1
EXHIBIT 2.2
ASSET PURCHASE AGREEMENT
BY AND AMONG
AMRE, INC.,
AMERICAN REMODELING, INC.,
AND
FACELIFTERS HOME SYSTEMS, INC.,
AS SELLERS,
AND
REDO, L.L.C.,
AS PURCHASER,
AND
XXXXXX XXXXXXXX
2
Schedules and Exhibits
Schedule 1.1 - Sales Offices
Schedule 2.1(a) - Leases
Schedule 2.1(b) - Furniture, Fixtures and Equipment
Schedule 2.1(d) - Computer Leases
Schedule 2.1(e) - Equipment Leases
Schedule 2.2(g) - Liabilities and Obligations
3
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is dated as of the 27th
day of February, 1997, by and among AMRE, Inc., a Delaware corporation
("AMRE"), American Remodeling, Inc., a Texas corporation ("ARI"), Facelifters
Home Systems, Inc., a Delaware corporation ("Facelifters"), REDO, L.L.C., a
Texas limited liability company ("Purchaser"), and Xxxxxx Xxxxxxxx, a former
officer and director of AMRE ("Bedowitz"). AMRE, ARI and Facelifters are
sometimes referred to herein individually as a "Seller" and collectively as
"Sellers."
RECITALS
WHEREAS, Sellers are in the vinyl siding and window remodeling and
products business; and
WHEREAS, each Seller is currently a debtor in possession in those certain
Chapter 11 bankruptcy proceedings in the United States Bankruptcy Court for the
Northern District of Texas, Dallas Division (the "Bankruptcy Court"), styled In
re AMRE, Inc. et al., Case No. 397-30567-SAF-11 (Jointly Administered); and
WHEREAS, the group that has formed Purchaser, with Bedowitz as its
representative, and AMRE have previously entered into the Interim Period Letter
Agreement (as hereinafter defined); and
WHEREAS, Purchaser desires to buy and Sellers desire to sell certain
assets more particularly described in Section 2.1 used in the vinyl siding and
window remodeling and products business of Sellers conducted primarily at the
Sales Offices (as hereinafter defined) (the "Business"), and to finally,
irrevocable, absolutely and unconditionally terminate all rights and
obligations of Sellers, and to the extent applicable, the bankruptcy estates of
Sellers, in the Business Assets (as hereinafter defined);
NOW, THEREFORE, in consideration of the above recitals, which constitute a
part of this Agreement, the mutual promises and agreements set forth herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Purchaser, Bedowitz and Sellers, intending to be
legally bound hereby, agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
As used in this Agreement, the following terms have the following
respective meanings:
"Agreement" has the meaning specified in the opening paragraph hereof.
4
"Xxxxxx Computer" means that certain IBM AS400 Model 320-2050 computer
located at AMRE's headquarters.
"AMRE" has the meaning specified in the opening paragraph hereof.
"AMRE Released Parties" has the meaning specified in Section 9.1 hereof.
"Applicable Law" means any statute, law, rule, or regulation or any
judgment, order, writ, injunction or decree of any Governmental Entity to which
a specified person or property is subject.
"ARI" has the meaning specified in the opening paragraph hereof.
"Assumed Liabilities" means (a) the obligations of each of the Sellers
under the Leases and (b) the liabilities and obligations of each of the Sellers
set forth on Schedule 2.2(g) hereto.
"Bankruptcy Code" means 11 U.S.C. Section 101, et seq.
"Bankruptcy Court" has the meaning specified in the Recitals.
"Bedowitz" has the meaning specified in the opening paragraph hereof.
"Business" has the meaning specified in the Recitals.
"Business Assets" has the meaning specified in Section 2.1 hereof.
"Cash Purchase Price" means the amounts specified in subsections (a) and
(b) of Section 2.2 hereof, as adjusted to reflect any prorations to be made
pursuant to Section 6.1 hereof.
"Claims" means any and all losses, claims, causes of action, lawsuits,
liabilities, demands, damages, costs and expenses, including, without
limitation, reasonable attorneys' fees and disbursements.
"Closing" means the consummation of the transactions contemplated by
Article II of this Agreement in accordance with the terms and upon the
conditions set forth in this Agreement.
"Closing Date" means the date on which the Closing occurs.
"Computer Leases" means those computer leases set forth on Schedule 2.1(d)
hereto.
"Equipment Leases" means those leases for furniture, fixtures and
equipment set forth on Schedule 2.1(e) hereto.
2
5
"Encumbrances" means liens, charges, pledges, options, mortgages, security
interest, claims, restriction (whether on voting, sale, transfer, disposition
or otherwise) and other encumbrances of every type and description, whether
imposed by law, agreement, understanding or otherwise.
"Excluded Assets" means all assets, whether real or personal, tangible or
intangible, used or held for use by any of the Sellers or their affiliates
either primarily or exclusively in the cabinet business of such person.
"Facelifters" has the meaning specified in the opening paragraph hereof.
"FF&E" means the furniture, fixtures and equipment set forth on Schedule
2.1(b).
"Governmental Entity" means any court or tribunal in any jurisdiction
(domestic or foreign) or any public, governmental, or regulatory body, agency,
department, commission, board, bureau, or other authority or instrumentality
(domestic or foreign).
"Interim Period Letter Agreement" means that certain letter agreement
dated February 10, 1997, by and among AMRE and the group that has formed
Purchaser, with Bedowitz as its representative.
"Inventory" means all inventory (including raw materials, work-in-progress
and finished goods) and related spare parts and supplies with respect to the
Business described on Schedule 2.1(c) that is owned by a Seller, located at
the Sales Offices, on hand at the Closing and determined to be usable by
Purchaser, but does not include any inventory (including raw materials,
work-in-progress and finished goods) and related spare parts and supplies with
respect to the Business that is subject to a valid and properly noticed claim
for reclamation.
"Leases" means those real property leases set forth on Schedule 2.1(a)
hereto and for which any necessary consents of lessors to the assignment to
Purchaser have been obtained prior to the Closing Date.
"Other Assets" means all assets, whether real or personal, tangible or
intangible, used or held for use in connection with the Business, including,
without limitation, all Consumer Contracts (as defined in the Interim Period
Letter Agreement); all books, records, manuals and other materials (in any form
or medium, including, without limitation, all records and materials, wherever
located, advertising matter, catalogs, price lists, correspondence, mailing
lists, lists of customers, distribution lists, photographs, sales and
promotional materials and records, purchasing materials and records, personnel
records, manufacturing and quality control records and procedures, media
materials, accounting records, manufacturing and quality control records and
procedures, media materials, accounting records, and sales order files); all
rights to television, radio and other advertising materials or production (in
any form or medium), excluding any television commercials and master tapes for
such commercials and all intellectual property rights associated therewith; all
general and intangible assets and contractual rights associated with the
Business; all computer software and data bases, including without limitation,
3
6
the computer software and data bases used or stored in the Remis Computer (as
defined in the Interim Period Letter Agreement) and Xxxxxx Computer; and all
rights to use any toll-free or other phone numbers associated with the Sales
Offices or the Business; and the related goodwill of the Business associated
therewith.
"Proceedings" means all proceedings, actions, suits, investigations, and
inquiries by or before any arbitrator or Governmental Entity.
"Purchaser" has the meaning specified in the opening paragraph hereof.
"Sale and Assignment Hearing" has the meaning specified in Section 6.2
hereof.
"Sale and Assignment Motion" has the meaning specified in Section 6.2
hereof.
"Sale and Assignment Order" has the meaning specified in Section 6.2
hereof.
"Sales Offices" means those offices of AMRE, ARI or Facelifters, as the
case may be, set forth on Schedule 1.1 hereto.
"Seller" and "Sellers" have the meanings specified in the opening
paragraph hereof.
"Taxes" means all taxes, charges, fees, levies or other assessments,
including, without limitation, income, excise, property, sales and franchise
taxes, imposed by the United States or any state, county, local or foreign
government or subdivision or agency thereof. Such term shall include any
interest, penalties or additions attributable to such assessments.
ARTICLE II
PURCHASE AND SALE
Section 2.1 Business Assets. Subject to the terms and conditions set
forth in this Agreement, on the Closing Date Sellers will sell, assign,
transfer, convey and deliver to Purchaser free and clear of all Encumbrances,
and Purchaser will purchase, acquire and receive an assignment, a conveyance
and the delivery of the following assets of each of the Sellers, other than the
Excluded Assets (all such assets included in this Section 2.1 are herein
collectively referred to as the "Business Assets"):
(a) all rights of each of the Sellers in, under and to each of the
Leases listed on Schedule 2.1(a) hereto, it being understood that
Purchaser is not acquiring any fee title to real property;
(b) all FF&E listed on Schedule 2.1(b) hereto;
(c) the Inventory described in Schedule 2.1(c);
4
7
(d) all rights of each of the Sellers in, under and to each of the
Computer Leases listed on Schedule 2.1(d) hereto;
(e) all rights of each of the Sellers in, under and to each of the
Equipment Leases listed on Schedule 2.1(e) hereto;
(f) all rights of each of the Sellers in, under and to the Other Assets.
Section 2.2 Consideration. The aggregate consideration for the Business
Assets, which is in addition to, and not in lieu of, any and all consideration
given by Purchaser pursuant to the Interim Period Letter Agreement, shall
consist of :
(a) cash in the amount of 125% of the liquidation value of the FF&E, net
of all liabilities assumed by Purchaser that are related to the FF&E
(but in no event shall such amount exceed the value of the asset
securing the debt), as determined by a qualified appraiser selected by
Sellers and reasonably acceptable to Purchaser; provided that if
Purchaser reasonably objects to the valuation set forth by the
appraiser, Purchaser may, at Purchaser's sole cost and expense, retain
a qualified appraiser reasonably acceptable to Sellers and the
Bankruptcy Court, and the liquidation value shall be the average of
the values determined by the two appraisers;
(b) cash in an amount equal to 35% of the cost of Inventory;
(c) the release provided for in Section 9.1; and
(d) assumption of the Assumed Liabilities.
Section 2.3 Limitations of Liabilities Assumed. Except for the
obligations expressly assumed by Purchaser and/or Bedowitz under the Interim
Period Letter Agreement and/or this Agreement, Purchaser does not assume or
agree to pay, perform or discharge any other liabilities or obligations of any
Seller, whether accrued, absolute, contingent or otherwise, including, without
limitation, liabilities based on or arising out of or in connection with (a)
any defects in work performed by any Seller, (b) any implied or express
warranties relating to such work or (c) any pension or other benefit liability
relating to any Seller's employees.
SECTION 2.4 NO WARRANTIES. EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN
THIS AGREEMENT, SELLERS MAKE NO REPRESENTATION OR WARRANTY WHATSOEVER,
INCLUDING, WITHOUT LIMITATION, NO WARRANTY AS TO FITNESS FOR A PARTICULAR
PURPOSE, WITH RESPECT TO ANY OF THE BUSINESS ASSETS, AND THE BUSINESS ASSETS
ARE TRANSFERRED "AS IS-WHERE IS."
5
8
ARTICLE III
CLOSING
Section 3.1 Time and Place. The Closing shall be held at 9:00 a.m.
(local time), at the offices of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., 0000
Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, on the fifth business day
following the date on which the Sale and Assignment Order becomes final and is
no longer subject to stay, or at such other time or place as the parties shall
mutually agree in writing.
Section 3.2 Transactions at Closing.
(a) Sellers shall deliver to Purchaser at the Closing:
(i) a xxxx of sale conveying the Business Assets, other than the
Leases, the Computer Leases and the Equipment Leases, to
Purchaser, signed by each applicable Seller;
(ii) an assignment and assumption agreement with respect to each of
the Leases, the Computer Leases and the Equipment Leases; and
(iii) the certificate contemplated by Section 7.3.
(b) Purchaser shall deliver to Sellers at the Closing:
(i) a wire transfer in the amount of the Cash Purchase Price;
(ii) an assignment and assumption agreement with respect to each of
the Leases, Computer Leases and the Equipment Leases;
(iii) the certificates contemplated by Section 7.2.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller represents and warrants to Purchaser as follows:
Section 4.1 Corporate Organization. Each of AMRE and Facelifters is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. ARI is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas.
Section 4.2 Authority Relative to This Agreement. Each Seller has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and
performance by each Seller of this
6
9
Agreement, and the consummation by it of the transactions contemplated hereby,
have been duly authorized by such Seller's Board of Directors, and no other
corporate proceedings on the part of such Seller are necessary to authorize the
execution, delivery and performance by it of this Agreement and the
consummation by such Seller of the transactions contemplated hereby.
Section 4.3 Title. Either AMRE, ARI or Facelifters owns good and
marketable title to the FF&E and the Inventory.
Section 4.4 Accuracy of Schedules. The initial Schedule 2.1(a) delivered
by Sellers for Purchaser's review shall contain a true and correct list of all
real property leases used in connection with the Business; the initial Schedule
2.1(b) delivered by Sellers for Purchaser's review shall contain a true and
correct list of all furniture, fixtures and equipment used at any Sales Office
and on the fourth and eighth floors of AMRE's corporate headquarters in
connection with the Business; the initial Schedule 2.1(d) delivered by Sellers
for Purchaser's review shall contain a true and correct list of all computer
leases used in connection with the Business; and the initial Schedule 21.(e)
delivered by Sellers for Purchaser's review shall contain a true and correct
list of all equipment leases used in connection with the Business.
ARTICLE V
COVENANTS, REPRESENTATIONS AND WARRANTIES
OF PURCHASER
Purchaser represents and warrants to Sellers as follows:
Section 5.1 Organization, Articles of Organization and Regulations.
Purchaser is a limited liability company duly organized, validly existing and
in good standing under the laws of the State of Texas. Purchaser has made
available to Sellers accurate and complete copies of its articles of
organization and regulations, each as currently in effect.
Section 5.2 Authority Relative to This Agreement. Purchaser has full
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance by
Purchaser of this Agreement, and the consummation by it of the transactions
contemplated hereby, have been duly authorized by the Manager of Purchaser,
and no other limited liability company proceedings on the part of Purchaser are
necessary to authorize the execution and delivery by it of this Agreement and
the consummation by Purchaser of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Purchaser and constitutes a
valid and legally binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms.
Section 5.3 Noncontravention. The execution, delivery and performance
by Purchaser of this Agreement and the consummation by it of the transactions
contemplated hereby do not and will not (a) conflict with or result in a
violation of any provision of the articles of organization or regulations of
Purchaser, (b) conflict with or result in a violation of any provision of, or
constitute (with or without the giving of notice or the passage of time or
both) a default under, or give rise (with or without the giving of notice or
the passage of time or both) to any
7
10
right of termination, cancellation or acceleration under, any bond, debenture,
note, mortgage, indenture, lease, agreement or other instrument or obligation
to which Purchaser is a party or by which Purchaser or any of its properties
may be bound, (c) result in the creation or imposition of any Encumbrance upon
the properties of Purchaser, or (d) violate any Applicable Law (other than any
applicable "bulk sales" laws) binding upon Purchaser, except, in the cases of
clauses (b), (c) and (d) of this Section 5.3, for any such conflicts,
violations, defaults, terminations, cancellations, accelerations or
Encumbrances which would not, individually or in the aggregate, have a material
adverse effect on the business, assets, results of operations or financial
condition of Purchaser or on the ability of Purchaser to consummate the
transactions contemplated hereby
Section 5.4 Governmental Approvals. No consent, approval, order or
authorization of, or declaration, filing or registration with, any Governmental
Entity is required to be obtained or made by Purchaser in connection with its
execution, delivery or performance of this Agreement or the consummation by it
of the transactions contemplated hereby.
Section 5.5 Litigation, etc. "" No Proceeding is pending or, to the
knowledge of Purchaser threatened, against Purchaser (a) relating to or
affecting any of the Business Assets, other than the bankruptcy case referred
to in the Recitals, or (b) that questions the validity of this Agreement or
challenges any of the transactions contemplated hereby.
Section 5.6 Financing. Purchaser has, and at the Closing Date Purchaser
will have, such funds as are necessary for the consummation by Purchaser of the
transactions contemplated hereby.
Section 5.7 Completion of Certain Contracts and Payment of Certain
Liabilities. In addition to, and not in lieu of, the consideration set forth
in this Agreement, Purchaser shall remain liable for any and all amounts
contemplated by, and any and all obligations under, the Interim Period Letter
Agreement, including, without limitation, consideration due upon completion of
all contracts and/or sales entered into by Purchaser as contemplated by
paragraph I.2. of the Interim Period Letter Agreement, and Purchaser shall pay
all amounts owed to Sellers under paragraph I.2. of the Interim Period Letter
Agreement.
Section 5.8 Brokerage Agreements. Neither Purchaser nor Bedowitz has,
directly or indirectly, retained any financial advisor, broker, agent, or
finder or paid or agreed to pay any financial advisor, broker, agent, or finder
on account of this Agreement, the Interim Period Letter Agreement or any
transaction contemplated by this Agreement or the Interim Period Letter
Agreement.
Section 5.9 Conduct of the Business. From and after the date hereof
through the Closing Date, Purchaser shall continue to operate the Business in
accordance with the terms of the Interim Period Letter Agreement and subject to
Bankruptcy Court action.
Section 5.10 Hiring of Former Employees and Current Employees. Prior to
the Closing Date, Purchaser may only hire any employee of any Seller for time
in excess of the normal forty (40) hour work week worked by such employee for
such Seller. With respect to hiring decisions
8
11
for employment subsequent to the Closing Date, Purchaser shall give preference
to former employees of Sellers employed in connection with the Business.
Notwithstanding the foregoing, Purchaser shall have no obligation to employ any
employee of any Seller or in any manner whatsoever be responsible for the
payment of any compensation, severance and/or termination pay relating to any
former employee of any Seller or due to any union or other labor organization.
In the event that Purchaser elects to employ any former employee of a Seller,
Purchaser shall be responsible for all salary and other compensation solely to
the extent that the same accrues and becomes payable to such employee after the
inception of such employee's employment by Purchaser. Purchaser shall assume
no liability for any obligation of any Seller associated with the current or
former employees or independent contractors of a Seller.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Certain Tax Matters. Any sales Tax or transfer Tax or
similar Tax upon the transfer of the Business Assets to Purchaser shall be
borne by Seller. All other Taxes with respect to the Business Assets shall be
prorated as of the Closing Date, based upon the assessment for the previous
year if current tax information is not available.
Section 6.2 Bankruptcy Court Approval. As promptly as practicable after
the date hereof, Sellers shall file a motion (the "Sale and Assignment Motion")
with the Bankruptcy Court pursuant to Sections 363 and 365 of the Bankruptcy
Code, in a form reasonably acceptable to Purchaser, seeking an order (the "Sale
and Assignment Order") approving the sale, assignment and transfer of the
Business Assets free and clear of all Encumbrances. Prior to the filing of the
Sale and Assignment Motion, Sellers shall consult with Purchaser about the
scope, manner and form of notice for the hearing on the Sale and Assignment
Motion (the "Sale and Assignment Hearing"), and Sellers shall provide proper
notice of such motion in accordance with applicable law. If the Sale and
Assignment Order shall be appealed by any party (or a petition for certiorari
or motion for rehearing or argument shall be filed with respect thereto),
Sellers shall take all steps, as may be reasonable and appropriate to prosecute
such appeal, petition or motion, or defend against such appeal, petition or
motion, and Purchaser shall cooperate in such efforts. Purchaser, and Sellers
agree to use their best efforts to obtain an expedited resolution of any such
appeal.
Section 6.3 Notification of Certain Matters. Sellers shall give prompt
notice to Purchaser, and Purchaser shall give prompt notice to Sellers, of (a)
the occurrence or nonoccurrence of any event the occurrence or nonoccurrence of
which would be likely to cause any representation or warranty contained in this
Agreement to be untrue or inaccurate in any material respect at or prior to the
Closing and (b) any material failure of Purchaser or Sellers, as the case may
be, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided, however, that neither the
delivery of nor the failure to deliver any notice pursuant to this Section 6.3
shall limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
9
12
Section 6.4 Announcement. Following the execution of this Agreement,
Purchaser shall approve an announcement of Sellers prepared to satisfy the
requirements of public disclosure applicable to Sellers, such approval not to
be unreasonably withheld by Purchaser. In addition, Sellers and Purchaser
agree to consult with each other before issuing any press release or making any
public statement with respect to this Agreement or the transactions
contemplated hereby, and, except as may be required by Applicable Law or any
listing agreement with any national securities exchange, will not issue any
such press release or make any such public statement prior to such
consultation.
Section 6.5 Fees and Expenses. All costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such costs or expenses.
Section 6.6 Competition Waiver. Sellers hereby agree that, in
undertaking and performing the actions contemplated by this Agreement,
Purchaser and/or Bedowitz shall not be deemed to have violated or breached any
provision of any agreement between or among the parties hereto prohibiting or
restricting Purchaser and/or Bedowitz from hiring any former employee or
independent contractor of any Seller.
Section 6.7 Xxxxxx Computer. As long as AMRE continues to lease the
Xxxxxx Computer AMRE may use the software thereon, and AMRE shall provide
Purchaser with access to the Xxxxxx Computer hardware and the software in
connection with Purchaser's operations following the Closing Date at a cost
equal to the pro-rata portion of the computer time used by Sellers. At such
time as AMRE decides it no longer requires the use of the Xxxxxx Computer it
will give Purchaser notice it intends to discontinue the lease for such
computer, and upon receipt of such notice, Purchaser shall have ten (10)
business days to assume such lease. Following such ten (10) business day
period, Seller shall have no further obligation to make the Xxxxxx Computer
available to Purchaser.
Section 6.8 Storage, Protection and Availability of Records. Purchaser
agrees to safeguard, protect and store, and provide Sellers with notice as to
the location of, all of the contracts, books, records, customer lists, purchase
orders and customer information relating to the Business that is located at the
Sales Offices for a minimum of one hundred twenty (120) days from the Closing
Date; provided that such records are currently located at the Sales Offices and
in the possession, custody and control of Purchaser. Purchaser agrees to xxxxx
Xxxxxxx access to, and allow Sellers to copy, all such contracts, books,
records, customer lists, purchaser orders and customer information for a
minimum of two (2) years from the Closing Date.
Section 6.9 Payment of Expenses. Sellers covenant that they will apply
amounts received from Purchaser pursuant to paragraph 6 of the Interim
Agreement to the rent, utilities, insurance and property taxes related to the
Managed Business (as defined by the Interim Period Letter Agreement).
Section 6.10 Submission of Schedules. On or before March 10, 1997 Sellers
shall complete and submit to Purchaser for its review all the schedules to be
attached hereto other than
10
13
Schedule 2.1(c) (Inventory). Purchaser shall have until March 17, 1997 to
accept or reject the items disclosed in such schedules in writing, and
Purchaser's failure to accept or reject any item disclosed in such schedule by
such date shall be deemed to be an acceptance of such item disclosed in such
schedule. Purchaser shall deliver Schedule 2.1(c) (Inventory) of the day
preceding the Closing Date, and such schedule shall be used to calculate the
Cash Purchase Price attributable to the Inventory.
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.1 Conditions to the Obligation of Each Party to Consummate the
Transactions Contemplated Hereby. The respective obligations of the parties
hereto shall be subject to the fulfillment on or prior to the Closing Date of
each of the following conditions:
(a) Application. The Sale and Assignment Motion shall have been
filed with the Bankruptcy Court requesting approval of:
(i) the assumption and assignment by Sellers to Purchaser of each
of the Leases;
(ii) the assumption and assignment by Sellers to Purchaser of each
of the Computer Leases;
(iii) the sale by Sellers to Purchaser, free and clear of all
liens, claims and encumbrances, of the Business Assets other
than the Leases, the Equipment Leases and Computer Leases;
(iv) the assumption and assignment by Sellers to Purchaser of each
of the Equipment Leases;
(v) releases provided for in Article IX; and
(vi) a breakup fee to be paid to Purchaser if the Bankruptcy Court
fails to approve this Agreement because another offer for the
Business or any part thereof has been approved by the
Bankruptcy Court, to be paid immediately upon the closing of
the transaction resulting from such offer, with such breakup
fee to be in the amount of $2,500.00 for reimbursement of
Purchaser's costs and expenses in connection with the
negotiation of and activities incident to this Agreement.
(b) Findings. The Sale and Assignment Motion shall have
requested a finding that:
(i) with respect to each Lease, Computer Lease and Equipment
Lease to be assumed and assigned to Purchaser pursuant to
this Agreement, the
11
14
applicable Seller is not in default under the lease or such
default will be waived, or if a default exists under such
lease that is not waived, the amount required to be paid by
such Seller to cure such default prior to assumption or
assignment of such Seller lease shall be as set forth in the
Sale and Assignment Motion;
(ii) with respect to each Lease, Computer Lease and Equipment
Lease to be assumed and assigned to Purchaser pursuant to
this Agreement, assignment of such lease to Purchaser does
not violate or constitute a breach of such lease;
(iii) with respect to each Lease, Computer Lease and Equipment
Lease to be assumed and assigned to Purchaser pursuant to
this Agreement, assumption and assignment of such lease is
authorized pursuant to Section 365 of the Bankruptcy Code and
that all requirements imposed by Section 365 of the
Bankruptcy Code for the assumption and assignment of
executory contracts and leases free and clear of liens
outside the scope of each Sellers' ordinary course of
business have been satisfied;
(iv) all requirements imposed by Section 363 of the Bankruptcy
Code for the sale of assets free and clear of liens, outside
of the scope of each Seller's ordinary course of business
have been satisfied;
(v) none of Purchaser, Bedowitz or any Seller has engaged in
conduct which would allow this Agreement to be set aside
pursuant to Section 363(n) of the Bankruptcy Code; and
(vi) any other provisions of the Bankruptcy Code governing the
sale of assets free and clear of liens outside the scope of
each Seller's ordinary course of business have been
satisfied.
(c) Good Faith. The Sale and Assignment Motion shall request a
finding that Purchaser is a good faith purchaser pursuant to Section
363(m) of the Bankruptcy Code, and that this Agreement constitutes
an arms-length transaction between Sellers, Bedowitz and Purchaser.
(d) Hearing. The Sale and Assignment Motion shall have been
brought on for the Sale and Assignment Hearing on or before March
31, 1997.
(e) Order. The Sale and Assignment Order by the Bankruptcy Court
in form satisfactory to Purchaser shall have been entered granting
the relief requested pursuant to the Sale and Assignment Motion
(which order shall provide, without limitation, for the payment of
any amounts required to cure any defaults under any of Sellers'
leases as set forth in the Sale and Assignment Motion), and the Sale
and Assignment Order shall have been entered by March 31, 1997 and
not stayed.
12
15
(f) No Proceedings. No preliminary or permanent injunction or other
order, decree or ruling shall have been issued by a Governmental
Entity, and no statute, rule, regulation or executive order shall
have been promulgated or enacted by a Governmental Entity, which
prevents consummation of the transactions contemplated by this
Agreement and which is in effect on the Closing Date; no Proceeding
by a Governmental Entity shall have been commenced or threatened
(and be pending or threatened on the Closing Date) against Purchaser
or any Seller, or any of their respective affiliates, associates,
managers, members, officers or directors, seeking to prevent or
challenging the transactions contemplated by this Agreement; and no
Proceeding before a court of competent jurisdiction shall have been
commenced (and be pending on the Closing Date) against Purchaser or
any Seller, or any of their respective affiliates, associates,
managers, members, officers or directors, seeking to prevent or
challenging the transactions contemplated hereby and seeking
material damages in connection therewith.
(g) Schedule Delivery. Sellers shall have delivered the schedules
referred to in Section 6.10 hereof in a timely manner.
(h) Overbids. The Sale and Assignment Motion shall have included an
express requirement that the first overbid, if any, offered in
competition with the offer represented by this Agreement, offer at
least $5,000.00 more in total consideration than the total
consideration offered by Purchaser under this Agreement.
Section 7.2 Additional Conditions to the Obligation of Sellers. The
obligations of Sellers to consummate the transactions contemplated by this
Agreement is also subject to the fulfillment of each of the following
conditions:
(a) The representations and warranties of Purchaser set forth in this
Agreement shall be true and correct on and as of the Closing Date as
if made on and as of such date, except as affected by transactions
contemplated or permitted by this Agreement and except to the extent
that any such representation or warranty is made as of a specified
date, in which case such representation or warranty shall have been
true and correct as of such date.
(b) Purchaser shall have performed each obligation to be performed by
him, as the case may be, hereunder on or prior to the Closing Date.
(c) Sellers shall have received such certificates of Purchaser dated the
Closing Date, signed by officers of Purchaser and others, to
evidence compliance with the conditions set forth in Section 7.1 and
this Section 7.2 as may be reasonably requested by Sellers.
13
16
Section 7.3 Additional Conditions to the Obligation of Purchaser. The
obligation of Purchaser to consummate the transactions contemplated hereby is
also subject to fulfillment of each of the following conditions:
(a) Sellers shall have performed each obligation to be performed by them
hereunder on or prior to the Closing Date.
(b) Purchaser shall have received such certificates of Sellers, dated
the Closing Date, signed by officers of Sellers and others, to
evidence compliance with the conditions set forth in Section 7.1 and
this Section 7.3 as may be reasonably requested by Purchaser.
(c) Purchaser shall have received a copy of the Sale and Assignment
Order authorizing the execution, delivery and performance by Sellers
of this Agreement.
ARTICLE VIII
TERMINATION
Section 8.1 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(a) by mutual written consent of Purchaser or Sellers;
(b) by either Purchaser or Sellers if there shall be any Applicable Law
that makes consummation of the transactions contemplated hereby
illegal or otherwise prohibited or a Governmental Entity shall have
issued an order, decree or ruling or taken any other action
permanently restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby, and such
order, decree, ruling or other action shall have become final and
nonappealable; or
(c) by Sellers if Sellers receive a bona fide third-party offer to
acquire all or substantially all of the Business Assets on terms and
conditions determined in good faith by Sellers which offer meets the
following conditions, and provided that Seller deliver to Purchaser
written notice of such offer within two (2) business days after
receipt thereof along with a copy of such offer:
(i) the third-party offer represents a higher and better offer than
the transaction set forth herein (which determination shall
include reference to price and contractual terms and
conditions); and
(ii) the third party is reasonable certain to pay the purchase price
under such offer in cash upon closing of such transaction; or
14
17
(d) by either Purchaser or Sellers if the Closing has not occurred on or
before April 30, 1997.
Section 8.2 Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 8.1 by Purchaser or Sellers, written notice
thereof shall forthwith be given to the other party specifying the provision
hereof pursuant to which such termination is made, and this Agreement shall
become void and have no effect, and there shall be no liability hereunder on
the part of Purchaser or Sellers or any of their respective directors,
officers, employees, stockholders or representatives, except that the
agreements contained in this Section 8.2 and in Sections 5.9, 6.5 and 6.9 shall
survive the termination hereof. Nothing contained in this Section 8.2 shall
relieve any party from liability for any breach of this Agreement.
ARTICLE IX.
WAIVER, RELEASES AND INDEMNIFICATION
Section 9.1 Release of AMRE. Purchaser and Bedowitz, on behalf of
themselves and, as applicable, their respective successors, assigns, employees,
agents, officers, directors, members, managers, heirs, attorneys and
representatives, hereby release and discharge AMRE and its affiliates
(including, without limitation, ARI and Facelifters) and their respective
officers, directors, employees and agents (the "AMRE Released Parties") from
any and all Claims now existing or which may hereafter accrue, whether known or
unknown, liquidated or unliquidated, direct or indirect, whether suspected or
unsuspected, whether having arisen or hereafter to arise, in each case in any
way relating to any acts, events, facts or circumstances associated with or
relating to AMRE, ARI, Facelifters, the Business or the transactions
contemplated hereby or by the Interim Period Letter Agreement; provided,
however, that nothing contained in this release shall effect any obligation or
liability of any Seller for the express representations, warranties or
covenants contained herein. In addition, Purchaser shall indemnify Sellers
against any and all damages, costs, expenses, obligations or liabilities,
including, without limitation, the reasonable attorneys' fees and
disbursements, arising out of any breach by Purchaser of the representations
and warranties of Purchaser contained herein.
Section 9.2 Release of Purchaser and Bedowitz. Sellers, on behalf of
themselves and their affiliates, successors, assigns, employees, agents,
officers, directors, attorneys, and representatives (in their capacity as
such), hereby release and discharge Purchaser and Bedowitz and, as applicable,
its and his respective agents, heirs, employees, officers, directors, members,
managers, attorneys, representatives, successors, and assigns of and from any
and all Claims, whether known or unknown, liquidated or unliquidated, direct or
indirect, whether suspected or unsuspected, whether having arisen or hereafter
to arise, in each case in any way relating to any acts, events, facts or
circumstances associated with or relating to prior relationships or business
dealings of Bedowitz or Purchaser with Sellers or the transactions contemplated
hereby or by the Interim Period Letter Agreement; provided, however, that
nothing contained in this release shall affect any obligation or liability of
Purchaser or Bedowitz for the express representations, warranties or covenants
contained herein.
15
18
Section 9.3 No Prior Assignment. Each of Bedowitz, Purchaser and the AMRE
Parties represent and warrant to the other that it has not transferred,
assigned or encumbered any claims subject to the release granted hereby.
Section 9.3 Survival of This Article IX". The provisions of this
Article IX shall survive the Closing indefinitely.
ARTICLE X.
MISCELLANEOUS
Section 10.1 Notices. All notices, requests, demands and other
communications required or permitted to be given or made hereunder by any party
hereto shall be in writing and shall be deemed to have been duly given if
delivered personally or transmitted by first class registered or certified
mail, postage prepaid, return receipt requested, or sent by prepaid overnight
delivery service, or sent by cable, telegram, or facsimile, to the parties at
the following addresses (or at such other addresses as shall be specified by
the parties by like notice):
If to Purchaser:
REDO, L.L.C.
______________________________________
______________________________________
Attention: Xx. Xxxxxx Xxxxxxxx
Telephone No.: _______________________
Facsimile No.: _______________________
with a copy to:
Xxxxx & Xxxxxx
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxx Held, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to Bedowitz:
Xx. Xxxxxx Xxxxxxxx
______________________________________
______________________________________
Telephone No.: _______________________
Facsimile No.: _______________________
16
19
If to Sellers:
AMRE, Inc.
0000 Xxxxx Xxxxxxxx Xxxxxxx, Xxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Mr. J. Xxxxx Xxxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: G. Xxxxxxx Xxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Section 10.2 Survival of Representations and Warranties. The
representations and warranties contained in this Agreement and in any
instrument delivered pursuant hereto shall survive beyond the Closing or a
termination of this Agreement for a period of one (1) year.
Section 10.3 Entire Agreement. This Agreement, including the Schedules
and other writings referred to herein (including, without limitation, the
Interim Period Letter Agreement) or delivered pursuant hereto, constitute
the entire agreement between the parties hereto with respect to the subject
matter hereof and supersede all prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter
hereof.
Section 10.4 Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (by operation of law or otherwise)
without the prior written consent of the other parties; provided further,
however, that Purchaser may assign, without the prior written consent of
Sellers, any and/or all of Purchaser's rights, interests and obligations
hereunder to any affiliate of Purchaser that has net assets of at least
$2,000,000. Except as provided in Article IX, nothing in this Agreement,
express or implied, is intended to or shall confer upon any person other than
Purchaser, Bedowitz and Sellers any rights, benefits or remedies of any nature
whatsoever under or by reason of this Agreement.
Section 10.5 Amendment and Waiver; Rights and Remedies. This Agreement
may be amended, superseded, canceled, renewed or extended, and the terms hereof
may be waived, only by a written instrument signed by the parties or, in the
case of a waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of either party of any
17
20
such right, power or privilege, or any single or partial exercise of any such
right, power or privilege, preclude any further exercise thereof or the
exercise of any other such right, power or privilege. The rights and remedies
herein provided are cumulative and are not exclusive of any rights or remedies
that any party may otherwise have at law or in equity. The rights and remedies
of any party based upon, arising out of or otherwise in respect of any
inaccuracy in or breach of any representation, warranty, covenant or agreement
contained in this Agreement shall in no way be limited by the fact that the
act, omission, occurrence or other state of facts upon which any claim of any
such inaccuracy or breach is based may also be the subject matter of any other
representation, warranty, covenant or agreement contained in this Agreement (or
in any other agreement between the parties) as to which there is no inaccuracy
or breach.
Section 10.6 Severability. If any provision of this Agreement is held
to be unenforceable, this Agreement shall be considered divisible and such
provision shall be deemed inoperative to the extent it is deemed unenforceable,
and in all other respects this Agreement shall remain in full force and effect;
provided, however, that if any such provision may be made enforceable by
limitation thereof, then such provision shall be deemed to be so limited and
shall be enforceable to the maximum extent permitted by applicable law.
SECTION 10.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS,
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF; PROVIDED,
HOWEVER, THAT THE BANKRUPTCY COURT SHALL RETAIN EXCLUSIVE JURISDICTION AS TO
ALL MATTERS PERTAINING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREBY UNTIL THE CLOSING.
Section 10.8 Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only, do not constitute a part of this
Agreement, and shall not affect in any manner the meaning or interpretation of
this Agreement.
Section 10.9 Gender. Pronouns in masculine, feminine and neuter genders
shall be construed to include any other gender, and words in the singular form
shall be construed to include the plural and vice versa, unless the context
otherwise requires.
Section 10.10 References. All references in this Agreement to Articles,
Sections and other subdivisions refer to the Articles, Sections and other
subdivisions of this Agreement unless expressly provided otherwise. The words
"this Agreement," "herein," "hereof," "hereby," "hereunder," and words of
similar import refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited.
Section 10.11 Counterparts. This Agreement may be executed by facsimile
signature and in any number of counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
18
21
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its representative thereunto duly authorized, all as
of the day and year first above written.
AMRE, INC.
By: /s/ J. XXXXX XXXXXXXXX
-------------------------------------
Name: J. Xxxxx Xxxxxxxxx
Title: President
AMERICAN REMODELING, INC.
By: /s/ J. XXXXX XXXXXXXXX
-------------------------------------
Name: J. Xxxxx Xxxxxxxxx
Title: President
FACELIFTERS HOME SYSTEMS, INC.
By: /s/ J. XXXXX XXXXXXXXX
-------------------------------------
Name: J. Xxxxx Xxxxxxxxx
Title: President
REDO, L.L.C.
By: AMERICAN XTERIORS, INC., Manager
By: /s/ XXXXXX XXXXXXXX
-------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: President
/s/ XXXXXX XXXXXXXX
----------------------------------------
XXXXXX XXXXXXXX
19
22
OMITTED SCHEDULES
REDO, L.L.C.
ASSET PURCHASE AGREEMENT
SCHEDULE CONTENTS
Schedule 1.1 Sales Offices of the Debtors from which REDO,
L.L.C. purchased assets.
Schedule 2.1(a) Real property leases to be assumed by
REDO, L.L.C.
Schedule 2.1(b) Furniture, fixtures, and equipment purchased by
REDO, L.L.C. pursuant to the Asset Purchase
Agreement.
Schedule 2.1(c) Inventory purchased by REDO, L.L.C. pursuant to
the Asset Purchase Agreement.
Schedule 2.1(d) Computer leases to be assumed by REDO, L.L.C.
Schedule 2.1(e) Equipment leases to be assumed by REDO, L.L.C.
Schedule 2.2(g) Liabilities assumed by REDO, L.L.C. pursuant to
the Asset Purchase Agreement (those liabilities
in connection with the computer and equipment
leases).
The Registrant hereby agrees to provide supplemental copies of any and all of
the above omitted schedules should the Commission so request.
