EXHIBIT 99.2
CALL/PUT OPTION AGREEMENT
THIS CALL/PUT OPTION AGREEMENT ("Agreement") is entered into effective
as of April 8, 1999 ("Effective Date") by and between California Coastal
Communities, Inc. ("Company") and Wheelabrator Technologies Inc. and its
wholly-owned subsidiary Resco Holdings Inc. (collectively, the "Seller").
RECITALS
WHEREAS, the Company desires to grant to the Seller an option to compel the
Company to purchase One Million Two Hundred Twenty Six Thousand Six Hundred and
Eight (1,226,608) shares of its common stock ("Shares") owned of record by the
Seller on the terms and conditions set forth below; and
WHEREAS, the Seller desires to grant to the Company, an option to compel
the Seller to sell the Shares to the Company on the terms and conditions set
forth below.
AGREEMENT
NOW, THEREFORE, in consideration of the preceding recitals and the mutual
representations, warranties, covenants and agreements set forth herein, and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
1. GRANT OF PUT OPTION. The Company hereby grants to the Seller an
option to compel the Company to purchase the Shares from the Seller ("Put
Option"), and the Company hereby agrees to purchase the Shares from the Seller
upon the Seller's exercise of the Put Option, subject to the terms and
provisions of this Agreement, at any time between June 1 and June 30, 1999 ("Put
Exercise Period").
2. GRANT OF CALL OPTION. The Seller hereby grants to the Company an
option to compel the Seller to sell the Shares to the Company ("Call Option"),
and the Seller hereby agrees to sell the Shares to the Company upon the
Company's exercise of the Call Option, subject to the terms and provisions of
this Agreement, at any time during the period commencing on June 1, 1999, and
ending on June 30, 1999 ("Call Exercise Period").
3. EXERCISE OF OPTIONS. The Seller may exercise the Put Option ("Put
Exercise") at any time during the Put Exercise Period by delivering to the
Company and the Escrow Agent (as defined below) the exercise notice attached
hereto as EXHIBIT A ("Put Exercise Notice"). The Company may exercise the Call
Option at any time during the Call Exercise Period by delivering to the Seller
and the Escrow Agent the exercise notice attached hereto as EXHIBIT B ("Call
Exercise Notice"). The parties hereby further agree that following any delivery
of a Put Exercise Notice or a Call Exercise Notice, they shall execute and
deliver such additional documents as may be reasonably necessary to effect the
transfer of the Shares and any matters related thereto.
4. EXERCISE PRICE. The exercise price for the Put Option or the Call
Option ("Exercise Price") shall be Five Dollars and Seventy Five Cents ($5.75)
per Share, or an aggregate of Seven Million Fifty Two Thousand Nine Hundred
Ninety Six Dollars ($7,052,996).
5. TERM. This Agreement shall have a term commencing on the Effective
Date and expiring at midnight, California time, on the earlier of the first
business day following June 30, 1999 or any Closing Date (as defined here). The
releases in Section 11 shall survive the expiration or termination of this
Agreement after any Closing Date.
6. STOCKHOLDER RIGHTS. Prior to the receipt by the Escrow Agent of a Put
Exercise Notice or a Call Exercise Notice, the Seller shall retain all
stockholder rights with respect to such Shares, including without limitation,
the right to vote the Shares in any and all actions for which the Shares are
entitled to vote.
7. ESCROW.
(a) Within six (6) business days following execution of this
Agreement, the parties shall deliver their respective closing deliveries
described below into the custody of Chase Manhattan Trust Company, National
Association as escrow agent ("Escrow Agent"). The Company and the Seller shall
share equally in the payment of any and all fees and expenses of the Escrow
Agent.
(b) The Seller's deliveries shall include: (i) all stock certificates
representing the Shares, (ii) a duly endorsed but undated stock powers
substantially in the form of EXHIBITS C-1 AND C-2 attached hereto (collectively,
the "Stock Power") for the transfer of the Shares to the Company upon any Put
Exercise or Call Exercise, and (iii) an executed copy of the Escrow Agreement,
substantially in the form attached hereto as EXHIBIT D ("Escrow Agreement")
which shall function in part as irrevocable escrow instructions to the Escrow
Agent.
(c) The Company's deliveries shall include: (i) cash or cash
equivalents in the full amount of the Exercise Price, which shall be deposited
into a separate account pending release of such funds upon any Put Exercise or
Call Exercise, and (ii) an executed copy of the Escrow Agreement which shall
function in part as irrevocable escrow instructions to the Escrow Agent.
(d) The Company and the Seller hereby agree that upon the Escrow
Agent's receipt of a Put Exercise Notice or a Call Exercise Notice, the Seller
shall be deemed to have sold, transferred and conveyed the Shares to the Company
and the Company shall be deemed to have purchased the Shares with no additional
actions being required by either party to consummate such purchase and sale,
except as may be otherwise provided herein.
8. ESCROW INSTRUCTIONS. The Escrow Agreement shall provide the following
irrevocable escrow instructions:
(a) The Escrow Agent shall accept delivery of and hold in escrow the
parties' respective deliveries as provided in Section 7 above.
(b) The Exercise Price shall be deposited into a separate account
until released pursuant to the provisions of this Agreement.
(c) Within two (2) business days following receipt by the Escrow
Agent of a Put Exercise Notice or a Call Exercise Notice ("Closing Date"), the
Escrow Agent shall (i) release to ChaseMellon Shareholder Services, LLC
("Transfer Agent") the fully endorsed Stock Power dated the date of the Put
Exercise or Call Exercise, as the case may be, together with the stock
certificates representing the Shares, (ii) release the Exercise Price (less the
amount of escrow fees payable by Seller) to the account of the Seller designated
in the Put Exercise Notice or the Call Exercise Notice, and (iii) remit to the
Company the balance of the funds representing any interest on the Exercise Price
not previously distributed to the Company (less the amount of escrow fees
payable by the Company). In the event the amount released to the Seller by the
Escrow Agent is less than the full Exercise Price (less the amount of escrow
fees payable by Seller), the Company shall wire transfer to the Seller on the
Closing Date any such deficiency to the account of the Seller designated in the
Put Exercise Notice or the Call Exercise Notice.
(d) The Escrow Agent shall distribute to the Company on a monthly
basis, all interest and dividends earned on the Exercise Price in excess of the
Exercise Price.
(e) If neither the Put Option is exercised during the Put Exercise
Period nor the Call Option is exercised during the Call Exercise Period, then
within one (1) business day following June 30, 1999, the Escrow Agent shall (i)
return to the Seller the stock certificates representing the Shares and the
Stock Power, and (ii) return to the Company the Exercise Price together with any
interest on the Exercise Price not previously distributed to the Company.
9. REPRESENTATIONS AND WARRANTIES OF THE PARTIES.
(a) REPRESENTATIONS AND WARRANTIES OF EACH PARTY. Each party hereto
represents and warrants to the other party hereof as of the date hereof and as
of any Closing Date as follows:
(i) ORGANIZATION. Such party is a corporation, duly organized,
validly existing and in good standing under the laws of its state of
incorporation.
(ii) AUTHORIZATION OF TRANSACTION. Such party has the power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder. All corporate actions
or proceedings to be taken by or on the part of such party to authorize and
permit the due execution and valid delivery by such party this Agreement and the
instruments required to be duly executed and validly delivered by such party
pursuant hereto, the performance by such party of its obligations hereunder, and
the consummation by such party of the transactions contemplated herein, have
been duly and properly taken. This Agreement has been duly executed and validly
delivered by such party, enforceable in accordance with its terms and
conditions, subject to applicable bankruptcy, reorganization, insolvency,
moratorium and other laws affecting creditors' rights generally from time to
time in effect and to general equitable principles.
(iii) NONCONTRAVENTION. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, license or other restriction of any
governmental authority to which such party is subject or any provision
of the articles of organization or bylaws of such party, or (ii) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract,
lease, license, instrument, or other arrangement to which such party is a
party or by which it is bound or to which any of its assets is subject.
(iv) BROKERS' FEES. Such party has no liability or obligation to
pay any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement.
(b) REPRESENTATIONS AND WARRANTIES OF THE COMPANY. In addition to
the foregoing representations and warranties, the Company represents and
warrants to the Seller that if the Company acquires the Shares it will acquire
the Shares for its own account for investment, without a view to, or for resale
in connection with, the distribution thereof in violation of federal or state
securities laws and with no present intention of distributing or reselling any
part thereof. The Company will not so distribute or resell any Shares in
violation of any such law.
10. NO RELIANCE, ASSUMPTION OF RISK. The Seller acknowledges that it
has been advised that the Company may have confidential information
concerning the Company's business and affairs which is not public and may be
considered material, including but not limited to information relating to (a)
the potential outcomes of certain litigation, and (b) various alternatives,
financial or otherwise, for the Company which might include, but not limited
to, (i) the status of strategic development plans for or the monetization of
the assets or business opportunities of the Company or its subsidiaries, (ii)
the sale or other disposition of all or a portion of the equity or assets of
the Company or one or more of the Company's subsidiaries, (iii) a public
offering of securities of the Company, (iv) a refinancing of all or a portion
of the Company's existing indebtedness, or (v) the purchase, in the open
market, in private transactions, through tender offers or otherwise, of all
or a portion of the outstanding common stock, and/or any other of the
Company's outstanding securities. Recognizing the foregoing, Seller does not
request, desire or require the Company as of the Effective Date or any
Closing Date hereunder to disclose any confidential information and
specifically requests the Company not to disclose any such information
relating to the Shares, the prospects for the Company or otherwise involving
the business or operations of the Company. In addition, Seller acknowledges
and agrees as of the Effective Date and any Closing Date hereunder that (1)
Seller desires to consummate the sale of the Shares to the Company in the
event of an option exercise pursuant to this Agreement, (2) Seller is fully
satisfied with the Exercise Price and the Exercise Price is all that Seller
is or will be entitled to receive for the Shares pursuant hereto, (3) Seller
is voluntarily assuming all risks associated with the sale of the Shares and
is not relying on any disclosure (or non-disclosure) made (or not made) in
connection with or arising out of the purchase of the Shares by the Company,
and (4) Seller does not and will not have or assert any claims against the
Company or any of its respective affiliates (as such term is defined in Rule
12b-2 under the Securities Exchange Act of 1934, as amended) for any
additional compensation or payments for any reason whatsoever, including by
reason of or as a result of the conclusion of any litigation, or the entering
into or consummation by the Company, or any of its affiliates, of any of the
potential transactions described above.
11. WAIVERS AND RELEASES.
(a) In further consideration for the purchase and sale of the
Shares, Seller, effective as of any Closing Date hereunder, on behalf of itself
and any of its successors, successors-in-interest and assignees (collectively,
the "Releasing Persons"), hereby waives and releases, to the fullest extent
permitted by law, any and all claims, rights and causes of action, whether known
or unknown (collectively, the "Claims"), that any of the Releasing Persons had,
has or may have against (i) the Company, (ii) any of the Company's current or
former parents, shareholders, affiliates, subsidiaries, divisions, predecessors
or assigns, or (iii) any of the Company's or such other persons' or entities'
current or former officers, directors, employees, consultants, spouses, heirs,
estates, executors, attorneys, auditors and associates and members of their
immediate families (collectively, the "Released Persons"), arising out of or
relating to any matter involving (x) the transactions pursuant to which the
Seller originally acquired the Shares, (y) the purchase and sale of the Shares
contemplated by this Agreement, or (z) the nondisclosure of any information
described in Section 10 hereof, except in the case of each of the foregoing, for
Claims arising out of breach by the Company of any representations, warranties
or covenants contained herein or in the Escrow Agreement. Seller represents and
warrants that it has not, and covenants that it will not, assign any Claims
based on the matters described in clauses (x), (y) and (z) in the foregoing
sentence (the "Released Claims") to any other person or entity. Seller further
represents and warrants that no parent, affiliate, division, subsidiary,
predecessor and, to its knowledge, any director, officer, shareholder, employee,
consultant, representative, principal, agent, associate or attorney of Seller is
entitled to assert any Released Claims against the Released Persons. Seller
shall indemnify, defend and hold the Released Persons harmless from and against
any Claims based on a breach of the foregoing representations and warranties.
(b) In consideration for the foregoing, effective as of any
Closing Date hereunder, the Company on behalf of itself and any of its trustees,
partners, directors, officers, shareholders, employees, consultants,
representatives, predecessors, principals, agents, parents, associates,
affiliates, divisions, subsidiaries, attorneys, successors,
successors-in-interest and assignees hereby waives and releases, to the fullest
extent permitted by law, any and all Claims that it had, has or may have against
(i) the Seller, (ii) any of the Seller's current or former parents,
shareholders, affiliates, subsidiaries, divisions, predecessors or assigns, or
(iii) any of the Seller's or such other persons' or entities' current or former
officers, directors, employees, consultants, spouses, heirs, estates, executors,
attorneys, auditors and associates and members of their immediate families,
arising out of or relating to any matter involving (x) the transactions pursuant
to which the Seller originally acquired the Shares, or (y) the purchase and sale
of the Shares contemplated by this Agreement, except for Claims arising out of
the breach by Seller of any representations, warranties or covenants contained
herein or in the Escrow Agreement.
12. ASSIGNMENT. Neither party hereto shall transfer or assign all or any
portion of its rights or obligations under this Agreement without the prior
written consent of the other party, which consent may be withheld in the
non-assigning party's sole discretion.
13. BINDING EFFECT; BENEFIT. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs, successors,
legal representatives and
permitted assigns. Except as otherwise provided in Section 11 hereof,
nothing in this Agreement, expressed or implied, is intended to confer on any
person other than the parties hereto, and their respective heirs, successors,
legal representatives and permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
14. AMENDMENT; WAIVER; TERMINATION. No provision of this Agreement may be
waived except by an instrument in writing executed by the party against whom the
waiver is to be effective. No provision of this Agreement may be amended or
otherwise modified except by an instrument in writing executed by both parties.
15. NOTICES. All notices and other communications given or made pursuant
hereto, unless otherwise specified, shall be in writing and shall be deemed to
have been duly given or made if sent by fax (with confirmation in writing),
delivered personally or sent by registered or certified mail (postage prepaid,
return receipt requested) to the parties at the fax number or address set forth
below or at such other addresses as shall be furnished by the parties by like
notice, and such notice or communication shall be deemed to have been given or
made upon receipt:
If to the Company: California Coastal Communities, Inc.
0 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Fax: (000) 000-0000
Phone: (000) 000-0000
With a copy to: XxXxxxxxx, Will & Xxxxx
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
Phone: (000) 000-0000
If to the Seller: Wheelabrator Technologies Inc.
Resco Holdings Inc.
0 Xxxxxxx Xxxx Xxxx
Xxxxxxx, Xxx Xxxxxxxxx 00000
Attention: Secretary
Fax: (000) 000-0000
Phone: (000) 000-0000
If to the Transfer Agent: Xxxxx Xxxxxx Shareholder Services, LLC
0 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxx
Fax: (000) 000-0000
Phone: (000) 000-0000
16. ATTORNEYS' FEES. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
17. ARBITRATION. Any controversy or dispute arising out of this Agreement,
the interpretation of any of the provisions hereof, or the action or inaction of
any party hereto (other than a claim for injunctive or other equitable relief)
shall be finally settled by arbitration in accordance with the then-current
rules for arbitration as established by J.A.M.S./ENDISPUTE ("JAMS"), and
judgment upon the award rendered by such arbitration may be entered in any court
having jurisdiction thereof. Such arbitration shall be conducted in Dallas,
Texas by one (1) arbitrator mutually agreed to by the parties in dispute from
the JAMS panel of retired judges, or an arbitrator appointed by JAMS in event
that no such mutual agreement is reached. The prevailing party will be entitled
to recover reasonable attorneys' fees, costs, and necessary disbursements in
addition to any other relief awarded by the arbitrator. The costs of the
arbitrations including any JAMS administration fee, the arbitrator's fee, and
costs for the use of facilities during the hearings, shall be born equally by
the parties to the arbitration. Attorneys' fees may be awarded to the
prevailing or most prevailing party at the discretion of the arbitrator.
18. HEADINGS. The headings contained in this Agreement are for
convenience only and shall not affect the meaning or interpretation of this
Agreement.
19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument. Facsimile
signatures shall be considered equivalent to originals.
20. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable and this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision never comprised a part hereof; and the remaining provisions hereof
shall remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance therefrom. Furthermore,
in lieu of such illegal, invalid or unenforceable provision, there shall be
added automatically as part of this Agreement a provision as similar in its
terms to such illegal, invalid or unenforceable provision as may be possible and
be legal, valid and enforceable.
21. INJUNCTIVE RELIEF. In the event of a breach or threatened breach by
any party to this Agreement, each party to this Agreement hereby agrees any such
breach or threatened breach will result in irreparable harm to the non-breaching
party and that the non-breaching party to this Agreement shall be entitled,
without posting a bond, to an injunction restraining the party or parties
involved in the breach or threatened breach from any such conduct. Nothing
herein shall be construed as prohibiting the exercise of any other available
remedy for such breach or threatened breach, including the recovery of damages.
22. CONSTRUCTION. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of
proof shall arise favoring or disfavoring a party by virtue of the authorship
of any of the provisions of this Agreement.
23. APPLICABLE LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without regard to the
conflicts of law rules of such state.
24. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter of this Agreement and
supersedes all prior agreements and understandings, both oral and written,
between the parties with respect to the subject matter of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first written above.
CALIFORNIA COASTAL COMMUNITIES, INC.
By /s/ XXXXXXX X. XXXXXX
---------------------------------
Xxxxxxx X. Xxxxxx
Chief Executive Officer
WHEELABRATOR TECHNOLOGIES INC.
By /s/ XXXX X. XXXXX
---------------------------------
Xxxx X. Xxxxx
Vice President
RESCO HOLDINGS INC.
By /s/ XXXX X. XXXXX
---------------------------------
Xxxx X. Xxxxx
Vice President
