Exhibit 10.2
EXECUTION COPY
AGREEMENT OF PURCHASE AND SALE OF ASSETS
BY AND AMONG
MERITAGE CORPORATION,
MTH-HOMES NEVADA, INC.,
PERMA-BILT, A NEVADA CORPORATION
AND
ZENITH NATIONAL INSURANCE CORP.
Dated October 7, 2002
AGREEMENT OF PURCHASE AND SALE OF ASSETS
This AGREEMENT OF PURCHASE AND SALE OF ASSETS (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. Pursuant to this Agreement and the Master Agreement (as defined
below), Buyer will acquire the Business.
2. The parties to this Agreement have concurrently entered into a
Master Transaction Agreement ("Master Agreement"), Agreement of Purchase and
Sale of Real Property ("Real Property Agreement"), and Indemnification
Agreement, all described in the Master Agreement. All capitalized terms
contained herein but not otherwise defined will have the meaning ascribed to
it in the Master Agreement.
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
PURCHASE AND SALE OF ASSETS
1.1 Agreement. This Agreement, together with the Master Agreement and
Indemnification Agreement, each incorporated herein by reference, will
constitute a binding contract on the part of Seller to sell and Buyer to
purchase the assets of the Business, unrelated to real property.
1.2 Assets to be Purchased. Upon the terms and subject to the
conditions set forth herein and in the Master Agreement, and in reliance on
the respective representations and warranties of the parties contained in the
Master Agreement, at the Closing, Seller agrees to sell, convey, grant,
assign, and transfer to Buyer and Buyer agrees to purchase, assume and acquire
from Seller all of the Assets, held by Seller. The "Assets" are the following,
provided, however, that the Assets shall not include any Excluded Assets:
A. All assets disclosed on the Final Closing Balance Sheet,
except for the Real Property Assets (as defined in and to be conveyed
pursuant to the Real Property Agreement);
B. Any current assets, accounts receivable and notes
receivable, and bank accounts, but excluding cash and cash
equivalents; provided, however, that (i) to the extent that following
the Closing Selling Parties receive any cash that constitutes an
Acquired Asset or relates to an Assumed Liability, Selling Parties
shall, as soon as practicable after receipt thereof, turn over such
cash to Buyer, and (ii) to the extent that following the Closing
Parent or Buyer receives any cash that constitutes an Excluded Asset
or relates to an Excluded Liability, Parent and Buyer shall, as soon
as practicable after receipt thereof, turn such cash over to Selling
Parties.
C. All prepaid expenses, the right to refunds, buyins or
deposits relating to utilities and infrastructure improvements,
deposits or assets relating to performance bonds;
D. All equipment, furniture, furnishings, inventory, machinery,
software, supplies, tools, vehicles, and other personal property
owned or leased by Seller;
E. All rights and benefits in all (1) processes, know-how,
technical data, and other trade secrets; (2) sales forms and
promotional and advertising materials; (3) copyrights, whether
registered or not, patents, trademarks, whether registered or not,
and applications, registrations, and renewals with respect thereto;
(4) customer, supplier and contractor lists; (5) software licensing
and equipment rental agreements associated with computers or data
processing; and (6) goodwill associated therewith. Additionally,
Seller hereby grants to Buyer an exclusive perpetual license in
Seller's right to use the names "Perma-Bilt Homes" and "Perma-Bilt,"
and all variations of or derivations from such names and any and all
logos used in connection therewith; provided, however, Selling
Parties' shall have the right to use the name "Perma-Bilt" for
corporate purposes for a period of up to 30 days after the Closing.
The foregoing is hereinafter referred to as the "Asset Intellectual
Property";
F. All of the books, instruments, papers, and records of
whatever nature and wherever located, whether in written form or
another storage medium, including without limitation (1) copies of
accounting and financial records; (2) property records and reports;
(3) environmental records and reports; (4) personnel and labor
relations records; and (5) property, sales, or transfer tax records
and returns; provided, however, that (x) Seller shall retain the
original accounting and financial records and (y) such books,
instruments, papers, and records will exclude any documents relating
exclusively to the Excluded Assets or the Excluded Liabilities (for
so long as they are Seller's sole responsibility) or to any employees
of Seller not hired by Buyer;
G. To the extent transferable, all the right, title, and
interest in all approvals, authorizations, certificates, consents,
franchises, licenses, permits, rights, variances, subdivision maps,
plans, entitlements, and waivers acquired, being acquired, applied
for, or used, and all agreements with, and any waivers, licenses,
permits, and approvals from or to any Governmental Authority,
department, board, commission, bureau or any other entity or
instrumentality, and other authorities in the nature thereof, all as
related to the Assets;
H. All rights and benefits in, to and under all vendor,
supplier and equipment lessor agreements concerning any supplies,
services, equipment and furniture utilized for office purposes;
I. All contracts, agreements or understandings to which Seller
is a party or by which Seller or any of its assets are bound,
excluding those contracts included in Real Property Assets pursuant
to Section 1.2B of the Real Property Agreement and excluding Excluded
Contracts (the "Asset Acquired Contracts"); and
J. The interests in any projects (and related joint venture,
partnership, or other interests) to the extent any exist.
1.3 Purchase Price. The Purchase Price to be paid by Buyer for the
Assets will be as provided in Section 2.5 of the Master Agreement.
1.4 Closing. Articles VII and VIII of the Master Agreement are
incorporated herein by reference as applicable.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PARENT AND BUYER
2.1 Incorporation by Reference. The representations and warranties
contained in Article III
of the Master Agreement are incorporated herein by reference.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLING PARTIES
3.1 Incorporation by Reference. The representations and warranties
contained in Article IV of the Master Agreement are incorporated herein by
reference.
ARTICLE IV
FURTHER ASSURANCES
4.1 Incorporation by Reference. Section 6.5 of the Master Agreement
is incorporated herein by
reference.
ARTICLE V
GENERAL PROVISIONS
5.1 Notices. All notices, consents, and other communications
hereunder will be in writing and deemed to have been duly given when (a)
delivered by hand, (b) sent by telecopier (with receipt confirmed, or (c) when
received by the addressee, if sent by Express Mail, Federal Express, or other
express delivery service (with delivery confirmation), in each case to the
appropriate addresses and telecopier numbers set forth below (or to such other
addresses and telecopier numbers as a party may designate as to itself by
notice to the other):
If to Buyer: Meritage Corporation
0000 Xxxxx Xxxxxxxxxx Xxxx,
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Chief Financial Officer
With a copy to: Xxxxx & Xxxxxx L.L.P.
Xxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx, Esq.
If to Selling Parties Zenith National Insurance Corp.,
00000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxxx X. Xxx
With a copy to: Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
5.2 Counterparts. This Agreement may be executed in any number of
counterparts, and each counterpart will constitute an original instrument, but
all such separate counterparts will constitute one and the same agreement.
5.3 Governing Law. The validity, construction, and enforceability of
this Agreement will be governed in all respects by the laws of the State of
Nevada, without regard to its conflict of laws rules.
5.4 Assignment. This Agreement will not be assigned by operation of
law or otherwise, (a) except that Buyer may assign all or any portion of its
rights under this Agreement to any wholly owned subsidiary, but no such
assignment will relieve Buyer or its successor or Parent of its primary
liability for all obligations of Buyer and Parent, respectively, hereunder,
and (b) except that this Agreement may be assigned by operation of law to any
corporation or entity with or into which Buyer may be merged or consolidated
or to which Buyer transfers all or substantially all of its assets, and such
corporation or entity assumes this Agreement and all obligations and
undertakings of Buyer hereunder, but no such assignment will relieve Buyer or
its successor or Parent of their liability for the respective obligations of
Buyer and Parent, respectively, hereunder. Any assignment in violation of the
provisions of this Agreement will be null and void.
5.5 Gender and Number. The masculine, feminine, or neuter pronouns
used herein will be interpreted without regard to gender, and the use of the
singular or plural will be deemed to include the other whenever the context so
requires.
5.6 Schedules and Exhibits. The Schedules and Exhibits referred to in
this Agreement and attached to this Agreement are incorporated in this
Agreement by such reference as if fully set forth in the text of this
Agreement.
5.7 Waiver of Provisions. The terms, covenants, representations,
warranties, and conditions of this Agreement may be waived only by a written
instrument executed by the party waiving compliance. The failure of any party
at any time to require performance of any provisions hereof will, in no
manner, affect the right at a later date to enforce the same. No waiver by any
party of any condition, or breach of any provision, term, covenant,
representation, or warranty contained in this Agreement, whether by conduct or
otherwise, in any one or more instances, will be deemed to be or construed as
a further or continuing waiver of any such condition or waiver of the breach
of any other provision, term, covenant, representation, or warranty of this
Agreement.
5.8 Costs. Except as otherwise provided in the Master Agreement, if
any legal action or any arbitration or other proceeding is brought for the
enforcement of this Agreement, or because of an alleged dispute, breach,
default, or misrepresentation in connection with any of the provisions of this
Agreement, the successful or prevailing party or parties will be entitled to
recover reasonable attorneys' fees, accounting fees, and other costs incurred
in that action or proceeding, in addition to any other relief to which it or
they may be entitled.
5.9 Amendment. This Agreement may not be amended except by an
instrument in writing approved by the parties to this Agreement and signed on
behalf of each of the parties hereto.
5.10 Severability. If any term, provision, covenant, or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void, or unenforceable, the remainder of the terms, provisions, covenants, and
restrictions of this Agreement will remain in full force and effect and will
in no way be affected, impaired, or invalidated and the court will modify this
Agreement or, in the absence thereof, the parties will negotiate in good faith
to modify this Agreement to preserve each party's anticipated benefits under
this Agreement.
5.11 Binding Effect. Subject to the provisions and restrictions of
Section 5.4, the provisions of this Agreement are binding upon and will inure
to the benefit of the parties and their respective heirs, personal
representatives, successors and assigns.
5.12 Construction. References in this Agreement to "Sections,"
"Articles," "Exhibits," and "Schedules" are to the Sections and Articles in,
and the Exhibits and Schedules to, this Agreement, unless otherwise noted.
5.13 Time Periods. Except as expressly provided for in this
Agreement, the time for performance of any obligation or taking any action
under this Agreement will be deemed to expire at 5:00 o'clock p.m. (Las Vegas,
Nevada time) on the last day of the applicable time period provided for in
this Agreement. If the time for the performance of any obligation or taking
any action under this Agreement expires on a Saturday, Sunday or legal
holiday, the time for performance or taking such action will be extended to
the next succeeding day which is not a Saturday, Sunday or legal holiday.
5.14 Headings. The headings of this Agreement are for purposes of
reference only and will not limit or define the meaning of any provision of
this Agreement.
5.15 Entire Agreement. This Agreement, the other Transaction
Agreements and all certificates, schedules and other documents attached to or
deliverable under such agreements (collectively, the "Agreements") constitute
the entire agreement, including with respect to representations and
warranties, between the parties pertaining to the subject matter contained in
the Agreements. All prior and contemporaneous agreements, representations and
understandings of the parties, oral or written, are superseded by and merged
in the Agreements. No supplement, modification or amendment of the Agreements
will be binding unless in writing and executed by the parties to the
Agreements.
5.16 Dispute Resolution. All Disputes shall be resolved exclusively
in accordance with the Dispute Resolution Procedures attached as Exhibit D to
the Master Agreement. Notwithstanding the foregoing, nothing herein will
prohibit the parties from pursuing equitable remedies.
5.17 No Third Beneficiaries. Except as otherwise set forth in
Sections 1 and 2 of the Indemnification Agreement and except as specifically
provided in Section 5.4 of this Agreement and similar provisions in the other
Transaction Agreements, neither this Agreement nor any other Transaction
Agreement is intended to, and none of them shall, create any rights in any
other Person other than the parties to such agreements. Without limiting the
generality of the foregoing, nothing herein or in any other Transaction
Agreement is intended to create, nor shall it create, in the Title Company or
any title insurer any right of subrogation to any rights of Parent or Buyer
arising from any representation or warranty of any Selling Party.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the date first written above by their respective officers
thereunder duly authorized.
MERITAGE CORPORATION,
a Maryland corporation
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Co-Chief Executive Officer
MTH-HOMES NEVADA, INC.,
an Arizona corporation
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Co-Chief Executive Officer
PERMA-BILT, a Nevada Corporation
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxxx
Title: President and Chief Executive
Officer
ZENITH NATIONAL INSURANCE CORP.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxx
-----------------------------------
Name: Xxxxxxx X. Xxx
Title: President
[Signature Page to Asset Agreement]
