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Title: |
Master Transaction Agreement |
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Entities: |
Meritage Corp.; Zenith National Insurance Corp.; Irell & Manella; Skadden, Arps, Slate, Meagher & Flom LLP; Snell & Wilmer |
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Date: |
2002 |
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Size: |
Preview shows 19KB of 314KB total |
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Price: |
$57 |
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ID: |
#333045 |
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MASTER TRANSACTION AGREEMENT
BY AND AMONG
MERITAGE CORPORATION,
MTH-HOMES NEVADA, INC.,
PERMA-BILT, A NEVADA CORPORATION,
AND
ZENITH NATIONAL INSURANCE CORP.
Dated October 7, 2002
{PAGE}
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.....................................................1
1.1 Definitions.........................................................1
ARTICLE II PURCHASE AND SALE OF ASSETS.....................................8
2.1 Closing.............................................................8
2.2 Assets to be Purchased..............................................8
2.3 Assets Not Being Transferred........................................8
2.4 Liabilities.........................................................9
2.5 Purchase Price; Earn-Out; Adjustment; and Warranty and
Reserves Administration............................................11
2.6 Allocation of Purchase Price.......................................17
2.7 Risk of Loss.......................................................18
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND BUYER.............18
3.1 Organization and Qualification.....................................18
3.2 Authority Relative to this Agreement...............................18
3.3 No Conflicts.......................................................18
3.4 Sufficient Funds...................................................18
3.5 No Consents........................................................18
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLING PARTIES..............19
4.1 Organization and Qualification.....................................19
4.2 Authority Relative to this Agreement...............................19
4.3 [intentionally omitted]............................................19
4.4 No Conflicts.......................................................19
4.5 No Consents........................................................20
4.6 Ownership Interests................................................20
4.7 Financial Statements...............................................20
4.8 [intentionally omitted]............................................20
4.9 No Material Adverse Changes........................................20
4.10 Absence of Certain Developments....................................20
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{PAGE}
TABLE OF CONTENTS
(CONTINUED)
PAGE
4.11 Permitted Liens; Good Title to and Condition of Acquired Assets....22
4.12 Legal Descriptions of Real Property................................22
4.13 Real Property......................................................22
4.14 Acquired Contracts.................................................25
4.15 Warranties.........................................................26
4.16 Environmental Matters..............................................26
4.17 Tax Matters........................................................27
4.18 Restrictions on Business Activities................................28
4.19 Intellectual Property..............................................28
4.20 Litigation.........................................................28
4.21 Employees..........................................................28
4.22 Employee Benefit Plans.............................................29
4.23 Insurance..........................................................29
4.24 Affiliate Transactions.............................................30
4.25 Compliance with Laws...............................................30
4.26 Permits............................................................30
4.27 Disclosure.........................................................31
ARTICLE V CONDUCT OF SELLER PENDING THE CLOSING..........................31
5.1 Conduct of Business Pending the Closing............................31
5.2 Business Relationships.............................................33
5.3 Notification of Certain Matters....................................33
5.4 Required Approvals.................................................33
ARTICLE VI ADDITIONAL AGREEMENTS..........................................33
6.1 Employment.........................................................33
6.2 No Negotiations....................................................34
6.3 Public Announcements...............................................34
6.4 Confidentiality....................................................35
6.5 Further Assurances.................................................36
6.6 Right to Enter and Inspect.........................................36
-ii-
{PAGE}
TABLE OF CONTENTS
(CONTINUED)
PAGE
6.7 Tax on Prior Sales.................................................37
6.8 Transfer of Permits................................................37
6.9 Landbanking........................................................37
6.10 Independent Auditors...............................................37
6.11 Charter Amendment..................................................37
ARTICLE VII CONDITIONS.....................................................37
7.1 Conditions to Obligation of Selling Parties........................37
7.2 Conditions to Obligations of Parent and Buyer......................38
ARTICLE VIII CLOSING........................................................40
8.1 Selling Parties' Obligations.......................................40
8.2 Parent's or Buyer's Obligations....................................42
8.3 Transfer Fees, Title Costs, and Closing Costs and
Other Fees; Prorations.............................................42
ARTICLE IX SURVIVAL AND INDEMNITIES.......................................44
9.1 Survival of Representations and Warranties.........................44
9.2 Nature of Statements...............................................44
9.3 Dispute Resolution.................................................44
9.4 Indemnification Agreement..........................................44
ARTICLE X TERMINATION/REMEDIES...........................................45
10.1 Termination........................................................45
10.2 Effect of Termination..............................................45
10.3 Specific Performance...............................................45
ARTICLE XI GENERAL PROVISIONS.............................................45
11.1 Notices..........................................................45
11.2 Counterparts.......................................................46
11.3 Governing Law......................................................46
11.4 Assignment.........................................................46
11.5 Gender and Number..................................................46
11.6 Schedules and Exhibits.............................................47
11.7 Waiver of Provisions...............................................47
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{PAGE}
TABLE OF CONTENTS
(CONTINUED)
PAGE
11.8 Costs..............................................................47
11.9 Amendment..........................................................47
11.10 Severability.......................................................47
11.11 Binding Effect.....................................................47
11.12 Construction.......................................................47
11.13 Time Periods.......................................................47
11.14 Headings...........................................................48
11.15 Access to Records..................................................48
11.16 Entire Agreement...................................................48
11.17 Enforcement of Rights..............................................48
11.18 No Third Beneficiaries.............................................48
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{PAGE}
TABLE OF CONTENTS
(CONTINUED)
EXHIBITS
EXHIBIT A - ASSET AGREEMENT
EXHIBIT B - REAL PROPERTY AGREEMENT
EXHIBIT C - INDEMNIFICATION AGREEMENT
EXHIBIT D - DISPUTE RESOLUTION PROCEDURES
EXHIBIT E - NON-DISCLOSURE AND NON-COMPETE AGREEMENT
EXHIBIT F - FORM OF GRANT, BARGAIN, SALE DEED
EXHIBIT G - ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT H - BILL OF SALE AND ASSIGNMENT AGREEMENT
EXHIBIT I - SCHWARTZ EMPLOYMENT AGREEMENT
EXHIBIT J - CAPITAL CHARGE SAMPLE CALCULATION
MASTER TRANSACTION AGREEMENT SCHEDULES
Schedule 2.3 - Excluded Assets
Schedule 2.4A - Seller Debt
Schedule 2.4D - Specific Reserves
Schedule 2.5B(1) - August 31, 2002 Balance Sheet
Schedule 2.5(B)(2) - Preliminary Closing Balance Sheet
Schedule 4.4 - Conflicts
Schedule 4.5 - Consents
Schedule 4.6 - Ownership Interests
Schedule 4.7A - Financial Statements
Schedule 4.7B - Undisclosed Liabilities
Schedule 4.9 - Material Adverse Changes
Schedule 4.10 - Certain Developments Since Balance Sheet Date
Schedule 4.11 - Permitted Liens
Schedule 4.12 - Legal Description of Owned Real Property
Schedule 4.13 - Disclosure for Owned Real Property
Schedule 4.13U - Flood Plain Maps
Schedule 4.13W - Noise Cone Disclosure
Schedule 4.14 - Material Contracts
Schedule 4.15 - Warranty Disclosure
Schedule 4.16 - Environmental Matters
Schedule 4.17 - Tax Matters
Schedule 4.19 - Intellectual Property
Schedule 4.20 - Litigation
Schedule 4.21 - Employee Information
Schedule 4.22 - Employee Benefit Plans
Schedule 4.23 - Insurance
Schedule 4.24 - Affiliate Transactions
Schedule 4.25 - Non-Compliance with Applicable Laws
-v-
{PAGE}
TABLE OF CONTENTS
(CONTINUED)
Schedule 4.26 - Land Use Entitlements
Schedule 4.26B - Permits
Schedule 5.1 - Conduct of Business Pending Closing
REAL PROPERTY AGREEMENT SCHEDULES
Schedule 4.2 - Real Property Assets; Title Reports; Surveys
Schedule 4.2C - Disapproved Title Exceptions
-vi-
{PAGE}
MASTER TRANSACTION AGREEMENT
This MASTER TRANSACTION AGREEMENT (this "AGREEMENT") is made as of October
7, 2002, by and among MERITAGE CORPORATION, a Maryland corporation ("MERITAGE or
PARENT"); MTH-HOMES NEVADA, INC., an Arizona corporation ("BUYER"); PERMA-BILT,
A NEVADA CORPORATION ("SELLER"); and ZENITH NATIONAL INSURANCE CORP., a Delaware
corporation ("ZENITH"). Collectively, Seller and Zenith are referred to herein
as "SELLING PARTIES."
RECITALS
1. Seller owns and operates the Perma-Bilt Homes land development,
homebuilding, and sales operations (the "BUSINESS").
2. Concurrently herewith, the Parties are entering into that Agreement of
Purchase and Sale of Assets in the form attached as EXHIBIT A hereto ("ASSET
AGREEMENT"), that Agreement of Purchase and Sale of Real Property in the form
attached as EXHIBIT B hereto ("REAL PROPERTY AGREEMENT") and that
Indemnification Agreement in the form attached as EXHIBIT C hereto (the
"INDEMNIFICATION AGREEMENT").
3. Pursuant to this Agreement, the Asset Agreement, and the Real Property
Agreement, Buyer will acquire the Business.
4. Selling Parties intend to transfer the economic benefits of the Business
after the Effective Date to the Buyer, subject to the liabilities and other
obligations of the Business arising after the Effective Date.
In consideration of the covenants and mutual agreements set forth herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and in reliance upon the representations and warranties
contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. The following terms will have the meanings set forth below
where used in this Agreement and identified with initial capital letters.
"ACCOUNTING ARBITRATOR" will have the meaning set forth in SECTION 2.5B(4).
"ACQUIRED ASSETS" will have the meaning set forth in SECTION 2.2.
"ACQUIRED CONTRACTS" means, collectively, the Real Property Acquired
Contracts and the Asset Acquired Contracts.
{PAGE}
"ADJUSTED BOOK VALUE" will mean total equity of the Business as reflected
on the August Balance Sheet, Preliminary Closing Balance Sheet, and the Final
Closing Balance Sheet, as the case may be, which are to be prepared in
accordance with Adjusted GAAP.
"ADJUSTED GAAP" will mean generally accepted accounting principles,
consistently applied in accordance with past practices of Seller, provided that
(i) there will be appropriate reserves or accruals for vacation pay, sick pay,
severance obligations and other similar types of employment obligations, (ii)
reserves for Excluded Construction Claims will be as agreed upon by the parties,
subject to revision based only on fraud, concealment or mistake, (iii) Excluded
Assets and Excluded Liabilities (including any reserves or accruals for federal
income taxes) will be omitted, and (iv) any profit or loss on the sale of real
property to landbankers or model homes to investors, which sales are approved by
Seller pursuant to SECTION 6.9, will be disregarded.
"AGREEMENTS" will have the meaning set forth in SECTION 11.16.
"APPLICABLE LAWS" will mean all federal, state, regional, local, or other
governmental or quasi-governmental statutes, laws, rules, regulations, codes,
ordinances, orders, plans, injunctions, decrees, rulings, or judicial or
administrative interpretations thereof, including without limitation
Environmental Laws, which are applicable to Seller, Buyer, the Business, or the
Acquired Assets or the use, development, or condition thereof or otherwise
applicable to any of the Acquired Assets.
"APPROVED TITLE EXCEPTIONS" will have the meaning set forth in SECTION 4.2C
of the Real Property Agreement.
"ASSET ACQUIRED CONTRACTS" shall have the meaning set forth in SECTION 1.2I
of the Asset Agreement.
"ASSET INTELLECTUAL PROPERTY" will have the meaning set forth in SECTION
1.2E of the Asset Agreement.
"ASSETS" will have the meaning set forth in SECTION 1.2 of the Asset
Agreement.
"ASSUMED LIABILITIES" will have the meaning set forth in SECTION 2.4A.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" will have the meaning set forth in
SECTION 8.1A.
"AUGUST BALANCE SHEET" will have the meaning set forth in SECTION 2.5B(1).
"BALANCE SHEET DATE" will have the meaning set forth in SECTION 4.7A.
"BASKET THRESHOLD" will have the meaning set forth in SECTION 4C of the
Indemnification Agreement.
"BILL OF SALE AND ASSIGNMENT AGREEMENT" will have the meaning set forth in
SECTION 8.1D.
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{PAGE}
"BONDS" will have the meaning set forth in SECTION 4.23.
"BOOK VALUE TARGET" will have the meaning set forth in SECTION 2.5A(1).
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