclosure is required by law, the
Executive or the Controlled Entity concerned shall provide the Company with
prompt notice of such requirement so that the Company may seek an appropriate
protective order.
7.6 In the event the termination or expiration of this
Agreement, the covenants and agreements contained in this Section 7 shall
survive, shall continue thereafter, and shall not expire unless and except as
expressly set forth in such Sections.
7.7 The parties to this Agreement agree that (a) if either the
Executive or any Controlled Entity breaches any provision of this Section 7, the
damage to the Company will be substantial, although difficult to ascertain, and
money damages will not afford the Company an adequate remedy, and (b) if either
the Executive or any Controlled Entity is in breach of this Agreement, or
threatens a breach of this Agreement, the Company shall be entitled, in addition
to all other rights and remedies as may be available to the Company at law or in
equity, to (i) specific performance, (ii) injunctive and other equitable relief
to prevent or restrain a breach of this Agreement and (iii) require the
breaching party to account for and pay over to the Company all compensation,
profits, monies, accruals or other benefits derived or received by such party as
the result of any transactions constituting a breach hereof.
7.8 If any court determines that any provision of this Section 7
is unenforceable because of the duration or geographic scope of such provision,
such court shall have the power to reduce the scope or duration of such
provision, as the case may be, and, in its reduced form, such provision shall
then be enforceable.
8. Headings. The section headings of this Agreement are for
convenience of reference only and are not to be considered in the interpretation
of the terms and conditions of this Agreement.
9. Notices. All notices and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given (a) when delivered personally, (b) if sent by
telecopy, when receipt thereof is acknowledged at the telecopy number below, (c)
the day following the day on which the same has been delivered prepaid for
overnight delivery to a national air courier service or (d) three business days
following deposit in the United States Mail, registered or certified, postage
prepaid, in each case, addressed as follows:
If to the Company: GMH Acquisition Corp.
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxx X. Xxxxx
Telecopy: ________________
with copies to: Strategic Investments &
Holdings, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxx
Telecopy: 000-000-0000
Nixon, Hargrave, Devans & Xxxxx LLP
0000 Xxxx Xxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Telecopy: 716-853-8109
If to the
Executive: Xxxxxxx Xxxxx Xxxxx
__________________________
__________________________
Telecopy: _______________
with a copy to: Holland & Knight
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: X. Xxxxxx Xxxxxx, III, Esq.
Telecopy: 000-000-0000
Any party may change the persons and address to which notices or other
communications are to be sent by given written notice of such change to the
other party in the manner provided herein for giving notice.
10. Waiver of Breach. No waiver by either party of any condition or
of the breach by the other of any term or covenant contained in this Agreement,
whether by conduct or otherwise, in any one or more instances shall be deemed or
construed as a further or continuing waiver of any such condition or breach or a
waiver of any other condition, or of the breach of any other term or covenant
set forth in this Agreement. The failure of either party to exercise any right
hereunder shall not bar the later exercise thereof.
11. Binding Nature; Assignment. This Agreement shall inure to the
benefit of and be binding on the parties and their respective successors in
interest, and shall not be assignable by either party without the written
consent of the other; provided that nothing in this Section shall preclude the
Executive from designating a beneficiary to receive any benefit payable
hereunder upon his death, or the executors, administrators or other legal
representatives of the Executive or his estate from assigning any rights
hereunder to which they become entitled to the person or persons entitled
thereto.
12. Governing Law. This Agreement is entered into and shall be
construed in accordance with the laws of the State of Georgia, without giving
effect to conflict of laws principles thereof requiring application of the
substantive laws of another jurisdiction.
13. Invalidity or Unenforceability. If any term or provision of this
Agreement is held to be invalid or unenforceable for any reason, such invalidity
or unenforceability shall not affect any other term or provision hereof and this
Agreement shall continue in full force and effect as if such invalid or
unenforceable term or provision (to the extent of the invalidity or
unenforceability) had not been contained herein.
14. Entire Agreement. This Agreement constitutes the full and
complete understanding and agreement of the Executive and the Company respecting
the subject matter hereof, and supersedes all prior understandings and
agreements concerning the subject matter hereof, oral or written, express or
implied. This Agreement may not be modified or amended orally, but only by an
agreement in writing, signed by the party against whom enforcement of any
modification or amendment is sought.
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be deemed one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written.
EXECUTIVE
/s/ Xxxxxxx Xxxxx/Drew Xxxx Xxxxx
______________________________________
Xxxxxxx Xxxxx/Drew Xxxx Xxxxx
COMPANY
GMH ACQUISITION CORP.
By: /s/ Xxxx X. Xxxxx
___________________________________
Xxxx X. Xxxxx
Title: Executive Vice President
EXHIBIT D
EXHIBIT D
[TO BE PROVIDED]
EXHIBIT E
GMH ACQUISITION CORP.
INSTALLMENT PROMISSORY NOTE
THIS NOTE IS NOT
NEGOTIABLE
$_______________ ___________, 1995
FOR VALUE RECEIVED, the undersigned GMH ACQUISITION CORP. ("GMH"), a
Delaware corporation, hereby promises to pay to the order of
___________________________, with an address of _____________________ (the
"Payee"), the principal amount of $__________, as follows:
(i) $__________ payable on November __, 1995;
(ii) $__________ payable on December __, 1995; and
(iii) $__________ payable on January, 1996.
Payments of principal shall be made by transfer of immediately available funds
to such account at such bank as Payee shall direct. No prepayment of all or any
part of this Note shall be permitted.
This Note is one of the Installment Promissory Notes issued by GMH in the
aggregate principal amount of $__________ (individually, a "Note" and
collectively, the "Notes") in connection with the purchase by GMH of all of the
issued and outstanding common stock of General Manufactured Housing, Inc.
pursuant to that certain Stock Purchase Agreement dated as of October __, 1995
(the "Stock Purchase Agreement") among GMH, the Sellers (as that term is defined
therein) and General Manufactured Housing, Inc. GMH, together with its
successors and assigns, are collectively referred to herein as the "Company."
1. Interest.
This Note shall bear interest on all outstanding principal at a fixed
rate per annum of _____ percent (___%) [___ percent (___%) reduced by all costs
of the letter of credit to be provided to the Sellers to secure the Notes].
Interest shall be payable on each of the three principal payment dates set forth
above. If this Note or any payment of principal or interest hereon shall not be
paid when due (whether at stated maturity, by acceleration or otherwise) the
overdue principal, and to the extent permitted by law, any overdue interest
shall bear interest at the rate of ___%, which interest shall accrue from the
date of such default in payment to the date payment of such overdue principal
and interest shall be made. Interest on overdue principal and interest shall be
payable on demand. All interest payments required on this Note shall be computed
on the basis of a 360-day year of twelve 30-day months. If any payment on this
Note becomes due and payable on a Saturday, Sunday or other day on which
commercial banks in Georgia or New York are authorized or required by law to
close, the maturity thereof shall be extended to the next succeeding business
day, and, with respect to payments of principal, interest thereon shall be
payable during such extension at the then applicable rate.
2. Securities Representation.
Payee represents that he will not transfer or dispose of all or any
part of this Note in violation of the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
3. Transfer of Note.
The holder of this Note shall not sell, assign, pledge, transfer,
hypothecate or in any manner dispose of or part with all or any part of his
right, title and interest in and to this Note without the prior written consent
of the Company.
4. Notices.
All notices, consents, demands, requests, approvals and other
communications which are required or may be given hereunder shall be in writing
and shall be deemed to have been duly given (a) when delivered personally, (b)
if sent by telecopy, when receipt thereof is acknowledged at the telecopy number
below, (c) the second day following the day on which the same has been delivered
prepaid to a national air courier service or (d) three business days following
deposit in the mail, registered or certified postage prepaid in each case,
addressed as follows: (i) if to the holder of this Note to whom this Note is
originally issued, to his address set forth in the first paragraph hereof, or at
such other address as may have been furnished to the Company by such holder in
writing, or (ii) if to any other holder of this Note, to such address as may
have been furnished to the Company in writing by such holder, or, until such
other holder furnishes to the Company an address, then to, and at the address
of, the last holder of this Note who has so furnished an address to the Company,
or (iii) if to the Company, at X.X. Xxx 0000, Xxxxxxxx, Xxxxxxx 00000-0000,
Telecopy: (___) ___-____. Any notice given pursuant to this Section shall be
effective, whether given by the Company or the holder of this Note, or by either
of their counsel.
5. Events of Default. In the event that:
(a) the Company fails to make any payment of principal on this Note
when due or defaults for more than 3 business days in making any payment of
interest required to be made on this Note; or
(b) the Company, (i) commences any case, proceeding or other action
(x) under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (y) seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or any substantial part of its
assets, or shall make a general assignment for the benefit of its creditors, or
(ii) is the debtor named in any other case, proceeding or other action of a
nature referred to in clause (i) above which (x) results in the entry of an
order for relief or any such adjudication or appointment or (y) remains
undismissed, undischarged or unbonded for a period of 60 days, or (iii) takes
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i) or (ii) above, or (iv)
shall generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; then, and in any such event, and
at any time thereafter, if such default shall then be continuing, the Payee may,
by written notice to the Company, declare this Note due and payable, whereupon
this Note, together with all accrued and unpaid interest thereon, shall be due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived. In addition, in any such event, the
Payee shall be entitled to recover reasonable attorneys' fees and other costs of
collection incurred.
6. Amendments and Waivers.
Neither this Note nor any term hereof may be changed, waived,
discharged or terminated orally or in writing, except that any term of this Note
may be amended and the observance of any such term may be waived (either
generally or in a particular instance either retroactively or prospectively)
with (but only with) the written consent of the holder of this Note.
7. Benefit.
All of the covenants, stipulations, promises and agreements contained
in this Note by GMH shall be binding upon GMH and its successors and assigns and
shall inure to the benefit of and be enforceable by the
holder of this Note and his successors and assigns.
8. Law Governing.
This Note shall be governed by and construed in accordance with the
laws of the State of Delaware without regard to conflicts of law principles
thereof.
9. Construction.
Wherever the context may require, any pronoun used herein shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns, pronouns and verbs shall include the plural and vice versa.
10. Security.
As collateral security for the faithful and timely performance of all
of the Company's obligations on this Note, GMH has obtained a stand-by letter of
credit from ______________ ___________, a copy of which is attached hereto. The
Payee shall be entitled to the benefits of such letter of credit.
11. No Recourse.
The Payee by his acceptance of this Note hereby agrees for itself and
its successors and assigns in favor of any incorporator, officer, director,
stockholder, agent or employee of GMH that this Note and the obligations of GMH
to Payee hereunder shall be payable only out of the assets of GMH, and no
recourse shall be had for payment of any amount due hereunder against any such
incorporator, stockholder, officer, director, agent or employee of GMH by virtue
of any law or by enforcement of any assessment or otherwise, all such liability,
if any, being, by the acceptance hereof and as a part of the consideration for
the issue hereof, expressly released, other than as a result of such
incorporator's, stockholder's, officer's, director's, agent's or employee's
fraud or willful misconduct.
IN WITNESS WHEREOF, GMH has executed this Note as of the day and year first
written above.
GMH ACQUISITION CORP.
By: ______________________________
Title: ___________
EXHIBIT F
GMH ACQUISITION CORP.
INCENTIVE COMPENSATION PLAN
1. PURPOSES OF THE PLAN
The purposes of this Incentive Compensation Plan (the "Plan") are to
enable GMH Acquisition Corp. (the "Company") to retain the services of key
employees and to provide them with increased motivation and incentive to
achieve and exceed the goals of the business consistent with both short
term and long term objectives.
2. DEFINITIONS
The following terms shall have the meanings set forth below:
(a) "Base Amount" means $11 million; provided, however, that for the
Stub Period, the Base Amount shall equal the product of (a) $11 million and (b)
a fraction, the numerator of which is the number of days in the Stub Period, and
the denominator of which is 365.
(b) "Board of Directors" means the Board of Directors of the Company.
(c) "Bonus Pool" means, for each Plan Year, an amount equal to EBIT in
excess of the Base Amount for such fiscal year; provided, however, that such
amount shall not exceed $4 million in the aggregate, $2 million in any one Plan
Year; and provided, further, however, that for the Stub Period, the Bonus Pool
shall not exceed an amount equal to the product of (a) $2 million and (b) a
fraction, the numerator of which is the number of days in the Stub Period, and
the denominator of which is 365.
(d) "EBIT" means, for each applicable Plan Year, the net income of the
Company for such year, before (i) interest expense, (ii) taxes, (iii)
amortization, (iv) amounts paid under the Company's Executive Bonus Plan, (v)
the Management Fee, (vi) reimbursement of the Company's expenses under Section
19 of the Stock Purchase Agreement, (vii) costs incurred by the Company in
remediating the Company's properties pursuant to Section 14(b) of the Stock
Purchase Agreement and (viii) all compensation and benefits payable to
management personnel added after the Effective Date other than at the direction
of the Chief Executive Officer of the Company's operating subsidiary and other
than in the ordinary course of the Company's business, all as shown on the
audited financial statements of the Company; provided, that EBIT shall be
determined in accordance with generally accepted accounting principles,
consistent with those employed by the Company in 1994 and reflected on its
audited financial statements for such year.
(e) "Effective Date" means __________, 1995.
(f) "Management Agreement" means the Management Agreement dated as of
__________________, 1995 by and between Strategic Investments & Holdings, Inc.
and the Company.
(g) "Management Fee" means an amount equal to the management fee paid
pursuant to the terms of the Management Agreement.
(h) "Participant" means Xxxxxx X. Xxxxx, Xxxxxxx Xxxxx Xxxxx, Xxxx Xxxx
Xxxxx and Xxxxx X. Xxxxxx.
(i) "Participant Percentage" means, for any Plan Year, the percentage of
the Bonus Pool allocated to a Participant.
(j) "Plan Year" means any of the fiscal years of the Company following the
consummation of the transactions contemplated by the Stock Purchase Agreement
and ending on or before December 31, 2000.
(k) "Stock Purchase Agreement" means that certain Stock Purchase Agreement
dated as of October __, 1995 by and among Xxxxxx X. Xxxxx et al. and the
Company.
(l) "Stub Period" shall mean the period from the Effective Date through
December 31, 1995.
3. TERM OF THE PLAN
The term of this Plan shall commence on the Effective Date and terminate on
the earlier of (i) December 31, 2000, (ii) the payment to Participants of $4
million under the terms of the Plan, or (iii) the initial public offering of the
common equity of the Company.
4. ADMINISTRATION OF THE PLAN
(a) The Plan shall be administered by the Board of Directors. In the event
the employment of any Participant terminates, the Board of Directors shall
[reallocate the Participant Percentage of the terminating Participant among the
remaining Participants]. Any decision by the Board of Directors regarding the
administration or interpretation or construction of any provisions of the Plan
shall be final, binding and conclusive.
(b) No member of the Board of Directors shall be liable for any action
taken or omitted to be taken or for any determination made by him or her in good
faith with respect to the Plan, and the Company shall indemnify and hold
harmless each member of the Board of Directors against any cost or expense
(including counsel fees) or liability (including any sum paid in settlement of a
claim with the approval of the Board of Directors) arising
out of any act or omission in connection with the administration or
interpretation of the Plan, unless arising out of such person's own fraud or bad
faith.
5. INCENTIVE AWARDS
(a) Based upon the recommendations of the Chief Executive Officer, the
Board of Directors shall determine the eligible Participants for the Plan Year
and the Participant Percentage for each Participant.
(b) If EBIT for any Plan Year does not exceed the Base Amount for such
year, the Company shall not allocate any amounts to the Bonus Pool.
(c) If EBIT for any Plan Year exceeds the Base Amount for such year, the
Company shall allocate 100% of the amount of EBIT in excess of the Base Amount
to the Bonus Pool to be allocated among the Participants; provided, however,
that the maximum amount to be allocated to the Bonus Pool in any Plan year shall
not exceed $2 million and the maximum amount to be allocated to the entire Bonus
Pool shall not exceed $4 million.
(d) The Bonus Pool, if any, for any Plan Year shall be calculated and paid
to the Participants, in cash, within thirty (30) days after the Company's
receipt of its audited financial statements for such year but no later than one
hundred fifty (150) days following the end of such year; [provided, however,
that except as provided in paragraph (e) hereof, no portion of the Bonus Pool
shall be paid to any Participant for any Plan Year if such Participant is not an
employee of the Company at the end of such year.]
[(e) In the event that a Participant is not an employee of the Company at
the end of a Plan year because of his death, termination for disability or
retirement during such year, the portion of the Bonus Pool, if any, payable to
such Participant for such Plan Year shall be prorated to the date of death, date
of termination for disability or date of retirement, and the portion of the
Bonus Pool attributable to the part of the Plan Year prior to such date of
death, termination or retirement shall be determined and paid to such
Participant or his legal representative in accordance with paragraph (d) above.
In the event that a Participant is not an employee of the Company at the end of
a Plan Year because such Participant has either voluntarily terminated his
employment or because of the termination of such Participant for any reason
other than death, disability or retirement during such year, no portion of the
Bonus Pool for such year shall be payable to such Participant but instead shall
be allocated among the remaining Participants proportionately based on their
existing Participant Percentages.]
(f) Any and all amounts payable under the Bonus Pool hereunder shall be
subject to applicable federal, state and local tax withholding requirements.
(g) In the event that the Company's common stock is sold in an initial
public offering prior to the end of the term of this Agreement, the Company will
pay, in cash, to the Participants, no later than ____________, an amount equal
to 90% of an amount equal to the difference between $4.0 million and the amounts
which have previously been paid to Participants or set off under the Stock
Purchase Agreement.
6. MISCELLANEOUS
(a) No right to receive any incentive compensation under the Plan shall be
transferable except by will or the laws of descent and distribution. Any
purported transfer contrary to this provision will be null and void and without
effect.
(b) Neither the adoption of the Plan nor its operation, nor any document
describing or referring to the Plan, or any part hereof, nor the designation of
any employee as a Participant in the Plan shall confer upon any Participant any
right to continue in the employ of the Company or shall in any way affect the
right and power of the Company to terminate the employment of any Participant at
any time with or without assigning a reason therefor, to the same extent as
might have been done if the Plan had not been adopted.
(c) By acceptance of any incentive compensation under the Plan, the
recipient shall be deemed to agree (a) to execute any and all documents
reasonably requested by the Company in connection with his or her participation
in the Plan, including an agreement to report any amounts received under the
Plan as compensation and (b) that any compensation paid
hereunder will not be taken into account as "base remuneration", "wages",
"salary" or "compensation" in determining the amount of any contribution to or
payment or any other benefit under any pension, retirement, incentive, profit-
sharing or deferred compensation plan of the Company.
(d) The place of administration of the Plan shall be in the State of
Georgia, and the validity, construction, interpretation, administration and
effect of the Plan and of its rules and regulations, and rights relating to the
Plan, shall be determined solely in accordance with the laws of the State of
Georgia.
(e) The amounts due under the Plan are subject to setoff in accordance
with the terms of the Stock Purchase Agreement and the Escrow Agreement dated as
of ____________, 1995 by and between the Company and ___________________.
EXHIBIT G
GMH ACQUISITION CORP.
SUBSCRIPTION AGREEMENT
October __, 1995
GMH Acquisition Corp.
____________________
____________________
RE: Subscription for Shares of [Class A] Common Stock, Par Value
[$0.01] Per Share, of GMH Acquisition Corp. (the "Corporation")
Ladies and Gentlemen:
The Corporation and the undersigned hereby agree as follows:
1. The Corporation hereby agrees to issue and sell to the undersigned,
and the undersigned hereby agrees to subscribe for and purchase from the
Corporation, _____ shares of its [Class A] Common Stock, [par value $0.01] per
share (the "Shares") at an aggregate purchase price of $_______________.
2. Payment for the Shares shall be made by the undersigned within two
days of the Corporation's request therefor. Payment shall be made by means of
delivery by the undersigned of a check payable to the Corporation in the amount
of _______________ and 00/100 Dollars ($_______________). Delivery by the
Corporation of a certificate representing the Shares shall be made on the date
of payment or promptly thereafter.
3. The undersigned represents that the undersigned is acquiring the
Shares for his own account for investment and not with a view to the
distribution or resale thereof or with any present intention of distributing or
selling such Shares. The undersigned agrees that the Shares may not be
transferred except upon registration under the Securities Act of 1933, as
amended (the "Act"), and under any applicable state securities or "blue sky"
laws, or upon receipt by the Corporation of an opinion of counsel, in form and
substance satisfactory to it, to the effect that such transfer may be made
without registration under the Act and applicable state securities or "blue sky"
laws.
4. The undersigned agrees that the following legend may be set forth on
all certificate representing the Shares:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAW
OF ANY STATE. SUCH SHARES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH
REGISTRATION IS NOT REQUIRED BY SAID ACT OR STATE LAWS.
5. The undersigned acknowledges that the undersigned has been informed by
the Corporation that in the absence of an effective registration statement under
the Act and under any applicable state securities or "blue sky" laws (or an
exemption from the registration requirements thereof), the Shares may not be
sold or otherwise transferred or disposed of. The Corporation is not obligated
to register under the Act any sale, transfer or other disposition of the Shares,
and accordingly, the Shares may be held indefinitely unless such sale, transfer
or disposition is registered under the Act and under any applicable state
securities or "blue sky" laws or is exempt from the registration requirements
thereof. Any sales pursuant to Rule 144 under the Act may only be made in
limited amounts upon compliance with all of the terms and conditions of that
Rule. The undersigned has been informed that the Corporation will not supply the
undersigned with any information necessary to enable the undersigned to make
routine sales of the Shares under Rule 144. In the event that Rule 144 is not
applicable, the Shares may not be sold, transferred or otherwise disposed of
without registration unless there is compliance with an applicable exemption.
6. The undersigned represents and affirms that the undersigned (i) has
such knowledge and experience in financial and business affairs that he is
capable of evaluating the merits and risks involved in purchasing the Shares,
(ii) is able to bear the economic risks involved in purchasing the Shares, and
(iii) has had the opportunity to ask questions of, and receive answers from, the
Corporation and persons acting on its behalf concerning the terms and conditions
of the offering of the Shares and to obtain any additional information in
connection therewith.
7. The undersigned further acknowledges that the Shares will be held
subject to the terms and conditions of a Stockholders Agreement to be entered
into among the Corporation and its stockholders.
Very truly yours,
______________________________
Accepted and Agreed:
GMH ACQUISITION CORP.
By:/s/ Xxxx X. Xxxxx
_________________________
Xxxx X. Xxxxx, President
EXHIBIT H
[TO BE PROVIDED]
EXHIBIT I
[TO BE PROVIDED]
SELLERS' SCHEDULES - 10/10/95
GENERAL MANUFACTURED HOUSING, INC.
Stock Purchase Agreement
among Xxxxx Xxxxx Xxxxxx, as Trustee, et al.,
General Manufactured Housing, Inc.
and GMH Acquisition Corp.
The following schedules form a part of that certain STOCK
PURCHASE AGREEMENT by and between Xxxxx Xxxxx XXXXXX, AS TRUSTEE, XXXXXXX XXXXX
XXXXX, XXXX XXXX XXXXX AND XXXXXX X. XXXXX AND XXXXXX X. XXXXX, as Joint Tenants
(collectively, the "Sellers"), GENERAL MANUFACTURED HOUSING, INC. and GMH
ACQUISITION CORP. (the "Buyer") dated October 10, 1995 (the "Amendment").
Capitalized terms contained in the following schedules have the same meanings as
given them in the Agreement. All references to sections refer to sections of the
Agreement unless otherwise specified. Any restatement or paraphrase in the
following schedules (indicated by small, non-bolded print) of any of the
statements set forth in Section 7 or elsewhere in the Agreement are for
reference purposes only and, in the event of any discrepancy between any such
restatement or paraphrase and the text of the Agreement, as amended, the text of
the Agreement shall control.
Addenda attached hereto:
Addendum 1 to Schedule 7(e) - Tangible Personal and Real Property of
GMH
Addendum 2 to Schedule 7(e) - List of all motor vehicles
Addendum 3 to Schedule 7(e) - List of all bank accounts and
certificates
Addendum 4 to Schedule 7(e) - Condition of manufacturing plants
Addendum to Schedule 7(n) - Schedule of Workers' Compensation
Insurance claims
Addendum to Schedule 7 (p) - List of additional insurance policies
GENERAL MANUFACTURED HOUSING, INC.
Stock Purchase Agreement
among Xxxxx Xxxxx Xxxxxx, as Trustee, et al.,
General Manufactured Housing, Inc.
and GMH Acquisition Corp.
Schedule 7(a) "Organization; Good Standing; Power; Etc."
I. Jurisdictions where business is conducted or assets are owned and in
which GMH is qualified as a foreign corporation to do business:
Florida
North Carolina
South Carolina
Lamar Housing, L.L.C., as a Georgia limited liability company, will
conduct business and own assets in South Carolina and consequently is
in the process of obtaining the necessary authority to transact
business in South Carolina.
II. Equity Interests in any corporation, partnership, joint venture or
other entity owned, directly or indirectly, by Acquired Entities:
99% ownership interest in the Capital Account of Xxxxx Housing,
L.L.C., is held by GMH.
III. List of all assumed names or trade names in use by Acquired Entities:
The Acquired Entities sometimes refer to themselves, their respective
divisions or their products by the following assumed names: "General
Housing," "Jaguar Homes," "Xxxxx Housing," "Augustine," "Cougar,"
"Little General," "Governor," or "Senator." These are not registered
trade or fictitious names or marks.
GENERAL MANUFACTURED HOUSING, INC.
Stock Purchase Agreement
among Xxxxx Xxxxx Xxxxxx, as Trustee, et al.,
General Manufactured Housing, Inc.
and GMH Acquisition Corp.
Schedule 7(b) "Capitalization"
Description of the authorized, issued and outstanding equity interests and names
of persons to whom issued:
GENERAL MANUFACTURED HOUSING, INC.:
100,000 shares of common stock authorized, par value $100.00 per
share
Shareholders No. of Shares
Xxxxxx X. Xxxxx and Xxxxxx X. 1,590
Xxxxx XX TEN
Drew Xxxx Xxxxx 1,220
Xxxxxxx Xxxxx Xxxxx 1,220
Xxxxx Xxxxx Xxxxxx, 1,220
Trustee of the
Xxxxx Xxxxx Xxxxxx
Revocable Trust--1995
dated October __, 1995
Treasury Shares:
General Manufactured Housing, Inc. 750
XXXXX HOUSING, L.L.C.
(non-stock entity)
Owner % of Capital Account
General Manufactured
Housing, Inc. 99%
Xxxxxx X. Xxxxx 1
GENERAL MANUFACTURED HOUSING, INC.
Stock Purchase Agreement
among Xxxxx Xxxxx Xxxxxx, as Trustee, et al.,
General Manufactured Housing, Inc.
and GMH Acquisition Corp.
Schedule 7(c) "Effective Agreement"
Other than the exceptions listed after each entry below, the execution, delivery
and performance of this Agreement by each of the Sellers and the consummation of
the Transaction do not and will not:
(I) conflict with, violate or result in the breach of any of the terms or
conditions of, or constitute a default under
a) the organizational or constituent documents of any of the
Acquired Entities;
None
b) any contract, agreement, commitment, indenture, mortgage, pledge,
note, bond, license, permit or other instrument or obligation to
which any of the Acquired Entities is a party or by which any of
the Acquired Entities or their assets may be bound or affected;
LICENSES
Alabama Manufacturer License No. 4521 (expires 12/31/95) and copy
of renewal application (no date)
Florida DMV License as Manufacturer of Mobile Homes, #MH10075,
effective 10/1/94 for 94-95 license year, and Renewal Certificate
through 9/30/95 of Bankers Insurance Company Bond No. 33-35881
(originally dated 10/1/93)
Florida DMV License as Manufacturer of Recreational Vehicles,
#MR10150, effective 10/1/94 for 94-95 license year, and Renewal
Certificate through 9/30/95 of Bankers Insurance Company Bond No.
33-35880 (originally dated 10/1/93)
Georgia Manufactured Homes Manufacturer/Dealer License No. 20913
(expires 12/31/95)
Kentucky Certificate of Acceptability No. 95-MM-10-59 (license to
manufacture, import or sell mobile homes to Kentucky Dealers;
expires 12/31/95)
Louisiana Manufacturer License No. 95-M00086 (expires 12/31/95)
Mississippi Privilege License for Manufacturer No. 95-M0157
(expires 6/30/96)
North Carolina Manufacturer's License No. 001113 (expires
6/30/95), Continuation Certificate through 6/30/96 of Selective
Insurance Xxxx Xx. X00000, and copies of various related 1994
documents
License Bonds, Manufacturer's Representative, to South Carolina
Manufactured Housing Board, through Bankers Insurance Company
(6/30/95 - 6/30/96): #33-19363, Xxxxxxx X'Xxxxxx; #33-19364, Xxx
Xxxxxx Xxxx; #33-35895, Xxxxxxx Xxxxx; and #33-19365, Xxxxx X.
Xxxxxxx
South Carolina Manufacturer License No. 6255 (expires 6/30/96)
and License Bond #33-19361 to South Carolina Manufactured Housing
Board through Bankers Insurance Company (6/30/95 - 6/30/96)
Tennessee Factory-Manufactured Structures License No. 4500
(expires 12/31/95), Continuation Certificate through 12/31/95 of
USF&G Bond No. 02-0130-11677-93-6
Virginia Manufacturer License #M-1995-00108 (expires 4/6/96)
REPURCHASE AGREEMENTS
1) Bombardier Capital Inc. Floorplan Repurchase Agreement
dated 8/7/92
2) Ford Motor Credit Manufacturer Agreement and Addendum dated
11/19/90 (not signed by Ford Motor Credit)
3) Green Tree Financial Corporation Stock Floorplan Financing
Agreement dated 2/24/95 and Pre-Sold Floorplan Financing
Agreement dated 1/25/94
4) Deere Credit, Inc. (a/k/a Deere Credit Services, Inc., a/k/a
Xxxx Deere Credit) Manufacturer's Financing Agreement and
Addendum dated 7/19/94
5) ITT Commercial Finance Corp. Floorplan Repurchase Agreement
dated 3/4/88
6) NationsCredit Commercial Corporation Inventory Repurchase
Agreement dated 7/21/93 and corporate Guaranty by General up
to $117,537 on specific invoices, dated 4/3/95
7) Whirlpool Financial Corporation Repurchase Agreement dated
4/17/90
8) Security Pacific Housing Services, Inc. Retail Credit Line
arrangements dated 10/9/89, including Manufacturer's
Invoicing Certification, Manufacturer's Indemnification
Agreement, and personal guaranty (which expired by its own
terms on or about 10/9/94)
9) SouthTrust Bank Repurchase Agreement dated 11/14/91
In addition, the Company has entered into repurchase agreements
with numerous local and regional financial institutions
(generally providing floorplan/inventory financing for a single
dealer) which in the aggregate represent not more than 20% of the
Company's total repurchase obligation (in dollars).
DEBT OBLIGATIONS
1) Corporate Guaranty of Deed to Secure Debt made by Waycross
and Xxxx County Development Authority to Xxxxxxxxx Bank
dated 12/30/93 encumbering Plants 2 and 3 to secure
Promissory Note in the original principal amount of
$613,727.63 in connection with sale and lease-back
transaction;
2) Promissory Note to NationsBank of Georgia, N.A., in the
original principal amount of $600,000 dated 8/24/94 (secured
by lien on aircraft, engines, propellers, accessories and
parts);
REAL PROPERTY LEASES:
1) Contract of Lease and Rent dated 12/30/93 with Waycross and
Xxxx County Development Authority for real property referred
to as Plants 2 and 3
2) Lease Agreement dated 5/26/95 between Xxx-Bar Corporation
and Hi-Tech Properties, Inc. (the primary lease underlying
the sublease to GMH) for real property referred to as Plant
4
3) Lease Agreement with Option to Purchase dated 7/10/95
between X. Xxxx & X. Xxxxx (dba Xxxxx Warehouse Co.) and
Xxxxx Housing, L.L.C. for real property referred to as Plant
5 in Lamar, South Carolina
4) Lease of vacant land adjacent to Plant 4, to be used for
storage of finished goods; lease terms are currently being
negotiated and the effect of the Transaction on the lease
has therefore not yet been determined
OTHER
"HUD Package" evidencing GMH's qualification as HUD-approved
manufacturer
Share Purchase Agreement dated September 1, 1992, by and between
Xxxxxx X. Xxxxx, Xxxxxx X. Xxxxx, Xxxxxxx Xxxxx Xxxxx, Xxxxx
Xxxxx Xxxxxx individually and as Trustee of the Xxxxx Xxxxx
Xxxxxx Revocable Trust dated June 3, 1994, and Drew Xxxx Xxxxx,
as amended June 3, 1994
Operating Agreement of Xxxxx Housing, L.L.C.
c) any law, regulation, ordinance or decree to which any of the
Acquired Entities or their assets are subject;
None
(II) result in the creation or imposition of any lien, security interest,
charge, encumbrance, restriction or right, including rights of
termination or cancellation, in or with respect to, or otherwise
materially adversely affect, any of the properties, assets or
businesses of any of the Acquired Entities.
All documents included in Part I Item b of this Schedule 7(c) are
incorporated herein by reference.
GENERAL MANUFACTURED HOUSING, INC.
Stock Purchase Agreement
among Xxxxx Xxxxx Xxxxxx, as Trustee, et al.,
General Manufactured Housing, Inc.
and GMH Acquisition Corp.
Schedule 7(d) "Consents"
Permits, consents, approvals, or authorizations of, or designations,
declarations or filings with, governmental authorities or other persons or
entities by Sellers or any Acquired Entity required in connection with the
execution or delivery by any of the Sellers or the consummation of the
Transaction:
The following licenses may not be transferable, but, to Sellers'
knowledge, new licenses should be obtainable by Buyer without undue
burden or expense. However, if such licenses are not maintained,
sales of the Company's products might be interrupted in the affected
jurisdictions. Xxxxx Housing, L.L.C. is in the process of applying
for similar licenses and bonding where required.
LICENSES:
Alabama Manufacturer License No. 4521 (expires 12/31/95) and copy of
renewal application (no date)
Florida DMV License as Manufacturer of Mobile Homes, #MH10075,
effective 10/1/94 for 94-95 license year, and Renewal Certificate
through 9/30/95 of Bankers Insurance Company Bond No. 33-35881
(originally dated 10/1/93)
Florida DMV License as Manufacturer of Recreational Vehicles,
#MR10150, effective 10/1/94 for 94-95 license year, and Renewal
Certificate through 9/30/95 of Bankers Insurance Company Bond No.
33-35880 (originally dated 10/1/93)
Georgia Manufactured Homes Manufacturer/Dealer License No. 20913
(expires 12/31/95)
Kentucky Certificate of Acceptability No. 95-MM-10-59 (license to
manufacture, import or sell mobile homes to Kentucky Dealers; expires
12/31/95)
Louisiana Manufacturer License No. 95-M00086 (expires 12/31/95)
Mississippi Privilege License for Manufacturer No. 95-M0157 (expires
6/30/96)
North Carolina Manufacturer's License No. 001113 (expires 6/30/96),
Continuation Certificate through 6/30/96 of Selective Insurance Xxxx
Xx. X00000, and copies of various related 1994 documents
License Bonds, Manufacturer's Representative, to South Carolina
Manufactured Housing Board, through Bankers Insurance Company (6/30/95
- 6/30/96): #33-19363, Xxxxxxx X'Xxxxxx; #33-19364, Xxx Xxxxxx Xxxx;
#33-35895, Xxxxxxx Xxxxx; and #33-19365, Xxxxx X. Xxxxxxx
South Carolina Manufacturer License No. 6255 (expires 6/30/96) and
License Bond #33-19361 to South Carolina Manufactured Housing Board
through Bankers Insurance Company (6/30/95 - 6/30/96)
Tennessee Factory-Manufactured Structures License No. 4500 (expires
12/31/95), Continuation Certificate through 12/31/95 of USF&G Bond No.
02-0130-11677-93-6
Virginia Manufacturer License #M-1995-00108 (expires 4/6/96)
REPURCHASE AGREEMENTS:
Green Tree Financial Corporation Stock Floorplan Financing Agreement
dated 2/24/95 and Pre-Sold Floorplan Financing Agreement dated 1/25/94
Deere Credit, Inc. (a/k/a Deere Credit Services, Inc., a/k/a Xxxx
Deere Credit) Manufacturer's Financing Agreement and Addendum dated
7/19/94
NationsCredit Commercial Corporation Inventory Repurchase Agreement
dated 7/21/93 and corporate Guaranty by General up to $117,537 on
specific invoices, dated 4/3/95
Whirlpool Financial Corporation Repurchase Agreement dated 4/17/90
In addition, the Company has entered into purchase agreements with
numerous local and regional financial institutions (generally
providing floorplan/inventory financing for a single dealer) which in
the aggregate represent not more than 20% of the Company's total
repurchase obligation (in dollars) and which may or may not require
the consent of such financial institution in connection with this
transaction.
DEBT OBLIGATIONS:
1) Corporate Guaranty of Deed to Secure Debt made by Waycross and
Xxxx County Development Authority to Xxxxxxxxx Bank dated 12/30/93
encumbering Plants 2 and 3 to secure Promissory Note in the original
principal amount of $613,727.63 in connection with sale and lease-back
transaction
2) Promissory Note to NationsBank of Georgia, N.A., in the original
principal amount of $600,000 dated 8/24/94 (secured by lien on
aircraft, engines, propellers, accessories and parts)
REAL PROPERTY LEASES:
1) Contract of Lease and Rent dated 12/30/93 between GMH and the
Waycross and Xxxx County Development Authority for real property
referred to as Plants 2 and 3
2) Lease Agreement dated 5/26/95 between Xxx-Bar Corporation and
Hi-Tech Properties, Inc. (the primary lease underlying the sublease to
GMH)
3) Lease Agreement with Option to Purchase dated 7/10/95 between X.
Xxxx & X. Xxxxx (dba Xxxxx Warehouse Co.) and Xxxxx Housing, L.L.C.
for Plant 5 in Lamar, South Carolina
4) Ground Lease dated 9/19/94 between Xxxx County and the City of
Waycross as Lessors and GMH for airplane hangar
OTHER:
"HUD Package" evidencing GMH's qualification as HUD-approved
manufacturer
GENERAL MANUFACTURED HOUSING, INC.
Stock Purchase Agreement
among Xxxxx Xxxxx Xxxxxx, as Trustee, et al.,
General Manufacutred Housing, Inc.
and GMH Acquisition Corp.
Schedule 7(e) "Title to and Assets"
I. Description of all property and assets, real and personal, tangible
and intangible (having a book value in excess of $20,000) owned by
each of the Acquired Entities:
Beechcraft King Air 200 airplane
Attached hereto as "Addendum 1 to Schedule 7(e)" and incorporated
herein by reference is the depreciation schedule of General
Manufactured Housing, Inc., as of June 30, 1995, reflecting
tangible personal and real property of GMH.
Attached hereto as "Addendum 2 to Schedule 7(e)" and incorporated
herein by reference is a list of all motor vehicles, including
serial numbers, as of 10/10/95.
Attached hereto as "Addendum 3 to Schedule 7(e)" and incorporated
herein by reference is a list of all bank accounts and
certificates as of 10/10/95.
II. Exceptions to title of assets listed in item I of this Schedule 7(e):
1) Deed to Secure Debt to BankSouth, Waycross dated 5/25/88
encumbering Plant 1, securing two Promissory Notes for $400,000
and $186,793, respectively (personally guaranteed by Xxx Xxxxx)
2) Deed to Secure Debt (second mortgage) encumbering Plant 1
property, securing Note to The Xxxxxxxxx Bank dated 3/2/95 in the
maximum amount of $209,000, for payment of a declining Letter of
Credit in favor of Xxx-Bar Corporation in the maximum amount of
$209,000 (declining at the rate of $9,000 per month) as Security
Deposit under Lease between Hi-Tech and Xxx-Bar for Plant 4
3) Deed to Secure Debt and UCC-1 to Xxxxxxxxx Bank dated
12/30/93 from Waycross and Xxxx County Development Authority
encumbering Plants 2 and 3 and certain personal property located
therein to secure Promissory Note in the original principal
amount of $613,727.63 in connection with sale and lease-back
transaction
4) Security Agreement dated 8/24/94 and UCC-1 Financing Statement
filed 9/26/94 in favor of NationsBank of Georgia, N.A., encumbering
aircraft, engines, propellers, accessories and parts, to secure
Promissory Note in the original principal amount of $600,000
5) UCC-1 Financing Statements in favor of Fabwel, Inc., encumbering
leased equipment consisting of Guttermaker Extruder and Watertite
Gutter Machines
6) UCC-1 Financing Statements in favor of AMS of Indiana, Inc.
encumbering leased equipment consisting of heat duct machines
7) UCC-1 Financing Statements in favor of Toyota Motor Credit Corp.
encumbering leased equipment including 6 Toyota Forklifts
III. Condition and repair of property:
See "Addendum 4 to Schedule 7(e)" (letter from Xxxx Xxxxxx, Esq.,
relating to condition of manufacturing plants) attached hereto and
incorporated herein by reference.
IV. Other material assets used substantially on an exclusive basis in
connection with the business of the Acquired Entities which are not
owned by the Acquired Entities:
Residential property located at 000 Xxxxx Xxxx Xxxx, Xxxxxxxx,
XX, leased pursuant to Rental Agreement dated August 1, 1995, by
and between Xxxxx and Xxxx Xxxxx (Owners) and Xxxxxx Xxxxxx
(Tenant), for the purpose of providing temporary living quarters
for employees of the Acquired Entities while in Waycross on
business
See also descriptions of leased equipment on Schedule 7(f)
incorporated herein by reference.
MANUFACTURED HOUSING, INC.
Stock Purchase Agreement
among Xxxxx Xxxxx Xxxxxx, as Trustee, et al.,
General Manufactured Housing, Inc.
and GMH Acquisition Corp.
Schedule 7(f) "Leases and Licensing Agreements"
I. List and brief description of all leases of real property and all
franchises, licensing agreements and leases of (or other arrangements
for the use of) any item of personal property:
REAL PROPERTY LEASES:
1) Lease and Assignment of Lease dated 12/30/93 in connection with
sale and leaseback to/from Waycross and Xxxx County Development
Authority for real property referred to as Plants 2 and 3
2) Sublease Agreement dated 7/1/95 between HI-TECH PROPERTIES, INC.
as sublessor and GMH for real property referred to as Plant 4, and
Lease Agreement dated 5/26/95 between Xxx-Bar Corporation and Hi-Tech
Properties, Inc. (the primary lease underlying the sublease to GMH)
3) Lease Agreement with Option to Purchase dated 7/10/95 between X.
Xxxx & X. Xxxxx, each individually and dba Xxxxx Warehouse Co., and
Xxxxx Housing, L.L.C. for Plant 5 in Lamar, South Carolina
4) Lease (documentation currently in process) of vacant land
adjacent to Plant 4, to be used for storage of finished goods
5) Ground Lease dated 9/19/94 between Xxxx County and the City of
Waycross as Lessors and GMH for airplane hangar
6) Residential property located at 000 Xxxxx Xxxx Xxxx, Xxxxxxxx,
XX, leased pursuant to Rental Agreement dated August 1, 1995, by and
between Xxxxx and Xxxx Xxxxx (Owners) and Xxxxxx Xxxxxx (Tenant), for
the purpose of providing temporary living quarters for employees of
the Acquired Entities while in Waycross on business
PERSONAL PROPERTY LEASES:
1) Equipment Lease Agreements with Handling Systems Engineering,
Inc. (all assigned simultaneously with execution to Toyota Motor
Credit Corporation), all for Toyota Forklifts, as follows:
6/2/95 . . . . . . . . . . . S/N 76092
8/18/93. . . . . . . . . . . S/N 75336
. . . . . . . . . . . . . . S/N 75390
. . . . . . . . . . . . . . SIN 75417
. . . . . . . . . . . . . . S/N 75431
12/16/92 . . . . . . . . . . S/N 75016
12/8/93. . . . . . . . . . . S/N 75536
. . . . . . . . . . . . . . S/N 75538
Additional Toyota Forklifts are being leased from Handling Systems
Engineering, Inc. by Xxxxx Housing, L.L.C.; documentation is being
processed by the Handling Systems Engineering, Inc.
2) Four (4) each Guttermaker Extruders and Watertite Gutter Machines
leased pursuant to [verbal arrangement] with Fabwel, Inc. in
consideration of $1 annual rent and purchase of raw materials from
Fabwel, Inc.
3) Four (4) Heat Duct Machines leased pursuant to [verbal
arrangement] with AMS of Indiana, Inc., in consideration of $1 annual
rent and purchase of raw materials from AMS of Indiana, Inc.
4) "Warranty Track" software license/lease (unwritten) from GPR
Software Systems
5) License for CAD software system [documentation cannot be located]
II. Consents required pursuant to the terms of the above as a result of
the Transaction:
REAL PROPERTY LEASES:
1) Lease and Assignment of Lease dated 12/30/93 in connection with
sale and leaseback to/from Waycross and Xxxx County Development
Authority for real property referred to as Plants 2 and 3
2) Lease Agreement dated 5/26/95 between Xxx-Bar Corporation and Hi-
Tech Properties, Inc. (the primary lease underlying the sublease
between GMH and Hi-Tech Properties, Inc. for Plant 4)
3) Lease Agreement with Option to Purchase dated 7/10/95 between X.
Xxxx & X. Xxxxx (dba Xxxxx Warehouse Co.) and Xxxxx Housing, L.L.C.
for Plant 5 in Lamar, South Carolina
4) Ground Lease dated 9/19/94 between Xxxx County and the City of
Waycross as Lessors and GMH for airplane hangar
5) Rental Agreement dated August 1, 1995, by and between Xxxxx and
Xxxx Xxxxx (Owners) and Xxxxxx Xxxxxx (Tenant), for residential
property located at 000 Xxxxx Xxxx Xxxx, Xxxxxxxx, XX, for the purpose
of providing temporary living quarters for employees of the Acquired
Entities while in Waycross on business
GENERAL MANUFACTURED HOUSING, INC.
Stock Purchase Agreement
among Xxxxx Xxxxx Xxxxxx, as Trustee, et al.,
General Manufactured Housing, Inc.
and GMH Acquisition Corp.
Schedule 7(g) "Agreements, Etc."
I. Indentures, mortgages, agreements, contracts, arrangements,
commitments, instruments, understandings or obligations of the
Acquired Entities to be performed in whole or in part on or after the
date of Closing, including product warranties, greater than $25,000
(excluding purchase orders for goods entered into by any of the
Acquired Entities in the ordinary course of business which
individually do not exceed $75,000):
SECURED DEBT OBLIGATIONS:
1) Deed to Secure Debt to BankSouth, Waycross dated 5/25/88
encumbering Plant 1, securing two Promissory Notes dated 5/25/88 for
$400,000 and $186,793, respectively (personally guaranteed by Xxx
Xxxxx)
2) Promissory Note in the original principal amount of $600,000
dated 8/24/94 in favor of NationsBank of Georgia, N.A., encumbering
aircraft, engines, propellers, accessories and parts, to secure
3) Deed to Secure Debt (second mortgage) dated 3/2/95, encumbering
Plant 1 real property, to The Xxxxxxxxx Bank, securing Note for
payment of Letter of Credit in favor of Xxx-Bar Corporation in the
maximum amount of $209,000 as Security Deposit under Lease between Hi-
Tech and xxx-Bar for Plant 4
LETTERS OF CREDIT:
1) Letter of Credit No. PB020 dated 5/22/95 issued by The Xxxxxxxxx
Bank in favor of Xxx-Bar Corporation in the maximum amount of $209,000
(said balance declining at the rate of $9,000 per month) as Security
Deposit under Lease between Hi-Tech and Xxx-Bar for Plant 4
2) Irrevocable Letter of Credit No. PB013 dated 5/18/93 issued by
The Xxxxxxxxx Bank in favor of Bankers Insurance Company for $50,000,
securing South Carolina Manufacturer's Representative License Bonds
REPURCHASE AGREEMENTS:
1) Bombardier Capital Inc. Floorplan Repurchase Agreement dated
8/7/92
2) Ford Motor Credit Manufacturer Agreement and Addendum dated
11/19/90
3) Green Tree Financial Corporation Stock Floorplan Financing
Agreement dated 2/24/95 and Pre-Sold Floorplan Financing Agreement
dated 1/25/94
4) Deere Credit, Inc. (a/k/a Deere Credit Services, Inc., a/k/a Xxxx
Deere Credit) Manufacturer's Financing Agreement and Addendum dated
7/19/94
5) ITT Commercial Finance Corp. Floorplan Repurchase Agreement dated
3/4/88
6) NationsCredit Commercial Corporation Inventory Repurchase
Agreement dated 7/21/93 and corporate Guaranty by General up to
$117,537 on specific invoices, dated 4/3/95
7) Whirlpool Financial Corporation Repurchase Agreement dated
4/17/90
8) Security Pacific Housing Services, Inc. Retail Credit Line
arrangements dated 10/9/89, including Manufacturer's Invoicing
Certification, Manufacturer's Indemnification Agreement, and personal
guaranty (which expired by its own terms on or about 10/9/94)
9) SouthTrust Bank Repurchase Agreement dated 11/14/91
In addition, the Company has entered into repurchase agreements with
numerous local and regional financial institutions (generally
providing floorplan/inventory financing for a single dealer) which in
the aggregate represent not more than 20% of the Company's total
repurchase obligation (in dollars).
GUARANTEES AND INDEMNIFICATIONS:
1) Indemnity Agreement in favor of Lessor as to deficiencies caused
by default of Lessee and Indemnification holding Lessor harmless
against claims for losses, damage or injury on the leased premises,
pursuant to Articles IX and XII, respectively, of Contract of Lease
and Rent with Waycross and Xxxx County Development Authority as Lessor
2) Corporate Guaranty by General to NationsCredit up to $117,537 on
specific invoices, dated 4/3/95 in connection with Commercial
Corporation Inventory Repurchase Agreement dated 7/21/93
3) Manufacturer's Indemnification Agreement and personal guaranty
dated 10/9/89 (which expired by its own terms on or about 10/9/94) to
Security Pacific Housing Services, Inc. in connection with retail
credit line arrangements
4) Corporate Guaranty by GMH of Deed to Secure Debt made by Waycross
and Xxxx County Development Authority to Xxxxxxxxx Bank dated 12/30/93
encumbering Plants 2 and 3 to secure Promissory Note in the original
principal amount of $613,727.63 in connection with sale and lease-back
transaction;
5) General indemnifications in favor of Lessor in Articles IX and
XII of that certain Lease and Assignment of Lease between GMH as
Lessee and Waycross and Xxxx County Development Authority as Lessor
dated 12/30/93 in connection with sale and lease-back of real property
referred to as Plants 2 and 3
6) Environmental indemnity and hold harmless provision in favor of
Lessor in Section 13 of that certain Lease Agreement dated 5/26/95, as
amended July 1, 1995, between Xxx-Bar Corporation as Lessor and Hi-
Tech Properties, Inc. as Lessee (the primary lease underlying that
certain Sublease Agreement dated 7/1/95 between HI-TECH PROPERTIES,
INC. as sublessor and GMH as sublessee for real property referred to
as Plant 4)
7) Environmental indemnity and hold harmless provision in favor of
Lessor in Section 22 of that certain Lease Agreement with Option to
Purchase dated 7/10/95 between X. Xxxx & X. Xxxxx, each individually
and dba Xxxxx Warehouse Co., and Xxxxx Housing, L.L.C. for Plant 5 in
Lamar, South Carolina
8) Personal guaranty by Xxx Xxxxx of GMH Deed to Secure Debt to
BankSouth, Waycross dated 5/25/88 encumbering Plant 1, securing two
Promissory Notes dated 5/25/88 for $400,000 and $186,793, respectively
9) Indemnity Agreement from GMH to Xxx-Bar Corporation as Lessor
under that certain Lease Agreement dated 5/26/95 as amended July 1,
1995 pursuant to Section paragraph F. of Section Two of Amendment to
Lease Agreement dated July 1, 1995
WARRANTY OBLIGATIONS:
1) "Gold Card Service" customer service warranty program, which
includes (i) HUD mandated 1-year warranty and (ii) additional 9-year
warranty (insured)
2) Product warranty obligations pursuant to warranty information
contained in Setup Manual, Homeowners' Manual, and advertising
literature distributed with finished homes
3) GMH may have additional liability under warranty claims not yet
filed by homeowners resulting from defective composite siding
manufactured by Cladwood (See GMH vs. Cladwood on Schedule 7(k));
Negotiations with Cladwood to recover damages incurred by GMH are
currently in progress
4) Xxxxxxxx vs. Southern Lifestyle Homes, Inc. and General
Manufactured Housing, Inc.: breach of contract claim filed June 1995
in South Carolina
5) Threatened warranty/product liability claim by Xxxxxx Xxxxx,
resident of South Carolina
6) Xxxx X. Xxxx vs. GMH and others: warranty claim suit filed in the
Court of Common Pleas for the Second Judicial Circuit, Aiken County,
South Carolina, Civil Action No. 95-CP-02-732; Complaint served on GMH
10/9/95
REAL PROPERTY LEASES:
1) Lease and Assignment of Lease dated 12/30/93 in connection with
sale and lease-back to/from Waycross and Xxxx County Development
Authority for real property referred to as Plants 2 and 3, including
also general indemnifications in favor of Lessor in Articles IX and
XII thereof
2) Sublease Agreement dated 7/1/95 between HI-TECH PROPERTIES, INC.
as sublessor and GMH for real property referred to as Plant 4; Lease
Agreement dated 5/26/95 between Xxx-Bar Corporation and Hi-Tech
Properties, Inc. (the primary lease underlying the sublease to GMH)
including also an environmental indemnity and hold harmless provision
in favor of Lessor in Section 13 of such primary lease
3) Lease Agreement with Option to Purchase dated 7/10/95 between X.
Xxxx & X. Xxxxx (dba Xxxxx Warehouse Co.) and Xxxxx Housing, L.L.C.
for Plant 5 in Lamar, South Carolina, including also an environmental
indemnity and hold harmless provision in favor of Lessor in Section 22
thereof
4) Lease (documentation currently in process) of vacant land
adjacent to Plant 4, to be used for storage of finished goods
5) Ground Lease dated 9/19/94 between Xxxx County and the City of
Waycross as Lessors and GMH for airplane hangar
PERSONAL PROPERTY LEASES:
1) Equipment Lease Agreements with Handling Systems Engineering,
Inc. (all assigned simultaneously with execution by Handling Systems
Engineering, Inc. to Toyota Motor Credit Corporation), all for Toyota
Forklifts, as follows:
6/2/95 . . . . . . . . . . . S/N 76092
8/18/93. . . . . . . . . . . S/N 75336
. . . . . . . . . . . . . . S/N 75390
. . . . . . . . . . . . . . S/N 75417
. . . . . . . . . . . . . . S/N 75431
12/16/92 . . . . . . . . . . S/N 75016
12/8/93. . . . . . . . . . . S/N 75536
. . . . . . . . . . . . . . S/N 75538
Additional Toyota Forklifts are being leased from Handling Systems
Engineering, Inc. by Xxxxx Housing, L.L.C.; documentation is being
processed by the Handling Systems Engineering, Inc.
2) Four (4) each Guttermaker Extruders and Watertite Gutter Machines
leased pursuant to [verbal understanding/ arrangement] with Fabwel,
Inc. in consideration of $1 annual rent and purchase of raw materials
from Fabwel, Inc.
3) Four (4) Heat Duct Machines leased pursuant to arrangements with
AMS of Indiana, Inc., dated 1995, in consideration of $1 annual rent
and purchase of raw materials from AMS of Indiana, Inc.
4) "Warranty Track" software license/lease (unwritten) from GPR
Software Systems
II. Agreements, contracts, understandings, arrangements and obligations
with any supplier paid more than $250,000 by Acquired Entities in any
of the last three fiscal years
GE Appliances National Contract Sales agreement for appliances
[GE is the only supplier paid more than $500,000. Because of the
reduced threshold ($250,000), this item will require
supplementation.]
or with any customer which has paid more than $500,000 to Acquired
Entities in any of the last three fiscal years
CUSTOMERS OVER $500,000 THRESHOLD SINCE 1/1/95:
Oakwood Mobile Homes, Inc., Volume Incentive Program pursuant to
letter dated 2/9/95 from GMH to Xxxx Xxxxxxx, Executive Vice
President of Oakwood Mobile Homes, Inc. [However, see
Schedule 7(w) concerning Oakwood's suspension of purchases.]
Additional Dealers under Volume Incentive Program:
Calvary Mobile Homes, Greenville, NC
Edisto Housing Center, Inc., Orangeburg, SC
Southern Lifestyle Homes, Florence, SC
[Information as to customers over $500,000 threshold for calendar
years 1993 and 1994 to be provided supplementally.]
III. Employee bonus, incentive, compensation, profit sharing, retirement,
pension, group insurance, death benefit or other fringe benefit plans,
deferred compensation and post-termination obligations or trust
agreements in effect or under which amounts remain unpaid as of, or
are to become effective after, the Closing of the Transaction
1) Health Insurance Contract: BCBS Master Contract #23041-001,004
eff. 5/1/93
2) Group Term Life Master Policy: Transamerica Life #BTL199 eff.
8/1/91
3) Group Travel Accident Insurance Policy: ITT Hartford #ETB-102015
(4/27/94 - 4/27/95)
4) GMH Premium Only Cafeteria Plan (A&R 1/1/95)
IV. Collective bargaining agreements with any labor union or other
representative of employees
None
and all employment and consulting contracts not terminable at will without
penalty;
None
V. Each instrument defining the terms on which debts of or guarantees by
Acquired Entities in excess of $25,000 have been or may be issued;
SECURED DEBT OBLIGATIONS:
1) Deed to Secure Debt to BankSouth, Waycross dated 5/25/88
encumbering Plant 1, securing two Promissory Notes for $400,000 and
$186,793, respectively (personally guaranteed by Xxx Xxxxx)
2) Corporate Guaranty of Deed to Secure Debt to Xxxxxxxxx Bank dated
12/30/93 from Waycross and Xxxx County Development Authority
encumbering Plants 2 and 3 to secure Promissory Note in the original
principal amount of $613,727.63, in connection with sale and lease-
back transaction
3) Security Agreement and UCC-1 Financing Statement dated 8/24/94 in
favor of NationsBank of Georgia, N.A., encumbering aircraft, engines,
propellers, accessories and parts, to secure Promissory Note in the
original principal amount of $600,000
4) Deed to Secure Debt (second mortgage) dated 3/2/95, encumbering
Plant 1 real property, to The Xxxxxxxxx Bank, securing Note for
payment of Letter of Credit in favor of Xxx-Bar Corporation in the
maximum amount of $209,000 as Security Deposit under Lease between Hi-
Tech and xxx-Bar for Plant 4
LETTERS OF CREDIT:
1) Declining Letter of Credit in favor of Xxx-Bar Corporation in the
maximum amount of $209,000 (declining at the rate of $9,000 per month)
as Security Deposit under Lease between Hi-Tech and Xxx-Bar for Plant
4
2) Irrevocable Letter of Credit in favor of Bankers Insurance
Company for $50,000, drawn on The Xxxxxxxxx Bank, dated 5/18/93
(expired 5/18/94), securing South Carolina Manufacturer's
Representative License Bonds
REPURCHASE AGREEMENTS (repurchase obligations survive termination of
Agreement in each case):
1) Bombardier Capital Inc. Floorplan Repurchase Agreement dated
8/7/92
2) Ford Motor Credit Manufacturer Agreement and Addendum dated
11/19/90 (not signed by Ford Motor Credit)
3) Green Tree Financial Corporation Stock Floorplan Financing
Agreement dated 2/24/95 and Pre-Sold Floorplan Financing Agreement
dated 1/25/94
4) Deere Credit, Inc. (a/k/a Deere Credit Services, Inc., a/k/a Xxxx
Deere Credit) Manufacturer's Financing Agreement and Addendum dated
7/19/94
5) ITT Commercial Finance Corp. Floorplan Repurchase Agreement dated
3/4/88
6) NationsCredit Commercial Corporation Inventory Repurchase
Agreement dated 7/21/93 and corporate Guaranty by General up to
$117,537 on specific invoices, dated 4/3/95
7) Whirlpool Financial Corporation Repurchase Agreement dated
4/17/90
8) Security Pacific Housing Services, Inc. Retail Credit Line
arrangements dated 10/9/89, including Manufacturer's Invoicing
Certification, Manufacturer's Indemnification Agreement, and personal
guaranty (which expired by its own terms on or about 10/9/94)
9) SouthTrust Bank Repurchase Agreement dated 11/14/91
In addition, the Company has entered into repurchase agreements with
numerous local and regional financial institutions (generally
providing floorplan/inventory financing for a single dealer) which in
the aggregate represent not more than 20% of the Company's total
repurchase obligation (in dollars).
WARRANTY OBLIGATIONS:
1) "Gold Card Service" customer service warranty program, which
includes (i) HUD mandated 1-year warranty and (ii) additional 9-year
warranty (insured)
2) Product warranty obligations pursuant to warranty information
contained in Setup Manual, Homeowners' Manual, and advertising
literature distributed with finished homes
3) GMH may have additional liability under warranty claims not yet
filed by homeowners resulting from defective composite siding
manufactured by Cladwood (See GMH vs. Cladwood on Schedule 7(k));
Negotiations with Cladwood to recover damages incurred by GMH are
currently in progress
4) Xxxxxxxx vs. Southern Lifestyle Homes, Inc. and General
Manufactured Housing, Inc.: breach of contract claim filed June 1995
in South Carolina
5) Threatened warranty/product liability claim by Xxxxxx Xxxxx,
resident of South Carolina
6) Xxxx X. Xxxx vs. GMH and others: warranty claim suit filed in
South Carolina; Complaint served on GMH 10/9/95
VI. Any agreement limiting the freedom of any of the Sellers or the
Acquired Entities to compete in any line of business or with any
person,
None
or limiting the freedom of any other person to compete with any of the
Sellers or any of the Acquired Entities
None
VII. Other agreements, contracts, arrangements, commitments, instruments,
understandings, or obligations, oral or written, to which any of the
Acquired Entities is a party and in which any Seller or any Affiliate
of any of the Acquired Entities has any interest, direct or indirect,
which involve payments of more than $25,000 to or from any of the
Acquired Entities
Sublease Agreement dated 7/1/95 between HI-TECH PROPERTIES, INC. as
sublessor and GMH as sublessee for real property referred to as Plant
4
VIII. Amounts and terms of all loans or advances by Acquired Entities to the
Sellers or their Affiliates or the employees and Affiliates of any of
the Acquired Entities;
After 12/31/94, advances for the first three calendar quarters of 1995
were made to each Seller by GMH in the total amount of $300,000 each,
against 1995 income taxes. It is anticipated that additional advances
of $100,000 each will be made for each calendar quarter thereafter
until the closing date. These amounts are reflected on the books as
loans but will be recharacterized as distributions at year-end.
IX. Summary of the anticipated terms and conditions of any item currently
being negotiated by or on behalf of any of the Acquired Entities which
would upon completion be included within the scope of paragraphs (i)
through (viii) of Section 7(g) of the Agreement.
Lease (documentation currently in process) of vacant land adjacent to
Plant 4, to be used for storage of finished goods
Xxxxx Housing, L.L.C. (Plant 5) is currently in development (expected
to be operational prior to 10/31/95) and therefore may, in connection
with such Plant, become a party to or subject to additional
agreements, arrangements, instruments, or obligations which would upon
completion be included within the scope of paragraphs (i) through
(viii) of Section 7(g) of the Agreement.
X. (A) Agreements in effect which permit any of the Acquired Entities to
incur debt for borrowed money to any bank, insurance company or other
financial institution;
None
(B) rights or obligations of Acquired Entities under any indenture,
mortgage, agreement, contract, arrangement, commitment, instrument,
understanding or obligation listed on this Schedule 7(g) which will be
materially adversely affected by the Transaction;
None
(C) material defaults or claimed, purported or alleged defaults or
state of facts which with notice or lapse of time or both would
constitute material defaults on the part of any party in the
performance of any obligation to be performed or paid by any party
under any indenture, mortgage, agreement, contract, arrangement,
commitment, instrument, understanding or obligation listed on this
Schedule 7(g).
None
GENERAL MANUFACTURED HOUSING, INC.
Stock Purchase Agreement
among Xxxxx Xxxxx Xxxxxx, as Trustee, et al.,
General Manufactured Housing, Inc.
and GMH Acquisition Corp.
Schedule 7(h) "Pension Plans"
List of all Plans (as defined in Section 7(h)) maintained for the benefit
of any current or former employee, officer or director of any of the
Acquired Entities or any ERISA Affiliate (as defined in Section 7(h)):
Health Insurance Contract: BCBS Master Contract #23041-001,004 eff.
5/1/93
Group Term Life Master Policy: Transamerica Life #BTL1199 eff. 8/1/91
Group Travel Accident Insurance Policy: ITT Hartford #ETB-102015
(4/27/94 - 4/27/95)
GMH Premium Only Cafeteria Plan (A&R 1/1/95)
AFLAC Cafeteria Plan (terminated 12/31/94)
The Acquired Entities do not and have not ever maintained any plan
qualified or intended to be qualified under 401(a) of the Code.
GENERAL MANUFACTURED HOUSING, INC.
Stock Purchase Agreement
among Xxxxx Xxxxx Xxxxxx, as Trustee, et al.,
General Manufactured Housing, Inc.
and GMH Acquisition Corp.
Schedule 7(j) "Financial Statements"
I. Amounts due or accrued to any Seller from GMH as of the Audit Date and
additional amounts of such accruals or amounts subsequent to the Audit
Date:
After 12/31/94, advances for the first three calendar quarters of 1995
were made to each Seller by GMH in the total amount of $300,000 each,
against 1995 income taxes. It is anticipated that additional advances
of $100,000 each will be made for each calendar quarter thereafter
until the closing date. These amounts are reflected on the books as
loans but will be recharacterized as distributions at year-end.
GENERAL MANUFACTURED HOUSING, INC.
Stock Purchase Agreement
among Xxxxx Xxxxx Xxxxxx, as Trustee, et al.,
General Manufactured Housing, Inc.
and GMH Acquisition Corp.
Schedule 7(k) "Litigation, Etc."
Suits, actions, litigation, administrative hearings, arbitrations, labor
controversies or negotiations, other proceedings or governmental inquiries
or investigations, judgments, consent decrees, injunctions, violations of
laws, ordinances, requirements, orders and regulations applicable to the
business of Acquired Entities, and notices received of claimed default with
respect to any of the foregoing:
"Outstanding State Cases" as of September 14, 1995, consisting of consumer
complaints made through state agencies, considered to be in the ordinary
course of business of the Acquired Entities, including:
SERIAL
STATE AGENCY NO. CUSTOMER DEALER
AL Manufactured Housing Comm. 3725 Schimmelfennig Robertsdale
AL Manufactured Housing Comm. 0000 XxXxxxxxx Xxxxxx
XX DMV 0000 Xxxxxx Xxxxx
XX DMV 0000 Xxxxxx Xxxxxxxxx
XX DMV 0000 Xxxxxxx Xxxxxxxxx
XX DMV 0000 Xxxxxx Xxx Xxxx
XX Safety Fire Commissioner 0000 Xxxxxxx Xxxxxxxxxxxxx
XX Safety Fire Commissioner 0000 Xxxxx Xxxxxxxx
XX Safety Fire Commissioner 0000 Xxxxxx Xxxx-XxxxxxxXX
XX Safety Fire Commissioner 0000 Xxxxx Xxxxxxxx
XX Safety Fire Commissioner 6294 Lot Inspect OliverEnterprises
LA 3349 Xxxxxxxxx Xxxxxx Springs
MS State Fire Marshal 0000 Xxxxxxx X'Xxxxxxxxx
XX Dept of Insurance 1421 Sports
NC Dept of Insurance 0000 Xxxxxxxx
XX Dept of Insurance 5025 Xxxxxxxx
NC Dept of Insurance 0000 Xxxxxxx Xxxx
XX Manufactured Housing Bd 0000 Xxxxxx Xxxx Xxxxxxxx
XX Manufactured Housing Bd 0566 Xxxxxxxxx Xxxxxxxx
The following EEOC Notices of Discrimination have been issued by the
Savannah Local Office of the Equal Employment Opportunity Commission:
1) Xxxxxxxx: Sex Discrimination Charge filed 9/24/93
2) Xxxxxxx: Sex Discrimination Charge filed 6/10/94
3) Woodie: Sex Discrimination Charge filed 9/16/94
4) Xxxxxx: Race and Retaliation and Disability Discrimination
Charge filed 3/22/95; Dismissal and Notice of Right to Xxx issued
8/4/95 by EEOC (Claimant has 90 days to bring charges in U.S.
District Court)
5) Xxxxx: Sex Discrimination Charge filed 6/20/95
Other Pending and Threatened Causes of Action:
1) Xxxxxxxx vs. Southern Lifestyle Homes, Inc. and General
Manufactured Housing, Inc.: breach of contract claim filed June
1995 in South Carolina
2) GMH vs. Xxxxx Xxxxxxx; relating to an alleged liability of
approximately $10,000 for towing services; Xxxxxxx has defaulted
in this matter
3) GMH vs. Cladwood Division of Smurfitt Newsprint Corporation
("Cladwood"), Product liability claim to recover amounts paid out
by GMH to settle warranty claims by homeowners resulting from
defective composite siding manufactured by Cladwood
4) Threatened warranty claim/product liability action by customer
Xxxxxx Xxxxx (South Carolina); settlement negotiations currently
in progress
5) Xxxxx Xxxxxx vs. GMH: Employee of Xxxxxx Plumbing Co., Inc., a
Georgia corporation and subcontractor of Solar Shield, Inc., a
South Carolina corporation and contractor engaged by GMH, has
filed a complaint in connection with a personal injury resulting
from a July 1994 accident which occurred at a GMH plant
6) Xxxx X. Xxxx vs. GMH and others: warranty claim suit filed in
South Carolina; Complaint served on GMH 10/9/95
GENERAL MANUFACTURED HOUSING, INC.
Stock Purchase Agreement
among Xxxxx Xxxxx Xxxxxx, as Trustee, et al.,
General Manufactured Housing, Inc.
and GMH Acquisition Corp.
Schedule 7(I) "Licenses and Permits"
1. Complete and accurate list and brief description of all governmental
licenses and permits:
Alabama Manufacturer License No. 4521 (expires 12/31/95) and copy of
renewal application (no date)
Florida DMV License as Manufacturer of Mobile Homes, #MH10075,
effective 10/1/94 for 94-95 license year, and Renewal Certificate
through 9/30/95 of Bankers Insurance Company Bond No. 33-35881
(originally dated 10/1/93)
Florida DMV License as Manufacturer of Recreational Vehicles,
#MR10150, effective 10/1/94 for 94-95 license year, and Renewal
Certificate through 9/30/95 of Bankers Insurance Company Bond No.
33-35880 (originally dated 10/1/93)
Georgia Manufactured Homes Manufacturer/Dealer License No. 20913
(expires 12/31/95)
Kentucky Certificate of Acceptability No. 95-MM-10-59 (license to
manufacture, import or sell mobile homes to Kentucky Dealers; expires
12/31/95)
Louisiana Manufacturer License No. 95-M00086 (expires 12/31/95)
Mississippi Privilege License for Manufacturer No. 95-M0157 (expires
6/30/96)
North Carolina Manufacturer's License No. 001113 (expires 6/30/96),
Continuation Certificate through 6/30/96 of Selective Insurance Xxxx
Xx. X00000, and copies of various related 1994 documents
License Bonds, Manufacturer's Representative, to South Carolina
Manufactured Housing Board, through Bankers Insurance Company (6/30/95
- 6/30/96): #33-19363, Xxxxxxx X'Xxxxxx; #33-19364, Xxx Xxxxxx Xxxx;
#33-35895, Xxxxxxx Xxxxx; and #33-19365, Xxxxx X. Xxxxxxx
South Carolina Manufacturer License No. 6255 (expires 6/30/96) and
License Bond #33-19361 to South Carolina Manufactured Housing Board
through Bankers Insurance Company (6/30/95 - 6/30/96)
Tennessee Factory-Manufactured Structures License No. 4500 (expires
12/31/95), Continuation Certificate through 12/31/95 of USF&G Bond No.
02-0130-11677-93-6
Virginia Manufacturer License #M-1995-00108 (expires 4/6/96)
Xxxxx Housing, L.L.C. is in the process of applying for similar
licenses and bonding where required.
"HUD Package" evidencing GMH's qualificatioan as HUD-approved
manufacturer.
II. Governmental licenses or permits required or to be required in
connection with or as a result of the Transaction:
See response to Part III below.
III. Licenses and permits which may NOT be transferred to the Buyer as
contemplated by the Agreement:
The foregoing licenses may not be transferable, but, to Sellers'
knowledge, new licenses should be obtainable by Buyer without undue
burden or expense. However, if such licenses are not maintained,
sales of the Company's products might be interrupted in the affected
jurisdictions.
GENERAL MANUFACTURED HOUSING, INC.
Stock Purchase Agreement
among Xxxxx Xxxxx Xxxxxx, as Trustee, et al.,
General Manufactured Housing, Inc.
and GMH Acquisition Corp.
Schedule 7(m) "Taxes"
I. Tax Returns which have been the subject of any audit during the past
six years, are the subject of an audit currently being conducted, or
concerning which the Acquired Entities have been notified of a forthcoming
audit:
I.R.S. audit completed for calendar years 1990 and 1991
I.R.S. audit of 1992 and 1993 currently in progress; see Note 3 to the
1994 Audited Financial Statements
Georgia audit of Sales and Use Tax completed for the period from July
1990 through June 1993
Notice received from Florida Department of Revenue indicates the
impending audit of Florida Corporation Income Tax for 1990 through
1993 and Florida Intangible Personal Property Tax for 1991 through
1994
II. Elections made by Acquired Entities or Sellers under the Code or other
tax law affecting any tax return of Acquired Entities for years ending in
or after 1989:
I.R.C. "S" Corporation election made by GMH effective for tax years
ending after 12/31/94
ADDITIONAL COMMENTS CONCERNING RETURNS NOT FILED:
The Company has not filed Form 5500 with respect to AFLAC Cafeteria
Plan termianted in 1994
Xxxxx Housing, L.L.C. was formed in 1995 and consequently its initial
income tax return will not be due until 1996.
GENERAL MANUFACTURED HOUSING, INC.
Stock Purchase Agreement
among Xxxxx Xxxxx Xxxxxx, as Trustee, et al.,
General Manufactured Housing, Inc.
and GMH Acquisition Corp.
Schedule 7(n) "No Material Adverse Change"
I. Material adverse changes in the condition of any of the Acquired
Entities, financial or otherwise:
Oakwood Mobile Homes gave notice on or about August 25, 1995, that
they will suspend purchases from GMH. The Buyer was promptly notified
of this development (i.e., prior to signing or executing this
Agreement). In its notification, Oakwood characterized this situation
as temporary; however, no assurances can be given that such suspension
may not be permanent. During the first six months of 1995, sales to
Oakwood accounted for approximately 10% of GMH's total revenues during
that period.
II. Other facts, conditions, proposals or circumstances relating to the
business and which materially adversely affects or will in the future
affect the same:
None
III. Employee Controversies:
The following EEOC Notices of Discrimination issued by the Savannah
Local Office of the Equal Employment Opportunity Commission:
1) Xxxxxxxx: Sex Discrimination Charge filed 9/24/93
2) Xxxxxxx: Sex Discrimination Charge filed 6/10/94
3) Woodie: Sex Discrimination Charge filed 9/16/94
4) Xxxxxx: Race and Retaliation Discrimination Charge filed
3/22/95; Dismissal and Notice of Right to Xxx issued 8/4/95 by
EEOC (Claimant has 90 days to bring charges in U.S. District
Court)
5) Xxxxx: Sex Discrimination Charge filed 6/20/95
Attached hereto as "Addendum to Schedule 7(n)" and incorporated
herein by reference is a schedule of Workers' Compensation
Insurance claims made or which might be made by employees of the
Acquired Entities.
GENERAL MANUFACTURED HOUSING, INC.
Stock Purchase Agreement
among Xxxxx Xxxxx Xxxxxx, as Trustee, et al.,
General Manufactured Housing, Inc.
and GMH Acquisition Corp.
Schedule 7(o) "Business Property Rights"
I. Complete and accurate, in every material respect, list and brief
description of all Business Property Rights owned or held by any of the
Acquired Entities or for which application has been made:
Registration of Xxxx and design No. S13433 filed 3/11/94 in the State
of Georgia: "Jaguar Homes 1994 . . . the Year of the Cat!!!"
II. Exceptions to the Acquired Entities' sole and exclusive right to use
all Business Property Rights listed in I. above:
Since the inception of the NFL expansion franchise in Jacksonville,
Florida, known as the "Jacksonville Jaguars," use of the "Jaguar" name
has become widespread throughout the region. Sellers and Acquired
Entities make no representation as to the exclusivity or
registrability of the name by the Buyer in any jurisdiction or the
Company's ability to preserve any rights it may have in said name.
III. Business of Acquired Entities which conflicts with any Business
Property Rights of others, or concerning which the Sellers or Acquired
Entities have received any notice of any claimed conflict:
Prior to the formation of GMH, Xxxxxx Xxxxx acquired title to various
patents that relate to the business of mobile home manufacturing.
Such patents are not material to the business conducted by the
Acquired Entities and, if and to the extent that the Acquired Entities
now or in the future were deemed to infringe upon the proprietary
rights evidenced by such patents, Xx. Xxxxx agrees to waive and
release any such infringement.
IV. Rights of third parties which would be infringed or violated by
assignment of any of the Business Property Rights listed in I. above:
None
V. Consents required to assign any of the Business Property Rights listed
in I. above:
[Preliminarily, there appears to be no indication in the Georgia Code
that an assignment and/or re-registration of the xxxx would be
required in a stock sale.]
GENERAL MANUFACTURED HOUSING, INC.
Stock Purchase Agreement
among Xxxxx Xxxxx Xxxxxx, as Trustee, et al.,
General Manufactured Housing, Inc.
and GMH Acquisition Corp.
Schedule 7(p) "Insurance"
1. List of all insurance policies of each of the Acquired Entities and a
description of the terms thereof:
Commercial General Liability Insurance Policy; Bankers Insurance Co.
#GLA 10 S100104-00 (3/31/95 - 3/31/96); covering all plants plus M/H
Retail, Inc., and products liability
Commercial Property Insurance Policy; Pennsylvania Lumbermens
#10-G-012-03-95 (3/31/95 - 3/31/96) covering 0000 Xxxxxxxxxx Xxxxx
(Plant 1); Airport Hangar; 0000 Xxxxxxx Xx (Plant 4); all inventory
(raw materials and finished goods) and machinery and equipment at all
locations
Commercial Property Insurance Policy; Georgia Casualty & Surety
Company #CMP0003174 (6/17/95 - 6/17/96) covering 0000 Xxxxxxxxxx Xxxx.
(Plant 2)
Commercial Property Insurance Policy; Georgia Casualty & Surety
Company #CF 3260 (11/17/94 - 11/17/95) covering 0000 Xxxxxxxxxx Xxxx.,
Xxxxxxxx, XX (Plant 3)
Aircraft Insurance Policy; Insurance Company of North America Policy
#S00293714 on 1979 King Air 200, N-561SS (9/17/94 - 9/17/95)
Workers' Comp/Employer's Liability Ins. Policy: Georgia Casualty &
Surety Company #WC 922721 (4/6/95 - 4/6/96)
Auto Insurance Policy: Georgia Casualty & Surety Company #BA 922723
(4/6/95-4/6/96) covering all trucks and cars
Additional policies are being procured for Xxxxx Housing, L.L.C.
Split-dollar life insurance on Xxx Xxxxx in the face amount of
$600,000; GMH pays premium and is entitled to reimbursement therefor
on policy payout; net benefits accrue to insured's beneficiaries
See also "Addendum to Schedule 7(p)" (list of additional insurance
policies) attached heereto and incorporated herein by reference.
II. Claims (other than Workers' Compensation claims) in excess of $50,000
each or $100,000 in the aggregate made or pending on the insurance
policies listed in I. above since January 1, 1992:
None
GENERAL MANUFACTURED HOUSING, INC.
Stock Purchase Agreement
among Xxxxx Xxxxx Xxxxxx, as Trustee, et al.,
General Manufactured Housing, Inc.
and GMH Acquisition Corp.
Schedule 7(q) "Inventories"
I. List of the locations at which inventories of any of the Acquired Entities
are located:
Plant 1 0000 Xxxxxxxxxx Xxxxxxxxx, Xxxxxxxx, XX
Plant 2 0000 Xxxxxxxxxx Xxxxxxxxx, Xxxxxxxx, XX
Plant 3 0000 Xxxxxxxxxx Xxxxxxxxx, Xxxxxxxx, XX
Plant 4 0000 Xxxxxxx Xxxx, Xxxxxxxx, XX
Vacant Lot Adjacent to Plant 4
Plant 5 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx, XX
GENERAL MANUFACTURED HOUSING, INC.
Stock Purchase Agreement
among Xxxxx Xxxxx Xxxxxx, as Trustee, et al.,
General Manufactured Housing, Inc.
and GMH Acquisition Corp.
Schedule 7(r) "Offices"
Principal executive office and other office locations maintained by Acquired
Entities:
General Manufactured Housing, Inc.
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX
Xxxxx Housing, L.L.C.
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx, XX
GENERAL MANUFACTURED HOUSING, INC.
Stock Purchase Agreement
among Xxxxx Xxxxx Xxxxxx, as Trustee, et al.,
General Manufactured Housing, Inc.
and GMH Acquisition Corp.
Schedule 7(s) "Company Actions"
I. Capital stock or other corporate securities issued since the Audit
Date:
None
II. Amounts borrowed and liabilities incurred (other than in the ordinary
course of business) since the Audit Date:
Deed to Secure Debt (second mortgage) dated 3/2/95, encumbering Plant
1 property to The Xxxxxxxxx Bank, securing Note in the maximum amount
of $209,000, for payment of a declining Letter of Credit in favor of
Xxx-Bar Corporation (declines at the rate of $9,000 per month), as
Security Deposit under Lease between Hi-Tech and Xxx-Bar for Plant 4
III. Liens, encumbrances, obligations, and liabilities discharged,
satisfied, or paid (other than current liabilities shown on the
balance sheet as of the Audit Date and current liabilities incurred in
the ordinary course of business) since the Audit Date other than in
compliance of the covenant to discharge all funded indebtedness:
None
IV. Payments or distributions to stockholders and purchases or redemptions
of shares of capital stock since the Audit Date:
After 12/31/94, advances for the first three calendar quarters of 1995
were made to each Seller by GMH in the total amount of $300,000 each,
against 1995 income taxes. It is anticipated that additional advances
of $100,000 each will be made for each calendar quarter thereafter
until the closing date. These amounts are reflected on the books as
loans but will be recharacterized as distributions at year-end.
V. Stock splits and reclassifications since the Audit Date:
None
VI. Assets mortgaged, pledged or subjected to lien, charge or other
encumbrance (other than mechanics' liens or tax liens not yet due and
payable) since the Audit Date:
Deed to Secure Debt (second mortgage) dated 3/2/95, encumbering
Industrial Blvd. property to The Xxxxxxxxx Bank, securing Note in the
maximum amount of $209,000, for payment of a declining Letter of
Credit in favor of Xxx-Bar Corporation (declining at the rate of
$9,000 per month) as Security Deposit under Lease between Hi-Tech and
Xxx-Bar for Plant 4
VII. Tangible assets sold, assigned or transferred and debts and
obligations cancelled (except in the ordinary course of business)
since the Audit Date:
In 1995, GMH's lease of a 1993 Jaguar automobile provided to Xxx Xxxxx
expired, whereupon Xx. Xxxxx personally exercised the option (included
in such lease) to purchase such automobile.
GMH recently has transferred the following personal property to
Sellers: Personal Computer (located in Xxx Xxxxx'x Waycross residence)
and fax machine (located in Xxx Xxxxx'x Montana residence) to Xxx
Xxxxx; fax machine and printer (located in Xxxxx Xxxxxx'x California
residence) to Xxxxx Xxxxxx.
VIII. Business Property Rights sold, assigned or transferred since the Audit
Date:
None
IX. Extraordinary losses suffered and rights of substantial value waived
since the Audit Date:
None
X. Changes in officer compensation (except in the ordinary course of
business and consistent with past practice) since the Audit Date:
None
XI. Investments made in, money advanced to, and obligations guaranteed for
any third person or entity since the Audit Date:
None
XII. Transactions entered into (other than in the ordinary course of
business) since the Audit Date:
Xxxxx Housing, L.L.C. (Plant 5) is currently in development (expected
to be operational prior to 10/31/95) and extraordinary development
expenses are being incurred in connection with such Plant
GENERAL MANUFACTURED HOUSING, INC.
Stock Purchase Agreement
among Xxxxx Xxxxx Xxxxxx, as Trustee, et al.,
General Manufactured Housing, Inc.
and GMH Acquisition Corp.
Schedule 7(t) "Related Party Transactions"
Current transactions with the Sellers or their Affiliates or any Affiliate of
any Acquired Entity (including purchases, acquisitions, leases, transfers or any
other transaction or agreement):
SEE NOTE 5 TO THE 1994 AUDITED FINANCIAL STATEMENT:
After 12/31/94, advances for the first three calendar quarters of 1995 were made
to each Seller by GMH in the total amount of $300,000 each, against 1995 income
taxes. It is anticipated that additional advances of $100,000 each will be made
for each calendar quarter thereafter until the closing date. These amounts are
reflected on the books as loans but will be recharacterized as distributions at
year-end.
Sublease Agreement dated 7/1/95 between HI-TECH PROPERTIES, INC. as sublessor
and GMH for real property referred to as Plant 4.
Xxxxxxxxx Bank issued Declining Letter of Credit dated 3/2/95, in the maximum
amount of $209,000, in favor of Xxx-Bar Corporation in the name of GMH and
secured by a GMH Deed to Secure Debt encumbering GMH real property, as the
Security Deposit under the primary Lease for Plant 4 between Hi-Tech Properties,
Inc. and Xxx-Bar Corporation
In 1995, GMH's lease of a 1993 Jaguar automobile provided to Xxx Xxxxx expired,
whereupon Xx. Xxxxx personally exercised the option (included in such lease) to
purchase such automobile.
The grounds of Xxx Xxxxx'x personal residence are maintained by the lawn service
contractor engaged by GMH. Xx. Xxxxx pays 50% of the total cost of lawn services
provided under such contract.
M/H Retail, Inc. engages in regular business transactions with GMH with respect
to warranty service and sales of surplus materials.
GMH recently has transferred the following personal property to Sellers:
Personal Computer (located in Xxx Xxxxx'x Waycross residence) and fax machine
(located in Xxx Xxxxx'x Montana residence) to Xxx Xxxxx; fax machine and printer
(located in Xxxxx Xxxxxx'x California residence) to Xxxxx Xxxxxx.
GENERAL MANUFACTURED HOUSING, INC.
Stock Purchase Agreement
among Xxxxx Xxxxx Xxxxxx, as Trustee, et al.,
General Manufactured Housing, Inc.
and GMH Acquisition Corp.
Schedule 7(u) "Undisclosed Liabilities"
Material liabilities not disclosed on financial statements:
None
GENERAL MANUFACTURED HOUSING, INC.
Stock Purchase Agreement
among Xxxxx Xxxxx Xxxxxx, as Trustee, et al.,
General Manufactured Housing, Inc.
and GMH Acquisition Corp.
Schedule 7(w) "Suppliers and Customers"
I. Suppliers which have cancelled or termianted, or made a written threat to
cancel or terminate, or concerning which any Seller has knowledge as to their
intention to cancel or terminate, their relationship with any of the Acquired
Entities, or at any time after 1/1/95 have decreased materially their services
or supplies to any of the Acquired entities other than in the ordinary course of
business:
None
II. Customers which have cancelled or terminated, or made a written threat to
cancel or terminate, or concerning which any Seller has knowledge as to their
intention to cancel or terminate, their relationship with any of the Acquired
Entities, or at any time after 1/1/95 have decreased materially their usage of
the services or products of any of the Acquired Entities or made any written
claim that any item sold by Acquired Entities failed to meet any specification
or were otherwise defective, other than in the ordinary course of business:
Oakwood Mobile Homes gave notice on or about August 25, 1995, that
they will suspend purchases from GMH. The Buyer was promptly notified
of this development (i.e., prior to signing or executing this
Agreement). In its notification, Oakwood characterized this situation
as temporary; however, no assurances can be given that such suspension
may not be permanent. During the first six months of 1995, sales to
Oakwood accounted for approximately 10% of GMH's total revenues during
that period.
GENERAL MANUFACTURED HOUSING, INC.
Stock Purchase Agreement
among Xxxxx Xxxxx Xxxxxx, as Trustee, et al.,
General Manufactured Housing, Inc.
and GMH Acquisition Corp.
Schedule 7(x) "Potential Conflicts of Interest"
I. Interest in competitor, customer or supplier
Xxxxxx Xxxxx owns an approximate 20% equity interest in Sweetwater
Homes, Inc., a competitor of GMH. At Closing, Xx. Xxxxx will execute a
letter setting forth his undertakings and commitments to the Company
with respect to his equity interest in Sweetwater Homes, Inc.
II. Interest in any tangible or intangible asset used by the Acquired Entities
in connection with their business
M/H Retail, Inc. (See Schedule 7(t))
Hi-Tech Properties, Inc. (See Schedule 7(t))
III. Claims or causes of action by Seller or any Affiliate against any
Acquired Entity (other than in the ordinary course of business)
None
GENERAL MANUFACTURED HOUSING, INC.
Stock Purchase Agreement
among Xxxxx Xxxxx Xxxxxx, as Trustee, et al.,
General Manufactured Housing, Inc.
and GMH Acquisition Corp.
Schedule 7(y) "Accounts Receivable"
Accounts Receivable in excess of $50,000 that are being contested or disputed by
the obligor thereon:
None
GENERAL MANUFACTURED HOUSING, INC.
Stock Purchase Agreement
among Xxxxx Xxxxx Xxxxxx, as Trustee, et al.,
General Manufactured Housing, Inc.
and GMH Acquisition Corp.
Schedule 7(z) "Environmental Compliance"
No exceptions other than as disclosed in the Environmental Reports.
Copies of the addenda to Schedules 7(e), 7(n) and 7(p)
will be provided upon request.
Schedule 14(b)
(a) All drums, empty or discarded, at each Plant shall be removed and
placed in a drum storage area at each Plant before removal to a
landfill authorized to receive such waste. The storage area shall be
contained by a three foot tall cinderblock wall with a sealed concrete
floor. Drums or containers currently in use shall be stored on metal
racks, off of the ground, in order to observe any leaks or spillage on
the ground. The contact adhesive at each Plant shall be stored off of
the floor to prevent any accidental spills reaching the ground.
(b) The aboveground storage tanks ("ASTs")at Plant Nos. 1 and 2 shall be
temporarily removed with the contaminated soil beneath the ASTs
excavated and placed in a landfill authorized to receive such waste.
The bottom of each AST area at each Plant shall be sealed with
concrete to the cinderblock walls. A manual valve that may be opened
or closed shall be installed at each AST area to allow for rainwater
drainage. A secondary containment, consisting of at least a six-inch
berm, shall be installed beneath the ASTs at each Plant.
(c) The surface tar areas at Plants No. 1 and No. 2 shall be removed and
placed in a landfill authorized to receive such waste.
(d) Soil and groundwater sampling will be conducted in accordance with the
Proposal for Phase II Environmental Site Assessment for Plant Nos. 1
and 2 dated September 25, 1995 prepared by United Consulting Group,
Ltd. Purchaser will remediate the soil and/or groundwater, if
necessary, in accordance with applicable Environmental Laws.
(e) Handauger borings will be conducted in accordance with the Proposal
for Phase II Environmental Site Assessment for Plant NO. 4 dated
October 4, 1995 prepared by United Consulting Group, Ltd. to establish
the condition of Plant No. 4 which existed prior to commencement of
the lease for Plant No. 4.
