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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
October 22, 1996
NATIONAL R.V. HOLDINGS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-22268 13-0371079
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(State or other (Commission (I.R.S. Employer
jurisdiction) File Number) Identification No.)
3411 N. Perris Blvd., Perris, California 92571
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (909) 943-6007
N/A
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(Former name and former address, if changed since last report)
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Item 5. Other Events.
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On September 22, 1996, National R.V. Holdings, Inc., a
Delaware corporation (the "Company"), announced that it had entered
into a Share Exchange Agreement, dated as of October 22, 1996 (the
"Exchange Agreement"), with Country Coach, Inc. ("CCI") and the
stockholders of CCI, pursuant to which all of the outstanding
shares of common stock of CCI will be exchanged for shares of the
Company's Common Stock in accordance with the terms of the Exchange
Agreement. The consummation of the transactions contemplated by
the Exchange Agreement is subject to the satisfaction of certain
conditions as set forth therein.
Item 7. Financial Statements and Exhibits.
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(c) Exhibits.
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A Share Exchange Agreement, dated as of October
22, 1996, by and among National R.V. Holdings,
Inc., Country Coach, Inc., Robert B. Lee, Jack
L. Courtemanche, Terry N. Lee, Kenda M. Mason
and Brenda J. Lee-Thomson.
B Press Release of the Company dated September
22, 1996.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
NATIONAL R.V. HOLDINGS, INC.
By: /s/ Stephen M. Davis
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Name: Stephen M. Davis
Title: Secretary
Dated: November 1, 1996
84116<PAGE>
Exhibit A
SHARE EXCHANGE AGREEMENT
BY AND AMONG
NATIONAL R.V. HOLDINGS, INC.,
COUNTRY COACH, INC.
AND THE CCI STOCKHOLDERS
October 22, 1996
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SHARE EXCHANGE AGREEMENT dated October 22, 1996 (the
"Agreement"), by and among NATIONAL R.V. HOLDINGS, INC., a
Delaware corporation ("NRVH"), COUNTRY COACH, INC., an Oregon
corporation ("CCI") and Robert B. Lee ("Mr. Lee"), Jack L.
Courtemanche ("Mr. Courtemanche") and Terry N. Lee ("Ms. Lee"),
Kenda M. Mason ("Ms. Mason") and Brenda J. Lee-Thomson ("Ms. Lee-
Thomson," collectively, with Mr. Lee, Mr. Courtemanche, Ms. Lee and
Ms. Mason, the "CCI Stockholders").
WHEREAS, the respective Boards of Directors of NRVH, and
CCI have each determined that it is advisable and for the benefit
and in the best interests of their corporations and their
respective stockholders that CCI be acquired by NRVH by means of an
exchange of CCI's Common Stock, no par value (the "CCI Common
Stock") for shares of common stock (the "NRVH Common Stock"), par
value $.01 per share of NRVH, on the terms and conditions
hereinafter set forth (the "Exchange");
WHEREAS, for federal income tax purposes, it is intended
that the Exchange qualify as a reorganization under the provisions
of Section 368(a)(1)(B) of the United States Internal Revenue Code
of 1986, as amended ("the "Code");
NOW, THEREFORE, in consideration of the premises, the
mutual covenants, representations and warranties herein contained,
and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto
intending to be bound hereby agree as follows:
ARTICLE I.
THE EXCHANGE
SECTION 1.1 The Exchange. Subject to the terms and
conditions hereof, on the Effective Date (as defined in Section
1.3), the outstanding CCI Common Stock shall be exchanged into
shares of NRVH Common Stock in accordance with the applicable
provisions of the laws of the State of Delaware ("Delaware Law")
and the State of Oregon ("Oregon Law"). Following the Effective
Date, CCI shall continue its corporate existence under Oregon Law.
SECTION 1.2 Board of Directors and Stockholders'
Meetings.
(a) CCI and the CCI Stockholders. CCI and the CCI
Stockholders shall, as soon as practicable, take all action
necessary in accordance with applicable law and its Certificate of
Incorporation and By-laws to approve the Exchange.
(b) NRVH. NRVH shall, as soon as practicable, take
all action necessary in accordance with applicable law and its
Certificate of Incorporation and By-laws to approve the Exchange.
SECTION 1.3 Consummation of the Exchange; Effective
Date. As soon as practicable following the Closing (as that term
is defined in Section 2.3), the parties hereto will file with the
Secretary of State of the State of Oregon, Articles of Share
Exchange in such form as required by, and executed in accordance
with, the relevant provisions of Oregon Law. The Exchange shall
become effective at such time (the "Effective Time") as the
Articles of Share Exchange shall have been duly filed with the
Secretary of State of the State of Oregon and, if necessary, all
required action has been taken pursuant to Delaware Law (the
"Effective Date").
SECTION 1.4 Directors. On the Effective Date, Mr. Lee
shall be appointed a director of NRVH, and the directors of the CCI
shall be those persons who are listed on Schedule 1.4B, all such
directors to hold office until their respective successors are duly
elected and qualified.
SECTION 1.5 Officers. On and after the Effective
Date, the officers of CCI shall be those persons who are listed on
Schedule 1.5B, each to hold the office(s) set forth opposite their
respective names on such Schedule, all duly elected and qualified.
ARTICLE 2.
EXCHANGE AND CANCELLATION
OF SECURITIES
SECTION 2.1 Conversion and Cancellation of Common
Stock of CCI. As of the Effective Date, by virtue of the Exchange
and without any action on the part of the holders thereof:
(a) Exchange Consideration. On the Effective Date,
all shares of CCI Common Stock issued and outstanding immediately
prior to the Effective Date, other than any shares of Common Stock
held by CCI, shall, by virtue of the Exchange automatically and
without any action on the part of the holder thereof, become and be
exchanged into the right to receive in total an aggregate number of
shares (the "Closing Shares") of NRVH Common Stock which equals the
quotient obtained by dividing $9,000,000 by the Market Value (as
defined in Section 12.3(e)). The Closing Shares are sometimes
collectively referred to hereinafter as the "Exchange
Consideration." Each share of CCI Common Stock so exchanged shall
be entitled to receive its pro rata portion (the "Pro Rata
Portion") of the Exchange Consideration. If the outstanding shares
of NRVH Common Stock are increased or decreased, as a result of one
or more reorganizations, recapitalizations, spin-offs, stock
splits, reverse stock splits, stock dividends or the like,
appropriate adjustments shall be made in the Exchange
Consideration.
(b) Capital Stock Held by CCI. On the Effective
Date, each share of capital stock of CCI held in the treasury of
CCI immediately prior to the Effective Date shall, by virtue of the
Exchange and without any action on the part of the holder thereof,
be automatically cancelled and retired and cease to exist and no
securities or other consideration shall be payable in respect
thereof.
SECTION 2.2 Surrender and Payment. After the
Effective Date, each holder of a certificate that formerly
represented shares of CCI Common Stock, issued and outstanding on
the Effective Date (other than shares held by CCI) shall be
entitled, upon surrender thereof to CCI, to receive the Pro Rata
Portion of the Exchange Consideration for each share of CCI Common
Stock theretofore represented by the certificate so surrendered as
provided in Section 2.1 hereof, and the certificate so surrendered
shall forthwith be cancelled.
SECTION 2.3 Closing. Subject to Section 10.1(e), the
closing of the transactions contemplated by this Agreement (the
"Closing") shall take place, unless the parties shall otherwise
agree, at the offices of Werbel & Carnelutti, 711 Fifth Avenue, New
York, New York 10022 at 10:00 A.M. local time, on October 31, 1996
or such other sooner or later time as NRVH and CCI may mutually
agree (the "Closing Date").
ARTICLE 3
CERTIFICATE OF INCORPORATION and BY-LAWS
SECTION 3.1 Certificate of Incorporation and By-laws.
As of the Effective Date, the Certificate of Incorporation and By-
laws of CCI shall be in the forms attached hereto as Exhibit 3.1.
ARTICLE 4
CERTAIN PROVISIONS RELATING TO SHARES
SECTION 4.1 No Fractional Shares of NRVH Common Stock.
No fractional shares of NRVH Common Stock shall be issued by NRVH
in the Exchange and the number of shares of NRVH Common Stock to be
issued pursuant to the terms of the Exchange shall be rounded down
to the next lower whole number.
SECTION 4.2 Taking of Necessary Action; Further
Action. NRVH, CCI and the CCI Stockholders shall each take all
such action as may be necessary or appropriate in order to
effectuate the Exchange as promptly as possible, subject to all of
the terms and conditions hereof. If, at any time after the
Effective Date, any further action is necessary or desirable to
carry out the purposes of this Agreement NRVH, CCI and the CCI
Stockholders agree to take, and shall take, all such action.
SECTION 4.3 Closing of CCI's Transfer Books. On the
Effective Date, the stock transfer books of CCI shall be closed and
no transfer of shares of capital stock of CCI shall thereafter be
made. If, after the Effective Date, certificates representing
shares of CCI Common Stock are presented to CCI, they shall be
cancelled and exchanged for the Exchange Consideration provided in
Section 2.1 hereof.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF CCI AND THE CCI STOCKHOLDERS
Except as set forth in the Disclosure Schedule delivered
by CCI to NRVH prior to the execution of this Agreement and
attached hereto (the "CCI Disclosure Schedule"), which shall
identify exceptions by specific Section references, CCI and each
CCI Stockholder, severally and jointly, hereby represents and
warrants to NRVH that:
SECTION 5.1 Organization and Qualification; No
Subsidiaries. CCI is a corporation duly organized and validly
existing under the laws of the State of Oregon, has all requisite
power and authority to own, lease and operate its properties and to
carry on its business as it is now being conducted and is duly
qualified and in good standing to do business in each jurisdiction
in which the nature of the business conducted by it or the
ownership or leasing of its properties makes such qualification
necessary, other than where the failure to be so duly organized,
validly existing and in good standing, or to have such power and
authority, or to be duly qualified and in good standing, as the
case may be, would not have a CCI Material Adverse Effect. The
term "CCI Material Adverse Effect" as used in this Agreement shall
mean any event, change or effect that, individually or when taken
together with all other such events, changes or effects, would be
materially adverse to the condition (financial or otherwise),
prospects, business, properties, assets, or operations of CCI at
the time of such event, change or effect. CCI has no subsidiaries.
Except as disclosed in Section 5.1 of CCI Disclosure Schedule,
there are no corporations, partnerships or joint venture
arrangements or other business entities in which CCI owns an equity
interest.
SECTION 5.2 Certificate of Incorporation and By-Laws.
CCI is not in violation of any of the provisions of its Certificate
of Incorporation or By-Laws.
SECTION 5.3 Capitalization. The authorized capital
stock of CCI consists of 1,000,000 shares of CCI Common Stock of
which: (x) as of October 21, 1996, 67,251 shares of CCI Common
Stock were issued and outstanding, all of which are duly
authorized, validly issued, fully paid and nonassessable; and (y)
as of October 21, 1996, no shares of CCI Common Stock were held in
the treasury of CCI. Except as described in this Section 5.3 or in
Section 5.3 of CCI Disclosure Schedule, as of the date of this
Agreement, no shares of CCI Common Stock are reserved for any other
purpose. Between January 1, 1996 and the date of this Agreement,
no shares of CCI Common Stock have been issued by CCI. Since
January 1, 1995, CCI has not granted any options in, or any other
rights to purchase, shares of CCI Common Stock and there are no
such options or rights outstanding. Each of the outstanding shares
of capital stock or other securities of CCI is duly authorized and
validly issued, and, in the case of shares of capital stock, fully
paid and nonassessable. Each CCI Stockholder is the owner of
record and beneficially of the number of shares of CCI Common Stock
set forth in Section 5.3 of the CCI Disclosure Schedule, which
total amount equals all outstanding shares of CCI Common Stock.
(b) Except as set forth in Section 5.3(a) above or
otherwise contemplated hereby, as of the date of this Agreement,
there are no options, warrants or other rights (including
registration rights), agreements, arrangements or commitments of
any character to which CCI is a party relating to the issued or
unissued capital stock or other securities of CCI, or obligating
CCI to grant, issue or sell any shares of the capital stock or
other securities of CCI, by sale, lease, license or otherwise.
There are no obligations, contingent or otherwise, of CCI to (x)
repurchase, redeem or otherwise acquire any shares of CCI capital
stock; or (y) provide funds to, or make any investment in (in the
form of a loan, capital contribution or otherwise), or provide any
guarantee with respect to the obligations of CCI or any other
person. As of the date of this Agreement, CCI neither owns nor has
agreed to purchase or otherwise acquire, any capital stock of, or
any interest convertible into or exchangeable or exercisable for,
any capital stock of any corporation, partnership, joint venture or
other business association or entity. Except as set forth in
Section 5.3 of CCI Disclosure Schedule, there are no agreements,
arrangements or commitments of any character (contingent or
otherwise) pursuant to which any person is or may be entitled to
receive any payment based on the revenues or earnings, or
calculated in accordance therewith, of CCI. There are no voting
trusts, proxies or other agreements or understandings to which CCI
is a party or relating to CCI with respect to the voting of any
shares of capital stock of CCI.
SECTION 5.4 Authority. CCI has all requisite
corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. Each CCI Stockholder has the
legal right and capacity to enter into this Agreement and to
perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of
this Agreement by CCI and the CCI Stockholders and the consummation
by CCI of the transactions contemplated hereby have been duly
authorized by all necessary corporate action and no other corporate
proceedings on the part of CCI are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby.
The holders of Common Stock of CCI have approved and adopted this
Agreement and have approved the Exchange. This Agreement has been
duly executed and delivered by CCI and the CCI Stockholders and,
assuming the due authorization, execution and delivery thereof by
NRVH, constitutes the legal, valid and binding obligation of CCI
and the CCI Stockholders, enforceable against CCI and the CCI
Stockholders in accordance with its terms.
SECTION 5.5 No Conflict; Business Relationships;
Required Filings and Consents. (a) The execution and delivery of
this Agreement by CCI does not, and the performance of this
Agreement by CCI and the CCI Stockholders will not (i) conflict
with or violate the Certificate of Incorporation or By-Laws, in
each case as amended or restated, of CCI, (ii) conflict with or
violate any federal, state, foreign or local law, statute,
ordinance, rule, regulation, order, judgment, arbitration award or
decree (collectively, "Laws") or CCI Permit (as hereinafter
defined) in effect as of the date of this Agreement and applicable
to CCI or any CCI Stockholder or by which any of their respective
properties is bound or subject to or (iii) result in any breach of
or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of,
or require payment under, or result in the creation of a lien or
encumbrance on any of the properties or assets of CCI or any CCI
Stockholder pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, order, decree,
franchise or other instrument or obligation to which CCI or any CCI
Stockholder is a party or by which CCI or any CCI Stockholder or
any of their respective properties is bound or is subject.
(b) Since January 1995, no supplier, dealer or
creditor of CCI (the "Business Relationships") has notified CCI,
either orally or in writing, that such Business Relationships may
take action which is reasonably likely to materially and adversely
affect the condition (financial or otherwise), business,
properties, assets, or operations, including sales, of CCI.
(c) The execution and delivery of this Agreement by
CCI and each CCI Stockholder does not, and the performance of this
Agreement by CCI and each CCI Stockholder will not require CCI or
any CCI Stockholder to obtain any consent, approval, authorization
or permit of, or to make any filing with or notification to, any
governmental or regulatory authority ("Governmental Entities"),
except for the filing and recordation of appropriate exchange
documents as required by Oregon Law.
SECTION 5.6 Permits; Compliance. CCI is in possession
of all franchises, grants, authorizations, licenses, permits,
easements, variances, exemptions, consents, certificates, approvals
and orders required to own, lease and operate its properties and to
carry on its business as it is now being conducted (collectively,
the "CCI Permits"), and, to the knowledge of CCI, there is no
action, proceeding or investigation pending or threatened regarding
suspension or cancellation of any CCI Permits, except where the
failure to possess, or the suspension or cancellation of, such CCI
Permits would not have a CCI Material Adverse Effect. CCI is not
in conflict with, or in default or violation of (a) any Law,
including but not limited to, Laws pertaining to the environment,
occupational safety, employment matters and licensing, or, to the
knowledge of CCI, any requirement, guideline, promulgation or rule
of the Recreational Vehicle Industry Association or (b) any of CCI
Permits, except for any such conflicts, defaults or violations
which would not have a CCI Material Adverse Effect. CCI has not
received from any Governmental Entity any written notification that
CCI is in conflict with, or has defaulted or violated any Law or
CCI Permit. For purposes of Section 5.6, an event or state of
facts which would require CCI to pay for any purpose or incur as an
obligation $5,000 (or $25,000 in the aggregate) is deemed to result
in a "CCI Material Adverse Effect."
SECTION 5.7 Financial Statements. CCI has furnished
to NRVH copies of the balance sheet of CCI as at December 31, 1994
and December 31, 1995, and the related statements of operations,
stockholders' equity and cash flows of CCI for the three years
ended December 31, 1995, audited by Coopers & Lybrand L.L.P. (the
"Audited Financial Statements"), and the balance sheet as at
September 30, 1996 and statement of operations of CCI for the nine
months ended September 30, 1996 (the "Unaudited Financial
Statements" and collectively with the Audited Financial Statements,
the "Financial Statements"). The Audited Financial Statements have
been prepared in accordance with generally accepted accounting
principles, and the Financial Statements fairly present the
consolidated financial position of CCI and its subsidiaries as of
the respective dates thereof and consolidated results of operations
and cash flows for the periods indicated. CCI and the subsidiaries
maintain a system of internal accounting controls sufficient to
provide assurances that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with
management's general or specific authorizations; (iv) appropriate
accruals, including for employee bonuses and vacation time, have
been taken; and (v) the recorded accountability for assets is
compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. The
Unaudited Financial Statements have been prepared on the basis of
a physical inventory taken by CCI. Schedule 5.7 describes the
deviations from generally accepted accounting principles of the
Unaudited Financial Statements.
SECTION 5.8 Absence of Certain Changes or Events.
Except as set forth in Section 5.8 of the CCI Disclosure Schedule,
during the period commencing January 1, 1996 and ending on the date
of this Agreement, CCI and its subsidiaries have conducted their
respective businesses only in the ordinary course and in a manner
consistent with past practice and there has not been: (i) any
material damage, destruction or loss (not covered by insurance)
with respect to any material assets of CCI; (ii) any change by CCI
or its subsidiaries in their accounting methods, principles or
practices; (iii) any declaration, setting aside or payment of any
dividends or distributions in respect of shares of CCI Common Stock
or any redemption, purchase or other acquisition of, or issuance or
sale of, any of CCI's securities; (iv) any increase in the benefits
under, or the establishment or amendment of, any bonus, insurance,
severance, deferred compensation, pension, retirement, profit
sharing, stock option, stock purchase or other employee benefit
plan, or any increases in the compensation payable or to become
payable to directors, officers, employees or consultants of CCI
(including the payment of any bonuses), except for increases in
salaries or wages payable or to become payable in the ordinary
course of business and consistent with past practice; (v) sale,
assignment or transfer of any material portion of its assets,
except in the ordinary course of business, or cancellation of any
material debts or claims, (vi) incurring of any capital
expenditures or any commitment therefor binding upon CCI which
would cause the aggregate amount of all actual expenditures for CCI
for fiscal 1996 to exceed $2,100,000; (vii) notice (in writing or
otherwise) by a dealer that such dealer intends to reduce the
amount of business it does with CCI; or (viii) repurchases by CCI
of a motorhome from any third party (other than as a trade-in from
a purchaser of a new motorhome from CCI), or (ix) a CCI Material
Adverse Effect.
SECTION 5.9 Absence of Litigation. Except as
disclosed in Section 5.9 of the CCI Disclosure Schedule, there is
no claim, action, suit, litigation, proceeding, arbitration or, to
the knowledge of CCI, investigation of any kind, at law or in
equity (including actions or proceedings seeking injunctive
relief), pending or, to the knowledge of CCI, threatened in writing
against CCI or any properties or rights of CCI (except for claims,
actions, suits, litigations, proceedings, arbitrations, or
investigations which, individually or in the aggregate, would not
reasonably be expected to have a CCI Material Adverse Effect) nor,
to the knowledge of CCI, does there exist any basis therefor, and
CCI is not subject to any continuing order of, consent decree,
settlement agreement or other similar written continuing
investigation by, or any judgment, order, writ, injunction, decree
or award of, any Governmental Entity, court or arbitrator,
including, without limitation, cease-and-desist or other orders,
except for matters which, individually or in the aggregate, would
not have a CCI Material Adverse Effect. For purposes of this
Section 5.9, "CCI Material Adverse Effect" is deemed to include any
claim, action, suit, litigation, proceeding, arbitration or
investigation which if decided against CCI would require the
payment of $25,000 individually and $50,000 in the aggregate.
SECTION 5.10 Employee Benefit Plans; Labor Matters. (a)
With respect to each employee benefit plan, program, arrangement
and contract (including, without limitation, any "employee benefit
plan", as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), maintained or
contributed to by CCI, or with respect to which CCI could incur
liability under Section 4069, 4212(c) or 4204 of ERISA (the
"Benefit Plans"), CCI has made available to NRVH a true and correct
copy of (i) the most recent annual report (Form 5500) filed with
the Internal Revenue Service (the "IRS"), (ii) such Benefit Plan,
(iii) each trust agreement relating to such Benefit Plan, (iv) the
most recent summary plan description for each Benefit Plan for
which a summary plan description is required, (v) the most recent
actuarial report or valuation relating to a Benefit Plan subject to
Title IV of ERISA and (vi) the most recent determination letter, if
any, issued by the IRS with respect to any Benefit Plan qualified
under Section 401(a) of the Code.
(b) With respect to the Benefit Plans, no event has
occurred and, to the knowledge of CCI, there exists no condition or
set of circumstances, in connection with which CCI could be subject
to any liability under the terms of such Benefit Plans, ERISA, the
Code or any other applicable Law.
(c) Except as disclosed in Section 5.10(c) of the
CCI Disclosure Schedule, neither CCI nor any of its subsidiaries is
a party to, or bound by, any collective bargaining agreement,
contract or other agreement or understanding with a labor union or
labor organization, nor is CCI the subject of a pending or
threatened proceeding seeking to compel it to bargain with any
labor organization as to wages or conditions of employment nor is
there any strike, work stoppage or other labor dispute involving it
or any of its subsidiaries pending or, to its knowledge,
threatened. To the knowledge of CCI, neither CCI nor its
subsidiaries, nor their respective representatives or employees,
has committed any unfair labor practices in connection with the
operation of the respective businesses of CCI or its subsidiaries,
and there is no pending or threatened charge or complaint against
CCI or its subsidiaries by the National Labor Relations Board or
any comparable state agency, except where such unfair labor
practice, charge or complaint would not have a CCI Material Adverse
Effect.
(d) Set forth in Section 5.10 (d) of the CCI
Disclosure Schedule is a list of: (i) all employment agreements
with employees of CCI; (ii) all agreements with consultants of CCI
obligating CCI to make annual cash payments in an amount exceeding
$25,000; (iii) all officers of CCI who have executed a non-
competition agreement with CCI; (iv) all severance agreements,
programs and policies of CCI with or relating to its employees; (v)
all plans, programs, agreements and other arrangements of CCI with
or relating to its employees which contain change in control
provisions. Except as disclosed in Section 5.10 of the CCI
Disclosure Schedule, no benefit plan or employment arrangement
exists which could result in the payment to any current, former or
future director or employee of CCI of any money or other property
or rights or accelerate or provide any other rights or benefits to
any such employee or director as a result of the transactions
contemplated by this Agreement, whether or not some other
subsequent action or event would be required to cause such payment,
acceleration or provision to be triggered. CCI has made available
to NRVH complete copies of all such agreements and documents.
(e) Except as provided in the employment agreements
referred to in clause (i) of Section 5.10(d), or in Section 5.10 of
CCI Disclosure Schedule, (x) no benefit plan provides retiree
medical or retiree life insurance benefits to any person and (y)
CCI is not contractually obligated (whether or not in writing) to
provide any person with life insurance or medical benefits upon
retirement or termination of employment.
SECTION 5.11 Taxes.
(i) All Returns (as defined in Section 12.3(g)) with
respect to any tax period ending on or before the close of the
Effective Date, ("Pre-Closing Tax Period") have, to the extent
required to be filed on or before the date hereof, been filed when
due in accordance with all applicable laws;
(ii) All Taxes (as defined in Section 12.3(i)) due and
payable by, or attributable to, CCI with respect to any Pre-Closing
Tax Period have, to the extent required to be paid on or before the
date hereof, been timely paid or withheld and remitted to the
appropriate Taxing Authority;
(iii) Except as disclosed in Section 5.11 of the CCI
Disclosure Schedule, CCI has not been granted any extension or
waiver of the statute of limitations period applicable to any
Return, which period (after giving effective to such extension or
waiver) has not yet expired;
(iv) Except as disclosed in Section 5.11 of the CCI
Disclosure Schedule, CCI has not received any written notice of any
deficiency, claim, audit, action, suit, proceeding, or
investigation with respect to any Pre-Closing Tax Period;
(v) There are no pending written requests by CCI for
rulings, determinations, or accounting method changes in respect of
any Tax with any taxing authority;
(vi) None of the property owned or used by CCI is subject
to a tax benefit transfer lease executed in accordance with Section
168(f)(8) of the Internal Revenue Code of 1954, as amended;
(vii) None of the property owned or used by CCI is subject
to a lease, other than a "true" lease for federal income tax
purposes;
(viii) None of the property owned by CCI is "tax-exempt use
property" within the meaning of Section 168(h) of the Code;
(ix) CCI has not entered into, nor will it enter into,
any agreement or consent pursuant to Section 341(f) of the Code;
(x) There are no liens for Taxes upon the assets of CCI,
except liens for current Taxes not yet due or payable;
(xi) CCI is not subject to withholding under Section 1445
of the Code with respect to any transaction contemplated hereby;
(xii) Without the prior written consent of NRVH, CCI shall
not between the date hereof and the Effective Date, make or change
any tax election, change any annual tax accounting period, adopt or
change any method of tax accounting, file any amended Return, enter
into any closing agreement, settle any Tax claim or assessment,
surrender any right to claim a Tax refund, or take or omit to take
any other action, if any such action or omission would have the
effect of increasing the Tax liability or reducing any Tax benefit
of NRVH and its subsidiaries after the Effective Date.
(xiii) As of the close of the day before the Effective
Date, CCI is, and has been for every taxable year since October 1,
1984, a valid S corporation (as defined in Section 1361 et seq. of
the Code, and regulations promulgated thereunder) and no entity-
level Tax has been imposed on the income of CCI during the period
in which CCI has been an S corporation.
SECTION 5.12 Tax Matters. Neither CCI nor, to the
knowledge of CCI, any of its affiliates has taken or agreed to take
any action that would prevent the Exchange from constituting a
reorganization qualifying under the provisions of Section 368(a) of
the Code.
SECTION 5.13 Certain Business Practices. Neither CCI
nor any directors, officers, or, to the knowledge of CCI, agents or
employees of CCI has (i) used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to
political activity, (ii) made any unlawful payment to government
officials or employees, or (iii) made any other unlawful payment.
Neither CCI nor any of its directors, officers, or, to the
knowledge of CCI, agents or employees have taken any action, or
made any omission, that has or with the elapsing of time could have
an adverse impact on CCI's ability to receive payment or
reimbursement for services rendered from any insurance carrier,
group health plan, or other third party payor.
SECTION 5.14 No Undisclosed Liabilities. Except as set
forth in Section 5.14 of the CCI Disclosure Schedule, neither CCI
nor any of its subsidiaries has any obligation or liability
(whether accrued, absolute, contingent, unliquidated or otherwise,
whether due or to become due) involving in excess of $25,000 in the
aggregate, except (i) liabilities expressly reflected on CCI's
audited balance sheet as of December 31, 1995, including the notes
thereto, (ii) liabilities under contracts or commitments described
in Section 5.16 of the CCI Disclosure Schedule (but not liabilities
for breaches thereof involving in excess of $25,000 in the
aggregate), (iii) liabilities incurred in the ordinary course of
business for the acquisition of supplies, parts and inventory for
production and operations in amounts consistent with past practice;
and (iv) liabilities which have arisen since December 31, 1995 in
the ordinary course of business (none of which is a liability for
breach of contract, breach of warranty, torts, infringements,
claims or lawsuits involving in excess of $25,000 in the
aggregate).
SECTION 5.15 Brokers. No broker, finder or investment
banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of CCI.
SECTION 5.16 Material Contract and Absence of Defaults.
Except as listed in Section 5.16 of the CCI Disclosure Schedule
("Material Contracts"), CCI does not have outstanding:
(a) Any single contract providing for an
expenditure by CCI in excess of $10,000 for the purchase of any
real property, machinery, equipment or other items which are in the
nature of capital investment or for the purchase of raw materials,
supplies, component parts or other items which are in the nature of
inventory;
(b) Any contract, bid or offer to sell products or
to provide services to third parties which (A) is pursuant to terms
or conditions that CCI does not reasonably expect to satisfy or
fulfill in its entirety, or (B) which involves more than $10,000,
or which, together with all other contracts, bids or offers to or
with the same party or any affiliates parties involves more than
$25,000;
(c) Any lease of any personal property under which
CCI is lessor requiring aggregate annual payments in excess of
$10,000;
(d) any revocable or irrevocable power of attorney
to any person, firm or corporation for any purpose whatsoever;
(e) Any loan agreement, indenture, promissory note,
conditional sales agreement, guarantee or other similar type of
agreement that involves $10,000 or more; or
(f) Any other material contract or commitment which
is not cancelable on thirty (30) or less days' notice without
further obligation on the part of CCI.
CCI has provided to NRVH true, correct and complete
copies of all Material Contracts. CCI is not, nor has it received
any notice that it is, or has any knowledge that any other party
is, in default in any respect under any such Material Contract; and
there has not occurred any event that with the lapse of time or the
giving of notice or both would constitute such a default. CCI's
Material Contracts comply with all applicable Laws.
SECTION 5.17 Corporate and Shareholder Approval. The
Board of Directors of CCI, at a meeting duly called and held, has
by unanimous vote of those directors present (who constituted 100%
of the Directors then in office) or by unanimous written consent
thereof, and the stockholders of CCI, have approved the terms of
this Agreement and the transactions contemplated hereby, including
the Exchange.
SECTION 5.18 Books and Records. The books of account
and other financial records of CCI are in all material respects
complete and correct, are maintained in accordance with good
business practices and all Laws applicable to CCI, and are
accurately reflected in the Financial Statements. The minute books
of CCI contain accurate records of all meetings, and accurately
reflect all other corporate action of the shareholders and
directors of CCI.
SECTION 5.19 Properties. Except as disclosed in the
Financial Statements, CCI (i) has good, clear and marketable title
to all the properties and assets reflected in the latest audited
balance sheet included in such Financial Statements as being owned
by CCI or acquired after the date thereof which are, individually
or in the aggregate, material to CCI's business (except properties
sold or otherwise disposed of since the date thereof in the
ordinary course of business), free and clear of (A) all liens
except statutory liens securing payments of Taxes or other liens
(other than real property mortgages or deeds of trust) as do not
materially affect the use of the properties or assets subject
thereto or affected thereby or otherwise materially impair business
operations at such properties, and (B) all real property mortgages
and deeds of trust and (ii) is the lessee of all leasehold estates
reflected in the Financial Statements or acquired after the date
thereof which are material to its business on a consolidated basis
and is in possession of the properties purported to be leased
thereunder, and each such lease is valid without default thereunder
by the lessee or, to CCI's knowledge, the lessor and no event has
occurred or fact exists which permit a lessor, now or with the
passage of time, notice or an opportunity to cure, to seek a remedy
under a lease and CCI is entitled to quiet enjoyment to its
premises.
SECTION 5.20 Environmental Matters.
(a) CCI currently conducts its business within the
limits set forth in each and every current environmental
authorization, license, permit, variance, exemption, consent,
approval and order (collectively, Environmental Permit") it holds,
and has conducted business in compliance with all terms and
conditions of such Environmental Permits since December 31, 1992.
(b) No Environmental Permit of any foreign or
domestic environmental authority is required for the performance of
the Agreement by CCI or the consummation of the transactions
contemplated hereby.
(c) CCI has not conducted or operated or currently
conducts or operates storage areas, drum storage areas, surface
impoundments, incinerators, land fills, tanks, lagoons, ponds,
waste piles or deep well injection system for the purpose of
treatment, storage or disposal of hazardous waste as defined by the
Federal Resource Conservation and Recovery Act, as amended
("RCRA"), or to which any other Law is applicable, on any real
property used or formerly used by it.
(d) CCI has not transported for offsite disposal
any hazardous waste or substance as defined in either RCRA or the
Federal Environmental Response, Compensation and Liability Act, as
amended ("CERCLA"), or to which any other Law is applicable, or
entered into any contract or agreement, or otherwise arranged, for
the transportation, storage, or disposal of any such hazardous
substance or waste at any offsite treatment, storage or disposal of
any such hazardous substance or waste at any off site treatment,
storage or disposal facility.
(e) There has been no release or discharge by CCI
of any hazardous substance, as defined in CERCLA or in the Federal
Superfund Amendment and Reauthorization Act of 1986 ("SARA") or to
which any similar local Law is applicable, or of a hazardous waste,
as defined in RCRA or to which any similar local Law is applicable,
which would (i) constitute or have constituted a violation of Law,
or (ii) give rise to any obligation by CCI, or its respective
assigns or successors in interest to effect any environmental
cleanup or remediation.
(f) No federal, state or local government or agency
has asserted or created any lien or other encumbrance upon any or
all of the real properties utilized by CCI and its subsidiaries in
conducting its business as a result of any use, spill, release,
discharge or cleanup of any hazardous substance or waste under
CERCLA, SARA or RCRA or any other Law, nor has any such use, spill,
release, discharge or cleanup occurred which could result in the
assertion or creation of such an encumbrance.
SECTION 5.21 Intellectual Property. CCI has the right
to use each tradename, service mark, patent, copyright, trademark
or other intellectual property right (the "Intellectual Property
Rights") listed in Section 5.21 of the CCI Disclosure Schedule in
the manner and location now used, and except as otherwise set forth
therein, all of such Intellectual Property Rights are and will be
at the Effective Time free and clear of all royalty obligations and
liens. There are no claims pending or threatened against CCI that
its use of any of the Intellectual Property Rights listed in
Section 5.21 of the CCI Disclosure Schedule infringes the rights of
any person. CCI and each CCI Stockholder has no knowledge of any
conflicting use of any of such Intellectual Property Rights.
(a) CCI has no Intellectual Property Right related
to its business, except those which are set forth in Section 5.21
of the CCI Disclosure Schedule, which are all those necessary for
the operation of its business as presently conducted.
(b) CCI is not a party in any capacity to any
franchise, license or royalty agreement respecting any Intellectual
Property Rights and there is no conflict with the rights of others
in respect to Intellectual Property Rights now used in the conduct
of its business.
SECTION 5.22 Customer Warranties. Except as disclosed
in Section 5.22 of the CCI Disclosure Schedule, there are not
pending, nor, to the best of the knowledge of CCI, threatened, any
claims under or pursuant to any warranty, whether expressed or
implied, on products or services sold prior to the date of this
agreement by CCI that are not disclosed or referred to in the
Financial Statements and which are not fully reserved against which
would result in a loss or damage to CCI in excess of $50,000 in the
aggregate.
SECTION 5.23 Products Liability and NHTSA. (a) Except
as set forth in Section 5.23 of the CCI Disclosure Schedule, (i)
there is no claim by or before any court or governmental or other
regulatory or administrative agency, commission or other
Governmental Entity, including the National Highway Traffic and
Safety Administration ("NHTSA"), against CCI alleging any product
manufactured, shipped, sold or delivered by or on behalf of CCI
which is pending or, to the knowledge of CCI, threatened nor, to
the knowledge of CCI, does there exist any basis therefor, relating
to or resulting from an alleged defect in design, manufacture,
materials or workmanship of any product manufactured, shipped, sold
or delivered by or on behalf of CCI or any alleged failure to warn,
or any alleged breach of implied warranties or representations,
nor, to the knowledge of CCI, is there any valid basis for any such
claim, (ii) to the knowledge of CCI, there has not been any
Occurrence (as defined in Section 5.23(b) below), (iii) there has
not been any product recall, rework or post-sale warning or similar
action (collectively "Recalls") conducted by CCI with respect to
any product manufactured, shipped, sold or delivered by or on
behalf of CCI, or, to the knowledge of CCI, any investigation or
consideration of or decision made by any person or entity
concerning whether to undertake or not undertake, any Recalls; (iv)
there are no pending or, to the knowledge of CCI, threatened,
claims against CCI under any state "lemon" law or other consumer
protection law, regulation or rule nor, to the knowledge of CCI,
does there exist any basis therefor; and (v) to the knowledge of
CCI, there are no material defects in design, manufacturing,
materials or workmanship including, without limitation, any failure
to warn, or any breach of express or implied warranties or
representations, which involve any product manufactured, shipped,
sold or delivered by or on behalf of CCI.
(b) For purposes of Section 5.23, the term
"Occurrence" means any accident, happening or event which occurs or
has occurred at any time prior to the Closing Date which is caused
or allegedly caused by any hazard or defect in manufacture, design,
materials or workmanship including, without limitation, any failure
or alleged failure to warn or any breach or alleged breach of
express or implied warranties or representations with respect to a
product manufactured, shipped, sold or delivered by or on behalf of
CCI which results or is alleged to have resulted in injury or death
to any person or damage to or destruction of property (including
damage to or destruction of the product itself) or other
consequential damages, at any time.
(c) All manufacturing standards applied, testing
procedures used and product specifications disclosed to customers
by CCI comply in all material respects with all requirements
established by any applicable Law.
(d) Set forth in Section 5.23 of the CCI Disclosure
Schedule is a list of all correspondence and communications
(summarized if oral) between CCI and NHTSA since October 1, 1993.
SECTION 5.24 Dealings with Affiliates. Section 5.24 of
the CCI Disclosure Schedule sets forth a complete list, including
the parties of all oral or written agreements and arrangements to
which CCI is, will be or has been a party, at any time from
January 1, 1994 to the Effective Time, and to which any affiliate
is also a party ("Related Party Transaction"). All Related Party
Transactions are on terms no less favorable to CCI than what CCI
could obtain on an arms' length basis from an unrelated party.
SECTION 5.25 Insurance. CCI currently has, and through
the Closing Date will have, adequate insurance contracts or
policies (the "Policies") in full force and effect which provide
for coverages that are usual and customary as to the amount and
scope in the business of CCI. Section 5.25 of the CCI Disclosure
Schedule sets forth details regarding all insurance contracts or
policies that relate to liability or excess liability insurance
(collectively the "Liability Policies"), including the name of the
insurer, the types, dates and amounts of coverages and any material
coverage exclusions. Except as set forth in Section 5.25 of the
CCI Disclosure Schedule, all of the Liability Policies remain in
full force and effect. CCI has not breached or otherwise failed to
perform in any material respects its obligations under any of the
Policies or the Liability Policies or has received any adverse
notice or communication from any of the insurers party to the
Policies or the Liability Policies with respect to any such alleged
breach or failure in connection with any of the Policies or the
Liability Policies. To the knowledge of CCI, all Policies are
sufficient for compliance with all Laws and all agreements to which
CCI is subject and all Policies are valid, outstanding, collectible
and enforceable Policies; and will not in any way be affected by,
or terminate or lapse by reason of, the execution and delivery of
this Agreement or the consummation of the transactions contemplated
hereby. CCI has never been refused any insurance with respect to
its assets or operations, nor has coverage ever been limited, by
any insurance carrier to which either has applied for any Policy or
with which either has carried a Policy.
SECTION 5.26 Health. Mr. Lee represents that, to his
knowledge, he is in good health and insurable for up to $3,000,000
in life insurance coverage.
SECTION 5.27 Disclosure. No representation or warranty
of CCI in this Agreement or any document, certificate or statement
issued in connection herewith contains any untrue statement of a
material fact or omits to state any material fact necessary in
order to make the statements contained herein and therein, in the
light of the circumstances in which they were made, not misleading.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF NRVH
Except as set forth in the Disclosure Schedule delivered
by NRVH to CCI prior to the execution of this Agreement and
attached hereto (the "NRVH Disclosure Schedule"), which shall
identify exceptions by specific Section references, NRVH hereby
represents and warrants to CCI that:
SECTION 6.1 Organization and Qualification;
Subsidiaries. Each of NRVH and its subsidiaries is a corporation
duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization and
has all requisite power and authority to own, lease and operate its
properties and to carry on its business as it is now being
conducted and NRVH and each subsidiary is duly qualified and in
good standing to do business in each jurisdiction in which the
nature of the business conducted by it or the ownership or leasing
of its properties makes such qualification necessary, other than
where the failure to be so duly organized, validly existing and in
good standing, or to have such power and authority, or to be duly
qualified and in good standing, as the case may be, would not have
an NRVH Material Adverse Effect. The term "NRVH Material Adverse
Effect" as used in this Agreement shall mean any event, change or
effect that, individually or when taken together with all other
such events, changes or effects, would be materially adverse to the
condition (financial or otherwise), prospects, business,
properties, assets or operations of NRVH and its subsidiaries,
taken as a whole, at the time of such event, change or effect.
SECTION 6.2 Certificate of Incorporation and By-Laws.
NRVH has heretofore furnished to CCI complete and correct copies of
the Certificate of Incorporation and By-Laws, as amended or
restated, of NRVH. NRVH is not in violation of any of the
provisions of its Certificate of Incorporation or By-Laws.
SECTION 6.3 Capitalization. As of the date of this
Agreement, the authorized capital stock of NRVH consists of (a)
10,000,000 shares of NRVH Common Stock and (b) 5,000 shares of
preferred stock, par value $.01 per share ("NRVH Preferred Stock").
As of October 21, 1996: (i) 4,744,023 shares of NRVH Common Stock
were issued and outstanding, all of which are duly authorized,
validly issued, fully paid and nonassessable and not subject to
preemptive rights created by statute, NRVH's Certificate of
Incorporation or By-Laws or any agreement to which NRVH is a party
or is bound; (ii) 1,178,700 shares of NRVH Common Stock were held
in treasury and (iii) 1,150,277 shares of NRVH Common Stock were
reserved for future issuance pursuant to outstanding stock options
and warrants issued to certain officers, employees, directors and
other persons excluding options issuable as a result of this
Transaction. As of the date of this Agreement, 4,000 shares of
NRVH Preferred Stock were issued and outstanding. Each of the
outstanding shares of capital stock of, or other equity interests
in, each of NRVH's subsidiaries is duly authorized and validly
issued and, if applicable, fully paid and nonassessable.
SECTION 6.4 Authority. NRVH has all requisite
corporate power and authority to execute and deliver this Agreement
to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of
this Agreement by NRVH and the consummation by NRVH of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action, and no other corporate proceedings on
the part of NRVH are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement
has been duly executed and delivered by NRVH and, assuming the due
authorization, execution and delivery thereof by CCI, constitutes
a legal, valid and binding obligation of NRVH enforceable against
NRVH in accordance with its terms.
SECTION 6.5 No Conflict; Required Filings and
Consents. (a) The execution and delivery of this Agreement by NRVH
does not, and the performance of this Agreement by NRVH and the
consummation of the transactions contemplated hereby will not,
excepting any shareholder votes required by Delaware Law, (i)
conflict with or violate the Certificate of Incorporation or By-
Laws, or the equivalent organizational documents, in each case as
amended or restated, of NRVH or any of NRVH's subsidiaries, (ii)
conflict with or violate any Laws or NRVH Permits (as hereafter
defined) in effect as of the date of this Agreement applicable to
NRVH or any of NRVH's subsidiaries or by which any of their
respective properties is bound or (iii) result in any breach of or
constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or give to others any rights
of termination, amendment, acceleration or cancellation of, or
result in the creation of a lien or encumbrance on any of the
properties or assets of NRVH or any of NRVH's subsidiaries pursuant
to, any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, order, decree, franchise or other
instrument or obligation to which NRVH, or any of NRVH's
subsidiaries is a party or by which NRVH or any of NRVH's
subsidiaries or any of their respective properties is bound or
subject to, except for any such conflicts or violations described
in clause (ii) or breaches, defaults, events, rights of
termination, amendment, acceleration or cancellation or liens or
encumbrances described in clause (iii) that would not have an NRVH
Material Adverse Effect.
(b) The execution and delivery of this Agreement by
NRVH does not, and the performance of this Agreement by NRVH will
not, as of the date of this Agreement, require NRVH to obtain any
consent, approval, authorization or permit of, or to make any
filing with or notification to, any Governmental Entities, except
(i) for applicable requirements, if any, of the Securities Act of
1933, as amended (the "Securities Act"), the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), state securities or
blue sky laws ("Blue Sky Laws") and the filing and recordation of
appropriate merger documents as required by Delaware Law and (ii)
where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or
notifications, would not, either individually or in the aggregate,
prevent NRVH from performing its obligations under this Agreement.
SECTION 6.6 Permits; Compliance. Each of NRVH and its
subsidiaries is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances,
exemptions, consents, certificates, identification numbers,
approvals and orders (collectively, the "NRVH Permits") necessary
to own, lease and operate its properties and to carry on its
business as it is now being conducted, and there is no action,
proceeding or investigation pending or, to the knowledge of NRVH,
threatened regarding suspension or cancellation of any of the NRVH
Permits, except where the failure to possess, or the suspension or
cancellation of, such NRVH Permits would not have an NRVH Material
Adverse Effect. Neither NRVH nor any of its subsidiaries is in
conflict with, or in default or violation of (a) any Law by which
any of their respective properties is bound or subject to or (b)
any of the NRVH Permits, except for any such conflicts, defaults or
violations which would not have an NRVH Material Adverse Effect.
SECTION 6.7 NRVH Reports; Financial Statements. (a)
Since January 1, 1996, NRVH and its subsidiaries have timely filed
(i) all forms, reports, statements and other documents required to
be filed with (A) the SEC, including, without limitation (1) all
Annual Reports on Form 10-K, (2) all Quarterly Reports on Form
10-Q, (3) all proxy statements relating to meetings of stockholders
(whether annual or special), (4) all Current Reports on Form 8-K,
(5) all other reports or registration statements and (6) all
amendments and supplements to all such reports and registration
statements (collectively, the "NRVH SEC Reports") and (B) any other
applicable state securities authorities and (ii) all forms,
reports, statements and other documents required to be filed with
any other applicable federal or state regulatory authorities,
except where the failure to file any such forms, reports,
statements or other documents would not have an NRVH Material
Adverse Effect (all such forms, reports, statements and other
documents in clauses (i) and (ii) of this Section 6.7(a) being
referred to herein, collectively, as the "NRVH Reports"). The NRVH
Reports, including all NRVH Reports filed after the date of this
Agreement and prior to the Effective Date (x) were or will be
prepared in all material respects in accordance with the
requirements of applicable Law (including, with respect to the NRVH
SEC Reports, the Securities Act and the Exchange Act, as the case
may be, and the rules and regulations of the SEC thereunder
applicable to such NRVH SEC Reports) and (y) did not at the time
they were filed, or will not at the time they are filed, contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading.
(b) Each of the consolidated financial statements
(including, in each case, any related notes thereto) contained in
the NRVH SEC Reports filed prior to, on or after the date of this
Agreement (i) have been or will be prepared in accordance with the
published rules and regulations of the SEC and generally accepted
accounting principles applied on a consistent basis throughout the
periods involved (except, with respect to NRVH SEC Reports filed
prior to the date of this Agreement, as may be indicated in the
notes thereto) and (ii) fairly present or will fairly present the
consolidated financial position of NRVH and its subsidiaries as of
the respective dates thereof and the consolidated results of
operations and cash flows for the periods indicated, except that
any unaudited interim financial statements were or will be subject
to normal and recurring year-end adjustments.
SECTION 6.8 Absence of Litigation. Except as
disclosed in the NRVH SEC Reports filed prior to the date of this
Agreement, and as disclosed in Section 6.8 of the NRVH Disclosure
Schedule, there is no claim, action, suit, litigation, proceeding,
arbitration or, to the knowledge of NRVH, investigation of any
kind, at law or in equity (including actions or proceedings seeking
injunctive relief), pending or, to the knowledge of NRVH,
threatened in writing against NRVH or any of its subsidiaries or
any properties or rights of NRVH or any of its subsidiaries (except
for claims, actions, suits, litigations, proceedings, arbitrations
or investigations which, individually or in the aggregate, would
not reasonably be expected to have an NRVH Material Adverse
Effect), and neither NRVH nor any of its subsidiaries is subject to
any continuing order of, consent decree, or, to the knowledge of
NRVH, continuing investigation by, or any judgment, order, writ,
injunction, decree or award of, any Governmental Entity, court or
arbitrator, including, without limitation, cease-and-desist or
other orders, except for such matters which would not reasonably be
expected to have an NRVH Material Adverse Effect.
SECTION 6.9 Tax Matters. Neither NRVH nor, to the
knowledge of NRVH, any of its affiliates has taken or agreed to
take any action that would prevent the Exchange from constituting
a reorganization qualifying under the provisions of Section 368(a)
of the Code.
SECTION 6.10 Taxes. Except for such matters that would
not have an NRVH Material Adverse Effect and except as disclosed in
Section 6.10 of the NRVH Disclosure Schedule, (a) NRVH and its
subsidiaries have timely filed or will timely file all returns or
reports required to be filed by them with any taxing authority with
respect to Taxes for any period ending on or before the Effective
Date, taking into account any extension of time to file, granted to
or obtained on behalf of NRVH or its subsidiaries, (b) all Taxes
shown to be payable on such Returns or reports that are due prior
to the Effective Date has been paid or will be paid when due,
(c) as of the date hereof, no deficiency for any material amount of
Tax has been asserted or assessed by a taxing authority against
NRVH or its subsidiaries, (d) all liability for Taxes of NRVH or
its subsidiaries that are or will become due or payable with
respect to periods covered by the financial statements referred to
in Section 6.7(b) hereof have been paid or adequately reserved for
on such financial statements and (e) no Tax Return or reports of
NRVH or any of its subsidiaries are under examination.
SECTION 6.11 Brokers. Other than 712 Advisory
Services, Inc., no broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of NRVH.
SECTION 6.12 NRVH Common Stock. NRVH Common Stock has
been duly authorized and, when issued in accordance with the
Exchange, will be validly issued, fully paid and nonassessable.
SECTION 6.13 Books and Records. The books of account
and other financial records of NRVH and its subsidiaries are in all
material respects complete and correct, are maintained in
accordance with good business practices and all Laws applicable to
NRVH, and are accurately reflected in the consolidated financial
statements of NRVH contained in the NRVH SEC Reports. The minute
books of NRVH contain accurate records of all meetings, and
accurately reflect all other corporate action of the shareholders
and directors of NRVH.
SECTION 6.14 No Undisclosed Liabilities. Except as set
forth in the Section 6.14 of the NRVH Disclosure Schedule, there
are no liabilities of NRVH or any of its subsidiaries of any kind
whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, other than:
(a) liabilities disclosed or provided for in the
consolidated financial statements contained in the NRVH SEC
Reports; and
(b) liabilities incurred in the ordinary course of
business consistent with past practice since December 31, 1995.
SECTION 6.15 Disclosure. No representation or warranty
of NRVH in this Agreement or in any document, certificate or
statement issued in connection herewith contains any untrue
statement of a material fact, or omits to state any material fact
necessary in order to make the statements contained herein and
therein in light of the circumstances in which they were made, not
misleading.
ARTICLE 7
COVENANTS
SECTION 7.1 Affirmative Covenants of CCI. (a) CCI
hereby covenants and agrees that, during the period commencing on
the date hereof and continuing until the Effective Time unless
otherwise expressly contemplated by this Agreement or consented to
in writing by NRVH, it will:
(i) operate its business only in the usual and
ordinary course consistent with past practices;
(ii) use its best efforts to preserve
substantially intact its business organizations, maintain its
rights and franchises, retain the services of its respective
officers and key employees and maintain its relationships with its
respective customers and suppliers, and otherwise operate its
business in a manner that breaches no Material Contract (as
defined);
(iii) use its best efforts to maintain and
keep its business relationships intact and unimpaired, and its
properties and assets in as good repair and condition as at
present, ordinary wear and tear excepted;
(iv) use its best efforts to keep in full force
and effect insurance and bonds comparable in amount and scope of
coverage to that currently maintained; provided, however, that in
the event CCI deems it necessary to take certain actions that would
otherwise be proscribed by clauses (i) - (iv) of this Section 7.1,
CCI shall consult with NRVH which shall consider in good faith
CCI's request to take such action and not unreasonably withhold its
consent for such action; and
(v) promptly advise NRVH of the commencement
or threat (to the extent that such threat comes to its knowledge)
of any claim, action, suit, proceeding or investigation against,
relating to or involving it or any of its directors, officers,
employees, agents or consultants in connection with its business or
the transactions contemplated hereby.
(b) CCI will make its stock transfer records and
stockholder lists available to the extent reasonably necessary to
effectuate the intent of this Agreement.
SECTION 7.2 Negative Covenants of CCI. Except as
expressly contemplated by this Agreement and except as set forth in
Section 7.2 of the CCI Disclosure Schedule, or otherwise consented
to in writing by NRVH, from the date of this Agreement until the
Effective Date, CCI will not do any of the following:
(a) (i) increase the compensation payable to or to
become payable to any director or officer (by making a bonus
payment or otherwise), (ii) grant any severance or termination pay
(other than pursuant to the normal severance policy of CCI or its
subsidiaries as in effect on the date of this Agreement and
disclosed in writing to NRVH) to, or enter into any employment or
severance agreement with, any director, officer or employee (other
than on a case by case basis with a limited number of employees who
are not directors or officers and in no event with employees
generally and other than employment agreements entered into with
the consent of NRVH, which consent shall not be unreasonably
withheld); or (iii) establish, adopt, enter into or amend any
employee benefit plan or arrangement except as may be required by
applicable Law;
(b) declare or pay any dividend on, or make any
other distribution in respect of, outstanding shares of its capital
stock;
(c) (i) redeem, purchase or otherwise acquire any
shares of its capital stock or equity interest or any securities or
obligations convertible into or exchangeable for any shares of its
capital stock or equity interest, or any options, warrants or
conversion or other rights to acquire any shares of its capital
stock or any such securities or obligations; (ii) effect any
reorganization or recapitalization; or (iii) split, combine or
reclassify any of its or its respective subsidiaries' capital stock
or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for, shares
of its capital stock;
(d) (i) issue, deliver, award, grant or sell, or
authorize or propose the issuance, delivery, award, grant or sale
(including the grant of any security interests, liens, claims,
pledges, limitations in voting rights, charges or other
encumbrances) of, any shares of any class of its capital stock or
other securities (including shares held in treasury), any
securities convertible into or exercisable or exchangeable for any
such shares, or any rights, warrants or options to acquire, any
such shares; or (ii) amend or otherwise modify the terms of any
such rights, warrants or options the effect of which shall be to
make such terms more favorable to the holders thereof;
(e) acquire or agree to acquire, by merging or
consolidating with, by purchasing an equity interest in or a
portion of the assets of, or by any other manner, any business or
any corporation, partnership, association or other business
organization or division thereof, or otherwise acquire or agree to
acquire any assets of any other person (other than the purchase of
assets from suppliers or vendors in the ordinary course of business
and consistent with past practice);
(f) sell, lease, exchange, mortgage, pledge,
transfer or otherwise dispose of, or agree to sell, lease,
exchange, mortgage, pledge, transfer or otherwise dispose of, any
of its assets other than in the ordinary course of business;
(g) propose or adopt any amendments to its
Certificate of Incorporation or, as to its By-Laws, any amendments
except as contemplated hereby;
(h) change any of its methods of accounting in
effect, or make or rescind any express or deemed election relating
to taxes, settle or compromise any claim, action, suit, litigation,
proceeding, arbitration, investigation, audit or controversy
relating to taxes (except where the amount of such settlements or
controversies, individually or in the aggregate, does not exceed
$25,000), or change any of its methods of reporting income or
deductions for federal income tax purposes from those employed in
the preparation of the federal income tax returns for the taxable
year ending December 31, 1995, except as may be required by Law or
generally accepted accounting principles;
(i) incur any obligation for borrowed money or
purchase money indebtedness, whether or not evidenced by a note,
bond, debenture or similar instrument, except in the ordinary
course of business consistent with past practice, provided that CCI
informs NRVH promptly of any increases in borrowings;
(j) enter into any material arrangement, agreement
or contract with any third party (other than customers in the
ordinary course of business) which provides for an exclusive
arrangement with that third party or is substantially more
restrictive on CCI or substantially less advantageous to CCI than
arrangements, agreements or contracts existing on the date hereof;
or
(k) agree in writing or otherwise to do any of the
foregoing.
SECTION 7.3 Negative Covenants of NRVH. Except as
expressly contemplated by this Agreement or otherwise consented to
in writing by CCI, from the date of this Agreement until the
Effective Time, NRVH will not do, and will not permit any of its
subsidiaries to do, any of the following:
(a) amend any of the material terms or provisions
of the NRVH Common Stock;
(b) knowingly take any action which would result in
a failure to maintain the trading of NRVH Common Stock on the
Nasdaq Stock Market system ("NASDAQ");
(c) declare or pay any extraordinary cash dividend
on outstanding shares of its capital stock; or
(d) agree in writing or otherwise to do any of the
foregoing.
SECTION 7.4 Access and Information. CCI shall (i)
afford to NRVH and its officers, directors, employees, accountants,
consultants, legal counsel, agents and other representatives
(collectively, the "NRVH Representatives") access upon reasonable
prior notice to CCI's officers, employees, agents, properties,
offices and other facilities and its subsidiaries and to the books
and records thereof and (ii) furnish promptly to NRVH and the NRVH
Representatives such information concerning the business,
properties, contracts, records and personnel of it and its
subsidiaries (including, without limitation, financial, operating
and other data and information) as may be requested, from time to
time, by NRVH.
SECTION 7.5 Confidentiality. (a) Except as may be
necessary to carry out this Agreement and the transactions
contemplated hereby, each of NRVH and CCI shall, and shall require
their respective officers, directors, employees and authorized
representatives to, hold in confidence prior to the Effective Time
and for two years from any termination of this Agreement all data
and information obtained by them from the other party (unless
required to disclose such information by judicial or administrative
process, as otherwise required by Law, or unless such information
(i) is or becomes generally available to the public other than as
a result of a disclosure by such party, any subsidiary of such
party or any of their authorized representatives, (ii) is
independently acquired or developed by such party, any subsidiary
of such party or any of their representatives, or (iii) is or
becomes available to such party, any subsidiary of such party or
any of their authorized representatives from a source other than
the other party, provided that such source is not known to be bound
by a confidentiality agreement with the other party or by any other
legal, contractual or fiduciary duty not to disclose such
information) and shall not, and shall use reasonable efforts to
cause such officers, directors, employees and authorized
representatives not to, disclose such information to others without
the prior written consent of the other party.
(b) If this Agreement is terminated, each of NRVH
and CCI shall, if so requested by the other party, promptly return
every document furnished to them or their affiliates in connection
with the transactions contemplated hereby and any copies of such
documents that may have been made and shall use reasonable efforts
to cause the representatives to whom such documents were furnished
promptly to return such documents and any copies of such documents,
other than documents filed with the Securities and Exchange
Commission or otherwise publicly available.
SECTION 7.6 No Solicitation or Negotiations. Unless
and until this Agreement is terminated, CCI and each of the CCI
Stockholders will not, and will use its or his reasonable efforts
to cause the directors, officers, employees, representatives,
agents, advisors, accountants and attorneys of CCI and the CCI
Stockholders not to, initiate or solicit, directly or indirectly,
any inquiries or the making of any proposal with respect to, or
engage in negotiations concerning, or provide any confidential
information or data to any person with respect to, or have any
discussions with any persons relating to, any acquisition, business
combination or purchase of all or any significant asset of, or any
equity interest in, directly or indirectly, CCI, or otherwise
facilitate any effort or attempt to do or seek any of the
foregoing, and will immediately cease and cause to be terminated
any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any of the foregoing.
SECTION 7.7 Insurance Coverage. NRVH agrees to
maintain, for a period of at least two years following the Closing
Date, a minimum of $6 million of insurance coverage for product
liability claims (which may include an umbrella insurance policy)
relating to CCI's products ("Minimum Product Liability Coverage").
SECTION 7.8 Monaco Property. R&T Lee Investments, LLC
("R&T Lee") and CCI shall execute the Addendum to the Monaco Lease
(the "Monaco Lease Addendum") set forth as Exhibit 7.8 hereof.
ARTICLE 8
ADDITIONAL AGREEMENTS
SECTION 8.1 Appropriate Action; Consents; Filings.
(a) CCI and NRVH shall each use their best efforts to (i) take, or
cause to be taken, all appropriate action, and do, or cause to be
done, all things necessary, proper or advisable under applicable
Law or otherwise to consummate and make effective the transactions
contemplated by this Agreement as promptly as practicable, (ii)
obtain from any Governmental Entities any consents, licenses,
permits, waivers, approvals, authorizations or orders required to
be obtained or made by NRVH or CCI or any of their subsidiaries in
connection with the authorization, execution and delivery of this
Agreement and the consummation of the transactions contemplated
herein, including, without limitation, the Exchange, (iii) make all
necessary filings, and thereafter make any other required
submissions, with respect to this Agreement and the Exchange
required under (A) the Securities Act and the Exchange Act and the
rules and regulations thereunder, and any other applicable federal
or state securities laws and (B) any other applicable Law; provided
that NRVH and CCI shall cooperate with each other in connection
with the making of all such filings, including providing copies of
all such documents to the non-filing party and its advisors prior
to filing and, if requested, to accept all reasonable additions,
deletions or changes suggested in connection therewith. CCI and
NRVH shall furnish all information required for any application or
other filing to be made pursuant to the rules and regulations of
any applicable Law in connection with the transactions contemplated
by this Agreement.
(b) Each of CCI and NRVH agree to cooperate and use
their best efforts vigorously to contest and resist any action,
including administrative or judicial action, and to have vacated,
lifted, reversed or overturned any decree, judgment, injunction or
other order (whether temporary, preliminary or permanent) (an
"Order") that is in effect and that restricts, prevents or
prohibits the consummation of the Exchange or any other
transactions contemplated by this Agreement, including, without
limitation, by vigorously pursuing all available avenues of
administrative and judicial appeal; provided, however, that in no
event shall either party take, or be required to take, any action
that would have a CCI or an NRVH Material Adverse Effect.
(c) Each of CCI and NRVH shall give (or shall cause
their respective subsidiaries to give) any notices to third
parties, and use, and cause their respective subsidiaries to use,
its best efforts to obtain any third party consents (i) necessary,
proper or advisable to consummate the transactions contemplated in
this Agreement, (ii) disclosed or required to be disclosed in the
CCI Disclosure Schedule or the NRVH Disclosure Schedule, as the
case may be, (iii) otherwise required under any contracts,
licenses, leases or other agreements in connection with the
consummation of the transactions contemplated herein or required to
prevent a CCI Material Adverse Effect from occurring prior to or
after the Effective Time or an NRVH Material Adverse Effect from
occurring prior to or after the Effective Time.
(d) In the event that either party shall fail to
obtain any third party consent described in subsection (c) above,
such party shall use its best efforts, and shall take any such
actions reasonably requested by the other party hereto, to minimize
any adverse effect upon CCI and NRVH, their respective
subsidiaries, and their respective businesses resulting, or which
could reasonably be expected to result, after the Effective Date,
from the failure to obtain such consent.
SECTION 8.2 Stockholders; Tax Treatment. CCI will
advise its stockholders of the resale restrictions imposed by
federal securities laws on the shares of NRVH Common Stock received
by them pursuant to the Exchange. Each party hereto shall use its
best efforts to cause the Exchange to qualify, and will not take
any actions which could prevent the Exchange from qualifying, as a
reorganization qualifying under the provisions of Section 368(a) of
the Code.
SECTION 8.3 Public Announcements. Unless otherwise
required by applicable Law or NASDAQ or stock exchange requirements
(and in that event only if time does not permit), NRVH and CCI
shall consult with each other before issuing any press release or
otherwise making any public statements with respect to the Exchange
and the transactions contemplated thereby and shall not issue any
such press release or make any such public statement prior to such
consultation.
SECTION 8.4 Tax Matters.
(a) Pre-Closing Tax Period Returns. CCI shall
prepare and file, or cause to be prepared or filed, at its own
expense, if not already prepared and filed, all 1995 federal, state
and local Returns of CCI, and all 1996 federal, state and local
Returns of CCI reflecting CCI's status as an S corporation (as
defined in Section 1361 et seq. of the Code, and regulations
promulgated thereunder). At least thirty (30) days prior to the
due date of any such Return, CCI shall cause such Return to be
delivered to NRVH for review by it and its representatives. If any
position reflected on such Return is inconsistent with CCI's past
filing practices and positions, then such Return shall not be filed
without the prior written consent of NRVH (which consent may not be
unreasonably withheld). For purposes of this Agreement, the "due
date" of a Return shall mean the earlier of (A) the date on which
the Return is required to be filed under applicable law (including
extensions) and (B) the actual filing date of such Return.
(b) Cooperation. (i) NRVH shall cooperate with
CCI Stockholders or their designated representatives (A) in
preparation of returns for Pre-Closing Tax Periods ("Pre-Closing
Tax Returns") and (B) with respect to any matter described in
Section 8.4(d). Such cooperation shall include, without
limitation, furnishing prior years Pre-Closing Tax Returns or
return preparation workpapers illustrating previous reporting
practices or containing historical information relevant to the
information within the possession of NRVH and its subsidiaries,
requested by such CCI Stockholders or their designated
representatives as is relevant to the preparation of the Returns,
provision of powers of attorney necessary for the purpose of
signing Returns and defending any audit or examination, immediately
forwarding to the stockholders copies of any notices or forms or
other communications received from or sent to any taxing authority
which relate to the Pre-Closing Tax Returns or any Pre-Closing Tax
Period (or any Tax Audit or Tax Adjustment thereof (as defined
below) to the extent that either the CCI Stockholders could have an
indemnification obligation with respect to such Return, Tax Audit
or Tax Adjustment or any taxpayer could have personal liability
because of the status of CCI as an S corporation, and providing
documents relating to rulings or other determinations by any taxing
authority and records concerning the ownership and tax basis of
property, which NRVH or CCI may possess. NRVH and its subsidiaries
shall make their respective accountants, employees and facilities
available on a mutually convenient basis to provide explanations of
any documents or information provided thereunder.
(ii) CCI Stockholders. Each CCI Stockholder shall
cooperate with NRVH and its subsidiaries (A) in preparation of, and
in connection with any post-closing matters relating to, all Pre-
Closing Tax Returns and (B) with respect to any matter described in
Section 8.4(d). Such cooperation shall include, without
limitation, immediately forwarding to NRVH copies of any notices or
forms or other communications received from or sent to any taxing
authority which relate to the Pre-Closing Tax Returns or any Pre-
Closing Tax Period (or any audit or examination thereof), and
providing documents relating to rulings or other determinations by
any taxing authority and records concerning the ownership and tax
basis of property, which such CCI Stockholders may possess. The
CCI Stockholders shall make their respective accountants, employees
and facilities available on a mutually convenient basis to provide
explanations of any documents or information provided hereunder.
(c) Books and Records. For a period of six (6) years
from the date hereof, NRVH shall, and shall cause its subsidiaries
to, retain all Pre-Closing Tax Returns, books and records of CCI
for all Pre-Closing Tax Periods, and shall allow the CCI
Stockholders or their designated representatives to examine and
make copies of such Returns, books and records. Thereafter, if
NRVH wishes to dispose of any such materials it shall return such
materials to the CCI Stockholders or their designated
representatives.
(d) Tax Audits and Adjustments.
(i) Pre-Closing Tax Returns of CCI
(A) With respect to any Pre-Closing Tax Return of CCI
for which a CCI Stockholder could have an indemnification
obligation or a CCI stockholder could have personal liability
because of the status of CCI as an S corporation, the CCI
Stockholder or its designated representatives shall have the sole
right to control and settle any audit or examination by any taxing
authority ("Tax Audit") and contest and defend against any
assessment, notice of deficiency, or other adjustment or proposed
adjustment ("Tax Adjustment"), provided, however, if the resolution
of any issue arising with respect to such Tax Audit or Tax
Adjustment could have a material adverse effect on the amount or
timing of the Tax liability of, or attributable to, CCI (or any
affiliate) in any Tax Period following the Closing(a "Post-Closing
Tax Period"), the CCI Stockholder shall promptly notify NRVH in
writing and shall afford NRVH the opportunity to control jointly
the conduct and resolution of the portion of such Tax Audit or Tax
Adjustment that could have the effect of increasing the Tax
liabilities of, or attributable to, NRVH or CCI (or any affiliate)
in a Post-Closing Tax Period.
(B) If NRVH shall decline in writing to participate in
the control of the conduct of such Tax Audit or Tax Adjustment, the
CCI Stockholder shall have the right to control the conduct of such
Tax Audit or Tax Adjustment, provided that the CCI Stockholder
shall not resolve such Tax Audit or Tax Adjustment without NRVH's
written consent, which shall not be unreasonably withheld.
(e) Other Transfer Taxes. All transfer, documentary,
sales, use, stamp, registration, value added and other such taxes
and fees (including any penalties and interest) incurred in
connection with this Agreement shall be paid by CCI when due, and
will, at its own expense, file all necessary Tax returns and other
documentation with respect to all such Taxes and fees, and, if
required by applicable law, will join in the execution of any such
Tax returns and other documentation.
SECTION 8.5 Employee Stock Options. NRVH agrees to
include up to 13 CCI employees in its next round of broadly-based
stock option grants. The CCI Board of Directors shall have the
authority to recommend to the NRVH Stock Option Committee the
eligible optionees and amounts granted to such optionees,
consistent with NRVH's practice of granting such options.
SECTION 8.6 Insurance. Mr. Lee will use his best
efforts to obtain "key man" life insurance in an amount not less
that $3,000,000 covering his life.
ARTICLE 9
CLOSING CONDITIONS
SECTION 9.1 Conditions to Obligations of Each Party
Under This Agreement. The respective obligations of each party to
effect the Exchange and the other transactions contemplated herein
shall be subject to the satisfaction at or prior to the Effective
Time of the following conditions, any or all of which may be
waived, in whole or in part, to the extent permitted by applicable
Law:
(a) Consents and Approvals. All material consents,
approvals and authorizations legally required to be obtained to
consummate the Exchange shall have been obtained from and made with
all required Governmental Entities or any other third party.
(b) No Order. No Governmental Entity or federal or
state court of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and which
has the effect of making the Exchange illegal or otherwise
prohibiting consummation of the Exchange.
(c) Employment Agreements. Employment agreements
between CCI and each of Mr. Lee and Mr. Courtemanche, in
substantially the form attached hereto as Exhibits 9.1(c), shall
have been executed and in full force and effect.
SECTION 9.2 Additional Conditions to Obligations of
NRVH. The obligations of NRVH to effect the Exchange and the other
transactions contemplated herein are also subject to the
satisfaction, on or prior to the Closing Date, of each of the
following conditions (any of which may be waived by NRVH in its
sole discretion):
(a) Representations and Warranties. Each of the
representations and warranties of CCI contained in this Agreement
shall be true and correct in all material respects as of the
Effective Date as though made on and as of the Effective Date,
except that those representations and warranties which address
matters only as of a particular date shall remain true and correct
as of such date. NRVH shall have received a certificate of the
President or Chief Financial Officer of CCI to such effect.
(b) Agreements and Covenants. CCI shall have
performed or complied with all agreements and covenants required by
this Agreement to be performed or complied with by it, in all
material respects, on or prior to the Effective Date. NRVH shall
have received a certificate of the President or Chief Financial
Officer of CCI to such effect.
(c) Opinion of CCI's Counsel. NRVH shall have
received an opinion, dated the Effective Date, of Hershner Hunter
Moulton Andrews & Neill, counsel to CCI, in form and substance
satisfactory to NRVH substantially in the form set forth as Exhibit
9.2(c).
(d) By-laws. The CCI By-laws shall be amended to
reflect the provision described in Exhibit 9.2(e).
(e) The Monaco Lease. The Monaco Lease Addendum
shall be executed and delivered by R&T Lee and CCI.
(f) Certificates. NRVH shall have received such
certificates from officers and representatives of CCI as it shall
have reasonably requested.
SECTION 9.3 Additional Conditions to Obligations of
CCI. The obligations of CCI to effect the Exchange and the other
transactions contemplated in this Agreement are also subject to the
satisfaction, on or prior to the Closing Date, of each of the
following conditions (any of which may be waived by CCI in its sole
discretion):
(a) Representations and Warranties. Each of the
representations and warranties of NRVH contained in this Agreement
shall be true and correct in all material respects as of the
Effective Date, as though made on and as of the Effective Date,
except that those representations and warranties which address
matters only as of a particular date shall remain true and correct
as of such date. CCI shall have received a certificate of the
Chief Financial Officer of NRVH to such effect.
(b) Agreements and Covenants. NRVH shall have
performed or complied with all agreements and covenants required by
this Agreement to be performed or complied with by it, in all
material respects, on or prior to the Effective Date. CCI shall
have received a certificate of the Chief Financial Officer of NRVH
to such effect.
(c) Opinion of Counsel to NRVH. CCI shall have
received an opinion, dated the Effective Date, of Werbel &
Carnelutti, A Professional Corporation, counsel to NRVH, in form
and substance satisfactory to CCI, substantially in the form set
forth as Exhibit 9.3(c).
(d) Registration Rights Agreement. A registration
rights agreement between NRVH and the CCI Stockholders, in
substantially the form attached hereto as Exhibit 9.3(d), shall
have been executed and in full force and effect.
(e) Stock Options. NRVH shall grant stock options
to CCI employees as set forth in Schedule 9.3(e).
(f) Release from Guaranty. Mr. Lee and Ms. Lee
shall have been released from the guaranties under CCI's prime bank
borrowing line of credit.
(g) Certificates. CCI shall have received such
certificates from officers and representatives of NRVH as it shall
have reasonably requested.
ARTICLE 10
TERMINATION, AMENDMENT AND WAIVER
SECTION 10.1 Termination. This Agreement may be
terminated at any time prior to the Effective Time, whether before
or after approval of this Agreement and the Exchange by the
stockholders of each of CCI and NRVH:
(a) by mutual consent of NRVH and CCI;
(b) by NRVH, upon a breach of any representation,
warranty, covenant or agreement on the part of CCI or the CCI
Stockholders set forth in this Agreement, or if any representation
or warranty of CCI or the CCI Stockholders shall have become
untrue, in either case such that the conditions set forth in
Section 9.2(a) or Section 9.2(b) would not be satisfied;
(c) by CCI, upon breach of any representation,
warranty, covenant or agreement on the part of NRVH set forth in
this Agreement, or if any representation or warranty of NRVH shall
have become untrue, in either case such that the conditions set
forth in Section 9.3(a) or Section 9.3(b) would not be satisfied;
(d) by either NRVH or CCI, if there shall be any
Order which is final and nonappealable preventing the consummation
of the Exchange, except if the party relying on such Order has not
complied with its obligations under Section 8.1(b);
(e) by either NRVH or CCI, if the Exchange shall
not have been consummated before March 31, 1997; and
(f) by NRVH or CCI at any time prior to the
Effective Date if (i) in the case of termination by NRVH, any of
the conditions specified in Section 9.2 shall not have been met in
all material respects or waived prior to such time as such
condition can no longer be satisfied or (ii) in the case of
termination by CCI, any of the conditions specified in Section 9.3
shall not have been met in all material respects or waived prior to
such time as such condition can no longer be satisfied.
The right of any party hereto to terminate this Agreement
pursuant to this Section 10.1 shall remain operative and in full
force and effect regardless of any investigation made by or on
behalf of any party hereto, any person controlling any such party
or any of their respective officers or directors, whether prior to
or after the execution of this Agreement.
SECTION 10.2 Effect of Termination. In the event of
the termination of this Agreement pursuant to Section 10.1, this
Agreement shall forthwith become void, there shall be no liability
on the part of NRVH or CCI or any of their respective officers or
directors to the other and all rights and obligations of any party
hereto shall cease, and except that nothing herein shall relieve
any party of liability for any breach of any representation or
warranty or failure to perform or comply with any obligation under
this Agreement prior to the termination hereof and except that
Section 7.5, 7.6, 10.2, 10.5 and Articles 11 and 12 shall survive
such termination.
SECTION 10.3 Amendment. This Agreement may be amended
by the parties hereto by action taken by or on behalf of their
respective Boards of Directors at any time prior to the Effective
Time. This Agreement may not be amended except by an instrument in
writing signed by the parties hereto.
SECTION 10.4 Waiver. At any time prior to the
Effective Time, any party hereto may extend the time for the
performance of any of the obligations or other acts of the other
party hereto, waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document
delivered pursuant hereto and waive compliance by the other party
with any of the agreements or conditions contained herein. Any
such extension or waiver shall be valid only if set forth in an
instrument in writing signed by the party or parties to be bound
thereby.
SECTION 10.5 Fees, Expenses and Other Payments. Except
as provided in Section 10.5(c), all Expenses (as defined in
paragraph(b) of this Section 10.5) incurred by the parties hereto
shall be borne solely and entirely by the party which has incurred
such Expenses.
(b) "Expenses" as used in this Agreement shall
include all reasonable out-of-pocket expenses (including, without
limitation, all fees and expenses of counsel, accountants,
investment bankers, experts and consultants to a party hereto and
its affiliates) incurred by a party or on its behalf in connection
with or related to the authorization, preparation, negotiation,
execution and performance of this Agreement, and all other matters
related to the closing of the transactions contemplated herein.
(c) If this Agreement shall be terminated by CCI
pursuant to Section 10.1(c) or by NRVH pursuant to Section 10.1(b)
(in each case, the "Non-Breaching Party"), then the other party
shall pay to the Non-Breaching Party, in consideration of the time,
effort and resources expended in connection herewith, all of the
Non-Breaching Party's Expenses. This shall be in addition to any
other rights the Non-Breaching Party shall have.
(d) Any payment required to be made pursuant to
Section 10.5(c) shall be made to the Non-Breaching Party entitled
to receive such payment not later than two business days after
delivery to the other party of notice of demand for payment and an
itemization setting forth in reasonable detail all Expenses of the
Non-Breaching Party, if any, and shall be made by wire transfer of
immediately available funds to an account designated by the Non-
Breaching Party in the notice of demand for payment delivered
pursuant to this Section 10.5(d).
ARTICLE 11
INDEMNIFICATION
SECTION 11.1 Indemnity by CCI and CCI Stockholders.
CCI and each of the CCI Stockholders, jointly and severally, agree
to indemnify and hold harmless NRVH and its successors and assigns
and its and their respective officers, directors, controlling
persons (if any), employees, attorneys, agents, affiliates,
partners and stockholders, in each case past, present, or as they
may exist at any time after the date of this Agreement (including
NRVH, the "NRVH Indemnities") against and in respect of any and all
claims, suits, actions, proceedings (formal and informal),
investigations, judgments, deficiencies, damages, settlements,
liabilities, losses, costs and legal and other expenses arising out
of or based upon any breach of any representation, warranty,
covenant or agreement of CCI or any CCI Stockholder contained in
this Agreement or in any other agreement executed and delivered by
CCI or either CCI Stockholder hereunder or in connection herewith.
SECTION 11.2 Indemnity by NRVH. NRVH agrees to
indemnify and hold harmless CCI and the CCI Stockholders and their
successors and assigns and its officers, directors, controlling
persons (if any), employees, attorneys, agents, affiliates,
partners (including CCI and the CCI Stockholders, the "CCI
Indemnities") against and in respect of any and all claims, suits,
actions, proceedings (formal and informal), investigations,
judgments, deficiencies, damages, settlements, liabilities, losses,
costs and legal and other expenses arising out of or based upon any
breach of any representation, warranty, covenant or agreement of
NRVH contained in this Agreement, or in any other agreement
executed and delivered by NRVH hereunder or in connection herewith.
SECTION 11.3 Defense of Claims. Any NRVH Indemnitee or
CCI Indemnitee (the "Indemnified Party") seeking indemnification
under this Agreement shall give to the party obligated to provide
indemnification to such Indemnified Party (the "Indemnitor") a
notice (a "Claim Notice") describing in reasonable detail the facts
giving rise to any claim for indemnification hereunder promptly
upon learning of the existence of such claim. Upon receipt by the
Indemnitor of a Claim Notice from an Indemnified Party with respect
to any claim of a third party, such Indemnitor may assume the
defense thereof with counsel reasonably satisfactory to the
Indemnified Party and, in such event, shall agree to pay and
otherwise discharge with the Indemnitor's own assets all judgments,
deficiencies, damages, settlements, liabilities, losses, costs and
legal and other expenses related thereto; and the Indemnified Party
shall cooperate in the defense or prosecution thereof and shall
furnish such records, information and testimony and attend all such
conferences, discovery proceedings, hearings, trials and appeals as
may be reasonably requested in connection therewith. If the
Indemnitor does not assume the defense thereof, the Indemnitor
shall similarly cooperate with the Indemnified Party in such
defense or prosecution. The Indemnified Party shall have the right
to participate in the defense or prosecution of any lawsuit with
respect to which the Indemnitor has assumed the defense and to
employ its own counsel therein, but the fees and expenses of such
counsel shall be at the expense of the Indemnified Party unless (i)
the Indemnitor shall not have promptly employed counsel reasonably
satisfactory to such Indemnified Party to take charge of the
defense of such action or (ii) such Indemnified Party shall have
reasonably concluded that there exists a significant conflict of
interest with respect to the conduct of such Indemnified Party's
defense by the Indemnitor, in either of which events such fees and
expenses shall be borne by the Indemnitor and the Indemnitor shall
not have the right to direct the defense of any such action on
behalf of the Indemnified Party. The Indemnitor shall have the
right, in its sole discretion, to settle any claim solely for
monetary damages for which indemnification has been sought and is
available hereunder, provided that the Indemnitor shall not agree
to the settlement of any claim which constitutes the subject of a
Claim Notice which settlement in the reasonable opinion of the
Indemnified Party would have an adverse continuing effect on the
business of the Indemnified Party without the prior written consent
of the Indemnified Party. The Indemnified Party shall give written
notice to the Indemnitor of any proposed settlement of any suit,
which settlement the Indemnitor may, if it shall have assumed the
defense of the suit, reject in its reasonable judgment within 10
days of receipt of such notice. Notwithstanding the foregoing the
Indemnified Party shall have the right to pay or settle any suit
for which indemnification has been sought and is available
hereunder, provided that, if the defense of such claim shall have
been assumed by the Indemnitor, the Indemnified Party shall
automatically be deemed to have waived any right to indemnification
hereunder.
SECTION 11.4 Limits on Recovery. (a) Neither CCI or
the CCI Stockholders (pursuant to Section 11.1) nor NRVH (pursuant
to Section 11.2) shall be required to indemnify the other parties
pursuant to such sections unless the aggregate amount of damages,
claims or other amounts for which the Indemnified Party is entitled
to indemnification pursuant to such sections (the "Damages")
exceeds $25,000 (the "Indemnification Threshold"), provided that if
such aggregate amount of Damages exceeds the Indemnification
Threshold, the Indemnitor shall indemnify the Indemnified Party for
the entire amount of Damages and not merely for the amount of
Damages which exceeds $25,000.
(b) Notwithstanding anything in Sections 11.1 or
11.2 to the contrary, an Indemnitor shall only be required to
indemnify an Indemnified Party pursuant to such sections with
respect to a particular claim for Damages to the extent the
Indemnified Party delivers to the Indemnitor a Claim Notice
relating to such claim within two (2) years from the Closing Date
(the "Indemnification Period"); provided, however, that with
respect to a claim by an Indemnified Party involving product
liability (including without limitation the representations
contained in Section 5.23) ("Product Liability Claims") or
liability for Taxes, such Indemnified Party shall be entitled to
indemnification pursuant to Sections 11.1 or 11.2, as the case may
be, until the relevant statute of limitations under applicable law
relating to such specific claim has expired; provided further,
however, that with respect to Product Liability Claims, the
indemnification covenants contained herein shall extend beyond the
Indemnification Period only if the Minimum Insurance Coverage is in
effect.
(c) Notwithstanding anything in Sections 11.1 or
11.2 to the contrary, the aggregate liability of CCI and the CCI
Stockholders pursuant to Section 11.1 and the aggregate liability
of NRVH pursuant to Section 11.2 shall be limited to $18,000,000
(two times the market value of the Exchange Consideration). In the
event that an NRVH Indemnitee is entitled to seek indemnity for
Damages under this Section 11 from CCI or the CCI Stockholders,
such NRVH Indemnitee may proceed against any of CCI or the CCI
Stockholders; provided however, that such NRVH Indemnitee shall not
proceed, in the first instance, against Ms. Mason or Ms. Lee-
Thomson if Ms. Mason or Ms. Lee-Thomson, as the case may be, has
theretofore paid at least $1,052,000 to the NRVH Indemnitees as
Damages pursuant to this Section 11; provided further, however,
that if such NRVH Indemnitee is unable to recover for Damages for
which it is entitled to indemnification from CCI or the other CCI
Stockholders within 60 days of its delivery of a Claim Notice with
respect to the claim for indemnification at issue, such NRVH
Indemnitee shall then be permitted to proceed against Ms. Mason and
Ms. Lee-Thomson.
ARTICLE 12
GENERAL PROVISIONS
SECTION 12.1 Effectiveness of Representations,
Warranties and Agreements. The representations, warranties and
agreements of each party hereto shall remain operative and in full
force and effect regardless of any investigation made by or on
behalf of any other party hereto, any person controlling any such
party or any of their officers or directors, whether prior to or
after the execution of this Agreement.
SECTION 12.2 Notices. All notices and other
communications given or made pursuant hereto shall be in writing
and shall be deemed to have been duly given or made as of the date
delivered, mailed or transmitted, and shall be effective upon
receipt, if delivered personally, mailed by registered or certified
mail (postage prepaid, return receipt requested) to the parties at
the following addresses (or at such other address for a party as
shall be specified by like changes of address) or sent by
electronic transmission to the telecopier number specified below:
(a) If to NRVH:
National R.V. Holdings Inc.
3411 N. Perris Blvd.
Perris, CA 92571
Attention: Mr. Wayne M. Mertes
with a copy to:
Werbel & Carnelutti
711 Fifth Avenue
New York, NY 10022
Attention: Stephen M. Davis, Esq.
Telecopier No.: (212) 832-3353
(b) If to CCI:
Country Coach, Inc.
135 East First Street
Junction City, OR 97448
Attention: Mr. Robert B. Lee
with a copy to:
Hershner Hunter Moulton
Andrews & Neill
180 E. Eleventh Avenue
Eugene, Oregon 94440
Attention: William R. Potter, Esq.
Telecopier No.: (503) 344-2025
SECTION 12.3 Certain Definitions. For purposes of this
Agreement, the term:
(a) "affiliate" means a person that directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the first mentioned
person;
(b) "business day" means any day other than a day
on which banks in the State of New York are authorized or obligated
to be closed;
(c) "control" (including the terms "controlled",
"controlled by" and "under common control with") means the
possession, directly or indirectly or as trustee or executor, of
the power to direct or cause the direction of the management or
policies of a person, whether through the ownership of stock or as
trustee or executor, by contract or credit arrangement or
otherwise;
(d) "knowledge" shall mean, with respect to any
matter in question, with respect to CCI, if an executive officer of
CCI or a CCI Stockholder or, with respect to NRVH, if an executive
officer of NRVH, as the case may be, has actual knowledge of such
matter, after due inquiry;
(e) "Market Value" shall mean the average of the
closing price per share of the NRVH Common Stock on the five
consecutive trading days ending on the second trading day following
the initial public announcement disclosing the Exchange. The
closing price for each such day shall be the last sale price or, in
case no such sale takes place on such day, the average of the
closing bid and asked prices of such NRVH Common Stock, in either
case on The Nasdaq Stock market or the principal securities
exchange on which the shares of NRVH Common Stock are listed or
admitted to trading.
(f) "person" means an individual, corporation,
partnership, association, trust, unincorporated organization, other
entity or group (as defined in Section 13(d) of the Exchange Act);
(g) "Returns" mean all tax returns, statements,
reports, forms (including estimated tax or information returns and
reports, or filing extensions with respect thereto) required to be
filed with any taxing authority in connection with the
determination or administration of any tax;
(h) "subsidiary" or "subsidiaries" of CCI, NRVH or
any other person, means any corporation, partnership, joint venture
or other legal entity of which CCI, NRVH or such other person, as
the case may be (either alone or through or together with any other
subsidiary), controls or owns, directly or indirectly, 50% or more
of the stock or other equity interests the holders of which are
generally entitled to vote for the election of the board of
directors or other governing body of such corporation or other
legal entity or, which by contract or agreement, has the power to
control such corporation or other legal entity, or which otherwise
constitutes a "subsidiary" as defined in Regulation S-X Section 210.1-
02(w). A "significant subsidiary" shall mean any entity
constituting a significant subsidiary under Regulation S-X, Section
210.1-02(v).
(i) "Tax" or "Taxes" shall mean any and all taxes,
charges, fees, levies, payable to any federal, state, local or
foreign taxing authority or agency, including, without limitation,
income, franchise, profits, gross receipts, minimum, alternative
minimum, estimated, ad valorem, value added, sales, use, service,
real or personal property, capital stock, license, payroll,
withholding disability, employment, social security, workers
compensation, unemployment compensation, utility, severance,
excise, stamp, windfall profits, transfer and gains taxes, customs
duties, imposts, charges, levies or other similar assessments of
any kind, and interest, penalties and additions to tax imposed with
respect thereto.
SECTION 12.4 Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.
SECTION 12.5 Severability. If any term or other
provision of this Agreement is invalid, illegal or incapable of
being enforced by any 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 contemplated hereby is not affected
in any manner materially 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 transactions contemplated hereby are
fulfilled to the extent possible.
SECTION 12.6 Entire Agreement. This Agreement
(together with the Exhibits and Schedules hereto) constitute the
entire agreement of the parties and supersede all prior agreements
and undertakings, both written and oral, between the parties, or
any of them, with respect to the subject matter hereof.
SECTION 12.7 Assignment. This Agreement shall not be
assigned by operation of law or otherwise.
SECTION 12.8 Parties in Interest. This Agreement shall
be binding upon and inure solely to the benefit of each party
hereto, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other person any right,
benefit or remedy of any nature whatsoever under or by reason of
this Agreement.
SECTION 12.9 Failure or Indulgence Not Waiver; Remedies
Cumulative. No failure or delay on the part of any party hereto in
the exercise of any right hereunder shall impair such right or be
construed to be a waiver of, or acquiescence in, any breach of any
representation, warranty or agreement herein, nor shall any single
or partial exercise of any such right preclude other or further
exercise thereof or of any other right. All rights and remedies
existing under this Agreement are cumulative to, and not exclusive
of, any rights or remedies otherwise available.
SECTION 12.10 Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of the
State of Delaware, regardless of the laws that might otherwise
govern under applicable principles of conflicts of law.
SECTION 12.11 Counterparts. This Agreement may be
executed in one or more counterparts, and by the different parties
hereto in separate counterparts, each of which when executed shall
be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
<PAGE>
IN WITNESS WHEREOF, NRVH, CCI and the CCI Stockholders
have caused this Agreement to be executed as of the date first
written above by their respective officers thereunto duly
authorized.
NATIONAL R.V. HOLDINGS, INC. COUNTRY COACH, INC.
By: /s/ Gary N. Siegler By: /s/ Jack L. Courtemanche
--------------------- -------------------------
Name: Gary N. Siegler Name: Jack L. Courtemanche
Title: Chairman of the Title: President
Board of Directors
/s/ Robert B. Lee
------------------------
Robert B. Lee
/s/ Jack L. Courtemanche
------------------------
Jack L. Courtemanche
/s/ Terry N. Lee
------------------------
Terry N. Lee
/s/ Kenda M. Mason
-------------------------
Kenda M. Mason
/s/ Brenda J. Lee-Thomson
-------------------------
Brenda J. Lee-Thomson
Solely for purposes of
Section 7.8 hereof
R&T LEE INVESTMENTS, LLC
By: /s/ Robert B. Lee
- -------------------------<PAGE>
Exhibit B
FOR IMMEDIATE RELEASE
NATIONAL R.V. HOLDINGS, INC. AGREES
TO ACQUIRE COUNTRY COACH, INC.
PERRIS, California (October 22, 1996) - National R.V. Holdings,
Inc. (Nasdaq:NRVH) announced today it has entered into a definitive
agreement to acquire Country Coach, Inc. of Junction City, Oregon.
Country Coach is a leading manufacturer of highline motorcoaches
under the Magna, Affinity, Concept, Intrigue, Allure and Country
Coach Prevost Conversion brand names. Following the acquisition,
Country Coach will be operated as a wholly-owned subsidiary of
National R.V.
Country Coach was founded in 1973 by Chief Executive Officer Robert
B. Lee. Mr. Lee along with the rest of the Country Coach
management team will continue in their current positions following
the acquisition. In 1995, Country Coach generated net sales of
approximately $70 million and pre-tax income of approximately $2.8
million. For the first nine months of 1996, Country Coach reported
net sales and pre-tax profits ahead of its results for the
comparable period in 1995. In fact, pre-tax profits for the first
nine months of 1996 already exceed full year 1995 results.
National R.V. expects the transaction, which is subject only to
customary closing conditions, to be accretive to earnings per
share.
Gary Siegler, Chairman of the Board of Directors of National R.V.,
stated, "We are extremely excited about the acquisition of Country
Coach. The addition of Country Coach's high-end product lines
allow us to offer our customers a complete line of products ranging
in price from $40,000 to more than $700,000. National R.V.'s
philosophy of quality is consistent with Country Coach's twenty
year reputation for building the finest motorhomes in the industry.
Additionally, we are pleased to add the depth of experience
afforded by Country Coach's excellent management to National's
first class management team. We believe that this acquisition will
position National as one of the nation's fastest-growing and most-
exciting R.V. manufacturers."
National R.V. is one of the nation's leading manufacturers of Class
A motorhomes. The Company designs, manufacturers and sells
motorhomes and fifth-wheel trailers under its Dolphin, Sea Breeze
and Tropi--Cal brand names.
CONTACTS: Kenneth W. Ashley Eugene G. Heller/Lynne P. Farris
Chief Financial Silverman Heller Associates
Officer (310) 208-2550
(909) 946-6007
