**EXHIBIT2.2**

 

**STOCK PURCHASE AGREEMENT**

 

 

**BY AND AMONG**

 

**MONACO COACH CORPORATION,**

 

**MCCACQUISITION CORPORATION,**

 

**OUTDOOR RESORTS OF AMERICA, INC.,**

 

**AND**

 

**OUTDOOR RESORTS MOTORCOACH COUNTRYCLUB, INC.,**

 

 

**Datedas of November 27, 2002**

 

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**TABLEOF CONTENTS**

 
| ARTICLE I PURCHASE AND SALE OF COMPANY  CAPITAL STOCK |
|-------------------------------------------------------|
|                                                  |
| 1.1                                                   | Purchase and Sale |
| 1.2                                                   | Closing Date |
| 1.3                                                   | Certain Definitions |
| 1.4                                                   | Acquisition Consideration |
| 1.5                                                   | Transfer of Certificates and Agreements |
| 1.6                                                   | Lost, Stolen or Destroyed Certificates |
| 1.7                                                   | Tax |
| 1.8                                                   | Taking of Necessary Action; Further Action |
| 1.9                                                   | Interpretation and Construction |
|                                                  |   |
| ARTICLE II REPRESENTATIONS AND WARRANTIES OF  ORA     |
|                                                  |
| 2.1                                                   | Organization of the Company |
| 2.2                                                   | Company Capital Structure |
| 2.3                                                   | Subsidiaries |
| 2.4                                                   | Authority |
| 2.5                                                   | Company Financial Statements |
| 2.6                                                   | ORA Financial Statements |
| 2.7                                                   | No Undisclosed Liabilities |
| 2.8                                                   | No Changes |
| 2.9                                                   | Tax and Other Returns and Reports |
| 2.10                                                  | Restrictions on Business Activities |
| 2.11                                                  | Title of Properties; Absence of Liens and  Encumbrances; Condition of Equipment |
| 2.12                                                  | Intellectual Property |
| 2.13                                                  | Agreements, Contracts and Commitments |
| 2.14                                                  | Interested Party Transactions |
| 2.15                                                  | Governmental Authorization |
| 2.16                                                  | Litigation |
| 2.17                                                  | Accounts Receivable |
| 2.18                                                  | Minute Books |
| 2.19                                                  | Environmental Matters |
| 2.20                                                  | Brokers’ and Finders’ Fees; Third Party  Expenses |
| 2.21                                                  | Employee Matters and Benefit Plans |
| 2.22                                                  | Insurance |
| 2.23                                                  | Compliance with Laws |
| 2.24                                                  | Consents |
| 2.25                                                  | No Injunctions or Restraints on Conduct of  Business |
| 2.26                                                  | Representations relating to the Property |
| 2.27                                                  | Warranties; Indemnities |
| 2.28                                                  | Representations Complete; Disclosure |
| 2.29                                                  | No Other Representations or Warranties |

 

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| ARTICLE III REPRESENTATIONS AND WARRANTIES  OF MONACO AND BUYER          |
|--------------------------------------------------------------------------|
|                                                                     |
| 3.1                                                                      | Organization, Standing and Power |
| 3.2                                                                      | Authority |
| 3.3                                                                      | Consents |
| 3.4                                                                      | Noncontravention |
| 3.5                                                                      | Brokers’ and Finders’ Fees; Third Party  Expenses |
| 3.6                                                                      | Monaco Loan |
| 3.7                                                                      | No Other Representations or Warranties |
|                                                                     |   |
| ARTICLE IV CONDUCT PRIOR TO CLOSING                                      |
|                                                                     |
| 4.1                                                                      | Conduct of Business of the Company |
| 4.2                                                                      | Other Offers |
|                                                                     |   |
| ARTICLE V ADDITIONAL AGREEMENTS                                          |
|                                                                     |
| 5.1                                                                      | Securityholder Agreements |
| 5.2                                                                      | Resignation of Directors and Officers of  Company |
| 5.3                                                                      | Access |
| 5.4                                                                      | Confidentiality |
| 5.5                                                                      | Expenses |
| 5.6                                                                      | Brokers’ or Finders’ Fees |
| 5.7                                                                      | Employee Matters |
| 5.8                                                                      | Consents |
| 5.9                                                                      | Reasonable Best Efforts |
| 5.10                                                                     | Notification of Certain Matters |
| 5.11                                                                     | Election to Supplement Sellers’ Disclosure  Letter |
| 5.12                                                                     | Inspection Period |
| 5.13                                                                     | Risk of Loss |
| 5.14                                                                     | Notice of Damage |
| 5.15                                                                     | Public Disclosure |
| 5.16                                                                     | Closing Cost Schedule |
| 5.17                                                                     | Additional Documents and Further Assurances |
|                                                                     |   |
| ARTICLE VI CONDITIONS TO THE ACQUISITION                                 |
|                                                                     |
| 6.1                                                                      | Conditions to Obligations of Each Party to  Effect the Acquisition |
| 6.2                                                                      | Additional Conditions to Obligations of the  Company and ORA |
| 6.3                                                                      | Additional Conditions to the Obligations of  Monaco and Buyer |
|                                                                     |   |
| ARTICLE VII SURVIVAL OF REPRESENTATIONS AND  WARRANTIES; INDEMNIFICATION |
|                                                                     |
| 7.1                                                                      | Survival of Representations and Warranties |
| 7.2                                                                      | Indemnification |
| 7.3                                                                      | Arbitration |
| 7.4                                                                      | Guaranty |
| 7.5                                                                      | Subrogation |
| 7.6                                                                      | Claims Made by ORA |

 

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| ARTICLE VIII TERMINATION, AMENDMENT AND  WAIVER |
|-------------------------------------------------|
|                                            |
| 8.1                                             | Optional Termination |
| 8.2                                             | Automatic Termination |
| 8.3                                             | Effect of Termination |
| 8.4                                             | Amendment |
| 8.5                                             | Extension; Waiver |
|                                            |   |
| ARTICLE IX POST-CLOSING COVENANTS               |
|                                            |
| 9.1                                             | Phase I Financing and Completion |
| 9.2                                             | Phase I Profits |
| 9.3                                             | Phase II Obligations |
| 9.4                                             | Phase III Obligations |
| 9.5                                             | Resales |
| 9.6                                             | Closing Costs |
| 9.7                                             | Interest on Certain Loans |
| 9.8                                             | Tax Matters |
| 9.9                                             | ORA Additional Cooperation |
| 9.10                                            | Loan Release |
| 9.11                                            | Employee Matters |
| 9.12                                            | Financial Information |
|                                            |   |
| ARTICLE X GENERAL PROVISIONS                    |
|                                            |
| 10.1                                            | Notices |
| 10.2                                            | Headings |
| 10.3                                            | Counterparts |
| 10.4                                            | Entire Agreement |
| 10.5                                            | Assignment |
| 10.6                                            | Severability |
| 10.7                                            | Other Remedies |
| 10.8                                            | No Third Party Beneficiaries |
| 10.9                                            | Governing Law |
| 10.10                                           | Specific Performance |

 

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**INDEXOF SCHEDULES AND EXHIBITS**

 
| **Exhibit**  |   | **Description**                                                            |
|--------------|--------|----------------------------------------------------------------------------|
|         |   |                                                                       |
| A            |   | Form  of Guaranty                                                          |
| B            |   | Form  of Affiliates Agreement                                              |
| C            |   | Form of Management Agreement                                               |
| D            |   | Form of Trademark Agreement                                                |
| E            |   | Description of Land                                                        |
| F            |   | Form of Opinion of Soper & Oakley, PLLC                                |
| G            |   | Form of Opinion of Tribler Orpett &  Crone, Professional Corporation   |
| H            |   | Form of Opinion of Schlecht, Shevlin &  Shoenberger, a Law Corporation |
|         |   |                                                                       |
| **Schedule** |   | **Description**                                                            |
|         |   |                                                                       |
| 1.3(bbbb)    |   | Permitted Exceptions                                                       |
| 2.1          |   | Directors and Officers                                                     |
| 2.2(a)       |   | Capital Structure                                                          |
| 2.5          |   | Company Financial Statements                                               |
| 2.6          |   | ORA Financial Statements                                                   |
| 2.11(c)      |   | Equipment                                                                  |
| 2.12         |   | Intellectual Property                                                      |
| 2.13(a)      |   | Company Contracts                                                          |
| 2.14(b)      |   | Intercompany Receivable                                                    |
| 2.15         |   | Governmental Authorization                                                 |
| 2.16         |   | Litigation                                                                 |
| 2.21(a)      |   | Employee Matters & Benefits Plans                                      |
| 2.22         |   | Insurance                                                                  |
| 2.26(d)      |   | Existing Improvements                                                      |
| 2.26(f)      |   | Governmental Approvals                                                     |
| 2.26(i)      |   | Utilities                                                                  |
| 2.26(j)      |   | Property                                                                   |
| 2.26(k)      |   | Leases; Options; Broker Agreement                                          |
| 2.26(l)      |   | Service Contracts                                                          |
| 2.26(p)      |   | Project                                                                    |
| 2.26(s)      |   | Monies Owed                                                                |
| 6.3(g)       |   | Consents                                                                   |

 

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**STOCK PURCHASE AGREEMENT**

 

This Stock PurchaseAgreement (the **“Agreement”**) is made and entered into as of November 27, 2002by and among Monaco Coach Corporation, a Delaware corporation (**“Monaco”**),MCC Acquisition Corporation, a Delaware corporation and a wholly-ownedsubsidiary of Monaco (“**Buyer**”),Outdoor Resorts of America, Inc., a Delaware corporation (“**ORA**”), and Outdoor Resorts MotorcoachCountry Club Inc., a California corporation and a wholly-owned subsidiary ofORA (the “**Company)**.

 

**RECITALS**

 

A.                                   ORAowns all of the issued and outstanding capital stock of the Company, consistingof 100 shares (the **“Shares”**) of the Company’s Class A commonstock (**“CommonStock”**).

 

B.                                     TheBoards of Directors of each of the Buyer and the Company believe it is in thebest interests of each company and their respective stockholders that Buyeracquire the Company through the purchase of all the outstanding Common Stockdirectly from ORA (the “**Acquisition**”), and, in furtherance thereof,have approved the Acquisition.

 

C.                                     Concurrentlywith the execution and delivery of this Agreement, Monaco, Buyer, ORA, andOutdoor Resorts of Naples Inc., a Florida corporation (“**ORN**”), are entering into a Stock PurchaseAgreement (the “**ORN Agreement**”)pursuant to which Buyer will purchase all the outstanding capital stock of ORN(the “**ORN Acquisition**”).

 

D.                                    Concurrentlywith the execution and delivery of this Agreement, Monaco, Buyer, ORA, andOutdoor Resorts of Las Vegas, Inc., a Nevada corporation (“**ORLV**”) are entering into a Stock PurchaseAgreement (the “**ORLV Agreement**”)pursuant to which Buyer will purchase all the outstanding capital stock of ORLV(the “**ORLV Acquisition**”).

 

E.                                      Concurrentlywith the execution and delivery of this Agreement, the Principals (as definedbelow) are entering into a Guaranty in favor of Monaco and Buyer in the formattached hereto as Exhibit A (the “**Guaranty**”)pursuant to which the Principals are agreeing to guarantee ORA’s obligationsunder ARTICLE VII of this Agreement.

 

F.                                      Concurrentlywith the execution and delivery of this Agreement, Monaco, Buyer, ORA, theCompany, ORN, ORLV and the Principals are entering into an Affiliates Agreement****in the form attached hereto as ExhibitB****(the “**Affiliates Agreement**”) pursuant to whichMonaco, Buyer, ORA, the Company, ORN, ORLV and the Principals release eachother from certain liabilities and the Principals agree to vote any shares ofstock of ORA held by them in favor of this Agreement and the transactionscontemplated hereby.

 

G.                                     Concurrentlywith the execution and delivery of this Agreement, the Company, ORA and ORI areentering into a Management Agreement in the form attached hereto as ExhibitC (the “**Management Agreement**”)pursuant to which ORA and ORI will develop, manage, operate and maintain theProperty.

 

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H.                                    Concurrentlywith the execution and delivery of this Agreement, the Company and ORA areentering into a Trademark License Agreement in the form attached hereto as ExhibitD (the “**Trademark Agreement**”)pursuant to which ORA will license or assign certain of its trademarks to theCompany.

 

I.                                         ORA,on the one hand, and Monaco and Buyer, on the other hand, desire to makecertain representations, warranties, covenants and other agreements inconnection with the Acquisition.

 

Now, therefore, inconsideration of the covenants, promises and representations set forth herein,and for other good and valuable consideration, the parties agree as follows:

 

**ARTICLE I**

 

**PURCHASEAND SALE OF COMPANY CAPITAL STOCK**

 

1.1                                 Purchase and Sale.  At the Closing (as defined in Section 1.2) and subjectto and upon the terms and conditions of this Agreement, Buyer shall purchasefrom ORA and ORA shall sell, convey, transfer, assign and deliver to Buyer,free and clear of all liens, encumbrances or other defects of title, all theShares.

 

1.2                                 Closing Date. Unless this Agreement is earlier terminated pursuant to Sections5.11, 5.12, 5.13, 8.1 or 8.2, the closing of the Acquisition (the **“Closing”**)will take place simultaneously with the closing of the ORN Acquisition and theORLV Acquisition and as promptly as practicable, but no later than five (5)business days, following satisfaction or waiver of the conditions set forth inArticle VI, at the offices of Wilson Sonsini Goodrich & Rosati, 650 PageMill Road, Palo Alto, California, unless another place or time is agreed to inwriting by Monaco and ORA.  The dateupon which the Closing actually occurs is herein referred to as the **“ClosingDate”**.

 

1.3                                 Certain Definitions.  For the purposes of this Agreement, thefollowing capitalized terms have the following meanings:

 

### (a)                                               “AccountsReceivable” shall have the meaning set forth in Section 2.17(a).

###  

### (b)                                              “Acquisition”shall have the meaning set forth in the recitals.

###  

### (c)                                               “Agreement”shall have the meaning set forth in the preamble.

###  

### (d)                                              “AffiliatesAgreement” shall have the meaning set forth in the recitals.

###  

### (e)                                               “AlternateTransaction” shall have the meaning set forth in Section 4.2(a).

###  

### (f)                                                 “AnnualFinancials” shall have the meaning set forth in Section 2.5.

###  

### (g)                                              “ApplicableLevels of Regulatory Concern” shall mean those soil or groundwater clean-upstandards existing as of the Closing Date and applicable to the affected

 

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property adopted pursuant to Environmental Laws orotherwise imposed by any Governmental Entity pursuant to Environmental Laws.

###  

### (h)                                              “Approvals”shall have the meaning set forth in Section 2.26(f).

###  

### (i)                                                  “BankAtlanticLoan” shall mean that certain loan in the amount of $7,408,942 made byBankAtlantic, a Federal Savings Bank (“BankAtlantic”), evidenced by a notedated October 31, 2001 from the Company in favor of BankAtlantic and secured bya deed of trust dated October 31, 2001.

###  

### (j)                                                  “BenefitsLiabilities” means any and all claims, debts, liabilities,commitments and obligations, whether fixed, contingent or absolute, matured orunmatured, liquidated or unliquidated, accrued or unaccrued, known or unknown,whenever or however arising, including all costs and expenses relating theretoarising under law, rule, regulation, permits, action or proceeding before anyGovernmental Entity, order or consent decree or any award of any arbitrator ofany kind relating to any Plan, Employment Agreement or otherwise to anEmployee.

###  

### (k)                                               “Buyer”shall have the meaning set forth in the preamble.

###  

### (l)                                                  “CarryoverLoss” shall mean the net loss, if any, from any Sale which is carried-overand reflected in a Net Profit Calculation of any subsequent Sale and shallequal, when reflected in a Net Profit Calculation, (i) the absolute value ofthe most recently completed Net Profit Calculation, if such calculation yieldsa negative number, or (ii) zero (0), if such calculation yields a positivenumber or if no previous Sale has occurred.

###  

### (m)                                            “Closing”shall have the meaning set forth in Section 1.2.

###  

### (n)                                              “ClosingCosts” shall mean the sum of (a) the premium charged for the Title Policyother than premiums for any endorsements requested by Buyer, (b) charges andfees required to cause title to the Property to be free and clear of all liens,restrictions and encumbrances except Permitted Exceptions and any unrecordedmechanic’s liens which are addressed in Article IX and (c) the closing orescrow charges by the title company issuing the Title Policy.

###  

### (o)                                              “ClosingDate” shall have the meaning set forth in Section 1.2.

###  

### (p)                                              “COBRA”shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, asamended.

###  

### (q)                                              “Code”shall mean the Internal Revenue Code of 1986, as amended, or any successorthereto.

###  

### (r)                                                 “CommonStock” shall have the meaning set forth in the recitals.

###  

### (s)                                               “Company”shall have the meaning set forth in the preamble.

###  

### (t)                                                 “CompanyContracts” shall have the meaning set forth in Section 2.13(a).

 

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### (u)                                              “CompanyFinancials” shall have the meaning set forth in Section 2.5.

###  

### (v)                                              “ConfidentialInformation” shall have the meaning set forth in Section 5.4.

###  

### (w)                                            “Conflict”shall have the meaning set forth in Section 2.4.

###  

### (x)                                                “CustomerInformation” shall have the meaning set forth in Section 2.11(d).

###  

### (y)                                              “DevelopmentCosts” shall have the meaning set forth in Section 5.3.

###  

### (z)                                                “DisclosureSupplement” shall have the meaning set forth in Section 5.11.

###  

### (aa)                                         “DOL”shall mean the Department of Labor.

###  

### (bb)                                       “Employee”means any current or former or retired employee or consultant of either theCompany or any ERISA Affiliate of the Company whose responsibilities primarilyrelate, or related, as the case may be, to the Company’s business.

###  

### (cc)                                         “EmploymentAgreement” means each management, employment, severance, consulting, relocation,repatriation, expatriation, visas, work permit or other agreement, contract orunderstanding between the Company or any ERISA Affiliate of the Company and anyEmployee relating, directly or indirectly, to such Employee’s terms andcondition of employment.

###  

### (dd)                                       “EnvironmentalLaws” shall mean any and all applicable laws, statutes, ordinances, rules,codes, orders, decrees, directives, guidelines and regulations which prohibit,regulate or control any Hazardous Material or relate in any way to pollution,the environment, or the protection of human health and worker safety, ornatural and cultural resources, and all amendments and modifications of any ofthe foregoing.

###  

### (ee)                                         “EnvironmentalRemediation Costs” shall mean anyliability, obligation, judgment, claim, penalty, fine, cost or expense(including reasonable attorneys’ fees and environmental consultant costs of anykind or nature) or the duty to indemnify, defend, or reimburse any Person withrespect to Remedial Activities which are necessary or required to both (i)comply with and fulfill Environmental Laws existing as of the Closing Date(including without limitation any orders of any Governmental Entity and anyconsent decree, consent agreement or memorandum of understanding with GovernmentalEntities), and (ii) remediate and/or remove Hazardous Materials to a levelcompliant with Applicable Levels of Regulatory Concern.  Such Remedial Activities shall, at aminimum, be those Remedial Activities necessary to insure that the affectedproperty is not encumbered by any use or deed restriction (1) which is morerestrictive than any current use or deed restriction of any kind affecting theProperty or (2) which would materially affect the development of the Project.

###  

### (ff)                                             “Equipment”shall have the meaning set forth in Section 2.11(c).

###  

### (gg)                                       “ERISA” means the Employee RetirementIncome Security Act of 1974, as amended.

 

4

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### (hh)                                       “ERISA Affiliate” means any otherperson or entity under common control with the Company within the meaning ofSection 414(b), (c), (m) or (o) of the Code and the regulations issuedthereunder.

###  

### (ii)                                               “ExpirationDate” shall have the meaning set forth in Section 5.1(a).

###  

### (jj)                                               “FMLA”shall mean the Family Medical Leave Act of 1993, as amended.

###  

### (kk)                                         “GAAP”shall have the meaning set forth in Section 2.5.

###  

### (ll)                                               “GovernmentalAuthorizations” shall mean each consent, license, permit, grant or otherauthorization issued to the Company by a Governmental Entity (i) pursuant towhich the Company currently operates or holds any interest in any of itsproperties, or (ii) which is required for the operation of its business or theholding of any such interest, including the completion and operation Phase I.

###  

### (mm)                                   “GovernmentalEntity” shall have the meaning set forth in Section 2.4.

###  

### (nn)                                       “Guaranty”  shall have the meaning set forth in therecitals.

###  

### (oo)                                       “HazardousMaterial” shall mean any material or substance that is prohibited orregulated by any Environmental Law or that has been designated by anyGovernmental Entity to be radioactive, toxic, hazardous, a pollutant, orotherwise a danger to health, safety, reproduction or the environment otherthan (1) products containing such materials used for janitorial or officepurposes properly and safely used and maintained and (2) building materials orproducts used in improving or maintaining the Property containing suchmaterials and properly and safely used in compliance with Environmental Laws.

###  

### (pp)                                       “Improvements”shall mean all improvements, structures and fixtures located on the Land.

###  

### (qq)                                       “IndemnifiedParty” shall have the meaning set forth in Section 7.2

###  

### (rr)                                             “IndemnificationCap” shall have the meaning set forth in the ORN Agreement.

###  

### (ss)                                         “InspectionPeriod” shall have the meaning set forth in Section 5.12.

###  

### (tt)                                             “IntellectualProperty” shall have the meaning set forth in Section 2.12(a).

###  

### (uu)                                       “IntercompanyPayables” shall mean any amount owed by the Company to any of ORA, TheRobert A. Schoellhorn Trust, Robert A. Schoellhorn and E. Randall Henderson orany affiliates of such parties.

###  

### (vv)                                       “IntercompanyReceivables” shall mean any amount owed to the Company by any of ORA, TheRobert A. Schoellhorn Trust, Robert A. Schoellhorn and E. Randall Henderson orany affiliates of such parties.

 

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### (ww)                                   “InterimBalance Sheet” shall have the meaning set forth in Section 2.5.

###  

### (xx)                                           “InterimFinancials” shall have the meaning set forth in Section 2.5.

###  

### (yy)                                       “InternationalEmployee Plan” shall mean each Plan that has been adopted or maintained bythe Company or any ERISA Affiliate, whether informally or formally, or withrespect to which the Company or any ERISA Affiliate will or may have anyliability**,**for the benefit of Employees who perform services outside the United States.

###  

### (zz)                                           “IRS”shall mean the Internal Revenue Service.

###  

### (aaa)                                   “knowledge”“to the knowledge of” “aware of” and words or phrases of similareffect with reference to the Company and/or ORA shall mean the knowledge, afterdue inquiry, of the officers, directors and managerial employees of the Companyand ORA and any direct or indirect subsidiary of ORA and shall include theknowledge of Robert A. Schoellhorn, E. Randall Henderson, Ronald W. Petty,Orien Dickerson and Dawn Schulz.

###  

### (bbb)                                “Land”shall mean all that certain approximately 80 acre tract or parcel of landlocated in Indio, California, and more particularly described on Exhibit Eattached hereto.

###  

### (ccc)                                   “Liens”shall have the meaning set forth in Section 2.9(b)(vii).

###  

### (ddd)                                “Losses”shall have the meaning set forth in Section 7.2(a).

###  

### (eee)                                   “ManagementAgreement” shall have the meaning set forth in the recitals.

###  

### (fff)                                         “MaterialAdverse Effect” shall have the meaning set forth in Section 2.1.

###  

### (ggg)                                “Monaco”shall have the meaning set forth in the preamble.

###  

### (hhh)                                “MonacoLoan” shall mean that certain loan from Monaco to the Company in the amountof $3,056,671 pursuant to a Loan Agreement dated July 27, 2001, as amended by aFirst Amendment to Agreement dated October 5, 2001 and secured by a deed oftrust dated October 5, 2001 on the Land and the Improvements.

###  

### (iii)                                            “MonacoLoan Cost” shall mean the principal amount of the Monaco Loan plus theprincipal amount of any other loans by Monaco to the Company plus any interestthat has accrued on any of the foregoing loans as of the relevant date.

###  

### (jjj)                                            “Mortgages”shall have the meaning set forth in Section 2.26(j).

###  

### (kkk)                                   “MultiemployerPlan” shall mean any “Pension Plan” (as defined below) which is a“multiemployer plan,” as defined in Section 3(37) of ERISA.

###  

### (lll)                                            “NetProfit Calculation” shall mean any calculation to determine net profitunder Sections 9.2, 9.3, 9.4 and 9.5.

###  

### (mmm)                          “Officer’sCertificate” shall have the meaning set forth in Section 7.2(c)(i).

 

6

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### (nnn)                                “ORA”shall have the meaning set forth in the preamble.

###  

### (ooo)                                “ORAAnnual Financials” shall have the meaning set forth in Section 2.6.

###  

### (ppp)                                “ORA’sand Company’s Unknown Environmental Liabilities” shall mean the presence ofany Hazardous Material in the soil, groundwater, surface water, air or buildingmaterials of any real property owned or leased by the Company at any time which(1) are not present as a result of the actions or omissions of the Company, thePrincipals or ORA or (2) were not known to the Company, the Principals or ORAas of the Closing Date.

###  

### (qqq)                                “ORAClosing Costs” shall have the meaning set forth in Section 9.6.

###  

### (rrr)                                         “ORAFinancials” shall have the meaning set forth in Section 2.6.

###  

### (sss)                                   “ORAInterim Financials” shall have the meaning set forth in Section 2.6.

###  

### (ttt)                                         “ORI”shall mean ORA Realty, Inc., a Tennessee corporation.

###  

### (uuu)                                “ORLV”shall have the meaning set forth in the recitals.

###  

### (vvv)                                “ORLVAcquisition” shall have the meaning set forth in the recitals.

###  

### (www)                          “ORLVAgreement” shall have the meaning set forth in the recitals.

###  

### (xxx)                                      “ORN”shall have the meaning set forth in the recitals.

###  

### (yyy)                                “ORNAcquisition” shall have the meaning set forth in the recitals.

###  

### (zzz)                                      “ORNAgreement” shall have the meaning set forth in the recitals.

###  

### (aaaa)                             “PensionPlan” shall mean each Company Employee Plan which is an “employee pensionbenefit plan,” within the meaning of Section 3(2) of ERISA.

###  

### (bbbb)                         “PermittedExceptions” shall mean those title exceptions set forth in Schedule1.3(bbbb).

###  

### (cccc)                             “Person”shall mean an individual, a partnership, a limited liability company, acorporation, an association, a joint stock corporation, a trust, a jointventure, an unincorporated organization, or a Governmental Entity.

###  

### (dddd)                         “Personalty”shall mean all tangible personal property and all intangible property used orusable in connection with the Land, the Improvements or the tangible personalproperty, or any part thereof, or the construction or operation thereof or inconnection with the use thereof; including, without limitation, all electrical,mechanical, structural, heating, ventilation, air conditioning and otherequipment and operating systems, any and all agreements, contract rights,guaranties, warranties (including, but not limited to, those relating toconstruction, fabrication and environmental condition), utility contracts andrights, plans and specifications, governmental approvals, permits, land use anddevelopment rights, easements and building materials.

 

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### (eeee)                             “PhaseI” shall mean that certain phase of the Project consisting of 136 lots andcommon areas including 1/3 of the main lake, 2 small lakes, 1 bathhouse, 1swimming pool, a sales/administration building and 2 holes of golf.

###  

### (ffff)                                     “PhaseI Completion Date” shall have the meaning set forth in Section 9.2(a).

###  

### (gggg)                         “PhaseI Net Profit” shall have the meaning set forth in Section 9.2(a).

###  

### (hhhh)                         “PhaseII” shall mean that certain phase of the project consisting of 113 lots andcommon areas including a clubhouse, 1/3 of the main lake, 1 swimming pool, 2spas, a maintenance building, 4 tennis courts and 4 holes of golf.

###  

### (iiii)                                         “PhaseII Completion Date” shall have the meaning set forth in Section 9.3(a).

###  

### (jjjj)                                         “PhaseII Net Profit” shall have the meaning set forth in Section 9.3(b).

###  

### (kkkk)                             “PhaseIII” shall mean that certain phase of the Project consisting of 151 lotsand common areas including an expansion of the clubhouse, 1/3 of main lake, 2small lakes, 1 bathhouse, 1 swimming pool, 1 spa, and 3 holes of golf.

###  

### (llll)                                         “PhaseIII Completion Date” shall have the meaning set forth in Section 9.4(a).

###  

### (mmmm)                 “Phase III NetProfit” shall have the meaning set forth in Section 9.4(b).

###  

### (nnnn)                         “Plans”means any plan, program, policy, practice, contract, Employment Agreement orother arrangement providing for compensation, severance, termination pay,pension benefits, retirement benefits, deferred compensation, performanceawards, stock or stock-related awards, fringe benefits (including health,dental, vision, life, disability, sabbatical, accidental death anddismemberment benefits), or other employee benefits or remuneration of anykind, whether written, unwritten or otherwise, funded or unfunded, including,without limitation, each “employee benefit plan,” within the meaning ofSection 3(3) of ERISA, which is or has been maintained, sponsored by,contributed to, or required to be contributed to, by the Company for thebenefit of any Employee, or with respect to which the Company has or may haveany liability or obligation to any Employee.

###  

### (oooo)                         “Plansand Specifications” shall have the meaning set forth in Section 2.26(r).

###  

### (pppp)                         “Principals”shall mean Robert A. Schoellhorn, E. Randall Henderson, and the Robert A.Schoellhorn Trust.

###  

### (qqqq)                         “Project”shall mean that certain motor coach resort to be constructed and operated onthe Property, consisting of Phase I, Phase II and Phase III.

 

8

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### (rrrr)                                     “Property”shall mean the Land, Improvements and Personalty.

###  

### (ssss)                             “RemedialActivities” shall mean any activities related to investigating, removing,remediating, treating, transporting, disposing, characterizing, sampling,monitoring, encapsulating or assessing Hazardous Materials (including, withoutlimitation, any assessment of health or environmental risks posed by HazardousMaterials).

###  

### (tttt)                                     “ReplacementLoan” shall mean that certain loan or loans that Monaco intends to secureto pay off the BankAtlantic Loan and/or to finance the Property.

###  

### (uuuu)                         “Resale”shall mean the Company’s sale of all or any portion of a Resale Property otherthan the sale of developed lots to third party users or the deeding of portionsof the Property to the Project’s home owner’s association.

###  

### (vvvv)                         “ResaleClosing Date” shall have the meaning set forth in Section 9.5.

###  

### (wwww)                 “ResaleProperty” shall mean that portion of the Property that has not been sold bythe Company or deeded to the Project’s home owners’ association.

###  

### (xxxx)                                 “ResaleNet Profit” shall have the meaning set forth in Section 9.5.

###  

### (yyyy)                         “Returns”shall have the meaning set forth in Section 2.9(b)(i).

###  

### (zzzz)                                 “Sale”means any sale of any portion of the Property by the Company that triggers a NetProfit Calculation.

###  

### (aaaaa)                       “Sellers’Disclosure Letter” shall mean the disclosure letter delivered by ORA toMonaco concurrently with the execution and delivery of this Agreement.

###  

### (bbbbb)                  “Shares”shall have the meaning set forth in the recitals.

###  

### (ccccc)                       “SubcontractorsWarranties” shall have the meaning set forth in Section 2.26(r).

###  

### (ddddd)                  “SupplementalDisclosure Election” shall have the meaning set forth in Section 5.11.

###  

### (eeeee)                       “Tax”shall have the meaning set forth in Section 2.9(a).

###  

### (fffff)                                 “TitlePolicy” shall have the meaning set forth in Section 6.3(n).

###  

### (ggggg)                  “TrademarkAgreement” shall have the meaning set forth in the recitals.

###  

### (hhhhh)                  “Work”shall mean shall mean the Improvements (including the buildings and buildingpads and all drives, parking lots, landscaping, curbs, sidewalks, sewers andother utilities) and all other construction activities and related services onthe Property, including grading and filling, whether completed or uncompleted,and includes all other labor, materials, equipment

 

9

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and services provided by ORA or the Company inconnection with the construction of the Improvements and the Project.

###  

1.4                                 Acquisition Consideration.  As consideration for the purchase of theShares, Monaco and Buyer shall take the following actions:

 

### (a)                                  Satisfactionof BankAtlantic Loan.  At theClosing, Monaco shall pay or cause to be paid to BankAtlantic the entireoutstanding principal and interest under the BankAtlantic Loan.

###  

### (b)                                 AffiliatesAgreement.  Monaco will release ORAand the Principals from certain liabilities as set forth in the AffiliatesAgreement.

###  

### (c)                                  Profitsfrom Resale of the Property.  Buyershall pay the amounts, if any, which may become due pursuant to Section 9.2through 9.5 hereof.

 

1.5                                 Transfer of Certificates and Agreements.  At the Closing, ORA shall deliver to Buyer(i) stock certificates representing the Shares duly endorsed or accompanied bystock powers duly endorsed in blank, with any required transfer stamps affixedthereto, and (ii) all other documents, agreements, certificates, instruments orwritings required to be delivered by the Company or ORA on or prior to theClosing Date pursuant to this Agreement. The Company shall transfer on its books all shares sold pursuant to thisAgreement.

 

1.6                                 Lost, Stolen or Destroyed Certificates.  In the event any certificates evidencing theShares shall have been lost, stolen or destroyed, ORA shall make an affidavitof that fact, and shall deliver to Monaco at Closing (i) such affidavit and(ii) an agreement (in form and substance satisfactory to Monaco) to indemnifyMonaco against any claim that may be made against Monaco with respect to thecertificates alleged to have been lost, stolen or destroyed.

 

1.7                                 Tax.  Buyer shallbear and pay any transfer taxes, documentation charges, recording fees orsimilar charges, fees or expenses that may become payable in connection withthe sale of the Shares, provided that Buyer shall not be responsible for ORA’sincome taxes resulting from the sale of the Shares, which taxes shall be borneby ORA.

 

1.8                                 Taking of Necessary Action; Further Action.  At any time, and from time to time on orafter the Closing, at the reasonable request of Monaco and without furtherconsideration, ORA and the Company will execute and deliver those otherinstruments of sale, transfer, conveyance, assignment and confirmation and takesuch action as Monaco may reasonably determine is necessary to transfer, conveyand assign to Buyer, and to confirm Buyer’s title to or interest in the Shares,to put Buyer in actual possession and operating control of the Company and toassist Buyer in exercising all rights with respect thereto and to otherwisecarry out the purposes of this Agreement including without limitation assigningto the Company any contracts, rights or warranties relating to the Propertythat are in the name of ORA or other affiliates of ORA.  If, at any time after the Closing, any suchfurther action is necessary or desirable to carry out the purposes of thisAgreement, Monaco, Buyer, ORA, the Company and the officers and directors ofthe Company and the Buyer are fully authorized in the name of their respectivecompanies or otherwise to take, and

 

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will take, all such lawful and necessary action, solong as such action is consistent with this Agreement.

 

1.9                                 Interpretation and Construction.

 

### (a)                                  All references in this Agreement to “Articles,”“Sections,” “Schedules” and “Exhibits” refer to thearticles, sections, schedules and exhibits of this Agreement, unless otherwiseindicated.

###  

### (b)                                 Asused in this Agreement, neutral pronouns and any variations thereof shall bedeemed to include the feminine and masculine and all terms used in the singularshall be deemed to include the plural, and vice versa, as the context mayrequire.

###  

### (c)                                  Thewords “hereof,” “herein” and “hereunder” and other wordsof similar import refer to this Agreement as a whole, as the same may from timeto time be amended or supplemented, and not to any subdivision contained inthis Agreement.

###  

### (d)                                 Theword “including” when used herein is not intended to be exclusive andmeans “including, without limitation.”

###  

### (e)                                  Theparties agree that they have been represented by counsel during the negotiationand execution of this Agreement and, therefore, waive the application of anylaw, regulation, holding or rule of construction providing that ambiguities inan agreement or other document will be construed against the party draftingsuch agreement or document.

###  

**ARTICLE II**

 

**REPRESENTATIONSAND WARRANTIES OF ORA**

 

ORA represents andwarrants to Monaco and Buyer, subject to such exceptions as are specificallydisclosed in the Sellers’ Disclosure Letter, as follows:

 

2.1                                 Organization of the Company.  The Company is a corporation duly organized,validly existing and in good standing under the laws of the State ofCalifornia.  The Company has thecorporate power to own its properties and to carry on its business as now beingconducted.  The Company is duly qualifiedto do business and in good standing as a foreign corporation in eachjurisdiction in which the failure to be so qualified would have a materialadverse effect on the business, assets (including intangible assets), financialcondition or results of operations of the Company (hereinafter referred to as a**“MaterialAdverse Effect”**).  TheCompany has delivered a true and correct copy of its Articles of Incorporationand Bylaws, each as amended and in full force and effect to date, toMonaco.  Schedule 2.1 lists thedirectors and officers of the Company.

 

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2.2                                 Company Capital Structure.

 

### (a)                                  Theauthorized capital stock of the Company consists of 1,000 shares of Class ACommon Stock, $1.00 par value per share, of which 100 shares are issued andoutstanding, and 1,000 shares of Class B Preferred Stock, no par value pershare, of which no shares are issued and outstanding.  All outstanding shares of the capital stock of the Company areduly authorized, validly issued, fully paid and non-assessable and not subjectto preemptive rights created by statute, the Articles of Incorporation orBylaws of the Company or any agreement to which the Company is a party or bywhich it is bound and have been issued in compliance with federal and statesecurities laws.  There are no declaredor accrued but unpaid dividends with respect to any shares of the Company’scapital stock.  Schedule 2.2(a)sets forth any restrictions as to the vesting of any of the Company’s capital stock,including the number of shares subject to restriction, the holder thereof andthe material terms of any such agreement.

###  

### (b)                                 ORAis and will be until immediately prior to the Closing the record and beneficialowner and holder of the Shares, free and clear of any charge, claim, communityproperty interest, condition, equitable interest, lien, option, pledge,security interest, right of first refusal, or restriction of any kind,including any restriction on use, voting, transfer, receipt of income, or exerciseof any other attribute of ownership. The Shares constitute and will constitute on the Closing Date, all theoutstanding capital stock of the Company. As a result of the Acquisition, Buyerwill be the sole record and beneficial owner of all outstanding capital stockof the Company.

###  

### (c)                                  Thereare no options, warrants, calls, rights, commitments or agreements of anycharacter, written or oral, to which the Company is a party or by which it isbound obligating the Company to issue, deliver, sell, repurchase or redeem, orcause to be issued, delivered, sold, repurchased or redeemed, any shares of thecapital stock of the Company or obligating the Company to grant or enter intoany such option, warrant, call, right, commitment or agreement.  Except as contemplated by this Agreement,there is no rights agreement, voting trust, proxy or other agreement orunderstanding to which the Company is a party or by which it is bound withrespect to any security of any class of the Company.

###  

2.3                                 Subsidiaries. The Company does not have and has never had any subsidiaries oraffiliated companies and does not otherwise own and has never otherwise ownedany shares of capital stock or any interest in, or control, directly orindirectly, any other corporation, partnership, association, joint venture orother business entity.

 

2.4                                 Authority. The Company and ORA have all requisite power and authority to enter intothis Agreement and to consummate the transactions contemplated hereby.  The execution and delivery of this Agreementand the consummation of the transactions contemplated hereby have been dulyauthorized by all necessary corporate action on the part of the Company andORA.  This Agreement has been dulyexecuted and delivered by the Company and ORA and constitutes the valid andbinding obligation of the Company and ORA, enforceable in accordance with itsterms except as such enforceability may be limited by principles of publicpolicy and subject to the laws of general application relating to bankruptcy,insolvency and the relief of debtors and rules of law governing specificperformance, injunctive relief or other equitable remedies.  Neither the execution and delivery of thisAgreement nor the consummation of the transactions contemplated hereby willconflict with, or result in any violation of, or default under (with or withoutnotice or lapse of time, or both), or give rise to a right of termination,cancellation or acceleration of any obligation or loss

 

12

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of any benefit under (any such event, a **“Conflict”**)(i) any provision of the Articles of Incorporation or Bylaws of the Company, or(ii) any mortgage, indenture, lease, contract or other agreement or instrument,permit, Approval, concession, franchise, license, warranty, insurance policy,judgment, order, decree, statute, law, ordinance, rule or regulation applicableto the Company and/or ORA or their respective properties or assets.  No consent, waiver, approval, order or authorizationof, or registration, declaration or filing with, any court, administrativeagency or commission or other federal, state, county, local or foreigngovernmental authority, instrumentality, agency or Commission (**“GovernmentalEntity”**) or any third party (so as not to trigger any Conflict), isrequired by or with respect to the Company and/or ORA in connection with theexecution and delivery of this Agreement or the consummation of thetransactions contemplated hereby.

 

2.5                                 Company Financial Statements.  Schedule 2.5 sets forth theCompany’s audited balance sheet as of March 31, 2002 and the related auditedstatements of income and cash flow for the twelve-month period then ended(collectively the **“Annual Financials”**), and the Company’sunaudited balance sheet as of September 30, 2002 and the related unauditedstatements of income and cash flow for the six-month period then ended(collectively the **“Interim Financials”**) (the AnnualFinancials and the Interim Financials collectively the **“Company Financials”**).  The Company Financials are (a) true andcorrect in all material respects, (b) present fairly the financial conditionand operating results of the Company as of the dates and during the periodsindicated therein, (c) are derived from and consistent with the Company’s booksand records, and (d) are prepared in accordance with generally acceptedaccounting principles (“**GAAP**”)applied on a basis consistent throughout the periods indicated and consistentwith each other (except that the Interim Financials need not contain thefootnotes required by GAAP and are subject to normal year-end adjustments,which will not be material in amount or significance in the aggregate).  Schedule 2.5 also sets forth a true,complete and accurate list of the Company’s accounts payable as of November 26,2002.  The Company’s balance sheet as ofSeptember 30, 2002 may be referred to hereinafter as the **“Interim Balance Sheet**.**”**

 

2.6                                 ORA Financial Statements.  Schedule 2.6 sets forth ORA’s audited balance sheetas of March 31, 2002 and the related audited statements of income and cash flowfor the twelve-month period then ended (collectively the **“ORA Annual Financials”**), andORA’s unaudited balance sheet as of September 30, 2002 and the relatedunaudited statements of income and cash flow for the six-month period then ended(collectively the **“ORA Interim Financials”**) (the ORA AnnualFinancials and the ORA Interim Financials collectively the **“ORA Financials”**).  The ORA Financials are (a) true and correctin all material respects, (b) present fairly the financial condition andoperating results of ORA as of the dates and during the periods indicatedtherein, (c) are derived from and consistent with ORA’s books and records, and(d) are prepared in accordance with GAAP on a basis consistent throughout theperiods indicated and consistent with each other (except that the ORA InterimFinancials need not contain the footnotes required by GAAP and are subject tonormal year end audit adjustments which are not material in amount).

 

2.7                                 No Undisclosed Liabilities.  The Company does not have any liability,indebtedness, obligation, expense, claim, deficiency, guaranty or endorsementof any type, whether accrued, absolute, contingent, matured, unmatured or other(whether or not required to be reflected in financial statements in accordancewith GAAP), which, individually or in the aggregate, (i) has not

 

13

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been reflected in the Company Financials, or (ii) hasarisen since the date of the Interim Financials outside the ordinary course ofthe Company’s business.

 

2.8                                 No Changes. Except as contemplated by this Agreement, since the date of the InterimBalance Sheet, there has not been, occurred or arisen any:

 

### (a)                                  transactionby the Company except in the ordinary course of business as conducted on thedate of the Interim Balance Sheet and consistent with past practices;

###  

### (b)                                 amendmentsor changes to the Articles of Incorporation or Bylaws of the Company;

###  

### (c)                                  expenditureor commitment by the Company in excess of $10,000 individually or $50,000 inthe aggregate;

###  

### (d)                                 destructionof, damage to or loss of any material assets, business or customer of theCompany (whether or not covered by insurance), including the Property;

###  

### (e)                                  changein accounting methods or practices (including any change in depreciation oramortization policies or rates) by the Company;

###  

### (f)                                    revaluationby the Company of any of its assets, including the Property;

###  

### (g)                                 declaration,setting aside or payment of a dividend or other distribution with respect tothe capital stock of the Company;

###  

### (h)                                 materialchange in any compensation arrangement or agreement with any employee, officer,director or stockholder;

###  

### (i)                                     acquisition,sale, lease, license or other disposition of any of the assets of the Company,or any creation of any security interest in such assets or properties,including the Property;

###  

### (j)                                     amendmentor termination of any material contract, agreement, permit, approval or licenseto which the Company is a party or by which it is bound, including any purchaseand sale agreements for lots in the Project;

###  

### (k)                                  loanby the Company to any Person, incurring by the Company of any indebtedness,guaranteeing by the Company of any indebtedness, issuance or sale of any debtsecurities of the Company or guaranteeing by the Company of any debt securitiesof others;

###  

### (l)                                     waiveror release of any right or claim of the Company, including any write-off orother compromise of any account receivable of the Company;

###  

### (m)                               commencementor notice or threat of commencement of any lawsuit or judicial oradministrative proceeding against or investigation of the Company or itsaffairs, including the Project;

 

14

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### (n)                                 anyevent or condition of any character that has or could be reasonably expected tohave a material adverse impact on the Company;

###  

### (o)                                 anyagreement, contract, lease or commitment or any extension or modification ofthe terms of any agreement, contract, lease or commitment which (i) involvesthe payment of greater than $25,000 per annum, (ii) extends for more than one(1) year, (iii) involves any payment or obligation to any affiliate of theCompany other than in the ordinary course of business as conducted on that dateand consistent with past practices, or (iv) involves the sale of, lease of ortransfer of any interest in any material assets;

###  

### (p)                                 hiringof, or offer of employment to, any employees (or if an offer was acceptedpeople that would become employees); or

###  

### (q)                                 negotiationor agreement by the Company or any officer or employees thereof to do any ofthe things described in the preceding clauses (a) through (p) (other thannegotiations with Monaco or Buyer and their representatives regarding thetransactions contemplated by this Agreement).

###  

2.9                                 Tax and Other Returns and Reports.

 

### (a)                                  Definitionof Taxes.  For the purposes of thisAgreement, **“Tax”** or, collectively, **“Taxes”**, means (i) any and all federal,state, local and foreign taxes, assessments and other governmental charges,duties, impositions and liabilities, including taxes based upon or measured bygross receipts, income, profits, sales, use and occupation, and value added, advalorem, transfer, franchise, withholding, payroll, recapture, employment,excise and property taxes, together with all interest, penalties and additionsimposed with respect to such amounts and any obligations under any agreementsor arrangements with any other Person with respect to such amounts, (ii) anyliability for the payment of any amounts of the type described in clause (i) ofthis Section 2.9(a) as a result of being a member of an affiliated,consolidated, combined or unitary group for any period, and (iii) any liabilityfor the payment of any amounts of the type described in clauses (i) or (ii) ofthis Section 2.9(a) as a result of any express or impliedobligation to indemnify any other Person or as a result of and including anyliability for taxes of a predecessor entity.

###  

(b)                                 TaxReturns and Audits.

 

#### (i)                                  TheCompany has prepared and timely filed all required federal, state, local andforeign returns, estimates, information statements and reports (**“Returns”**)relating to any and all Taxes concerning or attributable to the Company or itsoperations and such Returns are true and correct and have been completed inaccordance with applicable law.

####  

#### (ii)                               TheCompany:  (A) has timely paid all Taxesit is required to pay and (B) has withheld with respect to its employees (andtimely paid over to the appropriate taxing authority) all federal and stateincome taxes, Federal Insurance Contribution Act, Federal Unemployment Tax Actand other Taxes required to be withheld.

####  

#### (iii)                            TheCompany has not been delinquent in the payment of any Tax nor is there any Taxdeficiency outstanding, proposed or assessed against the Company, nor has the

 

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Company executed any waiver of any statute oflimitations on or extending the period for the assessment or collection of anyTax.

####  

#### (iv)                           Noaudit or other examination of any Return of the Company is presently inprogress, nor has the Company been notified of any request for such an audit orother examination.

####  

#### (v)                              TheCompany does not have any liabilities for unpaid federal, state, local andforeign Taxes which have not been accrued or reserved against on the CompanyFinancials, whether asserted or unasserted, contingent or otherwise, and theCompany and/or ORA have no knowledge of any basis for the assertion of any suchliability attributable to the Company or its assets or operations.  Since the date of the Interim Balance Sheet,the Company has not incurred any liability for Taxes other than in the ordinarycourse of business.

####  

#### (vi)                           TheCompany has provided to Monaco or its legal counsel copies of all federal andstate income and all state sales and use Tax Returns filed by the Company forall periods since inception.

####  

#### (vii)        There are (and as of immediatelyfollowing the Closing there will be) no liens, pledges, charges, claims,security interests or other encumbrances of any sort (**“Liens”**) on the assets of theCompany relating to or attributable to Taxes other than Permitted Exceptionsand the lien of ad valorem real estate taxes which are not delinquent as of theClosing Date.

####  

#### (viii)                     Neither theCompany nor ORA has any knowledge of any basis for the assertion of any claimrelating or attributable to Taxes which, if adversely determined, would resultin any Lien on the assets of the Company other than Permitted Exceptions andthe lien of ad valorem real estate taxes which are not delinquent as of theClosing Date.

####  

#### (ix)                             Noneof the Company’s assets are treated as “tax-exempt use property” within themeaning of Section 168(h) of the Code.

####  

#### (x)                                Noadjustment relating to any Tax Return filed by the Company has been proposedformally or, to the knowledge of the Company or ORA, informally by any taxingauthority to the Company or any representative thereof.

####  

#### (xi)                             TheCompany has not filed any consent agreement under Section 341(f) of the Code oragreed to have Section 341(f)(2) of the Code apply to any disposition of asubsection (f) asset (as defined in Section 341(f)(4) of the Code) owned by theCompany.

####  

#### (xii)         The Company has (a) never been a member of an affiliated group (within the meaning ofCode §1504(a)) filing a consolidated federal income Tax Return (other than agroup the common parent of which was ORA), (b) never been a party to aTax sharing, indemnification or allocation agreement nor does the Company oweany amount under any such agreement, (c) noliability for the Taxes of any Person (other than the Company) under Treas.Reg. § 1.1502-6 (or any similar provision of state, local or foreign law), as atransferee or successor, by contract, or otherwise and (d) never been a partyto any joint venture, partnership or other agreement that could be treated as apartnership for Tax purposes.

 

16

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#### (xiii)                       The Companyis not, nor has at any time been, a “United States real property holdingcorporation” within the meaning of Section 897(c)(2) of the Code.

####  

#### (xiv)                      TheCompany’s tax basis in its assets is accurately reflected on the Company’s taxbooks and records and will not be affected by any transactions contemplated bythis Agreement.

####  

#### (xv)                         The Company has not constituted either a“distributing corporation” or a “controlled corporation” in a distribution ofstock qualifying for tax-free treatment under Section 355 of the Code (x) inthe two (2) years prior to the date of this Agreement or (y) in a distributionwhich could otherwise constitute part of a “plan” or “series of related transactions”(within the meaning of Section 355(e) of the Code) in conjunction with the******Acquisition.

####  

### (c)                                  ExecutiveCompensation Tax.  There is nocontract, agreement, plan or arrangement to which the Company is a party,including the provisions of this Agreement, covering any employee or formeremployee of the Company, which individually or collectively, could give rise tothe payment of any amount that would not be deductible pursuant to Sections280G, 404 or 162(m) of the Code.

###  

2.10                           Restrictions on Business Activities.  There is no agreement (noncompete orotherwise), commitment, judgment, injunction, order or decree to which theCompany is a party or otherwise binding upon the Company which has orreasonably could be expected to have the effect of prohibiting or impairing anybusiness practice of the Company, any acquisition of property (tangible orintangible) by the Company or the conduct of business by the Company, includingthe completion or operation of the Project.

 

2.11                           Title of Properties; Absence of Liensand Encumbrances; Condition of Equipment.

 

### (a)                                  Exceptfor the Property, the Company does not own, lease, license, sublease orotherwise occupy any real property, nor has it ever owned, leased, licensed,subleased or otherwise occupied any real property.

###  

### (b)                                 TheCompany has good and valid title to, or, in the case of leased properties andassets, valid leasehold interests in, all of their tangible properties andassets, real, personal and mixed, used or held for use in its business, freeand clear of any Liens (as defined in Section 2.9(b)(vii)), except(i) as reflected in the Company Financials, (ii) the lien of ad valorem realestate taxes which are not delinquent as of the Closing Date, (iii) liens forother taxes not yet due and payable and (iv) such imperfections of title andencumbrances, if any, which are not material in character, amount or extent,and which do not materially detract from the value, or materially interferewith the present use, of the property subject thereto or affected thereby.

###  

### (c)                                  Schedule 2.11(c)identifies all material items of equipment, machinery, furniture, fixtures andtangible personal property owned or leased by the Company for use in thebusiness of the Company (collectively, the “**Equipment**”)and identifies if any such items are subject to any lien or encumbrance.  The Equipment set forth on Schedule 2.11(c)is all the

 

17

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equipment, machinery, furniture, fixtures and tangiblepersonal property used by the Company in the operation of its business.

###  

### (d)                                 TheCompany has sole and exclusive ownership, free and clear of any Liens, of allcustomer lists, customer contact information, customer correspondence andcustomer licensing and purchasing histories relating to its current and formercustomers (the **“Customer Information”**). No Person other than the Company possesses any claims or rights withrespect to use of the Customer Information.

###  

2.12                           Intellectual Property.

 

### (a)                                  Status.  Set forth in Schedule 2.12 is alist and brief description of all trademarks, trademark applications, servicemarks, service mark applications and trade names, and all applications for suchwhich are in the process of being prepared, owned by or registered in the nameof the Company, or of which the Company is a licensor or licensee or in whichthe Company has any right, and in each case a brief description of the natureof such right (the “**Intellectual Property**”).

###  

### (b)                                 Ownership.  Neither the Company nor ORA has anyknowledge of any conflict with or infringement of the rights of others withrespect to the Intellectual Property. There are no outstanding options, licenses, or agreements of any kindrelating to the Intellectual Property, nor is the Company bound by or a partyto any options, licenses or agreements of any kind with respect to thetrademarks, service marks and trade names of any other Person.

###  

### (c)                                  Infringement.  The Company has not received anycommunications alleging that the Company has violated or, by conducting itsbusiness as proposed, would violate any of the trademarks, service marks andtrade names of any other Person. Neither the Company nor ORA is aware of any action, suit, proceeding orinvestigation pending or currently threatened against the Company which relateto the Company’s ownership of the Intellectual Property that may, to theCompany’ or ORA’s knowledge, materially and adversely affect the Company’sbusiness as now conducted, nor are the Company or ORA aware that there is anybasis for the foregoing.

###  

2.13                           Agreements, Contracts and Commitments.

 

### (a)                                  Setforth in Schedule 2.13(a) is a list of all agreements, contracts,leases, licenses or commitments (a) under which the Company has or may acquireany rights, (b) under which the Company has or may become subject to any obligationor liability, or (c) by which the Company or any of the assets owned or used byit is or may become bound (collectively, the “**CompanyContracts**”), including any of the following:

###  

#### (i)                                  anyagreements or arrangements that contain any severance pay or post-employmentliabilities or obligations,

####  

#### (ii)                               anybonus, deferred compensation, pension, profit sharing or retirement plans, orany other employee benefit plans or arrangements,

 

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#### (iii)                            anyemployment or consulting agreement, contract or commitment with an employee orindividual consultant or salesperson or consulting or sales agreement, contractor commitment with a firm or other organization,

####  

#### (iv)                           anyfidelity or surety bond or completion bond,

####  

#### (v)                              anylease of personal property,

####  

#### (vi)                           anyagreement of indemnification or guaranty,

####  

#### (vii)                        anyagreement, contract or commitment containing any covenant limiting the freedomof the Company to engage in any line of business or to compete with any Person,

####  

#### (viii)                     anyagreement, contract or commitment relating to capital expenditures,

####  

#### (ix)                             anyagreement, contract or commitment relating to the disposition or acquisition ofassets or any interest in any business enterprise outside the ordinary courseof the Company’s business,

####  

#### (x)                                anymortgages, indentures, loans or credit agreements, security agreements or otheragreements or instruments relating to the borrowing of money or extension ofcredit, including guaranties referred to in clause (vi) hereof,

####  

#### (xi)                             anypurchase order or contract for the purchase of raw materials,

####  

#### (xii)                          anyconstruction contracts,

####  

#### (xiii)                       anydistribution, joint marketing or development agreement, or

####  

#### (xiv)                      any otheragreement, contract or commitment that is not cancelable without penalty withinthirty (30) days.

####  

### (b)                                 TheCompany has not breached, violated or defaulted under, or received notice thatit has breached, violated or defaulted under, any of the terms or conditions ofany Company Contract.  Each CompanyContract is in full force and effect and is not subject to any defaultthereunder of which the Company or ORA have knowledge by any party obligated tothe Company pursuant thereto.

###  

### (c)                                  Noconsents, waivers and approvals of parties to any Company Contract arenecessary in order to avoid any breach, violation, default, acceleration ortermination right or other loss of rights or event that would constitute abreach, violation, default, acceleration or termination right or other loss ofrights with the lapse of time, giving of notice, or both, in connection withthe execution and delivery of this Agreement and the consummation oftransactions contemplated hereby.

 

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### (d)                                 TheCompany has delivered to Monaco true, correct and complete copies of theCompany Contracts, including all exhibits, amendments and supplements and allmaterial correspondence related thereto. No party to any Company Contract has informed the Company of itsintention to terminate or not renew such Company Contract.  No issue has been raised by any party out ofthe ordinary course of business, if unresolved, would result in the terminationor nonrenewal of such Company Contract. Following the Closing, the Company will be permitted to exercise all ofthe rights that the Company had under the Company Contracts prior to theClosing without payment of any additional amounts or consideration other thanongoing fees or payments which the Company would otherwise be required to paypursuant to the terms of such Company Contract had the transactionscontemplated by this Agreement not occurred.

###  

2.14                           Interested Party Transactions.

 

### (a)                                  Otherthan by virtue of its interest in ORA, no officer, director or shareholder ofthe Company or, to the knowledge of the Company or ORA, nor any ancestor,sibling, descendant or spouse of any of such Persons, or any trust, partnershipor corporation in which any of such Persons has an interest, has, directly orindirectly, (i) an interest in any entity which furnished or sold, or furnishesor sells, services or products that the Company furnishes or sells or proposesto furnish or sell, or (ii) an interest in any entity that purchases from orsells or furnishes to the Company any goods or services, or (iii) a beneficialinterest in any Company Contract; provided, that ownership of no more than onepercent (1%) of the outstanding voting stock of a publicly traded corporationshall not be deemed an “interest in any entity” for purposes of this Section 2.14.

###  

### (b)                                 Schedule 2.14(b)accurately lists and describes each Intercompany Receivable and eachIntercompany Payable.

###  

2.15                           Governmental Authorization.

 

### (a)                                  Schedule 2.15accurately lists each Governmental Authorization. The GovernmentalAuthorizations are in full force and effect and constitute all GovernmentalAuthorizations required to permit the Company to operate or conduct itsbusiness substantially as it is currently, has been and is proposed to beconducted to complete and operate Phase I or hold any interest in itsproperties or assets.

###  

### (b)                                 Noevent has occurred or circumstance exists that may (with or without notice orlapse of time) (i) constitute or result directly or indirectly in a materialviolation of or a failure to comply with any term or requirement of anyGovernmental Authorization listed or required to be listed on Schedule 2.15or (ii) result directly or indirectly in the revocation, withdrawal,suspension, cancellation or termination of, or any modification to, anyGovernmental Authorization listed or required to be listed on Schedule 2.15.

###  

### (c)                                  Noneof the Company, ORA or the Principals have received any notice or othercommunication (whether written or oral) from any Governmental Entity or anyother Person regarding (i) any actual, alleged, possible or potential violationof or failure to comply with any term or requirement of any GovernmentalAuthorization or (ii) any actual, proposed, possible or potential

 

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revocation, withdrawal, suspension, cancellation,termination of or modification to any Governmental Authorization.

###  

2.16                           Litigation. Except as set forth on Schedule 2.16, there is no action,suit, claim or proceeding of any nature pending or threatened against theCompany or its properties, any of its officers or directors in their respectivecapacities as such or the Project (other than litigation which has been filedbut of which the Company and ORA have no knowledge of and with respect to whichhave not been served), nor, to the knowledge of the Company or ORA, is thereany basis therefor.  There is noinvestigation pending or threatened against the Company or its properties orany of its officers or directors by or before any Governmental Entity, nor, tothe knowledge of the Company or ORA, is there any basis therefor.  Schedule 2.16 sets forth, withrespect to any pending or threatened action, suit, proceeding or investigation,the forum, the parties thereto, the subject matter thereof and the amount ofdamages claimed or other remedy requested. No Governmental Entity has at any time challenged or questioned thelegal right of the Company to complete or operate the Project which remainsunresolved or which continues to be asserted. There is no action, suit, claim or proceeding of any nature pending, orovertly threatened, against the Company, or its properties or any of itsofficers or directors, arising out of, or in any way connected with, theexecution and delivery of this Agreement or the other transactions contemplatedby the terms of this Agreement.

 

2.17                           Accounts Receivable.

 

### (a)                                  TheCompany has made available to Monaco a list of all accounts receivable of theCompany reflected on the Company Financials (**“Accounts Receivable”**) alongwith a range of days elapsed since invoice.

###  

### (b)                                 AllAccounts Receivable of the Company arose in the ordinary course of business,are carried at values determined in accordance with GAAP consistently appliedand, to the best knowledge of the Company and ORA, should be collectible exceptto the extent of reserves therefor set forth in the Company Financials.  No Person has any Lien on any of suchAccounts Receivable and no request or agreement for material deduction ordiscount has been made with respect to any of such Accounts Receivable.

###  

2.18                           Minute Books. The minute books of the Company made available to counsel for Buyercontain complete and accurate copies of the only minute books of the Companyand such copies contain an accurate summary of all meetings of directors (orcommittees thereof) and shareholders and actions by written consent ofdirectors or shareholders since the time of incorporation of the Company.

 

2.19                           Environmental Matters.  No Hazardous Materials are present, as aresult of actions or omissions of the Company or ORA, or to the Company’s orORA’s knowledge, as a result of any actions or omissions of any third party orotherwise, in, on, or under any property, including the land and theimprovements, ground water and surface water thereof, that the Company has atany time owned, operated, occupied or leased. The Company has obtained, and isand has been in compliance in all material respects with all applicablepermits, licenses, registrations, approvals and other authorizations that arerequired for the operation of the Company’s business (including the completionand operation of the Project) under all applicable Environmental Laws.  The Company is

 

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and has been in compliance with all applicableEnvironmental Laws and to the knowledge of the Company and ORA, the Company’sagents, predecessors in interest, contractors, invitees or licensees are andhave been in compliance with all applicable Environmental Laws in connectionwith the operation of the Company’s business and the Project.  The Company has not disposed of, released,discharged, or emitted any Hazardous Materials into the air, soil, groundwateror otherwise at any properties owned, leased or occupied at any time by theCompany, or at any other property, or exposed any employee or other individualto any Hazardous Materials or any workplace or environmental condition in sucha manner as would reasonably be expected to subject the Company toliability.  Neither the Company nor ORAis aware of any fact or circumstance, which could result in any environmental liabilitywhich could reasonably be expected to result in a Material Adverse Effect onthe business or financial status of the Company. The Company has delivered toMonaco or made available for inspection by Monaco and its agents,representatives and employees all records in the Company’s possession orreasonably available to the Company concerning the Company’s compliance withEnvironmental Laws, and all environmental site assessments, sampling, analyses,tests, audits and engineering data relating to any real property currently orformerly owned or leased by the Company. The Company has complied with allenvironmental disclosure obligations imposed by applicable law with respect tothis transaction.

 

2.20                           Brokers’ and Finders’ Fees; Third PartyExpenses.  The Company has notincurred, nor will it incur, directly or indirectly, any liability forbrokerage or finders’ fees or agents’ commissions or any similar charges inconnection with this Agreement or any transaction contemplated hereby for whichMonaco or Buyer could become liable or obligated.

 

2.21                           Employee Matters and Benefit Plans.

 

### (a)                                  Schedule.  Schedule 2.21(a) contains anaccurate and complete list of each Plan and each Employment Agreement.  The Company does not have any plan orcommitment to establish any new Plan or Employment Agreement, to modify anyPlan or Employment Agreement (except to the extent required by law or toconform any such Plan or Employment Agreement to the requirements of anyapplicable law, in each case as previously disclosed to Monaco and Buyer inwriting, or as required by this Agreement), or to adopt or enter into any Planor Employment Agreement.

###  

### (b)                                 Documents.  The Company has provided to Monaco and Buyercorrect and complete copies of: (i) all documents embodying each Plan and eachEmployment Agreement including (without limitation) all amendments thereto andall related trust documents, administrative service agreements, group annuitycontracts, group insurance contracts, and policies pertaining to fiduciaryliability insurance covering the fiduciaries for each Plan; (ii) the mostrecent annual actuarial valuations, if any, prepared for each Plan;(iii) the three (3) most recent annual reports (Form Series 5500 andall schedules and financial statements attached thereto), if any, requiredunder ERISA or the Code in connection with each Plan; (iv) if the Plan isfunded, the most recent annual and periodic accounting of Plan assets;(v) the most recent summary plan description together with thesummary(ies) of material modifications thereto, if any, required under ERISAwith respect to each Plan; (vi) all IRS determination, opinion, notificationand advisory letters, and all applications and correspondence to or from theIRS or the DOL with respect to any such application or letter; (vii) allcommunications material to any Employee or Employees relating to any Plan and

 

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any proposed Plans, in each case, relating to anyamendments, terminations, establishments, increases or decreases in benefits,acceleration of payments or vesting schedules or other events which wouldresult in any material liability to the Company; (viii) all correspondence toor from any governmental agency relating to any Plan; (ix) all COBRA forms andrelated notices (or such forms and notices as required under comparable law);(x) the three (3) most recent plan years discrimination tests for each Plan;and (xi) all registration statements, annual reports (Form 11-K and allattachments thereto) and prospectuses prepared in connection with each Plan.

###  

### (c)                                  PlanCompliance.

###  

#### (i)                                     TheCompany has performed in all material respects all obligations required to beperformed by it under, is not in default or violation of, and has no knowledgeof any default or violation by any other party to each Plan, and each Plan hasbeen established and maintained in all material respects in accordance with itsterms and in compliance with all applicable laws, statutes, orders, rules andregulations, including but not limited to ERISA or the Code

####  

#### (ii)                                  EachPlan intended to qualify under Section 401(a) of the Code and each trustintended to qualify under Section 501(a) of the Code has either received afavorable determination, opinion, notification or advisory letter from the IRS withrespect to each such Plan as to its qualified status under the Code, includingall amendments to the Code effected by the Tax Reform Act of 1986 andsubsequent legislation, or has remaining a period of time under applicableTreasury regulations or IRS pronouncements in which to apply for such a letterand make any amendments necessary to obtain a favorable determination as to thequalified status of each such Plan.

####  

#### (iii)                               No “prohibitedtransaction,” within the meaning of Section 4975 of the Code or Sections 406and 407 of ERISA, and not otherwise exempt under Section 4975 of the Code orSection 408 of ERISA (or any administrative class exemption issued thereunder),has occurred with respect to any Plan.

####  

#### (iv)                              Thereare no actions, suits or claims pending, or, to the knowledge of the Company,threatened or reasonably anticipated (other than routine claims for benefits)against any Plan or against the assets of any Plan.

####  

#### (v)                                 EachPlan (other than any stock option plan) can be amended, terminated or otherwisediscontinued after the Closing Date, without material liability to Monaco andBuyer, Company or any of its ERISA Affiliates (other than ordinaryadministration expenses).

####  

#### (vi)                              Thereare no audits, inquiries or proceedings pending or, to the knowledge of theCompany or any ERISA Affiliates, threatened by the IRS or DOL with respect toany Plan.

####  

#### (vii)                           Neither the Company nor anyERISA Affiliate is subject to any penalty or tax with respect to any Plan underSection 502(i) of ERISA or Sections 4975 through 4980 of the Code.

 

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### (d)                                 PensionPlan.  Neither the Company nor anyERISA Affiliate has ever maintained, established, sponsored, participated in,or contributed to, any Pension Plan which is subject to Title IV of ERISAor Section 412 of the Code.

###  

### (e)                                  CollectivelyBargained, Multiemployer and Multiple Employer Plans.  At no time has the Company or any ERISAAffiliate contributed to or been obligated to contribute to any MultiemployerPlan.  Neither the Company, nor anyERISA Affiliate has at any time ever maintained, established, sponsored,participated in, or contributed to any multiple employer plan, or to any plandescribed in Section 413 of the Code.

###  

### (f)                                    NoPost-Employment Obligations.  NoPlan provides, or reflects or represents any liability to provide retireehealth to any person for any reason, except as may be required by COBRA orother applicable statute, and the Company has never represented, promised orcontracted (whether in oral or written form) to any Employee (eitherindividually or to Employees as a group) or any other person that suchEmployee(s) or other person would be provided with retiree health, except tothe extent required by statute.

###  

### (g)                                 HealthCare Compliance.  Neither the Companynor any ERISA Affiliate has, prior to the Closing Date and in any materialrespect, violated any of the health care continuation requirements of COBRA,the requirements of FMLA, the requirements of the Health Insurance Portabilityand Accountability Act of 1996, the requirements of the Women’s Health andCancer Rights Act of 1998, the requirements of the Newborns’ and Mothers’Health Protection Act of 1996, or any amendment to each such act, or anysimilar provisions of state law applicable to its Employees.

###  

### (h)                                 Effectof Transaction.

###  

#### (i)                                     Theexecution of this Agreement and the consummation of the transactionscontemplated hereby will not (either alone or upon the occurrence of anyadditional or subsequent events) constitute an event under any Plan, EmploymentAgreement, trust or loan that will or may result in any payment (whether ofseverance pay or otherwise), acceleration, forgiveness of indebtedness,vesting, distribution, increase in benefits or obligation to fund benefits withrespect to any Employee.

####  

#### (ii)                                  Nopayment or benefit which will or may be made by the Company or its ERISAAffiliates with respect to any Employee or any other “disqualified individual”(as defined in Code Section 280G and the regulations thereunder) will becharacterized as a “parachute payment,” within the meaning of Section280G(b)(2) of the Code.

####  

### (i)                                     EmploymentMatters.  The Company: (i) isin compliance in all respects with all applicable foreign, federal, state andlocal laws, rules and regulations respecting employment (including, withoutlimitation, all applicable foreign, federal, state and local laws, rules andregulations respecting termination of employment), employment practices, termsand conditions of employment and wages and hours, in each case, with respect toEmployees; (ii) has withheld and reported all amounts required by law orby agreement to be withheld and reported with respect to wages, salaries andother payments to Employees; (iii) is not liable for any arrears of wagesor any

 

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taxes or any penalty for failure to comply with any ofthe foregoing; and (iv) is not liable for any payment to any trust orother fund governed by or maintained by or on behalf of any governmentalauthority, with respect to unemployment compensation benefits, social securityor other benefits or obligations for Employees (other than routine payments tobe made in the normal course of business and consistent with pastpractice).  There are no pending,threatened or reasonably anticipated claims or actions against the Companyunder any worker’s compensation policy or long-term disability policy.

###  

### (j)                                     Labor.  No work stoppage or labor strike against theCompany is pending, threatened or reasonably anticipated.  The Company does not know of any activitiesor proceedings of any labor union to organize any Employees.  There are no actions, suits, claims, labordisputes or grievances pending, or, to the knowledge of the Company, threatenedor reasonably anticipated relating to any labor, safety or discriminationmatters involving any Employee, including, without limitation, charges ofunfair labor practices or discrimination complaints, which, if adverselydetermined, would, individually or in the aggregate, result in any material liabilityto the Company.  Neither the Company norany of its subsidiaries has engaged in any unfair labor practices within themeaning of the National Labor Relations Act. The Company is not presently, nor has it been in the past, a party to,or bound by, any collective bargaining agreement or union contract with respectto Employees and no collective bargaining agreement is being negotiated by theCompany.

###  

### (k)                                  InternationalEmployee Plan.  The Company does notnow, nor has it ever had the obligation to, maintain, establish, sponsor,participate in, or contribute to any International Employee Plan.

###  

2.22                           Insurance.  Schedule 2.22contains a true, correct and complete list of all insurance policies and bondscovering the assets, business, equipment, properties, operations, employees,officers and directors of the Company. There is no claim by the Company pendingunder any of such policies or bonds as to which coverage has been questioned,denied or disputed by the underwriters of such policies or bonds.  All premiums due, payable and not yetdelinquent under all such policies and bonds have been paid and the Company isotherwise in compliance with the terms of such policies and bonds (or otherpolicies and bonds providing substantially similar insurance coverage).  The Company and ORA have no knowledge of anythreatened termination of, or material premium increase with respect to, any ofsuch policies.

 

2.23                           Compliance with Laws.  The Company is in material compliance withall federal, state and local statutes, laws or regulations, domestic orforeign, and has not received any notices of violation with respect to any ofsuch statutes, laws or regulations.

 

2.24                           Consents.  Noconsent, waiver, approval, order or authorization of, or registration,declaration or filing with, any Governmental Entity or any third party (so asnot to trigger any Conflict), is required by or with respect to the Companyand/or ORA in connection with the execution and delivery of this Agreement orthe consummation of the transactions contemplated hereby or thereby.

 

2.25                           No Injunctions or Restraints onConduct of Business.  Notemporary restraining order, preliminary or permanent injunction or other orderissued by any court of competent

 

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jurisdiction or other legal or regulatory restraint orprovision challenging Buyer’s proposed acquisition of the Company, or limitingor restricting Buyer’s conduct or operation of the business of the Company orthe completion or operation of the Project (or its own business) following theClosing is in effect, nor, to ORA’s and the Company’s knowledge, has anyproceeding by an administrative agency or commission or other governmentalauthority or instrumentality, domestic or foreign, seeking any of the foregoingbeen overtly threatened or commenced.

 

2.26                           Representations relating to theProperty.

 

### (a)                                  NoCondemnation Pending or Threatened. There is no pending condemnation, environmental, zoning or other landuse regulatory proceeding affecting the Property or the completion andoperation of the Project or any portion thereof, and neither the Company norORA have any knowledge that any such action is currently contemplated orthreatened.

###  

### (b)                                 Partiesin Possession.  There are no partiesin pos­session of any portion of the Property, whether as lessees, tenants atsufferance, trespassers or otherwise.

###  

### (c)                                  FloodZone.  No portion of the Property islocated in a wetland area, as defined by laws, or in a designated or recognizedflood plain, flood plain district, flood hazard area or area of similarcharacterization.  The Project will notviolate any requirement of the United States Corps of Engineers or lawsrelating to wetland areas.

###  

### (d)                                 ExistingImprovements.  Except as set forthin Schedule 2.26(d), all of the Improvements required for the completionand operation of Phase I have been completed. To the best of the Company’s andORA’s knowledge, (a) the Improvements (includ­ing the buildings and buildingpads and all drives, parking lots, landscaping, curbs, side­walks, sewers andother utilities) and all other construction activities of the Property,including grading and filling, have been constructed, performed and installedsubstantially in accordance with plans and specifications approved by thevarious governmental authorities having jurisdic­tion, in compliance with alllaws and the recommendations of the Company’s consultants and (b) all materiallicenses, per­mits, authorizations and approvals required for the Improvementsby all governmental authorities having jurisdiction have been issued and havebeen paid for, and as of the Closing all of the same will be in full force andeffect.  All drives and parking areas onthe Property are private and have not been dedi­cated to any publicauthority.  Schedule 2.26(d)lists all Improvements required for the completion and operation of Phase Ithat are not yet complete, the status of completion of each such Improvement,the estimated time required to complete such Improvement, the estimated cost tocomplete such Improvement and any anticipated impediments to completing suchImprovement.

###  

### (e)                                  HazardousSubstances.

###  

#### (i)                                     Tothe knowledge of the Company and ORA (a) there are no surface impoundments,lagoons, waste piles, injection wells, or underground storage areas, or otherman-made facilities located on the Property that may have accommodatedHazardous Materials; (b) no portion of the Property has been used as a dump orlandfill or con­sists of filled-in land; (c) there are no buried, partiallyburied, above-ground or other tanks, storage vessels, drums or containerslocated on the Property; and (d) there has never been a spill, leak, discharge,emission, escape, leaching or

 

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disposal of the contents of any underground storagetank into groundwater, surface water or subsurface soils.

####  

#### (ii)                                  Tothe knowledge of the Company and ORA, the Property currently complies with allEnvironmental Laws, and the Company has received no warning, notice,administrative complaint, judicial complaint or other formal or informal noticealleging that any conditions on the Property are or may be in violation of anyEnvironmental Laws.  The Company has notreceived and, to the knowledge of the Company, and ORA, no previous owner ofthe Property has received any notice, summons, citation, letter or othercommunication, written or oral, from any Governmental Entity alleging orinquiring into any possible release, emission, discharge, disposal, use,storage, production, handling or presence of any Hazardous Materials on orabout the Property or the soil, surface water or groundwater thereof.

####  

#### (iii)                               To the knowledge of theCompany and ORA, there are no wells on the Property and the Project does notinclude installation of any wells for purposes of irrigation or consumptive useand all water necessary for consumption and irrigation for the Project as it isanticipated to be developed is currently provided by a municipal water supplywhich extends to the Property boundary.

####  

### (f)                                    GovernmentalApprovals; No Violations of Zoning Laws. Except as set forth on Schedule 2.26(f), the Company hasobtained all material licenses, permits, variances, approvals, authorizations,easements and rights of way, including proof of dedication, required from allGovernmental Entities having jurisdiction over the Property or from privateparties, for the completion and operation of Phase I, including, withoutlimitation, the sale of lots to third party users, and to insure vehicular andpedestrian ingress to and egress from the Property and adequate parking on theProperty (“**Approvals**”).  No action, proceeding, amendment procedure,writ, injunction or claim is pending, or to the Company’s or ORA’s knowledge,threatened concerning any such permit. No land use, zoning, build­ing or other law, ordinance, regulation orrestriction (including, without limitation, the Americans with DisabilitiesAct) is, or as of the Closing Date will be, violated by the Property or thecompletion and operation of Phase I, including the sale of lots on theProperty.  The Improvements and allparts thereof do not violate any restrictive covenants affecting it. Except asset forth on Schedule 2.26(f), there are no commitments togovernmental authorities or agencies or quasi-governmental entities whichrelate to land use or zoning affecting the Property and there are no conditionsof the Property’s zoning or use which have not been completely fulfilled.  To the Company’s and ORA’s knowledge, thereis no law, ordinance, order, regulation or requirement now in existence orunder active consideration by any government agency or legislative body whichwould require the owner of the Property to make any expenditure in excess of$1,000 to modify or improve the Property in order to bring it into compliancetherewith or to complete Phase I.  Thereis nothing that would constitute an uncured material violation of Federal,state, or municipal laws, ordinances, orders, regulations or requirementsaffecting any portion of the Property. Neither the sewage nor any waste water systems nor the heatingequipment, incinerators or other burning devices violate any applicableFederal, state or municipal laws, ordinances, orders, regulations orrequirements.  Schedule 2.26(f)lists all Approvals that have not yet been received or that require furtherperformance by the Company thereunder, the status of receipt of each Approvaland/or the performance by the Company thereunder, the steps required to receiveor complete performance with respect to each Approval, the estimated timerequired to receive and/or complete required

 

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performance with respect to each Approval, theestimated cost to receive and/or complete performance with respect to eachApproval and any anticipated impediments to receiving and/or completingperformance with respect to each Approval.

###  

### (g)                                 Soundness.  To the best of the Company’s and ORA’sknowledge, the mechanical, electrical, plumbing and sewer systems serving theImprovements are fully operational, there are no structural, electrical,mechanical, plumbing, roof, paving or other defects in the Property, the roofsof the Improvements are free of leaks and in sound structural condition, andthe Personalty is in good working order.

###  

### (h)                                 Access.  The Property has adequate direct access toand from completed, dedicated and accepted public roads for the completion andoperation of the Project and there is no pending or threatened governmentalproceeding which would impair or curtail such access.

###  

### (i)                                     Utilities.  Except as set forth in Schedule 2.26(i),there are presently in existence telephone, telecommunication, water, sewer,gas and electrical lines and cables and surface drainage systems on the Landand in the Improvements which have been completed, installed and paid for incompliance with all laws and which are sufficient to fully service Phase I whenPhase I is completed and operating. All utility lines serving the Property areseparately metered, are located in the rights of way of public roadways borderingthe Land and are set up to serve the Property independently of the neighboringproperties.  Schedule 2.26(i)lists all such utility, telecommunications and drainage systems that are notyet completed, installed and paid for in compliance with laws, the status ofcompletion of each such item, the estimated time required to complete suchitem, the estimated cost to complete such item and any anticipated impedimentsto completing such item.

###  

### (j)                                     Property.  Except for the recorded mortgages/deeds oftrust securing the Monaco Loan and the BankAtlantic Loan, liens for ad valoremreal estate taxes not delinquent at the Closing Date, the Permitted Exceptionsand as set forth in Schedule 2.26(j), the Company is and, following theconsummation of the transaction contemplated by this Agreement will be, theowner of good and marketable fee simple title to the Property free and clear ofany liens, mortgages, pledges, security interests, options, rights, leases,charges, encumbrances or restrictions of any kind (“**Mortgages**”).  TheProperty is all the property that is used or will be required in connectionwith the operation and completion of the Project.  Except as set forth in Schedule 2.11(c), there is nopersonal property owned by the Company which is used by the Company inconnection with the ownership of the Property other than the Personalty.  The Property is segregated on the applicabletax rolls, so that no other property is included on any tax bill relating toany portion of the Property.  There areno tax exemptions or abatements affecting any of the Property.  The Property complies in all respects withthe applicable subdivision or parcel map acts and has been properly subdividedso that the Property may be conveyed to Buyer as provided herein and the lots canbe conveyed to third party purchasers without future action.  The Property has sufficient parking for thecompletion and operation of the Project as required by applicable law and doesnot have any shared parking with any other property.  Schedule 2.26(j) lists (i) all Mortgages to which theProject is subject (other than the recorded mortgages/deeds of trust securingthe BankAtlantic Loan and the Monaco Loan), the parties in whose favor theMortgages run, the dates of such Mortgages, the amounts of such Mortgages andthe subject matter of such Mortgages, and (ii) all Approvals required so thatthe

###  

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### Property may be conveyed to third party purchasers,the status of receipt of each Approval, the steps required to obtain eachApproval, the estimated time required to obtain each such Approval, theestimated cost to obtain each such Approval and any anticipated impediments toobtaining each Approval.

###  

### (k)                                  Leases;Options; Broker Agreement.  Exceptas set forth in Schedule 2.26(k), there are no oral or writtenleases, licenses or other occupancy agreements, pending purchase and saleagreements or parking agreements with respect to the Property or options orrights of first refusal to lease or purchase the Property.  Schedule 2.26(k) sets forth alist of all such agreements, the names of the parties thereto, the datesthereof, the portions of the Property affected thereby (including the lotnumber, if applicable) and (a) as to leases, licenses and other occupancyagreements, the terms thereof and the aggregate rental and/or fees payablethereunder and (b) as to purchase agreements, the purchase price, the amount ofthe earnest money deposit, the estimated closing date and the conditions toclosing.  The Company has delivered toMonaco true, correct and complete copies of all such agreements, and suchagreements constitute the entire agreement with the Company thereunder.  The Company and the other parties thereto donot have any right to cancel or terminate any such agreements as a result ofany existing fact known to the Company. The Company is not in default under any such agreements, and to the bestknowledge of the Company, and ORA, the other party thereto is not in defaultunder any such agreements, and has performed all of the obligations required tobe performed by the Company thereunder. All such obligations to be performed on or prior to the Closing willhave been duly performed and paid for in full by the time of Closing.  No brokerage or leasing commissions or othercompensation is due or payable to any Person with respect to any suchagreements or any extension, expansion or renewal thereof.  No claims or litigation, actual orthreatened, exist with regard such agreements. Neither the Company nor ORA nor any of the Principals has entered intoany broker agreements, listing agreements or other similar agreements withrespect to the sale or leasing of any portion of the Property.

###  

### (l)                                     ServiceContracts.  There are presently inexistence no service contracts, billboard or other advertising agreements orother sorts of operating agreements with respect to the Property, other thanthose listed on Schedule 2.26(l), all of which can be canceled,without penalty or other payment, upon written notice of thirty (30) days orless.  There are no union contractsaffecting the Property.  Schedule 2.26(l)sets forth a list of all such agreements, the names of the parties thereto, thedates thereof, the work covered thereby, the terms thereof and the aggregatepayments thereunder.

###  

### (m)                               Insurance.  The Property is insured by “all-risk”property insurance at its full replacement value in favor of the Company.  The Company also carries commercial generalliability insurance with respect to the Property in the amount of $12,000,000.

###  

### (n)                                 NoAssessments.  To the Company’s andORA’s best knowledge, there are no pending or threatened assessments,improvements or activities of any public or quasi-public body either planned,in the process of construction or completed which may give rise to anyassessment against the Property or any portion thereof, including uponcompletion of the Project.

###  

### (o)                                 BankAtlanticLoan.  With respect to theBankAtlantic Loan, (i) prepayment of such indebtedness is permitted at anytime without premium or penalty, (ii) the Company has

###  

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### provided Monaco true, correct and complete copies ofall of the documents securing and evidencing the BankAtlantic Loan and none ofsuch documents has been endorsed, renewed, amended, transferred, pledged orotherwise modified, and (iii) the current outstanding principal balance underthe BankAtlantic Loan is seven million four hundred eight thousand nine hundredfourty-two dollars ($7,408,942).

###  

### (p)                                 Project.  As of the date hereof, no lots have beensold, there are no pending purchase and sale agreements with respect to thelots and there are 15 lot reservations. Schedule 2.26(p) lists each lot and whether it has been sold, itsasking price if it has not been sold, its sale price, sale date and purchaserif it has been sold, its pending sale date and purchase price if it is undercontract, the amount of the monthly assessments for each lot and whether suchassessments area current.  All the Approvals that have been obtained orthat will be obtained at Closing, all of the agreements described in Section2.26(k) and (l) above, all warranties, construction contacts and allsimilar documents and agreements relating to the Property and the Project arein the name of and/or in favor of the Company. None of the drinking water supplied to the Project comes from the groundwater on the Property, and it is not anticipated that future drinking waterwill come from the ground water on the Property.  The 3” PVC pipe located on the Property that was noted on anenvironmental report provided to Buyer was a breather pipe for irrigation andhas been removed in accordance with Legal Requirements.  To the best knowledge of the Company andORA, there is no opposition to the Project from any individual, group orentity.

###  

### (q)                                 AdverseInformation.  The Company has noinformation or knowledge that there are any laws, ordinances or restrictions,or any change contemplated therein, or any judicial or administrative action,or any action by adjacent landowners, or natural or artificial conditions uponthe Property, or any other facts or conditions which could, in the aggregate,have a material adverse effect upon the Property or the completion or operationof the Project, including the value or profitability thereof.  The Company has not received any notice fromany insurance company of any defects or inadequacies in any of the Propertywhich could materially and adversely affect the insurability of the Property orthe Project or the premiums for the insurance thereof.  No notice has been given by any insurancecompany which has issued a policy with respect to any of the Property or by anyboard of fire underwriters (or other body exercising similar functions) requestingthe performance of any repairs, alterations or other work with which compliancehas not been made.

###  

### (r)                                    Deliveryof Documents.  The Company hasprovided Monaco with true, correct and complete copies of the following itemsto the extent that ORA or the Company or their affiliates possess suchitems:  (a) all existing land useand development licenses, permits and approvals and building permits and“building finals” regarding the Project; (b) the most recent as-builtsurvey of the Property in the Company’s possession; (c) evidence that theProperty is properly zoned for the Project; (d) evidence that therecurrently exist no violations of any building, fire, health or safety code,law, rule, regulation or order; (e) a copy of the Company’s policy oftitle insurance on the Property; (f) all of the documents and agreementsdescribed in this Section 2.26, including, without limitation, those setforth in Schedules 2.26(k) and (l) and those described in Section 2.26(o),and none of such documents or agreements have been amended, transferred, otherthan pursuant to the BankAtlantic Loan documents, pledged or otherwisemodified; (g) copies of all air, soil, water, engineering (including, withoutlimitation, structural and seismic reports and reports with respect to theAmerican with Disabilities Act) and environmental reports, tests, indemnitiesand

###  

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### materials regarding the Property in the possession ofor commissioned or requested by the Company; (h) a complete copy of allplans and specifications for the construction of the Improvements and thedevelopment of the Project (the “**Plans andSpecifications**”); (i) a copy of all construction contractsentered into by the Company or otherwise in the Company’s possession withregard to the Property; (j) copies of all product and equipment warrantiesrelating to the Improvements and/or the Personalty, including, withoutlimitation, copies of all roof warranties; (k) copies of all concessionagreements, commercial licenses, governmental licenses, permits, covenants,conditions and restrictions and any other agreements related to the Property,which have been certified by the Company to be true, correct and completecopies; (l) copies of all contracts relating to the operation, maintenanceand management of the Property, including all service and supply agreements,franchise agreements and personal property leases; (m) copies of theProperty tax bills for the last three (3) years and a schedule of all bondassessments, if applicable, for the Property for the last three (3) years; (n)copies of all financing documents pertaining to the Property; (o) copies of allfire, casualty (including earthquake and flood), liability and other insurancepolicies regarding the Property; (p) an inventory of all tangible Personalty;and (q) all written warranties from each subcontractor that performed Work atthe Property as to the Work performed by such subcontractor (such writtenwarranties, the “**Subcontractors Warranties**”).

###  

### (s)                                  MoniesOwed.  Schedule 2.26(s) setsforth a true, correct and complete list of all amounts owed by the Company tothird parties in connection with services or supplies furnished to theProperty, the development of the Project or otherwise.

###  

### (t)                                    LoanApplications.  The Company has usedall of the loan proceeds received from the BankAtlantic Loan and the MonacoLoan, except as expressly approved by Monaco as to the Monaco Loan, only forthe purposes for which such proceeds were required in the Company’s loanapplication.

###  

### (u)                                 Off-SiteImprovements.  The Company hasproperly completed all of its construction and other obligations under thecovenants, conditions and restrictions and agreements with GovernmentalEntities relating to the development of the Project.

###  

### (v)                                 ProjectHome Owner’s Association.  The amountof the assessments for the Project’s home owner’s association set forth in thebudget approved by the California Department of Real Estate is materiallyadequate for the purposes for which it is required.

###  

### (w)                               MonacoLoan.  The current outstanding principalbalance under the Monaco Loan is three million fifty-six thousand six hundredseventy dollars ($3,056,670).

###  

2.27                           Warranties; Indemnities.  Except for those set forth in thisAgreement, the Company has not given indemnities relating to the Project.

 

2.28                           Representations Complete; Disclosure.  None of the representations or warrantiesmade by the Company and ORA (as modified by the Sellers’ Disclosure Letter),nor any statement made in any Schedule or certificate furnished by the Companyor ORA pursuant to this Agreement, contains or will contain at the Closing, anyuntrue statement of a material fact, or omits or will omit at the Closing tostate any material fact necessary in order to make the statements containedherein

##  

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## or therein, in the light of the circumstances underwhich made, not misleading.  Eachdocument delivered by the Company or its counsel to Monaco or its counsel inconnection with this Agreement or the transactions contemplated hereby was atrue and complete copy of such document including all exhibits, schedules andamendments thereto.

 

2.29                           No Other Representations orWarranties.  Except forthe representations and warranties made by the Company or ORA in thisAgreement, the ORLV Agreement, the ORN Agreement, the Guaranty and theAffiliates Agreement, neither the Company nor ORA make any representations orwarranties, and the Company and ORA hereby disclaim any other representationsor warranties, whether made by the Company or ORA or their respective officers,directors or employees, with respect to the execution and delivery of thisAgreement, the Guaranty or the Affiliates Agreement or the transactionscontemplated hereby and thereby, notwithstanding the delivery or disclosure to Monacoor Buyer or its representatives of any documentation or other information withrespect to any one or more of the foregoing.

 

**ARTICLE III**

 

**REPRESENTATIONSAND WARRANTIES OF MONACO AND BUYER**

 

Monaco and Buyerrepresent and warrant to the Company as follows:

 

3.1                                 Organization,Standing and Power. Each of Monaco and Buyer is a corporation duly organized, validlyexisting and in good standing under the laws of the State of Delaware.  Each of Monaco and Buyer has the corporatepower to own its properties and to carry on its business as now being conductedand is duly qualified to do business and is in good standing in eachjurisdiction in which the failure to be so qualified would have a materialadverse effect on the ability of Monaco or Buyer to consummate the transactionscontemplated hereby.

 

3.2                                 Authority.  Each of Monaco andBuyer has all requisite corporate power and authority to enter into thisAgreement and to consummate the transactions contemplated hereby.  The execution and delivery of this Agreementand the consummation of the transactions contemplated hereby have been dulyauthorized by all necessary corporate action on the part of each of Monaco andBuyer.  This Agreement has been dulyexecuted and delivered by Monaco and Buyer and constitutes the valid andbinding obligation of Monaco and Buyer, enforceable in accordance with itsterms, except as such enforceability may be limited by principles of publicpolicy and subject to the laws of general application relating to bankruptcy,insolvency and the relief of debtors and rules of law governing specificperformance, injunctive relief or other equitable remedies.

 

3.3                                 Consents. No consent of any Person not a party to this Agreement and no consent ofany Governmental Entity is required to be obtained on the part of Monaco orBuyer to permit the consummation of the transactions contemplated by thisAgreement.

 

3.4                                 Noncontravention.  The execution and delivery of this Agreementdoes not, and the consummation of the transactions contemplated hereby willnot, conflict with any provision of the Certificate of Incorporation or Bylawsof Monaco or Buyer.

 

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3.5                                 Brokers’ and Finders’ Fees; Third Party Expenses.  Neither Monaco nor Buyer has incurred, notwill they incur, directly or indirectly, any liability for brokerage orfinders’ fees or agents’ commissions or any similar charges in connection withthis Agreement or any transaction contemplated hereby for which the Company,ORA or the Principals could become liable or obligated.

 

3.6                                 Monaco Loan. The current outstanding principal balance under the Monaco Loan is threemillion fifty-six thousand six hundred seventy dollars ($3,056,670).

 

3.7                                 No Other Representations or Warranties.  Except for the representations andwarranties made by the Monaco or Buyer in this Agreement, the ORLV Agreementand the ORN Agreement, neither Monaco nor Buyer make any representations orwarranties, and Monaco and Buyer hereby disclaim any other representations orwarranties, whether made by the Monaco or Buyer or their respective officers,directors or employees, with respect to the execution and delivery of thisAgreement or the transactions contemplated hereby and thereby, notwithstandingthe delivery or disclosure to ORA or its representatives of any documentationor other information with respect to any of the foregoing.

 

**ARTICLE IV**

 

**CONDUCTPRIOR TO CLOSING**

 

4.1                                 Conduct of Business of the Company.  During the period from the date of thisAgreement and continuing until the earlier of the termination of this Agreementor the Closing, the Company agrees (except to the extent that Monaco shallotherwise consent in writing), to carry on its business in the usual, regularand ordinary course in substantially the same manner as heretofore conducted,materially comply with all the terms, conditions and provisions of all laws,rules regulations, orders, leases, liens, mortgages, agreements, insurancepolicies and other contractual arrangements relating to the Property, to payits debts and Taxes when due, to pay or perform other obligations when due,confer with Monaco concerning material business or operational matters relatingto the Company’s business, use reasonable, good faith efforts to maintain allthe assets of the Company in their current condition and to promptly replace,repair or restore such assets in the event of any damage to or destruction ofany of such assets prior to the Closing, maintain the books and records in theusual, regular and ordinary manner, on a basis consistent with prior years,report periodically to Monaco concerning the status and operation of theProject, and to use all reasonable efforts consistent with past practice andpolicies to preserve intact the Company’s present business organizations, keepavailable the services of its present officers and key employees and preservetheir relationships with customers, suppliers, licensors, licensees, and othershaving business dealings with it, all with the goal of preserving unimpairedthe Company’s goodwill and ongoing businesses at the Closing; it beingunderstood that Monaco and the Company shall keep each other informed ofdevelopments to, and relating actions to be taken in connection with thematters described in Schedule 6.3(g) hereto.  Without limiting the foregoing, but subjectto the limitations in Sections 4.1(a)-4.1(aa) below, during suchperiod, the Company agrees to (i) perform all of its

##  

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## obligations under all Approvals and applicationstherefore other than recording the subdivision Plat for Phase I of the Projectand obtaining the Property Report from the California Division of Real Estateto permit the sale of lots in Phase I****and(ii) maintain the present insurance on the Property and promptly provide Monacowith copies of any written notice from any insurance company or board of fireunderwriters (or other body exercising similar functions) of any defects orinadequacies in the Property or requesting performance of any repairs,alterations or other work to the Property. The Company shall promptly notifyMonaco of any event or occurrence or emergency not in the ordinary course ofbusiness of the Company, and any material event involving the Company.  Except as expressly contemplated by thisAgreement, the Company shall not, without the prior written consent of Monaco:

 

### (a)                                  Enterinto any commitment or transaction not in the ordinary course of business orany commitment or transaction of the type described in Section 2.8hereof;

###  

### (b)                                 Enterinto, assume, become bound or obligated by, or extend or modify the terms ofany agreement, contract or commitment which (i) involves the payment of greaterthan $10,000 per annum, (ii) extends for more than one year or (iii) involvesany payment or obligation to any affiliate of the Company;

###  

### (c)                                  Prepayany outstanding indebtedness;

###  

### (d)                                 Transferto any Person any rights to the Intellectual Property;

###  

### (e)                                  Amendor otherwise modify (or agree to do so), except in the ordinary course ofbusiness, or violate the terms of, any of the Company Contracts or Approvals;

###  

### (f)                                    Commence,settle, institute, prosecute, compromise any action, suit, proceeding,arbitration, or governmental or regulatory investigation or audit or obtain therelease of any threatened action, suit, proceeding, arbitration, orgovernmental or regulatory investigation or audit involving or relating to theCompany or its business or assets;

###  

### (g)                                 Declareor pay any dividends on or make any other distributions (whether in cash, stockor property) in respect of any of its capital stock, or split, combine orreclassify any of its capital stock or issue or authorize the issuance of anyother securities in respect of, in lieu of or in substitution for shares ofcapital stock of the Company, or repurchase, redeem or otherwise acquire,directly or indirectly, any shares of its capital stock (or options, warrantsor other rights exercisable therefor);

###  

### (h)                                 Issue,deliver or sell or authorize or propose the issuance, delivery or sale of, orpurchase or propose the purchase of, any shares of its capital stock orsecurities convertible into, or subscriptions, rights, warrants or options toacquire, or other agreements or commitments of any character obligating it toissue any such shares or other convertible securities;

###  

### (i)                                     Causeor permit any amendments to its Articles of Incorporation or Bylaws;

###  

### (j)                                     Acquireor agree to acquire by merging or consolidating with, or by purchasing asubstantial portion of the assets of, or by any other manner, any business orany

###  

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### corporation, partnership, association or otherbusiness organization or division thereof, or otherwise acquire or agree toacquire any assets which are material, individually or in the aggregate, to thebusiness of the Company;

###  

### (k)                                  Sell,lease, license or otherwise dispose of any of its properties or assets, orgrant a security interest in any of such properties or assets;

###  

### (l)                                     Incurany indebtedness for borrowed money or guarantee any such indebtedness or issueor sell any debt securities of the Company or guarantee any debt securities ofothers;

###  

### (m)                               Hireor extend an offer of employment with the Company to any individual;

###  

### (n)                                 Change,increase or amend the rate of remuneration or amount of bonuses or other benefitsor any other terms of employment of any employee;

###  

### (o)                                 Grantany severance or termination pay to any employee, or adopt any new severanceplan, amend or modify or alter in any manner any severance plan, agreement orarrangement relating to any employee;

###  

### (p)                                 Adoptor amend any Plan;

###  

### (q)                                 Revalueany of its assets, including without limitation writing down the value ofinventory or writing off notes or accounts receivable other than in theordinary course of business;

###  

### (r)                                    Pay,discharge or satisfy, in an amount in excess of $25,000 (in any one case) or$50,000 (in the aggregate), any claim, liability or obligation (absolute,accrued, asserted or unasserted, contingent or otherwise), other than thepayment, discharge or satisfaction in the ordinary course of business ofliabilities reflected or reserved against in the Company Financial Statements(or the notes thereto);

###  

### (s)                                  Makeor change any material election in respect of Taxes, adopt or change anyaccounting method in respect of Taxes, enter into any closing agreement, settleany claim or assessment in respect of Taxes, or consent to any extension orwaiver of the limitation period applicable to any claim or assessment inrespect of Taxes;

###  

### (t)                                    Enterinto any strategic alliance or joint marketing arrangement or agreement;

###  

### (u)                                 grantany loans to others or purchase debt securities of others or amend the terms ofany outstanding loan agreement;

###  

### (v)                                 enterinto any agreement to purchase or sell any interest in real property, grant anysecurity interest in any real property or enter into any lease, sublease,license or other occupancy agreement with respect to any real property;

###  

### (w)                               grantnor otherwise create or consent to the creation of any easement, covenant,restriction, assessment, encumbrance or lien affecting any of the Property;

###  

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### (x)                                   conveyany of the Property or any interest or rights therein, nor commit, permit orsuffer to exist any waste or nuisance on the Property;

###  

### (y)                                 makeor permit to be made any material change in the Property;

###  

### (z)                                   takeany action, or fail to take any action, that would reasonably be expected toresult in any of the representations and warranties set forth in ARTICLE II****not being true and correct on and as ofthe Closing Date with the same force and effect as if such representations andwarranties had been made on and as of the Closing Date; or

###  

### (aa)                            take,or agree in writing or otherwise to take, any of the actions described inSections 4.1(a) through (z) above, or any other action that would prevent theCompany from performing or cause the Company not to perform its covenantshereunder.

###  

4.2                                 Other Offers In the event the Company or ORA or any of the Principals shall receiveany offer or proposal with respect to any proposed agreement, contract orcommitment to sell to any Person other than Monaco or the Buyer all or anyportion of the Company’s business and properties or capital stock, whether bymerger, sale of assets, tender offer or otherwise (an “**Alternate Transaction**”), the Company and/orORA shall promptly (i) inform Monaco that such an offer or proposal has beenreceived and (ii) disclose to Monaco the identity of the party making the offeror proposal and the terms of such offer or proposal.  Thereafter, the Company and ORA shall consult with Monacoregularly with regard to such offer or proposal and the status of discussionsand/or negotiations with respect thereto. The Company and ORA will not enter into, and will prohibit the Company’sand ORA’s officers from entering into, any agreement, contract or commitmentwith respect to an Alternate Transaction without the prior written consent ofMonaco.

###  

**ARTICLE V**

 

**ADDITIONALAGREEMENTS**

 

5.1                                 Securityholder Agreements.

##  

### (a)                                  Agreementto Retain Shares.  ORA agrees not totransfer (except as may be specifically required by court order), sell,exchange, pledge or otherwise dispose of or encumber any shares of capitalstock of the Company beneficially owned by ORA as of the date hereof, or tomake any offer or agreement relating thereto, at any time prior to theExpiration Date.  As used herein, theterm **“ExpirationDate”** shall mean the earlier to occur of (i) the Closing Date, and(ii) such date and time as this Agreement shall be terminated pursuant toArticle VIII hereof.

###  

### (b)                                 Agreementto Vote Shares.  At every meeting ofthe shareholders of the Company called with respect to any of the following,and at every adjournment thereof, and on every action or approval by writtenconsent of the shareholders of the Company with respect to any of thefollowing, ORA shall vote the Shares: (i) in favor of approval of this Agreement and the Acquisition and anymatter that could reasonably be expected to facilitate the******Acquisition; and (ii) against approval ofany proposal made in opposition to or competition with consummation of the

###  

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### Acquisition and against any merger, consolidation,sale of assets, reorganization or recapitalization, with any party other thanwith Monaco, Buyer and their affiliates and against any liquidation or windingup of the Company.

###  

### (c)                                  AdditionalDocuments.  ORA hereby covenants andagrees to execute and deliver any additional documents necessary or desirable,in the reasonable opinion of Monaco or the Company, as the case may be, tocarry out the intent of this Agreement.

###  

### (d)                                 Consentand Waiver.  ORA hereby gives anyconsents or waivers that are reasonably required for the consummation of theAcquisition under the terms of any agreements to which such ORA is a party orpursuant to any rights ORA may have.

###  

5.2                                 Resignation of Directors and Officers ofCompany.  The Company and ORA shalluse their reasonable best efforts to cause all of the directors and officers ofthe Company to resign their respective positions effective as of the Closing,and to cause each director and officer of the Company to deliver written noticeof such resignation to Buyer at the Closing.

 

5.3                                 Access. The Company and ORA shall afford Monaco and its accountants, counsel,consultants, and other representatives, full and complete access to theProperty and the Company’s books and records, personnel, business andcommercial relationships relating to the Company’s business, the Property andthe Project during normal business hours during the period from the date hereofand prior to the Closing, including without limitation, to (i) all of theCompany’s and ORA’s properties, books, contracts, commitments, and recordsrelated to the Company’s business, the Property and the Project, including withoutlimitation, access to the Property for the purpose of (a) conducting anenvironmental audit or assessment that may include soil, groundwater, orHazardous Materials sampling as Monaco in its discretion deems necessary anddesirable to identify the presence or absence of Hazardous Materials, (b)conducting such surveys, tests, inspections and examinations as Monaco desiresin regard to engineering and planning for future development of the Property,and examining the current condition of the Property, and determining thefeasibility of future uses of the Property, including without limitation,as-built surveys, engineering studies, and seismic tests and (c) communicatingwith the Company’s personnel, consultants, Governmental Entities, andrepresentatives from financial institutions, (ii) other information concerningthe business, properties and personnel (subject to restrictions imposed byapplicable law) of the Company, including but not limited to documents relatingto the planning, permitting, construction and development costs (“**Development Costs**”) of the Project,forecasted future Development Costs of the Project and actual and forecastedsales of lots within the Project, and (iii) the records of the Company’sindependent accountants related to the Property or the Project. The Companyagrees to provide to Monaco and its accountants, counsel, consultants, andother representatives copies of internal financial statements (including Taxreturns and supporting documentation) promptly upon request.  No information or knowledge obtained in anyinvestigation pursuant to this Section 5.3 shall affect or bedeemed to modify any representation or warranty contained herein or theconditions to the obligations of the parties to consummate the Acquisition.

###  

5.4                                 Confidentiality.  Each of the parties hereto hereby agrees tokeep such information or knowledge obtained in any investigation pursuant to Section 5.3,or pursuant to the negotiation and execution of this Agreement or theeffectuation of the transactions contemplated hereby

##  

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## (**“Confidential Information”**), confidentialand not to use such Confidential Information except as contemplated by thisAgreement; provided, however, that the foregoing shall not apply to informationor knowledge which (a) a party can demonstrate was already lawfully in itspossession prior to the disclosure thereof by the other party, (b) isgenerally known to the public and did not become so known through any violationof law, (c) became known to the public through no fault of such party,(d) is later lawfully acquired by such party from other sources (and notin violation of an obligation of confidentiality of such other sources withrespect to such information), (e) is required to be disclosed by order ofcourt or government agency with subpoena powers, (f) is disclosed in the courseof any litigation between any of the parties hereto or (g) is developedindependently by either party without reference to, or specific knowledge of,the other parties’ Confidential Information.

 

5.5                                 Expenses. Whether or not the Acquisition is consummated, all fees and expensesincurred in connection with the Acquisition shall be the obligation of therespective party incurring such fees; provided, however, all feesand expenses incurred by the Company in connection with the Acquisition shallbe borne by ORA.  Such expenses shallinclude, without limitation, all legal, accounting, financial advisory,consulting and all other fees and expenses of third parties incurred by a partyin connection with the negotiation and effectuation of the terms and conditionsof this Agreement and the transactions contemplated hereby.

 

5.6                                 Brokers’ or Finders’ Fees  Monaco and Buyer will indemnify and hold theCompany and ORA harmless from any claim for brokers’ or finders’ fees arisingout of the transactions contemplated hereby by any Person claiming to have beenengaged by Monaco or Buyer.  ORA willindemnify and hold Monaco and Buyer harmless from any claim for brokers’ or finders’fees arising out of the transactions contemplated hereunder by any Personclaiming to have been engaged by the Company or ORA.

 

5.7                                 Employee Matters.  Effective as of the Closing, the Companywill terminate the Company’s employment of the Employees.

 

5.8                                 Consents. The Company and ORA shall use their reasonable best efforts to obtainthe consents, waivers and approvals under any of the Company Contracts as maybe required in connection with the Acquisition so as to preserve all rights of,and benefits to, the Company thereunder.

 

5.9                                 Reasonable Best Efforts.  Subject to the terms and conditions providedin this Agreement, each of the parties hereto shall use its reasonable bestefforts to take promptly, or cause to be taken, all actions, and to do promptly,or cause to be done, all things necessary, proper or advisable under applicablelaws and regulations to consummate and make effective the transactionscontemplated hereby, to obtain all necessary waivers, consents and approvalsand to effect all necessary registrations and filings and to remove anyinjunctions or other impediments or delays, legal or otherwise, in order toconsummate and make effective the transactions contemplated by this Agreementfor the purpose of securing to the parties hereto the benefits contemplated bythis Agreement.

 

5.10                           Notification of Certain Matters.  The Company and ORA shall give prompt noticeto Monaco, and Monaco shall give prompt notice to the Company, of (i) theoccurrence or

 

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## nonoccurrence of any event, the occurrence ornonoccurrence of which is likely to cause any representation or warranty of theCompany, ORA, Monaco or Buyer, respectively, contained in this Agreement to beuntrue or inaccurate at or prior to the Closing Date and (ii) any failure ofthe Company, ORA, Monaco or Buyer, as the case may be, to comply with orsatisfy any covenant, condition or agreement to be complied with or satisfiedby it hereunder; provided, however, that the delivery of any notice pursuant tothis section shall not (a) limit or otherwise affect any remedies available tothe party receiving such notice or (b) constitute an acknowledgment oradmission of a breach of this Agreement. No disclosure by any party pursuant to this Section 5.10shall be deemed to amend or supplement the Disclosure Letter or prevent or cureany misrepresentation, breach of warranty or breach of covenant.

 

5.11                           Election to Supplement Sellers’Disclosure Letter.  ORAis entitled to make a one time election (the “**SupplementalDisclosure Election**”) to provide Monaco with a Supplement to theSeller’s Disclosure Schedule (the “**DisclosureSupplement**”) at least seven (7) days prior to the Closing Date or,if Monaco provides less than nine (9) days notice of the Closing Date, withintwo (2) days after notice of the Closing Date. The Disclosure Supplement may contain only qualifications to ORA’srepresentations and warranties that the Company and ORA had no knowledge of asof the date of this Agreement. Notwithstanding Section 5.10 hereof, the DisclosureSupplement will be deemed to amend the Sellers’ Disclosure Schedule and to cureany breach of any or the representations or warranties related to suchDisclosure Supplement.  If ORA makes theSupplemental Disclosure Election, Monaco may terminate this Agreement in itssole an absolute discretion, whether or not the information contained in theDisclosure Supplement is material.

 

5.12                           Inspection Period.  Notwithstanding the provisions of Section 5.9,at any time between the date hereof and the date that is thirty (30) daysthereafter (the “**Inspection Period**”),Monaco may terminate this Agreement in accordance with the provisions of thisSection if (a) Monaco is not satisfied, in Monaco’s sole and absolutediscretion, with the information obtained from its examination of the Propertyor from documents delivered to it by the Company pursuant to the provisions ofthis Agreement or otherwise obtained by the Monaco; or (b) Monaco is notsatisfied, in Monaco’s sole and absolute discretion, with the informationdetermined by it or its representatives’ inspections of or inquiries regardingthe Property or relevant financial records; or (c) if Monaco does not approve,in Monaco’s sole and absolute discretion, the form and substance of eachPermitted Exception or is dissatisfied in any other way.  This Agreement establishes an option whichcan be exercised for any of the foregoing reasons if Monaco notifies theCompany of its dissatisfaction, in writing, on or prior to the last day of theInspection Period, which notice may, but need not, set forth the conditionsgiving rise to Monaco’s dissatisfaction, if any.  Monaco shall have the right at its option either immediately totermi­nate this Agreement by written notice or to terminate this Agreementimmediately prior to the date specified in Section 8.1(b)(i) unlessthose conditions specified in the notice of dissatisfaction have by then beensatisfied to Monaco’s satisfaction in Monaco’s sole and absolute discretion.

 

5.13                           Risk of Loss.  The Company shall bear all risk of loss or damage to the Propertyby fire, other casualty, condemnation or Hazardous Materials prior to theClosing.  If before the Closing theProperty should be damaged or taken or threatened to be taken or HazardousMaterials shall become present on the Property, or if access to or parking forthe Property is altered in any regard, Monaco may, at its option, (a) terminatethis Agreement by written notice delivered to the Company

##  

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## at or prior to the Closing or (b) proceed to Closingas provided under this Agreement, in which event Monaco shall receive any andall insurance and condemnation proceeds attributable to the casualty orcondemnation.

 

5.14                           Notice of Damage.  If at any time prior to the Closing all orany portion of the Property is destroyed or damaged as a result of fire or anyother cause whatsoever, or taken by condemna­tion or eminent domain or anyproceeding in condemnation or eminent domain or the Company or ORA become awareof the threat of such taking, or Hazardous Materials shall become present onthe Property, the Company or ORA, as applicable, shall promptly give writtennotice thereof to Monaco.

 

5.15                           Public Disclosure.  No party shall issue any statement orcommunication to any third party (other than to their respective agents)regarding the subject matter of this Agreement or the transactions contemplatedhereby, including, if applicable, the termination of this Agreement and thereasons therefore, without the prior written consent of the other party, whichconsent shall not be unreasonably withheld. This Section 5.15 shall not apply to any disclosure deemednecessary or advisable by Monaco (i) in order for Monaco to complete its duediligence of the Company, (ii) in order to comply with applicable securitieslaws, or to any disclosure required by other applicable law or (iii) to satisfythe condition to Closing set forth in Section 6.2(c).

 

5.16                           Closing Cost Schedule.  Monaco and ORA shall mutually agree at leastone (1) business day prior to the Closing Date on a Closing Cost Schedule,which shall identify the Closing Costs.

 

5.17                           Additional Documents and FurtherAssurances.  Each partyhereto, at the request of another party hereto, shall execute and deliver suchother instruments and do and perform such other acts and things as may benecessary or desirable for effecting completely the consummation of thisAgreement and the transactions contemplated hereby.

 

**ARTICLE VI**

 

**CONDITIONSTO THE ACQUISITION**

 

6.1                                 Conditions to Obligations of EachParty to Effect the Acquisition.  The respective obligations of each party to this Agreement toeffect the transactions contemplated by this Agreement shall be subject to thesatisfaction at or prior to the Closing of the following conditions:

 

### (a)                                  NoInjunctions or Restraints; Illegality. No temporary restraining order, preliminary or permanent injunction orother order issued by any court of competent jurisdiction or other legalrestraint or prohibition preventing the consummation of the transactionscontemplated by this Agreement shall be in effect, nor shall any proceedingbrought by an administrative agency or commission or other governmentalauthority or instrumentality, domestic or foreign, seeking any of the foregoingbe pending; nor shall there be any action taken, or any statute, rule,regulation or order enacted, entered, enforced or deemed applicable to theAcquisition, which makes the consummation of the Acquisition illegal.

###  

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### (b)                                 CertainRelated Agreements.  (i) Allconditions set forth in ARTICLE VII of each of the ORN Agreement and theORLV Agreement shall have been satisfied or waived and (ii) the ORN Acquisitionand the ORLV Acquisition shall have closed concurrently with the Closing.

###  

### (c)                                  Federaland State Filings and Approvals. All applicable federal and state filing or licensing requirements, andall required federal and state regulatory approvals, in connection with thetransactions contemplated by this Agreement shall have been satisfied orobtained, respectively.

 

6.2                                 Additional Conditions toObligations of the Company and ORA.  The obligations of the Company and ORA to consummate and effectthis Agreement and the transactions contemplated hereby shall be subject to thesatisfaction at or prior to the Closing of each of the following conditions,any of which may be waived, in writing, exclusively by the Company and ORA:

 

### (a)                                  Representations,Warranties and Covenants.  Therepresentations and warranties of Monaco and Buyer in this Agreement shall betrue and correct in all material respects on and as of the Closing******as though suchrepresentations and warranties were made on and as of such time (other thanthose representations and warranties which were qualified by terms such as“material,” “materially,” or “Material Adverse Effect,” which representationsand warranties shall have been true and correct, as so qualified, in allrespects on and as of the Closing) and Monaco and Buyer shall have performedand complied in all material respects with all covenants, obligations andconditions of this Agreement required to be performed and complied with bythem.

###  

### (b)                                 Certificateof Monaco.  ORA shall have beenprovided with a certificate executed on behalf of the Monaco by one of itsexecutive officers to the effect that, as of the Closing:

###  

#### (i)                                     allrepresentations and warranties made by the Monaco and Buyer in this Agreementare true and correct in all material respects (other than those representationsand warranties which were qualified by terms such as “material,” “materially,”or “Material Adverse Effect,” which representations and warranties so qualifiedshall have been true and correct in all respects on and as of the Closing);

####  

#### (ii)                                  allcovenants and obligations under this Agreement to be performed or complied withby Monaco and Buyer on or prior to the Closing have been so performed orcomplied with in all material respects; and

####  

#### (iii)                               all conditions to theobligations of the Company set forth in this Section 6.2 have beensatisfied (unless otherwise waived in accordance with the terms of thisAgreement.

####  

### (c)                                  Paymentof BankAtlantic Loan.  Monaco shallhave paid or caused to be paid to BankAtlantic the entire outstanding principaland interest under the BankAtlantic Loan.

###  

6.3                                 Additional Conditions to theObligations of Monaco and Buyer.  The obligations of Monaco and Buyer to consummate and effect thisAgreement and the transactions contemplated

##  

41

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## hereby shall be subject to the satisfaction at orprior to the Closing******ofeach of the following conditions, any of which may be waived, in writing,exclusively by Monaco:

 

### (a)                                  Representations,Warranties and Covenants.  Therepresentations and warranties of the Company and ORA in this Agreement weretrue and correct on the date they were made and shall be true and correct inall material respects on and as of the Closing as though such representationsand warranties were made on and as of such time (other than thoserepresentations and warranties which were qualified by terms such as“material,” “materially,” or “Material Adverse Effect,” which representationsand warranties shall have been true and correct, as so qualified, in allrespects on and as of the Closing) and each of the Company and ORA shall haveperformed and complied in all material respects with all of their respectivecovenants, obligations and conditions of this Agreement required to beperformed and complied with by them as of the Closing.

###  

### (b)                                 WrittenResignations.  All directors andofficers of the Company shall have delivered to Buyer written resignations fromtheir respective positions, effective as of the Closing.

###  

### (c)                                  Certificatesof Company ORA.  Monaco shall havebeen provided with certificates executed by ORA and executed on behalf of theCompany by its President and Secretary to the effect that, as of the Closing:

###  

#### (i)                                     allrepresentations and warranties made by the party providing the certificate inthis Agreement are true and correct in all material respects (other than thoserepresentations and warranties which were qualified by terms such as“material,” “materially,” or “Material Adverse Effect,” which representationsand warranties shall have been true and correct as so qualified in all respectson and as of the Closing);

####  

#### (ii)                                  allcovenants and obligations under this Agreement to be performed or complied withby the Company and the party providing the certificate on or prior to theClosing have been so performed or complied with in all material respects; and

####  

#### (iii)                               all conditions to theobligations of Monaco and Buyer set forth in this Section 6.3 have beensatisfied (unless otherwise waived in accordance with the terms of thisAgreement.)

####  

### (d)                                 Secretary’sCertificate of Company.  Monacoshall have been provided with a certificate executed on behalf of the Companyby its Secretary to the effect that, as of the Closing:

###  

#### (i)                                     theCompany has provided Monaco with complete and accurate copies of the Company’sArticles of Incorporation and Bylaws, each as amended and corrected to date;

####  

#### (ii)                                  theCompany has provided Monaco with complete and accurate copies of resolutions ofORA’s and the Company’s Boards of Directors approving the Acquisition and thetransactions contemplated by this Agreement; and

####  

#### (iii)                               the Company has providedMonaco with complete and accurate copies of resolutions of its shareholdersapproving the Acquisition and the transactions contemplated by this Agreement.

####  

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### (e)                                  IncumbencyCertificate.  The Company hasprovided Buyer with a certificate as to the incumbency of signatories andgenuineness of signatures.

###  

### (f)                                    Claims.  No claims shall have been asserted (whetheror not asserted in litigation) which might materially and adversely affect theconsummation of the transactions contemplated hereby or the business assets(including intangible assets), financial condition or results of operations ofthe Company.

###  

### (g)                                 ThirdParty Consents.  Any and allconsents, waivers, and approvals listed pursuant to Schedule 6.3(g)shall have been obtained.

###  

### (h)                                 SoperOpinion.  Monaco shall have receiveda legal opinion from Soper & Oakley, PLLC, legal counsel to the Company andORA, substantially in the form of Exhibit F hereto.

###  

### (i)                                     TriblerOpinion.  Monaco shall have receiveda legal opinion from Tribler Orpett & Crone, Professional Corporation,legal counsel to the Principals, substantially in the form of Exhibit Ghereto.

###  

### (j)                                     NoMaterial Adverse Changes.  Thereshall not have occurred any material adverse change in the business, assets(including intangible assets), results of operations, liabilities (contingentor accrued) or financial condition of the Company.

###  

### (k)                                  Litigation.  There shall be no action, suit, claim orproceeding of any nature pending, or overtly threatened, against the Buyer orthe Company, their respective properties or any of their officers or directors,arising out of, or in any way connected with, the Acquisition or the othertransactions contemplated by the terms of this Agreement.

###  

### (l)                                     FIRPTACompliance.  The Company shall havedelivered to Monaco a properly executed statement in a form reasonablyacceptable to Monaco for purposes of satisfying Monaco’s and Buyer’sobligations under Treasury Regulation Section 1.1445-2(b).

###  

### (m)                               IntercompanyPayables.  ORA shall have providedevidence satisfactory to Monaco that all Intercompany Payables have beenpermanently and irrevocably forgiven.

###  

### (n)                                 TitleInsurance. Buyer shall have obtained an ALTA form of owner’s title insurancepolicy with the survey exception deleted insuring Buyer’s fee simple title tothe Property following the Closing at standard rates in the amount of $12million, subject only to the Permitted Exceptions, and including zoning andsubdivision endorsements and such endorsements as Buyer may require, butexcluding mechanics’ and materialmen’s liens coverage (the “**Title Policy**”).

###  

### (o)                                 TitleAffidavits.  The Company and ORAshall have provided such affidavits and other documents as are reasonablyrequired as a condition to issuing the Title Policy without the surveyexception or other exceptions, except the Permitted Exceptions and thepreprinted mechanic’s lien exception, including, without limitation, an owner’saffidavit and gap indemnity.

###  

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### (p)                                 LoanDocuments.  Buyer shall havereceived pay-off statements acceptable to Monaco and the title company issuingthe Title Policy regarding the BankAtlantic Loan and any liens to be satisfiedon Closing, and such other documents and instruments (including, withoutlimitation, requests for reconveyance or substitutions of trustee andreconveyances of deeds of trust) as the title company issuing the Title Policymay require as a condition to insuring Buyer’s title to the Property free andclear of such deeds of trust.

###  

### (q)                                 IntercompanyReceivables.  The Company shall havebeen paid all amounts owed to it pursuant to Intercompany Receivables.

###  

### (r)                                    Permits.  Any Governmental Authorization relating tothe Project issued to any person or entity other than the Company shall havebeen transferred to or re-issued in the name of the Company.

###  

### (s)                                  Guaranty.  Each of the parties to the Guaranty shallhave executed and delivered the Guaranty.

###  

### (t)                                    AffiliatesAgreement.  Each of the parties tothe Affiliates Agreement shall have executed and delivered the AffiliatesAgreement.

###  

### (u)                                 ManagementAgreement.  Each of the parties tothe Management Agreement shall have executed and delivered the ManagementAgreement.

###  

### (v)                                 Employees.  The Company shall have terminated theCompany’s employment of all Employees.

###  

### (w)                               TrademarkAgreement.  ORA and the Companyshall have executed and delivered the Trademark Agreement.

###  

### (x)                                   Warranties.  ORA shall have provided to Monaco allSubcontractors Warranties to the extent that ORA or the Company or theiraffiliates or consultants possess such warranties.

###  

### (y)                                 SchlechtOpinion.  Monaco shall have receiveda legal opinion from Schlecht, Shevlin & Shoenberger, a Law Corporation,legal counsel to the Company and ORA, substantially in the form of Exhibit Hhereto.

###  

**ARTICLE VII**

 

**SURVIVALOF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION**

 

7.1                                 Survival of Representations andWarranties.  Allrepresentations and warranties in this Agreement or in any instrument deliveredpursuant to this Agreement, shall survive the Closing for three years, provided,however, that (i) the representations and warranties in Section 2.2(b)relating to title matters and the representations and warranties in Sections 2.9relating to tax matters

 

44

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shall survive the Closing and shall not terminate and(ii) the representations and warranties in Sections 2.19 and 2.26(e)relating to environmental matters and hazardous substances shall survive theClosing and shall terminate at the close of business on the 120thday following the expiration of the applicable statute of limitations withrespect to the environmental liabilities in question.

 

7.2                                 Indemnification.

 

### (a)                                  GeneralIndemnification. ORA covenants and agrees to indemnify, defend, protect andhold harmless Monaco, Buyer and their affiliates (each an “**Indemnified Party**”) from, against and inrespect of any claim, loss, expense, liability or other damage (includingwithout limitation any liability of Monaco, Buyer or any of their affiliatesfor expenses incurred by the Company related to the transactions contemplatedhereby), including reasonable attorneys’ fees, to the extent of the amount ofsuch claim, loss, expense, liability or other damage that Monaco, Buyer or anyof their affiliates have incurred or reasonably and in good faith anticipatesincurring (i) by reason of the inaccuracy or breach of any representation orwarranty of the Company and ORA contained herein or in any certificate, instrument,or other document delivered pursuant to this Agreement, subject to Section 7.1,(ii) by reason of a breach of any covenant or agreement, of the Company and ORAcontained herein, (iii) relating to ORA’s and Company’s Unknown EnvironmentalLiabilities, but only to the extent of any Environmental Remediation Costs,(iv) by reason of Company’s Benefit Liabilities, (v) relating to Taxesattributable to ORA or a member of ORA’s affiliated group (as defined inSection 1504(a)) of the Code (other than the Company) as a result of theCompany having been a member of ORA’s affiliated group or having filed aconsolidated (or similar) return with the ORA affiliated group****or (vi) relating to any and all payroll,employee related or income taxes whensoever arising with respect to or relatingto the Company that are attributable to any taxable period ending on or priorto the Closing Date and, in case of a taxable period that includes, but doesnot end on the Closing Date, the portion of such taxable period that ends onthe Closing Date (all of the foregoing collectively **“Losses”**);****provided, however, thatMonaco and Buyer shall only have the right to be indemnified against Lossesdescribed in clauses (i), (ii) and (iii) above if, and to the extent that, theaggregate of the Losses (as such term is defined in each of this Agreement, theORN Agreement and the ORLV Agreement) under this Agreement, the ORN Agreementand the ORLV Agreement exceeds $250,000 (though the right to offset Losses setforth in Section 9.2(b) shall apply to all Losses and not solely tothe amount of Losses above and beyond such $250,000 threshold).  After the Closing, ORA’s aggregatecontractual liability for Losses under this Agreement, the ORN Agreement andthe ORLV Agreement shall not exceed the Indemnification Cap; provided, however,that nothing herein shall limit any noncontractual remedy for fraud. For thepurpose of determining the amount of any Loss for which any of the indemnifiedparties may be entitled to indemnification by ORA pursuant to this ARTICLEVII, any representation or warranty contained in this Agreement or in anycertificate, instrument, or other document delivered pursuant to this Agreementthat is qualified by a term or terms such as “material,” “materially,” or“Material Adverse Effect,” shall be deemed made or given without suchqualification.

###  

### (b)                                 ExclusiveRemedy.  Except as provided in Section 10.10and except for remedies relating to fraud, the provisions of this ARTICLEVII shall constitute the sole and exclusive remedy of the IndemnifiedParties with respect to any Losses.

###  

45

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### (c)                                  IndemnificationProcedures.  All claims forindemnification under this ARTICLE VII shall be asserted and resolved asfollows:

###  

#### (i)                                     IndemnificationClaims.  In the event that anIndemnified Party has a claim for Losses hereunder which does not involve claimbeing asserted against or sought to be collected by a third party, Monaco shalldeliver to ORA and each of the Principals a certificate signed by any officerof Monaco (an **“Officer’s Certificate”**): (A) stating that Monaco (or an Indemnified Party) has paid or properlyaccrued or reasonably and in good faith anticipates that it will have to pay oraccrue Losses, and (B) specifying in reasonable detail the individual items ofLosses included in the amount so stated, the date each such item was paid orproperly accrued, or the basis for such anticipated liability, and the natureof the misrepresentation, breach of warranty or claim to which such item isrelated.  If ORA does not notify Monacoin writing within thirty (30) days from the date of receipt of the Officer’sCertificate that ORA objects to any claim or claims made in any Officer’sCertificate, the amount of the claim for Losses contained in the Officer’sCertificate shall be conclusively deemed a liability of the indemnifying partyhereunder.  Notwithstanding theforegoing, Monaco may not deliver an Officer’s Certificate to ORA to seekindemnification from ORA pursuant to this Section 7.2 for Losses relating tothe inaccuracy or breach of any representation or warranty of ORA containedherein or in any certificate, instrument, or other document delivered pursuantto this Agreement after the applicable representations or warranties have terminatedin accordance with Section 7.1.

####  

#### (ii)                                  Resolutionof Conflicts.

####  

##### (1)                             Incase ORA shall so object in writing to any claim or claims made in anyOfficer’s Certificate, ORA and Monaco shall attempt in good faith to agree uponthe rights of the respective parties with respect to each of such claims.  If ORA and Monaco should so agree, amemorandum setting forth such agreement shall be prepared and signed by bothparties.

#####  

#### (iii)                               If no such agreement canbe reached after good faith negotiation, either Monaco or ORA may demandarbitration of the matter as set forth below in Section 7.3 unlessthe amount of the damage or loss is at issue in pending litigation with a thirdparty, in which event arbitration shall not be commenced until such amount isascertained by court judgment or settlement of the parties to the litigation orMonaco and ORA agree to arbitration.

####  

### (d)                                 Third-PartyClaims.  In the event Monaco becomesaware of a third-party claim which Monaco believes may result in a claim byMonaco for indemnification pursuant to this ARTICLE VII, Monaco shallnotify ORA of such claim, and ORA shall be entitled, at its expense, toparticipate in any defense of such claim. Monaco shall have the right in its sole discretion to settle any suchclaim; provided, however, that except with the consent of ORA, no settlement ofany such claim with third-party claimants shall alone be determinative of theamount of any claim against ORA under this Section 7.2.  In the event that ORA has consented to anysuch settlement, ORA shall have no power or authority to object under anyprovision of this ARTICLE VII to the amount of any claim by Monacoagainst ORA for indemnification with respect to such settlement.

###  

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7.3                                 Arbitration.

 

### (a)                                  Theresolution of any disputes arising under this ARTICLE VII shall besettled by Arbitration.  Sucharbitration shall be conducted by three arbitrators.  Monaco shall select one arbitrator and ORA shall select onearbitrator.  The two arbitrators soselected shall select a third arbitrator. The decision of a majority of the three arbitrators as to the validityand amount of any claim in an Officer’s Certificate shall be binding andconclusive upon the parties to this Agreement.

###  

Judgment upon any awardrendered by the arbitrators may be entered in any court havingjurisdiction.  Any such arbitrationshall be held in Lane County, Oregon under the rules then in effect of theAmerican Arbitration Association. For purposes of this subsection, in any arbitrationhereunder in which any claim or the amount thereof stated in the Officer’sCertificate is at issue, Monaco shall be deemed to be the Non-Prevailing Partyin the event that the arbitrators award Monaco less than the sum of one half ofthe disputed amount plus any amounts not in dispute; otherwise, ORA shall bedeemed to be the Non-Prevailing Party. Each party shall pay its own expenses and one-half the fees of eacharbitrator and the administrative fee of the American Arbitration Association;provided, however, that the arbitrators may require the Non-Prevailing Party topay the expenses, including without limitation, reasonable attorneys’ fees andcosts, incurred by the other party to the arbitration if the arbitrators findthat the arbitration action was brought or defended other than in good faithand with a reasonable basis in fact by the Non-Prevailing Party.

 

7.4                                 Guaranty. In the event that after the procedures set forth above have beenfollowed, an Indemnified Party is entitled to indemnification pursuant to this ARTICLEVII, Monaco may, in its sole discretion, seek payment of such amount fromeither ORA pursuant to this Agreement or from the Principals pursuant to theGuaranty or both, provided that no Indemnified Party shall be entitled toreceive in payment in aggregate in excess of the amount it is entitled to underthis ARTICLE VII.

###  

7.5                                 Subrogation.  In the event ORA pays any Indemnified Party for Losses pursuantto Section 7.2 in connection with any third party claim, ORA shallbe subrogated to the extent of such payment to all of the rights of recovery ofthe Company, Monaco and Buyer, which shall cooperate with ORA to enable ORA tosecure such rights and to effectively to bring suit to enforce such rights.

###  

7.6                                 Claims Made by ORA.  If ORA brings an action against Monaco orBuyer relating to (i) the inaccuracy or breach of any representation orwarranty of Monaco and Buyer contained herein or in any certificate,instrument, or other document delivered pursuant to this Agreement, subject to Section 7.1,or (ii) a breach of any covenant or agreement, of Monaco and Buyer containedherein, then ORA may recover from Monaco or Buyer for any loss, expense,liability or other damage (including without limitation any liability of ORA orany of its affiliates for expenses incurred by ORA related to the transactionscontemplated hereby), including reasonable attorney’s fees, arising from (i) or(ii) above;****provided, however,that ORA and its affiliates shall only have the right to such recovery if, andto the extent that, Monaco’s and Buyer’s aggregate contractual liability underthis Agreement, the ORN Agreement and the ORLV Agreement exceeds $250,000.  After the Closing, Monaco’s and Buyer’saggregate contractual liability under this Agreement, the ORN Agreement and theORLV Agreement shall not exceed the Indemnification Cap; provided, however,that nothing herein shall limit any noncontractual remedy for fraud.

###  

47

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**ARTICLE VIII**

 

**TERMINATION,AMENDMENT AND WAIVER**

 

8.1                                 Optional Termination.  Except as provided in Section 8.3below, this Agreement may be terminated and the Acquisition abandoned at anytime prior to the Closing:

 

### (a)                                  bymutual consent of ORA and Monaco;

###  

### (b)                                 byMonaco or ORA if:  (i) the Closing hasnot occurred on or before December 15, 2002; (ii) there shall be a finalnonappealable order of a federal or state court in effect preventingconsummation of the Acquisition; or (iii) there shall be any statute, rule,regulation or order enacted, promulgated or issued or deemed applicable to theAcquisition by any Governmental Entity that would make consummation of theAcquisition illegal;

###  

### (c)                                  byMonaco if there shall be any action taken, or any statute, rule, regulation ororder enacted, promulgated or issued or deemed applicable to the Acquisition byany Governmental Entity, which would: (i) prohibit or materially and adversely restrict Buyer’s or theCompany’s ownership or operation of all or a portion of the business of theCompany or (ii) compel Buyer or the Company to dispose of or hold separate allor a portion of the business or assets of the Company or Buyer as a result ofthe Acquisition;

###  

### (d)                                 byMonaco if it is not in material breach of its obligations under this Agreementand there has been a material breach of any representation, warranty, covenantor agreement contained in this Agreement on the part of the Company or ORA andsuch breach has not been cured within ten (10) business days after writtennotice to the Company (provided that no cure period shall be required for abreach which by its nature cannot be cured);

###  

### (e)                                  byMonaco if there shall have occurred any event or condition of any characterthat has had or is reasonably likely to have a material adverse effect on thebusiness or operations of the Company;

###  

### (f)                                    bythe Company or ORA if they are not in material breach of their obligationsunder this Agreement and there has been a material breach of anyrepresentation, warranty, covenant or agreement contained in this Agreement onthe part of Monaco and such breach has not been cured within ten (10) businessdays after written notice to Monaco (provided that, no cure period shall berequired for a breach which by its nature cannot be cured);

###  

### (g)                                 pursuantto Sections 5.11, 5.12, or 5.13 of this Agreement.

###  

Where action is taken toterminate this Agreement pursuant to this Section 8.1, it shall besufficient for such action to be authorized by the Board of Directors (asapplicable) of the party taking such action.

 

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8.2                                 Automatic Termination.  Except as provided in Section 8.3below, this Agreement shall terminate and the Acquisition shall be abandoned ifat any time prior to the Closing either the ORLV Agreement or the ORN Agreementis terminated pursuant to Section 8.1 of such agreements.

 

8.3                                 Effect of Termination.  In the event of termination of thisAgreement as provided in Sections 8.1 or 8.2, this Agreementshall forthwith become void and there shall be no liability or obligation onthe part of Monaco, Buyer, the Company, or ORA, or their respective officers,directors or shareholders, if applicable, provided that each party shall remainliable for any breaches of this Agreement prior to its termination; andprovided further that, the provisions of Sections 5.4, 5.5, 5.6, this Section 8.3  and ARTICLE X of this Agreement shallremain in full force and effect and survive any termination of this Agreement.

 

8.4                                 Amendment. Except as may otherwise required by applicable law after theshareholders of the Company approve this Agreement, this Agreement may beamended at any time by execution of an instrument in writing signed by Monaco,Buyer, the Company and ORA.

 

8.5                                 Extension; Waiver.  At any time prior to the Closing, Monaco andBuyer, on the one hand, and the Company and ORA, on the other, may, to theextent legally allowed, (i) extend the time for the performance of any of theobligations of the other party hereto, (ii) waive any inaccuracies in therepresentations and warranties made to such party contained herein or in anydocument delivered pursuant hereto, and (iii) waive compliance with any of theagreements or conditions for the benefit of such party contained herein.  Any agreement on the part of a party heretoto any such extension or waiver shall be valid only if set forth in aninstrument in writing signed on behalf of such party.

 

**ARTICLE IX**

 

**POST-CLOSINGCOVENANTS**

 

9.1                                 Phase I Financing and Completion.  Buyer shall use commercially reasonableefforts to provide or obtain the financing necessary for, and to complete, (i)the construction of the Improvements required to complete Phase I and (ii) thesale to third party users on terms acceptable to Buyer in its sole and absolutediscretion all of the lots in Phase I. Notwithstanding the foregoing, Buyer shall have the right at any time,in its sole discretion, to cease all efforts to complete the Phase IImprovements and/or to sell the lots and elect instead to use commerciallyreasonable efforts to sell all or any portion of the Resale Property (includingall or any portion of Phase I) on terms acceptable to Buyer in its sole andabsolute discretion, in which case the provisions of Section 9.5shall apply.

 

9.2                                 Phase I Profits.

###  

### (a)                                  Allocationof Phase I Profits.  Within ten (10)days after all of the Improvements required to complete Phase I have beencompleted and all of the lots in Phase I have been sold to third party users(the “**Phase I Completion Date**”),Buyer or Monaco shall pay to ORA an amount equal to 20% of the Phase I NetProfit less any amounts paid to ORA pursuant to Section 9.2(c).  As used herein, the date that a lot is soldshall mean the date the escrow for such sale is closed (or if

###  

49

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### there is no escrow, upon recordation of the deed). “**Phase I Net Profit**” shall mean all cashproceeds received by Buyer from the original sales by Buyer of developed lotsin Phase I after the Closing Date, less:

###  

#### (i)                                     all amounts paid by Buyer or Monaco to repay the BankAtlantic Loan (includingaccrued interest) and pay offany delinquent taxes, mechanics’ liens and default judgments, including anyprepayment penalties, legal fees, processing fees, recording fees and any otherassociated costs;

####  

#### (ii)                                  allamounts paid by Buyer or Monaco to secure the Replacement Loan, if any,including legal fees, processing fees, recording fees and any other associated;

####  

#### (iii)                               the Carryover Loss;

####  

#### (iv)                              allinterest that has accrued under the Replacement Loan up to and including thePhase I Completion;

####  

#### (v)                                 allreasonable overhead costs of Monaco and Buyer relating to the operation andmanagement of the Property from the Closing Date to the Phase I Completion;

####  

#### (vi)                              theMonaco Loan Cost as of the Phase I Completion Date;

####  

#### (vii)                           all amounts outstanding(including interest) under any other loans to the Company as of thePhase I Completion Date;

####  

#### (viii)                        all Losses to the extent thatBuyer or Monaco are unable to seek indemnification against ORA pursuant to Section 7.2(a)due to the fact that the aggregate amount of Losses is less than $250,000;

####  

#### (ix)                                allTax liabilities arising from the sale of lots in Phase I;

####  

#### (x)                                   alltaxes paid by Buyer under Section 1.7 hereof;

####  

#### (xi)                                allliabilities incurred or costs paid by the Company under the Management Agreementand the Trademark Agreement up to and including the Phase I Completion Date;and

####  

#### (xii)                             all liabilities incurredor costs paid by Buyer, Monaco or the Company in connection with the operationand completion of the Project from the Closing Date to the Phase I CompletionDate, including all payments to satisfy contractors, consultants, managementcompanies, taxing authorities and vendors, and assessments, insurance, permitand land use fees and approvals, attorneys’ fees and payroll costs foremployees of Monaco or Buyer relating to services provided on the Project andincluding in connection with the sale of the lots in the phase, includingbroker commissions, transfer taxes, escrow costs, title costs, survey fees,attorneys’ fees and other closing costs.

####  

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Notwithstanding theforegoing, (A) all items listed in (i), (ii) and (iv) through (xii) shall notbe included in the foregoing calculation to the extent that such amounts havealready been accounted for in a prior Net Profit Calculation and (B) if theCompany conveys or sells any lots in Phase I to Buyer or any affiliate ofBuyer, then for the purpose of the Net Profit Calculation in this Section9.2(a), Buyer will be deemed to have sold such lots and to have received anamount equal to the market value of such lots.

 

### (b)                                 CarryoverLoss.  If the Phase I Net Profitcalculation set forth in Section 9.2(a) above yields a negativenumber, then (i) ORA shall receive no payments with respect to the completion ofPhase I and, (ii) to the extent that such calculation yields a negative amount,such negative amount shall be reflected in the Net Profit Calculation of thenext Sale as a Carryover Loss.

###  

### (c)                                  EstimatedPhase I Net Profit.  Within thirty(30) days after 95% all of the lots in Phase I have been sold to third partyusers, Buyer or Monaco shall pay to ORA an amount equal to the lesser of (i)Buyer’s conservative good faith estimate of what 20% of the Phase I Net Profitwill be upon sale of all the lots in Phase I and (ii) 20% of the Phase I NetProfit resulting from the Net Profit Calculation contained in Section 9.2(a)assuming that the sale of 95% of the lots in Phase I was the sale of all thelots in Phase I.

 

9.3                                 Phase II Obligations.

 

### (a)                                  Optionwith Respect to Phase II.  Buyermay, in its sole and absolute discretion, (i) commence development of Phase IIand sell lots on Phase II on terms acceptable to Buyer in its sole and absolutediscretion or, (ii) at any time, sell all or any portion of the Resale Property(including all or any portion of Phase II). If Buyer develops Phase II, then within ten (10) days after all of theImprovements required to complete Phase II have been constructed and all of thelots in Phase II have been sold to third party users (the “**Phase II Completion Date**”), Buyer or Monacoshall pay to ORA the amounts described in Section 9.3(b). If at anytime Buyer determines that it will not develop or that it will cease developingPhase II, then Buyer shall use commercially reasonable efforts to sell all orany portion of the Resale Property on terms acceptable to Buyer in its sole andabsolute discretion.  Profits from anyResale shall be distributed in accordance with Section 9.5.

###  

### (b)                                 DevelopedPhase II Profit Participation.  IfBuyer develops Phase II, then after the Phase II Completion Date, Buyer shallpay to ORA an amount equal to 20% of the Phase II Net Profit less any amountspaid to ORA pursuant to Section 9.3(d). “**Phase II Net Profit**” shallmean all cash proceeds received by Buyer from the original sales by Buyer ofdeveloped lots in Phase II after the Closing Date, less:

###  

#### (i)                                     allamounts paid by Buyer or Monaco to repay the BankAtlantic Loan (includingaccrued interest) and pay off any delinquent taxes, mechanics’ liens and defaultjudgments, including any prepayment penalties, legal fees, processing fees,recording fees and any other associated costs;

####  

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#### (ii)                                  allamounts paid by Buyer or Monaco to secure the Replacement Loan, if any,including legal fees, processing fees, recording fees and any other associatedcosts;

####  

#### (iii)                                the Carryover Loss;

####  

#### (iv)                              allinterest that has accrued under the Replacement Loan up to and including thePhase II Completion Date;

####  

#### (v)                                 allreasonable overhead costs of Monaco and Buyer relating to the operation andmanagement of the Property from the Closing Date to the Phase II CompletionDate;

####  

#### (vi)                              theMonaco Loan Cost as of the Phase II Completion Date;

####  

#### (vii)                           all amounts outstanding(including interest) under any other loans to the Company as of the Phase IICompletion Date;

####  

#### (viii)                        all Losses to the extent thatBuyer or Monaco are unable to seek indemnification against ORA pursuant to Section 7.2(a)due to the fact that the aggregate amount of Losses is less than $250,000;

####  

#### (ix)                                allTax liabilities arising from the sale of lots in Phase II;

####  

#### (x)                                   alltaxes paid by Buyer under Section 1.7 hereof;

####  

#### (xi)                                allliabilities incurred or costs paid by the Company under the ManagementAgreement and the Trademark Agreement up to and including the Phase IICompletion Date; and

####  

#### (xii)                             all liabilities incurredor costs paid by Buyer, Monaco or the Company in connection with the operationand completion of the Project from the Closing Date to the Phase II CompletionDate, including all payments to satisfy contractors, consultants, managementcompanies, taxing authorities and vendors, and assessments, insurance, permitand land use fees and approvals, attorneys’ fees and payroll costs foremployees of Monaco or Buyer relating to services provided on the Project andincluding in connection with the sale of the lots in the phase, includingbroker commissions, transfer taxes, escrow costs, title costs, survey fees,attorneys’ fees and other closing costs.

####  

Notwithstanding theforegoing, (A) all items listed in (i), (ii) and (iv) through (xii) shall notbe included in the foregoing calculation to the extent that such amounts havealready been accounted for in a prior Net Profit Calculation and (B) if theCompany conveys or sells any lots in Phase II to Buyer or any affiliate ofBuyer, then for the purpose of the Net Profit Calculation in this Section9.3(a), Buyer will be deemed to have sold such lots and to have received anamount equal to the market value of such lots.

 

### (c)                                  CarryoverLoss.  If the Phase II Net Profitcalculation set forth in Section 9.3(a) above yields a negativenumber, then (i) ORA shall receive no payments with respect to the completionof Phase II and, (ii) to the extent that such calculation yields a negativeamount,

###  

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### such negative amount shall be reflected in the NetProfit Calculation of the next Sale as a Carryover Loss.

###  

### (d)                                 EstimatedPhase II Net Profit.  Within thirty(30) days after 95% all of the lots in Phase I have been sold to third partyusers, Buyer or Monaco shall pay to ORA an amount equal to the lesser of (i)Buyer’s conservative good faith estimate of what 20% of the Phase II Net Profitwill be upon sale of all the lots in Phase II and (ii) 20% of the Phase II NetProfit resulting from the Net Profit Calculation contained in Section 9.3(a)assuming that the sale of 95% of the lots in Phase II was the sale of all thelots in Phase II.

###  

9.4                                 Phase III Obligations.

##  

### (a)                                  Optionwith Respect to Phase III.  Buyermay, in its sole and absolute discretion, (i) commence development of Phase IIIand sell lots on Phase III on terms acceptable to Buyer in its sole andabsolute discretion or, (ii) at any time, sell all or any portion of the ResaleProperty (including all or any portion of Phase III).  If Buyer develops Phase III, then within ten (10) days after allof the Improvements required to complete Phase III have been constructed andall of the lots in Phase III have been sold to third party users (the “**Phase III Completion Date**”), Buyer orMonaco shall pay to ORA the amounts described in Section 9.4(b). Ifat any time Buyer determines that it will not develop or that it will ceasedeveloping Phase III, then Buyer shall use commercially reasonable efforts tosell all or any portion of the Resale Property on terms acceptable to Buyer inits sole and absolute discretion. Profits from any Resale shall be distributed in accordance with Section 9.5.

###  

### (b)                                 DevelopedPhase III Profit Participation.  IfBuyer develops Phase III, then after the Phase III Completion Date, Buyer shallpay to ORA a sum equal to 20% of the Phase III Net Profit less any amounts paidto ORA pursuant to Section 9.2(c).  “**Phase III Net Profit**” shall mean all cashproceeds received by Buyer from the original sales by Buyer of developed lotsin Phase III after the Closing Date, less:

###  

#### (i)                                     allamounts paid by Buyer or Monaco to repay the BankAtlantic Loan (includingaccrued interest) and pay off any delinquent taxes, mechanics’ liens anddefault judgments, including any prepayment penalties, legal fees, processingfees, recording fees and any other associated costs;

####  

#### (ii)                                  allamounts paid by Buyer or Monaco to secure the Replacement Loan, if any,including legal fees, processing fees, recording fees and any other associatedcosts;

####  

#### (iii)                                the Carryover Loss;

####  

#### (iv)                              allinterest that has accrued under the Replacement Loan up to and including thePhase III Completion Date;

####  

#### (v)                                 allreasonable overhead costs of Monaco and Buyer relating to the operation andmanagement of the Property from the Closing Date to the Phase III CompletionDate;

####  

#### (vi)                              theMonaco Loan Cost as of the Phase III Completion Date;

####  

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#### (vii)                           all amounts outstanding(including interest) under any other loans to the Company as of the Phase IIICompletion Date;

####  

#### (viii)                        all Losses to the extent thatBuyer or Monaco are unable to seek indemnification against ORA pursuant to Section 7.2(a)due to the fact that the aggregate amount of Losses is less than $250,000;

####  

#### (ix)                                allTax liabilities arising from the sale of lots in Phase III;

####  

#### (x)                                   alltaxes paid by Buyer under Section 1.7 hereof;

####  

#### (xi)                                allliabilities incurred or costs paid by the Company under the ManagementAgreement and the Trademark Agreement up to and including the Phase IIICompletion Date; and

####  

#### (xii)                             all liabilities incurredor costs paid by Buyer, Monaco or the Company in connection with the operationand completion of the Project from the Closing Date to the Phase III CompletionDate, including all payments to satisfy contractors, consultants, managementcompanies, taxing authorities and vendors, and assessments, insurance, permitand land use fees and approvals, attorneys’ fees and payroll costs foremployees of Monaco or Buyer relating to services provided on the Project andincluding in connection with the sale of the lots in the phase, includingbroker commissions, transfer taxes, escrow costs, title costs, survey fees,attorneys’ fees and other closing costs.

####  

Notwithstanding theforegoing, (A) all items listed in (i), (ii) and (iv) through (xii) shall notbe included in the foregoing calculation to the extent that such amounts havealready been accounted for in a prior Net Profit Calculation and (B) if theCompany conveys or sells any lots in Phase III to Buyer or any affiliate ofBuyer, then for the purpose of the Net Profit Calculation in this Section9.4(a), Buyer will be deemed to have sold such lots and to have received anamount equal to the market value of such lots.

 

### (c)                                  CarryoverLoss.  If the Phase III Net Profitcalculation set forth in Section 9.4(a) above yields a negativenumber, then (i) ORA shall receive no payments with respect to the completionof Phase III and, (ii) to the extent that such calculation yields a negativeamount, such negative amount shall be reflected in the Net Profit Calculationof the next Sale as a Carryover Loss.

###  

### (d)                                 EstimatedPhase III Net Profit.  Within thirty(30) days after 95% all of the lots in Phase III have been sold to third partyusers, Buyer or Monaco shall pay to ORA an amount equal to the lesser of (i)Buyer’s conservative good faith estimate of what 20% of the Phase III NetProfit will be upon sale of all the lots in Phase III and (ii) 20% of the PhaseIII Net Profit resulting from the Net Profit Calculation contained in Section9.4(a) assuming that the sale of 95% of the lots in Phase III was the sale ofall the lots in Phase III.

###  

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9.5                                 Resales.

##  

### (a)                                  ResaleProfit Participation.  If Buyersells all or any portion of a Resale Property (other than the sale of developedlots to third party users in any of Phase I, Phase II or Phase III), Buyer orMonaco shall pay to ORA upon the close of escrow of such Resale (or if there isno escrow, upon recordation of the deed) (a “**ResaleClosing Date**”) an amount equal to 20% of the Resale Net Profit.  “**ResaleNet Profit**” shall mean all cash proceeds received by Buyer from aResale after the Closing Date, less:

###  

#### (i)                                     allamounts paid by Buyer or Monaco to repay the BankAtlantic Loan (includingaccrued interest) and pay off any delinquent taxes, mechanics’ liens anddefault judgments, including any prepayment penalties, legal fees, processingfees, recording fees and any other associated costs;

####  

#### (ii)                                  allamounts paid by Buyer or Monaco to secure the Replacement Loan, if any,including legal fees, processing fees, recording fees and any other associatedcosts;

####  

#### (iii)                               the Carryover Loss

####  

#### (iv)                              allinterest that has accrued under the Replacement Loan up to and including suchResale Closing Date;

####  

#### (v)                                 allreasonable overhead costs of Monaco and Buyer relating to the operation andmanagement of the Property from the Closing Date to such Resale Closing Date;

####  

#### (vi)                              theMonaco Loan Cost as of such Resale Closing Date;

####  

#### (vii)                           all amounts outstanding(including interest) under any other loans to the Company as of such ResaleClosing Date;

####  

#### (viii)                        all Losses to the extent thatBuyer or Monaco are unable to seek indemnification against ORA pursuant to Section 7.2(a)due to the fact that the aggregate amount of Losses is less than $250,000;

####  

#### (ix)                                allTax liabilities arising from such Resale

####  

#### (x)                                   alltaxes paid by Buyer under Section 1.7 hereof.

####  

#### (xi)                                allliabilities incurred or costs paid by the Company under the ManagementAgreement and the Trademark Agreement up to and including such Resale ClosingDate;

####  

#### (xii)                             all liabilities incurredor costs paid by Buyer, Monaco or the Company in connection with the operationand completion of the Project from the Closing Date to the such Resale ClosingDate, including all payments to satisfy contractors, consultants, managementcompanies, taxing authorities and vendors, and assessments, insurance, permitand land use fees and approvals, attorney’s fees and payroll costs foremployees of Monaco or Buyer relating to services provided on the Project andincluding in connection with the sale of the lots in the Project, including

####  

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#### broker commissions, transfer taxes, escrow costs,title costs, survey fees, attorneys’ fees and other closing costs; and

####  

#### (xiii)                          all liabilities incurred orcosts paid by Buyer, Monaco and the Company in connection with such Resale,including broker commissions, transfer taxes, escrow costs, title costs, surveycosts, attorneys’ fees and other closing costs.

####  

Notwithstanding theforegoing, all items listed in (i), (ii) and (iv) through (xiii) shall not beincluded in the foregoing calculation to the extent that such amounts havealready been accounted for in a prior Net Profit Calculation.

 

Buyer shall have no obligation to pay any amount inconnection with any sale transaction which fails to close (i.e., title isconveyed to the purchaser) for any reason. Buyer shall have the right, in its sole and absolute discretion, toreject any offer to purchase any portion of the Resale Property.

 

### (b)                                 CarryoverLoss.  If a Resale Net Profitcalculation set forth in Section 9.5(a) above yields a negativenumber, then (i) ORA shall receive no payments with respect to the Resale and,(ii) to the extent that such calculation yields a negative amount, suchnegative amount shall be reflected in the Net Profit Calculation of the nextSale as a Carryover Loss.

###  

9.6                                 Closing Costs.  Notwithstanding any other provision of this Article IX, Buyer’saggregate payment obligations to ORA under Sections 9.2, 9.3, 9.4 and9.5 shall be reduced by an amount equal to 50% of the Closing Costs (the “**ORA Closing Costs**”), and Buyer shall notpay any amounts to ORA pursuant to such sections until the ORA Closing Costshave been offset against such payments.

 

9.7                                 Interest on Certain Loans.  Notwithstanding the foregoing, the NetProfit Calculations shall not include interest accrued on loans from Monaco tothe Company after the Closing to the extent that the interest rate on suchloans exceeds the greater of (i) Monaco’s regular corporate funds borrowingrate at the time the loan is made and (ii) the prime rate at the time the loanis made plus one percent (1%).

 

9.8                                 Tax Matters.

 

### (a)                                  TaxFiling.  For purposes of thisAgreement and the filing of applicable Tax Returns, whenever Monaco and ORAreasonably agree that it is equitable to allocate an item of income, gain,deduction, loss or credit to either a taxable year or period that ends on orbefore the Closing Date or a taxable year or period that begins after theClosing Date, rules consistent with those in Treasury Regulation Section1.1502-76(b) will be applied.

###  

### (b)                                 Assistanceand Cooperation.

###  

#### (i)                                     Afterthe Closing Date, the parties to this Agreement shall (or shall cause theirrespective affiliates to):

####  

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(A)                              assistthe other party, to the extent the party providing assistance has pertinentinformation, in preparing any Tax Returns which such other party is responsiblefor preparing and filing after the Closing Date;

 

(B)                                cooperatefully, to the extent the party providing assistance has pertinent information,in preparing for any audits of, or disputes with taxing authorities regarding,any Tax Returns of the Company or its subsidiaries; and

 

(C)                                makeavailable to the other party and to any taxing authority as reasonablyrequested all information, records, and documents relating to Taxes of theCompany.

 

#### (ii)                                  Afterthe Closing Date but no later than July 31, 2003, ORA shall (or shall cause itsrespective affiliates to) deliver to Monaco a written good faith estimate ofany items (including, but not limited to, net operating losses) to be reportedon ORA’s 2002 federal or state income tax returns, which items would berequired by Monaco in preparing its 2002 federal or state income taxreturns.  ORA shall deliver to Monaco awritten final determination of any items reported on such estimate within 30days after ORA has filed its 2002 federal or state income tax return.

####  

9.9                                 ORA Additional Cooperation.  In consideration of the profit participationset forth hereinabove (i) ORA agrees after Closing to provide to Buyer anycontacts, inquiries or other communication received by Buyer in connection withthe possible sale of the Property, or any portion thereof, and (ii) withrespect to any letter of intent, contract, offer or other communicationpresently in the files of ORA or the Company or received after Closing, ORAagrees after Closing to assist Buyer in connection with Buyer’s review,assessment, negotiation and consummation of any transaction resulting in aResale as Buyer may choose to pursue. The profit participation set forthhereinabove is in consideration of this agreement and undertaking by ORA andshall not be construed to be a finder’s fee, broker’s fee or similar payment,such profit participation being part of the consideration for the transactionscontemplated by this Agreement.

 

9.10                           Loan Release.  Monaco shall use commercially reasonable efforts following theClosing Date to obtain a release of the deed of trust securing the BankAtlanticLoan and a cancellation of the related note and other loan documents.

 

9.11                           Employee Matters.  Following the Closing, ORA, with Buyer’scooperation, shall prepare and provide to Buyer for filing all federal, stateand local tax returns required with respect to the employment of any of theCompany’s Employees prior to the Closing.  Such returns shall include those required for income tax withholding,Federal Insurance Contribution Act taxes, unemployment taxes and any otheremployment related taxes that may apply. ORA, with Buyer’s cooperation, willalso prepare and provide to Buyer all required annual information returnsassociated with these Employees. Required information returns shall include 2002 Forms W-2, Form W-3 andany state or local equivalents or reconciliations required to be filed with anytaxing jurisdiction where the Company has employees.  ORA shall deliver final copies of all such tax and informationreturns to Monaco at least twenty (20) days before they must be filed.

 

9.12                           Financial Information.  Buyer shall furnish to ORA within onehundred twenty (120) days after the end of each fiscal year of the Company, anunaudited balance sheet of the Company as

##  

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## at the end of such fiscal year and unauditedstatements of income and cash flows of the Company for such year, prepared inaccordance with generally accepted accounting principles consistently applied.

 

**ARTICLE X**

 

**GENERALPROVISIONS**

 

10.1                           Notices. All notices and other communications hereunder shall be in writing andshall be deemed given if delivered personally or by commercial deliveryservice, or mailed by registered or certified mail (return receipt requested)or sent via facsimile (with acknowledgment of complete transmission) or sentvia electronic mail (with electronic acknowledgement of receipt) to the partiesat the following addresses (or at such other address for a party as shall bespecified by like notice):

 

### (a)                                  ifto Monaco or Buyer, or to the Company after the Closing, to:  Monaco Coach Corporation, 91320 IndustrialWay, Coburg, Oregon  97408, Attention:Controller, Tel: (541) 686-8011, Fax: (541) 302-3800, and to Monaco CoachCorporation, Indiana Operations, 606 Nelson’s Parkway, Wakarusa, IN 46573,Attention:  General Counsel, Tel (800)650-7337, Fax:  (219) 293-1528.

###  

with a copy to: Wilson Sonsini Goodrich & Rosati,Professional Corporation, 650 Page Mill Road, Palo Alto, California 94304-1050, Attention: Henry P.Massey, Jr., Esq., Tel: 650-493-9300, Fax: 650-493-6811.

 

### (b)                                 ifto ORA, or to the Company up to and including the Closing, to:  Robert A. Schoellhorn, President, MarathonCoach, Inc., 91333 Coburg Industrial Way, Coburg, OR 97408-9432, Tel: (541)343-9991, Fax: (541) 343-2401.

###  

with a copy to: StephenM. Alderman, Garfield & Merel, Ltd., 223 West Jackson Blvd., Suite 1010,Chicago, IL 60606, Tel: (312) 583-1600, Fax: (312) 583-1700.

 

### (c)                                  ifto a Principal, to the address for notice set forth on the signature pageto the Affiliates Agreement.

###  

with a copy to: Daniel D.Drew, Tribler, Orpett & Crone, 30 North La Salle Street, Chicago, IL 60602,Tel: (312) 201-6414, Fax: (312) 201-6401.

 

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10.2                           Headings. The table of contents and headings contained in this Agreement are forreference purposes only and shall not affect in any way the meaning orinterpretation of this Agreement.

 

10.3                           Counterparts.  This Agreement may be executed in one or more counterparts, allof which shall be considered one and the same agreement and shall becomeeffective when one or more counterparts have been signed by each of the partiesand delivered to the other party, it being understood that all parties need notsign the same counterpart.

 

10.4                           Entire Agreement.  This Agreement, the Schedules and Exhibitshereto, and the documents and instruments and other agreements among theparties hereto referenced herein: (a) constitute the entire agreement among theparties with respect to the subject matter hereof and supersede all prioragreements and understandings, both written and oral, among the parties withrespect to the subject matter hereof, including without limitation the agreementin principal among certain of the parties hereto dated July 24, 2002.

 

10.5                           Assignment. No party may assign or delegate either this Agreement or any of itsrights, interests, or obligations hereunder without the prior written approvalof the other parties.  Subject to theimmediately preceding sentence, this Agreement shall be binding upon and shallinure to the benefit of the parties hereto and their respective successors andpermitted assigns. Notwithstanding the foregoing, Buyer may assign its rights underthis Agreement without the consent of the Company or ORA provided the assigneeassumes in writing all obligations and liabilities of Buyer, in which eventBuyer but not Monaco shall be relieved of any further liability hereunder.

 

10.6                           Severability.  In the event that any provision of this Agreement or theapplication thereof, becomes or is declared by a court of competentjurisdiction to be illegal, void or unenforceable, the remainder of thisAgreement will continue in full force and effect and the application of suchprovision to other Persons or circumstances will be interpreted so asreasonably to effect the intent of the parties hereto.  The parties further agree to replace suchvoid or unenforceable provision of this Agreement with a valid and enforceableprovision that will achieve, to the extent possible, the economic, business andother purposes of such void or unenforceable provision.

 

10.7                           Other Remedies.  Except as otherwise provided herein, any and all remedies hereinexpressly conferred upon a party will be deemed cumulative with and notexclusive of any other remedy conferred hereby, or by law or equity upon suchparty, and the exercise by a party of any one remedy will not preclude theexercise of any other remedy.

 

10.8                           No Third Party Beneficiaries.  This Agreement is solely for the benefit of(a) Monaco and Buyer and its successors and permitted assigns with respectto the obligations of the Company, and ORA under this Agreement and(b) the Company and ORA, and their respective successors and permittedassigns with respect to the obligations of Monaco and Buyer under thisAgreement.  This Agreement shall not bedeemed to confer upon or give to any other third party any remedy, claim, rightto reimbursement, cause of action or other right, unless expressly provided forin this Agreement.

 

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10.9                           Governing Law.  This Agreement shall be governed by and construed in accordancewith the laws of the State of Oregon, regardless of the laws that mightotherwise govern under applicable principles of conflicts of laws thereof.

 

10.10                     SpecificPerformance.  The partiesagree that irreparable damage would occur in the event that any of theprovisions of this Agreement were not performed in accordance with theirspecific terms or were otherwise breached. It is accordingly agreed that either party shall be entitled to seek aninjunction or injunctions or other equitable relief to prevent breaches of thisAgreement and to enforce specifically the terms and provisions hereof in anycourt of the United States or any state having jurisdiction over the dispute.

 

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IN WITNESSWHEREOF, Monaco, Buyer, the Company and ORA have executed this Agreement as ofthe date first written above.

 
| **MONACO COACH CORPORATION**                     |                      | **MCC ACQUISITION CORPORATION** |
|--------------------------------------------------|---------------------------|---------------------------------|
|                                             |                      |                            |
| By:                                              | /s/ John W. Nepute        |                            | By: | /s/ John W. Nepute |
|                                             | John W. Nepute,           |                            |   | John W. Nepute, |
|                                             | President                 |                            |   | Vice President |
|                                             |                      |                            |
|                                             |                      |                            |
|                                             |                      |                            |
| **OUTDOOR RESORTS OF AMERICA, INC.**             |                      |                            |
|                                             |                      |                            |
| By:                                              | /s/ E. Randall  Henderson |                            |   |
|                                             | E. Randall Henderson,     |                            |   |
|                                             | President                 |                            |   |
|                                             |                      |                            |
|                                             |                      |                            |
|                                             |                      |                            |
| **OUTDOOR RESORTS MOTORCOACHCOUNTRY CLUB, INC.** |                      |                            |
|                                             |                      |                            |
|                                             |                      |                            |
| By:                                              | /s/ E. Randall  Henderson |                            |   |
|                                             | E. Randall Henderson,     |                            |   |
|                                             | President                 |                            |   |

 

**[SIGNATUREPAGE TO ORMCC STOCK PURCHASE AGREEMENT]**

 

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Withrespect to the following pages, the Company has omitted the listed exhibits,but agrees to furnish supplementally a copy of the exhibit to the Commissionupon request.

 

**EXHIBITA**

 

**FORM OF GUARANTY**

 

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**EXHIBITB**

 

**FORM OF AFFILIATES AGREEMENT**

 

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**EXHIBITC**

 

**FORM OF MANAGEMENT AGREEMENT**

 

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**EXHIBITD**

 

**FORM OF TRADEMARK AGREEMENT**

 

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**EXHIBITE**

 

**DESCRIPTION OF LAND**

 

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**EXHIBITF**

 

**FORMOF OPINION OF SOPER & OAKLEY, PLLC**

** **

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**EXHIBITG**

 

**FORM OF OPINION OFTRIBLER ORPETT & CRONE, PROFESSIONAL CORPORATION**

 

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**EXHIBITH**

 

**FORM OF OPINION OFSCHLECHT, SHEVLIN & SHOENBERGER, A LAW CORPORATION**

 

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