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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement"), is between XXXXXX
ENTERPRISES, INCORPORATED, a Delaware corporation ("Seller"); Xxxx X. Xxxxxx,
an individual (the "Shareholder") and XXXXXX, INC. a Georgia corporation
("Buyer"). For reference this Agreement is dated October 2, 1995.
RECITALS:
Seller owns and operates retail furniture stores, warehouses and
distribution centers, and regional offices in Colorado, Texas and Illinois, and
its corporate departments identified by Seller as its Purchasing Department and
Operations Department (the "Business") at locations set forth in Attachment 1
("Property Locations"); and,
Seller desires to sell certain assets associated with the operation of
these Business, and Buyer desires to purchase such assets (the "Property");
NOW THEREFORE, in consideration of these premises and the respective terms,
covenants, and conditions contained herein, the parties agree as follows:
1 PURCHASE AND SALE. Subject to the terms and conditions of this
Agreement, Buyer hereby agrees to purchase, and Seller hereby agrees to sell, on
the Closing Date, the following Property:
1.1 INCLUDED ASSETS. The Property to be purchased and sold shall
consist of the following described assets of Seller related to and in any way
used in the operation of the Property at the Property Locations ("Included
Assets"):
(a) all of Seller's merchandise inventory ("Inventory");
(b) all of Seller's leasehold improvements ("Leasehold
Improvements");
(c) all of Seller's computer equipment but not including
the GERS Data General computer ("Computer
Equipment");
(d) all of Seller's office equipment ("Office Equipment");
(e) all of Seller's warehouse equipment ("Warehouse
Equipment");
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(f) all of Seller's vehicles ("Vehicles");
(g) all of Sellers prepaid expenses and deposits ("Prepaid
Expenses");
(h) all cash on hand ("Cash on Hand") in each store
location;
(i) all sales written prior to Closing Date but to be
delivered and booked after Closing Date ("Undelivered
Sales");
(j) copies of all business records ("Business Records")
relating to the Included Assets as may be requested
by Buyer: Both parties will cooperate to the fullest
extent in sharing historical financial and other
business records of the Business according to the
needs of each party;
(k) customer lists, goodwill, slogans, logos, trademarks,
service marks, tradenames (including without
limitation the tradename "Xxxxxx'x" either alone or
in combinations with one or more other words in
connection with the retail home furnishings or
furniture business) and computer software (excluding
software for the GERS Date General computer) used or
held for use in the operation of the Business and the
covenant not to compete of Seller and the Shareholder
described in Section 9.5 ("Intangible Assets"). Use
of the name "Xxxxxx" by Shareholder, by Shareholder
d/b/a Xxxxxx Properties, and by Seller in its
corporate name as permitted pursuant to Section 9.5,
is excluded. Rights to Seller's computer software
shall be conveyed on a non-exclusive basis;
(l) all of Seller's rights in all of the leases, contracts
and other agreements to be assumed by Buyer pursuant
to Section 4 hereof; and
(m) all transferable licenses, permits, registrations and
authorizations issued by any governmental authority
that are used in or necessary for the lawful
operation of the Business as currently operated by
Seller.
1.2 EXCLUDED ASSETS. Notwithstanding the foregoing, the Assets
shall not include any of the following ("Excluded Assets"):
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(a) all cash or cash equivalents in transit or in bank
accounts;
(b) any tax refunds arising from taxes that accrued
during any period prior to the Closing Date;
(c) insurance policies, including any premium refunds in
respect to such policies and claims covered by such
policies arising prior to the Closing Date;
(d) that contract with GERS Retail Systems dated June 30,
1995 and referred to in Section 6.2 below, and all
hardware and software associated therewith;
(e) intangible assets not specifically included in
Section 1.1;
(f) all accounts receivable of Seller; and
(g) all land and building owned by Seller.
2 PURCHASE PRICE AND TERMS.
2.1 PURCHASE PRICE. The purchase price to be paid by Buyer to
Seller for the Included Assets (the "Purchase Price") is the total of the
following:
(a) For Inventory, the Book Value (landed cost). For
reference, Seller's book value as of August 31, 1995
was $22,967,439.
(b) For Leasehold Improvements, the Book Value
(depreciated cost) plus $350,000 representing the
depreciated value of the cantilever warehouse racks
now installed in the San Antonio Distribution Center
but not now included in the book value for leasehold
improvements. For reference, Seller's book value as
of August 31, 1995 was $4,858,050.
(c) For Computer Equipment, the Book Value (depreciated
cost). For reference, Seller's book value as of
August 31, 1995 was $270,496.
(d) For Office Equipment, the Book Value (depreciated
cost). For reference, Seller's book value as of
August 31, 1995 was $99,523.
(e) For Warehouse Equipment, the Book Value (depreciated
cost). For reference, Seller's book value as of
August 31, 1995 was $368,592.
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(f) For Vehicles, the Book Value (depreciated cost). For
reference, Seller's book value as of August 31, 1995
was $123,007.
(g) For Prepaid Expenses, the Book Value. For reference,
Seller's book value as of August 31, 1995 was
$374,205.
(h) For Cash on Hand, the Book Value. For reference,
Seller's book value as of August 31, 1995 was
$22,958.
(i) For Undelivered Sales, 30% of the book value (selling
price) of Seller's Undelivered Sales as of October
31, 1995, less Customer Deposits as shown on the
October 31, 1995 Interim Balance Sheet. For
reference, Seller's book value of Undelivered Sales
as of August 31, 1995 was $4,967,486. 30% of this
total would have been $1,490,246. For reference,
Seller's book value of Customer Deposits as of August
31, 1995 was $1,392,766. The net owed to Seller by
Buyer as of August 31, 1995 would therefore have been
$97,480.
(j) For Business Records and customer lists, the sum of
$1,000,000.
For purposes of this Agreement "Book Value" shall mean the value shown
on the October 31, 1995 Interim Balance Sheet.
2.2 ESTIMATED PURCHASE PRICE. The estimated purchase price to be
paid by Buyer to Seller for the Included Assets at Closing (the "Estimated
Purchase Price") is the total of the following:
(a) For Inventory, the book value (landed cost) shown on
the September 30, 1995 Interim Balance Sheet.
(b) For Leasehold Improvements, the book value
(depreciated cost) shown on the September 30, 1995
Interim Balance Sheet, plus $350,000 representing the
depreciated value of the cantilever warehouse racks
now installed in the San Antonio Distribution Center
but not now included in the book value for leasehold
improvements.
(c) For Computer Equipment, the book value (depreciated
cost) shown on the September 30, 1995 Interim Balance
Sheet.
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(d) For Office Equipment, the book value (depreciated
cost) shown on the September 30, 1995 Interim Balance
Sheet.
(e) For Warehouse Equipment, the book value (depreciated
cost) shown on the September 30, 1995 Interim Balance
Sheet.
(f) For Vehicles, the book value (depreciated cost) shown
on the September 30, 1995 Interim Balance Sheet.
(g) For Prepaid Expenses, the book value shown on the
September 30, 1995 Interim Balance Sheet.
(h) For Cash on Hand, the book value shown on the
September 30, 1995 Interim Balance Sheet.
(i) For Undelivered Sales, 30% of the book value (selling
price) of Seller's Undelivered Sales as of September
30, 1995, less Customer Deposits as shown on the
September 30, 1995 Interim Balance Sheet.
(j) For Business Records and Intangible Assets, the sum
of $1,000,000.
2.3 XXXXXXX MONEY AND PAYMENT OF ESTIMATED PURCHASE PRICE AND PURCHASE
PRICE. As non-refundable Xxxxxxx Money, Buyer has paid concurrently with the
execution of this Agreement the sum of Three Hundred Thousand and No/100
Dollars ($300,000.00). Xxxxxxx money paid shall be credited against the
Estimated Purchase Price at Closing. The Estimated Purchase Price, as
determined pursuant to this Section 2.1 and 2.2 of this Article 2 and Section
11.4 of Article 11 below, shall be paid by wire transfer into Seller's bank at
Closing. Seller's wire transfer instructions are attached as Schedule 2.3.
3. REAL PROPERTY LEASES.
3.1 THIRD PARTY LEASES. All leases of properties in which the
Business is conducted not owned by Xxxx X. Xxxxxx or Seller shall be assumed
by Buyer in accordance with their terms. All such third party leases are set
forth on Schedule 3.1.
3.2 XXXXXX LEASES. The properties owned by Xxxx X. Xxxxxx or
Seller in which the Business is conducted shall be leased to Buyer by execution
of original lease documents for each such property in the form attached on
Schedule 3.2.1, for the rent and terms set forth on Schedule 3.2.2.
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4 LEASES AND CONTRACTS.
4.1 LEASES, CONTRACTS AND OBLIGATIONS TO BE ASSUMED. Buyer shall
assume and agree to perform the following contracts only:
4.1.1 All leases provided to be assumed in Section 3.
4.1.2 All contracts and agreements affecting the operation
of the stores, the warehouses, the distribution centers and the corporate
purchasing and operations departments in which the Business is conducted. A
Schedule 4.1.2 is attached listing the material contracts and agreements.
4.2 CONTRACTS AND OBLIGATIONS NOT ASSUMED. Buyer expressly does
not assume the GERS Retail Systems agreements which Seller has entered into or
any other liabilities or obligations of Seller other than those listed in
Section 4.1.
5 CLOSE OF BUSINESS AND EMPLOYEES. Seller will cease retail business
operations at the business locations of the Property immediately following the
close of business on the Closing Date. Seller will terminate all of its
employees at the business locations of the Property effective immediately
following cessation of retail business operations on the Closing Date. Buyer
will hire on the day following Closing Date each prior employee of Seller at
the business locations of the Property who shall seek such employment.
Compensation at the rate in effect on Closing Date shall be continued
uninterrupted for such employees and such employees shall be entitled to
participate in employee benefit programs offered from time to time by Buyer to
its employees generally pursuant to Buyer's standard procedures for employee
participation in such programs; provided, however, that such employees shall
be eligible to participate in Buyer's group health and life program without a
waiting period and such employees shall retain all vacation days, to a maximum
of fifteen (15) work days, accrued but not used while working for Seller.
Attached as Schedule 5 is a list of those corporate employees who are expected
to be retained by Seller as Seller's employees following closing.
6 REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE SHAREHOLDER.
Seller and the Shareholder represent and warrant to the Buyer:
6.1 ORGANIZATION AND STANDING. Seller is a corporation duly
organized, existing, and in good standing under the laws of the State of
Delaware. Except as set forth in Section 6.6 below, Seller has all requisite
corporate power and authority to carry on its business as it is presently being
conducted and to own or lease the Property and Included Assets, and is duly
qualified and in good standing in every state of the United States in which the
conduct
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of its business or the ownership of the Included Assets requires it to be so
qualified.
6.2 AUTHORIZATION: ENFORCEABLE OBLIGATIONS. Seller has the
corporate power, authority and legal right to execute, deliver and perform this
Agreement except as set forth in 6.6 below. On or before the Closing Date,
Seller shall have, by proper corporate proceedings, duly authorized the
execution, delivery and performance of this Agreement and the consummation of
all transactions called for herein. This Agreement has been duly executed by
seller. This Agreement constitutes the legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms, except as the
same may be limited or otherwise affected by applicable bankruptcy, insolvency
or other laws affecting creditor's rights.
6.3 NO THIRD PARTY OPTIONS. Except as set forth in 6.6 below,
there are no existing agreements, options, commitments or rights with, of, or
to any person to acquire any of the Property or any interest therein, except
for those agreements entered into in the normal course of business consistent
with past practice for the sale of Inventory of Seller.
6.4 TITLE TO PROPERTIES. Except as set forth in 6.6 below, the
Seller has good and marketable title to the Property, subject to no mortgage,
deed of trust, security interest, pledge, lien, conditional sales agreement,
encumbrance or charge, except for those matters explicitly disclosed in this
Agreement including the obligations to be assumed by Buyer. If a mortgage, deed
of trust, security interest, pledge, lien, conditional sales agreements,
encumbrance or charge does exist that relates to the Property, Seller shall
cause it to be fully discharged and released prior to the Closing Date.
6.5 LITIGATION. There is no litigation or proceeding (at law or in
equity or before any court, arbitrator or governmental authority or body)
pending or, to the best of Seller's knowledge, threatened against Seller which
relates to the Property or the transactions contemplated by this Agreement or
the result of which could adversely affect the Property or the transactions
contemplated by this Agreement, except a Xxxxxxx'x Compensation claim fully
insured, entitled Xxxx x. Xxxxxx Enterprises, Inc.
6.6 NO VIOLATION. The execution, delivery and performance of the
Agreement by Seller, and the consummation of the transactions contemplated by
this Agreement, will not violate or result in a breach of or constitute a
default under or require the consent of any other person under any provision of
any charter, bylaw, contract, lien, instrument, order, judgment, decree,
ordinance, regulation, law or any other restriction of any kind to which the
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Included Assets, Property or Seller are subject or by which Seller is bound
except for restrictions in the mortgage loan on the Denver Distribution Center,
the equipment loan on the warehouse racks installed in the Denver Distribution
Center, and provisions of the Xxxxxx operating loan from First Interstate Bank,
each of which will be removed before Closing.
6.7 EMINENT DOMAIN. Seller has not received any notice, written or
oral, and has no knowledge of any eminent domain or condemnation proceeding
regarding any of the Property.
6.8 LABOR MATTERS. Seller is not a party to any collective
bargaining agreements, nor is there any collective bargaining agreement
currently being negotiated by Seller, and there is no labor strike, dispute,
slowdown, stoppage, solicitation or union certification cards or union
certification petition actually pending or threatened against or involving
Seller with respect to Seller's employees employed at the Property.
6.9 CONDITION OF THE INCLUDED ASSETS. The Included Assets are in
good operating condition and reasonable state of repair, subject only to
ordinary wear and tear. Except for items in need of repair, to the extent of
that needed repair, the Inventory consists of items of a quality and quantity
readily usable or readily salable, in the normal course of business, at prices
at least equal to the values at which such items are reflected on the books of
Seller, and are valued so as to reflect the normal valuation policy of Seller
in accordance with GAAP but without conversion to LIFO or provision for uniform
capitalization costs. The Included Assets constitute all of the assets necessary
to operate the Business in substantially the same manner as operated by Seller
prior to the date hereof.
6.10 FINANCIAL INFORMATION. (a) Attached hereto as Schedule 6.10 is
a true, correct and complete copy of Seller's audited financial statements as
of and for the year ended December 31, 1994, and an unaudited interim balance
sheet as of August 31, 1995 (collectively, the "Financial Statements"). The
Financial Statements are complete, have been prepared in accordance with GAAP,
fairly present the financial condition of Seller as of the dates thereof and
results of operation for the periods presented thereby, and disclose all
liabilities of Seller, whether absolute, contingent, accrued or otherwise,
existing as of the dates thereof which are of a nature required to be reflected
in financial statements prepared in accordance with GAAP. Seller has no
liability or obligation related to the Included Assets or the Business (whether
accrued, absolute, contingent or otherwise) except for (i) the liabilities and
obligations of Seller which are disclosed or reserved against in the Financial
Statements, to the extent and in the amounts so disclosed or reserved against,
and
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(ii) the liabilities incurred or accrued in the ordinary course of the Business
since August 31, 1995, and which do not, either individually or in the
aggregate, have a materially adverse effect on the Included Assets or the
Business.
(b) Seller will prepare unaudited interim balance sheets
as of September 30, 1995 (the "September 30, 1995 Interim Balance Sheet") and
as of October 31, 1995 (the "October 31, 1995 Interim Balance Sheet;" and
collectively with the September 30, 1995 Interim Balance Sheet, the "Interim
Balance Sheets"). The Interim Balance Sheets will be complete, will be prepared
in accordance with and consistent with GAAP (but without conversion to LIFO or
provision for uniform capitalization costs) and Seller's normal accounting
methods as used for the balance sheets for August 31, 1995 attached to this
Agreement as Attachment 2, and will fairly present the financial condition of
Seller as of the dates thereof.
6.11 PERMITS AND LICENSES. Seller holds, and is in compliance with
all material respects with, all licenses, permits, registrations and
authorizations necessary or required for the conduct of the Business.
6.12 CONSENTS AND APPROVALS. Except as set forth in Schedule 6.12
attached hereto, no consent or approval is required by virtue of the execution
hereof or the consummation of any of the transactions contemplated herein to
avoid the violation or breach of, or the default under, or the creation of a
lien on the Assets pursuant to the terms of, any regulation, order, decree or
award of any court or governmental agency or any lease, contract, mortgage,
note, license or any other instrument to which Seller is a party or to which it
or the Included Assets is subject.
6.13 LIMITATIONS. No representation or warranty of Seller shall be
and remain in effect beyond December 31, 2000.
7 COVENANTS OF SELLER. The Seller agrees that, subsequent to the date of
this Agreement and pending the Closing Date:
7.1 NEGATIVE COVENANTS AS TO FUTURE OPERATIONS. Seller will not,
unless provided for in this Agreement or written approval by Buyer being first
obtained:
(a) sell, assign, lease or otherwise transfer or dispose
of any of the Included Assets sold or leased under
this Agreement except Seller may sell, the Inventory
in the ordinary course of business.
(b) enter into any contract or commitment or agree to
incur any liability or indebtedness except in the
ordinary course of the business consistent with
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past practice including orders for purchase of Inventory and
customer special orders; or
(c) implement any change in its policies or practices with respect
to credit approval, collections or other operations.
7.2 AFFIRMATIVE COVENANTS AS TO THE FUTURE OPERATIONS.
Seller will:
(a) give Buyer and its representative full access, during
normal business hours, to the Property, furnish all
information as Buyer may reasonably request concerning
Seller's operations at the Property, specifically to include
all lease agreements in effect that involve any of the
Property;
(b) disclose to Buyer any information contained in its
representations and warranties set forth in this Agreement
which because of an event occurring after the date hereof, is
incomplete or is no longer correct as of all times after the
date hereof until the Closing Date;
(c) use its best efforts to conduct its business in such a
manner that on the Closing Date the representations and
warranties of Seller contained in this Agreement shall be true
as though such representation and warranties were made on and
as of this date hereof and use its best efforts to cause all
of the conditions of its obligations to Buyer under this
Agreement to be satisfied on or prior to the Closing Date;
(d) Seller shall conduct its business in all respects in the
ordinary course of business consistent with prior practice;
(e) Seller shall provide Buyer with access to its
independent accountants and its financial records and
accounting papers to enable Purchaser to cause such
accountants to prepare any audited financial statements deemed
by Buyer to be necessary to file with the Securities and
Exchange Commission (the "SEC") pursuant to the rules and
regulations promulgated by the SEC. All costs and expenses
associated with this paragraph and with filings made with the
SEC shall be paid by Buyer.
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(f) Seller shall cooperate with Purchaser to obtain the
consents necessary for the transfer of the Included Assets, to
make all necessary filings, and thereafter make any other
required submissions, with respect to this Agreement and the
transactions contemplated hereby required under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX
Xxx") and otherwise to consummate the transactions
contemplated hereby, and shall use its best effort to cause
each of the conditions to Closing set forth in Section 11
below to be satisfied at the earliest practicable date. All
costs and expenses associated with filings made pursuant to
the HSR Act shall be paid one-half by Buyer and one-half by
Seller.
8 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants
to Seller as follows:
8.1 ORGANIZATION AND STANDING. Buyer is a corporation duly
organized, existing and in good standing under the laws of Georgia. At Closing
Date Buyer shall be duly qualified to do business and shall be in good standing
as a foreign corporation in Colorado, Texas and Illinois.
8.2 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Buyer
has the corporate power, authority and legal right to execute, deliver and
perform this Agreement. This Agreement has been duly executed by Buyer. This
Agreement constitutes the legal, valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms, except as the same may
be limited or otherwise affected by applicable bankruptcy, insolvency or other
laws affecting creditors' rights generally.
8.3 ASSETS ACCEPTED ONLY IN ACCORDANCE WITH REPRESENTATIONS.
Buyer shall accept the Property in the condition represented by Seller in this
Agreement. Seller makes no representations with respect to the condition of the
Property except as explicitly made in this Agreement.
9 CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS. Buyer's obligation to
purchase the Included Assets is subject to the fulfillment prior to or on the
Closing Date of each of the following conditions:
9.1 CONVEYANCE AND TRANSFER. Seller shall deliver to Buyer such
bills of sale, leases, endorsements, assignments and other good and sufficient
evidence of conveyance and transfer as in the opinion of Buyer's counsel shall
be effective to vest in Buyer good
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and marketable title to the Included Assets.
9.2 REPRESENTATIONS AND WARRANTIES; PERFORMANCE. The
representations and warranties of Seller contained in this Agreement shall be
true at and as of the time of Closing as though such representations and
warranties were made at and as of such time and Seller shall have performed and
complied with all agreements and conditions required by this Agreement to be
performed or complied with by Seller prior to or on the Closing Date. Seller
shall have furnished to Buyer a certificate dated the Closing Dated signed by a
duly authorized officer of Seller stating that all of Seller's representations
and warranties contained in this Agreement remain in all respects true and
correct as of the Closing Date and that Seller has performed and complied with
in all respects all agreements and conditions required by this Agreement to be
performed or complied with by it prior to or on the Closing Date.
9.3 NO ADVERSE CHANGE. There shall have been no material adverse
change in the Included Assets except Inventory fluctuations in the normal
course of business or in the financial condition, operation or prospects of the
Business since August 31, 1995.
9.4 CONSENTS. All consents, waivers and approvals required from
third parties or governmental authorities required in connection with the
consummation of the transactions contemplated by this Agreement shall have been
obtained and remain in full force and effect, including without limitation the
expiration or termination of the applicable waiting period under the HSR Act.
9.5 COVENANT NOT TO COMPETE. Buyer shall have received from Seller
and the Shareholder a covenant not to compete in a form reasonably satisfactory
to Buyer. The covenant not to compete shall be limited to competition in the
retail furniture business in the States of Colorado, Texas, and Illinois, and
shall be for a period of five (5) years, but shall not prohibit Seller or
Shareholder from participating in the higher priced furniture lines business
under a name other than one containing the word "Xxxxxx."
10 INDEMNIFICATION BY SELLER AND THE SHAREHOLDER. On and after the
Closing Date, Seller and the Shareholder, jointly and severally, shall
indemnify and hold Buyer harmless against, defend and shall reimburse Buyer on
demand for any payment, including attorney fees, made by Buyer at any time
after the Closing Date in respect of: (i) any claim for brokerage or other
commissions arising from acts of Seller relating to this Agreement or to the
transactions contemplated hereby, (ii) any material inaccuracy in, or the
material breach of, any representation or warranty made by Seller herein or in
any Schedule or Exhibit hereto or in any other document or agreement executed
and delivered to Buyer pursuant
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hereto, (iii) any material failure of Seller to perform or observe any term,
provision, covenant or agreement hereunder on the part of Seller to be
performed or observed, (iv) the operation of the Business or use of the
Included Assets prior to the Closing, and (v) any liability, debt or obligation
relating in any way to the Included Assets, Property or operations or Seller
which is not specifically assumed by Buyer pursuant to this Agreement.
11 CLOSING. The closing of the sale and purchase of the Property (the
"Closing") shall take place at the law office of Xxxxxxxx, Dude, Xxxxxx &
Xxxxx, P.C., 000 Xxxxx Xxxxxxx Xxx., Xxxxx 000, Xxxxxxxx Xxxxxxx, Colorado, at
9:00 MDT on October 31, 1995 (the "Closing Date") or at such other time and
place as the parties shall determine.
11.1 BUYER OBLIGATIONS. At the Closing, the Buyer shall deliver to
Seller the Estimated Purchase Price by wire transfer to Seller's bank.
11.2 SELLER OBLIGATIONS. At the Closing, Seller shall deliver to
the Buyer:
(a) Xxxx of sale to all personalty constituting the
Property except vehicles, sufficient to vest all of Seller's
interest in the Included Assets to the Buyer.
(b) Certificates of title properly endorsed for all motor
vehicles to be transferred.
(c) Assignments of all contracts to be assigned as part
of the Property.
(d) Leases and assignments of leases sufficient to
constitute Buyer as tenant of each of the leases provided for
in Section 3 above.
11.3 TAXES AND PRORATIONS. Buyer and Seller shall each pay fifty
percent (50%) of any and all sales and transfer taxes payable in connection
with this Agreement. Seller and Buyer shall prorate as of the Closing Date all
property taxes, including real property taxes, and business personal property
taxes and special assessment installments on the Included Assets due and
payable for 1995, if known, otherwise the said amount shall be determined on
the real estate taxes and special assessment installments of the preceding
year. At Closing the parties shall prorate rents, and common area assessments
and charges.
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11.4 ADJUSTMENTS RELATING TO CONDUCT OF BUSINESS. Sales which shall
have been written by Seller prior to Closing Date but which shall not have been
delivered to the customer shall be adjusted at Closing as follows:
11.4.1 Buyer shall pay to Seller at Closing the estimated costs and
profits from sales which were written but not delivered prior to Closing Date
calculated to be 30% of each such written but undelivered sale.
11.4.2 Seller shall pay to Buyer at Closing the amount of all
customer deposits held pending delivery of sales written but not delivered
prior to closing date.
11.5 POST CLOSING ADJUSTMENTS. On or before November 30, 1995 a
calculation shall be completed by the parties calculating the difference
between the Estimated Purchase Price paid at Closing based upon the September
30, 1995 Interim Balance Sheet and the Purchase Price. To the extent the
parties are in agreement with respect to Post Closing Adjustments, on or before
November 30, 1995, Seller shall pay to Buyer, or Buyer shall refund to Seller
the net difference between the actual Purchase Price and the Estimated Purchase
Price.
11.5.1 In the event of a disagreement between the parties with
respect to the September 31, 1995 Interim Balance Sheet, October 31, 1995
Interim Balance Sheet or the difference between the Estimated Purchase Price
and the Purchase Price or the Property purchased which cannot be resolved by
the parties prior to December 31, 1995, the parties hereto shall jointly select
a nationally recognized accounting firm to resolve such disputed items and the
decision of such firm shall be final and binding on the parties hereto. All
fees and expenses of the accounting firm selected pursuant to the provisions of
this Section 11.5.1, shall be paid one-half by Seller and one-half by Buyer. On
or before January 31, 1996, or on such later date as the accountant may finally
resolve any dispute between the parties, Seller shall pay to Buyer, or Buyer
shall refund to Seller, as the case may be, an amount equal to the amount
determined by such firm. Such payment shall be made by wire transfer to the
appropriate party pursuant to wire transfer instructions provided by such
party.
12 GENERAL PROVISIONS.
12.1 NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
statements contained in any certificate or other instrument delivered by or on
behalf of either party pursuant hereto or in connection with the transactions
contemplated hereby shall be deemed representations and warranties hereunder
and shall survive the Closing. Notwithstanding the above, no party will be
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entitled to rely on any certificate or other instrument, or the statements
therein unless it is attached to the Agreement at the time of Closing.
12.2 PARTIES IN INTEREST. All the terms and provision of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the successor and assigns of Buyer and Seller.
12.3 LAW TO GOVERN. This Agreement is being made in Colorado and
shall be construed and enforced in accordance with the laws of Colorado.
12.4 NOTICES. All notices, requests, demands, waivers, consents,
approvals or other communication which are required or permitted hereunder
shall be in writing and shall be deemed to have been made when delivered
personally or by certified mail or by Federal Express to the party at its
address as follows:
Seller: Xxxxxx Enterprises, Inc.
000 Xxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Fax (000) 000-0000
with a copy to
Xxxxxxxx X. Xxxxx
Xxxxxxxx, Dude, Xxxxxx & Xxxxx, P.C.
000 Xxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Fax (000) 000-0000
Buyer: Xxxxxx, Inc.
0000 Xxxxxxxxx Xx., X.X.
Xxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
Attention: Xx. Xxxx Xxxxxx
with copy to
King & Spalding
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: E. Xxxxxxx Xxxxx, II
or to such other address as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver,
consent, approval or other communication
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will be deemed to have been given as of the date so delivered or mailed,
whichever occurs first.
12.5 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
12.6 FURTHER ASSISTANCE. From time to time (whether at or after the
Closing) Seller and Buyer shall execute and deliver such further instruments of
conveyance and transfer or take such other action as either party may
reasonable require in order to more effectively convey and transfer to Buyer
the Property.
12.7 COSTS. Each party shall bear its own expenses and costs
incurred in connection with the preparation of this Agreement and the
consummation of the transactions contemplated hereby, subject to the rights of
the parties to include such expenses and costs in any claim for damages
sustained as a result of a breach of this Agreement.
12.8 NO ASSIGNMENT. This Agreement is not assignable by either
party without the written consent of the other. Nothing in this Agreement is
intended to confer, expressly or by implication, upon any person who is not a
party, or successor or assign to a party, any rights or remedies under or by
reason of this Agreement.
12.9 ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties with respect to the transactions contemplated between them
and, except as otherwise provided, supersedes all previous negotiations,
commitments and writings.
12.10 ALTERATION. No alteration, modification or change of this
Agreement shall be valid unless made in writing and executed by the parties
hereto.
12.11 NO WAIVER. No failure or delay by any party hereto in
exercising any right, power or privilege hereunder (and no course of dealing
between or among any of the parties) shall operate as a waiver of any right,
power or privilege. No waiver of any default on any one occasion shall
constitute a waiver of any subsequent or other default. No single or partial
exercise of any right, power or privilege shall preclude the further or full
exercise thereof.
12.12 HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
12.13 PUBLIC DISCLOSURE. Except as required by law, neither of the
parties hereto shall make any disclosure to third parties except accountants,
attorneys or other professional persons
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employed to assist in this transaction, nor otherwise make any public
statements or releases concerning this Agreement or the transaction
contemplated hereby except for such written information as shall have been
approved in writing as to form and content by each of the parties hereto, said
approval shall not be unreasonably withheld.
12.14 DEFAULT/REMEDIES. In the event that Buyer shall breach this
Agreements by failure to pay the sums required herein, and Seller shall not
have breached any of its representations, warranties, covenants or obligations,
the Seller, upon 5 days written notice to Buyer, shall have the right to
terminate this Agreement, seek specific enforcement, damages or such other
relief as it may elect, including to declare the entire unpaid balance
immediately due and payable, retake possession of all property transferred by
this Agreement, or any one or more of the above, and shall have the right and
option to bring any action at law or equity to enforce the terms of this
Agreement, and seek restitution or damages, if said sum is not paid within five
(5) days of Buyer's receipt of a notice to that effect sent by Seller.
In the event that either party shall otherwise substantially fail to comply
with the terms, conditions, warranties, or representations of this Agreement,
excluding the timely payment of sums as referred to in the paragraph
immediately above, and said failure to comply is not cured within thirty (30)
days of written notice by one party to the other setting forth said failure to
comply, or if either party shall be adjudicated bankrupt or if any proceeding
against either seeking any reorganization, arrangement, liquidation,
dissolution, or other similar relief under the present or any future federal
bankruptcy code shall remain undismissed or unstayed for an aggregate of sixty
(60) days after the commencement thereof; or if any Trustee receiver or
liquidator of either party shall be appointed without consent or acquiescence
of that party, or such appointment shall remain unvacated or unstayed for an
aggregate of sixty (60) days, then in such event, a default may be declared by
the party not in breach etc., in written notice to the other, and the
non-breaching party may declare the entire unpaid balance due hereunder
immediately due and payable, retake possession of all property transferred by
this Agreement, or any one or more of the above, and shall have the right and
option to bring an action at law or equity to enforce the terms of this
Agreement, and seek restitution, damages and specific performance.
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AGREED TO AND ACCEPTED on this 7th day of October, 1995.
XXXXXX ENTERPRISES, INC.
By: /s/ Xxxx Xxxxxx
----------------------------
Its: C.E.O.
---------------------------
/s/ Xxxx X. Xxxxxx
-------------------------------
Xxxx X. Xxxxxx
XXXXXX, INC.
By: Xxxxx Xxxxxxxxxx
----------------------------
Its: C.E.O.
-------------------------------
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FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT
This First Amendment to Asset Purchase Agreement ("First Amendment")
is between Xxxxxx Enterprises, Inc., a Delaware corporation ("Xxxxxx"), Xxxx X.
Xxxxxx, an individual ("Shareholder") and Xxxxxx, Inc., a Georgia corporation
("Xxxxxx"), and is dated for reference October 31, 1995.
Recitals:
The parties to this First Amendment entered into an Asset Purchase
Agreement ("Agreement") on October 2, 1995.
This First Amendment is intended to amend the Agreement in the
following particulars only.
NOW THEREFORE THE PARTIES AGREE AS FOLLOWS:
1. Sections 3 and 4 of the Agreement are amended to provide that the
following third party leases shall be conveyed to Xxxxxx in the form of
subleases; the approvals of the landlords for assignment having been sought and
not been forthcoming on a timely basis. Complete and accurate copies of such
subleases are attached hereto as Attachments A-l and A-2. Xxxxxx and
Shareholder shall use their best efforts to assure Xxxxxx quiet enjoyment and
possession pursuant to the terms of such subleases:
x. Xxxxxx Warehouse
x. Xxxxxx Showroom
2. Section 5 is amended to add the following:
SALARIED EMPLOYEES OF XXXXXX WHO HAVE EARNED SEVERANCE PAY AND WHO
ELECT TO BECOME EMPLOYED BY XXXXXX SHALL BE CREDITED BY XXXXXX WITH
SEVERANCE PAY ENTITLEMENT EARNED WHILE EMPLOYED BY XXXXXX. IN THE
EVENT THE EMPLOYMENT OF ANY SUCH SALARIED EMPLOYEE SHALL THEREWITH
TERMINATE OR BE TERMINATED WITHIN THE FIRST YEAR NEXT FOLLOWING
CLOSING, XXXXXX SHALL REIMBURSE XXXXXX FOR ALL MONIES PAID TO SUCH
EMPLOYEE FOR SEVERANCE PAY EARNED WHILE HE OR SHE WAS EMPLOYED BY
XXXXXX.
3. Section 11.2(a) of the Agreement is amended to provide that conveyance
of inventory at closing on October 31, 1995 shall be by Xxxx of Sale with
summary of inventory attached. At the post closing adjustment provided for in
Section 11.5 of the Agreement, the inventory xxxx of sale shall be amended to
have attached a computer printout of all inventory purchased.
4. The following Section 11.4.3 is added:
XXXXXX GRANTS TO XXXXXX THE RIGHT TO PROCEED IN ITS NAME, PLACE AND
STEAD TO COMPLETE FINANCING PREVIOUSLY APPROVED BY HRSI, N.A. ON
CONTRACTS WRITTEN FOR SALE TO CUSTOMERS
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(AND PURCHASED BY XXXXXX HEREUNDER) WITH RESPECT TO MERCHANDISE NOT
DELIVERED AS OF DATE OF CLOSING.
5. Section 12.1 is amended to read as follows:
ALL STATEMENTS CONTAINED IN ANY CERTIFICATE OR OTHER INSTRUMENT
DELIVERED BY OR ON BEHALF OF EITHER PARTY PURSUANT HERETO OR IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE DEEMED
REPRESENTATIONS AND WARRANTIES HEREUNDER AND SHALL SURVIVE THE
CLOSING.
6. Schedule 3.2.1 is amended to revise the following (i) Section 7.5 on
page six to delete the phrase "insurable value" in the fourth line thereof and
to replace it with the phrase "replacement value," and (ii) to add at the end
of Section 7.7 thereof the sentence: "All insurance policies shall be endorsed
to reflect that the insurer has waived its right of subrogation."
7. Schedule 4.1.2 is amended to delete:
MERCHANT AGREEMENT dated 9/19/90 and MERCHANDISE FINANCING AGREEMENT
dated 9/2/81, as amended, with HRSI, N.A. for credit services.
INDUSTRY TRACK AGREEMENT dated 3/4/94 with Union Pacific Railroad
Company for DDC rail spur.
DERMURRAGE AVERAGE AGREEMENT dated 10/7/93 with Burlington Northern
Railroad Company for rail service demurrage.
8. Except for the specific provisions set forth above, the Agreement is
ratified and confirmed in all other respects.
9. In the event the provisions of this First Amendment shall be in
conflict with any provision of the Agreement, the provisions of this First
Amendment shall control.
Xxxxxx Enterprises, Inc.
by: /s/ Xxxx X. Xxxxxx
-----------------------
Xxxx X. Xxxxxx
Chief Executive Officer
/s/ Xxxx X. Xxxxxx
---------------------------
Xxxx X. Xxxxxx
Xxxxxx, Inc.
by: /s/ X.X. Xxxxx
------------------------
Authorized Agent
Senior V.P.
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