**EXHIBIT 2.3**

 

**STOCKPURCHASE AGREEMENT**

 

**BY ANDAMONG**

 

**MONACOCOACH CORPORATION,**

 

**MCC ACQUISITION CORPORATION,**

 

**OUTDOORRESORTS OF AMERICA, INC.,**

** **

**AND**

** **

**OUTDOORRESORTS OF LAS VEGAS, 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                                                                            | Broker  License |
| 5.18                                                                            | 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 |
|                                                                                 |  |  |

 

 

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| 7.6                                                    | Claims  Made by ORA               |
|--------------------------------------------------------|-----------------------------------|
|                                                   |                              |
| 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                                                    | Resales                           |
| 9.5                                                    | Closing  Costs                    |
| 9.6                                                    | Interest on Certain Loans         |
| 9.7                                                    | Tax Matters                       |
| 9.8                                                    | ORA Additional Cooperation        |
| 9.9                                                    | Loan  Release                     |
| 9.10                                                   | Employee  Matters                 |
| 9.11                                                   | 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              |

 

 

iii

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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 Santoro, Driggs, Walch, Kearney, Johnson & Thompson |
|         |                                                                        |
| **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                                                                 |
| 2.26(v)      | Homeowner’s Association  Assessments                                   |
| 6.3(g)       | Consents                                                                    |

 

 

iv

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**STOCK PURCHASE AGREEMENT**

 

This StockPurchase Agreement (the **“Agreement”**) is made and entered into as ofNovember 27, 2002 by 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 of Las VegasInc., a Nevada corporation and a wholly-owned subsidiary of ORA (the “**Company)**.

** **

**RECITALS**

 

A.                                   ORA owns all of the issued andoutstanding capital stock of the Company, consisting of 100 shares (the **“Shares”**)of the Company’s Class A common stock (**“Common Stock”**).

 

B.                                     The Boards of Directors of each of theBuyer and the Company believe it is in the best interests of each company andtheir respective stockholders that Buyer acquire the Company through thepurchase of all the outstanding Common Stock directly from ORA (the “**Acquisition**”),and, in furtherance thereof, have approved the Acquisition.

 

C.                                     Concurrently with the execution anddelivery of this Agreement, Monaco, Buyer, ORA, and Outdoor Resorts of NaplesInc., a Florida corporation (“**ORN**”),are entering into a Stock Purchase Agreement (the “**ORN Agreement**”) pursuant to which Buyer will purchase all theoutstanding capital stock of ORN (the “**ORN**Acquisition”).

 

D.                                    Concurrently with the execution anddelivery of this Agreement, Monaco, Buyer, ORA, and Outdoor Resorts MotorcoachCountry Club, Inc., a California corporation (“**ORMCC**”) are entering into a Stock Purchase Agreement (the “**ORMCC Agreement**”) pursuant to which Buyerwill purchase all the outstanding capital stock of ORMCC (the “**ORMCC Acquisition**”).

 

E.                                      Concurrently with the execution anddelivery of this Agreement, the Principals (as defined below) are entering intoa Guaranty in favor of Monaco and Buyer in the form attached hereto as ExhibitA (the “**Guaranty**”) pursuant towhich the Principals are agreeing to guarantee ORA’s obligations under ARTICLEVII of this Agreement.

 

F.                                      Concurrently with the execution anddelivery of this Agreement, Monaco, Buyer, ORA, the Company, ORN, ORMCC and thePrincipals are entering into an Affiliates Agreement****in the form attached hereto as Exhibit B****(the “**AffiliatesAgreement**”) pursuant to which Monaco, Buyer, ORA, the Company, ORN,ORMCC and the Principals release each other from certain liabilities and thePrincipals agree to vote any shares of stock of ORA held by them in favor ofthis Agreement and the transactions contemplated hereby.

 

G.                                     Concurrently with the execution anddelivery of this Agreement, the Company, ORA and ORI are entering into aManagement Agreement in the form attached hereto as Exhibit C (the “**Management Agreement**”) pursuant to whichORA and ORI will develop, manage, operate and maintain the Property.

 

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H.                                    Concurrently with the execution anddelivery of this Agreement, the Company and ORA are entering into a TrademarkLicense Agreement in the form attached hereto as Exhibit D (the “**Trademark Agreement**”) pursuant to which ORAwill license or assign certain of its trademarks to the Company.

 

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                                 Purchaseand Sale. At the Closing (as defined in Section 1.2) and subject toand upon the terms and conditions of this Agreement, Buyer shall purchase fromORA and ORA shall sell, convey, transfer, assign and deliver to Buyer, free andclear of all liens, encumbrances or other defects of title, all the Shares.

 

1.2                                 Closing Date.  Unless this Agreement isearlier terminated pursuant to Sections 5.11, 5.12, 5.13, 8.1 or 8.2,the closing of the Acquisition (the **“Closing”**) will take place simultaneouslywith the closing of the ORN Acquisition and the ORMCC Acquisition and aspromptly as practicable, but no later than five (5) business days, followingsatisfaction or waiver of the conditions set forth in Article VI, at theoffices of Wilson Sonsini Goodrich & Rosati, 650 Page Mill Road, Palo Alto,California, unless another place or time is agreed to in writing by Monaco andORA.  The date upon which the Closingactually occurs is herein referred to as the **“Closing Date”**.

 

1.3                                 CertainDefinitions. For the purposes of this Agreement, the following capitalized terms havethe following meanings:

###  

### (a)                                            “Accounts Receivable” shall havethe meaning set forth in Section 2.17(a).

###  

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

###  

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

###  

### (d)                                           “Affiliates Agreement” shall havethe meaning set forth in the recitals.

###  

### (e)                                            “Alternate Transaction” shall havethe meaning set forth in Section 4.2.

###  

### (f)                                              “Annual Financials” shall have themeaning set forth in Section 2.5.

 

### (g)                                           “Applicable Levels of RegulatoryConcern” shall mean those soil or groundwater clean-up standards existingas of the Closing Date and applicable to the affected property adopted pursuantto Environmental Laws or otherwise imposed by any Governmental Entity pursuantto Environmental Laws.

###  

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

###  

 

2

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### (i)                                               “Benefits Liabilities” means any and all claims, debts,liabilities, commitments and obligations, whether fixed, contingent or absolute,matured or unmatured, liquidated or unliquidated, accrued or unaccrued, knownor unknown, whenever or however arising, including all costs and expensesrelating thereto arising under law, rule, regulation, permits, action orproceeding before any Governmental Entity, order or consent decree or any awardof any arbitrator of any kind relating to any Plan, Employment Agreement orotherwise to an Employee.

###  

### (j)                                               “Buyer” shall have the meaning setforth in the preamble.

###  

### (k)                                            “Carryover Loss” shall mean thenet loss, if any, from any Sale which is carried-over and reflected in a NetProfit Calculation of any subsequent Sale and shall equal, when reflected in aNet Profit Calculation, (i) the absolute value of the most recently completedNet Profit Calculation, if such calculation yields a negative number, or (ii)zero (0), if such calculation yields a positive number or if no previous Salehas occurred.

###  

### (l)                                               “Closing” shall have the meaningset forth in Section 1.2.

###  

### (m)                                         “Closing Costs” shall mean the sumof (a) the premium charged for the Title Policy other than premiums for anyendorsements requested by Buyer, (b) charges and fees required to cause titleto the Property to be free and clear of all liens, restrictions andencumbrances except Permitted Exceptions and any unrecorded mechanic’s lienswhich are addressed in Article IX and (c) the closing or escrow charges by thetitle company issuing the Title Policy.

###  

### (n)                                           “Closing Date” shall have themeaning set forth in Section 1.2.

###  

### (o)                                           “COBRA” shall mean the ConsolidatedOmnibus Budget Reconciliation Act of 1985, as amended.

###  

### (p)                                           “Code” shall mean the InternalRevenue Code of 1986, as amended, or any successor thereto.

###  

### (q)                                           “Common Stock” shall have themeaning set forth in the recitals.

###  

### (r)                                              “Company” shall have the meaningset forth in the preamble.

###  

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

###  

### (t)                                              “Company Financials” shall havethe meaning set forth in Section 2.5.

###  

### (u)                                           “Confidential Information” shallhave the meaning set forth in Section 5.4.

###  

### (v)                                           “Conflict” shall have the meaningset forth in Section 2.4.

###  

### (w)                                         “Conveyed Common Area” shall meanthat portion of the Property that has been conveyed to Las Vegas MotorcoachResort Owners Association, a Nevada non-profit corporation, as of the date ofthis Agreement, if any.

###  

 

3

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### (x)                                             “Customer Information” shall havethe meaning set forth in Section 2.11(d).

###  

### (y)                                           “Development Costs” shall have themeaning set forth in Section 5.3.

###  

### (z)                                             “Disclosure Supplement” shall havethe meaning set forth in Section 5.11.

###  

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

###  

### (bb)                                    “Donovan Side Letter” shall meanthat certain side letter agreement dated February 15, 2001 between the Companyand Donovan Construction.

###  

### (cc)                                      “Employee” means any current orformer or retired employee or consultant of either the Company or any ERISAAffiliate of the Company whose responsibilities primarily relate, or related,as the case may be, to the Company’s business.

###  

### (dd)                                    “Employment Agreement” means eachmanagement, employment, severance, consulting, relocation, repatriation,expatriation, visas, work permit or other agreement, contract or understandingbetween the Company or any ERISA Affiliate of the Company and any Employeerelating, directly or indirectly, to such Employee’s terms and condition ofemployment.

###  

### (ee)                                      “Environmental Laws” shall meanany and all applicable laws, statutes, ordinances, rules, codes, orders,decrees, directives, guidelines and regulations which prohibit, regulate orcontrol any Hazardous Material or relate in any way to pollution, theenvironment, or the protection of human health and worker safety, or naturaland cultural resources, and all amendments and modifications of any of theforegoing.

###  

### (ff)                                          “Environmental Remediation Costs” shall meanany liability, obligation, judgment, claim, penalty, fine, cost or expense (including reasonable attorneys’ feesand environmental consultant costs of any kind or nature) or the duty toindemnify, defend, or reimburse any Person with respect to Remedial Activitieswhich are necessary or required to both (i) comply with and fulfillEnvironmental Laws existing as of the Closing Date (including withoutlimitation any orders of any Governmental Entity and any consent decree,consent agreement or memorandum of understanding with Governmental Entities),and (ii) remediate and/or remove Hazardous Materials to a level compliant withApplicable Levels of Regulatory Concern. Such Remedial Activities shall, at a minimum, be those RemedialActivities necessary to insure that the affected property is not encumbered byany use or deed restriction (1) which is more restrictive than any current useor deed restriction of any kind affecting the Property or (2) which would materiallyaffect the development of the Project.

###  

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

###  

### (hh)                                    “ERISA”means the Employee Retirement IncomeSecurity Act of 1974, as amended.

###  

 

4

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### (ii)                                            “ERISA Affiliate” means any other person or entity undercommon control with the Company within the meaning of Section 414(b), (c),(m) or (o) of the Code and the regulations issued thereunder.

###  

### (jj)                                            “Expiration Date” shall have themeaning set forth in Section 5.1(a).

###  

### (kk)                                      “FMLA” shall mean the FamilyMedical Leave Act of 1993, as amended.

###  

### (ll)                                            “GAAP” shall have the meaning setforth in Section 2.5.

###  

### (mm)                                “Governmental Authorizations”shall mean each consent, license, permit, grant or other authorization issuedto the Company by a Governmental Entity (i) pursuant to which the Companycurrently operates or holds any interest in any of its properties, or (ii)which is required for the operation of its business or the holding of any suchinterest, including the completion and operation of Phase I.

###  

### (nn)                                    “Governmental Entity” shall havethe meaning set forth in Section 2.4.

###  

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

###  

### (pp)                                    “Hazardous Material” shall meanany material or substance that is prohibited or regulated by any EnvironmentalLaw or that has been designated by any Governmental Entity to be radioactive,toxic, hazardous, a pollutant, or otherwise a danger to health, safety,reproduction or the environment other than (1) products containing suchmaterials used for janitorial or office purposes properly and safely used andmaintained and (2) building materials or products used in improving ormaintaining the Property containing such materials and properly and safely usedin compliance with Environmental Laws.

###  

### (qq)                                    “Improvements” shall mean allimprovements, structures and fixtures located on the Land.

###  

### (rr)                                          “Indemnified Party” shall have themeaning set forth in Section 7.2

###  

### (ss)                                      “Indemnification Cap” shall havethe meaning set forth in the ORN Agreement.

###  

### (tt)                                           “Inspection Period” shall havethe meaning set forth in Section 5.12.

###  

### (uu)                                    “Intellectual Property” shall havethe meaning set forth in Section 2.12(a).

###  

### (vv)                                    “Intercompany Payables” shall meanany amount owed by the Company to any of ORA, The Robert A. Schoellhorn Trust,Robert A. Schoellhorn and E. Randall Henderson or any affiliates of suchparties.

###  

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

###  

 

5

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### (xx)                                        “Interim Balance Sheet” shall havethe meaning set forth in Section 2.5.

###  

### (yy)                                    “Interim Financials” shall havethe meaning set forth in Section 2.5.

###  

### (zz)                                        “International Employee Plan”shall mean each Plan that has been adopted or maintained by the Company or anyERISA Affiliate, whether informally or formally, or with respect to which theCompany or any ERISA Affiliate will or may have any liability**,**for the benefit of Employees who perform services outside the United States.

###  

### (aaa)                                “IRS” shall mean the InternalRevenue Service.

###  

### (bbb)                             “knowledge” “to the knowledgeof” “aware of” and words or phrases of similar effect with referenceto the Company and/or ORA shall mean the knowledge, after due inquiry, of theofficers, directors and managerial employees of the Company and ORA and anydirect or indirect subsidiary of ORA and shall include the knowledge of RobertA. Schoellhorn, E. Randall Henderson, Ronald W. Petty, Orien Dickerson, SidOwens and Carl Townsend.

###  

### (ccc)                                “Land” shall mean all that certainapproximately 42.5 acre tract or parcel of land located in Las Vegas, Nevada,and more particularly described on Exhibit E attached hereto.

###  

### (ddd)                             “Liens” shall have the meaning setforth in Section 2.9(b)(vii).

###  

### (eee)                                “Losses” shall have the meaningset forth in Section 7.2(a).

###  

### (fff)                                      “Management Agreement” shall havethe meaning set forth in the recitals.

###  

### (ggg)                             “Material Adverse Effect” shallhave the meaning set forth in Section 2.1.

###  

### (hhh)                             “Monaco” shall have the meaningset forth in the preamble.

###  

### (iii)                                         “Monaco Loan” shall mean thatcertain loan from Monaco to the Company in the amount of $14,000,000 pursuantto a Loan Agreement dated July 21, 2000 and secured by a deed of trust datedDecember 18, 2000 on the Land and the Improvements.

###  

### (jjj)                                         “Monaco Loan Cost” shall mean theprincipal amount of the Monaco Loan plus the principal amount of any otherloans by Monaco to the Company plus any interest that has accrued on any of theforegoing loans as of the relevant date.

###  

### (kkk)                                “Mortgages” shall have the meaningset forth in Section 2.26(j).

###  

### (lll)                                         “Multiemployer Plan” shall meanany “Pension Plan” (as defined below) which is a “multiemployer plan,” asdefined in Section 3(37) of ERISA.

###  

### (mmm)                       “Net Profit Calculation” shallmean any calculation to determine net profit under Sections 9.2, 9.3 and9.4.

###  

### (nnn)                             “Officer’s Certificate” shall havethe meaning set forth in Section 7.2(c)(i).

###  

 

6

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### (ooo)                             “ORA” shall have the meaning setforth in the preamble.

###  

### (ppp)                             “ORA Annual Financials” shall havethe meaning set forth in Section 2.6.

###  

### (qqq)                             “ORA’s and Company’s UnknownEnvironmental Liabilities” shall mean the presence of any HazardousMaterial in the soil, groundwater, surface water, air or building materials ofany real property owned or leased by the Company at any time which (1) are notpresent as a result of the actions or omissions of the Company, the Principalsor ORA or (2) were not known to the Company, the Principals or ORA as of theClosing Date.

###  

### (rrr)                                      “ORA Closing Costs” shall have themeaning set forth in Section 9.4.

###  

### (sss)                                “ORA Financials” shall have themeaning set forth in Section 2.6.

###  

### (ttt)                                      “ORA Interim Financials” shallhave the meaning set forth in Section 2.6.

###  

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

###  

### (vvv)                             “ORMCC” shall have the meaning setforth in the recitals.

###  

### (www)                       “ORMCC Acquisition” shall have themeaning set forth in the recitals.

###  

### (xxx)                                   “ORMCC Agreement” shall have themeaning set forth in the recitals.

###  

### (yyy)                             “ORN” shall have the meaning setforth in the recitals.

###  

### (zzz)                                   “ORN Acquisition” shall have themeaning set forth in the recitals.

###  

### (aaaa)                          “ORN Agreement” shall have themeaning set forth in the recitals.

###  

### (bbbb)                      “Pension Plan” shall mean eachCompany Employee Plan which is an “employee pension benefit plan,” within themeaning of Section 3(2) of ERISA.

###  

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

###  

### (dddd)                      “Person” shall mean an individual,a partnership, a limited liability company, a corporation, an association, ajoint stock corporation, a trust, a joint venture, an unincorporatedorganization, or a Governmental Entity.

 

(eeee)                            “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.

7

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###  

###  

### (ffff)                                  “Phase I” shall mean that certainphase of the Project consisting of 202 lots and common areas including a clubhouse, 2 bathhouse/laundry buildings, 1 large pool with spa, 2 small pools withspas, 2 tennis courts and 9 hole pitch and putt golf course.

###  

### (gggg)                      “Phase I Completion Date” shallhave the meaning set forth in Section 9.2(a).

###  

### (hhhh)                      “Phase I Net Profit” shall havethe meaning set forth in Section 9.2(a).

###  

### (iiii)                                      “Phase II” shall mean that certainphase of the project consisting of 201 lots and common areas including 2swimming pools and an expansion of the Phase I clubhouse.

###  

### (jjjj)                                      “Phase II Completion Date” shallhave the meaning set forth in Section 9.3(a).

###  

### (kkkk)                          “Phase II Net Profit” shall havethe meaning set forth in Section 9.3(b).

###  

### (llll)                                       “Plans” means any plan, program,policy, practice, contract, Employment Agreement or other arrangement providingfor compensation, severance, termination pay, pension benefits, retirementbenefits, deferred compensation, performance awards, stock or stock-relatedawards, fringe benefits (including health, dental, vision, life, disability,sabbatical, accidental death and dismemberment benefits), or other employeebenefits or remuneration of any kind, whether written, unwritten or otherwise,funded or unfunded, including, without limitation, each “employee benefitplan,” within the meaning of Section 3(3) of ERISA, which is or has beenmaintained, sponsored by, contributed to, or required to be contributed to, bythe Company for the benefit of any Employee, or with respect to which theCompany has or may have any liability or obligation to any Employee.

###  

### (mmmm)              “Plans and Specifications” shallhave the meaning set forth in Section 2.26(r).

###  

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

###  

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

###  

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

###  

### (qqqq)                      “Remedial Activities” shall meanany activities related to investigating, removing, remediating, treating,transporting, disposing, characterizing, sampling, monitoring, encapsulating orassessing Hazardous Materials (including, without limitation, any assessment ofhealth or environmental risks posed by Hazardous Materials).

###  

### (rrrr)                                  “Replacement Loan” shall mean thatcertain loan or loans that Monaco intends to secure to pay off the US Bank Loanand/or to finance the Property.

###  

8

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### (ssss)                          “Resale” shall mean the Company’ssale of all or any portion of a Resale Property other than the sale of developedlots to third party users or the deeding of portions of the Property to theProject’s home owner’s association.

###  

### (tttt)                                  “Resale Closing Date” shall havethe meaning set forth in Section 9.4.

###  

### (uuuu)                      “Resale Property” shall mean thatportion of the Property that has not been sold by the Company or deeded to theProject’s home owners’ association.

###  

### (vvvv)                      “Resale Net Profit” shall have themeaning set forth in Section 9.44.

###  

### (wwww)              “Returns” shall have the meaningset forth in Section 2.9(b)(i).

###  

### (xxxx)                              “Sale” means any sale of anyportion of the Property by the Company that triggers a Net Profit Calculation.

###  

### (yyyy)                      “Sellers’ Disclosure Letter” shallmean the disclosure letter delivered by ORA to Monaco concurrently with theexecution and delivery of this Agreement.

###  

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

###  

### (aaaaa)                    “Sold Lots” shall have the meaningset forth in Section 2.26(b).

###  

### (bbbbb)               “Subcontractors Warranties” shallhave the meaning set forth in Section 2.26(r).

###  

### (ccccc)                    “Supplemental Disclosure Election”shall have the meaning set forth in Section 5.11.

###  

### (ddddd)               “Tax” shall have the meaning setforth in Section 2.9(a).

###  

### (eeeee)                    “Title Policy” shall have themeaning set forth in Section 6.3(n).

###  

### (fffff)                              “Trademark License Agreement”shall have the meaning set forth in the recitals.

###  

### (ggggg)               “US Bank” shall mean U.S. BankNational Association.

###  

### (hhhhh)               “US Bank Loan” shall mean thatcertain loan in the amount of $9.62 million made by US Bank, evidenced by anote dated July 18, 2000, as amended and restated by notes dated February 7,2002, from the Company in favor of US Bank and secured by a deed of trust datedJuly 18, 2000.

###  

### (iiiii)                                   “Work” shall mean the Improvements(including the buildings and building pads and all drives, parking lots,landscaping, curbs, sidewalks, sewers and other utilities) and all otherconstruction activities and related services on the Property, including gradingand filling, whether completed or uncompleted, and includes all other labor,materials, equipment and services provided by ORA or the Company in connectionwith the construction of the Improvements and the

###  

9

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### Project; provided,however, that (i) the Work shall exclude any construction and related servicesthat are covered by the construction contract between Donovan Construction andthe Company and (ii) notwithstanding the foregoing clause (i), the Work shallinclude any construction and related services that are the subject of theDonovan Side Letter.

 

1.4                                 AcquisitionConsideration. As consideration for the purchase of the Shares, Monaco and Buyer shalltake the following actions:

###  

### (a)                                  Satisfaction of US Bank Loan. At the Closing, Monaco shall pay or cause to be paid to US Bank theentire outstanding principal and interest under the US Bank Loan.

###  

### (b)                                 Affiliates Agreement. Monaco will release ORA and the Principals from certain liabilities asset forth in the Affiliates Agreement.

###  

### (c)                                  Profits from Resale of the Property.  Buyer shall pay the amounts, if any, whichmay become due pursuant to Section 9.2 through 9.4 hereof.

 

1.5           Transfer ofCertificates and Agreements.  Atthe Closing, ORA shall deliver to Buyer (i) stock certificates representing theShares duly endorsed or accompanied by stock powers duly endorsed in blank,with any required transfer stamps affixed thereto, and (ii) all otherdocuments, agreements, certificates, instruments or writings required to bedelivered by the Company or ORA on or prior to the Closing Date pursuant to thisAgreement.  The Company shall transferon its books all shares sold pursuant to this Agreement.

 

1.6                                 Lost, Stolen or Destroyed Certificates.  In the event any certificates evidencing the Shares shall havebeen lost, stolen or destroyed, ORA shall make an affidavit of that fact, andshall deliver to Monaco at Closing (i) such affidavit and (ii) an agreement (inform and substance satisfactory to Monaco) to indemnify Monaco against anyclaim that may be made against Monaco with respect to the certificates allegedto have been lost, stolen or destroyed.

** **

1.7                                 Tax.  Buyershall bear 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 or after the Closing, atthe reasonable request of Monaco and without further consideration, ORA and theCompany will execute and deliver those other instruments of sale, transfer,conveyance, assignment and confirmation and take such action as Monaco mayreasonably determine is necessary to transfer, convey and assign to Buyer, andto confirm Buyer’s title to or interest in the Shares, to put Buyer in actualpossession and operating control of the Company and to assist Buyer inexercising all rights with respect thereto and to otherwise carry out thepurposes of this Agreement including without limitation assigning to theCompany any contracts, rights or warranties relating to the Property that arein the name of ORA or other affiliates of ORA. If, at any time after the Closing, any such further action is necessaryor desirable to carry out the purposes of this Agreement, Monaco, Buyer, ORA,the Company and the officers and directors of the Company and

 

10

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the Buyer are fully authorized in the name oftheir respective companies or otherwise to take, and will take, all such lawfuland necessary action, so long as such action is consistent with this Agreement.

 

1.9                                 Interpretation and Construction.

 

### (a)                                  All references inthis Agreement to “Articles,” “Sections,” “Schedules” and“Exhibits” refer to the articles, sections, schedules and exhibits ofthis Agreement, unlessotherwise indicated.

###  

### (b)                                 As used in this Agreement, neutralpronouns and any variations thereof shall be deemed to include the feminine andmasculine and all terms used in the singular shall be deemed to includethe plural, and vice versa, as the context may require.

###  

### (c)                                  The words “hereof,” “herein”and “hereunder” and other words of similar import refer to thisAgreement as a whole, as the same may from time to time be amended orsupplemented, and not to any subdivision contained in this Agreement.

###  

### (d)                                 The word “including” when usedherein is not intended to be exclusive and means “including, withoutlimitation.”

###  

### (e)                                  The parties agree that they have beenrepresented by counsel during the negotiation and execution of this Agreementand, therefore, waive the application of any law, regulation, holding or ruleof construction providing that ambiguities in an agreement or other documentwill be construed against the party drafting such agreement or document.

# ** **

# **ARTICLE II**

# ** **

# **REPRESENTATIONSAND WARRANTIES OF ORA**

 

ORA represents and warrantsto Monaco and Buyer, subject to such exceptions as are specifically disclosedin the Sellers’ Disclosure Letter, as follows:

 

2.1                                 Organization ofthe Company.  The Company is a corporation duly organized,validly existing and in good standing under the laws of the State ofNevada.  The Company has the corporatepower to own its properties and to carry on its business as now beingconducted.  The Company is dulyqualified to do business and in good standing as a foreign corporation in eachjurisdiction in which the failure to be so qualified would have a material adverseeffect 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 CapitalStructure.

###  

### (a)                                  The authorized capital stock of theCompany consists of 1,000 shares of Class A Common Stock, $1.00 par value pershare, of which 100 shares are issued and outstanding, and 1,000 shares ofClass B Preferred Stock, no par value per share, of which no shares are issuedand outstanding.  All outstanding sharesof the capital stock of the Company are duly authorized, validly issued, fullypaid and non-assessable and not subject to preemptive rights created bystatute, the Articles of Incorporation or Bylaws of the Company or anyagreement to which the Company is a party or by which it is bound and have beenissued in compliance with federal and state securities laws.  There are no declared or accrued but unpaiddividends with respect to any shares of the Company’s capital stock.  Schedule 2.2(a) sets forth anyrestrictions as to the vesting of any of the Company’s capital stock, includingthe number of shares subject to restriction, the holder thereof and thematerial terms of any such agreement.

 

### (b)                                 ORA is and will be until immediatelyprior to the Closing the record and beneficial owner and holder of the Shares,free and clear of any charge, claim, community property interest, condition,equitable interest, lien, option, pledge, security interest, right of firstrefusal, or restriction of any kind, including any restriction on use, voting,transfer, receipt of income, or exercise of any other attribute ofownership.  The Shares constitute andwill constitute on the Closing Date, all the outstanding capital stock of theCompany. As a result of the Acquisition, Buyer will be the sole record andbeneficial owner of all outstanding capital stock of the Company.

###  

### (c)                                  There are no options, warrants, calls,rights, commitments or agreements of any character, written or oral, to whichthe Company is a party or by which it is bound obligating the Company to issue,deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold,repurchased or redeemed, any shares of the capital stock of the Company orobligating the Company to grant or enter into any such option, warrant, call,right, commitment or agreement.  Exceptas contemplated by this Agreement, there is no rights agreement, voting trust,proxy or other agreement or understanding to which the Company is a party or bywhich it is bound with respect to any security of any class of the Company.

 

2.3                                 Subsidiaries.  The Company does not have and has never hadany subsidiaries or affiliated companies and does not otherwise own and hasnever otherwise owned any shares of capital stock or any interest in, orcontrol, directly or indirectly, any other corporation, partnership,association, joint venture or other business entity.

 

2.4                                 Authority.  The Company and ORA have all requisite powerand authority to enter into this Agreement and to consummate the transactionscontemplated hereby.  The execution anddelivery of this Agreement and the consummation of the transactionscontemplated hereby have been duly authorized by all necessary corporate actionon the part of the Company and ORA. This Agreement has been duly executed and delivered by the Company andORA and constitutes the valid and binding obligation of the Company and ORA,enforceable in accordance with its terms except as such enforceability may belimited by principles of public policy and subject to the laws of generalapplication relating to bankruptcy, insolvency and the relief of debtors andrules of law governing specific performance, injunctive relief or otherequitable remedies.  Neither theexecution and delivery of this Agreement nor the consummation of thetransactions contemplated hereby will conflict with, or result in any violationof, or default under (with or without notice or lapse of time, or both), orgive rise to a right of termination, cancellation or acceleration of anyobligation or loss 

 

12

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ofany benefit under (any such event, a **“Conflict”**) (i) any provision of theArticles 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 applicable to the Companyand/or ORA or their respective properties or assets.  No consent, waiver, approval, order or authorization of, orregistration, declaration or filing with, any court, administrative agency orcommission or other federal, state, county, local or foreign governmentalauthority, instrumentality, agency or Commission (**“Governmental Entity”**) or anythird party (so as not to trigger any Conflict), is required by or with respectto the Company and/or ORA in connection with the execution and delivery of thisAgreement or the consummation of the transactions contemplated hereby.

 

2.5                                 CompanyFinancial Statements.  Schedule 2.5sets forth the Company’s audited balance sheet as of March 31, 2002 and therelated audited statements of income and cash flow for the twelve-month periodthen 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 November 26,2002. The Company’s balance sheet as of September 30, 2002 may be referred tohereinafter as the **“Interim Balance Sheet**.**”**

 

2.6                                 ORA FinancialStatements.  Schedule 2.6sets forth ORA’s audited balance sheet as of March 31, 2002 and the relatedaudited statements of income and cash flow for the twelve-month period thenended (collectively the **“ORA Annual Financials”**), and ORA’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 **“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 endorsement of any type,whether accrued, absolute, contingent, matured, unmatured or other (whether ornot required to be reflected in financial statements in accordance with GAAP),which, individually or in the aggregate, (i) has not 

 

13

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beenreflected in the Company Financials, or (ii) has arisen since the date of theInterim Financials outside the ordinary course of the Company’s business.

 

2.8                                 No Changes.  Except as contemplated by this Agreement,since the date of the Interim Balance Sheet, there has not been, occurred orarisen any:

###  

### (a)                                            transaction by the Company except in theordinary course of business as conducted on the date of the Interim BalanceSheet and consistent with past practices;

###  

### (b)                                           amendments or changes to the Articles ofIncorporation or Bylaws of the Company;

###  

### (c)                                            expenditure or commitment by the Companyin excess of $10,000 individually or $50,000 in the aggregate;

###  

### (d)                                           destruction of, damage to or loss of anymaterial assets, business or customer of the Company (whether or not covered byinsurance), including the Property;

###  

### (e)                                            change in accounting methods or practices(including any change in depreciation or amortization policies or rates) by theCompany;

 

###  

### (f)                                              revaluation by the Company of any of itsassets, including the Property;

###  

### (g)                                           declaration, setting aside or payment ofa dividend or other distribution with respect to the capital stock of theCompany;

###  

### (h)                                           material change in any compensationarrangement or agreement with any employee, officer, director or stockholder;

###  

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

###  

### (j)                                               amendment or termination of any materialcontract, agreement, permit, approval or license to which the Company is aparty or by which it is bound, including any purchase and sale agreements forlots in the Project;

###  

### (k)                                            loan by the Company to any Person,incurring by the Company of any indebtedness, guaranteeing by the Company ofany indebtedness, issuance or sale of any debt securities of the Company orguaranteeing by the Company of any debt securities of others;

###  

### (l)                                               waiver or release of any right or claimof the Company, including any write-off or other compromise of any accountreceivable of the Company;

###  

### (m)                                         commencement or notice or threat ofcommencement of any lawsuit or judicial or administrative proceeding against orinvestigation of the Company or its affairs, including the Project;

###  

14

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### (n)                                           any event or condition of any characterthat has or could be reasonably expected to have a material adverse impact onthe Company;

###  

### (o)                                           any agreement, contract, lease orcommitment or any extension or modification of the terms of any agreement,contract, lease or commitment which (i) involves the payment of greater than$25,000 per annum, (ii) extends for more than one (1) year, (iii) involves anypayment or obligation to any affiliate of the Company other than in theordinary course of business as conducted on that date and consistent with pastpractices, or (iv) involves the sale of, lease of or transfer of any interestin any material assets;

###  

### (p)                                           hiring of, or offer of employment to, anyemployees (or if an offer was accepted people that would become employees); or

###  

### (q)                                           negotiation or agreement by the Companyor any officer or employees thereof to do any of the things described in thepreceding clauses (a) through (p) (other than negotiations with Monaco or Buyerand their representatives regarding the transactions contemplated by thisAgreement).

 

2.9                                 Tax and Other Returns and Reports.

 

### (a)                                            Definition of Taxes. For the purposes of this Agreement, **“Tax”** or, collectively, **“Taxes”**,means (i) any and all federal, state, local and foreign taxes, assessments andother governmental charges, duties, impositions and liabilities, includingtaxes based upon or measured by gross receipts, income, profits, sales, use andoccupation, and value added, ad valorem, transfer, franchise, withholding,payroll, recapture, employment, excise and property taxes, together with allinterest, penalties and additions imposed with respect to such amounts and anyobligations under any agreements or arrangements with any other Person withrespect to such amounts, (ii) any liability for the payment of any amounts ofthe type described in clause (i) of this Section 2.9(a) as a resultof being a member of an affiliated, consolidated, combined or unitary group forany period, and (iii) any liability for the payment of any amounts of the typedescribed in clauses (i) or (ii) of this Section 2.9(a) as a resultof any express or implied obligation to indemnify any other Person or as aresult of and including any liability for taxes of a predecessor entity.

###  

### (b)                                           Tax Returns and Audits.

####  

#### (i)                                     The Company has prepared and timely filedall required federal, state, local and foreign returns, estimates, informationstatements and reports (**“Returns”**) relating to any and all Taxesconcerning or attributable to the Company or its operations and such Returnsare true and correct and have been completed in accordance with applicable law.

####  

#### (ii)                                  The Company:  (A) has timely paid all Taxes it is required to pay and (B) haswithheld with respect to its employees (and timely paid over to the appropriatetaxing authority) all federal and state income taxes, Federal InsuranceContribution Act, Federal Unemployment Tax Act and other Taxes required to bewithheld.

####  

(iii)                               The Company hasnot been delinquent in the payment of any Tax nor is there any Tax deficiencyoutstanding, proposed or assessed against the Company, nor has the 

 

15

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#### Company executed anywaiver of any statute of limitations on or extending the period for theassessment or collection of any Tax.

####  

#### (iv)                              No audit or other examination of anyReturn of the Company is presently in progress, nor has the Company beennotified of any request for such an audit or other examination.

####  

#### (v)                                 The Company does not have any liabilitiesfor unpaid federal, state, local and foreign Taxes which have not been accruedor reserved against on the Company Financials, whether asserted or unasserted,contingent or otherwise, and the Company and/or ORA have no knowledge of anybasis for the assertion of any such liability attributable to the Company orits assets or operations.  Since thedate of the Interim Balance Sheet, the Company has not incurred any liabilityfor Taxes other than in the ordinary course of business.

####  

#### (vi)                              The Company has provided to Monaco or itslegal counsel copies of all federal and state income and all state sales anduse Tax Returns filed by the Company for all 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 the Company nor ORA has any knowledgeof any basis for the assertion of any claim relating or attributable to Taxeswhich, if adversely determined, would result in any Lien on the assets of theCompany other than Permitted Exceptions and the lien of ad valorem real estatetaxes which are not delinquent as of the Closing Date.

####  

#### (ix)                                None of the Company’s assets are treatedas “tax-exempt use property” within the meaning of Section 168(h) of the Code.

 

#### (x)                                   No adjustment relating to any Tax Returnfiled by the Company has been proposed formally or, to the knowledge of theCompany or ORA, informally by any taxing authority to the Company or anyrepresentative thereof.

####  

#### (xi)                                The Company has not filed any consentagreement under Section 341(f) of the Code or agreed to have Section 341(f)(2)of the Code apply to any disposition of a subsection (f) asset (as defined inSection 341(f)(4) of the Code) owned by the Company.

####  

#### (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.

####  

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#### (xiii)                          The Company is not, nor has at any timebeen, a “United States real property holding corporation” within the meaning ofSection 897(c)(2) of the Code.

####  

#### (xiv)                         The Company’s tax basis in its assets isaccurately reflected on the Company’s tax books and records and will not beaffected by any transactions contemplated by this Agreement.

####  

#### (xv)                            The Company has notconstituted either a “distributing corporation” or a “controlled corporation”in a distribution of stock qualifying for tax-free treatment underSection 355 of the Code (x) in the two (2) years prior to the date of thisAgreement or (y) in a distribution which could otherwise constitute part of a“plan” or “series of related transactions” (within the meaning of Section355(e) of the Code) in conjunction with the******Acquisition.

###  

### (c)                                  Executive Compensation Tax. There is no contract, agreement, plan or arrangement to which the Companyis a party, including the provisions of this Agreement, covering any employeeor former employee of the Company, which individually or collectively, couldgive rise to the payment of any amount that would not be deductible pursuant toSections 280G, 404 or 162(m) of the Code.

 

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

 

2.11                           Title of Properties; Absence of Liens andEncumbrances; Condition of Equipment.

###  

### (a)                                  Except for the Property, the Company doesnot own, lease, license, sublease or otherwise occupy any real property, norhas it ever owned, leased, licensed, subleased or otherwise occupied any realproperty.

###  

### (b)                                 The Company has good and valid title to,or, in the case of leased properties and assets, valid leasehold interests in,all of their tangible properties and assets, real, personal and mixed, used orheld for use in its business, free and 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 valoremreal estate taxes which are not delinquent as of the Closing Date, (iii) liensfor other taxes not yet due and payable and (iv) such imperfections of titleand encumbrances, if any, which are not material in character, amount orextent, and which do not materially detract from the value, or materiallyinterfere with the present use, of the property subject thereto or affectedthereby.

###  

(c)                                  Schedule 2.11(c) identifies allmaterial items of equipment, machinery, furniture, fixtures and tangiblepersonal property owned or leased by the Company for use in the business of theCompany (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

 

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### equipment, machinery,furniture, fixtures and tangible personal property used by the Company in theoperation of its business.

###  

### (d)                                 The Company has sole and exclusiveownership, free and clear of any Liens, of all customer lists, customer contactinformation, customer correspondence and customer licensing and purchasinghistories relating to its current and former customers (the **“CustomerInformation”**).  No Personother than the Company possesses any claims or rights with respect to use ofthe Customer Information.

 

2.12                           IntellectualProperty.

###  

### (a)                                  Status.  Set forth inSchedule 2.12 is a list and brief description of all trademarks,trademark applications, service marks, service mark applications and tradenames, and all applications for such which are in the process of beingprepared, owned by or registered in the name of the Company, or of which theCompany is a licensor or licensee or in which the Company has any right, and ineach case a brief description of the nature of such right (the “**Intellectual Property**”).

###  

### (b)                                 Ownership.  Neither theCompany nor ORA has any knowledge of any conflict with or infringement of therights of others with respect to the Intellectual Property.  There are no outstanding options, licenses,or agreements of any kind relating to the Intellectual Property, nor is theCompany bound by or a party to any options, licenses or agreements of any kindwith respect to the trademarks, service marks and trade names of any otherPerson.

###  

### (c)                                  Infringement. The Company has not received any communications alleging that the Companyhas violated or, by conducting its business as proposed, would violate any ofthe trademarks, service marks and trade names of any other Person.  Neither the Company nor ORA is aware of anyaction, suit, proceeding or investigation pending or currently threatenedagainst the Company which relate to the Company’s ownership of the IntellectualProperty that may, to the Company’ or ORA’s knowledge, materially and adverselyaffect the Company’s business as now conducted, nor are the Company or ORAaware that there is any basis for the foregoing.

 

2.13                           Agreements, Contracts and Commitments.

###  

### (a)                                  Set forth in Schedule 2.13(a)is a list of all agreements, contracts, leases, licenses or commitments (a)under which the Company has or may acquire any rights, (b) under which theCompany has or may become subject to any obligation or liability, or (c) bywhich the Company or any of the assets owned or used by it is or may becomebound (collectively, the “**Company Contracts**”),including any of the following:

####  

#### (i)                                     any agreements or arrangements thatcontain any severance pay or post-employment liabilities or obligations,

####  

#### (ii)                                  any bonus, deferred compensation,pension, profit sharing or retirement plans, or any other employee benefitplans or arrangements,

####  

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#### (iii)                               any employment or consulting agreement,contract or commitment with an employee or individual consultant or salespersonor consulting or sales agreement, contract or commitment with a firm or otherorganization,

####  

#### (iv)                              any fidelity or surety bond or completionbond,

####  

#### (v)                                 any lease of personal property,

####  

#### (vi)                              any agreement of indemnification orguaranty,

####  

#### (vii)                           any agreement, contract or commitmentcontaining any covenant limiting the freedom of the Company to engage in anyline of business or to compete with any Person,

####  

#### (viii)                        any agreement, contract or commitmentrelating to capital expenditures,

####  

#### (ix)                                any agreement, contract or commitmentrelating to the disposition or acquisition of assets or any interest in anybusiness enterprise outside the ordinary course of the Company’s business,

####  

#### (x)                                   any mortgages, indentures, loans orcredit agreements, security agreements or other agreements or instrumentsrelating to the borrowing of money or extension of credit, including guarantiesreferred to in clause (vi) hereof,

####  

#### (xi)                                any purchase order or contract for thepurchase of raw materials,

####  

#### (xii)                             any construction contracts,

####  

#### (xiii)                          any distribution, joint marketing ordevelopment agreement, or

####  

#### (xiv)                         any other agreement, contract orcommitment that is not cancelable without penalty within thirty (30) days.

###  

### (b)                                 The Company has not breached, violated ordefaulted under, or received notice that it has breached, violated or defaultedunder, any of the terms or conditions of any Company Contract.  Each Company Contract is in full force andeffect and is not subject to any default thereunder of which the Company or ORAhave knowledge by any party obligated to the Company pursuant thereto.

###  

### (c)                                  No consents, waivers and approvals ofparties to any Company Contract are necessary in order to avoid any breach,violation, default, acceleration or termination right or other loss of rightsor event that would constitute a breach, violation, default, acceleration ortermination right or other loss of rights with the lapse of time, giving ofnotice, or both, in connection with the execution and delivery of thisAgreement and the consummation of transactions contemplated hereby.

####  

 

19

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###  

### (d)                                 The Company has delivered to Monaco true,correct and complete copies of the Company Contracts, including all exhibits,amendments and supplements and all material correspondence relatedthereto.  No party to any CompanyContract has informed the Company of its intention to terminate or not renewsuch Company Contract.  No issue hasbeen raised by any party out of the ordinary course of business, if unresolved,would result in the termination or nonrenewal of such Company Contract.  Following the Closing, the Company will bepermitted to exercise all of the rights that the Company had under the CompanyContracts prior to the Closing without payment of any additional amounts orconsideration other than ongoing fees or payments which the Company would otherwisebe required to pay pursuant to the terms of such Company Contract had thetransactions contemplated by this Agreement not occurred.

 

2.14                           Interested Party Transactions.

 

### (a)                                  Other than by virtue of its interest inORA, no officer, director or shareholder of the Company or, to the knowledge ofthe Company or ORA, nor any ancestor, sibling, descendant or spouse of any ofsuch Persons, or any trust, partnership or corporation in which any of suchPersons has an interest, has, directly or indirectly, (i) an interest in anyentity which furnished or sold, or furnishes or sells, services or productsthat the Company furnishes or sells or proposes to furnish or sell, or (ii) aninterest in any entity that purchases from or sells or furnishes to the Companyany goods or services, or (iii) a beneficial interest in any Company Contract;provided, that ownership of no more than one percent (1%) of the outstandingvoting stock of a publicly traded corporation shall not be deemed an “interestin 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 2.15 accurately lists each GovernmentalAuthorization. The Governmental Authorizations are in full force and effect andconstitute all Governmental Authorizations required to permit the Company tooperate or conduct its business substantially as it is currently, has been andis proposed to be conducted to complete and operate Phase I or hold anyinterest in its properties or assets.

###  

### (b)                                 No event has occurred or circumstanceexists that may (with or without notice or lapse of time) (i) constitute orresult directly or indirectly in a material violation of or a failure to complywith any term or requirement of any Governmental Authorization listed orrequired to be listed on Schedule 2.15 or (ii) result directly orindirectly in the revocation, withdrawal, suspension, cancellation ortermination of, or any modification to, any Governmental Authorization listedor required to be listed on Schedule 2.15.

###  

(c)                                  None of theCompany, ORA or the Principals have received any notice or other communication(whether written or oral) from any Governmental Entity or any other Personregarding (i) any actual, alleged, possible or potential violation of orfailure to comply with any term or requirement of any GovernmentalAuthorization or (ii) any actual, proposed, possible or potential 

20

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### revocation, withdrawal,suspension, cancellation, termination of or modification to any GovernmentalAuthorization.

 

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)                                  The Company has made available to Monacoa list of all accounts receivable of the Company reflected on the CompanyFinancials (**“Accounts Receivable”**) along with a range of days elapsedsince invoice.

###  

### (b)                                 All Accounts Receivable of the Companyarose in the ordinary course of business, are carried at values determined inaccordance with GAAP consistently applied and, to the best knowledge of theCompany and ORA, should be collectible except to the extent of reservestherefor set forth in the Company Financials. No Person has any Lien on any of such Accounts Receivable and no requestor agreement for material deduction or discount has been made with respect toany of such Accounts Receivable.

 

2.18                           Minute Books.  The minute books of the Company madeavailable to counsel for Buyer are the only minute books of the Company andcontain an accurate summary of all meetings of directors (or committeesthereof) and shareholders and actions by written consent of directors orshareholders since the time of incorporation of the Company.

 

2.19                           Environmental Matters.  No Hazardous Materials are present, as a result of actions oromissions of the Company or ORA, or to the Company’s or ORA’s knowledge, as aresult of any actions or omissions of any third party or otherwise, in, on, orunder any property, including the land and the improvements, ground water andsurface water thereof, that the Company has at any time owned, operated,occupied or leased. The Company has obtained, and is and has been in compliancein all material respects with all applicable permits, licenses, registrations,approvals and other authorizations that are required for the operation of theCompany’s business (including the completion and operation of the Project)under all applicable Environmental Laws. The Company is and has been in compliance with all applicableEnvironmental Laws and to the knowledge of the

21

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Companyand ORA, the Company’s agents, predecessors in interest, contractors, inviteesor licensees are and have been in compliance with all applicable EnvironmentalLaws in connection with the operation of the Company’s business and theProject.  The Company has not disposedof, released, discharged, or emitted any Hazardous Materials into the air,soil, groundwater or otherwise at any properties owned, leased or occupied atany time by the Company, or at any other property, or exposed any employee orother individual to any Hazardous Materials or any workplace or environmentalcondition in such a manner as would reasonably be expected to subject theCompany to liability.  Neither theCompany nor ORA is aware of any fact or circumstance, which could result in anyenvironmental liability which could reasonably be expected to result in aMaterial Adverse Effect on the business or financial status of the Company. TheCompany has delivered to Monaco or made available for inspection by Monaco andits agents, representatives and employees all records in the Company’spossession or reasonably available to the Company concerning the Company’scompliance with Environmental Laws, and all environmental site assessments,sampling, analyses, tests, audits and engineering data relating to any realproperty currently or formerly owned or leased by the Company. The Company hascomplied with all environmental disclosure obligations imposed by applicablelaw with respect to this transaction.

 

2.20                           Brokers’ and Finders’ Fees; Third Party Expenses.  The Company has not incurred, nor will it incur, directly orindirectly, any liability for brokerage or finders’ fees or agents’ commissionsor any similar charges in connection with this Agreement or any transactioncontemplated hereby for which Monaco or Buyer could become liable or obligated.

 

2.21                           EmployeeMatters and Benefit Plans.

###  

### (a)                                  Schedule. Schedule 2.21(a) contains an accurate and complete list of eachPlan and each Employment Agreement.  TheCompany does not have any plan or commitment to establish any new Plan orEmployment Agreement, to modify any Plan or Employment Agreement (except to theextent required by law or to conform any such Plan or Employment Agreement tothe requirements of any applicable law, in each case as previously disclosed toMonaco and Buyer in writing, or as required by this Agreement), or to adopt orenter into any Plan or Employment Agreement.

###  

### (b)                                 Documents.  The Companyhas provided to Monaco and Buyer correct and complete copies of: (i) alldocuments embodying each Plan and each Employment Agreement including (withoutlimitation) all amendments thereto and all related trust documents,administrative service agreements, group annuity contracts, group insurancecontracts, and policies pertaining to fiduciary liability insurance coveringthe fiduciaries for each Plan; (ii) the most recent annual actuarialvaluations, if any, prepared for each Plan; (iii) the three (3) mostrecent annual reports (Form Series 5500 and all schedules and financial statementsattached thereto), if any, required under ERISA or the Code in connection witheach Plan; (iv) if the Plan is funded, the most recent annual and periodicaccounting of Plan assets; (v) the most recent summary plan descriptiontogether with the summary(ies) of material modifications thereto, if any,required under ERISA with respect to each Plan; (vi) all IRS determination,opinion, notification and advisory letters, and all applications andcorrespondence to or from the IRS or the DOL with respect to any such applicationor letter; (vii) all communications material to any Employee or Employeesrelating to any Plan and any proposed Plans, in each case, relating to anyamendments, terminations, establishments, 

 

22

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### increases or decreases inbenefits, acceleration of payments or vesting schedules or other events whichwould result in any material liability to the Company; (viii) allcorrespondence to or from any governmental agency relating to any Plan; (ix)all COBRA forms and related notices (or such forms and notices as requiredunder comparable law); (x) the three (3) most recent plan years discriminationtests for each Plan; and (xi) all registration statements, annual reports (Form11-K and all attachments thereto) and prospectuses prepared in connection witheach Plan.

###  

### (c)                                  Plan Compliance.

####  

#### (i)                                     The Company has performed in all materialrespects all obligations required to be performed by it under, is not indefault or violation of, and has no knowledge of any default or violation byany other party to each Plan, and each Plan has been established and maintainedin all material respects in accordance with its terms and in compliance withall applicable laws, statutes, orders, rules and regulations, including but notlimited to ERISA or the Code

####  

#### (ii)                                  Each Plan intended to qualify underSection 401(a) of the Code and each trust intended to qualify under Section501(a) of the Code has either received a favorable determination, opinion,notification or advisory letter from the IRS with respect to each such Plan asto its qualified status under the Code, including all amendments to the Codeeffected by the Tax Reform Act of 1986 and subsequent legislation, or hasremaining a period of time under applicable Treasury regulations or IRSpronouncements in which to apply for such a letter and make any amendmentsnecessary to obtain a favorable determination as to the qualified status ofeach such Plan.

####  

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

####  

#### (iv)                              There are no actions, suits or claimspending, or, to the knowledge of the Company, threatened or reasonablyanticipated (other than routine claims for benefits) against any Plan oragainst the assets of any Plan.

####  

#### (v)                                 Each Plan (other than any stock optionplan) can be amended, terminated or otherwise discontinued after the ClosingDate, without material liability to Monaco and Buyer, Company or any of itsERISA Affiliates (other than ordinary administration expenses).

####  

#### (vi)                              There are no audits, inquiries orproceedings pending or, to the knowledge of the Company or any ERISAAffiliates, threatened by the IRS or DOL with respect to any Plan.

####  

#### (vii)                           Neither the Company nor any ERISAAffiliate 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.

###  

 

23

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

###  

### (e)                                  Collectively Bargained, Multiemployer andMultiple Employer Plans.  At no time has the Company orany ERISA Affiliate contributed to or been obligated to contribute to anyMultiemployer Plan.  Neither theCompany, nor any ERISA Affiliate has at any time ever maintained, established,sponsored, participated in, or contributed to any multiple employer plan, or toany plan described in Section 413 of the Code.

 

### (f)                                    No Post-Employment Obligations. No Plan provides, or reflects or represents any liability to provideretiree health to any person for any reason, except as may be required by COBRAor other 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)                                 Health Care Compliance. Neither the Company nor any ERISA Affiliate has, prior to the ClosingDate and in any material respect, violated any of the health care continuationrequirements of COBRA, the requirements of FMLA, the requirements of the HealthInsurance Portability and Accountability Act of 1996, the requirements of theWomen’s Health and Cancer Rights Act of 1998, the requirements of the Newborns’and Mothers’ Health Protection Act of 1996, or any amendment to each such act,or any similar provisions of state law applicable to its Employees.

###  

### (h)                                 Effect of Transaction.

####  

#### (i)                                     The execution of this Agreement and theconsummation of the transactions contemplated hereby will not (either alone orupon the occurrence of any additional or subsequent events) constitute an eventunder any Plan, Employment Agreement, trust or loan that will or may result inany payment (whether of severance pay or otherwise), acceleration, forgivenessof indebtedness, vesting, distribution, increase in benefits or obligation tofund benefits with respect to any Employee.

####  

#### (ii)                                  No payment or benefit which will or maybe made by the Company or its ERISA Affiliates with respect to any Employee orany other “disqualified individual” (as defined in Code Section 280G and theregulations thereunder) will be characterized as a “parachute payment,” withinthe meaning of Section 280G(b)(2) of the Code.

###  

### (i)                                     Employment Matters. The Company: (i) is in compliance in all respects with allapplicable foreign, federal, state and local laws, rules and regulations respectingemployment (including, without limitation, all applicable foreign, federal,state and local laws, rules and regulations respecting termination ofemployment), employment practices, terms and conditions of employment and wagesand hours, in each case, with respect to Employees; (ii) has withheld andreported all amounts required by law or by agreement to be withheld andreported with respect to wages, salaries and other payments to Employees;(iii) is not liable for any arrears of wages or any

 

24

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### taxes or any penalty forfailure to comply with any of the foregoing; and (iv) is not liable forany payment to any trust or other fund governed by or maintained by or onbehalf of any governmental authority, with respect to unemployment compensationbenefits, social security or other benefits or obligations for Employees (otherthan routine payments to be made in the normal course of business andconsistent with past practice).  Thereare no pending, threatened or reasonably anticipated claims or actions againstthe Company under any worker’s compensation policy or long-term disabilitypolicy.

###  

### (j)                                     Labor.  No workstoppage or labor strike against the Company is pending, threatened orreasonably anticipated.  The Companydoes not know of any activities or proceedings of any labor union to organizeany Employees.  There are no actions,suits, claims, labor disputes or grievances pending, or, to the knowledge ofthe Company, threatened or reasonably anticipated relating to any labor, safetyor discrimination matters involving any Employee, including, withoutlimitation, charges of unfair labor practices or discrimination complaints,which, if adversely determined, would, individually or in the aggregate, resultin any material liability to the Company. Neither the Company nor any of its subsidiaries has engaged in anyunfair labor practices within the meaning of the National Labor Relations Act.  The Company is not presently, nor has itbeen in the past, a party to, or bound by, any collective bargaining agreementor union contract with respect to Employees and no collective bargainingagreement is being negotiated by the Company.

###  

### (k)                                  International Employee Plan. The Company does not now, nor has it ever had the obligation to,maintain, establish, sponsor, participate in, or contribute to anyInternational 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 with all federal, state andlocal statutes, laws or regulations, domestic or foreign, and has not receivedany notices of violation with respect to any of such statutes, laws orregulations.

 

2.24                           Consents.  No consent, waiver, approval, order orauthorization of, or registration, declaration or filing with, any GovernmentalEntity or any third party (so as not to trigger any Conflict), is required byor with respect to the Company and/or ORA in connection with the execution anddelivery of this Agreement or the consummation of the transactions contemplatedhereby or thereby.

 

2.25                           No Injunctions or Restraints on Conduct ofBusiness.  No temporary restraining order, preliminaryor permanent injunction or other order issued by any court of competent

 

25

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jurisdiction or other legal or regulatoryrestraint or provision challenging Buyer’s proposed acquisition of the Company,or limiting or restricting Buyer’s conduct or operation of the business of theCompany or the completion or operation of the Project (or its own business)following the Closing is in effect, nor, to ORA’s and the Company’s knowledge,has any proceeding by an administrative agency or commission or othergovernmental authority or instrumentality, domestic or foreign, seeking any ofthe foregoing been overtly threatened or commenced.

 

2.26                           Representations relating tothe Property.

###  

### (a)                                  No Condemnation 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)                                 Parties in Possession. Other than the third parties that have purchased lots as described in Schedule2.26(p) (the “**Sold Lots**”) orthat occupy lots under rental agreements, there are no parties in pos­sessionof any portion of the Property other than the Conveyed Common Area, whether aslessees, tenants at sufferance, trespassers or otherwise.

###  

### (c)                                  Flood Zone.  No portionof the Property is located in a wetland area, as defined by laws, or in adesignated or recognized flood plain, flood plain district, flood hazard areaor area of similar characterization. The Project will not violate any requirement of the United States Corpsof Engineers or laws relating to wetland areas.

###  

### (d)                                 Existing Improvements.  Except asset forth in Schedule 2.26(d), all of the Improvements required for thecompletion and operation of Phase I have been completed. To the best of theCompany’s and ORA’s knowledge, (a) the Improvements (includ­ing the buildingsand building pads and all drives, parking lots, landscaping, curbs, side­walks,sewers and other utilities) and all other construction activities of theProperty, including grading and filling, have been constructed, performed andinstalled substantially in accordance with plans and specifications approved bythe various governmental authorities having jurisdic­tion, in compliance withall laws and the recommendations of the Company’s consultants and (b) allmaterial licenses, per­mits, authorizations and approvals required for theImprovements by all governmental authorities having jurisdiction have beenissued and have been paid for, and as of the Closing all of the same will be infull force and effect.  All drives andparking areas on the Property are private and have not been dedi­cated to anypublic authority.  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)                                  Hazardous Substances.

####  

#### (i)                                     To the knowledge of the Company and ORA(a) there are no surface impoundments, lagoons, waste piles, injection wells,or underground storage areas, or other man-made facilities located on theProperty that may have accommodated Hazardous Materials; (b) no portion of theProperty has been used as a dump or landfill or con­sists of filled-in land;(c) there are

 

26

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#### 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 disposal of the contents of any undergroundstorage tank into groundwater, surface water or subsurface soils.

####  

#### (ii)                                  To the knowledge of the Company and ORA,the Property currently complies with all Environmental Laws, and the Companyhas received no warning, notice, administrative complaint, judicial complaintor other formal or informal notice alleging that any conditions on the Propertyare or may be in violation of any Environmental Laws.  The Company has not received and, to the knowledge of theCompany, and ORA, no previous owner of the Property has received any notice,summons, citation, letter or other communication, written or oral, from anyGovernmental Entity alleging or inquiring into any possible release, emission,discharge, disposal, use, storage, production, handling or presence of anyHazardous Materials on or about the Property or the soil, surface water orgroundwater thereof.

####  

#### (iii)                               To the knowledge of the Company and ORA,there are no wells on the Property and the Project does not includeinstallation of any wells for purposes of irrigation or consumptive use and allwater 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)                                    Governmental Approvals; 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. There is nothing that would constitute an uncured material vio­lation ofFederal, state, or municipal laws, ordinances, orders, regula­tions orrequirements affecting 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

 

27

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### performance by theCompany thereunder, the steps required to receive or complete performance withrespect to each Approval, the estimated time required to receive and/orcomplete required performance with respect to each Approval, the estimated costto receive and/or complete performance with respect to each Approval and anyanticipated impediments to receiving and/or completing performance with respectto each Approval.

###  

### (g)                                 Soundness.  To the bestof the Company’s and ORA’s knowledge, the mechanical, electrical, plumbing andsewer systems serving the Improvements are fully operational, there are nostructural, electrical, mechani­cal, plumb­ing, roof, paving or other defectsin the Property, the roofs of the Improvements are free of leaks and in soundstructural condition, and the Personalty is in good working order.

###  

### (h)                                 Access.  The Propertyhas adequate direct access to and from completed, dedicated and accepted publicroads for the completion and operation of the Project and there is no pendingor threatened governmental proceeding which would impair or curtail suchaccess.

###  

### (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 Phase I when Phase Iis completed and operating. All utility lines serving the Property areseparately metered, are located in the rights of way of public roadwaysbordering the Land and are set up to serve the Property independently of theneighboring properties.  Schedule2.26(i) lists all such utility, telecommunications and drainage systemsthat are not yet completed, installed and paid for in compliance with laws, thestatus of completion of each such item, the estimated time required to completesuch item, the estimated cost to complete such item and any anticipatedimpediments to completing such item.

###  

### (j)                                     Property.  Except forthe recorded mortgages/deeds of trust securing the Monaco Loan and the US BankLoan, liens for ad valorem real estate taxes not delinquent at the ClosingDate, the Permitted Exceptions and as set forth in Schedule 2.26(j), theCompany is and, following the consummation of the transaction contemplated bythis Agreement will be, the owner of good and market­able fee simple title tothe Property other than the Sold Lots and the Conveyed Common Area free andclear of any liens, mortgages, pledges, security interests, options, rights,leases, charges, encumbrances or restrictions of any kind (“**Mortgages**”).  The Property is all the property that is used or will be requiredin connec­tion with the operation and completion of the Project.  Except as set forth in Schedule 2.11(c),there is no personal property owned by the Company which is used by the Companyin connection with the own­er­ship of the Property other than thePersonalty.  The Property is segregatedon the applicable tax rolls, so that no other property is included on any taxbill relating to any portion of the Prop­erty. There are no tax exemptions or abatements affecting any of theProperty.  The Property complies in allrespects with the applicable subdivision or parcel map acts and has beenproperly subdivided so that the Property may be conveyed to Buyer as providedherein and the lots can be conveyed to third party purchasers without futureaction.  The Property has sufficientparking for the completion and operation of the Project as required byapplicable law and does not have any shared parking with any otherproperty.  Schedule 2.26(j) lists(i) all Mortgages to which the Project is subject (other than the recorded 

 

28

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### mortgages/deeds of trustsecuring the US Bank Loan, the Monaco Loan and with respect to the Sold Lots),the parties in whose favor the Mortgages run, the dates of such Mortgages, theamounts of such Mortgages and the subject matter of such Mortgages, and (ii)all Approvals required so that the Property may be conveyed to third partypurchasers, the status of receipt of each Approval, the steps required toobtain each Approval, the estimated time required to obtain each such Approval,the estimated cost to obtain each such Approval and any anticipated impedimentsto obtaining each Approval.

###  

### (k)                                  Leases; Options; Broker Agreement.  Except asset forth in Schedule 2.26(k), there are no oral or written leases,licenses or other occupancy agreements, pending purchase and sale agreements orparking agreements with respect to the Property or options or rights of firstrefusal to lease or purchase the Property. Schedule 2.26(k) sets forth a list of all such agreements,the names of the parties thereto, the dates thereof, the portions of theProperty affected thereby (including the lot number, if applicable) and (a) asto leases, licenses and other occupancy agreements, the terms thereof and theaggregate rental and/or fees payable thereunder and (b) as to purchaseagreements, the purchase price, the amount of the earnest money deposit, theestimated closing date and the conditions to closing.  The Company has delivered to Monaco true, correct and completecopies of all such agreements, and such agreements constitute the entireagreement with the Company thereunder. The Company and the other parties thereto do not have any right tocancel or terminate any such agreements as a result of any existing fact knownto the Company.  The Company is not indefault under any such agreements, and to the best knowledge of the Company,and ORA, the other party thereto is not in default under any such agreements,and has performed all of the obligations required to be performed by theCompany thereunder.  All suchobligations to be performed on or prior to the Closing will have been dulyperformed 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 or threatened,exist with regard such agreements.  Neitherthe Company nor ORA nor any of the Principals has entered into any brokeragreements, listing agreements or other similar agreements with respect to thesale or leasing of any portion of the Property.

###  

### (l)                                     Service Contracts.  There arepresently in existence no service contracts, billboard or other advertisingagreements or other sorts of operating agreements with respect to the Property(excluding the Sold Lots and the Conveyed Common Area), other than those listedon Schedule 2.26(l), all of which can be canceled, without penaltyor other payment, upon written notice of thirty (30) days or less.  There are no union contracts affecting theProperty.  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(excluding the Sold Lots and the Conveyed Common Area) 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 (excluding the Sold Lots andthe Conveyed Common Area) in the amount of $12,000,000.

###  

### (n)                                 No Assessments. To the Company’s and ORA’s best knowledge, there are no pending orthreatened assessments, improvements or activities of any public orquasi-public body

 

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### either planned, in theprocess of construction or completed which may give rise to any assessmentagainst the Property or any portion thereof, including upon completion of theProject.

###  

### (o)                                 US Bank Loan. With respect to the US Bank Loan, (i) prepayment of suchindebtedness is permitted at any time without premium or penalty, (ii) the Companyhas provided Monaco true, correct and complete copies of all of the documentssecuring and evidencing the US Bank Loan and none of such documents has beenendorsed, renewed, amended, transferred, pledged or otherwise modified, and(iii) the current outstanding principal balance under the US Bank Loan is ninemillion six hundred twenty-two thousand eight hundred forty-six dollars($9,622,846).

###  

### (p)                                 Project.  As of thedate hereof, 30 lots have been sold and there are 4 pending purchase and saleagreements with respect to the lots.  Schedule2.26(p) lists each lot and whether it has been sold, its asking price if ithas not been sold, its sale price, sale date and purchaser if it has been sold,its pending sale date and purchase price if it is under contract, the amount ofthe monthly assessments for each lot and whether such assessments areacurrent.  All the Approvals that havebeen obtained or that 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.  All abandoned wells on the Property have been properly closed inaccordance with Legal Requirements.  Tothe best knowledge of the Company and ORA, there is no opposition to theProject from any individual, group or entity.

###  

### (q)                                 Adverse Information. The Company has no information or knowledge that there are any laws,ordinances or restrictions, or any change contemplated therein, or any judicialor administrative action, or any action by adjacent landowners, or natural orartificial conditions upon the Property, or any other facts or conditions whichcould, in the aggregate, have a material adverse effect upon the Property orthe completion or operation of the Project, including the value orprofitability thereof.  The Company hasnot received any notice from any insurance company of any defects orinadequacies in any of the Property which could materially and adversely affectthe insurability of the Property or the Project or the premiums for theinsurance thereof.  No notice has beengiven by any insurance company which has issued a policy with respect to any ofthe Property or by any board of fire underwriters (or other body exercisingsimilar functions) requesting the performance of any repairs, alterations orother work with which compliance has not been made.

###  

### (r)                                    Delivery of Documents. The Company has provided Monaco with true, correct and complete copiesof the following items to the extent that ORA or the Company or theiraffiliates possess such items: (a) all existing land use and development licenses, permits andapprovals and building permits and “building finals” regarding the Project;(b) the most recent as-built survey of the Property in the Company’spossession; (c) evidence that the Property is properly zoned for theProject; (d) evidence that there currently exist no violations of anybuilding, fire, health or safety code, law, rule, regulation or order;(e) a copy of the Company’s policy of title insurance on the Property;(f) all of the documents and agreements described in this Section 2.26,including, without limitation, those set forth in Schedules 2.26(k) and (l)and those described in Section 2.26(o), and none of such documentsor agreements have been amended, transferred, other 

 

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### than pursuant to the USBank Loan documents, pledged or otherwise modified; (g) copies of all air,soil, water, engineering (including, without limitation, structural and seismicreports and reports with respect to the American with Disabilities Act) andenvironmental reports, tests, indemnities and materials regarding the Propertyin the possession of or commissioned or requested by the Company; (h) acomplete copy of all plans and specifications for the construction of theImprovements and the development of the Project (the “**Plans and Specifications**”); (i) a copyof all construction contracts entered into by the Company or otherwise in theCompany’s possession with regard to the Property; (j) copies of allproduct and equipment warranties relating to the Improvements and/or thePersonalty, including, without limitation, copies of all roof warranties; (k)copies of all concession agreements, commercial licenses, governmentallicenses, permits, covenants, conditions and restrictions and any otheragreements related to the Property, which have been certified by the Company tobe true, correct and complete copies; (l) copies of all contracts relatingto the operation, maintenance and management of the Property, including allservice and supply agreements, franchise agreements and personal propertyleases; (m) copies of the Property tax bills for the last three (3) yearsand a schedule of all bond assessments, if applicable, for the Property for thelast three (3) years; (n) copies of all financing documents pertaining to theProperty; (o) copies of all fire, casualty (including earthquake and flood),liability and other insurance policies regarding the Property; (p) aninventory of all tangible Personalty; and (q) all written warranties from eachsubcontractor that performed Work at the Property as to the Work performed bysuch subcontractor (such written warranties, the “**Subcontractors Warranties**”).

###  

### (s)                                  Monies Owed.  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)                                    Loan Applications. The Company has used all of the loan proceeds received from the US BankLoan and the Monaco Loan, except as expressly approved by Monaco as to theMonaco Loan, only for the purposes for which such proceeds were required in theCompany’s loan application.

###  

### (u)                                 Off-Site Improvements. The Company has properly completed all of its construction and otherobligations under the covenants, conditions and restrictions and agreementswith Governmental Entities relating to the development of the Project.

###  

### (v)                                 Project Home Owner’s Association. Schedule 2.26(v) sets forth the current amount that the Project’shomeowner’s association needs to assess each lot per month in order toadequately fund the operations and obligations of the homeowner’sassociation.  All of the owner’s of thelots in the Project, including the Company, are current on their payment of themonthly assessments.

###  

### (w)                               Monaco Loan. The current outstanding principal balance under the Monaco Loan is twomillion eight hundred thousand dollars ($2,800,000).

 

2.27                           Warranties; Indemnities.  Except for those set forth in this Agreement, the Company has notgiven indemnities relating to the Project.

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2.28                           Representations Complete; Disclosure.  None of the representationsor warranties made by the Company and ORA (as modified by the Sellers’Disclosure Letter), nor any statement made in any Schedule or certificatefurnished by the Company or ORA pursuant to this Agreement, contains or willcontain at the Closing, any untrue statement of a material fact, or omits orwill omit at the Closing to state any material fact necessary in order to makethe statements contained herein or therein, in the light of the circumstancesunder which made, not misleading.  Each documentdelivered by the Company or its counsel to Monaco or its counsel in connectionwith this Agreement or the transactions contemplated hereby was a true andcomplete copy of such document including all exhibits, schedules and amendmentsthereto.

 

2.29                           No Other Representations or Warranties.  Except forthe representations and warranties made by the Company or ORA in thisAgreement, the ORLV Agreement, the ORMCC 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 this Agreement,the Guaranty or the Affiliates Agreement or the transactions contemplatedhereby and thereby, notwithstanding the delivery or disclosure to Monaco orBuyer 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**

 

Monacoand Buyer represent 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 and Buyer has all requisite corporate power andauthority to enter into this Agreement and to consummate the transactionscontemplated hereby.  The execution anddelivery of this Agreement and the consummation of the transactionscontemplated hereby have been duly authorized by all necessary corporate actionon the part of each of Monaco and Buyer. This Agreement has been duly executed and delivered by Monaco and Buyerand constitutes the valid and binding obligation of Monaco and Buyer,enforceable in accordance with its terms, except as such enforceability may belimited by principles of public policy and subject to the laws of generalapplication relating to bankruptcy, insolvency and the relief of debtors andrules of law governing specific performance, injunctive relief or other equitableremedies.

 

 

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3.3                                 Consents.  No consent of any Person not a party to this Agreement and noconsent of any Governmental Entity is required to be obtained on the part ofMonaco or Buyer to permit the consummation of the transactions contemplated bythis Agreement.

 

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.

 

3.5                                 Brokers’ and Finders’ Fees; Third PartyExpenses.  NeitherMonaco nor Buyer has incurred, not will they incur, directly or indirectly, anyliability for brokerage or finders’ fees or agents’ commissions or any similarcharges in connection with this Agreement or any transaction contemplatedhereby for which the Company, ORA or the Principals could become liable orobligated.

 

3.6                                 Monaco Loan.  The current outstanding principal balanceunder the Monaco Loan is two million eight hundred thousand dollars($2,800,000)

 

3.7                                 NoOther Representations or Warranties.  Except forthe representations and warranties made by the Monaco or Buyer in thisAgreement, the ORMCC Agreement and the ORN Agreement, neither Monaco nor Buyermake any representations or warranties, and Monaco and Buyer hereby disclaimany other representations or warranties, whether made by the Monaco or Buyer ortheir respective officers, directors or employees, with respect to theexecution and delivery of this Agreement or the transactions contemplatedhereby and thereby, notwithstanding the delivery or disclosure to ORA or itsrepresentatives of any documentation or other information with respect to anyof the foregoing.

 

# **ARTICLE IV**

# ** **

# **CONDUCTPRIOR TO CLOSING**

 

4.1                                 Conductof Business of the Company. During the period from the date of this Agreement and continuing untilthe earlier of the termination of this Agreement or the Closing, the Companyagrees (except to the extent that Monaco shall otherwise consent in writing),to carry on its business in the usual, regular and ordinary course insubstantially the same manner as heretofore conducted, materially comply withall the terms, conditions and provisions of all laws, rules regulations,orders, leases, liens, mortgages, agreements, insurance policies and othercontractual arrangements relating to the Property, to pay its debts and Taxeswhen due, to pay or perform other obligations when due, confer with Monacoconcerning material business or operational matters relating to the Company’sbusiness, use reasonable, good faith efforts to maintain all the assets of theCompany in their current condition and to promptly replace, repair or restoresuch assets in the event of any damage to or destruction of any of such assetsprior to the Closing, maintain the books and records in the usual, regular andordinary manner, on a basis consistent with prior years, report periodically toMonaco concerning the status and operation of the Project, and to use all reasonable

 

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effortsconsistent with past practice and policies to preserve intact the Company’spresent business organizations, keep available the services of its presentofficers and key employees and preserve their relationships with customers,suppliers, licensors, licensees, and others having business dealings with it,all with the goal of preserving unimpaired the Company’s goodwill and ongoingbusinesses at the Closing; it being understood that Monaco and the Companyshall keep each other informed of developments to, and relating actions to betaken in connection with the matters described in Schedule 6.3(g)hereto.  Without limiting the foregoing,but subject to the limitations in Sections 4.1(a)-4.1(aa) below,during such period, the Company agrees to (i) use reasonable efforts to selllots on the Project on terms reasonably acceptable to Monaco, (ii) perform allof its obligations under all Approvals and applications therefore****and (iii) maintain the present insuranceon the Property and promptly provide Monaco with copies of any written noticefrom any insurance company or board of fire underwriters (or other bodyexercising similar functions) of any defects or inadequacies in the Property orrequesting performance of any repairs, alterations or other work to theProperty. The Company shall promptly notify Monaco of any event or occurrenceor emergency not in the ordinary course of business of the Company, and anymaterial event involving the Company.  Except as expressly contemplated by this Agreement, the Companyshall not, without the prior written consent of Monaco:

###  

### (a)                                  Enter into any commitment or transactionnot in the ordinary course of business or any commitment or transaction of thetype described in Section 2.8 hereof;

###  

### (b)                                 Enter into, assume, become bound orobligated by, or extend or modify the terms of any agreement, contract orcommitment which (i) involves the payment of greater than $10,000 per annum,(ii) extends for more than one year or (iii) involves any payment or obligationto any affiliate of the Company;

 

### (c)                                  Prepay any outstanding indebtedness;

###  

### (d)                                 Transfer to any Person any rights to theIntellectual Property;

###  

### (e)                                  Amend or otherwise modify (or agree to doso), except in the ordinary course of business, or violate the terms of, any ofthe Company Contracts or Approvals;

###  

### (f)                                    Commence, settle, institute, prosecute,compromise any action, suit, proceeding, arbitration, or governmental orregulatory investigation or audit or obtain the release of any threatenedaction, suit, proceeding, arbitration, or governmental or regulatoryinvestigation or audit involving or relating to the Company or its business orassets;

###  

### (g)                                 Declare or pay any dividends on or makeany other distributions (whether in cash, stock or property) in respect of anyof its capital stock, or split, combine or reclassify any of its capital stockor issue or authorize the issuance of any other securities in respect of, inlieu of or in substitution for shares of capital stock of the Company, orrepurchase, redeem or otherwise acquire, directly or indirectly, any shares ofits capital stock (or options, warrants or other rights exercisable therefor);

 

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###  

### (h)                                 Issue, deliver or sell or authorize orpropose the issuance, delivery or sale of, or purchase or propose the purchaseof, any shares of its capital stock or securities convertible into, orsubscriptions, rights, warrants or options to acquire, or other agreements orcommitments of any character obligating it to issue any such shares or otherconvertible securities;

###  

### (i)                                     Cause or permit any amendments to itsArticles of Incorporation or Bylaws;

###  

### (j)                                     Acquire or agree to acquire by merging orconsolidating with, or by purchasing a substantial portion of the assets of, orby any other manner, any business or any corporation, partnership, associationor other business organization or division thereof, or otherwise acquire oragree to acquire any assets which are material, individually or in theaggregate, to the business of the Company;

###  

### (k)                                  Sell, lease, license or otherwise disposeof any of its properties or assets, or grant a security interest in any of suchproperties or assets;

###  

### (l)                                     Incur any indebtedness for borrowed moneyor guarantee any such indebtedness or issue or sell any debt securities of theCompany or guarantee any debt securities of others;

###  

### (m)                               Hire or extend an offer of employmentwith the Company to any individual;

###  

### (n)                                 Change, increase or amend the rate ofremuneration or amount of bonuses or other benefits or any other terms ofemployment of any employee;

###  

### (o)                                 Grant any severance or termination pay toany employee, or adopt any new severance plan, amend or modify or alter in anymanner any severance plan, agreement or arrangement relating to any employee;

 

### (p)                                 Adopt or amend any Plan;

###  

### (q)                                 Revalue any of its assets, includingwithout limitation writing down the value of inventory or writing off notes oraccounts receivable other than in the ordinary course of business;

###  

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

###  

### (s)                                  Make or change any material election inrespect of Taxes, adopt or change any accounting method in respect of Taxes,enter into any closing agreement, settle any claim or assessment in respect ofTaxes, or consent to any extension or waiver of the limitation periodapplicable to any claim or assessment in respect of Taxes;

###  

### (t)                                    Enter into any strategic alliance orjoint marketing arrangement or agreement;

###  

 

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### (u)                                 grant any loans to others or purchasedebt securities of others or amend the terms of any outstanding loan agreement;

###  

### (v)                                 enter into any agreement to purchase orsell any interest in real property, grant any security interest in any realproperty or enter into any lease, sublease, license or other occupancyagreement with respect to any real property;

###  

### (w)                               grant nor otherwise create or consent tothe creation of any easement, covenant, restriction, assessment, encumbrance orlien affecting any of the Property;

###  

### (x)                                   convey any of the Property or anyinterest or rights therein, nor commit, permit or suffer to exist any waste ornuisance on the Property;

###  

### (y)                                 make or permit to be made any materialchange in the Property;

###  

### (z)                                   take any action, or fail to take anyaction, that would reasonably be expected to result in any of therepresentations 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 totake, any of the actions described in Sections 4.1(a) through (z) above, or anyother action that would prevent the Company from performing or cause theCompany not to perform its covenants hereunder.

 

### 4.2                                 Other Offers.  In the event the Company orORA or any of the Principals shall receive any offer or proposal with respectto any proposed agreement, contract or commitment to sell to any Person otherthan Monaco or the Buyer all or any portion of the Company’s business andproperties or capital stock, whether by merger, sale of assets, tender offer orotherwise (an “**Alternate Transaction**”),the Company and/or ORA shall promptly (i) inform Monaco that such an offer orproposal has been received and (ii) disclose to Monaco the identity of theparty making the offer or proposal and the terms of such offer orproposal.  Thereafter, the Company andORA shall consult with Monaco regularly with regard to such offer or proposaland the status of discussions and/or negotiations with respect thereto.  The Company and ORA will not enter into, andwill prohibit the Company’s and ORA’s officers from entering into, anyagreement, contract or commitment with respect to an Alternate Transactionwithout the prior written consent of Monaco.

 

# **ARTICLE V**

# ** **

# **ADDITIONALAGREEMENTS**

 

5.1                                 Securityholder Agreements.

###  

### (a)                                  Agreement to Retain Shares. ORA agrees not to transfer (except as may be specifically required bycourt order), sell, exchange, pledge or otherwise dispose of or encumber anyshares of capital stock of the Company beneficially owned by ORA as of the datehereof, or to make 

 

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### any offer or agreementrelating thereto, at any time prior to the Expiration Date.  As used herein, the term **“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)                                 Agreement to Vote Shares. At every meeting of the shareholders of the Company called with respectto any of the following, and at every adjournment thereof, and on every actionor approval by written consent of the shareholders of the Company with respectto any of the following, ORA shall vote the Shares:  (i) in favor of approval of this Agreement and the Acquisitionand any matter that could reasonably be expected to facilitate the******Acquisition; and(ii) against approval of any proposal made in opposition to or competition withconsummation of the Acquisition and against any merger, consolidation, sale ofassets, reorganization or recapitalization, with any party other than withMonaco, Buyer and their affiliates and against any liquidation or winding up ofthe Company.

###  

### (c)                                  Additional Documents. ORA hereby covenants and agrees to execute and deliver any additionaldocuments necessary or desirable, in the reasonable opinion of Monaco or theCompany, as the case may be, to carry out the intent of this Agreement.

###  

### (d)                                 Consent and Waiver. ORA hereby gives any consents or waivers that are reasonably requiredfor the consummation of the Acquisition under the terms of any agreements towhich such ORA is a party or pursuant to any rights ORA may have.

 

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5.2                                 Resignation of Directors andOfficers of Company.  The Company and ORA shall use theirreasonable best efforts to cause all of the directors and officers of theCompany to resign their respective positions effective as of the Closing, andto cause each director and officer of the Company to deliver written notice ofsuch resignation to Buyer at the Closing.

 

5.3           Access.  The Company and ORA shall afford Monaco andits accountants, counsel, consultants, and other representatives, full andcomplete access to the Property and the Company’s books and records, personnel,business and commercial relationships relating to the Company’s business, theProperty and the Project during normal business hours during the period fromthe date hereof and prior to the Closing, including without limitation, to (i)all of the Company’s and ORA’s properties, books, contracts, commitments, andrecords related to the Company’s business, the Property and the Project,including without limitation, access to the Property for the purpose of (a)conducting an environmental audit or assessment that may include soil,groundwater, or Hazardous Materials sampling as Monaco in its discretion deemsnecessary and desirable to identify the presence or absence of HazardousMaterials, (b) conducting such surveys, tests, inspections and examinations asMonaco desires in regard to engineering and planning for future development ofthe Property, and examining the current condition of the Property, anddetermining the feasibility of future uses of the Property, including withoutlimitation, as-built surveys, engineering studies, and seismic tests and (c)communicating with the Company’s personnel, consultants, Governmental Entities,and representatives from financial institutions, (ii) other informationconcerning the business, properties and personnel (subject to restrictionsimposed by applicable law) of the Company, including but not limited todocuments relating to the planning, permitting, construction and developmentcosts (“**Development Costs**”) of theProject, forecasted future Development Costs of the Project and actual andforecasted sales of lots within the Project, and (iii) the records of the

 

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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  (**“Confidential Information”**), confidential and not to use suchConfidential Information except as contemplated by this Agreement; provided,however, that the foregoing shall not apply to information or knowledge which(a) a party can demonstrate was already lawfully in its possession priorto the disclosure thereof by the other party, (b) is generally known tothe public and did not become so known through any violation of law,(c) became known to the public through no fault of such party, (d) islater lawfully acquired by such party from other sources (and not in violationof an obligation of confidentiality of such other sources with respect to suchinformation), (e) is required to be disclosed by order of court orgovernment agency with subpoena powers, (f) is disclosed in the course of anylitigation between any of the parties hereto or (g) is developed independentlyby either party without reference to, or specific knowledge of, the otherparties’ Confidential Information.

 

5.5                                 Expenses.  Whether or not the Acquisition isconsummated, all fees and expenses incurred in connection with the Acquisitionshall be the obligation of the respective party incurring such fees; provided,however, all fees and expenses incurred by the Company in connectionwith the Acquisition shall be borne by ORA. Such expenses shall include, without limitation, all legal, accounting,financial advisory, consulting and all other fees and expenses of third partiesincurred by a party in connection with the negotiation and effectuation of theterms and conditions of this Agreement and the transactions contemplatedhereby.

 

5.6                                 Brokers’ or Finders’ Fees.  Monaco and Buyer will indemnify and hold the Company and ORAharmless from any claim for brokers’ or finders’ fees arising out of thetransactions contemplated hereby by any Person claiming to have been engaged byMonaco or Buyer.  ORA will indemnify andhold Monaco and Buyer harmless from any claim for brokers’ or finders’ feesarising out of the transactions contemplated hereunder by any Person claimingto have been engaged by the Company or ORA.

 

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

 

5.8                                 Consents.  The Companyand ORA shall use their reasonable best efforts to obtain the consents, waiversand approvals under any of the Company Contracts as may be required inconnection with the Acquisition so as to preserve all rights of, and benefitsto, the Company thereunder.

 

5.9                                 Reasonable Best Efforts.  Subject to the terms and conditions provided in this Agreement,each of the parties hereto shall use its reasonable best efforts to takepromptly, or cause

 

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tobe taken, all actions, and to do promptly, or cause to be done, all thingsnecessary, proper or advisable under applicable laws and regulations toconsummate and make effective the transactions contemplated hereby, to obtainall necessary waivers, consents and approvals and to effect all necessaryregistrations and filings and to remove any injunctions or other impediments ordelays, legal or otherwise, in order to consummate and make effective thetransactions contemplated by this Agreement for the purpose of securing to theparties hereto the benefits contemplated by this Agreement.

 

5.10                           Notification of Certain Matters.  The Company and ORA shall give prompt notice to Monaco, andMonaco shall give prompt notice to the Company, of (i) the occurrence ornonoccurrence of any event, the occurrence or nonoccurrence of which is likelyto cause any representation or warranty of the Company, ORA, Monaco or Buyer,respectively, contained in this Agreement to be untrue or inaccurate at orprior to the Closing Date and (ii) any failure of the Company, ORA, Monaco orBuyer, as the case may be, to comply with or satisfy any covenant, condition oragreement to be complied with or satisfied by it hereunder; provided, however,that the delivery of any notice pursuant to this section shall not (a) limit orotherwise affect any remedies available to the party receiving such notice or(b) constitute an acknowledgment or admission of a breach of thisAgreement.  No disclosure by any partypursuant to this Section 5.10 shall be deemed to amend orsupplement the Disclosure Letter or prevent or cure any misrepresentation,breach of warranty or breach of covenant.

 

5.11                           Election to SupplementSellers’ Disclosure Letter.  ORA is entitled to make a one time election(the “**Supplemental Disclosure Election**”)to provide Monaco with a Supplement to the Seller’s Disclosure Schedule (the “**Disclosure Supplement**”) at least seven (7)days prior to the Closing Date or, if Monaco provides less than nine (9) daysnotice of the Closing Date, within two (2) days after notice of the ClosingDate.  The Disclosure Supplement maycontain only qualifications to ORA’s representations and warranties that theCompany and ORA had no knowledge of as of the date of this Agreement.  Notwithstanding Section 5.10hereof, the Disclosure Supplement will be deemed to amend the Sellers’Disclosure Schedule and to cure any breach of any or the representations orwarranties related to such Disclosure Supplement.  If ORA makes the Supplemental Disclosure Election, Monaco mayterminate this Agreement in its sole an absolute discretion, whether or not theinformation contained in the Disclosure 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 theProperty or from documents delivered to it by the Company pursuant to theprovisions of this Agreement or otherwise obtained by the Monaco; or (b) Monacois not satis­fied, in Monaco’s sole and absolute discretion, with theinformation determined by it or its representa­tives’ inspections of orinquiries regarding the Property or relevant financial records; or (c) ifMonaco does not approve, in Monaco’s sole and absolute discretion, the form andsub­stance of each Permitted Exception or is dissatisfied in any otherway.  This Agreement establishes anoption which can be exercised for any of the foregoing reasons if Monaco noti­fiesthe Company of its dis­satis­fac­tion, in writing, on or prior to the last dayof the Inspection Period, which notice may, but need not, set forth theconditions giving rise to Monaco’s dissatisfaction, if any.  Monaco shall have

 

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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 ordamage to the Property by fire, other casualty, condemnation or HazardousMaterials prior to the Closing.  Ifbefore the Closing the Property should be damaged or taken or threatened to betaken or Hazardous Materials shall become present on the Property, or if accessto or parking for the Property is altered in any regard, Monaco may, at itsoption, (a) terminate this Agreement by written notice delivered to the Companyat or prior to the Closing or (b) proceed to Closing as provided under thisAgreement, in which event Monaco shall receive any and all insurance andcondemnation proceeds attributable to the casualty or condemnation.

 

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                           ClosingCost Schedule. Monaco and ORA shall mutually agree at least one (1) business day priorto the Closing Date on a Closing Cost Schedule, which shall identify theClosing Costs.

 

5.17                           BrokerLicense. ORA agrees to use its best efforts to obtain a valid corporate realestate broker and property manager license in the State of Nevada as soon aspossible; provided, however, that ORA shall obtain such corporatereal estate broker and property manager license no later than ten (10) businessdays after the Closing Date.

 

5.18                           Additional Documents andFurther Assurances.  Each party hereto, at the request of anotherparty hereto, shall execute and deliver such other instruments and do andperform such other acts and things as may be necessary or desirable foreffecting completely the consummation of this Agreement and the transactionscontemplated hereby.

 

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# **ARTICLE VI**

# ** **

# **CONDITIONSTO THE ACQUISITION**

 

6.1                                 Conditions to Obligations of Each Party toEffect the Acquisition.  The respective obligations of each party tothis Agreement to effect the transactions contemplated by this Agreement shallbe subject to the satisfaction at or prior to the Closing of the followingconditions:

###  

### (a)                                  No Injunctions 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.

###  

### (b)                                 Certain Related Agreements. (i) All conditions set forth in ARTICLE VII of each of the ORNAgreement and the ORMCC Agreement shall have been satisfied or waived and (ii)the ORN Acquisition and the ORMCC Acquisition shall have closed concurrentlywith the Closing.

###  

### (c)                                  Federal and 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 or obtained,respectively.

 

6.2                                 Additional Conditions to Obligations of the Companyand ORA. The obligations of the Company and ORA to consummate and effect thisAgreement 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. The representations and warranties of Monaco and Buyer in this Agreementshall be true 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)                                 Certificate of Monaco. ORA shall have been provided with a certificate executed on behalf ofthe Monaco by one of its executive officers to the effect that, as of theClosing:

###  

 

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####  

#### (i)                                     all representations and warranties madeby the Monaco and Buyer in this Agreement are true and correct in all materialrespects (other than those representations and warranties which were qualifiedby terms such as “material,” “materially,” or “Material Adverse Effect,” whichrepresentations and warranties so qualified shall have been true and correct inall respects on and as of the Closing);

####  

#### (ii)                                  all covenants and obligations under thisAgreement to be performed or complied with by Monaco and Buyer on or prior tothe Closing have been so performed or complied with in all material respects;and

####  

#### (iii)                               all conditions to the obligations of theCompany set forth in this Section 6.2 have been satisfied (unlessotherwise waived in accordance with the terms of this Agreement.

###  

### (c)                                  Payment of US Bank Loan. Monaco shall have paid or caused to be paid to US Bank the entireoutstanding principal and interest under the US Bank 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 hereby shall be subject to thesatisfaction at or prior to the Closing******of each of the following conditions, any of which maybe waived, in writing, exclusively by Monaco:

###  

### (a)                                  Representations, Warranties and Covenants. The representations and warranties of the Company and ORA in thisAgreement were true and correct on the date they were made and shall be trueand 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 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)                                 Written Resignations. All directors and officers of the Company shall have delivered to Buyerwritten resignations from their respective positions, effective as of theClosing.

###  

### (c)                                  Certificates of Company ORA. Monaco shall have been provided with certificates executed by ORA andexecuted on behalf of the Company by its President and Secretary to the effectthat, as of the Closing:

 

#### (i)                                     all representations and warranties madeby the party providing the certificate in this Agreement are true and correctin all material respects (other than those representations and warranties whichwere qualified by terms such as “material,” “materially,” or “Material AdverseEffect,” which representations and warranties shall have been true and correctas so qualified in all respects on and as of the Closing);

 

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####  

#### (ii)                                  all covenants and obligations under thisAgreement to be performed or complied with by the Company and the partyproviding the certificate on or prior to the Closing have been so performed orcomplied with in all material respects; and

####  

#### (iii)                               all conditions to the obligations ofMonaco and Buyer set forth in this Section 6.3 have been satisfied(unless otherwise waived in accordance with the terms of this Agreement.)

###  

#### (d)                                 Secretary’s Certificate of Company. Monaco shall have been provided with a certificate executed on behalf ofthe Company by its Secretary to the effect that, as of the Closing:

####  

#### (i)                                     the Company has provided Monaco withcomplete and accurate copies of the Company’s Articles of Incorporation andBylaws, each as amended and corrected to date;

####  

#### (ii)                                  the Company has provided Monaco withcomplete and accurate copies of resolutions of ORA’s and the Company’s Boardsof Directors approving the Acquisition and the transactions contemplated bythis Agreement; and

####  

#### (iii)                               the Company has provided Monaco withcomplete and accurate copies of resolutions of its shareholders approving theAcquisition and the transactions contemplated by this Agreement.

###  

#### (e)                                  Incumbency Certificate. The Company has provided Buyer with a certificate as to the incumbencyof signatories and genuineness of signatures.

###  

#### (f)                                    Claims.  No claimsshall have been asserted (whether or not asserted in litigation) which mightmaterially and adversely affect the consummation of the transactions contemplatedhereby or the business assets (including intangible assets), financialcondition or results of operations of the Company.

###  

#### (g)                                 Third PartyConsents. Any and all consents, waivers, and approvals listed pursuant to Schedule 6.3(g)shall have been obtained.

###  

#### (h)                                 Soper Opinion. Monaco shall have received a legal opinion from Soper & Oakley,PLLC, legal counsel to the Company and ORA, substantially in the form of ExhibitF hereto.

###  

#### (i)                                     Tribler Opinion. Monaco shall have received a legal opinion from Tribler Orpett &Crone, Professional Corporation, legal counsel to the Principals, substantiallyin the form of Exhibit G hereto.

###  

### (j)                                     No Material Adverse Changes. There shall not have occurred any material adverse change in thebusiness, assets (including intangible assets), results of operations,liabilities (contingent or accrued) or financial condition of the Company.

###  

#### (k)                                  Litigation.  There shallbe no action, suit, claim or proceeding of any nature pending, or overtlythreatened, against the Buyer or the Company, their respective properties orany 

 

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#### of their officers ordirectors, arising out of, or in any way connected with, the Acquisition or theother transactions contemplated by the terms of this Agreement.

###  

#### (l)                                     FIRPTA Compliance. The Company shall have delivered to Monaco a properly executed statementin a form reasonably acceptable to Monaco for purposes of satisfying Monaco’sand Buyer’s obligations under Treasury Regulation Section 1.1445-2(b).

###  

#### (m)                               Intercompany Payables. ORA shall have provided evidence satisfactory to Monaco that allIntercompany Payables have been permanently and irrevocably forgiven.

###  

#### (n)                                 Title Insurance. Buyer shall have obtained an ALTA formof owner’s title insurance policy with the survey exception deleted insuringBuyer’s fee simple title to the Property following the Closing at standardrates in the amount of $12 million, subject only to the Permitted Exceptions,and including zoning and subdivision endorsements and such endorsements asBuyer may require, but excluding mechanics’ and materialmen’s liens coverage(the “**Title Policy**”).

###  

#### (o)                                 Title Affidavits. The Company and ORA shall have provided such affidavits and otherdocuments as are reasonably required as a condition to issuing the Title Policywithout the survey exception or other exceptions, except the PermittedExceptions and the preprinted mechanic’s lien exception, including, withoutlimitation, an owner’s affidavit and gap indemnity.

###  

#### (p)                                 Loan Documents. Buyer shall have received pay-off statements acceptable to Monaco andthe title company issuing the Title Policy regarding the US Bank Loan and anyliens to be satisfied on Closing, and such other documents and instruments(including, without limitation, requests for reconveyance or substitutions oftrustee and reconveyances of deeds of trust) as the title company issuing theTitle Policy may require as a condition to insuring Buyer’s title to theProperty free and clear of such deeds of trust.

###  

#### (q)                                 Intercompany Receivables. The Company shall have been paid all amounts owed to it pursuant toIntercompany Receivables.

###  

#### (r)                                    Permits.  AnyGovernmental Authorization relating to the Project issued to any person orentity other than the Company shall have been transferred to or re-issued inthe name of the Company.

###  

#### (s)                                  Guaranty.  Each of theparties to the Guaranty shall have executed and delivered the Guaranty.

###  

#### (t)                                    Affiliates Agreement. Each of the parties to the Affiliates Agreement shall have executed anddelivered the Affiliates Agreement.

 

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

###  

#### (v)                                 Employees.  The Companyshall have terminated the Company’s employment of all Employees.

 

 

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####  

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

###  

#### (x)                                   Warranties.  ORA shallhave provided, in form reasonably acceptable to Monaco, (i) all SubcontractorsWarranties to the extent that ORA or the Company or their affiliates possesssuch warranties, (ii) a written warranty as to the roof installed at theclubhouse on the Property and (iii) a letter from Donovan Constructionconfirming the date of its warranty under its general construction contract forthe Project.

###  

#### (y)                                 HOA Letter.  ORA shallhave provided a letter from the Project’s home owner’s association dated as ofthe Closing Date confirming that the Company is in compliance with the covenants,conditions and restrictions to which the Property is subject and that theCompany is current in all assessments and dues relating to the association,except as described therein.

###  

#### (z)                                   Santoro Opinion. Monaco shall have received a legal opinion from Santoro, Driggs, Walch,Kearney, Johnson & Thompson, legal counsel to the Company, substantially inthe form of Exhibit H hereto.

# ** **

# **ARTICLE VII**

# ** **

# **SURVIVALOF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION**

 

#### 7.1           Survivalof Representations and Warranties.  All representations and warranties in this Agreement or in anyinstrument delivered pursuant to this Agreement, shall survive the Closing forthree years, provided, however, that (i) the representations andwarranties in Section 2.2(b) relating to title matters and therepresentations and warranties in Sections 2.9 relating to taxmatters shall survive the Closing and shall not terminate and (ii) therepresentations 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)           General Indemnification. ORAcovenants and agrees to indemnify, defend, protect and hold harmless Monaco,Buyer and their affiliates (each an “**IndemnifiedParty**”) from, against and in respect of any claim, loss, expense,liability or other damage (including without limitation any liability ofMonaco, Buyer or any of their affiliates for expenses incurred by the Companyrelated to the transactions contemplated hereby), including reasonableattorneys’ fees, to the extent of the amount of such claim, loss, expense, liabilityor other damage that Monaco, Buyer or any of their affiliates have incurred orreasonably and in good faith anticipates incurring (i) by reason of theinaccuracy or breach of any representation or warranty of the Company and ORAcontained herein or in any certificate, instrument, or other document deliveredpursuant to this Agreement, subject to Section 7.1, (ii) by reasonof a breach of any covenant or agreement, of the Company and ORA containedherein, (iii) relating to ORA’s and Company’s Unknown EnvironmentalLiabilities, but only to the extent of any Environmental Remediation Costs,(iv) by 

 

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### reason of Company’sBenefit Liabilities, (v) relating to the Donovan Side Letter, (vi) relating toTaxes attributable 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 (vii) 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), (iii) and (v) above if, and to the extent that,the aggregate of the Losses (as such term is defined in each of this Agreement,the ORN Agreement and the ORMCC Agreement) under this Agreement, the ORNAgreement and the ORMCC Agreement exceeds $250,000 (though the right to offsetLosses set forth in Section 9.2(b) shall apply to all Losses andnot solely to the amount of Losses above and beyond such $250,000threshold).  After the Closing, ORA’saggregate contractual liability for Losses under this Agreement, the ORNAgreement and the ORMCC Agreement shall not exceed the Indemnification Cap;provided, however, that nothing herein shall limit any noncontractual remedyfor fraud. For the purpose of determining the amount of any Loss for which anyof the indemnified parties may be entitled to indemnification by ORA pursuantto this ARTICLE VII, any representation or warranty contained in thisAgreement or in any certificate, instrument, or other document deliveredpursuant to this Agreement that is qualified by a term or terms such as“material,” “materially,” or “Material Adverse Effect,” shall be deemed made orgiven without such qualification.

###  

#### (b)                                 Exclusive Remedy. Except as provided in Section 10.10 and except for remediesrelating to fraud, the provisions of this ARTICLE VII shallconstitute the sole and exclusive remedy of the Indemnified Parties withrespect to any Losses.

###  

#### (c)                                  Indemnification Procedures. All claims for indemnification under this ARTICLE VII shall beasserted and resolved as follows:

####  

#### (i)                                     Indemnification Claims. In the event that an Indemnified Party has a claim for Losses hereunderwhich does not involve claim being asserted against or sought to be collectedby a third party, Monaco shall deliver to ORA and each of the Principals acertificate signed by any officer of Monaco (an **“Officer’s Certificate”**):  (A) stating that Monaco (or an IndemnifiedParty) has paid or properly accrued or reasonably and in good faith anticipatesthat it will have to pay or accrue Losses, and (B) specifying in reasonabledetail the individual items of Losses included in the amount so stated, thedate each such item was paid or properly accrued, or the basis for suchanticipated liability, and the nature of the misrepresentation, breach ofwarranty or claim to which such item is related.  If ORA does not notify Monaco in writing within thirty (30) daysfrom the date of receipt of the Officer’s Certificate that ORA objects to anyclaim or claims made in any Officer’s Certificate, the amount of the claim forLosses contained in the Officer’s Certificate shall be conclusively deemed aliability of the indemnifying party hereunder. Notwithstanding the foregoing, Monaco may not deliver an Officer’s Certificateto ORA to seek indemnification from ORA pursuant to this Section 7.2 for Lossesrelating to the inaccuracy or breach of any representation or warranty of ORAcontained herein or in any certificate, instrument, 

 

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#### or other documentdelivered pursuant to this Agreement after the applicable representations orwarranties have terminated in accordance with Section 7.1.

####  

#### (ii)                                  Resolution of Conflicts.

#####  

#### (1)                                  In case ORA shall so object in writing toany claim or claims made in any Officer’s Certificate, ORA and Monaco shallattempt in good faith to agree upon the rights of the respective parties withrespect to each of such claims.  If ORAand Monaco should so agree, a memorandum setting forth such agreement shall beprepared and signed by both parties.

####  

#### (iii)                               If no such agreement can be reached aftergood faith negotiation, either Monaco or ORA may demand arbitration of thematter as set forth below in Section 7.3 unless the amount of thedamage or loss is at issue in pending litigation with a third party, in whichevent arbitration shall not be commenced until such amount is ascertained bycourt judgment or settlement of the parties to the litigation or Monaco and ORAagree to arbitration.

###  

#### (d)                                 Third-Party Claims. In the event Monaco becomes aware of a third-party claim which Monacobelieves may result in a claim by Monaco for indemnification pursuant to this ARTICLEVII, Monaco shall notify ORA of such claim, and ORA shall be entitled, atits expense, to participate in any defense of such claim.  Monaco shall have the right in its solediscretion to settle any such claim; provided, however, that except with theconsent of ORA, no settlement of any such claim with third-party claimantsshall alone be determinative of the amount 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 Monaco againstORA for indemnification with respect to such settlement.

 

7.3                                 Arbitration.

###  

#### (a)           The resolution of any disputesarising under this ARTICLE VII shall be settled by Arbitration.  Such arbitration shall be conducted by threearbitrators.  Monaco shall select onearbitrator and ORA shall select one arbitrator.  The two arbitrators so selected shall select a thirdarbitrator.  The decision of a majorityof the three arbitrators as to the validity and amount of any claim in anOfficer’s Certificate shall be binding and conclusive upon the parties to thisAgreement.

 

#### Judgment upon anyaward rendered 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 anyarbitration hereunder in which any claim or the amount thereof stated in theOfficer’s Certificate is at issue, Monaco shall be deemed to be theNon-Prevailing Party in the event that the arbitrators award Monaco less thanthe sum of one half of the disputed amount plus any amounts not in dispute;otherwise, ORA shall be deemed to be the Non-Prevailing Party.  Each party shall pay its own expenses andone-half the fees of each arbitrator and the administrative fee of the AmericanArbitration Association; provided, however, that the arbitrators may requirethe Non-Prevailing Party to pay the expenses, including without limitation,reasonable attorneys’ fees and costs, incurred by the other party to thearbitration if the arbitrators find that the arbitration action was

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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 setforth above have been followed, an Indemnified Party is entitled toindemnification pursuant to this ARTICLE VII, Monaco may, in its solediscretion, seek payment of such amount from either ORA pursuant to thisAgreement or from the Principals pursuant to the Guaranty or both, providedthat no Indemnified Party shall be entitled to receive in payment in aggregatein excess of the amount it is entitled to under this ARTICLE VII.

###  

7.5                                 Subrogation.  In the event ORA pays any Indemnified Partyfor Losses pursuant to Section 7.2 in connection with any thirdparty claim, ORA shall be subrogated to the extent of such payment to all ofthe rights of recovery of the Company, Monaco and Buyer, which shall cooperatewith ORA to enable ORA to secure such rights and to effectively to bring suitto 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 ORMCC Agreement exceeds$250,000.  After the Closing, Monaco’sand Buyer’s aggregate contractual liability under this Agreement, the ORNAgreement and the ORMCC Agreement shall not exceed the Indemnification Cap; provided,however, that nothing herein shall limit any noncontractual remedy forfraud.

 

# **ARTICLE VIII**

# ** **

# **TERMINATION,AMENDMENT AND WAIVER**

 

8.1                                 Optional Termination.  Except as provided in Section 8.3 below, thisAgreement may be terminated and the Acquisition abandoned at any time prior tothe Closing:

 

#### (a)                                  by mutual consent of ORA and Monaco;

###  

(b)                                 by Monaco orORA if:  (i) the Closing has notoccurred 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;

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(c)           by Monaco if there shall be anyaction taken, or any statute, rule, regulation or order enacted, promulgated orissued or deemed applicable to the Acquisition by any Governmental Entity,which would:  (i) prohibit or materiallyand adversely restrict Buyer’s or the Company’s ownership or operation of allor a portion of the business of the Company or (ii) compel Buyer or the Companyto dispose of or hold separate all or a portion of the business or assets ofthe Company or Buyer as a result of the Acquisition;

###  

#### (d)                                 by Monaco if it is not in material breachof its obligations under this Agreement and there has been a material breach ofany representation, warranty, covenant or agreement contained in this Agreementon the part of the Company or ORA and such breach has not been cured within ten(10) business days after written notice to the Company (provided that no cureperiod shall be required for a breach which by its nature cannot be cured);

###  

#### (e)                                  by Monaco if there shall have occurredany event or condition of any character that has had or is reasonably likely tohave a material adverse effect on the business or operations of the Company;

####  

#### (f)                                    by the Company or ORA if they are not inmaterial breach of their obligations under this Agreement and there has been amaterial breach of any representation, warranty, covenant or agreementcontained in this Agreement on the part of Monaco and such breach has not beencured within ten (10) business days after written notice to Monaco (providedthat, no cure period shall be required for a breach which by its nature cannotbe cured);

###  

#### (g)                                 pursuant to Sections 5.11, 5.12, or5.13 of this Agreement.

####  

#### Where action istaken to terminate this Agreement pursuant to this Section 8.1, itshall be sufficient for such action to be authorized by the Board of Directors(as applicable) of the party taking such action.

 

8.2                                 Automatic Termination.  Except as provided in Section 8.3 below, thisAgreement shall terminate and the Acquisition shall be abandoned if at any timeprior to the Closing either the ORMCC Agreement or the ORN Agreement isterminated pursuant to Section 8.1 of such agreements.

 

8.3                                 Effect of Termination.  In the event of termination of this Agreement as provided in Sections 8.1or 8.2, this Agreement shall forthwith become void and there shall be noliability or obligation on the part of Monaco, Buyer, the Company, or ORA, ortheir respective officers, directors or shareholders, if applicable, providedthat each party shall remain liable for any breaches of this Agreement prior toits termination; and provided further that, the provisions of Sections 5.4,5.5, 5.6, this Section 8.3 and ARTICLE X of this Agreement shall remain in full force andeffect and survive any termination of this Agreement.

 

8.4                                 Amendment.  Except as may otherwise required byapplicable law after the shareholders of the Company approve this Agreement,this Agreement may be amended at any time by execution of an instrument inwriting signed by Monaco, Buyer, the Company and ORA.

 

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8.5           Extension;Waiver.  At any time prior tothe Closing, Monaco and Buyer, on the one hand, and the Company and ORA, on theother, may, to the extent legally allowed, (i) extend the time for theperformance of any of the obligations of the other party hereto, (ii) waive anyinaccuracies in the representations and warranties made to such party containedherein or in any document delivered pursuant hereto, and (iii) waive compliancewith any of the agreements or conditions for the benefit of such partycontained herein.  Any agreement on thepart of a party hereto to any such extension or waiver shall be valid only ifset forth in an instrument in writing signed on behalf of such party.

 

# **ARTICLE IX**

# ** **

# **POST-CLOSINGCOVENANTS**

 

9.1                                 Phase I Financing and Completion.  Buyer shall use commercially reasonable efforts to provide orobtain the financing necessary for, and to complete, (i) the construction ofthe Improvements required to complete Phase I and (ii) the sale to third partyusers on terms acceptable to Buyer in its sole and absolute discretion all ofthe lots in Phase I.  Notwithstandingthe foregoing, Buyer shall have the right at any time, in its sole discretion,to cease all efforts to complete the Phase I Improvements and/or to sell thelots and elect instead to use commercially reasonable efforts to sell all orany portion of the Resale Property (including all or any portion of Phase I) onterms acceptable to Buyer in its sole and absolute discretion, in which casethe provisions of Section 9.4 shall apply.

 

9.2                                 Phase IProfits.

 

#### (a)                                  Allocation of Phase I Profits. Within ten (10) days after all of the Improvements required to completePhase I have been completed and all of the lots in Phase I have been sold tothird party users (the “**Phase I CompletionDate**”), Buyer or Monaco shall pay to ORA an amount equal to 20% ofthe Phase I Net Profit less any amounts paid to ORA pursuant to Section9.2(c).  As used herein, the date that alot is sold shall mean the date the escrow for such sale is closed (or if thereis no escrow, upon recordation of the deed). “**PhaseI Net Profit**” shall mean all cash proceeds received by Buyer fromthe original sales by Buyer of developed lots in Phase I after the ClosingDate, less:

####  

#### (i)                                      all amounts paid by Buyer or Monaco torepay the US Bank Loan (including accrued interest), to convey the common areasto the homeowner’s association and to pay off any delinquent taxes, mechanics’liens and default judgments, including any prepayment penalties, legal fees,processing fees, recording fees and any other associated costs;

####  

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

####  

#### (iii)                                the Carryover Loss;

####  

(iv)                              all interestthat has accrued under the Replacement Loan up to and including the Phase ICompletion;

 

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#### (v)                                 all reasonable overhead costs of Monacoand Buyer relating to the operation and management of the Property from theClosing Date to the Phase I Completion;

####  

#### (vi)                              the Monaco Loan Cost as of the Phase ICompletion Date;

####  

#### (vii)                           all amounts outstanding (includinginterest) under any other loans to the Company as of the Phase I CompletionDate;

####  

#### (viii)                        all Losses to the extent that Buyer orMonaco 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)                                all Tax liabilities arising from the saleof lots in Phase I;

####  

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

####  

#### (xi)                                all liabilities incurred or costs paid bythe Company under the Management Agreement and the Trademark Agreement up toand including the Phase I Completion Date; and

####  

#### (xii)                             all liabilities incurred or costs paid byBuyer, Monaco or the Company in connection with the operation and completion ofthe Project from the Closing Date to the Phase I Completion Date, including allpayments to satisfy contractors, consultants, management companies, taxingauthorities and vendors, and assessments, insurance, permit and land use feesand approvals, attorneys’ fees and payroll costs for employees of Monaco orBuyer relating to services provided on the Project and including in connectionwith the sale of the lots in the phase, including broker commissions, transfertaxes, escrow costs, title costs, survey fees, attorneys’ fees and otherclosing costs.

 

Notwithstanding the foregoing, (A) all items listed in(i), (ii) and (iv) through (xii) shall not be included in the foregoingcalculation to the extent that such amounts have already been accounted for ina prior Net Profit Calculation and (B) if the Company conveys or sells any lotsin Phase I to Buyer or any affiliate of Buyer, then for the purpose of the NetProfit Calculation in this Section 9.2(a), Buyer will be deemed to have soldsuch lots and to have received an amount equal to the market value of suchlots.

###  

### (b)                                 Carryover Loss. If the Phase I Net Profit calculation set forth in Section 9.2(a)above yields a negative number, then (i) ORA shall receive no payments withrespect to the completion of Phase I and, (ii) to the extent that suchcalculation yields a negative amount, such negative amount shall be reflectedin the Net Profit Calculation of the next Sale as a Carryover Loss.

###  

#### (c)                                  Estimated Phase I Net Profit. Within thirty (30) days after 95% all of the lots in Phase I have beensold to third party users, Buyer or Monaco shall pay to ORA an amount equal to thelesser of (i) Buyer’s conservative good faith estimate of what 20% of the PhaseI Net Profit will be upon sale of all the lots in Phase I and (ii) 20% of thePhase I Net Profit resulting from the 

 

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### Net Profit Calculationcontained in Section 9.2(a) assuming that the sale of 95% of the lots in PhaseI was the sale of all the lots in Phase I.

 

9.3                                 Phase II Obligations.

###  

### (a)                                  Option with Respect to Phase II. Buyer may, in its sole and absolute discretion, (i) commence developmentof Phase II and sell lots on Phase II on terms acceptable to Buyer in its soleand absolute discretion or, (ii) at any time, sell all or any portion of theResale Property (including all or any portion of Phase II).  If Buyer develops Phase II, then within ten(10) days after all of the Improvements required to complete Phase II have beenconstructed and all of the lots in Phase II have been sold to third party users(the “**Phase II Completion Date**”),Buyer shall pay to ORA the amounts described in Section 9.3(b). Ifat any time Buyer determines that it will not develop or that it will ceasedeveloping Phase II, 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 9.4.

###  

### (b)                                 Developed Phase II Profit Participation. If Buyer develops Phase II, then after the Phase II Completion Date,Buyer or Monaco shall pay to ORA an amount equal to 20% of the Phase II NetProfit less any amounts paid to ORA pursuant to Section 9.3(d).  “**Phase IINet Profit**” shall mean all cash proceeds received by Buyer from theoriginal sales by Buyer of developed lots in Phase II after the Closing Date,less:

####  

#### (i)                                     all amounts paid by Buyer or Monaco torepay the US Bank Loan (including accrued interest), to convey the common areasto the homeowner’s association and to pay off any delinquent taxes, mechanics’liens and default judgments, including any prepayment penalties, legal fees,processing fees, recording fees and any other associated costs;

####  

#### (ii)                                  all amounts paid by Buyer or Monaco tosecure the Replacement Loan, if any, including legal fees, processing fees,recording fees and any other associated costs;

####  

#### (iii)                                the Carryover Loss;

####  

#### (iv)                              all interest that has accrued under theReplacement Loan up to and including the Phase II Completion Date;

####  

#### (v)                                 all reasonable overhead costs of Monacoand Buyer relating to the operation and management of the Property from theClosing Date to the Phase II Completion Date;

####  

#### (vi)                              the Monaco Loan Cost as of the Phase IICompletion Date;

####  

#### (vii)                           all amounts outstanding (includinginterest) under any other loans to the Company as of the Phase II CompletionDate;

####  

### (viii)                        all Losses to the extent that Buyer orMonaco 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;

 

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#### (ix)                                all Tax liabilities arising from the saleof lots in Phase II;

####  

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

####  

#### (xi)                                all liabilities incurred or costs paid bythe Company under the Management Agreement and the Trademark Agreement up toand including the Phase II Completion Date; and

####  

#### (xii)                             all liabilities incurred or costs paid byBuyer, Monaco or the Company in connection with the operation and completion ofthe Project from the Closing Date to the Phase II Completion Date, includingall payments to satisfy contractors, consultants, management companies, taxingauthorities and vendors, and assessments, insurance, permit and land use feesand approvals, attorneys’ fees and payroll costs for employees of Monaco orBuyer relating to services provided on the Project and including in connectionwith the sale of the lots in the phase, including broker commissions, transfertaxes, escrow costs, title costs, survey fees, attorneys’ fees and otherclosing costs.

 

Notwithstanding the foregoing, (A) all items listed in (i), (ii) and(iv) through (xii) shall not be included in the foregoing calculation to theextent that such amounts have already been accounted for in a prior Net ProfitCalculation and (B) if the Company conveys or sells any lots in Phase II toBuyer or any affiliate of Buyer, then for the purpose of the Net ProfitCalculation in this Section 9.3(a), Buyer will be deemed to have sold such lotsand to have received an amount equal to the market value of such lots.

###  

### (c)                                  Carryover Loss. If the Phase II Net Profit calculation set forth in Section 9.3(a)above yields a negative number, then (i) ORA shall receive no payments withrespect to the completion of Phase II and, (ii) to the extent that suchcalculation yields a negative amount, such negative amount shall be reflectedin the Net Profit Calculation of the next Sale as a Carryover Loss.

###  

### (d)                                 Estimated Phase II Net Profit. Within thirty (30) days after 95% all of the lots in Phase I have beensold to third party users, Buyer or Monaco shall pay to ORA an amount equal tothe lesser of (i) Buyer’s conservative good faith estimate of what 20% of thePhase II Net Profit will be upon sale of all the lots in Phase II and (ii) 20%of the Phase II Net Profit resulting from the Net Profit Calculation containedin Section 9.3(a) assuming that the sale of 95% of the lots in Phase II was thesale of all the lots in Phase II.

 

9.4                                 Resales.

###  

(a)                                  Resale Profit Participation. If Buyer sells all or any portion of a Resale Property (other than thesale of developed lots to third party users in any of Phase I, Phase II orPhase III), Buyer or Monaco shall pay to ORA upon the close of escrow of suchResale (or if there is no escrow, upon recordation of the deed) (a “**Resale Closing Date**”) an amount equal to20% of the Resale Net Profit.  “**Resale Net Profit**” shall mean all cashproceeds received by Buyer from a Resale after the Closing Date, less:

 

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(i)            all amounts paid by Buyer or Monacoto repay the US Bank Loan (including accrued interest), to convey the commonareas to the homeowner’s association and to pay off any delinquent taxes,mechanics’ liens and default judgments, including any prepayment penalties,legal fees, processing fees, recording fees and any other associated costs;

####  

#### (ii)                                  all amounts paid by Buyer or Monaco tosecure the Replacement Loan, if any, including legal fees, processing fees,recording fees and any other associated costs;

####  

#### (iii)                               the Carryover Loss

####  

#### (iv)                              all interest that has accrued under theReplacement Loan up to and including such Resale Closing Date;

####  

#### (v)                                 all reasonable overhead costs of Monacoand Buyer relating to the operation and management of the Property from theClosing Date to such Resale Closing Date;

####  

#### (vi)                              the Monaco Loan Cost as of such ResaleClosing Date;

 

#### (vii)                           all amounts outstanding (includinginterest) under any other loans to the Company as of such Resale Closing Date;

####  

#### (viii)                        all Losses to the extent that Buyer orMonaco 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)                                all Tax liabilities arising from suchResale

####  

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

####  

#### (xi)                                all liabilities incurred or costs paid bythe Company under the Management Agreement and the Trademark Agreement up toand including such Resale Closing Date;

####  

#### (xii)                             all liabilities incurred or costs paid byBuyer, Monaco or the Company in connection with the operation and completion ofthe Project from the Closing Date to the such Resale Closing Date, includingall payments to satisfy contractors, consultants, management companies, taxingauthorities and vendors, and assessments, insurance, permit and land use feesand approvals, attorney’s fees and payroll costs for employees of Monaco orBuyer relating to services provided on the Project and including in connectionwith the sale of the lots in the Project, including broker commissions,transfer taxes, escrow costs, title costs, survey fees, attorneys’ fees andother closing costs; and

####  

(xiii)                          all liabilitiesincurred or costs paid by Buyer, Monaco and the Company in connection with suchResale, including broker commissions, transfer taxes, escrow costs, titlecosts, survey costs, attorneys’ fees and other closing costs.

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Notwithstanding the foregoing, all itemslisted in (i), (ii) and (iv) through (xiii) shall not be included in theforegoing calculation to the extent that such amounts have already beenaccounted for in a prior Net Profit Calculation.Buyer shall have no obligationto pay any amount in connection with any sale transaction which fails to close(i.e., title is conveyed to the purchaser) for any reason.  Buyer shall have the right, in its sole andabsolute discretion, to reject any offer to purchase any portion of the ResaleProperty.

###  

### (b)                                 Carryover Loss. If a Resale Net Profit calculation set forth in Section 9.4(a)above yields a negative number, then (i) ORA shall receive no payments withrespect to the Resale and, (ii) to the extent that such calculation yields anegative amount, such negative amount shall be reflected in the Net ProfitCalculation of the next Sale as a Carryover Loss.

 

9.5                                 Closing Costs.  Notwithstanding any otherprovision of this Article IX, Buyer’s aggregate payment obligations to ORAunder Sections 9.2, 9.3, and 9.4 shall be reduced by an amountequal to 50% of the Closing Costs (the “**ORAClosing Costs**”), and Buyer shall not pay any amounts to ORA pursuantto such sections until the ORA Closing Costs have been offset against suchpayments.

 

9.6                                 Intereston Certain Loans. Notwithstanding the foregoing, the Net Profit Calculations shall notinclude interest accrued on loans from Monaco to the Company after the Closingto the extent that the interest rate on such loans exceeds the greater of (i)Monaco’s regular corporate funds borrowing rate at the time the loan is madeand (ii) the prime rate at the time the loan is made plus one percent (1%).

 

9.7                                 Tax Matters.

###  

### (a)                                  Tax Filing.  For purposesof this Agreement and the filing of applicable Tax Returns, whenever Monaco andORA reasonably 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)                                 Assistance and Cooperation.

####  

#### (i)                                     After the Closing Date, the parties tothis Agreement shall (or shall cause their respective affiliates to):

 

(A)                               assist theother 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)                                cooperate fully, to the extent the partyproviding assistance has pertinent information, in preparing for any audits of,or disputes with taxing authorities regarding, any Tax Returns of the Company orits subsidiaries; and

 

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(C)                                make availableto the other party and to any taxing authority as reasonably requested allinformation, records, and documents relating to Taxes of the Company.

####  

#### (ii)                                  After the Closing Date but no later thanJuly 31, 2003, ORA shall (or shall cause its respective affiliates to) deliverto Monaco a written good faith estimate of any items (including, but notlimited to, net operating losses) to be reported on ORA’s 2002 federal or stateincome tax returns, which items would be required by Monaco in preparing its2002 federal or state income tax returns. ORA shall deliver to Monaco a written final determination of any itemsreported on such estimate within 30 days after ORA has filed its 2002 federalor state income tax return.

 

9.8                                 ORA Additional Cooperation.  In consideration of the profit participation set forthhereinabove (i) ORA agrees after Closing to provide to Buyer any contacts,inquiries or other communication received by Buyer in connection with thepossible sale of the Property, or any portion thereof, and (ii) with respect toany letter of intent, contract, offer or other communication presently in thefiles of ORA or the Company or received after Closing, ORA agrees after Closingto assist Buyer in connection with Buyer’s review, assessment, negotiation andconsummation of any transaction resulting in a Resale as Buyer may choose topursue. The profit participation set forth hereinabove is in consideration ofthis agreement and undertaking by ORA and shall not be construed to be afinder’s fee, broker’s fee or similar payment, such profit participation beingpart of the consideration for the transactions contemplated by this Agreement.

 

9.9                                 Loan Release.  Monaco shall use commerciallyreasonable efforts following the Closing Date to obtain a release of the deedof trust securing the US Bank Loan and a cancellation of the related note andother loan documents.

 

9.10         Employee Matters.  Following the Closing, ORA, with Buyer’s cooperation, shallprepare and provide to Buyer for filing all federal, state and local taxreturns required with respect to the employment of any of the Company’sEmployees prior to the Closing.   Suchreturns shall include those required for income tax withholding, FederalInsurance Contribution Act taxes, unemployment taxes and any other employmentrelated taxes that may apply. ORA, with Buyer’s cooperation, will also prepareand provide to Buyer all required annual information returns associated withthese Employees.  Required informationreturns shall include 2002 Forms W-2, Form W-3 and any state or localequivalents or reconciliations required to be filed with any taxingjurisdiction where the Company has employees. ORA shall deliver final copies of all such tax and information returnsto Monaco at least twenty (20) days before they must be filed.

 

9.11                           Financial Information.  Buyer shall furnish to ORA within one hundred twenty (120) daysafter the end of each fiscal year of the Company, an unaudited balance sheet ofthe Company as at the end of such fiscal year and unaudited statements ofincome and cash flows of the Company for such year, prepared in accordance withgenerally accepted accounting principles consistently applied.

 

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# **ARTICLE X**

# ** **

# **GENERALPROVISIONS**

 

10.1                           Notices.  All notices and other communicationshereunder shall be in writing and shall be deemed given if delivered personallyor by commercial delivery service, or mailed by registered or certified mail(return receipt requested) or sent via facsimile (with acknowledgment ofcomplete transmission) or sent via electronic mail (with electronicacknowledgement of receipt) to the parties at the following addresses (or atsuch other address for a party as shall be specified by like notice):

###  

### (a)                                  if to Monaco or Buyer, or to the Companyafter the Closing,to:  Monaco Coach Corporation, 91320Industrial Way, Coburg, Oregon  97408,Attention: Controller, Tel: (541) 686-8011, Fax: (541) 302-3800, and to MonacoCoach Corporation, Indiana Operations, 606 Nelson’s Parkway, Wakarusa, IN46573, Attention:  General Counsel, Tel(800) 650-7337, Fax:  (219) 293-1528.

 

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

###  

### (b)                                 if to ORA, or to the Company up to andincluding the Closing, to:  Robert A. Schoellhorn,President, Marathon Coach, Inc., 91333 Coburg Industrial Way, Coburg, OR97408-9432, Tel: (541) 343-9991, Fax: (541) 343-2401.

 

with a copy to:Stephen M. Alderman, Garfield & Merel, Ltd., 223 West Jackson Blvd., Suite1010, Chicago, IL 60606, Tel: (312) 583-1600, Fax: (312) 583-1700.

###  

### (c)                                  if to a Principal, to the address for notice set forth onthe signature page to 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.

 

10.2                           Headings.  The table of contents and headings containedin this Agreement are for reference purposes only and shall not affect in anyway the meaning or interpretation of this Agreement.

 

10.3                           Counterparts.  This Agreement may be executed in one ormore counterparts, all of which shall be considered one and the same agreementand shall become effective when one or more counterparts have been signed byeach of the parties and delivered to the other party, it being understood thatall parties need not sign the same counterpart.

 

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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 theagreement in principal among certain of the parties hereto dated July 24, 2002.

 

10.5                           Assignment.  No party may assign or delegate either thisAgreement or any of its rights, interests, or obligations hereunder without theprior written approval of the other parties. Subject to the immediately preceding sentence, this Agreement shall bebinding upon and shall inure to the benefit of the parties hereto and theirrespective successors and permitted assigns. Notwithstanding the foregoing,Buyer may assign its rights under this Agreement without the consent of theCompany or ORA provided the assignee assumes in writing all obligations andliabilities of Buyer, in which event Buyer but not Monaco shall be relieved ofany further liability hereunder.

 

10.6                           Severability.  In the event that any provision of thisAgreement or the application thereof, becomes or is declared by a court ofcompetent jurisdiction to be illegal, void or unenforceable, the remainder ofthis Agreement will continue in full force and effect and the application ofsuch provision 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 andall remedies herein expressly conferred upon a party will be deemed cumulativewith and not exclusive of any other remedy conferred hereby, or by law orequity upon such party, and the exercise by a party of any one remedy will notpreclude the exercise of any other remedy.

 

10.8                           No Third Party Beneficiaries.  This Agreement is solely for the benefit of (a) Monaco andBuyer and its successors and permitted assigns with respect to the obligationsof the Company, and ORA under this Agreement and (b) the Company and ORA,and their respective successors and permitted assigns with respect to theobligations of Monaco and Buyer under this Agreement.  This Agreement shall not be deemed to confer upon or give to anyother third party any remedy, claim, right to reimbursement, cause of action orother right, unless expressly provided for in this Agreement.

 

10.9                           Governing Law.  This Agreement shall be governed by andconstrued in accordance with the laws of the State of Oregon, regardless of thelaws that might otherwise govern under applicable principles of conflicts oflaws thereof.

 

10.10                     Specific Performance.  The parties agree that irreparable damage would occur in theevent that any of the provisions of this Agreement were not performed inaccordance with their specific terms or were otherwise breached.  It is accordingly agreed that either partyshall be entitled to seek an injunction or injunctions or other equitablerelief to prevent breaches of this Agreement and to enforce specifically theterms and provisions hereof in any court of the United States or any statehaving 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 OF LAS VEGAS, INC.** |                            |   |   |
|                                    |                            |   |   |
|                                    |                            |   |   |
| By:                                     | /s/ E. Randall Henderson        |   |   |   |
|                                    | E. Randall Henderson,           |   |   |   |
|                                    | President                       |   |   |   |
|                                         |                                 |        |  |  |  |  |  |  |

 

**[SIGNAURE PAGE TO ONLY STOCK PURCHASE AGREEMENT]**

 

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With respect to thefollowing pages, the Company has omitted the listed exhibits, but agrees tofurnish supplementally a copy of the exhibit to the Commission upon request.

 

**EXHIBIT A**

 

**FORMOF GUARANTY**

 

 

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**EXHIBIT B**

 

**FORM OF AFFILIATES AGREEMENT**

 

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**EXHIBIT C**

 

**FORM OF MANAGEMENT AGREEMENT**

 

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**EXHIBIT D**

 

**FORM OF TRADEMARK AGREEMENT**

 

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**EXHIBIT E**

 

**DESCRIPTIONOF LAND**

 

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**EXHIBIT F**

 

**FORM OF OPINION OF SOP**ER & OAKLEY, PLLC

 

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**EXHIBIT G**

 

**FORM OF OPINION OFTRIBLER ORPETT & CRONE, PROFESSIONALCORPORATION**

 

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**EXHIBIT H**

 

**FORM OF OPINI****ON OF**

**SANTORO, DRIGGS, WALCH, KEARNEY, JOHNSON & THOMPSON**

 

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