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EXHIBIT 99.3
[EXECUTION COPY]
INTEREST EXCHANGE AGREEMENT
INTEREST EXCHANGE AGREEMENT (the "Agreement"), dated as of February 15,
2001, by and between CAPITAL PACIFIC HOLDINGS, INC., a Delaware corporation
("CPH Inc.") and CALIFORNIA HOUSING FINANCE, L.P., a Delaware limited
partnership ("CHF").
RECITAL
CPH Inc. and CHF wish to exchange (the "Exchange"): (i) all of CPH Inc.'s
right, title and interest in and to each of the Mirror Companies (the "CPH
Mirror Company Interests") for (ii) a portion of CHF's right, title and interest
in and to Capital Pacific Holdings, L.L.C. ("CPH LLC") and all of CHF's right,
title and interest in and to the Conveyed Companies (the "Conveyed Company
Interests") on the terms and subject to the conditions of this Agreement. CPH,
Inc. will transfer the CPH Mirror Company Interests directly to the Joint
Venture, on behalf of CHF.
AGREEMENT
In consideration of the premises and the mutual covenants and the
agreements herein set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement, except as otherwise defined in
the Recitals hereto, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
"Action" against a Person means an action, suit, litigation, arbitration,
investigation, complaint or other proceeding threatened or pending against the
Person or its property, whether civil, criminal, administrative or
investigative, in law or equity before any arbitrator or Governmental Body.
"Advances" means the aggregate amount of all unreimbursed cash advances
made by CPH Inc., by CPH LLC or by Capital Pacific Homes, Inc. ("CP Homes") to
the Relevant Companies prior to the Closing Date.
"Affiliate" of a Person means any other Person that directly or indirectly
controls, is controlled by or is under common control with, the Person or any of
its Subsidiaries. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction
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of the management and policies of a Person, whether through the ownership of
voting securities, by contract or otherwise.
"Ancillary Agreements" means (i) the Assignment of CPH Mirror Company
Interest, (ii) the Lease, (iii) the Management Agreements, (iv) the Construction
Agreements, (v) the Consulting Agreement, (vi) the Assignment of Transferred
Interest, (vii) the Service Xxxx License Agreement, (viii) the Indemnification
Agreement, (ix) the Sublease, and (x) all other agreements, certificates,
instruments and other writings to be delivered pursuant to Sections 4.1 and 4.2.
"Assets" means all Real Property, Leaseholds and Other Assets.
"Assignment of CPH Mirror Company Interest" has the meaning stated in
Section 4.1(i)(i).
"Assignment of Transferred Interest" has the meaning stated in Section
4.2(d)(i).
"Business Plan" means the business plan and/or budget of any Group Company
in effect as of November 30, 2000.
"Capital Contributions" means the aggregate amount of any capital
contributions made by CPH Inc., CPH LLC or by CP Homes to any of the Relevant
Companies from December 1, 2000 to and including the Closing Date.
"CHF Advances" means the aggregate amount of all unreimbursed cash advances
made by CHF to CPH LLC and the Conveyed Companies prior to the Closing Date.
"CHF Capital Contributions" means the aggregate amount of any capital
contributions made by CHF to CPH LLC or to any of the Conveyed Companies from
December 1, 2000 to and including the Closing Date.
"CHF's Fundamental Representations" has the meaning stated in Section
8.2(b).
"CHF Indemnified Persons" has the meaning stated in Section 8.1(a).
"CHF Member Interest" means all of CHF's right, title and interest in and
to its membership interest in CPH LLC less the Remainder Interest.
"CHF Payment Amount" means the aggregate amount in cash of (A) the
Advances, (B) the Capital Contributions, (C) the Deposit Amount and (D) the
Repayment Amount provided, however, that in no event shall any individual
disbursement or receipt by CPH or any Designated Affiliate be included in more
than one of the foregoing categories.
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"CHF Repayment Amount" means the aggregate amount of all distributions made
by the Relevant Companies to CPH Inc. and to its Affiliates (other than CHF and
the Relevant Companies) (other than $338,771 distributed by CPH Industrial I,
LLC to CPH Inc. in respect of the period prior to December 1, 2000), under the
respective limited liability company agreements of such entities in each case
from December 1, 2000 to and including the Closing Date.
"Closing" has the meaning stated in Section 3.1.
"Closing Date" has the meaning stated in Section 3.1.
"Construction Agreements" has the meaning stated in Section 4.1(i)(v).
"Consulting Agreement" has the meaning stated in Section 4.1(i)(vi).
"Consents" means any approval, consent, authorization or order of, notice
to or registration or filing with, or any other action by, any Governmental Body
or other Person.
"Contract" means any agreement, contract, license, lease, instrument,
document, note, bond, mortgage, indenture, guarantee, or other legally binding
commitment or obligation, whether oral or in writing, including without
limitation development agreements and consultant contracts.
"Conveyed Companies" means the following companies:
CPH Newport Coast, LLC
CPH Yucaipa I, LLC
CPH Inland Empire, LLC
"Conveyed Company Interests" has the meaning stated in the Recital.
"CPH Inc. Indemnified Persons" has the meaning stated in Section 8.1(b).
"CPH Inc.'s Employees" has the meaning stated in Section 2.4(b).
"CPH Inc.'s Fundamental Representations" has the meaning stated in Section
8.2(a).
"CPH Inc. Payment Amount" means the aggregate amount in cash of (A) the CHF
Advances, (B) the CHF Capital Contributions (except any portion attributable to
the Remainder Interest) (C) the CHF Repayment Amount provided, however, that in
no event shall any individual disbursement or receipt by CHF be included in more
than one of the foregoing categories.
"CPH LLC" has the meaning stated in the Recital.
"CPH Mirror Company Interests" has the meaning stated in the Recital.
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"Deposit" means any deposit of funds made by CPH Inc., by CPH LLC or by CP
Homes with any third party in connection with the Potential Transactions.
"Deposit Amount" means the total amount of the Deposits.
"Environmental Laws" means all federal, state, local and foreign
Regulations relating to pollution, human health, safety, industrial hygiene,
pollution or protection of the environment.
"Environmental Liability" has the meaning stated in Section 5.1(r)(i).
"Equity Securities" means common stock, preferred stock and any other
capital stock, equity interest or other ownership interest or profit
participation or similar right with respect to any entity, including, without
limitation, any partnership or membership interest, any stock appreciation,
phantom stock or similar right or plan, and any note or debt security having or
containing equity or profit participation features, or any option, warrant or
other security or right which is directly or indirectly convertible into or
exercisable or exchangeable for any other equity securities.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the related regulations and published interpretations.
"Governmental Body" means any agency, bureau, commission, court,
department, official, political subdivision, tribunal or other instrumentality
of any government, whether federal, state, local, domestic or foreign.
"Group Companies" means CPH Inc., the Mirror Companies and the Project
Companies.
"Hazardous Materials" means any hazardous or toxic substance, waste,
contaminant, pollutant, gas or material, including, without limitation,
radioactive materials, oil, petroleum and petroleum products and constituents
thereof, which are regulated under any Environmental Law.
"Indemnification Agreement" has the meaning stated in Section 4.1(i)(viii).
"Intellectual Property" means all copyrights, uncopyrighted works, computer
software, trademarks, trademark rights, trademark registrations, service marks,
trade names, trade name rights, patents, including, without limitation, all
reissues, divisions, continuations and extensions thereof, patent rights,
unpatented inventions, licenses, permits, trade secrets, know-how, inventions,
technology, processes, domain names and intellectual property rights and other
proprietary rights, whether or not subject to statutory registration, together
with applications for any of the foregoing.
"Joint Venture" means Makallon, LLC, a Delaware limited liability company
formed by CHF and Makar.
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"Joint Venture Agreement" means the limited liability company agreement of
the Joint Venture.
"Leaseholds" has the meaning stated in Section 5.1(m).
"Lease" has the meaning stated in Section 4.1(i)(ii).
"Lien" means any lien, claim, encumbrance, security interest, pledge or
hypothecation of any kind.
"Losses" has the meaning stated in Section 8.1(a).
"Makar" has the meaning stated in Section 2.4(a).
"Management Agreement" has the meaning stated in Section 4.1(i)(iv).
"Material Adverse Effect" means (a) a material adverse effect upon any of
(i) the business, results, operations, the Assets, the liabilities, condition
(financial or otherwise), or prospects of (x) CPH Inc., (y) the Relevant
Companies taken as a whole, (z) any of the Specified Relevant Companies
individually, (ii) the legality, validity or enforceability of this Agreement,
any of the Ancillary Agreements or any Material Contract, or (b) the impairment,
hindrance or adverse effect in any material respect upon the ability of CPH
Inc., any Mirror Company or any Project Company or any of their respective
Subsidiaries to perform their obligations under this Agreement or the Ancillary
Agreements or to consummate the Transactions.
"Material Consents" has the meaning stated in Section 4.1(d).
"Material Contracts" means Contracts (a) to which any Relevant Company is a
party and (b) which evidence or contain rights, liabilities or obligations with
respect to payments or other consideration which in the aggregate are in excess
of $250,000.
"Mirror Companies" has the meaning stated in Section 2.1.
"Non-Financed Companies" means CPH Newport Building LLC, CPH Las Vegas
Building, LLC, CPH Industrial I, LLC and CPH Jarupa/Xxxxxxxx, LLC.
"Notice of Election" has the meaning stated in Section 6.6(a).
"Offer" has the meaning stated in Section 6.6(a).
"Offeree" has the meaning stated in Section 6.6(a).
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"Other Assets" means all properties, rights, interests or assets of any
kind, other than Real Property and Leaseholds.
"Owned Stock" has the meaning stated in Section 6.6(a).
"Permit" means any permit, license, approval, consent, permission, notice,
registration, qualification or other authorization issued, granted or given by
or under the authority of any Governmental Body or pursuant to any federal,
state, local or foreign Regulation.
"Permitted Liens" means (a) mechanic's, materialmen's, and similar liens,
(b) liens for real property taxes not yet due and payable, (c) purchase money
liens and liens securing rental payments under capital lease arrangements, (d)
other liens arising in the ordinary course of business and not incurred in
connection with the borrowing of money, (e) liens and encumbrances of record as
of the date of the acquisition of any property by any Relevant Company (other
than any Non-Financed Company) in any transaction in which CHF or any Affiliate
of CHF participated, (f) liens and encumbrances arising in any transaction
approved by CHF or any Affiliate of CHF under the operating agreement of any
Relevant Company and (g) any Liens set forth on Schedule 5.1(m) attached hereto.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or organization,
including, without limitation, a governmental agency or authority.
"Potential Transactions" means the potential transactions of CPH Inc.'s
commercial division set forth on Schedule 6.3.
"Project" has the meaning stated in Section 2.1.
"Project Company" has the meaning stated in Section 2.1.
"Prospective Seller" has the meaning stated in Section 6.6(a).
"Real Property" means all real property interests, other than as lessee,
together with all tenements, hereditaments, easements, rights of way, privileges
and appurtenances to those interests and improvements and fixtures on or to
those interests.
"Registration Rights Agreement" means the Registration Rights Agreement
dated October 1, 1997 by and between CPH Inc. and CHF.
"Regulation" means each applicable law, rule, regulation, order, guidance
or recommendation by any Governmental Body and each writ, judgment, injunction,
order, decree or award of any arbitrator, Governmental Body or other Person.
"Relevant Companies" means the Mirror Companies and the Project Companies.
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"Remainder Interest" means a 7% membership interest in CPH LLC.
"Repayment Amount" means the aggregate amount of all distributions made by
(i) the Conveyed Companies or (ii) CPH LLC to CHF under the respective limited
liability company agreements of such entities, in each case from December 1,
2000 to and including the Closing Date.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations promulgated thereunder,
all as the same shall be in effect at the time.
"Service Marks License Agreement" has the meaning stated in Section
4.1(i)(vii).
"Specified Relevant Companies" means CPHR-1, LLC; CPH Resorts I, LLC; CPH
RPV, LLC; RPV Associates, LLC; CPHMB, LLC; CPH Monarch Beach, LLC and each of
the Non-Financed Companies.
"Sublease" has the meaning stated in Section 4.2(d)(viii).
"Subsidiary" of a Person means any Person of which equity securities or
other ownership interests having ordinary voting power to elect a majority of
the board of directors, the general partner, the manager or other Persons
performing similar functions are at the time directly or indirectly owned by the
Person.
"Tax" or "Taxes" means all taxes, charges, fees, levies, duties, imposts,
deposits, withholdings, restrictions, fines, interest, penalties, additions to
tax or other tax, assessment or charge of any kind, and all interest and
penalties thereon and additions thereto.
"Tax Return" means any federal, state, local or foreign return, report,
declaration or other form relating to Taxes, including any schedule thereto or
amendment thereof.
"Termination Date" has the meaning stated in Section 7.1(b).
"Termination of the Investment and Stockholders Agreement" has the meaning
stated in Section 4.1(i)(iii).
"Third Party" has the meaning stated in Section 6.6(a).
"Third Party Notice" has the meaning stated in Section 6.6(a).
"Threshold Amount" has the meaning stated in Section 8.3.
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"Transactions" means the transactions described in this Agreement and in
the Ancillary Agreements.
"Transferred Interest" has the meaning stated in Section 2.2.
"Unaudited Balance Sheet" has the meaning stated in Section 5.1(g).
ARTICLE II
EXCHANGE
2.1 Description of CPH Inc. Exchange Assets. The "Mirror Companies" are the
companies listed under the heading "Mirror Company" below and each Mirror
Company is a member of the corresponding limited liability company (each, a
"Project Company") that owns directly, or in the case of CPH Dos Pueblos, LLC
and CPH Austin, LLC, indirectly through the entity listed in the column
"Corresponding Project", the corresponding commercial, residential, mixed use or
land development project (each, a "Project") listed below, except for CPH
Newport Building, LLC and CPH Las Vegas Building, LLC, each of which directly
owns the corresponding office building, together with the land thereunder (each
also referred to herein as a "Project") at the address listed below:
Mirror Company Corresponding Project Company Corresponding Project
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CPHAHB, LLC Atlanta Huntington Beach, LLC Huntington Beach
CPHMB,LLC CPH Monarch Beach, LLC Ritz Pointe
CPHR-I, LLC CPH Resorts I, LLC Monarch Beach Resort
CPHVP, LLC CPH Vista Palisades, LLC Vista Palisades
CPHCHF Golf, LLC CPH Dos Pueblos, LLC CPH Dos Pueblos Associates, LLC
Dos Pueblos
CPHROB, LLC CPH Redhill Office Building, LLC Summit Office Building
CPHAOB, LLC CPH Airport Office Building, LLC Airport Office Building
CPHDP, LLC CPH Xxxx Point, LLC Xxxx Point
CPH Industrial I, LLC CPH Jarupa/Xxxxxxxx, LLC Commerce Point
CPHOOB, LLC CPH Orange Office Building, LLC Xxxxxxx Plaza
Office Building
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CPHRPV, LLC RPV Associates, LLC Rancho Palos Verdes
CPH Newport Building, LLC None 0000 XxxXxxxxx Xxxx.
Xxxxxxx Xxxxx, XX
CPH Las Vegas Building, LLC None Formerly 0000 Xxxxxxx Xxxxx Xxxxx
Xxx Xxxxx, XX
CPHA, LLC CPH Austin, LLC CPH Xxxxxx Ranch, X.X.
Xxxxxx Ranch
2.2 Exchange. At the Closing, (i) CHF shall transfer to CPH Inc. all of
CHF's right, title and interest in and to the CHF Member Interest and the
Conveyed Companies (collectively the "Transferred Interest"), and (ii) CPH, Inc.
shall transfer to the Joint Venture (on behalf of CHF) all of CPH Inc.'s right,
title and interest in and to the Relevant Companies, the Potential Transactions
and the Deposits.
2.3 Option to Substitute Shares.
(a) Option to Convert. At the option of either of CPH Inc. or CHF, the
Remainder Interest shall be converted into 1,235,000 newly issued shares of
Non-Voting Common Stock of CPH, Inc. (the "Issued Shares"). The option shall be
exercised by written notice to CPH Inc. or CHF, as the case may be, on or after
the date ninety (90) days and on or before the date one hundred eighty (180)
days following the Closing Date and the Issued Shares shall be delivered within
thirty (30) days of such exercise. Simultaneously with the delivery of the
Issued Shares, CHF shall deliver to CPH Inc. documentation reasonably acceptable
to CPH Inc. of its relinquishment of the Remainder Interest.
(b) Registration etc. In the event of the exercise of the option as stated
herein by CPH Inc. or CHF, (i) the Issued Shares shall be deemed "Registrable
Stock" under the terms of the Registration Rights Agreement, (ii) the
Registration Rights Agreement shall be deemed to be amended to include three (3)
demand registration rights and (iii) CPH Inc. shall within eight (8) months of
the Closing Date cause the Issued Shares to be registered under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and listed on the stock
exchange or quotation system on which the voting Common Stock is then traded.
(c) True-Up; Adjustment. In the event of the exercise of the option under
Section 2.3(a) any capital distributions made by CPH LLC to CHF, or capital
contributions made by CHF to CPH LLC, during the period from and after the
Closing Date through the date of conversion shall be repaid to CPH LLC or CHF,
respectively, without payment of interest or other earnings. In addition, CHF
will receive the benefit of any dividend paid by CPH Inc. on its Common Stock
(of any class) during the period from the Closing Date through the date of
conversion. The number of Issued Shares shall be adjusted for any stock split,
stock dividend, dividend of any rights to
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acquire stock or similar event or recapitalization of CPH, Inc. occurring prior
to the exercise of the option so that CHF will receive the number of Issued
Shares as it would have had the option been exercised immediately prior to such
event or recapitalization.
(d) Voting Conversion; Premium. In consideration of CHF's agreement to
accept Non-Voting Common Stock, CPH Inc. agrees that upon any sale by CHF (or
any Affiliate to which CHF has transferred such Issued Shares) of any of the
Issued Shares (other than to an Affiliate of CHF), it shall pay CHF a cash
premium of 5% of the cash sales price of such Issued Shares promptly upon
receiving written notice from CHF including the name(s) of the purchaser(s) (or
in the event of a sale into the open market the name of the broker effecting the
transactions) together with reasonable evidence of the terms of such
transaction. Notwithstanding the foregoing, at any time prior to or within five
(5) days after receiving notice of any such transaction, CPH Inc. may elect to
cause the Issued Shares to be converted into voting Common Stock prior to any
such sale in lieu of payment of such cash premium. In order to facilitate the
election by CPH Inc. to so convert the Issued Shares, CHF shall give CPH Inc. at
least ten (10) days advance notice of any such proposed sales including all
available information regarding its terms. In addition, CPH Inc. shall
(immediately upon such sale) convert any Non-Voting Stock to be sold by CHF
under Section 6.6 in the event that both (i) CPH2, LLC and CPH3, LLC are selling
more than fifty percent (50%) of the Common Stock collectively owned by such
entities in one or a series of transactions to which Section 6.6 applies, and
(ii) (x) CHF exercises its right under Section 6.6 of this Agreement to
participate in such sale by the Principal Shareholders or (y) CHF issues an
Offer Notice under Section 6.6 and the Principal Shareholders elect to
participate in such sale.
2.4 Employees.
(a) Xxxx Xxxxxxxxxxx. CPH Inc. consents to Xxxx Xxxxxxxxxxx terminating his
employment with CPH Inc. and, through one or more newly-formed entities
controlled by him (collectively "Makar"), entering into the Joint Venture
Agreement all effective at or before the Closing. CPH Inc. and CHF acknowledge
and agree that CPH Inc. will be responsible for and shall duly and timely pay,
perform and discharge all legal and contractual obligations to Xxxx Xxxxxxxxxxx,
including, but not limited to, accrued unpaid salary, bonus and incentive
compensation (if any), with respect to the period through the date of
termination of employment and will have no obligation to CHF with respect to
Xxxx Xxxxxxxxxxx thereafter.
(b) Other Employees. CPH Inc. consents to Makar discussing employment with
and making an offer of employment to, all the employees of CPH Inc. which are
set forth on Schedule 2.4(b) (collectively, the "CPH Inc.'s Employees"), prior
to and after the Closing. CPH Inc. and CHF acknowledge and agree that CPH Inc.
will be responsible for and shall duly and timely pay, perform and discharge all
legal and contractual obligations to CPH Inc. Employees, including, but not
limited to, accrued unpaid salary, severance, accrued unused vacation time and
accrued unused sick pay, with respect to the period through the date of
termination of their respective employment or the Closing, whichever first
occurs. CPH Inc. shall have no responsibility to Makar or CHF for any decision
made by any CPH Inc. Employee to accept or reject the offer of employment made
to such CPH Inc. Employee and except as provided in this Agreement, shall
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have no obligation to CHF or Makar with respect to any CPH Inc. Employee with
respect to the period after the Closing Date.
(c) No Solicitation. For a period of two (2) years following the Closing
Date, CHF shall not, directly or indirectly, hire, solicit for hire or otherwise
attempt to hire, as an employee, consultant, contractor or otherwise, any
employee of CPH Inc. not listed on Schedule 2.4(b) without the prior written
consent of CPH Inc. For the same two (2) year period, CPH Inc. and its
Affiliates shall not, directly or indirectly, hire, solicit for hire or
otherwise attempt to hire, as an employee, consultant, contractor or otherwise,
any employee of CHF, the Joint Venture or Makar without the prior written
consent of CHF.
ARTICLE III
CLOSING
3.1 Closing. Subject to the terms and conditions contained herein, the
consummation of the transactions contemplated by this Agreement (the "Closing")
shall occur promptly after the conditions for Closing hereunder have been
satisfied or waived. The parties intend that the Closing will occur on February
15, 2001. The Closing shall take place at CPH Inc.'s offices located at 0000
XxxXxxxxx Xxxxxxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000. The date upon which the
Closing occurs is referred to in this Agreement as the "Closing Date."
3.2 Transaction to be Effected at Closing. Upon the terms and subject to
the satisfaction of the conditions set forth in this Agreement at the Closing:
(a) Deliveries by CHF. CHF shall deliver to CPH Inc.: (i) the documents,
certificates and instruments listed in Section 4.2(d), (ii) such other documents
as are reasonably required of CHF to effect the transactions contemplated by
this Agreement, and (iii) an amount equal to the CHF Payment Amount less the CPH
Inc. Payment Amount, but only if such difference is a positive number, by wire
transfer of immediately available funds. For avoidance of doubt, in the event
that the difference from clause (iii) above is a negative number, CHF shall not
be required to deliver any amount to CPH Inc.
(b) Deliveries by CPH Inc. CPH Inc. shall deliver to CHF: (i) the
documents, certificates and instruments listed in Section 4.1, (ii) such other
documents as are reasonably required of CPH Inc. to effect the transactions
contemplated by this Agreement, and (iii) an amount equal to the CPH Inc.
Payment Amount less the CHF Payment Amount, but only if such difference is a
positive number, by wire transfer of immediately available funds. For avoidance
of doubt, in the event that the difference from clause (iii) above is a negative
number, CPH Inc. shall not be required to deliver any amount to CHF.
(c) Simultaneous Delivery. All proceedings to take place on the Closing
Date shall be considered to take place simultaneously, and no delivery or
payment shall be considered to have been made on such date until all deliveries,
payments and proceedings due to occur under this Agreement on such Closing Date
have been completed.
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(d) Release of Liabilities. Effective at Closing: (i) CHF agrees and
acknowledges that CPH Inc. has no further obligations to make capital
contributions as a member in any Mirror Company, and (ii) CPH Inc. agrees and
acknowledges that CHF has no further obligations to make capital contributions
as a member in CPH LLC or any of the Conveyed Companies.
ARTICLE IV
CONDITIONS TO CLOSING
4.1 Conditions to CHF's Obligations. The obligations of CHF under this
Agreement are subject to the satisfaction of each of the following conditions,
unless waived by CHF in writing, at or before the Closing:
(a) Representations and Warranties. The representations and warranties of
CPH Inc. contained in this Agreement and in the Ancillary Agreements shall be
true and correct in all material respects when made, and shall be true and
correct on the Closing Date with the same force and effect as though made on and
as of the Closing Date.
(b) Performance of Agreements. CPH Inc. shall have performed and complied
in all material respects with all of its obligations and covenants contained in
this Agreement, including its delivery obligations set forth in Section 3.2(b),
and in the Ancillary Agreements required to be performed or complied with by CPH
Inc. at or before the Closing.
(c) Compliance Certificate. CHF shall have received a certificate of the
Chief Financial Officer of CPH Inc. substantially in the form attached hereto as
Exhibit A hereto as to the fulfillment of the conditions set forth in Sections
4.1(a) and (b) and certifying the CHF Payment Amount and the CPH Inc. Payment
Amount.
(d) Consents. All Material Consents shall have been duly obtained or made
and shall be effective on and as of the Closing Date. For purposes of this
Agreement, "Material Consents" means (i) the consent of the disinterested
members of the Board of Directors of CPH Inc., (ii) the consent of the Relevant
Companies and their members, (iii) the qualification of the Transactions under
any applicable state securities laws, and (iv) all consents that are required in
connection with consummation of the Transactions by CPH Inc., all of which are
set forth on Schedules 4.1(d) or 5.1(d).
(e) Consent of Noteholders. CHF shall have received evidence satisfactory
to CHF that, (i) the noteholders under the Indenture for the 12 3/4% Senior
Notes due 2002 (the "Indenture") have consented to the Transactions to the
extent that such consent is required by the Indenture, or (ii) such consent is
not required.
(f) Opinion of Counsel. CHF shall have received an opinion of counsel to
CPH Inc. substantially in the form of Exhibit B.
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(g) No Material Adverse Effect. No Material Adverse Effect shall have
occurred (i) with respect to CPH, Inc., since November 30, 2000 and (ii) with
respect to the Relevant Companies taken as a whole or with respect to any
Specified Relevant Company, since the most recent reporting date set forth in
each Relevant Company's governing documents, which report was actually delivered
to CHF.
(h) No Actions. There shall be no (i) Action by or before any Governmental
Body or by any other Person (A) challenging or seeking to restrain or prohibit
the Transactions, (B) seeking to obtain from CHF or any of its Affiliates in
connection with the Transactions any damages or (C) which could reasonably be
expected to cause a Material Adverse Effect, or (ii) Regulation in effect that
has or could reasonably be expected to have any of the consequences referred to
in clause (i) above.
(i) Ancillary Agreements. CHF shall have received the following, each dated
the Closing Date, each in form and substance reasonably satisfactory to CHF and
its counsel:
(i) A separate assignment of all of CPH Inc.'s right, title and
interest in and to the CPH Mirror Company Interest in each Mirror
Company, in the form attached hereto as Exhibit C, duly executed by
CPH Inc. (each, an "Assignment of CPH Mirror Company Interest");
(ii) Lease by CPH Newport Building, LLC to CPH Inc. in the form
attached hereto as Exhibit D (the "Lease"), duly executed by CPH Inc.;
(iii) The Termination of the Investment and Stockholders Agreement, in
the form attached hereto as Exhibit E (the "Termination of the
Investment and Stockholders Agreement"), duly executed by CPH Inc.,
CPH LLC and each other party thereto (other than CHF);
(iv) The Management Agreements, in the form attached hereto as Exhibit
F (the "Management Agreements"), duly executed by CP Homes;
(v) Construction Agreements, in the form attached hereto as Exhibit G
(the "Construction Agreements"), duly executed by CP Homes;
(vi) The Consulting Agreement, in the form attached hereto as Exhibit
H (the "Consulting Agreement"), duly executed by Xxxx Xxxxxxxxxxx;
(vii) The Service Marks License Agreement in the form attached hereto
as Exhibit I (the "Service Marks License Agreement"), duly executed by
CPH Inc.; and
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(viii) The Indemnification Agreement in the form attached hereto as
Exhibit J (the "Indemnification Agreement"), duly executed by CPH Inc.
(j) Secretary's Certificate. CHF shall have received a certificate of the
Secretary of CPH Inc., substantially in the form of Exhibit K hereto, with
respect to (i) the certificate of incorporation and the bylaws of CPH Inc., (ii)
the resolutions of the board of directors of CPH Inc. approving this Agreement
and the Ancillary Agreements to which CPH Inc. is a party and the other
documents to be delivered by it under this Agreement and the Ancillary
Agreements and the performance of the obligations of CPH Inc. thereunder, and
(iii) the names and true signatures of the officers of CPH Inc. and of each
Relevant Company authorized to sign this Agreement and each of the Ancillary
Agreements to which it is a party and the other documents to be delivered by it
thereunder.
(k) Managing Member's Certificate. CHF shall have received a certificate of
the Managing Member of each Relevant Company, in each case, substantially in the
form of Exhibit L hereto, with respect to (i) the certificate of formation and
limited liability company operating agreement of each Relevant Company, (ii) the
consent of the members of each Relevant Company approving the Ancillary
Agreements, if any, to which it is a party and the other documents to be
delivered by it under such Ancillary Agreements and the performance of the
obligations of such Relevant Company thereunder, and (iii) the names and true
signatures of the Persons authorized on behalf of such Relevant Company to sign
such Ancillary Agreements, if any, to which it is a party and the other
documents to be delivered by it thereunder.
(l) Good Standing Certificate. CHF shall have received a certificate of the
Secretary of State of Delaware, dated as of a recent date, as to (i) the good
standing of CPH Inc. and as to the charter documents of CPH Inc. on file in the
office of the Secretary of State of Delaware and (ii) the good standing of each
Relevant Company.
(m) Corporate Authorization. CPH Inc. shall provide to CHF certified copies
of resolutions of the Board of Directors of CPH Inc., duly adopted, which shall
be in full force and effect at the time of the Closing, authorizing the
execution, delivery and performance by CPH Inc. of the Interest Exchange
Agreement and the Ancillary Agreements.
(n) Receipt. In the event that CHF pays to CPH Inc. any amount pursuant to
Section 3.2(a)(iii), CHF shall have received a receipt for such amount, duly
executed by CPH Inc.
(o) Evidence of Title. CHF shall have received sufficient evidence of title
of the Real Property owned by the Non-Financed Companies.
(p) Joint Venture. Makar shall have executed and delivered the Joint
Venture Agreement.
4.2 Conditions to CPH Inc.'s Obligations. The obligations of CPH Inc. under
this Agreement are subject to the satisfaction of each of the following
conditions, unless waived by CPH Inc. in writing, at or before the Closing:
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(a) Representations and Warranties. The representations and warranties of
CHF contained in this Agreement and in the Ancillary Agreements shall be true
and correct in all material respects when made, and shall be true and correct on
the Closing Date with the same force and effect as though made on and as of the
Closing Date.
(b) Performance of Agreements. CHF shall have performed and complied in all
material respects with all of its obligations and covenants contained in this
Agreement, including its delivery obligations set forth in Section 3.2(a), and
in the Ancillary Agreements required to be performed or complied with by CHF at
or before the Closing.
(c) Consents. All Consents that are required in connection with
consummation of the Transactions by CHF shall have been duly obtained or made
and shall be effective on and as of the Closing Date, including, without
limitation, the qualification of the transactions described in this Agreement
under any applicable state securities laws.
(d) Ancillary Agreements. CPH Inc. shall have received the following, each
dated the Closing Date, each in form and substance reasonably satisfactory to
CPH Inc. and its counsel:
(i) The assignment to CPH Inc. of CHF's right, title and interest in
and to (x) the CHF Member Interest and (y) the Conveyed Companies in
the form attached hereto as Exhibit M, duly executed by CHF (the
"Assignment of Transferred Interest");
(ii) The Lease, duly executed by CPH Newport Building, LLC;
(iii) The Termination of the Investment and Stockholders Agreement,
duly executed by CHF;
(iv) The Management Agreements, duly executed by the Joint Venture and
the Project Companies set forth on Schedule 4.2(d)(iv);
(v) Construction Agreements, duly executed by the Joint Venture and
the Project Companies set forth on Schedule 4.2(d)(v);
(vi) The Consulting Agreement, duly executed by the Joint Venture on
its own behalf and on behalf of the Project Companies;
(vii) The Indemnification Agreement, duly executed by the Project
Companies and the Joint Venture; and
(viii) The Sublease with respect to 0000 Xxxxxxx Xxxxx Xxxxx, Xxx
Xxxxx, XX, duly executed by the Joint Venture in the form attached
hereto as Exhibit N.
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(e) Authorization. CHF shall provide to CPH Inc. certified copies of
appropriate resolutions, duly adopted, which shall be in full force and effect
at the time of the Closing, authorizing the execution, delivery and performance
by CHF of the Interest Exchange Agreement and the Ancillary Agreements.
(f) Opinion of Counsel. CPH Inc. shall have received an opinion of counsel
to CHF substantially in the form of Exhibit O.
(g) Receipt. In the event that CPH Inc. pays to CHF any amount pursuant to
Section 3.2(b)(iii), CPH Inc. shall have a receipt for such amount, duly
executed by CHF.
(h) No Material Adverse Effect. No material adverse effect on CHF's or
Makallon's ability to perform their respective obligations under this Agreement
or the Ancillary Agreements or to consummate the Transactions shall have
occurred.
(i) Joint Venture. Makar shall have executed and delivered the Joint
Venture Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties of CPH Inc. CPH Inc. represents and
warrants to CHF as of the date hereof and as of the Closing as follows:
(a) Authority and Enforceability. By the Closing Date, and assuming any
necessary approvals from CHF are issued, all actions on the part of each Group
Company necessary for the authorization, execution and delivery of this
Agreement and each of the Ancillary Agreement and for the consummation of the
Transactions, have been duly and validly taken. This Agreement and each of the
Ancillary Agreements have been duly executed and delivered by each Group
Company, as the case may be, and constitute the valid and legally binding
obligations of each Group Company, as the case may be, enforceable against each
Group Company, as the case may be, in accordance with their terms.
(b) Organization of Companies. Each Group Company (i) is a corporation or a
limited liability company, as the case may be, duly organized, validly existing
and in good standing under the laws of the State of Delaware, (ii) is duly
qualified to transact business in the State of California and in each other
jurisdiction in which qualification is required to own, lease or license its
properties or to carry on its business, and (iii) has all necessary corporate or
other power and authority to own its properties, to carry on its business and to
execute and deliver this Agreement and each of the Ancillary Agreements and to
consummate the Transactions.
(c) No Conflicts. Neither the execution and delivery of this Agreement or
the Ancillary Agreements, nor consummation of the Transactions, nor compliance
with any of the provisions hereof or in the Ancillary Agreements, will upon
obtaining of the Material Consents conflict with
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or result in the breach or violation of, or default under, or give any other
party any right to modify, accelerate or cancel, any of the terms, conditions or
provisions of CPH Inc.'s articles of incorporation or bylaws or other governing
documents or any Relevant Company's limited liability company agreement or other
governing documents, or any Contract, license, or Regulation to which any Group
Company is a party or by which any Group Company or any of its respective
properties or Assets is bound except where the breach, violation or default, or
any such modification, accelerator or cancellation, would not have a Material
Adverse Effect. Without limiting the generality of the foregoing, the
distribution of 0000 XxxXxxxxx Xxxx., Xxxxxxx Xxxxx, XX, 3200 Soaring Gulls Dr.,
Las Vegas, NV from CPH LLC and the membership interest in RPV Associates, LLC to
the respective Mirror Companies was not in violation of CPH LLC's obligations
under the Indenture.
(d) Consents. Schedule 5.1(d) sets forth all Consents which are required
from any Governmental Body in connection with (i) the due execution and delivery
by each Group Company, as the case may be, of this Agreement and the Ancillary
Agreements, (ii) the consummation by each Group Company of the Transactions,
(iii) the performance by each Group Company of its obligations under this
Agreement and the Ancillary Agreements, or (iv) the exercise by CHF of its
rights and remedies under this Agreement and the Ancillary Agreements.
(e) Capitalization. The authorized capital stock of CPH Inc. consists of
30,000,000 shares of Voting Common Stock, 5,000,000 shares of non-designated
Preferred Stock, and 30,000,000 shares of Non-Voting Common Stock, of which
13,767,311 shares of Voting Common Stock are issued and outstanding. As of the
Closing, except as set forth above, and except as the result of the (i) exercise
of (x) employee stock options set forth on Schedule 5.1(e) or (y) of warrants
for not in excess of 569,732 shares of Common Stock or (ii) stock repurchases
made in the ordinary course of business, CPH Inc. shall not have any Equity
Securities issued and outstanding. As of the Closing, (A) CPH Inc. is not
subject to any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any of its Equity Securities, and (B) all of the outstanding
shares of CPH Inc.'s Equity Securities shall be validly issued, fully paid and
non-assessable. There are no statutory or contractual preemptive rights or
rights of refusal in favor of any Person other than CHF or any Affiliate with
respect to any of CPH Inc.'s Common Stock. The Non-Voting Common Stock has
rights and privileges that are in every way identical to those of the Common
Stock, except that the Non-Voting Common Stock does not have the right to vote.
(f) Title to CPH Mirror Company Interests. CPH Inc. has good and marketable
title to the CPH Mirror Company Interests and at the Closing, CHF, its
successors and assigns will receive good and marketable title to the CPH Mirror
Company Interests, free and clear of all Liens. None of the CPH Mirror Company
Interests is subject to any pending or threatened condemnation, attachment or
Action of any kind.
(g) Financial Statements. The unaudited consolidated balance sheet of each
Relevant Company and its respective Subsidiaries dated November 30, 2000 (each,
an "Unaudited Balance Sheet") copies of which were previously delivered to CHF,
were prepared in accordance with generally accepted accounting principles
applied on a consistent basis in accordance with the past
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practice of each such Relevant Company (except with respect to the unaudited
statements, for the absence of footnotes and subject to year end adjustments in
accordance with generally accepted accounting principles) and fairly present the
financial position of each such Relevant Company and its respective Subsidiaries
as of such date. None of the Non-Financed Companies has any indebtedness or
other obligation or liability except as reflected in their respective Unaudited
Balance Sheet. The unaudited consolidated statement of operations, statement of
changes in shareholder's equity and statement of cash flows of each Relevant
Company and its respective Subsidiaries for the year-to-date ended November 30,
2000, copies of which were previously delivered to CHF, were prepared in
accordance with generally accepted accounting principles applied on a consistent
basis in accordance with the past practice of each such Relevant Company (except
with respect to the unaudited statements, for the absence of footnotes and
subject to year end adjustments in accordance with generally accepted accounting
principles) and fairly present the consolidated results of operations, changes
in shareholder's equity and cash flows of each such Relevant Company and its
respective Subsidiaries for such period.
(h) Taxes. Each Relevant Company has duly and timely filed all of its
respective Tax Returns which each such Relevant Company has had an obligation to
file. Each Relevant Company has paid all Taxes due and owing by such Relevant
Company (whether or not such Taxes are required to be shown on a Tax Return).
The charges, accruals and reserves on the books of each Relevant Company in
respect of Taxes are accurate and adequate and were calculated in the ordinary
course of such Relevant Company's business. All material Taxes that each
Relevant Company is required to withhold or collect have been withheld or
collected and, to the extent required, have been paid over to the proper
Governmental Body on a timely basis. Proper amounts have been withheld by each
Relevant Company from such Relevant Company's employees for all periods in
material compliance with Tax withholding provisions of applicable federal,
state, local, domestic and foreign Regulations.
(i) Litigation. There is no Action (i) against any Group Company or any of
its respective officers or directors, (ii) that questions the validity of any of
this Agreement or any of the Ancillary Agreements or that relates to any of the
Transactions, or (iii) that could reasonably be expected to have a Material
Adverse Effect.
(j) Compliance with Laws. Each Relevant Company is and at all times has
been in material compliance with each Regulation applicable to such Relevant
Company and such Relevant Company's business except where the failure to be in
compliance will not have a Material Adverse Effect. None of the Relevant
Companies has at any time made any bribes, kickback payments or other illegal
payments.
(k) Absence of Certain Changes or Events. Since November 30, 2000, (i)
there has not occurred a Material Adverse Effect, and (ii) except as set forth
on Schedule 5.1(k) each Relevant Company has conducted its respective businesses
in the ordinary course in accordance with its Business Plan in all material
respects.
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(l) Other Assets. Except as set forth on Schedule 5.1(l), each Relevant
Company has good and marketable title to, or a valid leasehold interest in, each
of such Relevant Company's Other Assets free and clear of any Liens other than,
in the case of Other Assets other than any Mirror Company's interest in any
Project Company, Permitted Liens.
(m) Real Property and Leaseholds. Schedule 5.1(m) sets forth a correct and
complete list and legal description of all Real Property and all leasehold
interests as lessee ("Leaseholds") in which each Non-Financed Company owns or
has an interest and its location. Each Relevant Company has good, marketable
title to its respective Real Property and good, marketable and insurable
leasehold interest to its respective Leaseholds free and clear of any Liens,
other than Permitted Liens, except as set forth on Schedule 5.1(m).
(n) Material Contracts. Listed on Schedule 5.1(n) are (i) the Material
Contracts to which any of the Non-Financed Companies is a party and (ii) the
Material Contracts of which CHF has not been previously made aware. Each of the
Material Contracts (A) has been duly authorized, executed and delivered by the
respective Relevant Company and is in full force and effect and (B) constitutes
the legal, valid and binding obligation of such Relevant Company enforceable
against such Relevant Company in accordance with the terms of each such
Contract. There exists no breach or default (or event which with or without the
lapse of time or the giving of notice, or both would constitute a breach or
default) under the Material Contracts by the respective Relevant Company or to
the knowledge of CPH Inc., the other parties thereto, except in each case, for
breaches or defaults which could not reasonably be expected to have a Material
Adverse Effect. The Company has delivered to CHF true and complete copies of
each Material Contract listed in Schedule 5.1(n).
(o) Intellectual Property. To CPH Inc.'s knowledge, each Relevant Company,
as the case may be, owns, or has the legal and valid right to use, all
Intellectual Property used by it.
(p) Insurance. Set forth on Schedule 5.1(p) are the material insurance
policies ("Insurance Policies") that cover the Relevant Companies and their
Assets. All Insurance Policies are valid and currently effective and none of the
Relevant Companies is in default with respect to their respective obligations
under any of the Insurance Policies.
(q) Books and Records. The records and books of account of each Relevant
Company are correct and complete in all material respects, have been maintained
in accordance with good business practices and are reflected accurately in all
material respects in the financial statements referred to in Section 5.1(g).
(r) Environmental Matters.
(i) CPH Inc. Except as set forth on Schedule 5.1(r) and for matters of
which CHF has knowledge (A) CPH Inc. has no known actual, alleged or
contingent liability or obligation relating to any Project or its
membership interests in any Relevant Company (I) under any
Environmental Law or (II) with respect to the generation,
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presence, disposal, release, handling, transportation, storage,
cleanup or contamination of or by any Hazardous Material (any such
liability or obligation being an "Environmental Liability"); (B) there
is no Action of which CPH Inc. has notice regarding any Environmental
Liability against CPH Inc. arising out of, based on or resulting from
any Project or its membership interests in any Relevant Company; and
(C) CPH Inc. has not received any communication from a Governmental
Body, Person or any citizens' group, employee or otherwise alleging
that it has any Environmental Liability relating to any Project or its
membership interests in any Relevant Company.
(ii) Relevant Companies. Except as set forth on Schedule 5.1(r) and
for matters of which CHF has knowledge, (A) none of the Relevant
Companies has notice of any actual, alleged or contingent liability or
obligation (I) under any Environmental Law or (II) with respect to any
Environmental Liability; (B) there is no Action of which any Relevant
Company has notice regarding Environmental Liability against any
Relevant Company, or relating to any of its respective Assets; and (C)
none of the Relevant Companies has received any communication from a
Governmental Body, Person or any citizens' group, employee or
otherwise alleging that such Relevant Company has any Environmental
Liability.
(iii) Copies of Environmental Liabilities. Prior to the date of this
Agreement, CPH Inc. has furnished to CHF correct and complete copies
of all correspondences and information with respect to, or a written
summary setting forth the terms of, the Environmental Liabilities and
environmental matters set forth in clauses (i) and (ii) above or on
Schedule 5.1(r).
(s) Employees. None of the Relevant Companies has any employees.
(t) Affiliate Transactions. Except as set forth on Schedule 5.1(t), no
officer, director, five percent (5%) or greater shareholder or other Affiliate
of a Group Company, or any spouse, former spouse, parent, sibling or child of
any such individual, (i) is, or has been within the past 12 months, involved in
any business arrangement or relationship with any Relevant Company, (ii) is, or
has been within the past 12 months, a party to any Contract or transaction with
any Relevant Company or (iii) has any interest in any of the Assets of any
Relevant Company.
(u) Investment Representation.
(i) Acquisition for Own Account. The Transferred Interest to be
acquired by CPH Inc. hereunder will be acquired for CPH Inc.'s own
account, not as a nominee or agent, and not with a view to the
distribution of any part thereof in violation of applicable securities
laws.
(ii) No Registration. CPH Inc. understands and acknowledges that the
Transferred Interest is not being registered under the Securities Act,
or any state securities
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laws, on the grounds that the issuance thereof is exempt under Section
4(2) of the Securities Act and such state securities laws as a
transaction by an issuer not involving any public offering, and that
reliance on such exemption is predicated in part on the
representations by CPH Inc. herein. CPH Inc. understands that the
Transferred Interest cannot be sold unless they are subsequently
registered under the Securities Act and applicable state securities
laws or an exemption from such registration is available.
(iii) Accredited Investor; Sophisticated Purchaser. CPH Inc. is an
"accredited investor" as defined in Rule 501(a) of the Securities Act.
CPH Inc., alone or in connection with its financial, legal and other
advisers, is sufficiently experienced in financial and business
matters to be capable of analyzing and evaluating the merits and risks
of an investment in CPH LLC, and to make an informed decision relating
thereto, and otherwise to protect its own interests with respect to
the investment in CPH LLC and the acquisition of the Transferred
Interest.
(v) No Brokers. No person or any other entity is entitled to any brokerage
commission, finder's fee or like payment in connection with the transactions
contemplated by this Agreement due to any agreement, engagement or
representation made by or on behalf of CPH Inc.
(w) Mirror Companies. Each CPH Mirror Company Interest constitutes 67.93%
of the ownership interests in the corresponding Mirror Company and the only
other membership interests in the Mirror Companies are the ownership interests
held by CHF. Except for the Buy/Sell provision set forth in the limited
liability company operating agreement of each Mirror Company, if any, no Person
has any right to acquire any membership interest in any Mirror Company nor has
any right of first refusal or right with respect of issuances of new interests
or transfers of interests been granted. Except for CPH Newport Building, LLC,
CPH Las Vegas Building, LLC, CPH Industrial I, LLC and CPHCHF Golf, LLC, each
Mirror Company's sole asset consists of its 1% capital interest and 100% of the
"carried interest" in each corresponding Project Company. The sole assets of CPH
Newport Building, LLC consist of that certain 43,838 square foot office
building, together with any interest of such LLC in the land thereunder, located
at 0000 XxxXxxxxx Xxxxxxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx, and the personal
property set forth on Schedule 5.1(z). The sole asset of CPH Las Vegas Building,
LLC consists of a promissory note in the principal amount of $2,300,000 (a copy
of which has been delivered to CHF). The sole assets of CPH Industrial I, LLC
consist of its 98.05% capital interest and its share of the "carried interest"
in CPH Jarupa/Xxxxxxxx, LLC. The sole asset of CPHCHF Golf, LLC is its
approximate 23% capital interest and its share of the carried interest in CPH
Dos Pueblos, LLC. Each Mirror Company owns all such assets free and clear of any
and all Liens other than, except in the case of each Mirror Company's capital
and carried interests in the Project Companies and the cash and promissory note
owned by CPH Las Vegas Building, LLC, Permitted Liens. CPH Inc. has provided to
CHF a true and complete copy of each limited liability company agreement, and
all amendments and waivers thereto, for each Mirror Company. CPH Inc. has fully
performed all of, and has not defaulted in respect of any of, its obligations to
each Mirror Company and each Mirror Company has fully performed all of, and not
defaulted in respect of any of, its obligations
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to each Project Company and to each other Person. No Mirror Company or other
member of any Project Company has any further obligation to contribute capital
or otherwise finance any Project Company except for the unfunded capital
commitment set forth on Schedule 5.1(w).
(x) Project Companies. Except for the Buy/Sell provision set forth in the
limited liability company operating agreement of each Project Company, if any,
no Person has any right to acquire any membership interest in any Project
Company nor has any right of first refusal or right with respect of issuances of
new interests or transfers of interests been granted. Except in the case of CPH
Dos Pueblos, LLC and CPH Austin, LLC, each Project Company's sole asset consists
of the project described in Section 2.1. The sole assets of CPH Dos Pueblos, LLC
is its 95.98% capital interest and its share of the carried interest in CPH Dos
Pueblos Associates, LLC. The sole assets of CPH Austin, LLC are (i) the sole
limited partnership interest in CPH Xxxxxx Ranch, L.P. and (ii) 100% of the
equity of CPHFR, Inc., sole general partner of CPH Xxxxxx Ranch, L.P. Each
Project Company owns such assets free and clear of any and all Liens other than,
except in the case of CPH Dos Pueblos, LLC's interest in CPH Dos Pueblos
Associates, LLC and CPH Austin, LLC's interest in CPH Xxxxxx Ranch, L.P.,
Permitted Liens or as set forth on Schedule 5.1(x). CPH Inc. has provided to CHF
a true and complete copy of each limited liability company agreement, and all
amendments and waivers thereto for each Project Company.
(y) Payment Amounts. The CPH Inc. Payment Amount and the CHF Payment
Amount, each as calculated and set forth on Schedule 5.1(y), as calculated by
the Chief Financial Officer of CPH Inc. and included in the compliance
certificate delivered by him pursuant to Section 4.1(c), are true and correct.
(z) Transfer of Personal Property to CPH Newport Building LLC. All of CPH
Inc.'s right, title and interest in the furniture, computers and other office
equipment set forth on Schedule 5.1(z), has been transferred to CPH Newport
Building LLC and CPH Newport Building LLC is the sole owner of such personal
property. None of CPH Inc. or its Affiliates (except for CPH Newport Building
LLC) has any ownership interest in any such personal property.
(aa) No Material Misstatements or Omissions. No information, document,
certificate, schedule or report furnished or to be furnished by, or on behalf
of, any Group Company (or by their employees, representatives, counsel,
accountants or other professionals) to CHF (or to CHF's employees,
representatives, counsel, accountants or other professionals) in connection with
the Transactions, and no representation or warranty contained in this Agreement
or in any of the Ancillary Agreements, contained or will contain, as the case
may be, any material misstatement of fact or omitted or will omit, as the case
may be, to state a material fact or any fact necessary to make the statement
contained therein not materially misleading.
5.2 Representations and Warranties of CHF. CHF represents and warrants to
CPH Inc. as of the date hereof and as of the Closing as follows:
(a) Authority and Enforceability. All actions on the part of CHF necessary
for the authorization, execution and delivery of this Agreement and each of the
Ancillary Agreements
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and for the consummation of the Transactions, have been duly and validly taken.
This Agreement and each of the Ancillary Agreements have been duly executed and
delivered by CHF and constitute the valid and legally binding obligations of CHF
enforceable against CHF in accordance with their terms.
(b) Organization of CHF. CHF is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of Delaware
and is duly qualified to transact business in the State of California.
(c) No Conflicts. Neither the execution and delivery of this Agreement or
the Ancillary Agreements, nor consummation of the Transactions, nor compliance
with any of the provisions hereof or in the Ancillary Agreements, will upon
obtaining the Consents required under Section 5.2(d) conflict with or result in
the breach or violation of, or default under, or give any other party any right
to modify, accelerate or cancel, any of the terms, conditions or provisions of
CHF's limited partnership agreement or other governing documents, or any other
Regulation by which CHF or any of its properties or assets is bound (except
where the breach, violation or default, or any such modification, acceleration,
or cancellation, would not have a material adverse effect upon the legality,
validity or enforceability of this Agreement or any of the Ancillary
Agreements).
(d) Consents. At Closing, all Consents have been obtained which are
required from any Governmental Body in connection with (i) the due execution and
delivery by CHF of this Agreement and the Ancillary Agreements, (ii) the
consummation by CHF of the Transactions, (iii) the performance by CHF of its
obligations under this Agreement and the Ancillary Agreements, or (iv) the
exercise by CPH Inc. of its rights and remedies against CHF under this Agreement
and the Ancillary Agreements.
(e) Title to Transferred Interest. CHF has good and marketable title to the
Transferred Interest and at the Closing, CPH Inc., its successors and assigns
will receive good and marketable title to the Transferred Interest, free and
clear of all Liens. The Transferred Interest is not subject to any pending or
threatened condemnation, attachment or Action of any kind.
(f) No Brokers. No person or any other entity is entitled to any brokerage
commission, finder's fee or like payment in connection with the transactions
contemplated by this Agreement, due to any agreement, engagement or
representation made by or on behalf of CHF.
(g) Investment Representations.
(i) Acquisition for Own Account. The CPH Mirror Company Interests and
the Non-Voting Common Stock to be acquired by CHF hereunder will be
acquired for CHF's own account (or, in the case of the CPH Mirror
Company Interests, for the account of the Joint Venture), not as a
nominee or agent, and not with a view to the distribution of any part
thereof in violation of applicable securities laws.
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(ii) No Registration. CHF understands and acknowledges that the CPH
Mirror Company Interests and the Non-Voting Common Stock are not being
registered under the Securities Act, or any state securities laws, on
the grounds that the issuance thereof is exempt under Section 4(2) of
the Securities Act and such state securities laws as a transaction by
an issuer not involving any public offering, and that reliance on such
exemption is predicated in part on the representations by CHF herein.
CHF understands that no CPH Mirror Company Interest or Non-Voting
Common Stock can be sold unless it is subsequently registered under
the Securities Act and applicable state securities laws or an
exemption from such registration is available.
(iii) Accredited Investor; Sophisticated Purchaser. CHF is an
"accredited investor" as defined in Rule 501(a) of the Securities Act.
CHF, alone or in connection with its financial, legal and other
advisers, is sufficiently experienced in financial and business
matters to be capable of analyzing and evaluating the merits and risks
of an investment in CPH Inc. and each Mirror Company, and to make an
informed decision relating thereto, and otherwise to protect its own
interests with respect to the investment in each Mirror Company and
the acquisition of the CPH Mirror Company Interests.
(h) No Material Misstatements or Omissions. No information, document,
certificate, schedule or report furnished or to be furnished by, or on behalf
of, CHF (or by its employees, representatives, counsel, accountants or other
professionals) to CPH Inc. (or to CPH Inc.'s employees, representatives,
counsel, accountants or other professionals) in connection with the
Transactions, and no representation or warranty contained in this Agreement or
in any of the Ancillary Agreements, contained or will contain, as the case may
be, any material misstatement of fact or omitted or will omit, as the case may
be, to state a material fact or any fact necessary to make the statement
contained therein not materially misleading.
5.3 No Knowledge. CHF has no actual notice of any breach of any of CPH
Inc.'s representations, warranties or covenants under this Agreement. CPH Inc.
has no actual notice of any breach of any of CHF's representations, warranties
or covenants under this Agreement.
5.4 Remaking and Survival of Representations and Warranties. Each of the
representations and warranties of the parties set forth in this Article V shall
be deemed to have been remade on the Closing Date by CPH Inc. to CHF (as to the
representations and warranties set forth in Section 5.1), and by CHF to CPH Inc.
(as to the representations and warranties set forth in Section 5.2). CPH Inc.
and CHF shall not take any action or refrain from taking any action that will
cause any of their respective representations or warranties set forth in Section
5.1 or 5.2 to be untrue or inaccurate at any time from the date of this
Agreement to the Closing. The representations and warranties of the parties set
forth in this Article V shall survive the Closing.
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ARTICLE VI
ADDITIONAL COVENANTS AND AGREEMENTS
6.1 Continued Operation of Companies. Until the Closing, without the
consent of CHF, CPH Inc. shall cause each Relevant Company to be operated in the
ordinary course of business consistent with past practices and shall not permit
any Relevant Company to undergo any material change in its operations,
indebtedness or other liabilities (other than draws in the ordinary course of
business under existing credit facilities or other matters contemplated by the
respective Business Plan), and shall not permit any Relevant Company to transfer
any Assets or any right or interest therein except for cash sales of homes
individually, office leases and associated agreements and hotel, restaurant,
golf and other reservations entered into in the ordinary course of business.
6.2 Distributions. Except for management fees associated with the Relevant
Companies which accrued on or before the Closing and reimbursements of Advances,
from December 1, 2000 through the Closing, CPH Inc. and its Affiliates have not
accepted, and CPH Inc. and its Affiliates shall not accept, any payments from
any Relevant Company or CPH LLC, whether by the way of fees, distributions,
salary or otherwise, or permit any Relevant Company or CPH LLC to make any
payments to any other party, except in the ordinary course of business. CPH
confirms that none of the Relevant Companies has made any distributions to its
Members from December 1, 2000 through the Closing other than as accounted for on
Schedule 5.1(y).
6.3 CHF Interests in CPH Inc. CHF acknowledges that after the Closing its
sole interest in the business of CPH Inc. and its Affiliates (other than the
Relevant Companies and the Potential Transactions) will be as a holder of the
Remainder Interest and as a stockholder of CPH Inc. Without limiting the
generality of the foregoing, CHF shall have no interest in any corporate
opportunities of CPH Inc. or any Affiliate (other than the Relevant Companies
and the Potential Transactions) whether arising prior to or after the Closing.
CPH Inc. shall transfer its rights to the Deposits and after the Closing shall
notify any third party holders of such Deposits that the rights to such Deposits
have been transferred to CHF.
6.4 Consents. Without limitation on Sections 4.1(d) or 5.1(d), CPH Inc.
shall use its best efforts to obtain the Consents required under the terms of
any Contracts to which any Relevant Company is a party, including, without
limitation, the Material Contracts, if any, each in form reasonably satisfactory
to CHF.
6.5 Press Releases. Upon the Closing, if it occurs, the form and content of
all press releases or other public communications (other than any filings with
the Securities and Exchange Commission) by or on behalf of CPH Inc. or CHF shall
be subject to the approval of each other.
6.6 Tag-Along. CPH2, LLC and CPH3, LLC are the principal shareholders of
CPH, Inc. and have joined this Agreement solely for the purposes of this Section
6.6. CPH2, LLC and CPH3, LLC hereby represent and warrant to CHF as of the
Closing that the ownership of
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Common Stock of CPH Inc. by XXX0 XXX, XXX0 LLC and CHF is accurately set forth
in the Proxy Statement of CPH, Inc. dated June 13, 2000.
(a) Subject to the limitations set forth below, in the event CPH2, LLC or
CPH 3, LLC (collectively the "Principal Shareholder"), on the one hand, or CHF,
on the other hand (each a "Prospective Seller") shall receive a bona fide offer
(an "Offer") from a third party (a "Third Party") to purchase in one or a series
of related transactions all or a portion of the Common Stock or Non-Voting
Common Stock of CPH, Inc. (the "Owned Stock") owned by such Prospective Seller
and such Prospective Seller shall be willing to accept such Offer, such
Prospective Seller shall give notice thereof (the "Third Party Notice") to the
Principal Shareholder or CHF, as the case may be (the "Offeree"), describing the
price and all other material terms and conditions of the Offer. Each Offeree
shall have the right and option, for a period of twenty (20) business days after
the Third Party Notice is deemed given as herein provided, by giving the
Prospective Seller written notice (the "Notice of Election"), to sell to the
Third Party a pro rata portion of its Owned Stock based on the number of shares
of Owned Stock owned respectively by the Prospective Seller and the Offeree
(treating the Common Stock and the Non-Voting Stock as a single class for such
purpose) for the same consideration and otherwise on the same terms and
conditions as contained in the Offer. The amount of Owned Stock to be
transferred by the Prospective Seller shall be reduced to the extent necessary
to provide for such sales by the Offeree. The Prospective Seller may not sell
any Owned Stock pursuant to the Offer unless any Offeree electing to be included
in the sale in accordance with the terms hereof has the opportunity to sell at
the same time and on the same terms and conditions as set forth herein.
(b) At the closing of any proposed transfer pursuant to the Offer, the
Prospective Seller, together with the Offeree if it has elected to sell Owned
Stock pursuant to such Offer, shall deliver to the Third Party certificates
and/or other instruments representing the Owned Stock to be sold, free and clear
of all liens and encumbrances, together with stock or other appropriate powers
duly endorsed therefor, and shall receive in exchange therefor the consideration
to be paid or delivered by the Third Party in respect of such Stock as described
in the Third Party Notice.
(c) The provisions of this Section 6.6 shall not apply to any transfer of
Owned Stock to any person pursuant to (i) a public offering by the Company which
includes a secondary offering by a Prospective Seller or a secondary offering by
CHF in accordance with its registration rights pursuant to the Registration
Rights Agreement; (ii) a transaction effected pursuant to Rule 144 promulgated
under the Securities Act of 1933; (iii) a transaction involving a gift or for
estate or personal financial planning purposes not involving any cash or other
financial consideration, or a transaction involving a transfer to an entity
controlled by or under common control with the Prospective Seller, in either
case provided that any transferee agrees to be bound by this Agreement to the
same extent as was the transferor as evidenced by a written adoption of the
relevant provisions of this Agreement by such transferee in a form reasonably
satisfactory to CHF if the Principal Shareholder is transferring, or the
Principal Shareholder if CHF is transferring, as the case may be; or (iv) a
transaction which results in proceeds which in the aggregate with all other
transfers after the Closing Date by such Prospective Seller are not in excess of
Three Million Dollars ($3,000,000). The Prospective Seller and the Offeree
electing to participate in the Offer
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each shall bear their respective expenses (including, without limitation, legal
expenses) incurred in connection with such sale.
(d) If an Offeree shall not have given as provided herein a Notice of
Election pursuant to this Section 6.6 with respect to any Offer Notice or
breaches its obligation to participate in such a sale after delivery of such a
Notice of Election, such Offeree will be deemed to have waived all its rights
under this Section 6.6 with respect to the transaction specified in such Third
Party Notice.
(e) Except as expressly provided in this Section 6.6, the Prospective
Seller shall not have any obligation to any Offeree with respect to the sale of
any Owned Stock owned by such Prospective Seller in connection with this Section
6.6. Anything herein to the contrary notwithstanding and irrespective of whether
any Notice of Election shall have been given as herein provided, the Prospective
Seller shall not have any obligation to any Offeree to sell any Owned Stock
pursuant to this Section 6.6 if such Prospective Seller decides not to accept or
consummate any Offer with respect to its Owned Stock (it being understood that
any and all such decisions shall be made by such Prospective Seller in its sole
discretion).
6.7 Future Affiliate Transactions. From and after the Closing Date, and
until CHF no longer owns at least five percent (5%) of the total CPH Inc. Common
Stock and Non-Voting Common Stock outstanding (treated as a single class for
such purpose), CPH Inc. covenants that it shall not without the consent of CHF,
which consent shall not be unreasonably withheld, enter into any transaction
with any officer, director, five percent (5%) or greater shareholder or other
Affiliate of CPH Inc., or any spouse, former spouse, parent, sibling or child of
any such individual, other than (i) in the ordinary course of business
consistent with past practice, (ii) on fair and reasonable terms no less
favorable to CPH Inc. than could be obtained on an arms length basis with an
unaffiliated third party, (iii) transactions with an Affiliate of CHF or with
Makar or any other entity controlled by Xxxx Xxxxxxxxxxx, (iv) transactions
involving less than $2,000,000 in consideration or (v) any compensation of Xxxx
Xxxxxxxxxxx as an officer of CPH Inc.
6.8 Reporting. From and after the Closing Date, and until CHF no longer
owns at least five percent (5%) of the total outstanding Voting Common Stock and
Non-Voting Comon Stock of CPH Inc. (treated as a single class for such purpose),
if at any time CPH Inc. is no longer filing quarterly and annual reports on
Forms 10-Q and 10-K under the Exchange Act, CPH Inc. shall provide to CHF (i)
within forty-five (45) days of the end of each fiscal quarter and ninety (90)
days of the end of each fiscal year, financial statements (together with
accompanying footnotes) of the detail and prepared (x) in accordance with the
requirements of Item 1 of Form 10-Q and Item 8 of Form 10-K or (y) in accordance
with the requirements of CPH Inc.'s senior lenders and (ii) within ten (10) days
of the delivery of any periodic written corporate financial report required by
CPH Inc.'s senior lenders (but not any asset-specific report), a copy of such
report.
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ARTICLE VII
TERMINATION
7.1 Termination. This Agreement may be terminated at any time prior to the
Closing by:
(a) the mutual written consent of CPH Inc. and CHF;
(b) CHF, if the conditions set forth in Section 4.1 shall not have been
satisfied by February 28, 2001 (the "Termination Date"), unless the failure of
such condition is the result of a material breach of this Agreement or any
Ancillary Agreement by CHF;
(c) CPH Inc., if the conditions set forth in Section 4.2 shall not have
been satisfied by the Termination Date, unless the failure of such condition is
the result of a material breach of this Agreement or any Ancillary Agreement by
CPH Inc., any Mirror Company or any Project Company;
(d) CHF or CPH Inc. if any Governmental Body shall have issued an order,
decree or ruling or taken any other action restraining, enjoining or otherwise
prohibiting the Transactions.
7.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 7.1 hereof, such termination shall be the sole
remedy, and (a) this Agreement shall forthwith become void, and (b) there shall
be no liability on the part of CPH Inc. or CHF; provided, however, that if such
termination shall result from the breach by a party hereto of any of its
obligations under this Agreement, such party shall be fully liable for any and
all damages sustained or incurred by the other party hereto, its affiliates or
any of the representatives of any of them as a result of or arising from such
breach and such other party shall be entitled to seek any remedies available to
its at law or in equity.
7.3 Expenses. Each of the parties hereto will bear its own legal and
accounting charges and other expenses arising from the negotiation, preparation
and execution of this Agreement and the Ancillary Agreements.
7.4 Transfer Taxes. If there should be any stock transfer Taxes, sales or
use Taxes and real property gains or transfer Taxes (excluding any income
Taxes), filing fees, recording charges, registration costs or expenses directly
or indirectly attributable to or arising out of the exchange of interests and
other transactions contemplated by this Agreement or the Ancillary Agreements
("Transfer Taxes") payable, CPH Inc. will be responsible for filing any Tax
Returns, with the assistance of CHF, and complying with any procedures required
in connection with all Transfer Taxes resulting therefrom. CPH Inc. and CHF will
each pay one-half of any such Transfer Taxes due.
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ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification.
(a) Indemnification by CPH Inc. CPH Inc. will indemnify and defend CHF and
its Affiliates and each of their respective partners, members, managers,
directors, officers, employees, agents and Affiliates (collectively, the "CHF
Indemnified Persons") against and hold each CHF Indemnified Person harmless from
any and all liabilities, obligations, losses, damages, penalties, Actions,
judgments, costs, expenses, claims, diminution in value, or disbursements of any
kind or nature whatsoever, including, without limitation, interest, penalties,
fines, judgments, settlements, costs of preparation and investigation, costs
incurred in enforcing this indemnity and reasonable attorneys' fees and expenses
(collectively, "Losses"), that CHF Indemnified Persons may suffer, sustain,
incur or become subject to arising out of, relating to, or due to any inaccuracy
or breach of any of the representations, warranties, covenants or agreements of
CPH Inc. contained in this Agreement or any Ancillary Agreement.
(b) Indemnification by CHF. CHF will indemnify and defend CPH Inc. and each
of its managers, directors, officers, employees, agents and Affiliates
(collectively, the "CPH Inc. Indemnified Persons") against and hold each CPH
Inc. Indemnified Person harmless from any and all Losses that CPH Inc.
Indemnified Persons may suffer, sustain, incur or become subject to arising out
of, relating to, or due to any inaccuracy or breach of any of the
representations, warranties, covenants or agreements of CHF contained in this
Agreement or any Ancillary Agreement.
(c) Right to Assign. The parties hereto agree that CHF shall have the right
to assign its rights to indemnification under this Section 8.1 to any single
Person, including but not limited to, the Joint Venture, that acquires
substantially all of the CPH Mirror Company Interests from CHF, whether by sale,
merger, consolidation or otherwise.
8.2 Survival of Representations and Warranties and Right to
Indemnification. With respect to Sections 8.1(a) and (b) only, the
representations and warranties of the parties contained in this Agreement or any
Ancillary Agreement and the rights to indemnification under this Agreement with
respect thereto will survive the Closing Date and any investigation at any time
made by or on behalf of CHF or any other party and will remain in full force and
effect thereafter until March 31, 2002 and will be effective with respect to any
inaccuracy therein or breach thereof, notice of which has been given prior to
such date; provided, however, that:
(a) the representations and warranties set forth in Sections 5.1(a), (b),
(c), (d), (f), (h), (j), (l), (m), (r), (t), (u), (w) and (x) (the "CPH Inc.'s
Fundamental Representations") and the rights to indemnification under Section
8.1(a) with respect thereto will survive the Closing and will remain in full
force and effect for the longer of five years and the applicable statute of
limitations.
(b) the representations and warranties set forth in Sections 5.2(a), (b),
(c), (d), (e) and (g) (the "CHF's Fundamental Representations") and the rights
to indemnification under
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Section 8.1(b) with respect thereto will survive the Closing and will remain in
full force and effect for the longer of five years and the applicable statute of
limitations.
8.3 Thresholds; Limitation on Liability. CHF Indemnified Persons and CPH
Inc. Indemnified Persons will be able to recover Losses under Section 8.1 from
the first dollar of such Losses; provided, however, that no CHF Indemnified
Person or CPH Inc. Indemnified Person will be entitled to any recovery from the
other party in accordance with the provisions of Sections 8.1(a) and (b), unless
and until the aggregate amount of such Losses suffered, sustained, or incurred
by the asserting party, or to which such party becomes subject, by reason of
inaccuracy or breach of any representations or warranties thereunder, exceeds
$250,000 calculated on a cumulative basis (for all Losses) and not per item
basis (the "Threshold Amount").
(d) Limitations on Liability of CHF. The liability of CHF for
indemnification under Section 8.1(b) shall not exceed $10,000,000 in the
aggregate.
(e) Limitations on Liability of CPH Inc. The liability of CPH Inc. for
indemnification under Section 8.1(a) shall not exceed $10,000,000 in the
aggregate.
8.4 Fraud Exception. Notwithstanding any provision contained in Article
VIII to the contrary, (a) in the event any Loss or failure to discover a fact or
condition by a CHF Indemnified Person is due to, arises from, or is in
connection with, fraud or willful misconduct by the CPH Inc., such CHF
Indemnified Person will be entitled to recover any such Losses from the CPH Inc.
without regard to any of the time limitations, the Threshold Amount or the
$10,000,000 dollar limitations set forth above, and will be entitled to recover
the full amount of such Losses from the first dollar of any such Loss; and (b)
in the event any Loss or failure to discover a fact or condition by a CPH Inc.
Indemnified Person is due to, arises from, or is in connection with, fraud or
willful misconduct by the CHF, such CPH Inc. Indemnified Person will be entitled
to recover any such Losses from the CHF without regard to any of the time
limitations, dollar thresholds or dollar limitations set forth above, and will
be entitled to recover the full amount of such Losses from the first dollar of
any such Loss.
ARTICLE IX
GENERAL PROVISIONS
9.1 Entire Agreement; Amendment. This Agreement and the Ancillary
Agreements, together with all exhibits hereto, sets forth the entire
understanding of the parties, and supersede all prior arrangements and
communications, whether oral or written, with respect to the subject matter
hereof. For avoidance of doubt, this Agreement does not constitute an "Election
Notice" under Section 7.03 of the Investment and Stockholders Agreement dated
September 29, 1997 or under Article IV of the Amended and Restated Limited
Liability Company Agreement of CPH LLC.
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9.2 Severability. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions of this
Agreement, and this Agreement shall be construed in all respects as if the
invalid or unenforceable provision were omitted.
9.3 Notices. All notices, demands and communications hereunder shall be in
writing and shall be deemed to be duly given upon personal delivery or five (5)
days after being mailed from the State of California by registered or certified
United States mail, postage pre-paid, return receipt requested, addressed to the
parties at the addresses herein set forth, or at such other address as any party
shall have furnished to the other parties in writing:
If to CPH Inc.: Capital Pacific Holdings, Inc.
0000 XxxXxxxxx Xxxxxxxxx
Xxxxxxx Xxxxx, XX 00000
Attn: President and General Counsel
with a copy (not Wiley, Rein & Fielding
constituting notice) 0000 X Xxxxxx, XX
Xxxxxxxxxx XX 00000
Attn: Xxx Xxxxxxxxx, Esq.
If to CHF: x/x Xxxxxxxx Xxxxxxx Xxxxxxxxxx, X.X.X.
Xxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx and Xxxx Xxxxxx
with a copy (not Xxxxxxxx Xxxxxx Xxxxx & Xxxx
constituting notice) Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxx, Esq.
9.4 Assignment. This Agreement shall not be assignable by CPH Inc. or CHF,
except that CHF shall have the right to by written notice to CPH Inc. to assign
its rights and delegate its obligations under this Agreement and the Ancillary
Agreements to any entity that is majority owned or controlling, controlled by or
under common control with CHF or its majority equity owners or to the Joint
Venture and which owns all or substantially all of the CPH Mirror Company
Interests provided that CHF in connection with any delegation of any duties
under this Agreement provides assurances of the assignee's financial capacity
acceptable to CPH Inc. in its sole discretion. This Agreement, the Ancillary
Agreements and all of the provisions hereof and thereof shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
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9.5 Governing Law and Venue. This Agreement, the Ancillary Agreements and
the rights and obligations of the parties hereunder and thereunder shall be
governed by and construed in accordance with the internal laws, but not the laws
pertaining to conflict or choice of laws, of the State of California. The
exclusive forum for the determination of any action relating to this Agreement
or any Ancillary Agreement shall be either an appropriate court of the State of
California in Orange County or the appropriate court of the United States in
Orange County, California.
9.6 Attorneys' Fees. If either party to this Agreement brings an action
against the other party to interpret or enforce this Agreement or any Ancillary
Agreement, the prevailing party shall be entitled to recover its costs and
expenses, including without limitation attorneys' fees and costs actually and
reasonably incurred in connection with such action, including any appeal of such
action.
9.7 No Waiver. No waiver of any provision of this Agreement or any
Ancillary Agreement or any rights or obligations of any party hereunder shall be
effective, except pursuant to a written instrument signed by the party or
parties waiving compliance, and any such waiver shall be effective only in the
specific instance and for the specific purpose stated in such writing.
9.8 Cooperation and Further Assurances. The parties shall fully cooperate
with each other in good faith to execute any and all reasonable documents and to
perform all actions reasonably necessary or appropriate to effect the
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements, both before or after the Closing.
9.9 Captions and References to Articles and Sections. The titles of the
articles and sections to this Agreement are for convenience only and are not a
part of this Agreement and do not in any way limit, amplify or explain any of
the provisions of this Agreement. All uses of the words "Article" and "Section"
in this Agreement are references to articles and sections of this Agreement,
unless otherwise specified.
9.10 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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IN WITNESS WHEREOF, each of the parties hereto have executed this Agreement
as of the date first written above.
CAPITAL PACIFIC HOLDINGS, INC.,
a Delaware corporation
By:
------------------------------------
Name:
Title:
CALIFORNIA HOUSING FINANCE, L.P.,
a Delaware limited partnership
By: California Housing Finance L.L.C.,
its General Partner
By: Farallon Capital Management, L.L.C.,
its Manager
By:
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Member
The undersigned entities are executing this Agreement solely for the
purposes set forth in Section 6.6.
CPH2, LLC
a Delaware limited liability company
By:
------------------------------------
Name:
Title:
CPH3, LLC
a Delaware limited liability company
By:
------------------------------------
Name:
Title:
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List of Schedules to Interest Exchange Agreement
Schedule 2.4(b) CPH Inc.'s Employees
Schedule 4.1(d) Consents
Schedule 4.2(d)(v) Project Companies Executing Management Agreements
Schedule 4.2(d)(vi) Project Companies Executing Construction Agreements
Schedule 5.1(d) Governmental Consents
Schedule 5.1(e) Employee Stock Options
Schedule 5.1(k) Material Changes
Schedule 5.1(l) Liens and Encumbrances on Other Assets
Schedule 5.1(m) Certain Real Property, Leaseholds and Liens
Schedule 5.1(n) Material Contracts
Schedule 5.1(p) Insurance Policies
Schedule 5.1(r) Environmental Matters
Schedule 5.1(t) Affiliate Transactions
Schedule 5.1(w) Unfunded Capital Commitments
Schedule 5.1(x) Liens on Assets of Project Companies
Schedule 5.1(y) Payment Amounts
Schedule 5.1(z) Personal Property of CPH Newport Building
Schedule 6.3 Potential Transactions
List of Exhibits to Interest Exchange Agreement
Exhibit A Certificate of Chief Financial Officer of CPH Inc.
Exhibit B Opinion of Counsel of CPH Inc.
Exhibit C Assignment of CPH Mirror Company Interests
Exhibit D Lease
Exhibit E Termination of the Investment and Stockholders Agreement
Exhibit F Management Agreements
Exhibit G Construction Agreements
Exhibit H Consulting Agreement
Exhibit I Service Marks License Agreement
Exhibit J Indemnification Agreement
Exhibit K Secretary's Certificate of CPH Inc.
Exhibit L Managing Member Certificate of Relevant Companies
Exhibit M Assignment of Transferred Interest
Exhibit N Sublease
Exhibit O Opinion of Counsel of CHF
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