Exhibit 10.1
Xxxxxxxx-ALCO Stores, Inc.
MEMORANDUM OF UNDERSTANDING
(Stock Purchase Transaction)
THIS MEMORANDUM OF UNDERSTANDING (Stock Purchase Transaction) (the
"Agreement") is made as of April 19, 2005, by and among Xxxxxxxx-ALCO Stores,
Inc., a Kansas corporation ("Buyer"), and Xxxxxxxx X. Xxxxx, trustee of the
Xxxxxxx X. Xxxxx Revocable Trust ("Seller").
RECITAL
WHEREAS, Seller owns 399,362 shares of common stock, $.0001 par value, of
the Company (the "Shares"); and
WHEREAS, in accordance with the terms of this Agreement Seller desire to
sell, and Buyer desires to purchase, the Shares for the consideration and on the
terms and conditions set forth in this Agreement.
1. Purchase of Shares. Buyer hereby agrees to pay to Seller on or before
April 22, 2005 in cash $7.2 million pursuant to the wire transfer instructions
attached hereto on Exhibit A in exchange for transfer on or before April 22,
2005 by Seller to Buyer of the Shares free and clear of all liabilities, liens
or encumbrances.
2. Closing Procedures
On or before April 22, 2005, Seller shall send by fax or email a letter of
instruction substantially in the form attached hereto as Exhibit B instructing
Fidelity Investments to xxxx the Shares "DWAC withdrawal from Broker."
On or before April 22, 2005, Buyer shall send by fax or email a letter of
instruction substantially in the form attached hereto as Exhibit C instructing
and authorizing UMB Bank, n.a., Securities Transfer Division ("UMB"), to:
a. immediately upon receipt of the notice of the DWAC, accept the DWAC
of the Shares and to retire the Shares; and
b. inform Buyer once UMB has accepted the DWAC of the Shares and
retired the Shares by sending an email to Xxxx Xxxxxxxxx, the Chief Financial
Officer of the Company at xxxxxxxxxx@xxxxxxxx.xxx.
3. Seller's Representations and Warranties
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Seller represents and warrants to Buyer that the matters set forth in this
Article 3.
a. Organization and Good Standing. Seller is a trust duly organized,
validly existing, and in good standing under the laws of California, with full
power and authority to conduct the transactions contemplated hereby.
b. Authority. Seller has full power and authority to execute and
deliver this Agreement and to perform Seller's obligations under this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery by Seller of this Agreement and the performance by Seller of Seller's
obligations under this Agreement and the consummation of the transactions
contemplated hereby by Seller have been duly and validly authorized by any and
all necessary action on Seller's part. This Agreement has been duly executed and
delivered by Seller and constitutes the legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms.
c. Consents and Approvals. Except for filing promptly after closing
filing an amended Schedule 13D with the Securities and Exchange Commission
("SEC"), there is no requirement applicable to Seller to make any filing with,
or to obtain any permit, authorization, consent or approval of, any governmental
authority as a condition to the lawful consummation of the transactions
contemplated hereby.
d. Shares. Seller owns the Shares free and clear of any and all
liabilities, liens or encumbrances.
4. Buyer's Representations and Warranties
Buyer represents and warrants to Seller the matters set forth in this
Article 4.
a. Organization and Good Standing. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of Kansas, with
full corporate power and authority to conduct the transactions contemplated
hereby.
b. Authority. Buyer has full power and authority to execute and
deliver this Agreement and to perform Buyer's obligations under this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery by Buyer of this Agreement and the performance by Buyer of Buyer's
obligations under this Agreement and the consummation of the transactions
contemplated hereby by Buyer have been duly and validly authorized by any and
all necessary action on Buyer's part. This Agreement has been duly executed and
delivered by Buyer and constitutes the legal, valid and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms.
c. Consents and Approvals. Other than filing with the SEC a Current
Report on Form 8-K and reporting this transaction publicly and to the SEC, there
is no requirement applicable to Buyer to make any filing with, or to obtain any
permit, authorization, consent or approval of, any governmental authority as a
condition to the lawful consummation of the transactions contemplated hereby.
5. Conditions to Obligation of Seller. Seller's obligation to consummate
the transactions contemplated by this Agreement is subject to the following
conditions:
a. The representations and warranties set forth in Section 4 shall be
true and correct in all material respects at and as of the Closing Date.
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b. Buyer shall have performed all obligations and complied with all
covenants hereunder required to be performed or complied with by Buyer at or
prior to the Closing.
c. There shall not be any injunction, judgment, order, decree, ruling
or change in effect preventing or prohibiting consummation of any of the
transactions contemplated by this Agreement.
Sellers may waive by notice to Buyer any condition specified in this
Section 5 at or prior to the Closing.
6. Conditions to Obligation of Buyer. Buyer's obligation to consummate the
transactions contemplated by this Agreement is subject to the following
conditions:
a. The representations and warranties set forth in Section 3 shall be
true and correct in all material respects at and as of the Closing Date.
b. Seller shall have performed all obligations and complied with all
covenants hereunder required to be performed or complied with by Seller at or
prior to the Closing.
c. There shall not be any injunction, judgment, order, decree, ruling
or change in effect preventing or prohibiting consummation of any of the
transactions contemplated by this Agreement.
Buyer may waive by notice to Seller any condition specified in this
Section 5 at or prior to the Closing.
7. Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Kansas without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Kansas or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Kansas.
8. Entire Agreement And Modification. This Agreement supersedes all prior
agreements between the parties with respect to its subject matter and
constitutes along with the documents referred to in this Agreement a complete
and exclusive statement of the terms and conditions of the agreement between the
parties with respect to its subject matter. This Agreement may not be amended
except by a written agreement executed by all parties.
9. Assignment, Successors, and No Third-Party Rights. No party may assign
any of its rights under this Agreement without the prior consent of the other
parties. Subject to the preceding sentence, this Agreement will apply to, be
binding in all respects upon, and inure to the benefit of the successors and
permitted assigns of Buyer and the respective legal representatives, successors,
executors, administrators, heirs and assigns of Seller. Nothing expressed or
referred to in this Agreement will be construed to give any person other than
the parties to this Agreement any legal or equitable right, remedy or claim
under or with respect to this Agreement or any provision of this Agreement. This
Agreement and all of its provisions and conditions are for the sole and
exclusive benefit of the parties and their respective legal representatives,
executors, administrators, heirs, successors and assigns.
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10. Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
11. Section Headings, Construction.
a. The section headings in this Agreement are provided for convenience
only and will not affect the construction or interpretation of this Agreement.
b. Unless the context of this Agreement otherwise requires, (a) words
of any gender include each other gender; (b) words using the singular or plural
number also include the plural or singular number, respectively; (c) the terms
"hereof," "herein," "hereby" and derivative or similar words refer to this
entire Agreement and not to any particular provision of this Agreement; (d) the
terms "Section," "Schedules" and "Exhibit" without reference to any document
refer to the specified Section, Schedule and Exhibit, respectively, of this
Agreement; and (e) any reference to a Section herein shall be a reference to the
entire section, (e.g., a reference to Section 7 shall include all parts thereof,
and a reference to Section 7.1 shall include all parts thereof).
c. The words "including," "include" and "includes" are not exclusive
and shall be deemed to be followed by the words "without limitation"; if
exclusion is intended, the word "comprising" is used instead.
d. The word "or" shall be construed to mean "and/or" unless the
context clearly prohibits that construction.
e. Any reference to any federal, state, local or foreign statute or
law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise.
f. The parties have participated jointly in the negotiation and
drafting of this Agreement. If an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement.
12. Counterparts/Facsimile. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement. The Agreement may be executed by facsimile or
electronic signature, each of which shall be lawful and binding
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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first written above.
Xxxxxxx X. Xxxxx Revocable Trust
dated as of December 16, 1986
By: /s/Xxxxxxxx X. Xxxxx
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Xxxxxxxx X. Xxxxx, Trustee
Xxxxxxxx-ALCO Stores, Inc.
By: /s/Xxxxxxx X. Xxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President - Finance
Chief Financial Officer
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Exhibit A
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Wire Transfer Instructions for Seller
Fidelity wire instructions Page 1 of 1
Xxxxx Xxxxxxx
-------------------------------------------------------------------------------
From: Xxxxxx, Xxxx [Xxxx.Xxxxxx@XXX.XXX]
Sent: Tuesday, February 03, 2004 12:28 PM
To: xxxxx@xxxxxxxx.xxx
Cc: Xxx Xxxxxxxx - Compliance
Subject:Fidelity wire instructions
Wire to: X.X. Xxxxxx Chase Bank
ABA number: 000000000
For credit to: National Financial Services
Account number: 066196-221
For benefit of: XXXXXXXX XXXXX Trust Under Agreement
Account number: 613-515183
Address: Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx Xxxx, XX 00000
Thanks,
Xxxx
Xxxx Xxxxxx
Senior Client Service Manager
Operations & Services Group - Advisor Client Service
Fidelity Investments
Clearing, custody or other brokerage services may be provided by Fidelity
Brokerage Services LLC or National Financial Services LLC, members NYSE, SIPC
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Exhibit B
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Seller's Letter of Instruction to Fidelity Investment
To: Fidelity Investments
Re: 613-515183
XXXXXXXX XXXXX Trust Under Agreement
Consider this my letter of instructions to DWAC all shares (399,362)
of XXXXXXXX ALCO STORES INC. (DUCK) directly to transfer agent of
record, UMB Bank.
Sincerely,
Xxxxxxxx X. Xxxxx
Trustee
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Exhibit C
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Buyer's Letter of Instructions to UMB Bank
Xxxxxxxx-ALCO Stores, Inc.
Letter of Instruction
April 22, 2005
Ms. Xxxxx Xxxxxxx
UMB Bank, n.a.
Securities Transfer Division
000 Xxxxx Xxxx. 0xx Xxxxx
Xxxxxx Xxxx, XX 00000
In accordance with a Memorandum of Understanding dated as of April 19,
2005 between Xxxxxxxx-ALCO Stores, Inc. (the "Company") and K&A Asset Management
LLC ("K&A"), on behalf of Xxxxxxxx X. Xxxxx, trustee of the Xxxxxxx X. Xxxxx
Revocable Trust, K&A has instructed Fidelity Investments to initiate a DWAC
withdrawal for 399,362 shares of Common Stock, $.0001 par value, of the Company
(the "Shares").
Pursuant to this Letter of Instruction, I, on behalf of the Company,
hereby authorize UMB Bank, n.a., Securities Transfer Division ("UMB"), to
(immediately upon receipt of the DWAC) accept the DWAC of the Shares and to
retire the Shares.
Once UMB has accepted the DWAC of the Shares and retired the Shares, you
are further instructed to email me at xxxxxxxxxx@xxxxxxxx.xxx to inform me of
same.
Xxxxxxxx-ALCO Stores, Inc.
By:
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Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President - Finance
Chief Financial Officer
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