EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
DATED MARCH 30, 2002
BY AND BETWEEN
CENDANT CORPORATION
TORNADO ACQUISITION CORPORATION
JELD-WEN, INC.
AND CERTAIN OTHER SHAREHOLDERS
OF
TRENDWEST RESORTS, INC.
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement"), dated as of March 29,
2002, is made by and among Cendant Corporation, a Delaware corporation
("Parent"), Tornado Acquisition Corporation, an Oregon corporation
("Purchaser"), JELD-WEN, inc., an Oregon corporation ("Majority Shareholder"),
and certain other shareholders of the Company (as defined below) set forth on
Schedule 1 hereto, each such shareholder and Majority Shareholder being each a
"Seller", and collectively the "Sellers".
R E C I T A L S
WHEREAS, as of the date hereof, each Seller is the record and
Beneficial Owner (as defined below) of the number of shares of common stock, no
par value (the "Company Common Stock"), of Trendwest Resorts, Inc., an Oregon
corporation (the "Company") and the number of options to acquire Company Common
Stock (each, a "Company Option") set forth opposite the name of such Seller on
Schedule 1 hereto;
WHEREAS, Parent, Purchaser, Majority Shareholder and the Company have
agreed to enter into an Agreement and Plan of Merger and Reorganization, dated
as of the date hereof (the "Merger Agreement"), which provides, among other
things, following the stock purchase contemplated hereby for the merger of
Purchaser with and into the Company with the Company continuing as the surviving
corporation (the "Merger") upon the terms and subject to the conditions set
forth in the Merger Agreement (capitalized terms used herein without definition
shall have the respective meanings specified in the Merger Agreement) and in
accordance with the Oregon Business Corporation Act (the "OBCA");
WHEREAS, each Seller desires to sell to Purchaser, and Purchaser
desires to purchase from each Seller, the Company Common Stock owned by such
Seller on the terms and subject to the conditions hereinafter set forth;
WHEREAS, on the date hereof and prior to the Stock Purchase Closing (as
defined below), Majority Shareholder and the Company effected the Redemptions;
WHEREAS, for federal income tax purposes, it is intended that the
purchases of Company Common Stock pursuant to this Stock Purchase Agreement and
the Merger shall be treated as an integrated transaction and shall qualify as a
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code"), and that this Agreement shall constitute a
plan of reorganization; and
WHEREAS, concurrently with the execution of the Merger Agreement and as
an inducement to the willingness of Parent and Purchaser to enter into the
Merger Agreement, each of the Sellers have agreed to enter into this Stock
Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and the agreements set forth herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree to be legally bound as follows:
Section 1. CERTAIN DEFINITIONS. In addition to the terms defined
elsewhere in this Stock Purchase Agreement, capitalized terms used and not
defined in this Agreement have the respective meanings ascribed to them in the
Merger Agreement. For purposes of this Agreement:
(a) "Beneficially Own" or "Beneficial Ownership" with respect to any
securities means having "beneficial ownership" of such securities as determined
pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Without duplicative counting of the same securities by the
same holder, securities Beneficially Owned by a person include securities
Beneficially Owned by all other persons with whom such person would constitute a
"group" within the meaning of Section 13(d) of the Exchange Act with respect to
securities of the same issuer, except that for purposes of Section 7(b) hereof
only, the number of shares of Parent Common Stock beneficially owned by Majority
Shareholder shall mean the number of shares of Parent Common Stock owned by
Majority Shareholder and any Person to whom Majority Shareholder is permitted to
transfer such shares in accordance with Section 7(b)(iii).
(b) "Existing Shares" means the shares of Company Common Stock
Beneficially Owned by each Seller as of the date of this Agreement as set forth
on Schedule 1 hereto; provided, however, that in the event of a stock dividend
or distribution, or any change in the Company Common Stock by reason of any
stock split, reclassification or the like, the term "Existing Shares" will be
deemed to refer to and include the shares of Company Common Stock as well as all
such stock dividends and distributions and any shares into which or for which
any or all of the shares of Company Common Stock may be changed or exchanged,
and appropriate adjustments shall be made to the terms and provisions of this
Agreement.
(c) "Voting Shares" means the Existing Shares together with any shares
of Company Common Stock or other securities of the Company acquired by each
Seller in any capacity after the date of this Agreement and prior to its
termination whether upon the exercise of options, warrants, or rights, the
conversion or exchange of convertible or exchangeable securities, or by means of
purchase, dividend, distribution,
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split-up, recapitalization, combination, exchange of shares, or the like, gift,
bequest, inheritance, or as a successor in interest in any capacity, or
otherwise.
(d) A Person shall be deemed to have a effected a "Transfer" of a
security if such Person directly or indirectly: (i) sells, pledges, encumbers,
grants an option with respect to, transfers, distributes, transfers the economic
risk of ownership in or otherwise disposes of such security or any interest in
such security; (ii) enters into an agreement or commitment contemplating the
possible sale of, pledge of, encumbrance of, grant of an option with respect to,
transfer of or disposition of such security or any interest therein; (iii)
grants any proxy, power-of-attorney or other authorization or consent with
respects to any such security or any interest therein; (iv) deposits any such
security or any interest therein into a voting trust, or enters into a voting
agreement or arrangement with respect to any such security or any interest
therein; or (v) takes any other action that would in any way restrict, limit or
interfere with the performance of such Shareholder's obligations hereunder or
the transactions contemplated hereby.
Section 2. PURCHASE AND SALE OF COMPANY COMMON STOCK.
(a) Agreement to Purchase and Sell. On the Stock Purchase Closing Date
(as defined in Section 3(a)) and upon the terms and subject to the conditions
set forth in this Agreement, each Seller shall sell, assign, transfer, convey
and deliver to Purchaser, and Purchaser will accept and purchase from each
Seller, all of such Seller's rights, title and interests in and to all of the
shares of Company Common Stock beneficially owned by such Seller at the Stock
Purchase Closing (as defined below) (the "Stock Purchase"), in each case free
and clear of all Liens.
(b) Purchase Price. Subject to the terms and conditions set forth
herein, the purchase price to be paid by Purchaser for each share of Company
Common Stock (the "Per Share Purchase Price" and, in respect of all shares of
Company Common Stock, in the aggregate, the "Purchase Price") shall be a number
of shares of Parent Common Stock, rounded to the nearest thousandth of a share,
equal to the number determined by dividing twenty-four dollars ($24.00) by the
Stock Purchase Average Trading Price (as adjusted pursuant to Section 2(d) below
and this Section 2(b)) (the "Majority Shareholder Exchange Ratio"); provided,
however, that (x) if the foregoing would result in an Exchange Ratio less than
the Low-End Ratio, then the Majority Shareholder Exchange Ratio shall be the
Low-End Ratio, and (y) if the foregoing would result in an Exchange Ratio
greater than the High-End Ratio, then the Majority Shareholder Exchange Ratio
shall be the High-End Ratio; provided, further, however, that (A) in the event
the Merger Consideration is determined to be a number of fully paid and
nonassessable shares of Parent Common Stock equal to the Public Shareholder
Exchange Ratio, then the Per Share Purchase Price to be paid to the Sellers
other than the
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Majority Shareholder shall be adjusted upward, with an additional number of
shares of Parent Common Stock to be issued to each such Seller immediately prior
to the Merger at the Merger Closing (certificates evidencing which shall be
delivered thereafter by Purchaser by first class mail to each such Seller at the
address listed next to such Seller's name on Schedule 1 hereto) equal to the
product of (i) (x) the Public Shareholder Exchange Ratio minus (y) the Majority
Shareholder Exchange Ratio and (ii) the aggregate number of shares of Company
Common Stock sold by each such Seller pursuant hereto and (B) in the event that
the Merger Consideration is determined to be a number of fully paid and
nonassessable shares of Parent Common Stock equal to the Top-Up Public
Shareholder Exchange Ratio, then the Per Share Purchase Price to be paid to the
Sellers other than the Majority Shareholder shall be adjusted upward, with an
additional number of shares of Parent Common Stock to be issued to each such
Seller immediately prior to the Merger at the Merger Closing (certificates
evidencing which shall be delivered thereafter by Purchaser by first class mail
to each such Seller at the address listed next to such Seller's name on Schedule
1 hereto) equal to the product of (i) (x) the Top-up Public Shareholder Exchange
Ratio minus (y) the Majority Shareholder Exchange Ratio and (ii) the aggregate
number of shares of Company Common Stock sold by each such Seller pursuant
hereto; and provided, further, however, that in the event that the Cancellation
occurs pursuant to Section 7.15(c) of the Merger Agreement and the Redemption
Agreement, Parent shall issue to Majority Shareholder immediately prior to the
Merger at the Merger Closing the number of shares of Parent Common Stock
(certificates evidencing which shall be delivered thereafter by Purchaser by
first class mail to each such Seller at the address listed next to such Seller's
name on Schedule 1 hereto) equal to the product of (i) the Redeemed Shares
multiplied by (ii) the Majority Shareholder Exchange Ratio.
(c) For purposes of this Agreement:
(i) "Stock Purchase Average Trading Price" shall mean the arithmetic
average of the 4:00 p.m. Eastern Time closing sales prices of Parent Common
Stock reported on the New York Stock Exchange ("NYSE") Composite Tape for the
ten (10) consecutive NYSE trading days (each, a "Trading Day") ending on (and
including) the second Trading Day immediately prior to, and excluding, the Stock
Purchase Closing Date (such period, the "Valuation Period").
(ii) "High-End Ratio" shall mean the number determined by dividing (I)
twenty-four dollars ($24.00) by (II) sixteen dollars and fifteen cents ($16.15).
(iii) "Low-End Ratio" shall mean the number determined by dividing (I)
twenty-four dollars ($24.00) by (II) eighteen dollars and fifty cents ($18.50).
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(d) If after the date hereof and on or prior to the Effective Time the
outstanding shares of Parent Common Stock or Company Common Stock shall be
changed into a different number of shares as a result of any stock split,
reverse stock split, stock dividend, reclassification or any similar
transaction, the Majority Shareholder Exchange Ratio, High-End Ratio and Low-End
Ratio shall be appropriately and equitably adjusted.
(e) All shares of Parent Common Stock issued pursuant hereto in
accordance with the terms of this Article II (including any cash paid pursuant
to Section 2(f)) shall be deemed to have been issued (and paid) in full
satisfaction of all rights pertaining to the Company Common Stock previously
represented by the Certificates delivered at the Stock Purchase Closing (it
being understood that the MountainStar Redemption may be deemed to constitute a
distribution by the Company in redemption of certain of the shares of Company
Common Stock held by Majority Shareholder such that the shares of Company Common
Stock redeemed, subject to Section 7.15(c) of the Merger Agreement, shall be no
longer outstanding at the Stock Purchase Closing).
(f) No Fractional Shares.
(i) No certificates or scrip representing fractional shares of Parent
Common Stock shall be issued as part of the Purchase Price, no dividend or
distribution of Parent shall relate to such fractional share interests and such
fractional share interests will not entitle the owner thereof to vote or to any
rights of a stockholder of Parent.
(ii) Notwithstanding any other provision of this Agreement, each Seller
who would otherwise have been entitled to receive a fraction of a share of
Parent Common Stock (after taking into account all of such Seller's shares of
Company Common Stock sold pursuant hereto) shall receive, in lieu thereof, cash
(without interest) in an amount, less the amount of any withholding taxes, as
contemplated by Section 2(g), which are required to be withheld with respect
thereto, equal to the product of (A) such fractional part of a share and (B) the
Stock Purchase Average Trading Price.
(g) Purchaser shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any Seller such
amounts as it is required to deduct and withhold with respect to the making of
such payment under the Code, or any provision of state, local or foreign Law. To
the extent that amounts are so withheld by the Purchaser such withheld amounts
shall be treated for all purposes of
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this Agreement as having been paid to the Seller in respect of which such
deduction and withholding was made by the Purchaser.
Section 3. CLOSING.
(a) Consummation of the transactions contemplated hereby (the "Stock
Purchase Closing") shall take place at the offices of Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, 0 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, at 10:00 a.m., local
time, on the first business day following the day on which notice that the last
of the conditions set forth in Sections 9(a), 9(b) and 9(c) is fulfilled or
waived (other than those conditions that by their nature are to be fulfilled at
the Stock Purchase Closing, but subject to the fulfillment or waiver of those
conditions) and has been delivered in accordance with Section 11(c) hereof by
Purchaser to Majority Shareholder, or at such other time and place and on such
other date as Purchaser and Majority Shareholder shall agree (the "Stock
Purchase Closing Date").
(b) Seller's Closing Deliveries. Subject to the conditions set forth in
this Agreement, at the Stock Purchase Closing, simultaneously with Purchaser's
deliveries hereunder, each Seller shall deliver or cause to be delivered to
Purchaser stock certificates representing the Company Common Stock accompanied
by stock powers duly endorsed in blank or accompanied by duly executed
instruments of transfer and appropriate signature guarantees, with all necessary
transfer tax and other revenue stamps affixed thereto.
(i) At the Stock Purchase Closing, Sellers shall also deliver the
following to Purchaser:
(x) The certificate of each Seller contemplated by Section 9(b)(xiii);
(y) all such other certificates, documents and instruments as Purchaser
shall reasonably request in connection with the consummation of the
transactions contemplated by this Agreement.
(c) Purchaser's Closing Deliveries. Subject to the conditions set forth
in this Agreement, at the Stock Purchase Closing, simultaneously with each
Seller's deliveries hereunder, Purchaser shall deliver or cause to be delivered
to each Seller, stock certificates evidencing the shares of Parent Common Stock
paid to each such as in consideration of such Seller's shares of Company Common
Stock being sold pursuant hereto.
(d) Majority Shareholder Lock-Up Legend. The certificates evidencing
seventy percent (70%) of the aggregate number of shares of Parent Common
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Stock to be delivered to Majority Shareholder in accordance with Section 3(c)
above shall bear the following legend:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER PURSUANT TO THAT CERTAIN STOCK PURCHASE
AGREEMENT, DATED AS OF MARCH 29, 2002, BY AND BETWEEN CENDANT CORPORATION,
TORNADO ACQUISITION CORPORATION, JELD-WEN, INC. AND CERTAIN OTHER SHAREHOLDERS
OF TRENDWEST RESORTS, INC. ANY TRANSFER OF SUCH SHARES OF COMMON STOCK IN
VIOLATION OF THE TERMS AND PROVISIONS OF SUCH AGREEMENT SHALL BE NULL AND VOID
AND OF NO EFFECT WHATSOEVER.
(e) Securities Act Legend. The certificates evidencing all shares of
Parent Common Stock to be delivered to the Sellers, including without limitation
the shares of Parent Common Stock referred to in Section 3(d) above, in
accordance with Section 3(c) above shall bear the following legend:
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT, OR UNLESS THE COMPANY
HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE, SATISFACTORY TO THE
COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
Section 4. REPRESENTATIONS AND WARRANTIES OF SELLERS. Each Seller hereby
represents and warrants, severally and not jointly, in respect of himself only
(or in the case of Majority Shareholder, in respect of itself only) to Parent
and Purchaser as follows:
(a) Ownership of Stock; Title. Seller is the sole lawful record and
beneficial owner of the Existing Shares listed on Schedule 1 opposite Seller's
name, free and clear of all Liens (except in the case of Xx. Xxxxxxxx Xxxxx and
Xx. Xxxxxxx Xxxxx (the "Wendts"), some or all of whose Existing Shares are
subject to Liens in favor of certain banks securing indebtedness for borrowed
money, which Liens shall be removed prior to the Stock Purchase Closing). Except
for the Options listed on Schedule 1 hereto opposite Seller's name, the Existing
Shares are the only shares of Company Common Stock, securities convertible into
or exchangeable for any shares of Company Common Stock or other capital stock,
warrants, options, agreements, call rights, conversion rights, exchange rights,
preemptive rights or other rights or commitments or understandings which call
for the issuance, sale, delivery, pledge, transfer, redemption or other
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disposition of any shares of Company Common Stock or other capital stock of the
Company or any of its Subsidiaries that Seller owns, beneficially or of record.
Seller is not a party to any agreement creating in any Person other than
Purchaser rights with respect to the Existing Shares or Options, and Seller has
the full power and legal right to sell, assign, transfer and deliver his or its
Existing Shares and all other Voting Shares beneficial ownership of which is
acquired by Seller on or after the date hereof. There are no existing warrants,
options, stock purchase agreements, redemption agreements, restrictions of any
nature, voting trust agreement, proxies, calls or rights to subscribe of any
character relating to the Existing Shares, Options or shares of Company Stock
receivable by Seller upon exercise of any such Options. Seller has not received
any notice of any adverse claim to the ownership of any Existing Shares, has no
reason to know of any such adverse claim that may be justified and is not aware
of existing facts that would give rise to any adverse claim to the ownership of
Existing Shares. On the Stock Purchase Closing Date, Seller shall have good and
marketable title to the Existing Shares, free and clear of all Liens, and to all
other Voting Shares beneficial ownership of which is acquired by Seller on or
after the date hereof. The delivery to Purchaser of certificates for the
Existing Shares (and all other Voting Shares beneficial ownership of which is
acquired by Seller on or after the date hereof) owned by Seller pursuant to the
provisions of this Agreement will transfer to Purchaser good and marketable
title to such Existing Shares (and such other Voting Shares), free and clear of
all Liens, except for Liens created in favor of Purchaser pursuant hereto. The
Existing Shares and the certificates representing the Existing Shares owned by
Seller are now, and at all times during the term hereof will be, held by Seller,
or by a nominee, trustee or custodian for the benefit of Seller, free and clear
of all Liens, except for any such Liens arising hereunder.
(b) Authority.
(i) Seller (other than Majority Shareholder) has full legal capacity
necessary to execute, deliver and perform his or her obligations under this
Agreement and the other agreements and instruments to be executed and delivered
by Seller hereunder or in connection herewith and to carry out Seller's
obligations hereunder and thereunder and the transactions contemplated hereby
and thereby. This Agreement has been duly and validly executed and delivered to
Purchaser by Seller and constitutes a valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms.
(ii) Majority Shareholder has full corporate power and authority to
execute and deliver this Agreement. The execution, delivery and performance by
Majority Shareholder of this Agreement has been duly and validly authorized by
the Board of Directors of Majority Shareholder, and no other corporate action on
the part of Majority Shareholder is necessary to
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authorize the execution and delivery by Majority Shareholder of this Agreement
and the consummation by it of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Majority Shareholder and,
assuming due and valid authorization, execution and delivery hereof by
Purchaser, is a valid and binding obligation of Majority Shareholder enforceable
against Majority Shareholder in accordance with its terms. No vote of any class
or series of the capital stock of Majority Shareholder is necessary to approve
this Agreement or any of the transactions contemplated hereby.
(c) No Violation; Consents and Approvals.
(i) The execution and delivery of this Agreement by Seller and the
consummation of the transactions contemplated hereby do not and will not: (i)
violate, or conflict with, or result in a breach of any provisions of, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or give rise to a right of termination,
cancellation, modification or acceleration of the performance required by or a
loss of a benefit under, any note, bond, mortgage, indenture, deed of trust,
lease contract or agreement by which Seller or any of the Existing Shares are
bound; (ii) constitute a violation of any Order to which Seller or any of such
the Existing Shares are bound; or (iii) result in the creation of any Lien upon
any of the assets or properties of any Seller, including the Existing Shares.
(ii) Except to the extent set forth in Section 4.1 of the Merger
Agreement, no consent, approval, permit, waiver, authorization, notice or filing
is required to be made or obtained in connection with the execution, delivery
and performance by any Seller of this Agreement or the consummation of the
transactions contemplated hereby.
(d) Litigation. There are no suits, claims, arbitrations, mediations,
actions or proceedings pending or, to Sellers' knowledge, threatened or
investigations pending or threatened against Seller or with respect to any
material property or assets of Seller, including the Existing Shares, before any
Governmental Authority, and neither Seller nor any of their property or assets
are subject to any order, judgment, injunction or decree of any Governmental
Authority, in each case, which restricts in any material respect or prohibits
(or, if successful, would restrict or prohibit), the exercise by Purchaser of
its rights under this Agreement or the performance by Seller of its obligations
under this Agreement.
(e) Finder's Fee. Except as set forth in the Merger Agreement, no
broker, investment banker, financial advisor or other person is entitled to any
broker's, finder's, financial adviser's or other similar fee or commission in
connection with the
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transactions contemplated hereby based upon arrangements made by or on behalf of
Seller.
(f) Investment Representations.
(i) Seller is not acquiring the shares of Parent Common Stock
constituting the Purchase Price with any present intention of distributing or
selling such shares in violation of federal, state or other securities laws.
Seller agrees that it will not sell, transfer, offer for sale, pledge,
hypothecate or otherwise dispose of the shares of Parent Common Stock
constituting the Purchase Price in violation of any federal, state or other
securities laws. Seller acknowledges that the Parent Common Stock is subject to
market and other conditions beyond the control of Parent or Purchaser.
(ii) Reliance upon Seller's Representations. Seller understands that the
Parent Common Stock is being offered and sold to it in reliance on specific
exemptions from the registration requirements of the United States federal
securities laws and that Parent and Purchaser are relying on the truth and
accuracy of, and Seller's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of Seller set forth herein in
order to determine the availability of such exemptions and the eligibility of
Seller to acquire Parent Common Stock.
(iii) Accredited Investor. Seller is an "accredited investor" as defined
in Rule 501(a) of Regulation D under the Securities Act.
(iv) Restricted Securities. Seller understands that the Parent Common
Stock may not be sold, transferred, or otherwise disposed of without
registration under the Securities Act or an exemption therefrom, and that in the
absence of an effective registration statement covering the Parent Common Stock
or an available exemption from registration under the Securities Act, the Parent
Common Stock must be held indefinitely. In particular, Seller is aware that the
Parent Common Stock may not be sold pursuant to Rule 144 promulgated under the
Securities Act unless all of the conditions of that Rule are met. Among the
conditions for use of Rule 144 may be the availability of current information to
the public about Parent.
(v) Experience. Each Seller represents that such Seller is experienced
in evaluating can bear the economic risk of investment in securities which are
not registered under the Securities Act, and has such knowledge and experience
in financial and business matters that such Seller is capable of evaluating the
merits and risks of an investment in Parent Common
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Stock. If other than an individual, such Seller represents that such Seller has
not been organized for the purpose of acquiring Parent Common Stock.
(g) Merger Agreement Covenants. Each of the Wendts agrees that the
covenants contained in Section 7.14 and 7.18 of the Merger Agreement are
incorporated herein as if set forth herein.
Section 5. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER.
Parent and Purchaser hereby represent and warrant to each Seller as follows:
(a) Organization; Authority. Parent is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware
and Purchaser is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Oregon and each has all requisite
corporate power and authority to carry on its business as now being conducted.
Parent and Purchaser have full power and authority necessary to execute, deliver
and perform their respective obligations under this Agreement and the other
agreements and instruments to be executed and delivered by Parent or Purchaser
hereunder or in connection herewith and to carry out their respective
obligations hereunder and thereunder. The execution and delivery of this
Agreement and the other agreements and instruments to be executed and delivered
by Parent and Purchaser hereunder or in connection herewith, and the
consummation by Parent and Purchaser of the transactions contemplated hereby to
be consummated by each of them, have been duly authorized pursuant to and in
accordance with the laws governing each of Parent and Purchaser. This Agreement
and the other agreements and instruments to be executed and delivered by each of
Parent and Purchaser hereunder or in connection herewith have been duly and
validly executed and delivered by each of Parent and Purchaser and constitute
valid and binding obligations of Purchaser, enforceable against Purchaser in
accordance with their respective terms.
(b) No Violation. The execution and delivery by Purchaser of this
Agreement and the transactions contemplated hereby do not and will not (i)
conflict with or result in any breach of any provision of the certificate of
incorporation or bylaws of Purchaser, (ii) violate, or conflict with, or result
in a breach of any provisions of, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under, or give
rise to a right of termination, cancellation, modification or acceleration of
the performance required by or a loss of a benefit under, any material
agreement, permit or other instrument to which Purchaser is a party or to which
Purchaser is subject (except to the extent such breach, violation or default is
not reasonably likely to materially impair the ability of Purchaser to
consummate the transactions contemplated hereby or to hold the Existing Shares),
or (iii) violate any material order, judgment, writ, injunction, decree,
statute, rule or regulation applicable to Purchaser or to which Purchaser is
subject.
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(c) Consents and Approvals. Except as set forth in the Merger Agreement,
no consent, approval, permit, waiver, authorization, notice or filing is
required to be made or obtained in connection with the execution, delivery and
performance by Purchaser of this Agreement or the consummation by Purchaser of
the transactions contemplated hereby.
Section 6. COVENANTS.
(a) Consents and Approvals.
(i) Each Seller shall cooperate with Purchaser and use reasonable best
efforts to (and Majority Shareholder shall cause the Company to) take or cause
to be taken all actions, and do or cause to be done all things, necessary,
proper or advisable on its part under this Agreement and applicable Laws to
consummate and make effective the transactions contemplated by this Agreement in
respect of such Seller as soon as reasonably practicable, including preparing
and filing as promptly as reasonably practicable all documentation to effect all
necessary notices, reports, applications and other filings and to obtain as
promptly as reasonably practicable all consents, including, without limitation,
the consents set forth on Schedule 9(b)(vii) hereto, registrations, approvals,
permits and authorizations necessary or advisable to be obtained from any third
party and/or any Governmental Authority in order to consummate the transactions
contemplated by this Agreement.
(ii) Majority Shareholder shall notify Purchaser in writing promptly
upon receipt by the Company of each consent set forth on Schedule 9(b)(vii) and
of the satisfaction of each of the conditions set forth in Sections 9b(viii)
through and 9b(x).
(iii) Nothing in this Agreement shall require, or be construed to
require, Parent or Purchaser, in connection with the receipt of any regulatory
approval, to proffer to, or agree to sell or hold separate and agree to sell,
divest, discontinue or limit, before or after the Stock Purchase Closing Date or
the Effective Time, any assets, businesses, or interest in any assets or
businesses of Parent, Purchaser, the Company or any of their respective
affiliates or enter into any consent decree or other agreement that would
restrict Parent or the Company in the conduct of its respective businesses as
heretofore conducted.
(b) Transfer Taxes. All excise, sales, use, transfer (including real
property transfer or gains), stamp, documentary, filing, recordation and other
similar
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Taxes and fees which may be imposed or assessed as a result of the transactions
effected pursuant to this Agreement, together with any interest, additions or
penalties with respect thereto and any interest in respect of such additions or
penalties, shall be borne by each Seller (and not by Parent, Purchaser, the
Company or its Subsidiaries).
(c) Publicity.
(i) Each Seller agrees that it will not issue any press release or
otherwise make any public statement with respect to this Agreement or the
transactions contemplated hereby without the prior consent of Purchaser;
provided, however, that such disclosure may be made without obtaining such prior
consent if (i) the disclosure is required by Law or is required by any
Governmental Authority, including but not limited to any national securities
exchange, trading market or inter-dealer quotation system on which the Company
Common Stock trades, and (ii) such Seller has first used its best efforts to
consult with Purchaser about the form and substance of such disclosure.
(ii) Each Seller hereby agrees to permit Parent and Purchaser to publish
and disclose (including in all documents, statements and schedules filed with
the SEC) its identity and ownership of the Voting Shares and the nature of its
commitments, arrangements and understandings under this Agreement.
(d) Acquisition Proposals. Each Seller will promptly notify Parent and
Purchaser if any proposals are received by, any information is requested from,
or any negotiations or discussions are sought to be initiated or continued with
such Seller or any of its Representatives or the Company or any of its
Representatives, in each case in connection with any Acquisition Proposal or the
possibility or consideration of making an Acquisition Proposal Interest
indicating, in connection with such notice, the name of the person indicating
such Acquisition Proposal Interest and the material terms and conditions of any
proposals or offers. Each Seller agrees that it will immediately cease and cause
to be terminated all existing activities, discussions, negotiations and
communications with any Persons conducted heretofore with respect to any
Acquisition Proposal or Acquisition Proposal Interest. Each Seller will keep
Parent and Purchaser fully informed, on a current basis, of the status and terms
of any Acquisition Proposal Interest.
(e) Non-Solicitation. Each Seller and its respective Representatives
shall not directly or indirectly (i) initiate, solicit or encourage (including,
without limitation, by way of furnishing information), or take any action to
facilitate the making of, any offer or proposal which constitutes or is
reasonably likely to lead to any Acquisition Proposal,
13
(ii) enter into any agreement regarding an Acquisition Proposal, (iii)
participate in negotiations or discussions with, or provide any information or
data to, any Person (other than Parent, Purchaser or any of their respective
affiliates or Representatives) regarding any Acquisition Proposal or (iv) make
or authorize any statement, recommendation or solicitation in support of any
Acquisition Proposal, or otherwise encourage any effort or attempt by any Person
to do or seek any of the foregoing. Any violation of the foregoing restrictions
by Seller or its respective Representatives, whether or not Seller or its
Representatives is so authorized by Seller and whether or not Seller or its
Representatives is purporting to act on behalf of the Company or Seller or
otherwise, shall be deemed to be a breach of this Agreement. It is understood
that this Section 6(e) limits the rights of each Seller only to the extent that
such Seller is acting in such Seller's capacity as a shareholder of the Company.
Nothing herein shall be construed as limiting or restricting any Seller who is a
director or officer of the Company from acting in such Seller's capacity as a
director or officer of the Company (including, subject to the limitations
contained in Sections 6.2, 6.3 and 7.2 of the Merger Agreement, the performance
of obligations required by the fiduciary obligations of such Seller acting
solely in his or her capacity as an officer or director)
(f) Certain Actions. Prior to the termination of this Agreement, each
Seller agrees not to, directly or indirectly, take any other action that would
make any representation or warranty of Seller contained herein untrue or
incorrect.
(g) Registration Statement. At the Stock Purchase Closing, Parent,
Purchaser and Sellers shall enter into a registration rights agreement in
substantially the form of Exhibit A hereto (the "Registration Rights Agreement")
relating to the shares of Parent Common Stock issued to the Sellers as the
Purchase Price hereunder.
(h) Majority Shareholder Release. Effective as of the Stock Purchase
Closing, each of Majority Shareholder, on behalf of itself and each of its
predecessors, and direct and indirect Subsidiaries, and their respective
officers, employees, directors, shareholders, successors and assigns, and each
of the Wendts, on behalf of himself and his executors, administrators,
conservators, successors and assigns (the "Releasing Parties"), hereby fully and
forever releases and discharges the Company, Parent and Purchaser, and each of
its respective predecessors, direct and indirect Subsidiaries (including, for
such purposes, the Clubs), and affiliates, and each of their respective
officers, employees, directors, and successors and assigns (collectively, the
"Releasees") from any and all claims, demands, obligations and liabilities of
whatever kind or nature at law, in equity, or otherwise as of the Stock Purchase
Closing based on any facts and circumstances existing the date thereof
(collectively, "Claims"), except for (i) subject to the terms and conditions of
the Merger Agreement, any Claims which Majority Shareholder and/or either or
both of the Wendts may have against Parent or Purchaser arising out of a breach
by Parent or Purchaser of their respective
14
representations, warranties, agreements and covenants set forth in the Merger
Agreement, (ii) subject to the terms and conditions of this Agreement, any
Claims which Majority Shareholder and/or either or both of the Wendts may have
against Parent or Purchaser arising out of a breach by Parent or Purchaser of
their respective representations, warranties, agreements and covenants set forth
in this Agreement, and (iii) such Claims arising solely pursuant to the items
set forth on Schedule 6(h) hereof; provided, however, that the foregoing shall
not be deemed to preclude Majority Shareholder's right, except in connection
with any matter in respect of which Majority Shareholder is obligated to
indemnify any Indemnified Person under Article VIII or Article IX of the Merger
Agreement, to pursue any Claims against the Releasees (other than Parent and
Purchaser and their respective officers, employees, directors, and successors
and assigns) in respect to a third party claim brought against the Majority
Shareholder for which any of the Releasees (other than Parent and Purchaser and
their respective officers, employees, directors, and successors and assigns) is
responsible in whole or in part. The Releasing Parties hereby acknowledge that
there is a possibility that subsequent to the execution of this Agreement or the
Stock Purchase Closing they will discover facts or incur or suffer Claims which
were unknown or unsuspected at the time this Agreement was executed, and which
if known by them at that time may have materially affected their decision to
execute this Agreement and/or, in the case of Majority Shareholder, the Merger
Agreement and, except for claims which otherwise would exist by virtue of a
breach of any representation or warranty made by Parent or Purchaser in Article
V of the Merger Agreement or Section 5 of this Agreement, the Releasing Parties
acknowledge and agree that by reason of the release contained in the preceding
paragraph, they are assuming any risk of such unknown facts and such unknown and
unsuspected Claims.
(i) At or prior to the Stock Purchase Closing, Xx. Xxxxx shall, in
exchange for $1.00, transfer to the Company (or any other designee of
Purchaser's) all shares owned by him on the date hereof in the Trendwest Fiji
entity.
Section 7. TRANSFER RESTRICTIONS
(a) Restrictions on Company Common Stock
(i) Prior to the termination of this Agreement in accordance with
Section 10(d) hereof, each Seller agrees not to Transfer any Voting Shares. If
any involuntary Transfer of any Voting Shares shall occur, the transferee (and
all subsequent transferees thereof) shall take and hold such Voting Shares
subject to all of the rights, obligations and restrictions under this Agreement,
which shall continue in force and effect.
(ii) Each Seller agrees to surrender to the Company, or to the transfer
agent for the Company, certificates evidencing the
15
Voting Shares, and shall cause the Company or the transfer agent for the Company
to place the below legend on any and all certificates evidencing the Voting
Shares:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER PURSUANT TO THAT CERTAIN STOCK PURCHASE
AGREEMENT, DATED AS OF MARCH 29, 2002, BY AND BETWEEN TORNADO ACQUISITION
CORPORATION, JELD-WEN, INC. AND CERTAIN OTHER SHAREHOLDERS OF TRENDWEST RESORTS,
INC. ANY TRANSFER OF SUCH SHARES OF COMMON STOCK IN VIOLATION OF THE TERMS AND
PROVISIONS OF SUCH AGREEMENT SHALL BE NULL AND VOID AND OF NO EFFECT WHATSOEVER.
(b) Restrictions on Parent Common Stock
(i) Majority Shareholder agrees that until the first anniversary of the
Stock Purchase Closing Date, Majority Shareholder shall not cause or permit any
Transfer of any shares of Parent Common Stock Beneficially Owned by Majority
Shareholder as of any date after the date of this Agreement; provided, however,
that during the period from and after the Stock Purchase Closing Date and ending
on the first anniversary of the Stock Purchase Closing Date, Majority
Shareholder may Transfer up to, but not more than, thirty percent (30%) of the
number of shares of Parent Common Stock that Majority Shareholder acquires
pursuant to this Agreement; and provided, further, however, that during the
period from and after the Stock Purchase Closing Date and ending on the first
anniversary of the Stock Purchase Closing Date, Majority Shareholder may pledge
the other seventy percent (70%) of the number of shares of Parent Common Stock
that Majority Shareholder acquires pursuant to this Agreement as collateral for
a loan of money provided that (x) the pledgee agrees (and if the party making
the loan and the pledgee are different Persons, then provided that both the
pledgee and the Person making the loan each agree) not to, and not to instruct,
cause or permit any Person acting on their behalf or for their benefit to,
engage in any Hedging Transaction (as defined below) with respect to any of such
pledged shares of Parent Common Stock and, (y) for the sake of clarity, such
pledge is not associated with any Hedging Transaction.
(ii) Majority Shareholder agrees that, from and after the date hereof
until the first anniversary of the Stock Purchase Closing Date, it will not,
without the prior written consent of Parent (which consent may be withheld or
granted in the sole and absolute discretion of Parent) or except as otherwise
expressly permitted herein, (A) effect, directly or indirectly, any "short
sales" (as defined in Rule 3b-3 of the Exchange Act) of Parent Common Stock or
16
any securities convertible, exercisable or exchangeable, directly or indirectly
and with or without consideration, into any Parent Common Stock (the
"Convertible Securities") or (B) engage in any sale, exchange, transfer,
distribution, redemption or other transactions or use any puts, calls, or other
derivatives directly involving any Parent Common Stock or Convertible Securities
to reduce in any way Seller's risk of ownership of the Parent Common Stock (the
transactions referred to in clauses (A) and (B) above are referred to herein as
"Hedging Transactions"). The foregoing shall not be deemed to prohibit Majority
Shareholder from engaging in Hedging Transactions (i) involving mutual funds of
which the value of each such fund's position in Parent Common Stock does not
exceed more than 10% of the total value of each of such funds and (ii) in
respect of a number of shares of Parent Common Stock equal, at any time, to (x)
thirty percent (30%) of the number of shares of Parent Common Stock that Seller
acquires pursuant to this Agreement, minus (y) the aggregate number of shares of
Parent Common Stock that Majority Shareholder has Transferred as of such time,
minus (z) the aggregate number of shares of Parent Common Stock in respect of
which Majority Shareholder has, prior to such time, entered into Hedging
Transactions.
(iii) Majority Shareholder may Transfer shares of Parent Common Stock to
any Person which is a direct wholly-owned corporate Subsidiary of Majority
Shareholder or to the JW Employee Stock Purchase Plan, the JW Pension Plan or
the JW Foundation (the "Permitted Transferees"), subject to applicable law,
provided, however, in connection with any such Transfer, Parent is reasonably
satisfied that such Transfer will not result in a violation of applicable
securities laws, including by virtue of the fact that such Person shall have
agreed to be bound by this Agreement to the same extent as Majority Shareholder
(and, for the sake of clarity, by so doing shall be deemed to have made the
representations and warranties set forth in Section 4(f) hereof) and, prior to
such Transfer, shall have delivered to Parent a copy of such agreement, and
provided further, that, for purposes of any calculation required hereunder, the
number of such shares of Parent Common Stock then held by all such Persons shall
be aggregated with the number of such shares of Parent Common Stock then held by
Majority Shareholder for purposes of determining whether a Transfer or Hedging
Transaction is permitted.
(iv) From and after the first anniversary of the Stock Purchase Closing
Date, Parent Common Stock Beneficially Owned by Majority Shareholder, may be
Transferred without any restriction stemming from this Section 7(b), and the
legend placed on Majority Shareholder's Parent Common Stock pursuant to Section
3(c) shall be removed upon delivery of such certificates to Parent or its agent.
17
Section 8. INDEMNIFICATION.
Indemnification by Sellers. Each Seller shall, severally and not
jointly, indemnify Purchaser and its successors, permitted assigns and
affiliates, and their respective officers, directors, employees, agents,
representatives and affiliates from and against and shall reimburse the same for
and in respect of any and all losses, costs, fines, liabilities, claims,
penalties, damages (other than consequential damages) and expenses (including
all legal fees and expenses) of any nature or kind, known or unknown, fixed,
accrued, absolute or contingent, liquidated or unliquidated (collectively
"Losses") which may be suffered, sustained or incurred by, or claimed or
assessed against, any of them or to which any of them may be subject, in
connection with any and all claims, suits or Losses which arise from or are
related to a breach of any representation or warranty set forth in Sections
4(a), 4(b) and 4(f) or to a material breach of any other representation or
warranty made by any Seller that is contained in or made pursuant to Section 4
of this Agreement.
Section 9. CONDITIONS TO CLOSING.
(a) Conditions to Each Party's Obligations. The respective obligations
of each party under this Agreement are subject to the satisfaction, at or prior
to the Stock Purchase Closing Date, of the following conditions, unless waived
by Purchaser and Majority Shareholder in writing:
(i) No judgment, order, decree, statute, law, ordinance, rule or
regulation, entered, enacted, promulgated, enforced or issued by any court or
other Governmental Authority of competent jurisdiction or other legal restraint
or prohibition (collectively, "Restraints") shall be in effect restraining or
prohibiting (i) the consummation of the any of the Transactions or (ii) the
effective operation of the business of the Company and its Subsidiaries after
the Stock Purchase Closing Date.
(ii) There has been no change in Laws after the execution of this
Agreement that would prevent the Stock Purchase and Merger from qualifying as an
integrated transaction that is a reorganization within the meaning of Section
368(a) of the Code.
(b) Conditions to Obligations of Purchaser. The obligations of Purchaser
under this Agreement are subject to the satisfaction, at or prior to the Stock
Purchase Closing Date, of the following conditions, unless waived by Purchaser
in writing:
(i)
18
(1) Each of the Company and Majority Shareholder shall have performed
and complied in all material respects with its obligations under the Merger
Agreement required to be performed by it at or prior to the Stock Purchase
Closing Date; and
(2) the Redemption shall have occurred.
(ii) The actions required to be taken by Sections 1.6(b) and 1.6(c) of
the Merger Agreement shall have been taken so that, among other things, in
accordance with Section 1.6(b) of the Merger Agreement, New Club Directors shall
represent at least three of the five directors of the Club on the Stock Purchase
Closing Date.
(iii) The representations and warranties of the Company and Majority
Shareholder set forth in the Merger Agreement that are qualified as to
materiality (including Company Material Adverse Effect and Club Material Adverse
Effect) and the representations and warranties of the Company set forth in
Sections 3.1(b) through (d), 3.2(a) and (b), 3.3(c) and (d), 3.9 and 3.11(f) of
the Merger Agreement shall be true and correct and each of the other
representations and warranties of the Company and Majority Shareholder set forth
in the Merger Agreement shall be true and correct in all material respects, in
each case as of the date of the Merger Agreement and (except to the extent
expressly made as of a specific earlier date or time, in which case as of such
specified date or time) as of the Stock Purchase Closing Date as if made on and
as of the Stock Purchase Closing Date.
(iv) Parent shall have received a certificate signed by the chief
executive officer and chief financial officer of the Company to the effect of
Sections 9(b)(i), 9(b)(ii) and 9(b)(iii)
(v) There shall not have occurred any Company Material Adverse Effect or
Club Material Adverse Effect.
(vi) No action, suit, proceeding, investigation or inquiry shall have
been instituted, or shall be pending or threatened, by a Governmental Authority
(i) seeking to restrain in any material respect to prohibit the consummation of
the transactions contemplated hereby or any of the other Transactions, including
the Merger, (ii) seeking to prohibit or materially limit the ownership or
operation by the Company, parent or any of Parent's Subsidiaries of any material
portion of any business or of any assets of the Company or its Subsidiaries or
of Parent or of any of Parent's Subsidiaries or (iii) which would be reasonably
likely to materially adversely affect the aggregate economic benefits
19
of the Transactions, taken as a whole, to Parent or the Surviving Corporation or
any of the businesses they operate.
(vii) All consents, orders or approvals of, declarations or filings with
any Governmental Authority or third party listed on Schedule 9(b)(vii) shall
have been obtained and in effect and no condition or requirement shall have been
imposed by any Governmental Authority in connection with any approval (or
exemption) required of them in connection with the Transactions which, either
alone or together with all such other conditions or requirements, (x) requires
the Company or its Subsidiaries (including the Clubs) to be operated in a manner
which is materially different from industry standards in effect or which is
different in any material respect from the manner in which the Company
(including the Clubs) currently conducts its operations on the date hereof or
(y) would have a Company Material Adverse Effect.
(viii) FIRB Approval shall have been received.
(ix) Trendwest Resorts South Pacific Limited ("TRSP") shall have (x)
demonstrated to the reasonable satisfaction of Parent that its current Dealer's
Licence No. 193164 issued by ASIC permits the selling activities currently
undertaken by TRSP in Australia, (y) TRSP shall have obtained changes in the
conditions of such Dealer's Licence enabling it to provide investment advice or
(z) TRSP shall have obtained a licence under the Australian Financial Services
Reform Act to provide financial product advice.
(x) The Company shall have received an owner's policy of title insurance
(or an equivalent in the jurisdiction in which any parcel of Owned Real Property
is located) with respect to each parcel of Owned Real Property located in the
United States (the "Title Policies"), in each case issued on the Closing Date by
First American Title Company (the "Title Company"). Each such Title Policy shall
insure the Company's ownership of title with respect to the Owned Real Property,
in an amount to be determined by Merger Sub, subject to the Schedule B standard
preprinted exceptions (or equivalents) to the extent customarily and
commercially utilized in the state in which the applicable Owned Real Property
is located and free and clear of all other exceptions to or exclusions from
coverage except the Permitted Liens or other matters which are specifically
excluded from the scope of the representations and warranties set forth in
Section 3.8 of the Merger Agreement. The Title Policies shall contain such
endorsements as may be reasonably requested by counsel to Merger Sub and shall
otherwise be in form reasonably satisfactory to Merger Sub's counsel. Prior to
Closing the Company shall attempt to cure, remove or otherwise satisfy any
defects or other exceptions to title which are not Permitted Liens.
20
(xi) Each of Majority Shareholder and the Sellers listed on Schedule
9(b)(xi) hereof shall have performed and complied in all material respects with
its obligations under this Agreement required to be performed by it at or prior
to the Stock Purchase Closing Date.
(xii) The representations and warranties of each of Majority Shareholder
and the Sellers listed on Schedule 9(b)(xi) hereof set forth in this Agreement
shall be true and correct as of the date of this Agreement and as of the Stock
Purchase Closing Date as if made on and as of the Stock Purchase Closing Date.
(xiii) Purchaser shall have received certificates signed by each of
Majority Shareholder and the Sellers listed on Schedule 9(b)(xi) hereof to the
effect of Sections 9(b)(xi) and 9(b)(xii).
(xiv) Each Seller shall have made the deliveries required by Section
3(b).
(c) Conditions to Obligations of Sellers. The obligations of Sellers
under this Agreement are subject to the satisfaction or waiver, at or prior to
the Stock Purchase Closing Date, of the following conditions, unless waived by
Majority Shareholder in writing:
(i) Parent and Purchaser shall have performed and complied in all
material respects with their respective obligations under the Merger Agreement
required to be performed by them at or prior to the Stock Purchase Closing Date.
(ii) The representations and warranties of Parent and Purchaser set
forth in the Merger Agreement that are qualified as to materiality shall be true
and correct and all other representations and warranties of Parent and Purchaser
set forth in the Merger Agreement shall be true and correct in all material
respects, in each case as of the date of the Merger Agreement and (except to the
extent expressly made as of a specific earlier date or time, in which case as of
such specified date or time) as of the Stock Purchase Closing Date as if made on
and as of the Stock Purchase Closing Date.
(iii) The Company and Majority Shareholder shall have received a
certificate signed by an executive officer of Parent to the effect of Sections
9(c)(i) and 9(c)(ii).
21
(iv) There shall not have occurred any Parent Material Adverse Effect.
(v) Parent and Purchaser shall have performed and complied in all
material respects with its obligations under this Agreement required to be
performed by it at or prior to the Stock Purchase Closing Date.
(vi) The representations and warranties of Parent and Purchaser
contained in this Agreement shall be true and correct in all material respects
in each case as of the date of this Agreement and at and as of the Stock
Purchase Closing Date as if made at and as of such date.
(vii) The Company and Majority Shareholder shall have received a
certificate signed by an executive officer of Parent to the effect of Sections
9(c)(v) and 9(c)(vi).
Section 10. TERMINATION.
(a) This Agreement may be terminated and the transactions contemplated
hereby may be abandoned at any time prior to the Stock Purchase Closing (it
being understand that any termination pursuant to Section 10(a)(v) can only
occur after the notice described in Section 3(a) has been delivered):
(i) By mutual written consent of Parent and Majority Shareholder; or
(ii) By either Parent or Majority Shareholder,
(w) if a Governmental Authority shall have issued a non-appealable
final order, decree or ruling or taken any other non-appealable final
action having the effect of permanently restraining, enjoining or
otherwise prohibiting the Stock Purchase or the Merger; or
(x) if there has been a breach by the Company or Majority Shareholder,
on the one hand, or by Parent, on the other hand, of any one or more
(A) representations or warranties or (B) covenants or agreements set
forth in the Merger Agreement, which breach shall result in any
condition to Parent's obligation, on the one hand, or the Sellers'
obligations, on the other hand, set forth in Section 9 not being
satisfied (and such breach, in the case of each of clause (A) and
clause (B), is not reasonably capable of being cured or has not been
cured within 10 calendar days after the receipt of written notice
thereof); or
22
(y) if the Stock Purchase has not been consummated on or prior to July
15, 2002; provided, however, that the right to terminate this
Agreement pursuant to this Section 10(a)(ii)(y) shall not be available
to any party whose failure to fulfill any obligation under this
Agreement or the Merger Agreement has been the cause of the failure of
the Stock Purchase to be consummated by such date; or
(iii) By Parent, if there shall have been a breach by any of Majority
Shareholder and any of the Sellers listed on Schedule 9 of any of the
representations, warranties, covenants or agreements set forth in this
Agreement, which breach (i) is not cured within ten days following written
notice to such Seller (with a copy of such notice to Majority Shareholder) or
(ii) by its nature cannot be cured prior to the Stock Purchase Closing Date;
(iv) By Majority Shareholder, if there shall have been a breach by
Parent or Purchaser of any of the representations, warranties, covenants or
agreements set forth in this Agreement, which breach (i) is not cured within ten
days following written notice to Parent or (ii) by its nature cannot be cured
prior to the Stock Purchase Closing Date;
(v) By Majority Shareholder, if the Stock Purchase Average Trading Price
is less than $13.50 per share;
(vi) By Parent, if a Change in the Company Recommendation shall have
occurred; or
(vii) By Parent, if the Company shall have violated or breached any of
its obligations in Section 6.2 of the Merger Agreement.
(b) Effect of Termination. In the event of the termination of this
Agreement as provided in Section 10(a), written notice thereof shall forthwith
be given to the other party or parties in accordance with Section 11(c),
specifying the provision hereof pursuant to which such termination is made, and
except for this Section 10(b) and Section 11, this Agreement shall forthwith
become null and void; provided, however, that termination of this Agreement
shall not relieve any party from liability for any breach of this Agreement.
Section 11. MISCELLANEOUS PROVISIONS.
(a) Transactional Costs. Except as set forth in Section 6(b),
23
Purchaser shall be responsible for all of its legal, accounting, advisory and
other fees and expenses incurred in connection with this Agreement and the
consummation of the transactions contemplated hereby and each Seller shall be
responsible for all legal, accounting (including all costs and fees), advisory
and other fees and expenses incurred by such Seller in connection with this
Agreement and the consummation of the transactions contemplated hereby.
(b) Successors and Assigns.
(i) This Agreement shall not be assigned by any of the parties hereto
(whether by operation of Law or otherwise) without the prior written consent of
the other parties, except that Purchaser may assign, in its sole discretion and
without the consent of any other party, any or all of its rights, interests and
obligations hereunder (x) to Parent, (y) to Parent and one or more direct or
indirect wholly-owned Subsidiaries of Parent, or (z) to one or more direct or
indirect wholly-owned Subsidiaries of Parent (each, a "Parent Assignee"). Any
such Parent Assignee may thereafter assign, in its sole discretion and without
the consent of any other party, any or all of its rights, interests and
obligations hereunder to one or more additional Parent Assignees. Subject to the
preceding sentence, but without relieving any party hereto of any obligation
hereunder, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
(ii) Notwithstanding anything to the contrary set forth herein,
Purchaser may assign all or a portion of its rights under Section 8 of this
Agreement in connection with the sale of the outstanding capital stock of the
Company, the sale of all or substantially all of the assets of the Company or
the sale of any material facility of the Company.
(c) Notices. All notices, requests, consents, instructions and other
communications required or permitted to be given hereunder shall be in writing
and hand delivered, sent by nationally-recognized, next-day delivery service or
mailed by certified or registered mail, return receipt requested, postage
prepaid, addressed as set forth below or by facsimile transmission; receipt
shall be deemed to occur on the date of actual receipt if delivered personally
or by registered or certified mail and if delivered by facsimile, then on the
business day on which transmitted if transmitted before noon on such day and on
the next business day if transmitted after noon on any day.
(i) if to Purchaser, to:
Tornado Acquisition Corporation
c/o Cendant Corporation
0 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
Fax: 000-000-0000
24
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxx, Esq.
Fax: 000-000-0000
(ii) if to any Seller:
JELD-WEN, inc.
0000 Xxxxxxxx Xxxxxxxxx
X.X. Xxx 0000
Xxxxxxx Xxxxx, XX 00000-0000
Attention: General Counsel
Fax: 000-000-0000
with a copy to:
Xxxxxx Pepper & Shefelman PLLC
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Fax: 000-000-0000
or such other address or persons as the parties may from time to time designate
in writing in the manner provided in this Section.
(d) Entire Agreement; No Third Party Beneficiaries. This Agreement,
together with the Schedules and Exhibits hereto, and, to the extent relevant,
the Merger Agreement constitute the entire agreement among the parties with
respect to the subject matter hereof and thereof and supersedes all other prior
agreements and understandings, both written and oral, among the parties or any
of them with respect to the subject matter hereof and thereof (provided, that
the provisions of this Agreement shall not, except as set forth herein,
including, without limitation, in Section 6(h) hereof, supersede the provisions
of the Confidentiality Agreements, dated July 23, 2001 and
25
March 5, 2002, respectively, between Parent and the Company and the
Confidentiality Agreement, dated March 5, 2002 between Parent and Majority
Shareholder), and is not intended to confer upon any Person other than the
parties hereto any rights or remedies hereunder.
(e) Survival. None of the representations and warranties set forth
herein (including, without limitation, in any instrument or other document
delivered pursuant hereto) shall survive the Stock Purchase Closing, except for
those set forth in Sections 4(a), (e) and (f) hereof. The covenants and
agreements set forth herein shall survive the Stock Purchase Closing.
(f) Amendments and Waivers. Subject to applicable Law and as otherwise
provided in the Agreement, this Agreement may be amended, modified and
supplemented in any and all respects, whether before or after any purchase of
shares of Company Common Stock, by written agreement of Parent and Purchaser on
the one hand and Majority Shareholder on the other hand, by action taken by
their respective boards of directors or equivalent governing bodies, provided
that any such amendment that adversely affects the consideration to be received
by any Seller for such Seller's shares of Company Common Stock pursuant to
Section 2 hereof shall not be effective to bind any Seller other than Majority
Shareholder without the written consent of such Seller. This Agreement may not
be amended except by an instrument in writing signed on behalf of each of Parent
and Purchaser on the one hand and Majority Shareholder on the other hand. No
delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof; nor shall any waiver on the part of
any party of any such right, power or privilege, nor any single or partial
exercise of any such right, power or privilege, preclude any further exercise
thereof or the exercise of any other such right, power or privilege.
(g) Headings. The article and section headings contained in this
Agreement are solely for convenience of reference and shall not affect the
meaning or interpretation of this Agreement or of any term or provision hereof.
(h) GOVERNING LAW; JURISDICTION AND VENUE. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE,
WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH PARTY
HERETO HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY DELAWARE
STATE COURT OR FEDERAL COURT SITTING IN THE STATE OF DELAWARE IN ANY ACTION
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS, AND HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION MAY BE HEARD AND
DETERMINED IN SUCH DELAWARE STATE OR FEDERAL COURT. EACH PARTY HERETO HEREBY
IRREVOCABLY CONSENTS TO PERSONAL JURISDICTION IN ANY SUCH ACTION BROUGHT IN ANY
SUCH DELAWARE STATE OR FEDERAL COURT, CONSENTS TO SERVICE OF PROCESS BY
REGISTERED MAIL MADE UPON SUCH PARTY AND SUCH PARTY'S AGENT AND WAIVES ANY
OBJECTION TO VENUE IN ANY SUCH DELAWARE STATE OR
00
XXXXXXX XXXXX AND ANY CLAIM THAT ANY SUCH DELAWARE STATE OR FEDERAL COURT IS AN
INCONVENIENT FORUM. EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS. EACH PARTY HEREBY CERTIFIES THAT IT HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS SET
FORTH ABOVE IN THIS SECTION 11(h).
(i) Counterparts. This Agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.
(j) Interpretation. When a reference is made in this Agreement to
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. Whenever the words "include", "includes" or "including" are
used in this Agreement they shall be deemed to be followed by the words "without
limitation." As used in this Agreement, the term "affiliates" shall have the
meaning set forth in Rule 12b-2 of the Exchange Act. The words "hereof,"
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein. The definitions contained in
this Agreement are applicable to the singular as well as the plural forms of
such terms and to the masculine as well as to the feminine and neuter genders of
such term. Unless otherwise stated, any agreement, instrument or statute defined
or referred to herein or in any agreement or instrument that is referred to
herein means such agreement, instrument or statute as from time to time amended,
modified or supplemented, including (in the case of agreements or instruments)
by waiver or consent and (in the case of statutes) by succession of comparable
successor statutes and references to all attachments thereto and instruments
incorporated therein. As used in this Agreement, "Person" shall mean any
individual, corporation, partnership, limited liability company, joint venture,
estate, trust, association, organization, labor union or entity of any kind
whatsoever, including any Governmental Authority. References to a Person are
also to its permitted successors and assigns.
27
(k) Acknowledgements. The parties hereto acknowledge and agree that (i)
each party has reviewed and negotiated the terms and provisions of this
Agreement and has had the opportunity to contribute to its revision, and (ii)
each party has been represented by counsel in reviewing and negotiating such
terms and provisions. Accordingly, the rule of construction to the effect that
ambiguities are resolved against the drafting party shall not be employed in the
interpretation of this Agreement. Rather, the terms of this Agreement shall be
construed fairly as to both parties hereto and not in favor or against either
party.
(l) Counterparts. This Agreement may be executed manually or by
facsimile by the parties hereto, or xerographically or electronically by their
respective attorneys, in any number of counterparts, each of which shall be
considered one and the same agreement and shall become effective when a
counterpart hereof shall have been signed by each of the parties and delivered
to the other parties.
(m) Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by rule of law or public policy,
all other conditions and provisions of this Agreement shall nevertheless remain
in full force and effect so long as the economic or legal substance of the
Transactions is not affected in any manner adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the Transactions are fulfilled
to the extent possible.
(n) EACH SELLER HEREBY DESIGNATES AND APPOINTS MAJORITY SHAREHOLDER AS
HIS ATTORNEY IN FACT FOR PURPOSES OF (I) WAIVING ANY OF THE CONDITIONS SET FORTH
IN SECTION 9(A) OR (C) HEREOF, (II) THE EXERCISE OF ANY RIGHTS UNDER SECTION 10
HEREOF AND (III) EXTENDING THE DATE SET FORTH IN SECTION 10(A)(II)(Y) HEREOF.
(o) Legal Representation. Each Seller hereto acknowledges that the law
firm of Xxxxxx Pepper & Shefelman PLLC (including its members, employees, agents
and successors) ("Counsel") represents only the Majority Shareholder with
respect to this Agreement, and that Counsel is not representing any other Seller
with respect to this Agreement and that other Sellers acknowledge that they have
been advised to seek independent counsel and have had opportunity to do so.
(p) Consent of Spouse. If Seller is married and a resident of Alaska,
Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Puerto Rico, Texas,
Washington or Wisconsin, Seller agrees to deliver to Purchaser within one week
of the
28
date hereof the Consent of Spouse attached hereto as Exhibit A on the date
hereof.
29
IN WITNESS WHEREOF, Parent, Purchaser, Majority Shareholder and certain other
Sellers have caused this Agreement to be signed by their respective officers
thereunto duly authorized as of the date first written above.
CENDANT CORPORATION
By:/s/
________________________________
Name:
Title:
TORNADO ACQUISITION CORPORATION
By:/s/
________________________________
Name:
Title:
SELLERS:
JELD-WEN, inc.
By:/s/
________________________________
Name:
Title:
/s/
___________________________________
Name: Xxxxxxx X. Xxxxx
/s/
___________________________________
Name: Xxxxxxx X. Xxxxx
/s/
___________________________________
Name: Xxxxxxx X. Sites
/s/
___________________________________
Name: Xxxx Xxxxxxx
30
/s/
___________________________________
Name: Xx Xxxxxxxx
/s/
___________________________________
Name: Xxx X'Xxxx
/s/
___________________________________
Name: Xxxxx Xxxxxx
/s/
___________________________________
Name: Xxxxxxx X. Xxxxxxxxxx
/s/
___________________________________
Name: Xxxxxxxx X. Xxxxx
/s/
___________________________________
Name: Xxxx Xxxxxxxx
/s/
___________________________________
Name: Xxxxxxxx Xxxxxxxxxxx
/s/
___________________________________
Name: Xxxxx X. Xxxxxx
/s/
___________________________________
Name: Xxxxxxx X. Early
/s/
___________________________________
Name: Xxxxx Xxxxxxxxxx
31
SCHEDULE 1
Name Address Existing Shares Options
------------------------------------------------------ ---------------- -----------
JELD-WEN, inc. 30,883,0989 0
------------------------------------------------------ ---------------- -----------
Xxxxxxx X. Xxxxx 2,218,686 0
------------------------------------------------------ ---------------- -----------
Xxxxxxx X. Xxxxx 600,494 84,000
------------------------------------------------------ ---------------- -----------
Xxxxxxx X. Sites 104,718 84,000
------------------------------------------------------ ---------------- -----------
Xxxx Xxxxxxx 450 84,000
------------------------------------------------------ ---------------- -----------
Xx Xxxxxxxx 4,163 84,000
------------------------------------------------------ ---------------- -----------
Xxx X'Xxxx 4,725 48,000
------------------------------------------------------ ---------------- -----------
Xxxxx Xxxxxx 4500
------------------------------------------------------ ---------------- -----------
Xxxxxxx X. Xxxxxxxxxx 15,264 0
---------------------------------------------------- ---------------- -----------
Xxxxxxxx X. Xxxxx 672,775 0
---------------------------------------------------- ---------------- -----------
Xxxx Xxxxxxxx 5,400 18,000
---------------------------------------------------- ---------------- -----------
Xxxxxxxx Xxxxxxxxxxx 56,250 0
---------------------------------------------------- ---------------- -----------
Xxxxx X. Xxxxxx 58,340 0
---------------------------------------------------- ---------------- -----------
Xxxxxxx X. Early 63,498 0
---------------------------------------------------- ---------------- -----------
Xxxxx Xxxxxxxxxx 40,619 0
---------------------------------------------------- ---------------- -----------
TOTAL 34,728,480
---------------------------------------------------- ---------------- -----------
EXHIBIT A
CONSENT OF SPOUSE
I, _____________________, spouse of _____________, have read and
approved the foregoing
Stock Purchase Agreement. In consideration of the right
of my spouse to sell the Company Common Stock as set forth in such Agreement, I
hereby appoint my spouse as my attorney-in-fact in respect to the exercise of
any rights of such Agreement insofar as I may have any rights under such
community property laws of the state in which I reside or similar laws relating
to marital property in effect in the state of our residence as of the date of
the signing of the foregoing Agreement.
Dated: ______________________ By: ______________________
Signature
______________________
Printed Name
2
Schedule 6(h) to the Stock Purchase Agreement
None of the Sellers has any reason to believe that the Company is
obligated under any Contract with Majority Shareholder or has obligations under
any Contract with Majority Shareholder other than in respect of the Items listed
as number 1-16 below. In particular, none of the Sellers has any reason to
believe that there are accrued liabilities on [the balance sheet] for (i) for
products or services purchased in the ordinary course of business or (ii) as
indebtedness for borrowed money other than in respect of one of more of the
items listed in #1-16 below (for the sake of clairty, given the large number of
Majority Shareholder Subsidiaer' and the wide range of businesses the y conduct,
#17 is being listed in case of immaterial amounts of which Sellers may not be
aware owed to one or more of Majority Shaerholders' Subsidiaries).
1. Director Indemnification by Company. The Company is obligated to Xxxxxxxx
Xxxxx, Xxxxxxx Xxxxxxxxxx, and Xxxxx Xxxxxx, directors of the Company (and
officers of Majority Shareholder and/or its Subsidiaries), pursuant to
indemnification agreements with the Company.
2. Post-Stock Purchase Closing Benefits. The Company will be responsible for
all payments called for in connection with Section 7.11(c) of the Stock
Purchase Agreement in respect of benefits to be provided following the
Stock Purchase Closing to Company Employees pursuant to Section 7.11(c) of
the Stock Purchase Agreement.
3. Majority Shareholder Health Benefit Plan. Majority Shareholder provides a
self-insured health, life and disability benefits plan to its employees, in
which the Company participates. Majority Shareholder is entitled to collect
from the Company premiums that will have accrued in respect of such Plan up
to and including the Stock Purchase Closing, consistent with past practice.
4. Majority Shareholder Worker's Compensation Plan. Majority Shareholder,
through it self-insured program, provides Worker's Compensation insurance
to the Company employees. Majority Shareholder is entitled to collect from
the Company premiums (based on a rate per man-hour of $0.12) that will have
accrued in respect of such Plan up to and including the Stock Purchase
Closing Date. The Company will also remain responsible, consistent with
past practice, for the first $50,000 payable in respect of each claim under
such Plan based on an occurrence giving rise to such claim which occurrence
occurred prior to the Stock Purchase Closing (it being understood that
claims under such Plan may be made after the Stock Purchase Closing based
on an occurrence prior to the Stock Purchase Closing).
3
5. Borrowings/Extensions of Credit. The Company has borrowed from Majority
Shareholder as follows:
(a) The Company maintains an unsecured, open, revolving credit line with
Majority Shareholder in the amount of $10 million which is payable at
prime + 1% on demand. As of February 28, 2002, $6,614,042, including
accrued interest, was owed by the Company to Majority Shareholder
under this promissory note.
(b) Subject to Section 7.15(b) of the Merger Agreement, the Company is
responsible for all amounts owing under a $17,731,000 promissory note
issued to Majority Shareholder in connection with the acquisition of
MountainStar pursuant to a Stock Purchase Agreement dated June 12,
2000; As of February 28, 2002, $13,597,460, including accrued
interest, was outstanding under this promissory note.
(c) The Company is responsible for all amounts owing under a $1,293,000
promissory note issued to ECI in connection with the acquisition of a
McCall, Idaho property. As of February 28, 2002, $1,293,000 was
outstanding under this promissory note.
(d) The Company is responsible for all amounts owing under a $3,513,078
promissory note issued to ECI for the acquisition of Eagle Crest
Vacation Club receivables. As of February 28, 2002, $3,037,856 was
outstanding under this promissory note.
7. EC Marketing Agreement. ECI and RYI entered into the EC Marketing Agreement
pursuant to which they obtained, subject to Section 7.16 of the Merger
Agreement, the exclusive right to sell WorldMark Memberships at the EC
Resort and the RY Resort. The Company has certain obligations under the EC
Marketing Agreement, including obligations to purchase notes receivable
(WorldMark Contracts, as defined in the EC Marketing Agreement) in respect
of sales of Vacation Credits acquired by ECI or RYI pursuant to the
Acquisition Agreement dated May 4, 2001.
8. Lease Arrangements with The Club. The Club is responsible as landlord under
the following leases:
4
(a) Lease dated September 1, 2001 between the Club and RYI for the lease
of a sales model unit at the RY Resort.
(b) Lease dated September 1, 2001 between the Club and ECI for the lease
of a sales model unit at the EC Resort.
9. Purchase of Majority Shareholder Products. There is a general understanding
between the Company and Majority Shareholder that Company will purchase
products sold by Majority Shareholder where feasible which is terminable at
will by either party without notice, cost or obligation. Company shall be
responsible for amounts accrued prior to the Stock Purchase Closing Date in
respect of products purchased in the ordinary course of business that have
not been paid for.
10. AT&T Service/Data Services Contract. Majority Shareholder has entered into
a Service/Data contract with AT&T Corp., effective as of October 5, 1999,
for telecommunications needs. Company shall be responsible for amounts
accrued in the ordinary course of business prior to the Stock Purchase
Closing Date.
11. Receivables Transfer Agreement. Pursuant to the Transfer Agreement, the
Company purchased receivables from ECI and RYI notes receivable contracts.
To the best of Majority Shareholder's knowledge, the Company is not
obligated in any way to Majority Shareholder under such Contract.
12. Creative Media Development. The Company purchases merchandise, including
incentives and/or promotional products from Creative Media Development,
Inc., a subsidiary of Majority Shareholder, pursuant to the Servicing
Agreement dated August 21, 2001. Company shall be responsible for amounts
accrued prior to the Stock Purchase Closing Date for products purchased in
the ordinary course of business and inventory for logoed merchandise
created in the ordinary course of business.
13. Performance Bonds. Majority Shareholder's Risk Management Department has
secured the performance bonds set forth below. The Company's obligations to
Majority Shareholder Company in respect of such bonds is limited to its
responsibility for the portion of the premiums indicated below through the
Stock Purchase Closing Date:
a) Letter of Credit #238549 -State of California LOC - Workers
Compensation for Self Insurance Period 8/22/1996 to 11/01/1999; Annual
Premium $6,793; Company Percent 28%.
5
b) Letter of Credit #428114 - USF&G - Security to USF&G for all Lines
5/1/1997 - current; Annual Premium $31,725; Company Percent 8%
c) Bond #158321785 - State of Washington - Self Insurance Bond from
inception of self insurance in state to current; Annual Premium
$10,035; Company Percent 8%.
d) Xxxx #000000000 - Xxxxx xx Xxxxxx - Self Insurance Bond from inception
of self insurance in state until 7/1/1999 (minimum bond premium);
Annual Premium $50; Company Percent 96%.
e) Xxxx #000000000 - Xxxxx xx Xxxxxx - Self Insurance Bond from inception
of self insurance in state to current ; Annual Premium $3,856; Company
Percent 7%.
f) Bond #158776300 - State of Arizona - Self Insurance Bond form
inception of self insurance in state to current; Company Premium $511;
Company Percent 38%.
g) Bond #158776281- Surface Mining Reclamation Bond, $43,500, Winston
Pit, Kittitas City. Permit No. 70-012663/Washington Department of
Natural Resources. The Company pays a premium of $272 per year. Bond
#929229098; Surface Mining Reclamation Bond, $42,000,
h) Bullfrog Pit, Xxxxxx, WA. Permit No. 70-010149/State of Washington.
The Company pays a premium of $189 per year.
The total estimated bond/letter of credit premiums for which the Company is
responsible each year is $6,170.
14. ECI and RYI Services. ECI provides laundry services for the Company for a
fee. ECI. and RYI provide master association services to the Company
relating to utilities, use of recreation facilities, and road maintenance.
Company shall be responsible for amounts accrued prior to the Stock
Purchase Closing Date in the ordinary course.
15. Insurance. Majority Shareholder, or its subsidiaries, as indicated below,
have secured insurance policies and have named the Company and/or Worldmark
as an additional insured on the following policies:
6
(a) Eagle Crest Master Association, Insurance Package including Property
and General Liability provided by New Hampshire Insurance Company,
policy #01LX6343907-1, is expiring 12/1/02. World Xxxx, The Club is
listed as additional insured.
(b) Eagle Crest Master Association, Umbrella Liability Coverage provided
by New Hampshire Insurance Company, policy #01UD4068157-1, is expiring
12/1/02. World Xxxx, The Club is listed as additional insured.
(c) Eagle Crest Master Association/Riverview Vista Estates Owner's
Association/Fairway Vista Estates Owner's Association, Directors &
Officers Liability Coverage provided by Lumberman's Mutual Casualty
Company, policy #3DY-00-8049-0, is expiring 1/1/05. World Xxxx, The
Club is listed as additional insured.
(d) Eagle Crest Vacation Resort Owner's Association, Directors & Officers
Liability Coverage provided by Lumberman's Mutual Casualty Company,
policy #3DY-00-8050-0, is expiring 1/1/05. World Xxxx, The Club is
listed as additional insured.
(e) Running Y Ranch Resort Owner's Association, Insurance Package
including Property and General Liability provided by New Hampshire
Insurance Company, policy #01LX6344221-1, is expiring 12/1/02. World
Xxxx, The Club is listed as additional insured.
(f) Running Y Ranch Resort Owner's Association, Umbrella Liability
Coverage provided by New Hampshire Insurance Company, policy
#01UD4068164-1, is expiring 12/1/02. World Xxxx, The Club is listed as
additional insured.
(g) Running Y Ranch Resort Owner's Association, Directors & Officers
Liability Coverage provided by Lumberman's Mutual Casualty Company,
policy #3DY-00-8048-0, is expiring 1/1/05. World Xxxx, The Club is
listed as additional insured.
(h) JELD-WEN, inc., Excess Workers Compensation Coverage provided by
United States Fidelity and Guaranty Company, policy # DRE1531700, is
expiring 5/1/03. Trendwest Resorts is included in this policy
(i) JELD-WEN, inc., Workers Compensation Coverage (AOS) provided by
Fidelity and Guaranty Insurance Company, policy # D003W00001, is
expiring 5/1/02. Trendwest Resorts is included in this policy
(j) JELD-WEN, inc., Workers Compensation Coverage (NJ, HI) provided by
United States Fidelity and Guaranty Insurance Company, policy #
D003W00002, is expiring 5/1/02. Trendwest Resorts is included in this
policy.
7
(k) JELD-WEN, inc., Workers Compensation Coverage (AK, NV, WI) provided by
Fidelity and Guaranty Insurance Company, policy # D003W00003, is
expiring 5/1/02. Trendwest Resorts is included in this policy
The Company is not obligated to Majority Shareholder or its Subsidiaries in
connection with any such policies other than with respect to providing
information.
16. WorldMark Points. Majority Shareholder and/or its Subsidiaries own Vacation
Credits and are entitled to the privileges and rights of the Memberships
they represent.
17. The Company shall be responsible (without double-counting for any items
referred to above on this Schedule 6(h)) for any amounts owed reflected as
accrued liabilities on the Company's consolidated balance sheet of December
31, 2001 (included in the Company's Form 10K filed for the period ended
December 31, 2001) (i) for products or services purchased in the ordinary
course of business or (ii) as indebtedness for borrowed money.
8
Schedule 9(b)(vii) to Stock Purchase Agreement
I. TIMESHARE REGULATORY CONSENTS
All required registrations and amendments shall have been made and written
consents, approvals or exemptions obtained under the timeshare laws (or
related real estate or securities registration laws in jurisdictions that
do not have specific timeshare laws) in the following jurisdictions from
the appropriate regulatory authorities:
1. Arizona
2. California
3. Colorado
4. Idaho
5. Missouri
6. Nevada
7. Oregon
8. Utah
9. Washington
10. Australia
II. LEASE CONSENTS
For leases for the following premises:
1. 0000 X. Xxxx Xxxx, Xxxxx 000, Xxxxx Xxx, XX
2. 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxx, XX
3. 00000 Xxx Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, XX
4. 0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxx Xxxxx, XX 00000
5. 262, 000X Xxxxxx Xxxxx Xxxxx xxx Xxxxxxxx Xxxxx, Xxxxxxxxx, XX
9
6. 0000 Xxxx Xxxx Xx., Xxxxx 000, Xxxxxxxxx, XX
7. San Dimas (Ontario), CA lease
8. 00000 X. Xxxxxx Xxx., Xxxxxxxxx, XX
9. Xxxxxx Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, XX
10. 00000 Xxxxxxxxxxx Xxx Xxxxx, Xxxxx 000, Xxxxxxx Xxx, XX
11. 00000 0xx Xxx. X, Xxxxx 0X, Xxxxxxxx, XX
III. CONSENTS UNDER OTHER CONTRACTS
1. Receivables Purchase Agreement among the Company, TW Holdings III,
Inc., Xxxxx Fargo Bank Minnesota, Jupiter Securitization Corporation,
Blue Keel Funding, LLC, Fleet Securities, Inc., Bank One, NA, and Bank
One Trust Company, dated as of September 28, 2001 (warehouse facility)
2. [CONSENT SHOULD BE OBTAINED PRIOR TO SIGNING: Credit Agreement among
the Company, and Trendwest South Pacific PTY. Ltd., as the Borrowers,
the lenders named therein, KeyBank National Association, as lead
arranger and administrative agent and as the letter of credit issuing
lender, Bank One, NA, as syndication agent and Australian lender dated
as of August 14, 2000](revolver)
3. All receivables securitization-related agreements listed on Schedule
3.1(f) to the Merger Agreement.
IV. MOUNTAINSTAR AGREEMENTS
1. DEVELOPMENT AGREEMENT, dated October 10, 2000, by and between Kittitas
County, Washington, Trendwest Resorts, Inc. and Trendwest Investments,
Inc.
2. AGREEMENT, dated September 1, 2000, by and between Trendwest and
Xxxxxx Course Design Company.
3. PRE-ANNEXATION AGREEMENT, dated July 26, 2000, by and between City of
Cle Elum, a second class municipal corporation organized under the
laws of the State of Washington, Trendwest Resorts, Inc., a Washington
corporation, Trendwest Investments, Inc., a Washington corporation,
and Trendwest Properties, Inc., a Washington corporation.
10
4. AGREEMENT RELATING TO WATER DELIVERY TO MOUNTAINSTAR RESORT, dated
June 19, 2001, by and between City of Cle Elum, Trendwest Resorts,
Inc., Trendwest Investments, Inc., and MountainStar Resort Resources,
Inc.
5. WATER SUPPLY SYSTEM PROJECT DEVELOPMENT AGREEMENT, dated June 19,
2001, by and between City of Cle Elum, Town of South Cle Elum,
Trendwest Investments, Inc., Trendwest Resorts, Inc. and Trendwest
Properties, Inc.
6. AGREEMENT RELATING TO WATER SUPPLY FOR BULLFROG FLATS UGA, dated June
19, 2001, by and between City of Cle Elum, Trendwest Investments,
Inc., Trendwest Resorts, Inc., and Trendwest Properties, Inc.
7. AGREEMENT RELATING TO FUNDING FOR THE UPPER KITTITAS COUNTY TRANSFER
STATION PHASE I UPGRADE, dated February 6, 2001, by and between
Kittitas County Solid Waste, Trendwest Resorts, Inc. and Trendwest
Investments, Inc.
8. INTERIM WASTEWATER TREATMENT FACILITIES PROJECT DEVELOPMENT AGREEMENT,
dated July 26, 2000, by and between City of Cle Elum, Town of South
Cle Elum, Trendwest Investments, Inc., Trendwest Resorts, Inc. and
Trendwest Properties, Inc.
9. SETTLEMENT AGREEMENT, dated September 19, 2001, by and between
Trendwest Resorts, Inc., Trendwest Investments, Inc., Trendwest
Properties, Inc., MountainStar Resort Resources, Inc., and RIDGE.
Estoppel Certificates to be Sought (not closing condition)
I. DEVELOPMENT SITE AGREEMENTS
1. City of Angels Development Agreement (Angels Camp)
2. City of Seaside Disposition and Development Agreement (Seaside)
3. Swinerton Builders Construction Agreement (Seaside)
4. Ter Har Enterprises Ground Lease (Seaside)
11
5. Ter Har Enterprises Exchange Agreement (Seaside)
6. City of Las Vegas Off-Site Improvements Agreements (Las Vegas)
7. Xxxx Construction Company Construction Agreement (Las Vegas)
8. Las Vegas Valley Water District Construction Agreement (Las Vegas)
9. XXX Xxxxxxxxxx Architects Agreement (Las Vegas)
10. Krump Construction, Inc. Construction Agreement (South Lake Tahoe)
11. Xxxxx Group Architects LLC Architects Agreement (South Lake Tahoe)
12. Xxxxxxx Xxxxx, LLC Architects Agreement (South Lake Tahoe)
13. City of Solvang Agreement Regarding Land Development Improvements
(Solvang)
14. Xxxx Construction Construction Agreement (Big Bear)
15. 582967 B.C. Ltd. Purchase and Sale Agreement (Victoria)
16. 582967 B.C. Ltd. Deposit Mortgage (Victoria)
II. CONSTRUCTION PARTIES
1. Swinerton Builders (Seaside)
2. Xxxx Construction Company (Las Vegas)
3. XXX Xxxxxxxxxx (Las Vegas)
4. Krump Construction, Inc. (South Lake Tahoe)
5. Xxxxx Group Architects LLC (South Lake Tahoe)
6. Xxxxxxx Xxxxx, LLC (South Lake Tahoe)
7. Xxxx Construction (Big Bear)
8. 582967 B.C. Ltd.
12
Schedule 9(b)(xi) to Stock Purchase Agreement
Xxxxxxx Xxxxx
Xxxxxxxx Xxxxx
Xxxxxxx Xxxxx
13
